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Home My WebLink About112696 CC Agenda In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the office of the City Clerk (909) 694-6444. Notification 48 hours prior to a meeting will enable the City to make reasonable arrangements to ensure accessibility to that meeting [28 CFR 35.102.35.104 ADA Title II] AGENDA TEMECULA CITY COUNCIL A REGULAR MEETING CITY COUNCIL CHAMBERS 43200 BUSINESS PARK DRIVE, TEMECULA NOVEMBER 26,1996 - 7:00 PM .. .. .. .. .. .. .. ........ . .. .. .. .. ........... uo. O"t:@ 0 5pm:,: Cidsiw s . ........... .. vernme ..... ..... .. .. .. . .. ........ ........ ........... .. . .. . .. ..... .. an entrain @Liti 1:: C faron ith L ion' one .. .. .. .. ........ . ........... . . ........ I I ". , ". " @: @:: ]:: ]:: , I I 1. 1. I..... 1. I .. I.. I @.. .. ........... .. .. .. -.E RCHC. W. xi ti @t' h@it!@t Li. hd fer. .. .. .. .. .. .. .. .. .. ..... .. .. .. I I..,.,.,.........,., . .. I.... : : ... :T r ta .. it. am p t. H At approximately 9:45 PM, the City Council will determine which of the remaining agenda items can be considered and acted upon prior to 10:00 PM and may continue all other items on which additional time is required until a future meeting. All meetings are scheduled to end at 10:00 PM. Next in Order: Ordinance: No. 96-21 Resolution:No. 96-133 CALL TO ORDER:Mayor Karel Lindemans presiding Invocation:Reverend James Egea, Church of Religious Science of Temecula Valley Flag Salute:Mayor Pro Tem Birdsall ROLL CALL:Birdsall, Ford, Roberts, Stone, Lindemans PRESENTATIONS/Presentation by Western Riverside Council of Governments - PROCLAMATIONS"Draft Comprehensive Transportation Plan" Western Riverside County R:\Agenda\l 12696 1 PUBLIC COMMENTS A total of 30 minutes is provided so members of the public can address the Council on items that appear within the Consent Calendar or ones that are not listed on the agenda. Speakers are limited to two (2) minutes each. If you desire to speak to the Council on an item which is listed on the Consent Calendar or a matter = listed on the Agenda, a pink "Request to Speak" form should be filled out and filed with the City Clerk. When you are called to speak, please come forward and state your name for the record. For all Public Hearing or Council Business matters on the agenda, a "Request to Speak" form must be filed with the City Clerk before the Council gets to that item. There is a five (5)minute time limit for individual speakers. CITY COUNCIL REPORTS Reports by the members of the City Council on matters not on the agenda will be made at this time. A total, not to exceed, ten (1 0) minutes will be devoted to these reports. CONSENT CALENDAR NOTICE TO THE PUBLIC All matters listed under Consent Calendar are considered to be routine and all will be enacted by one roll call vote. There will be no discussion of these items unless members of the City Council request specific items be removed from the Consent Calendar for separate action. 1Standard Ordinance Adol2tion Procedure RECOMMENDATION: 1.1Motion to waive the reading of the text of all ordinances and resolutions included in the agenda. 2Resolution Approvina List of Demands RECOMMENDATION: 2.1Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A R:\Agenda\l 12696 2 3Liability Insurance Renewal RECOMMENDATION: 3.1Approve the City of Temecula Liability Insurance Policy Renewal with Insurance Company of the West for the period of December 1, 1996 through December 1, 1997 in the amount of $98,852. 4Accept Public Improvements On Tract No. 24135-1 (Located at the Northwesterly corner of Pio Pico Road at Margarita Road) RECOMMENDATION: 4.1Accept the Public Improvements in Tract No. 24135-1; 4.2Authorize the initiation of the one-year warranty period and reduction of the Faithful Performance Street and drainage, and Water and Sewer Security amounts and release the Subdivision Monumentation and Traffic Signalization Mitigation securities; 4.3Accept substitute securities for Faithful Performance Warranty and Labor and materials; 4.4Direct the City Clerk to so advise the Developer and Sureties. 5Accept Public Improvements in Tract No. 24135-3 (Located at the Southeasterly corner of Santiago Road at Margarita Road) RECOMMENDATION: 5.1Accept the Public Improvements in Tract No. 24135-3; 5.2Authorize the initiation of the one-year warranty period, reduce the Faithful Performance Street, and Water and Sewer Bond amounts, release the subdivision monumentation bond; 5.3Accept substitute bonds; 5.4 Direct the City Clerk to so advise the Developer and Surety. R:\Agenda\l 12696 6Acceptance of Public Streets into the City-Maintained Street System (Within Tracts @ 24135-1 and 24135-3) Located Easterly of Margarita Road between Pio Pico Road and Santiago Road) RECOMMENDATION: 6.1Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA, CALIFORNIA, ACCEPTING CERTAIN PUBLIC STREETS INTO THE CITY-MAINTAINED STREET SYSTEM (WITHIN TRACTS NO. 24135-1 AND 24135-3) 7Accel2t Public Improvements in Parcel Map No. 23472 (Located at the Northwest corner of Margarita Road at Rancho California Road) RECOMMENDATION: 7.1Accept public improvements in Parcel Map No. 23472; 7.2Authorize release of the faithful performance, labor and material, and subdivision monumentation bonds; 7.3Direct the City Clerk to so advise the Clerk of the Board of Supervisors, the developer and the surety. 8Award of Contract for the Purchase of PC Workstations RECOMMENDATION: B. 1Award a contract for P.C. workstations to Valley Micro Computers in the amount of $2,107.78 per unit, including sales tax, for a total purchase amount of $50,486. 8.2Authorize the Mayor and City Clerk to execute all necessary agreements. 8.3Appropriate $1 2,000 to the Depreciation Expense Account in the Information Systems Internal Services Fund. R:\Agenda\l 12696 4 9Second Readina of Ordinance No. 96-19 RECOMMENDATION: 9.1Adopt an ordinance entitled: ORDINANCE NO. 96-19 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA AMENDING CHAPTER 17 OF THE TEMECULA MUNICIPAL CODE TO MAKE TYPOGRAPHIC AND OTHER MINOR CHANGES TO THE DEVELOPMENT CODE R:@Agenda\l 12696 5 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..... .. ................ .. .. .. .. .. .. .. . .. .. .. .. .. .. .. . ..... .. .. ........ ..... .. .. .. .. .. .. .. ........ .. .. .. .. ... . . . . .. .. .. .. ........ .. .. ..... .. .......... .. .. ..... ........... ... .. .. .. .. .. @TE@M@E.CULA@@ -C-QMMUNII)(@@ SERVICES@@@@DIS.T- RICT@@@@M@EE-T-ING......,., .. .. .. .. .. . . .. ............. ... .. ........ ..... .. .. .. .. .. . .. . .. .. ..... Next in Order: Ordinance:No. CSD 96-01 Resolution:No. CSD 96-1 0 CALL TO ORDER: President Ron Roberts ROLL CALL: DIRECTORS: Birdsall, Ford, Lindemans, Stone, Roberts PUBLIC COMMENT: A total of 1 5 minutes is provided so members of the public can address the Board of Directors on items that are not listed on the Agenda or on the Consent Calendar. Speakers are limited to two (2) minutes each. If you desire to speak to the Board of Directors on an item not listed on the Agenda or on the Consent Calendar, a pink "Request to Speak" form should be filled out and filed with the City Clerk. When you are called to speak, please come forward and state your name for the record. For all other agenda items a "Request to Speak" form must be filed with the City Clerk before the Board of Directors gets to that item. There is a five (5) minute time limit for individual speakers. Anyone wishing to address the Board of Directors, should present a completed pink "Request to Speak" to the City Clerk. When you are called to speak, please come forward and state your name and address for the record, CONSENT CALENDAR 1 Minutes RECOMMENDATION: 1.1 Approve the minutes of November 12, 1996. DIRECTOR OF COMMUNITY SERVICES REPORT - Nelson GENERAL MANAGERS REPORT - Bradley BOARD OF DIRECTORS REPORTS ADJOURNMENT: Next meeting: December 3, 1996, 4:00 PM, Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California. , Next regular meeting: December 10, 1996, 7:00 PM, Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California. R:\Agenda\l 1 2696 6 ............ .. .. .. .. .. .. .. .. .. .. ..... .. . .. .. .. .. .. . .. .. ..... ........ .. .. .. .......... @TE@M@E-CULA@@@@REDEVE@L.O.PMENT@ @AGEbt.@ 'Y@@@MEEi .. .. . .. ..... ............ .. .. .. .. .. .. .. .. ........ .. .. Next in Order: Ordinance:No. RDA 96-01 Resolution:No. RDA 96-21 CALL TO ORDER: Chairperson Patricia H. Birdsall presiding ROLL CALL: AGENCY MEMBERS: Ford, Lindemans, Roberts, Stone, Birdsall PUBLIC COMMENT: A total of 1 5 minutes is provided so members of the public can address the Redevelopment Agency on items that are not listed on the Agenda or on the Consent Calendar. Speakers are limited to two (2) minutes each. If you desire to speak to the Agency on an item not listed on the Agenda or on the Consent Calendar, a pink "Request to Speak" form should be filled out and filed with the City Clerk. When you are called to speak, please come forward and state your name for the record. For all other agenda items a "Request to Speak" form must be filed with the City Clerk before the Agency gets to that item. There is a five (5) minute time limit for individual speakers. CONSENT CALENDAR 1 Minutes RECOMMENDATION: 1.1 Approve the minutes of November 1 2, 1996. EXECUTIVE DIRECTOR'S REPORT AGENCY MEMBER'S REPORTS Recess to Joint Meeting of the City Council, Redevelopment Agency, Old Town Westside Community Facilities District Financing Authority and Old Town/Westside Improvement Authority. R:\Agendakl 12696 7 .. .. .. .. .. .. .. .. .. .. .. .. .. .. . . . ... . . . . .. .. .. .. .. .. .. .. ..... ..... .. .. .. .. .. ........ 'HORITY @OLD@@TOWN@@@W IDE@@CO@M@MUN@ITY@@@FACILIT..IE-S@@@@DISTRICT@@@@FINANCING@@@AU-71 . ..... .. .. .. ...... .1 . .. ..... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 11.11.,.,. Next in Order: Resolution No.: No. FA 96-12 CALL TO ORDER: President Patricia H. Birdsall ROLL CALL: Ford, Lindemans, Roberts, Stone, Birdsall PUBLIC COMMENTS A total of 1 5 minutes is provided so members of the public can address the Council on items that are not listed on the Agenda. Speakers are limited to two (2) minutes each. If you desire to speak to the Council about an item not listed on the Agenda a pink "Request To Speak" form should be filled out and filed with the City Clerk. When you are called to speak, please come forward and state )lour name and address. CONSENT CALENDAR 1 Minutes RECOMMENDATION: 1.1Approve the minutes of November 12, 1996. Recess to Joint Meeting of the City Council, Redevelopment Agency, Old Town Westside Community Facilities District Financing Authority and Old Town/Westside Improvement Authority. R:\Agenda\l 1 2696 8 . .. .. ..... .. .. .. .. . . .. .. ..... ..... . . ... . . . . . .. .. .. .. .. .. .. .. .. @A@@JOI @M@EE G@@@GF@@THE@@@@TEMECUL.A@@@CIT.Y@@CO@UNCIL@@@]@@THE@@@TEMECULA . ........ . . . ........... . @@REDE-VELOPMENT@@@AG tHE@@OLD@@ WN@@@TEM@=-. LA@@@@WIE gibiE@@C., ........... .. ..... .......... .. .... .. ........... .. ,...,.,....I .. .. .. .. .. .FAC-ILITIES@@@DISTRICT@@@@FINANCING@@@@AUTHORITY:., .. .. .. .. .. .. .. . .. .. .. .. .. .. ..... .. .. .. . .. .. .. ..... ..... .. .. . . .. .. .. .. .. .. .. ..... .. .. .. .. . 1.CITY COUNCIL BUSINESS - Mayor Karel Lindemans presiding A12proval of Final Documents for Old Town Public Imi2rovement District RECOMMENDATION: 1.1Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA AUTHORIZING FORMATION OF A JOINT EXERCISE OF POWERS AUTHORITY WITH THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA, AND DIRECTING CANCELLATION OF AMENDMENT TO JOINT COMMUNITY FACILITIES AGREEMENT RECONVENE TEMECULA REDEVELOPMENT AGENCY MEETING - Chairperson Patricia Birdsall presiding 2.REDEVELOPMENT AGENCY BUSINESS 2.1Adopt a resolution entitled: RESOLUTION NO. RDA 96- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA AUTHORIZING FORMATION OF A JOINT EXERCISE OF POWERS AUTHORITY WITH THE CITY OF TEMECULA 2.2Adopt a resolution entitled: RESOLUTION NO. RDA 96- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA ACCEPTING GUARANTEES FOR THE COMPLETION OF PUBLIC IMPROVEMENTS FOR THE OLD TOWN AREA RECESS: Brief Recess to allow the Mayor and Agency Chairperson to execute the Joint Powers Agreement establishing the Old Town/Westside Improvement Authority. R:\Aganda\l 1 2696 9 RECONVENE OLD\TOWN WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY Chairperson Patricia Birdsall presiding 3.OLD\TOWN WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY 3.1Adopt a resolution entitled: RESOLUTION NO. FA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY APPROVING SALE OF BONDS TO THE OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY, AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS 3.2Adopt a resolution entitled RESOLUTION NO. FA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY APPROVING CONSTRUCTION MANAGEMENT AND SUPERVISION AGREEMENT BETWEEN THE AUTHORITY AND FLUOR DANIEL, INC. AND A GUARANTY WITH FLUOR CORPORATION 4.OLD TOWN WESTSIDE IMPROVEMENT AUTHORITY CALL TO ORDER: Mayor Karel Lindemans 4.1Election of Chairperson and Vice Chairperson Newly Elected Chairperson presiding 4.2Adopt a resolution entitled: RESOLUTION NO. IA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN[WESTSIDE IMPROVEMENT AUTHORITY REGARDING MEETINGS, ESTABLISHING A SEAL FOR THE AUTHORITY, DIRECTING THE FILING OF A NOTICE OF FORMATION WITH THE SECRETARY OF STATE, AND ESTABLISHING THE RULES FOR ITS PROCEEDINGS R:\Agenda\l 12696 10 4.3Adopt a resolution entitled: RESOLUTION NO. IA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY AUTHORIZING ISSUANCE AND SALE OF REVENUE BONDS FOR THE PURPOSE OF FINANCING ACQUISITION OF COMMUNITY FACILITIES DISTRICT BONDS (OLD TOWN AREA), AND APPROVING RELATED AGREEMENTS AND ACTIONS ADJOURNMENT Adjourn the Temecula Redevelol2ment Agency, the Old Town\Westside Community Facilities District Financing Auth@ and the Old Town/Westside Improvement Authority to: Next meeting: December 3, 1996, 4:00 PM, Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California. Next regular meeting: December 10, 1995, 7:00 PM, Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California R:\Agenda\l 12696 1 1 RECONVENE TEMECULA CITY COUNCIL PUBLIC HEARINGS Any person may submit written comments to the City Council before a public hearing or may appear and be heard in support of or in opposition to the approval of the project(s) at the time of hearing. If you challenge any of the projects in court, you may be limited to raising only those issues you or someone else raised at the public hearing or in written correspondences delivered to the City Clerk at, or prior to, the public hearing. 10Final Draft Riverside Countywide Intearated Waste Management Plan (CIWMP) RECOMMENDATION: 10.1Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THE FINAL DRAFT COUNTYWIDE INTEGRATED WASTE MANAGEMENT PLAN, INCLUDING THE COUNTYWIDE SUMMARY PLAN AND COUNTYWIDE SITING ELEMENT 1 1Special Tax Election - Community Services, Parks, Recreational Facilities and Programs, Street Lighting Services and Landsc@ RECOMMENDATION: 11.1Adopt an ordinance by a 4/5 vote entitled: ORDINANCE NO. 96- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA, CALIFORNIA, LEVYING A SPECIAL TAX TO FINANCE THE OPERATION, MAINTENANCE AND SERVICING OF PUBLIC PARKS AND RECREATIONAL FACILITIES, RECREATIONAL AND COMMUNITY SERVICES PROGRAMS, MEDIAN LANDSCAPING, ARTERIAL STREET LIGHTS AND TRAFFIC SIGNALS R:%Agenda\l 12696 1 2 11.2Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ORDERING, CALLING AND GIVING NOTICE OF A MUNICIPAL ELECTION TO BE HELD IN THE CITY OF TEMECULA ON TUESDAY, MARCH 4,1997, FOR SUBMISSION TO THE VOTERS OF A MEASURE RELATING TO THE LEVY OF A SPECIAL TAX TO FINANCE THE OPERATION, MAINTENANCE AND SERVICING OF PUBLIC PARKS AND RECREATIONAL FACILITIES, RECREATIONAL AND COMMUNITY SERVICES PROGRAMS, MEDIAN LANDSCAPING, ARTERIAL STREET LIGHTS AND TRAFFIC SIGNALS 11.3Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA REQUESTING THE SERVICES OF THE COUNTY REGISTRAR OF VOTERS TO CONDUCT A MUNICIPAL ELECTION TO BE HELD ON MARCH 4,1997 11.4Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA AUTHORIZING ITS MEMBERS TO FILE A WRITTEN ARGUMENT REGARDING A CITY MEASURE 11.5Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA FOR THE FILING OF REBUTTAL ARGUMENTS FOR A CITY MEASURE SUBMITTED AT MUNICIPAL ELECTIONS 1 1. 6 Appropriate $36,000 from the unappropriated General Fund Balance to Account No. 001-120-999-5225. R:\Agenda\l 12696 1 3 COUNCIL BUSINESS 1 2Ordinance Amendinci the Municil2al Code Sections Relating to Purchasing RECOMMENDATION: 12.1Read by title only and introduce an ordinance entitled: ORDINANCE NO. 96- AN ORDINANCE OF THE CITY COUNCIL ADDING SECTIONS 3.28.245 AND 3.28.305TO AND AMENDING SECTIONS 3.28.140, 3.28.150, 3.28.290 AND 3.32.050OF THE TEMECULA MUNICIPAL CODE RELATING TO THE SOLICITATION OF PROPOSALS FOR THE PURCHASE OF SUPPLIES AND EQUIPMENT AND THE AWARD THEREOF ON THE BASIS OF HIGHEST QUALITY AND COST EFFECTIVENESS, REVISING ADVERTISING REQUIREMENTS, AND ESTABLISHING THE CITY MANAGER'S AUTHORITY TO APPROVE PURCHASE, SERVICE AND CONSTRUCTION CONTRACTS 13Riverside County Intergovernmental Agencies Discussion Placed on the Agenda at the Request of Councilmember Roberts for discussion and direction) CITY MANAGER'S REPORT CITY ATTORNEY'S REPORT ADJOURNMENT Next meeting: December 3, 1996, 4:00 PM, Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California. Next regular meeting: December 10, 1996, 7:00 PM, Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California. R:\Agenda\l 12696 14 PROCLAMATIONS/ PRESENTATIONS APPROVAL CITY ATTORNEY FINANCE DIRECTOR CITY MANAGER CITY OF TEMECULA AGENDA REPORT TO: City Council/City Manager FROM: Joseph Kicak, Director of Public Works/City Engineer DATE: November 26, 1996 SUBJECT:Presentation by Western Riverside Council of Governments "Draft Comprehensive Transportation Plan' Western Riverside County RECOMMENDATION: None r:kagdrpt\96\1 1 26\prosentaiajp iL i eL E- 1\4 1 ITEI\4 2 RESOLUTION NO. 96- A RESOLUTTON OF THE CITY COUNC]IL OF THE CITY OF ALLOWING CERTAIN CLAIM AND D S AS SET FORTH IN IT A THE CITY COUNCIIL OF THE CrrY OF TEMECULA DOES RESOLVE, DE AND ORDER AS FOLLOWS: Section 1. That the following claims and demands as set forth in Exhibit A, on file in the Office of the City Clerk, have been audited by the City er, and that the same are hereby allowed in the amount of $2,757.429.83 Section 2. The City Clerk shau ce@ the adoption of this resolution. APPROVED AND ADOPIED, this 26th day of November, 1996. Karel F. Lindemans, Mayor ATMT: June S. Greek, CMC, City Clerk [SEAL] Resm 120 1 STAT'E OF CALIFORNIA) COUNTY OF RWMIDE) SS CrrY OF TEMECULA) I, June S. Greek, City Clerk of the City of Temecula, hereby do certify that the foregoing Resolution No. 96- was duly adopted at a regular meeting of the City Council of the City of Temecula on the 26di day of November, 1996 by the following roll call vote: AYES: COUNCEL ERS: NOES: COUNCJL- ABSENT: COUNCEL ERS: June S. Greek, CMC, City Clerk Raw@ 120 2 CITY OF TEMECULA LIST OF DEMANDS 11/07/96 TOTAL CHECK RUN: $114,523.67 11/14/96 TOTAL CHECK RUN: 1,389,044.52 li@ TOTAL CHECK RUN: 1,110,729.18 11/14/96 TOTAL PAYROLL RUN: 143,132.46 TOTAL LIST OF DEMANDS FOR 11126/96 COUNCIL MEETING: $2,757,429.83 DISBURSEMENTS BY FUND: CHECKS: 001 GENERALFUND 823,755.12 100 GASTAXFUND 4,544.86 165 RDA DEV-LOW/MOD SET ASIDE 1,201,884.50 190 COMMUNITY SERVICES DISTRICT 76,382.54 191 TCSD SERVICE LEVEL A 2,556.56 192 TCSD SERVICE LEVEL B 117.68 193 TCSD SERVICE LEVEL C 23,211.49 194 TCSD SERVICE LEVEL D 866.76 210 CAPITAL IMPROVEMENT PROJ. FUND 298,400.09 280 REDEVELOPMENT AGENCY-CIP 129,207.83 300 INSURANCE FUND 15,349.04 310 VEHICLES FUND 23,480.88 320 INFORMATION SYSTEMS 6,241.11 330 SUPPORT SERVICES 1,100.34 340 FACILITIES 7,198.57 2,614,297.37 PAYROLL: 001 GENERAL $100,540.45 165 RDA-LOWIMOD 1,677.56 190 TCSD 25,744.30 191 TCSD SERVICE LEVEL A 69.43 192 TCSD SERVICE LEVEL B 175.23 193 TCSD SERVICE LEVEL C 2,987.90 194 TCSD SERVICE LEVEL D 1,065.69 280 RDA-CIP 3,737.43 300 INSURANCE 615.14 320 INFORMATION SYSTEMS 2,925.05 330 SUPPORT SERVICES 862.44 340 FACILITIES 2,731.84 143,132.46 TOTAL BY FUND: $ 2,757,429.83 PREPAREWTHE G SPECIALIST I HEREBY CERTIFY THAT THE FOLLOWING IS TRUE AND CORRECT. GENrt R DIRE(TOROFFII NCE v HEREBY CERTIFY THAT THE FOLLOWING IS TRUE AND CORRECT. MARYJA@ RNE@AS'61STANT@ GER VOLJCHRE2 CITY OF TEMECULA PAGE 7 11/07/96 14:46 VOtJCHER/CHECK REGISTER FOR ALL PERIODS FUND TITLE AMOUNT 001 GENERAL FUND 28,507.73 165 RDA DEV- LOW/MOD SET ASIDE 1,553.50 190 COMMUNITY SERVICES DISTRICT 21,364.51 191 TCSD SERVICE LEVEL A 377.39 193 TCSD SERVICE LEVEL C 1,292.55 210 CAPITAL IMPROVEMENT PROJ FUND 13,561.47 280 REDEVELOPMENT AGENCY - CIP 42,968.65 320 INFOR14ATION SYSTEMS 1,727.87 340 FACILITIES 3,170.00 TOTAL 114,523.67 VOtJCHRE2 CITY OF TEMECULA PAGE 1 11/07/96 14;46 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOUCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40194 11/01/96 000515 TEMECULA VALLEY CHAMBER 96/97 FUNDING PER ECON DEV PLN 280-199-999-5264 40,000.00 40,000.00 40195 11/05/96 001610 CALTRANS-DISTRICT NO. 8 PERMIT CABLE FOR CITY HALL 001-1270 560.00 560.00 40198 11/07/96 000680 A M S - T M S DEPOSIT FOR RESETTING POSTAGE 001-100-999-5230 .96 40198 11/07/96 000680 A M S - T M S DEPOSIT FOR RESETTING POSTAGE 001-110-999-5230 165.84 40198 11/07/96 000680 A M S - T N S DEPOSIT FOR RESETTING POSTAGE 001-120-999-5230 122.61 40198 11/07/96 000680 A M S - T M S DEPOSIT FOR RESETTING POSTAGE 001-162-999-5230 60.94 40198 11/07/96 000680 A M S - T N S DEPOSIT FOR RESETTING POSTAGE 190-180-999-5230 236.52 40198 11/07/96 000680 A M S - T N S DEPOSIT FOR RESETTING POSTAGE 001-140-999-5230 365.70 40198 11/07/96 000680 A M S - T N S DEPOSIT FOR RESETTING POSTAGE 001-150-999-5230 153.13 40198 11/07/96 000680 A M S - T N S DEPOSIT FOR RESETTING POSTAGE 001-161-999-5230 751.98 40198 11/07/96 000680 A N S - T N S DEPOSIT FOR RESETTING POSTAGE 001-164-604-5230 153.73 40198 11/07/96 000680 A N S - T N S DEPOSIT FOR RESETTING POSTAGE 320-199-999-5230 .96 40198 11/07/96 000680 A N S - T 14S DEPOSIT FOR RESETTING POSTAGE 280-199-999-5230 79.09 2,091.46 40199 11/07/96 001515 A S A P TRUCK TRACTOR & WEED ABATEMENT 001-162-999-5440 3,205.00 3,205.00 40200 11/07/96 001916 ALBERT A. WEBB ASSOCIAT SIXTH STREET PARKING PW95-26 280-199-804-5802 880.00 880.00 40201 11/07/96 001281 ALHAMBRA GROUP OCT DESIGN SRVCS-DUCK POND 210-190-143-5802 800.00 40201 11/07/96 001281 ALHAMBRA GROUP OCT DESIGN SRVCS-WINCH. CRK PK 210-190-149-5802 909.10 40201 11/07/96 001281 ALHAMBRA GROUP OCT DESIGN SRVCS-ADA PARK IMPR 210-190-148-5802 900.00 2,609.10 40202 11/07/96 000102 AMERICAN FENCE CO. OF C SECURITY FENCE FOR PUJOL ST 165-199-812-5804 44.00 44.00 40203 11/07/96 002194 AMERICAN PLANNING ASSN. MEMBERSHIP:S,NAASEH 96/97 001-161-999-5226 172.00 40203 11/07/96 002194 AMERICAN PLANNING ASSN. MEMBERSHIP:D.UBNOSKE 96/97 001-161-999-5226 15.00 40203 11/07/96 002194 AMERICAN PLANNING ASSN. MEMBERSHIP:D.HOGAN 96/97 001-161-999-5226 271.00 458.00 40204 11/07/96 002508 AMERISPEC PROPERTY INSPECTION N. PUJOL 165-199-812-5804 1,500.00 1,500.00 40205 11107196 001323 ARROWHEAD WATER, INC. BOTTLED WATER FOR CITY MAINT 001-164-601-5240 51.54 51.54 40206 11107196 BUSTOS, J.E. DDS REFUND-BALLROOM DANCING 190-183-4982 28.00 28.00 40207 11107/96 002099 BUTTERFIELD ENTERPRISES OCT RENT-O.T. RESTROOM 280-199-999-5212 826.00 826.00 40208 11/07/96 000588 C C A P A CONFERENCE SEM:LEGISLATIVE 11/14 M.FAGAN 001-161-999-5261 60.00 60.00 40209 11/07/96 000125 CALIFORNIA ASSOC FOR LO RECRUITMNT AD-EDC EXE DIRECTOR 280-199-999-5254 250.00 250.00 40210 11/07/96 000126 CALIFORNIA LANDSCAPE MA PALA PARK-REPAIR MAINLINE 190-180-999-5212 1,953.15 40210 11107/96 000126 CALIFORNIA LANDSCAPE MA TRIM TREES AT SPORTS PARK 190-180-999-5415 2,155.00 4,108.15 40211 11/07/96 000980 COAST IRRIGATION SUPPLY IRRIGATION PARTS & EQUIPMENT 190-180-999-5212 15.38 15.38 40212 11/07/96 000447 COMTROMIX OF HEMET REMOVE RADIO-TEMECULA POLICE 001-170-999-5215 121.08 40212 11/07/96 000447 COMTRONIX OF HEMET INSTALL RADIO IN POLICE UNIT 001-170-999-5215 215.69 40212 11/07/96 000447 COMTROMIX OF HEMET RADIO ANTENNAS AND FEEDLINES 210-199-650-5804 77.43 40212 11/07/96 000447 COMTRONIX OF HEMET LABOR 210-199-650-5804 480.00 VOtJCHRE2 CITY OF TEMECULA PAGE 2 11/07/96 14:46 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40212 11/07/96 000447 COMTRONIX OF HEMET TAX 210-199-650-5804 6.00 900.20 40213 11/07/96 002450 CONSOLIDATED MEDIA SYST BROADCAST SYSTEM NEW CITY HALL 210-199-650-5804 1,153.00 40213 11/07/96 002450 CONSOLIDATED MEDIA SYST TAX 210-199-650-5804 84.86 1,237.86 40214 11/07/96 CONTINENTAL LAWYERS TIT REFUND:OVERPAYMENT 395-1093 001-2660 319.75 319.75 40215 11/07/96 001014 COUNTRY SIGNS & DESIGNS PLAQUE FOR NELEME FOX MONUMENT 190-180-999-5244 472.35 472.35 40216 11/07/96 001673 DIVERSIFIED TEMPORARY S TEMP HELP W/E 10/20 KAPRYN 001-161-999-5118 638.87 638.87 40217 11/07/96 002466 DOVER ELEVATOR COMPANY REPAIRS-ELEVATOR NEW CITY HALL 210-199-650-5804 2,982.00 2,982.00 40218 11107/96 002517 ERNIE B'S LUNCH-SISTER CITY STUDENTS 001-100-999-5280 173.48 173.48 40219 11/07/96 002060 EUROPEAN DELI & CATERIN CATERING FOR COUNCIL MEETINGS 001-100-999-5260 125.63 125.63 40220 11/07/96 001056 EXCEL LANDSCAPE INSTALL RAINBIRD-RANCHO VISTA 193-180-999-5415 602.00 602.00 40221 11/07/96 001313 FAGAN, MATTHEW ENTERTAINMENT-GRAND OPENING 210-199-650-5804 150.00 150.00 40222 11/07/96 000165 FEDERAL EXPRESS, INC. EXPRESS MAIL SERVICES 001-140-999-5230 18.25 40222 11/07/96 000165 FEDERAL EXPRESS, INC. EXPRESS MAIL SERVICES 001-161-999-5230 16.75 40222 11/07/96 000165 FEDERAL EXPRESS, INC. EXPRESS MAIL SERVICES 001-110-999-5230 13.50 40222 11/07/96 000165 FEDERAL EXPRESS, INC. EXPRESS MAIL SERVICES 001-162-999-5230 26.81 40222 11/07/96 000165 FEDERAL EXPRESS, INC. EXPRESS MAIL SERVICES 001-110-999-5230 13.50 40222 11/07/96 000165 FEDERAL EXPRESS, INC. EXPRESS KAIL SERVICES 001-161-999-5230 15.25 40222 11/07/96 000165 FEDERAL EXPRESS, INC. EXPRESS 14AIL SERVICES 165-199-999-5250 9.50 113.56 40223 11/07/96 000184 G T E CALIFORNIA - PAYN 909-308-1079-OCT-GENERAL USAGE 320-199-999-5208 53.60 40223 11/07/96 000184 G T E CALIFORNIA - PAYN 909-693-0779-OCT-COMM SRVCS 190-180-999-5208 54.46 40223 11/07/96 000184 G T E CALIFORNIA - PAYM 909-693-0956-OCT-GENERAL USAGE 320-199-999-5208 28.32 40223 11/07/96 000184 G T E CALIFORNIA - PAYN 909-694-4356-OCT-HINTERGARDT 320-199-999-5208 28.75 40223 11/07/96 000184 G T E CALIFORNIA - PAYN 909-694-8927-OCT-GENERAL USAGE 320-199-999-5208 22.25 40223 11/07/96 000184 G T E CALIFORNIA - PAYN 909-695-1409-OCT-GENERAL USAGE 320-199-999-5208 78.94 40223 11/07/96 000184 G T E CALIFORNIA - PAYM 909-699-0128-OCT-GENERAL USAGE 320-199-999-5208 1,188.60 1,454.92 40224 11/07/96 GARVEY, PAT REFUND:SEC DEPOSIT/ROOM RENTAL 190-2900 100.00 40224 11/07/96 GARVEY, PAT REFUND:SEC DEPOSIT/ROOM RENTAL 190-183-4990 120.00 220.00 40225 11/07196 002141 GEIS, PAUL TEMECULA PD MOTORCYCLE REPAIRS 001-170-999-5214 50.00 40225 11/07/96 002141 GEIS, PAUL TEMECULA PD MOTORCYCLE REPAIRS 001-170-999-5214 50.00 100.00 40226 11/07/96 002528 GLASS BLASTERS ENGRAVED MUGS FOR EMPLOYEES 001-150-999-5265 707.00 40226 11/07/96 002528 GLASS BLASTERS PERSONALIZATION OF MUGS 001-150-999-5265 194.00 40226 11/07/96 002528 GLASS BLASTERS TAX 001-150-999-5265 69.83 970.83 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT MISC. OFFICE SUPPLIES 001-120-999-5220 22.76 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT MISCELLANEOUS OFFICE SUPPLIES 001-162-999-5220 251.17 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES FINANCE DEPT. 001-140-999-5220 16.98 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES FOR TCSD - 190-180-999-5220 232.34 VOUCHRE2 CITY OF TEMECULA PAGE 3 11/07/96 14:46 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40227 11/07196 000177 GLENNIES OFFICE PRODUCT MISC OFFICE SUPPLIES 001-161-999-5220 33.73 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT MISC OFFICE SUPPLIES 001-161-999-5220 21.13 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT MISCELLANEOUS OFFICE SUPPLIES 001-162-999-5220 5.13 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES FINANCE DEPT. 001-140-999-5220 81.00 40227 11/07/96 000177 GLENNIES OFFICE PRODUCT CREDIT:OFFICE SUPPLIES 001-110-999-5220 23.79- 640.45 40228 11/07/96 002372 HARMON, JUDY TCSD INSTRUCTOR EARNINGS 190-183-999-5330 343.20 343.20 40229 11/07/96 001517 HEALTH & HUMAN RESOURCE EMPLOYEE ASSISTANCE PROGRAM 001-150-999-5250 348.45 348.45 40230 11/07/96 001013 HINDERLITER de LLAMAS A SALES TAX CALCULATION SERVICE 001-140-999-5248 900.00 40230 11/07/96 001013 HINDERLITER de LLAMAS A SALES TAX FINDERS FEE FY 96/97 001-140-999-5248 3,309.75 4,209.75 40231 11/07/96 002098 HOUSE OF 140TORCYCLES REPAIR & MAINT. POLICE MOTOR. 001-170-999-5214 27.02 27.02 40232 11/07/96 JAKOFSKY, LES REFUND:BALLROOM DANCING 190-183-4982 28.00 28.00 40233 11/07/96 002475 JONES, DAVID G. LABOR/MATERIALS TO CUT TILES 320-199-999-5215 300.00 300.00 40234 11/07/96 001667 KELLY TEMPORARY SERVICE TEMP HELP WE 10120 EVANS 001-164-604-5118 110.92 40234 11/07/96 001667 KELLY TEMPORARY SERVICE TEMP HELP WE 10/20 EVANS 001-163-999-5118 110.92 40234 11/07/96 001667 KELLY TEMPORARY SERVICE TEMP HELP WE 10/20 EVANS 001-165-999-5118 110.96 332.80 40235 11/07/96 000206 KINKOIS OF RIVERSIDE, I STATIONERY PAPER/MISC SUPPLIES 280-199-999-5220 30.90 30.90 40236 11/07/96 001123 KNOX INDUSTRIAL SUPPLIE (48)LOCKS/KEYS-SIGNAL BOXES 001-164-602-5242 332.64 40236 11/07/96 001123 KNOX INDUSTRIAL SUPPLIE TAX 001-164-602-5242 25.78 358.42 40237 11/07/96 000209 L & M FERTILIZER, INC. PARTS, EQUIP AND REPAIRS 190-180-999-5242 130.55 40237 11/07/96 000209 L & M FERTILIZER, INC. MISC. MAINT. SUPPLIES 001-164-601-5218 194.99 325.54 40238 11/07/96 001719 L P A, INC. SEPT DESIGN SRVCS FOR CRC GYM 210-190-152-5802 462.50 462.50 40239 11/07/96 001982 L WILLIAMS LANDSCAPE, I EMERG. TREE REMOVAL/TRIMMING 001-164-601-5402 1,640.00 1,640.00 40240 11107/96 001973 LA SALLE LIGHTING SERVI PRKG LIGHT REPAIRS CITY HALL 340-199-701-5212 688.00 688.00 40241 11/07/96 002229 LUCE PRESS CLIPPINGS, I PRESS CLIPPING SRVCS OCT 280-199-999-5270 148.28 148.28 40242 11/07/96 LUTTGENS, JAMES REFUND:BALLROOM DANCING 190-183-4982 21.00 21.00 40243 11/07/96 001967 MANPOWER TEMPORARY SERV TEMP HELP W/E 9/22 HYATT,L. 001-110-999-5118 288.96 288.96 40244 11/07/96 000220 MAURICE PRINTERS, INC. NEIGHBORHOOD WATCH NEWSLETTER 001-170-999-5222 220.00 40244 11/07/96 000220 MAURICE PRINTERS, INC. TAX 001-170-999-5222 17.05 237.05 40245 11/07/96 001384 MINUTEMAN PRESS BUSINESS CARDS-LINDEMANS 001-100-999-5222 259.92 40245 11/07/96 001384 MINUTEMAN PRESS TAX 001-100-999-5222 20.14 280.06 40246 11/07/96 001654 14ONTEREY SYSTEMS, INC. MASTER/DUPLICATE APERTURE CARD 001-120-999-5277 15.62 15.62 VOUCHRE2 CITY OF TEMECULA PAGE 4 11/07/96 14:46 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOUCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40247 11/07/96 000727 NATIONAL FIRE PROTECTIO SUBSCRIPITION RENEWAL:12/97 001-171-999-5228 450.00 450.00 40248 11/07/96 001584 NEWPORT PRINTING SYSTEM PAYROLL CHECKS 001-140-999-5222 726.80 40248 11/07/96 001584 NEWPORT PRINTING SYSTEM TEMPLATE CHARGES FOR CITY HALL 001-140-999-5222 40.00 40248 11/07/96 001584 NEWPORT PRINTING SYSTEM FREIGHT 001-140-999-5222 4.50 40248 11/07/96 001584 NEWPORT PRINTING SYSTEM TAX 001-140-999-5222 59.43 830.73 40249 11/07/96 002139 NORTH COUNTY TIMES - AT NOTICE OF ORDINANCE NOA96-18 001-120-999-5256 21.30 40249 11/07/96 002139 NORTH COUNTY TIMES - AT PUBLIC NOTICES PA96-0157 001-161-999-5256 36.21 40249 11/07/96 002139 NORTH COUNTY TIMES - AT PUBLIC NOTICES EDUC INST 1 001-161-999-5256 34.08 91.59 40250 11/07/96 001150 O'BRIEN, CARY REISSUE- PRK GATES INSTALL/REP 190-180-999-5212 750.00 750.00 40251 11/07/96 OAKLAND, CITY OF NEIGHBOR MGMNT:ROBERTS,R:11/20 001-100-999-5258 50.00 40251 11/07/96 OAKLAND, CITY OF NEIGHBOR MGMNT:KICAK,J.:11/20 001-164-604-5258 50.00 100.00 40252 11/07/96 002105 OLD TOWN TIRE & SERVICE CITY VEHICLE REPAIRS & MAINT 001-163-999-5214 82.84 40252 11/07/96 002105 OLD TOWN TIRE & SERVICE CITY VEHICLE REPAIRS & MAINT 001-162-999-5214 15.95 40252 11/07/96 002105 OLD TOWN TIRE & SERVICE CITY VEHICLE REPAIRS & MAINT 001-110-999-5214 137.96 40252 11/07/96 002105 OLD TOWN TIRE & SERVICE CITY VEHICLE REPAIRS & MAINT 001-110-999-5214 19.34 256.09 40253 11/07/96 002216 P F C UNLIMITED (120) POLYCARBONATE BLANKS 340-199-701-5250 70.04 70.04 40254 11/07/96 001561 PAGENET PAGERS RENTAL AND SERVICE 001-100-999-5250 15.00 40254 11/07/96 001561 PAGENET PAGERS RENTAL AND SERVICE 001-163-999-5250 15.00 40254 11/07/96 001561 PAGEMET PAGERS RENTAL AND SERVICE 001-164-601-5238 15.00 40254 11/07/96 001561 PAGENET PAGERS RENTAL AND SERVICE 001-165-999-5238 22.50 40254 11/07/96 001561 PAGENET PAGERS RENTAL AND SERVICE 001-164-604-5250 7.50 40254 11/07/96 001561 PAGEMET PAGERS RENTAL AND SERVICE 190-180-999-5250 75.00 40254 11/07/96 001561 PAGENET PAGERS RENTAL AND SERVICE 001-120-999-5250 7.50 40254 11/07/96 001561 PAGENET PAGERS RENTAL AND SERVICE 320-199-999-5238 26.45 40254 11/07/96 001561 PAGENET PAGERS RENTAL AND SERVICE 001-170-999-5242 70.00 40254 11/07/96 001561 PAGEMET PAGERS RENTAL AND SERVICE 001-162-999-5238 37.50 291.45 40255 11/07/96 000580 PHOTO WORKS FILM & PHOTO DEVELOPING 190-180-999-5301 24.74 40255 11/07/96 000580 PHOTO WORKS FILM & PHOTO DEVELOPING 190-180-999-5301 13.46 40255 11/07/96 000580 PHOTO WORKS CAMERA & PHOTO SUPPLIES 190-180-999-5301 471.91 40255 11/07/96 000580 PHOTO WORKS CAMERA & PHOTO SUPPLIES 190-180-999-5301 21.73 40255 11/07/96 000580 PHOTO WORKS PHOTOS FOR RDA MAP 280-199-999-5270 31.90 40255 11/07196 000580 PHOTO WORKS TAX 280-199-999-5270 2.48 566.22 40256 11/07/96 002019 PRECISION INTERCONNECT TELEPHONE CABLE & MATERIAL 210-190-626-5804 378.58 40256 11/07/96 002019 PRECISION INTERCONNECT LABOR 210-190-626-5804 780.00 1,158.58 40257 11/07/96 002110 PRIME EQUIPMENT EQUIPMENT RENTAL-PW MAINT 001-164-601-5238 21.55 40257 11/07/96 002110 PRIME EQUIPMENT EQUIPMENT RENTAL-PW MAINT 001-164-601-5238 134.69 40257 11/07/96 002110 PRIME EQUIPMENT EQUIPMENT RENTAL-PW MAINT 001-164-601-5238 32.33 188.57 40258 11/07/96 000255 PRO LOCK & KEY NEW CITY HALL - LOCKSMITH 340-199-701-5250 11516.53 40258 11/07/96 000255 PRO LOCK & KEY INSTALL LOCKS-FINANCE CABINETS 001-140-999-5250 330.42 1,846.95 VOtJCHRE2 CITY OF TEMECULA PAGE 5 11107/96 14:46 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40259 11/07/96 000947 RANCHO BELL BLUEPRINT C BLUEPRINTS AND MISC SUPPLIES 001-161-999-5220 49.37 49.37 40260 11/07/96 000262 RANCHO CALIFORNIA WATER 01-23-00143-3 DE PORTOLA RD 193-180-999-5240 430.17 40260 11/07/96 000262 RANCHO CALIFORNIA WATER 01-23-00144-3 DE PORTOLA RD 193-180-999-5240 260.38 40260 11/07/96 000262 RANCHO CALIFORNIA WATER 01-23-00178-3 BUTTERFIELD STAG 191-180-999-5240 24.07 40260 11/07/96 000262 RANCHO CALIFORNIA WATER 01-31-20010-1 NICOLAS RD 190-180-999-5240 130.91 845.53 40261 11/07/96 002400 REBEL TEMECULA FLOOD LIGHT RENTAL 280-199-999-5250 198.00 40261 11/07/96 002400 REBEL TEMECULA FLOOD TRIPOD LIGHTS RENTAL 280-199-999-5250 180.00 40261 11/07/96 002400 REBEL TEMECULA FLOOD LIGHTS RENTAL 280-199-999-5250 180.00 40261 11/07/96 002400 REBEL TEMECULA FLOOD LIGHTS RENTAL 280-199-999-5250 180.00 40261 11/07/96 002400 REBEL TEMECULA CREDIT-DAMAGE WAIVER 280-199-999-5250 18.00- 720.00 40262 11/07/96 001046 REXON, FREEDMAN, KLEPET SEPT PROF LEGAL SERVS 001-130-999-5247 1,514.65 1,514.65 40263 11/07/96 000266 RIGHTWAY TEMP POWER-VOORBURG PARK 190-180-999-5212 30.00 30.00 40264 11/07/96 000418 RIVERSIDE CO. CLERK & R NOTICE OF EXEMPTION-MURR. CRK 001-164-604-5224 78.00 40264 11/07/96 000418 RIVERSIDE CO. CLERK & R DETERMINATION-WINCH CREEK PRK 210-190-149-5802 1,328.00 1,406.00 40265 11/07/96 001365 RIVERSIDE CO. ENVIRONNE FACILITY # 36470:N/S SNACK BAR 190-180-999-5250 65.00 40265 11/07/96 001365 RIVERSIDE CO. ENVIRONNE FACILITY #39262:HEALTH PERMIT 190-180-999-5250 65.00 130.00 40266 11/07/96 000406 RIVERSIDE CO. SHERIFFIS OLD TWN SUMMER NIGHTS-LW ENFOR 001-170-999-5288 971.04 40266 11/07/96 000406 RIVERSIDE CO. SHERIFFIS OLD TWN SU14MER NIGHTS-LW ENFOR 001-170-999-5262 36.00 1,007.04 40267 11/07/96 000271 ROBERT BEIM, WM FROST & WALCOTT CORRIDOR ENG SERVS 210-165-637-5802 370.00 370.00 40268 11/07/96 000873 ROBERTS, RONALD H. CAL CONTRACT CITIES:9/20-22 001-100-999-5258 24.00 40268 11/07/96 000873 ROBERTS, RONALD H. LEAGUE OF CAL CF:10/13-15/96 001-100-999-5258 12.00 36.00 40269 11/07/96 000815 ROWLEY, CATHERINE TCSD INSTRUCTOR EARNINGS 190-183-999-5330 480.00 480.00 40270 11/07/96 000645 SMART & FINAL, INC. SUPPLIES FOR THE SENIOR CENTER 190-181-999-5301 64.19 64.19 40271 11/07/96 000537 SOUTHERN CALIF EDISON 2-02-351-4946 6TH STREET 190-181-999-5240 923.31 40271 11/07/96 000537 SOUTHERN CALIF EDISON 2-00-397-5059 VARIOUS METERS 190-180-999-5240 11,839.81 40271 11/07/96 000537 SOUTHERN CALIF EDISON 2-02-351-5489 FRONT ST 001-164-601-5240 99.67 40271 11/07/96 000537 SOUTHERN CALIF EDISON 2-02-351-6800 VARIOUS METERS 191-180-999-5240 41.75 40271 11/07/96 000537 SOUTHERN CALIF EDISON 53-77-850-2000-01 RANCHO CAL 191-180-999-5319 311.57 40271 11/07/96 000537 SOUTHERN CALIF EDISON 57-77-780-9998-01 NICOLAS 190-180-999-5240 49.84 13,265.95 40272 11/07/96 000465 STRADLEY, MARY KATHLEEN TCSD INSTRUCTOR EARNINGS 190-183-999-5330 56.00 56.00 40273 11/07/96 STRICTLY WORKOUT WEAR REFUND-SECURITY DEPOSIT 190-2900 100.00 100.00 40274 11/07/96 001672 TEMECULA DRAIN SERV & P PLUMBING SRVCS-CITY HALL 340-199-701-5250 254.00 254.00 40275 11/07/96 000307 TEMECULA TROPHY CO. PLATE FOR AIRPLANE-DEDICATION 001-100-999-5220 78.67 78.67 40276 11/07/96 000311 TEMECULA VALLEY HIGH SC SPONSORSHIP FOR BEAR BACKERS 001-100-999-5254 220.00 220.00 VOUCHRE2 CITY OF TEMECULA PAGE 6 11/07/96 14:46 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40277 11/07/96 001409 TEMECULA VALLEY VOLUNTE COMM SERVICE FUNDING 96-97 001-100-999-5267 3,000.00 3,000.00 40278 11/07/96 000826 TRAVEL TRUST AIR:PURCH CF:KUHNS,ALLIE:12/6 001-140-999-5261 101.00 40278 11/07/96 000826 TRAVEL TRUST AIR:PURCH CF:VOLLMUTH,M:1216 001-140-999-5261 101.00 202.00 40279 11/07/96 002492 U.S. TOY COMPANY, INC. CRC SUPPLIES-APRONS 190-183-999-5370 27.50 40279 11/07/96 002492 U.S. TOY COMPANY, INC. CRC SUPPLIES-PAPER HATS 190-183-999-5370 90.00 40279 11/07/96 002492 U.S. TOY COMPANY, INC. CRC SUPPLIES-COLORING BOOKS 190-183-999-5370 1.50 40279 11/07/96 002492 U.S. TOY COMPANY, INC. FREIGHT 190-183-999-5370 8.73 40279 11/07/96 002492 U.S. TOY COMPANY, INC. TAX 190-183-999-5370 8.63 136.36 40280 11/07/96 002463 UNIVERSAL ASPHALT CO., COAT & STRIPE PRKG-TEN CON CTR 210-190-151-5804 2,700.00 2,700.00 40281 11/07/96 000332 VANDORPE CHOTJ ASSOCIATI OCT PLAN CHECK CONSULTANT SERV 001-162-999-5248 2,300.70 2,300.70 40282 11/07/96 VELA, JANETT REFUND-PARK RENTAL 190-183-4988 10.00 10.00 40283 11/07/96 001342 WAXIE SANITARY SUPPLY, BUILDING MAINTENANCE SUPPLIES 340-199-701-5212 494.85 40283 11/07/96 001342 WAXIE SANITARY SUPPLY, BUILDING MAINTENENACE SUPPLIES 190-181-999-5212 49.46 40283 11/07/96 001342 WAXIE SANITARY SUPPLY, BLDG MAINT SUPPLIES 340-199-701-5212 146.58 690.89 40284 11/07/96 001002 WELLS FARGO BANK 5473-6664-0391-0198-MJM-SEP 001-110-999-5261 55.30 55.30 40285 11/07196 000339 WEST PUBLISHING COMPANY CITY HALL LEGAL PUBLICATIONS 001-120-999-5228 92.51 92.51 40286 11/07/96 002097 WESTERN HIGHWAY PRODUCT SLEEVE PUNCH FOR INSTALL SIGNS 001-164-601-5218 108.00 40286 11/07/96 002097 WESTERN HIGHWAY PRODUCT TAX 001-164-601-5218 8.37 116.37 40287 11/07/96 000345 XEROX CORPORATION BILLI NOV LEASE FOR COPIER 2 CRC 190-182-999-5239 117.84 117.84 TOTAL CHECKS 114,523.67 VOtJCHRE2 CITY OF TEMECULA PAGE 13 11115/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS FUND TITLE AMOUNT 001 GENERAL FUND 120,563.00 100 GAS TAX FUND 4,544.86 165 RDA DEV- LOW/MOD SET ASIDE 1,198,626.47 190 COMMUNITY SERVICES DISTRICT 25,723.95 191 TCSD SERVICE LEVEL A 1,253.17 192 TCSD SERVICE LEVEL 8 117.68 193 TCSD SERVICE LEVEL C 1,838.17 194 TCSD SERVICE LEVEL D 866.76 210 CAPITAL IMPROVEMENT PROJ FUND 20,190.43 280 REDEVELOPMENT AGENCY - CIP 5,805.04 300 INSURANCE FUND 414.21 320 INFORMATION SYSTEMS 4,513.24 330 SUPPORT SERVICES 1,100.34 340 FACILITIES 3,487.20 TOTAL 1,389,044.52 VOtJCHRE2 CITY OF TEMECULA PAGE 1 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 20289 11/08/96 000311 TEMECULA VALLEY HIGH SC SPONSORSHIP FOR BEARBACKERS 001-100-999-5254 220.00 220.00 40288 11/08/96 WALL, WAYNE RADAR HOLSTER P.D. MOTORCYCLE 001-171-999-5242 100.00 100.00 40290 11/14/96 002448 B C N LIGHTING & SIGNS DEPOSIT:BANNER INSTALLATION 280-199-999-5270 1,280.00 1,280.00 604786 11114/96 000444 INSTATAX (EDD) 000444 SDI 001-2070 113.96 604786 11/14/96 000444 INSTATAX (EDD) 000444 SDI 165-2070 3.58 604786 11/14/96 000444 INSTATAX (EDD) 000444 SDI 190-2070 68.32 604786 11/14/96 000444 INSTATAX (EDD) 000444 SDI 193-2070 4.86 604786 11/14196 000444 INSTATAX (EDD) 000444 SDI 280-2070 21.43 604786 11/14/96 000444 INSTATAX (EDD) 000444 SDI 320-2070 9.95 604786 11/14/96 000444 INSTATAX CEDD) 000444 SDI 340-2070 2.97 604786 11/14196 000444 INSTATAX (EDD) 000444 STATE 001-2070 4,157.28 604786 11/14/96 000444 INSTATAX (EDD) 000444 STATE 165-2070 82.09 604786 11/14/96 000444 INSTATAX (EDD) 000444 STATE 190-2070 824.97 604786 11/14/96 000444 INSTATAX (EDD) 000444 STATE 191-2070 1.69 604786 11/14/96 000444 INSTATAX CEDD) 000444 STATE 192-2070 3.95 604786 11/14/96 000444 INSTATAX (EDD) 000444 STATE 193-2070 74.19 604786 11/14/96 000444 INSTATAX (EDD) 000444 STATE 194-2070 29.71 604786 11/14196 000444 INSTATAX CEDD) 000444 STATE 280-2070 183.48 604786 11/14/96 000444 INSTATAX (EDD) 000444 STATE 300-2070 41.70 604786 11/14/96 000444 INSTATAX CEDD) 000444 STATE 320-2070 208.39 604786 11/14/96 000444 INSTATAX (EDD) 000444 STATE 330-2070 22.52 604786 11/14/96 000444 INSTATAX CEDD) 000444 STATE 340-2070 27.56 5,882.60 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 001-2070 15,776.62 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 165-2070 254.69 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 190-2070 3,529.29 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 191-2070 9.01 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 192-2070 22.52 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 193-2070 384.75 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 194-2070 163.86 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 280-2070 631.02 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 300-2070 137.01 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 320-2070 718.56 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 330-2070 99.34 697745 11/14/96 000283 INSTATAX (EDD) 000283 FEDERAL 340-2070 219.35 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 001-2070 3,749.79 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 165-2070 62.22 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 190-2070 924.02 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 191-2070 2.39 697745 11/14/96 0002a3 INSTATAX (EDD) 000283 MEDICARE 192-2070 6.04 697745 11/14/96 0002a3 INSTATAX (EDD) 000283 MEDICARE 193-2070 103.48 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 194-2070 37.88 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 280-2070 136.46 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 300-2070 23.64 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 320-2070 125.64 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 330-2070 27.82 697745 11/14/96 000283 INSTATAX (EDD) 000283 MEDICARE 340-2070 91.46 27,236.a6 VOLJCHRE2 CITY OF TEMECULA PAGE 2 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 961114 11/14/96 002159 FIRST AMERICAN TITLE IN RDA PURCHASE OF PROP.-PUJOL ST 165-199-812-5804 1,195,836.98 1,195,836.98 40293 11/14/96 002539 3CMA CF:CITIZENS 12/4 G.WOLNICK 001-110-999-5258 55.00 40293 11/14/96 002539 3CMA CF:CITIZENS 12/4 R.BRADLEY 001-110-999-5258 89.00 144.00 40294 11/14/96 002158 A S A P SERVICES INC. RELEASE RETENTION ST STRIPING 100-2035 4,544.86 4,544.86 40295 11/14/96 000116 A V P VISION PLANS 000116 AVP 001-2310 521.46 40295 11/14/96 000116 A V P VISION PLANS 000116 AVP 165-2310 12.25 40295 11/14/96 000116 A V P VISION PLANS 000116 AVP 190-2310 71.91 40295 11/14/96 000116 A V P VISION PLANS 000116 AVP 193-2310 .49 40295 11/14/96 000116 A V P VISION PLANS 000116 AVP 280-2310 12.25 40295 11/14/96 000116 A V P VISION PLANS 000116 AVP 300-2310 2.44 40295 11/14/96 000116 A V P VISION PLANS 000116 AVP 340-2310 16.70 40295 11/14/96 000116 A V P VISION PLANS NOV 96 COBRA 001-1180 16.70 40295 11/14/96 000116 A V P VISION PLANS WIMBERLY/NOV/VISION INS 001-1170 9.75 663.95 40296 11/14/96 002485 ALMOST ANYTHING PROF. 0 TEMP HELP W/E 10/25 SECRETARY 001-140-999-5118 203.50 203.50 40297 11/14/96 000101 APPLE ONE, INC. TEMP HELP W/E 10/5 WILLAIMS 001-162-999-5118 288.96 40297 11/14/96 000101 APPLE ONE, INC. TEMP HELP W/E 10/12 WILLIAMS 001-162-999-5118 361.20 40297 11/14/96 000101 APPLE ONE, INC. TEMP HELP W/E 10/12 BARNETT 001-150-999-5118 361.20 40297 11/14/96 000101 APPLE ONE, INC. TEMP HELP W/E 10/26 WILLAIMS 001-161-999-5118 361.20 40297 11/14/96 000101 APPLE ONE, INC. TEM HELP W/E 10/26 BARNETT 001-162-999-5118 361.20 1,733.76 40298 11/14/96 002506 BAILEY'S BLINDS & DRAPE (35)SETS VERTICAL BLINDS 210-199-650-5804 1,686.00 1,686.00 40299 11/14/96 000622 BANTA ELECTRIC-REFRIGER HVAC/ELECTRICAL SERVICES-CITY 340-199-701-5250 671.00 40299 11114/96 000622 BANTA ELECTRIC-REFRIGER ELECTRICAL SERVICES FOR TCSD 190-180-999-5212 90.00 761.00 40300 11/14196 BARTELS-KILCLINE, TANYA REFUND:BALLROOM DANCING 190-183-4982 21.00 21.00 40301 11/14/96 001876 BEIJING LONGEVITY, INC. TCSD INSTRUCTOR EARNINGS 190-183-999-5330 32.00 32.00 40302 11/14/96 002522 BRAVO SIGN & DESIGN PAINT CITY HALL MONUMENT SIGN 340-199-701-5212 275.00 275.00 40303 11/14/96 000702 CADDY GRAPHICS DESIGN OF HOLIDAY BANNER 280-199-999-5270 205.75 205.75 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 001-2370 6,697.81 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 165-2370 113.98 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 190-2370 2,393.71 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 191-2370 1.35 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 192-2370 3.36 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 193-2370 367.64 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 194-2370 44.51 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 280-2370 152.46 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 300-2370 12.71 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 320-2370 76.14 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 330-2370 16.64 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 330-2370 465.18 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 001-161-999-5112 2.87 VOtJCHRE2 CITY OF TEMECULA PAGE 3 11/15/96 16:57 VOUCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 001-162-999-5112 1.51 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 001-164-604-5112 1.43 40304 11/14/96 000128 CAL-SUP.ANCE ASSOCIATES, OCT 96 WORKER COMP INS 190-180-999-5112 1.87 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 190-181-999-5112 1.09 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 190-182-999-5112 .72 40304 11/14/96 000128 CAL-SURANCE ASSOCIATES, OCT 96 WORKER COMP INS 001-120-999-5112 .43 10,355.41 40306 11/14/96 000502 CALIFORNIA MUNICIPAL ST DEBT STATEMENT FOR CAFR 001-140-999-5250 375.00 375.00 4030-( 11/14/96 000135 CENTRAL CITIES SIGN SER STREET SIGNS & MISC HARDWARE 001-164-601-5244 178.18 178.18 40308 11/14/96 001195 CENTRAL SECURITY SERVIC NOV ALARM MONITORING @ CRC 190-182-999-5250 50.00 40308 11/14/96 001195 CENTRAL SECURITY SERVIC NOV ALARM MONITORING-SEN CENTR 190-181-999-5250 45.00 95.00 40309 11/14/96 002343 CHINO CONSTRUCTION COMP RELEASE RETENTION PCC REPAIRS 001-2035 31635.65 3,635.65 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 600 A&S 001-2330 39.75 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 600 A&S 190-2330 39.75 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 800 A&S 001-2330 66.50 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 800 A&S 190-2330 113.31 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 800 A&S 193-2330 .94 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 CANCER 001-2330 188.16 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 CANCER 165-2330 12.94 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 CANCER 190-2330 88.05 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 CANCER 193-2330 1.59 40310 11/14/96 000140 COLONIAL LIFE & ACCIDEN 000140 CANCER 280-2330 12.94 563.93 40311 11/14/96 002106 DA FAMILY SUPPORT 002106 SUPPORT 190-2140 100.00 100.00 40312 11/14/96 000155 DAVLIN TAPING OF COUNCIL MEETING 001-100-999-5250 810.88 40312 11/14/96 000155 DAVLIN PLANNING COMMISSION MEETINGS 001-161-999-5250 156.68 967.56 40313 11/14/96 000156 DENTICARE OF CALIFORNIA 000156 DEN-AMIN 001-2340 15.00 40313 11/14/96 000156 DENTICARE OF CALIFORNIA 000156 DENT-ADV 001-1180 8.81 40313 11/14/96 000156 DENTICARE OF CALIFORNIA 000156 DENTICAR 001-2340 8.81 40313 11/14/96 000156 DENTICARE OF CALIFORNIA 000156 DENT-REV 001-1180 8.81- 40313 11/14/96 000156 DENTICARE OF CALIFORNIA 000156 DENTICAR 001-2340 8.81 32.62 40314 11/14/96 000684 DIEHL, EVANS & COMPANY CF:96 GOV'T TAX 12/18 B.SMITH 001-140-999-5261 75.00 40314 11/14/96 000684 DIEHL, EVANS & COMPANY CF:96 GOV'T TAX 12/18 S.OAKLEY 001-140-999-5261 75.00 150.00 40315 11/14/96 001673 DIVERSIFIED TEMPORARY S TEMP HELP W/E 10/27 COX,CAMILL 001-161-999-5118 144.48 144.48 40316 11/14/96 DOYLE, LABECCA TCSD INSTRUCTOR EARNINGS 190-183-999-5330 20.00 20.00 40317 11/14/96 001380 E S I EMPLOYMENT SERVIC TEMP HELP W/E 10/16 MAGNERA 001-165-999-5118 638.00 638.00 40318 11/14/96 002390 EASTERN MUNICIPAL WATER INSPECTION/P/C SEWER ON PAUBA 210-190-626-5804 3,408.67 3,408.67 40319 11/14/96 002060 EUROPEAN DELI & CATERIN CITY HALL GRAND OPENING EVENT 001-100-999-5265 1,885.63 1,885.63 VOtJCHRE2 CITY OF TEMECULA PAGE 4 11/15/96 16:57 VOIJCHER/CHECK REGISTER FOR ALL PERIODS VOUCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NL#48ER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40320 11/14/96 001056 EXCEL LANDSCAPE MAINLINE REPAIR-SPORTS PARK 190-180-999-5212 344.74 40320 11/14/96 001056 EXCEL LANDSCAPE MAINLINE REPAIR RCSP 193-180-999-5212 32.03 376.77 40321 11/14/96 000165 FEDERAL EXPRESS, INC. EXPRESS MAIL SERVICES 001-162-999-5230 59.70 59.70 40322 11/14/96 001135 FIRST CARE INDUSTRIAL N PRE-EMPLOYMENT EXPENSES 001-150-999-5250 374.00 374.00 40323 11/14/96 FORGY, PAT REFUND:TENNIS 190-183-4982 20.00 20.00 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 001-2360 574.61 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 165-2360 7.65 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 190-2360 115.61 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 191-2360 .43 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 192-2360 1.28 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 193-2360 16.16 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 194-2360 8.90 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 280-2360 8.50 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 300-2360 4.24 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 320-2360 8.50 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 330-2360 8.50 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LIFE INS 340-2360 19.12 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 001-2380 979.85 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 165-2380 16.16 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 190-2380 186.01 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 191-2380 .73 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 192-2380 1.80 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 193-2380 23.64 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 194-2380 11.02 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 280-2380 17.67 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 300-2380 7.08 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 320-2380 18.52 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 330-2380 6.89 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 LTD 340-2380 22.83 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 001-2500 1,020.07 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 165-2500 17.09 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 190-2500 195.65 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 191-2500 .77 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 192-2500 1.90 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 193-2500 25.02 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 194-2500 11.67 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 280-2500 18.70 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 300-2500 7.49 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 320-2500 19.59 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 330-2500 7.29 40324 11/14/96 002002 FORTIS BENEFITS INS. CO 002002 STD 340-2500 24.16 40324 11/14/96 002002 FORTIS BENEFITS INS. CO WIMBERLY/NOV/STD/LIFE INS 001-1170 20.06 3,435.16 40326 11/14/96 000643 FORTNER HARDWARE, INC. TCSD MAINTENANCE SUPPLIES 190-180-999-5212 80.92 40326 11/14/96 000643 FORTNER HARDWARE, INC. MISC. SUPPLIES FOR STREET 001-164-601-5218 42.77 123.69 40327 11/14/96 000170 FRANKLIN QUEST COMPANY, FRANKLIN - DAY PLANNERS 001-161-999-5220 43.26 43.26 VOtJCHRE2 CITY OF TEMECULA PAGE 5 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40328 11/14/96 000184 G T E CALIFORNIA - PAYN 909-695-3539-GENERAL USAGE-OCT 320-199-999-5208 222.21 40328 11/14/96 000184 G T E CALIFORNIA - PAYM 909-699-0590-TEN TOWN ASN-OCT 320-199-999-5208 53.60 40328 11/14/96 000184 G T E CALIFORNIA - PAYN 909-699-1370-CABOOSE-OCT 001-110-999-5223 95.11 40328 11/14/96 000184 G T E CALIFORNIA - PAYM 909-699-2309-GENERAL USAGE-OCT 320-199-999-5208 221.06 591.98 40329 11/14/96 002141 GEIS, PAUL TEMECULA PD MOTORCYCLE REPAIRS 001-170-999-5214 100.00 100.00 40330 11/14196 000481 GEOTECHNICAL & ENVIRONM PHASE 1 ENVIRO REVIEW PUJOL 165-199-812-5804 365.50 365.50 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES 190-184-999-5220 86.57 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT MISC. OFFICE SUPPLIES 190-184-999-5220 20.44 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES 190-184-999-5220 45.78 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES 001-120-999-5220 142.47 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES 001-120-999-5220 6.71 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES 001-120-999-5220 55.33 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT MISCELLANEOUS OFFICE SUPPLIES 001-162-999-5220 108.66 40331 11/14/96 000177 GLENNIES OFFICE PRODUCT OFFICE SUPPLIES 001-120-999-5220 17.24 483.20 40332 11/14/96 002370 GOLF SPECIALTIES GOLF CART FOR TEMECULA POLICE 001-170-999-5610 1,922.00 1,922.00 40333 11/14/96 002374 GOVERNMENT INTERFACE, L OCT CONSULTING SRVCS-PALA RD 001-164-604-5248 1,000.00 1,000.00 40334 11/14/96 002174 GROUP 1 PRODUCTIONS VIDEO TAPING OF CITY HALL 210-199-650-5804 2,703.80 2,703.80 40335 11/14/96 000520 H D L COREN & CONE, INC FINDER FEE-DOC TRANSFER TAX 001-140-999-5248 8.66 8.66 40336 11/14/96 001697 HALL, NANCY LEE TCSD INSTRUCTOR EARNINGS 190-183-999-5330 180.00 180.00 40337 11/14/96 000186 HANKS HARDWARE, INC. MISC HARDWARE SUPPLIES 001-164-601-5218 32.09 40337 11/14/96 000186 HANKS HARDWARE, INC. MAINTENANCE SUPPLIES FOR TCSD 340-199-701-5212 295.43 327.52 40338 11/14/96 000194 1 C M A RETIREMENT TRUS 000194 DEF COMP 001-2080 1,873.70 40338 11/14/96 000194 1 C M A RETIREMENT TRUS 000194 DEF COMP 190-2080 468.37 40338 11/14/96 000194 I C M A RETIREMENT TRUS 000194 DEF COMP 193-2080 7.14 40338 11/14/96 000194 I C M A RETIREMENT TRUS 000194 DEF COMP 280-2080 27.99 2,377.20 40339 11/14/96 IAPMA MEMBERSHIP:G.YATES 96/97 001-150-999-5226 20.00 20.00 40340 11/14/96 002464 IKON CAPITAL LEASE AGRMNT FOR SHARP COPIER 001-171-999-5239 526.41 526.41 40341 11/14/96 001407 INTER VALLEY POOL SUPPL POOL SANITIZING CHEMICALS 190-182-999-5212 148.16 148.16 40342 11/14/96 000199 INTERNAL REVENUE SERVIC 000199 IRS GARN 001-2140 291.35 291.35 40343 11/14/96 001667 KELLY TEMPORARY SERVICE TEMP HELP W/E 10/27 EVANS 001-164-604-5118 83.19 40343 11/14/96 001667 KELLY TEMPORARY SERVICE TEMP HELP W/E 10/27 EVANS 001-163-999-5118 83.19 40343 11/14/96 001667 KELLY TEMPORARY SERVICE TEMP HELP W/E 10/27 EVANS 001-165-999-5118 83.22 249.60 40344 11/14/96 000206 KINKOIS OF RIVERSIDE, I PRINTING SERVICES FOR RDA 280-199-999-5222 7.28 7.28 40345 11/14/96 000945 L P S COMPUTER SERVICE DEC LASER PRINTER MAINT 320-199-999-5250 310.76 VOtJCHRE2 CITY OF TEMECULA PAGE 6 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40345 11/14/96 000945 L P S COMPUTER SERVICE (10)REFURB. TONER CARTRIDGES 320-199-999-5221 440.00 40345 11/14/96 000945 L P S COMPUTER SERVICE TAX 320-199-999-5221 34.10 784.86 40346 11/14/96 001534 LA MASTERS OF FINE TRAV AIR:R.ROBERTS CF 11/20 001-100-999-5258 116.00 40346 11/14/96 001534 LA MASTERS OF FINE TRAV AIR:J.KICAK CF OAKLAND 11/20 001-164-604-5258 116.00 232.00 40347 11/14/96 001973 LA SALLE LIGHTING SERVI PARKING LIGHT REPAIRS 340-199-701-5212 312.00 40347 11/14/96 001973 LA SALLE LIGHTING SERVI PARKING LIGHT REPAIRS 340-199-701-5212 376.00 688.00 40348 11/14/96 002519 LAB SAFETY SUPPLY EAGLE SINGLE-DRUM CONTAINMENT 001-170-999-5242 87.90 40348 11/14/96 002519 LAB SAFETY SUPPLY FREIGHT 001-170-999-5242 55.65 143.55 40349 11/14/96 000869 LAWRENCE WELK RESORT TH DEPOSIT WELK CHRISTMAS EXCTJRSN 190-183-999-5350 159.50 159.50 40350 11/14/96 000596 LEAGUE OF CAL. CITIES SEM:S.JONES 12/4-6 NEW LAW CF 001-120-999-5258 245.00 245.00 40351 11/14/96 000217 MARGARITA OFFICIALS ASS ADULT SOFTBALL OFFICIALS 190-183-999-5380 2,871.00 2,871.00 40352 11/14/96 001400 MARRIOTT HOTEL - SAN FR NOTEL:D.HOGAN BUILDOUT CF 10/3 001-161-999-5258 335.16 335.16 40353 11/14/96 000220 MAURICE PRINTERS, INC. LETTERHEAD - RDA CLASSIC CREST 280-199-999-5270 1,455.00 40353 11/14/96 000220 MAURICE PRINTERS, INC. TAX 280-199-999-5270 112.76 40353 11/14/96 000220 MAURICE PRINTERS, INC. LETTERHEAD - RDA CLASSIC CREST 280-199-999-5270 269.00 40353 11/14/96 000220 14AURICE PRINTERS, INC. NEW PLATES FOR RDA LETTERHEAD 280-199-999-5270 168.00 40353 11114/96 000220 MAURICE PRINTERS, INC. TAX 280-199-999-5270 33.87 2,038.63 40354 11/14196 001905 MEYERS, DAVID WILLIAM TCSD INSTRUCTOR EARNINGS 190-183-999-5330 288.00 288.00 40355 11/14/96 001892 MOBILE MODULAR NOV INTERIM FIRE ST MODULAR 001-171-999-5470 905.00 40355 11/14/96 001892 MOBILE MODULAR TAX 001-171-999-5470 70.14 40355 11/14/96 001892 MOBILE MODULAR NOV INTERIM FIRE ST MODULAR 001-171-999-5470 685.00 40355 11/14/96 001892 MOBILE MODULAR TAX 001-171-999-5470 53.09 1,713.23 40356 11/14/96 000883 MONTELEONE EXCAVATING EROSION CONTROL - N. PUJOL ST 165-199-812-5804 999.00 999.00 40357 11/14/96 002213 MUFFLERS WEST OF TENECU WIRING PW MAINT TRAILER 001-164-601-5215 151.89 151.89 40358 11/14/96 002105 OLD TOWN TIRE & SERVICE VEHICLE MAINTENANCE & REPAIR 001-164-601-5214 22.19 40358 11/14/96 002105 OLD TOWN TIRE & SERVICE VEHICLE MAINTENANCE AND REPAIR 190-180-999-5214 58.81 81.00 40359 11/14/96 001383 P M W ASSOCIATES, INC. 3RD PARTY CONSULTATION 001-150-999-5248 1,138.87 1,138.87 40360 11/14/96 002297 PACIFIC RELOCATION CONS SPANISH TRANSLATION-PUJOL ST 165-199-812-5804 85.00 85.00 40361 11/14/96 001243 PALMOUIST, MARY TCSD INSTRUCTOR EARNINGS 190-183-999-5330 348.00 348.00 40362 11/14/96 002398 PALOMAR COMMUNICATIONS, DISPATCH RADIO MOBILE SERVICE 320-199-999-5209 600.00 600.00 40363 11/14/96 000635 PARTY PALACE, THE CITY HALL GRAND OPENING EVENT 001-100-999-5265 2,157.07 2,157.07 40364 11/14/96 001683 PENFOLD COMMUNICATIONS, COMM SRVCS FUNDING 96/97 001-100-999-5267 2,000.00 2,000.00 VOtJCHRE2 CITY OF TEMECULA PAGE 7 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PER REDE 001-2130 289.68 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PER REDE 190-2130 3.34 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PER REDE 280-2130 1.00 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 001-2390 14,709.75 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 165-2390 240.14 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 190-2390 2,957.41 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 191-2390 11.05 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 192-2390 27.67 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 193-2390 379.29 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 194-2390 174.67 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 280-2390 265.43 40365 11114196 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 300-2390 103.51 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 320-2390 292.08 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 330-2390 124.91 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 PERS RET 340-2390 353.77 40365 11/14/96 000246 PERS (EMPLOYEES# RETIRE 000246 SURVIVOR 001-2390 66.23 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 165-2390 .84 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 190-2390 13.58 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 191-2390 .05 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 192-2390 .14 40365 11/14/96 000246 PERS (EMPLOYEES# RETIRE 000246 SURVIVOR 193-2390 1.77 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 194-2390 .97 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 280-2390 .92 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 300-2390 .46 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 320-2390 .93 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 330-2390 .93 40365 11/14/96 000246 PERS (EMPLOYEES' RETIRE 000246 SURVIVOR 340-2390 2.09 20,022.61 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 AETNA SO 001-2090 536.75 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 AETNA SO 165-2090 113.52 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 AETNA SO 280-2090 113.52 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 BLSHIELD 001-2090 404.91 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 BLSHIELD 190-2090 .84 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 BLSHIELD 280-2090 .25 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 CIGNA 001-2090 421.03 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 CIGNA 300-2090 38.27 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 001-2090 4,420.45 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 190-2090 1,551.44 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 191-2090 14.84 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 192-2090 29.60 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 193-2090 222.04 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 194-2090 29.52 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 280-2090 38.48 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHMET 330-2090 296.00 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 340-2090 378.21 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 001-2090 2,006.46 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 190-2090 352.01 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 193-2090 14.15 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 340-2090 70.77 40366 11/14/96 000245 PERS (HEALTH INST)R. PRE 000245 PACIFICR 001-2090 2,067.64 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PACIFICR 190-2090 305.70 VOtJCHRE2 CITY OF TEMECULA PAGE 8 11115/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PACIFICR 192-2090 15.72 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PACIFICR 193-2090 78.42 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PACIFICR 194-2090 321.30 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PERS CHO 001-2090 2,203.60 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PERS CHO 190-2090 1.37 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PERS CHO 280-2090 .41 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PERS DED 001-2090 671.67 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PERS-ADM 001-2090 94.65 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 TAKECARE 001-2090 1,334.54 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE WIMBERLY/NOV/HEALTH INS 001-1170 296.00 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 AETNA SO 001-2090 26.91 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 AETNA SO 165-2090 89.88 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 AETNA SO 280-2090 89.88 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 001-2090 99.47 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 190-2090 46.96 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 HELTHNET 340-2090 6.59 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 001-2090 24.62 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 190-2090 81.90 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 193-2090 5.85 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 KAISERSO 340-2090 29.25 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PACIFICR 001-2090 95.78 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PERS CHO 001-2090 54.62 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 PERS REV 001-2090 671.67- 40366 11/14/96 000245 PERS (HEALTH INSUR. PRE 000245 TAKECARE 001-2090 19.96 18,444.08 40367 11/14/96 001958 PERS LONG TERM CARE PRO 001958 PERS L-T 001-2122 40.62 40.62 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 190-181-999-5301 31.30 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 190-181-999-5301 30.48 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 190-183-999-5320 1.08 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-100-999-5280 19.23 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-110-999-5214 5.99 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-164-604-5262 34.10 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-165-999-5260 16.00 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-140-999-5220 13.47 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-161-999-5242 5.49 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-164-604-5220 18.52 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 190-182-999-5301 33.19 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 190-180-999-5220 28.72 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-161-999-5261 35.56 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-110-999-5223 29.55 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-164-604-5220 6.60 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-164-602-5238 29.44 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-162-999-5260 12.33 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-162-999-5242 34.44 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-170-999-5220 48.48 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-100-999-5280 14.33 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-171-999-5261 20.00 40368 11114/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-164-601-5260 15.00 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-120-999-5220 20.46 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-100-999-5260 9.65 VOtJCHRE2 CITY OF TEMECULA PAGE 9 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDDR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 190-180-999-5301 6.42 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-164-601-5215 8.00 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-150-999-5265 31.02 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-110-999-5260 30.00 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 320-199-999-5242 45.93 40368 11/14/96 000249 PETTY CASH PETTY CASH REIMBURSEMENT 001-164-604-5262 42.10 676.88 40370 11/14/96 000580 PHOTO WORKS FILM & PHOTO DEVELOPING 001-171-999-5250 15.84 15.84 40371 11/14/96 000252 POLYCRAFT, INC. CITY SEAL VEHICLE DECALS 001-161-999-5214 223.50 40371 11/14/96 000252 POLYCRAFT, INC. CITY SEAL VEHICLE DECALS 001-164-601-5214 335.25 40371 11/14/96 000252 POLYCRAFT, INC. CITY SEAL VEHICLE DECALS 190-180-999-5214 335.25 40371 11/14/96 000252 POLYCRAFT, INC. TAX 001-161-999-5214 17.97 40371 11/14/96 000252 POLYCRAFT, INC. TAX 001-164-601-5214 26.95 40371 11/14/96 000252 POLYCRAFT, INC. TAX 190-180-999-5214 26.94 965.86 40372 11/14/96 000254 PRESS-ENTERPRISE COMPAN PHOTO REPRINT-FIRE FIGHTERS 280-199-999-5250 35.00 40372 11/14/96 000254 PRESS-ENTERPRISE COMPAN PUBLIC NOTICES 001-161-999-5256 49.47 84.47 40373 11/14/96 002110 PRIME EQUIPMENT EQUIPMENT RENTALS-PARKS 190-180-999-5238 75.43 75.43 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 001-2340 2,112.41 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 165-2340 32.09 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 190-2340 286.07 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 193-2340 3.21 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 280-2340 32.08 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 300-2340 16.04 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 330-2340 24.32 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. 001537 DENTALPM 340-2340 80.21 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. NOV 96 COBRA 001-1180 176.98 40374 11/14/96 001537 PRINCIPAL MUTUAL, INC. WIMBERLY/NOV/DENTAL 001-1170 64.17 2,827.58 40375 11/14/96 002483 PRO TECH SERVICES REPAIR AND MAINTENANCE OF POOL 190-182-999-5250 60.00 60.00 40376 11/14/96 002535 RAMONA VNA & HOSPICE COMM SRVCS FUNDING 96/97 001-100-999-5267 1,000.00 1,000.00 40377 11/14/96 002445 RELOCATION SYSTEMS, INC RELOCATION SRVCS TO CITY HALL 210-199-650-5804 13,300.00 40377 11/14/96 002445 RELOCATION SYSTEMS, INC CREDIT:ITEMS INCLUDED IN PRICE 210-199-650-5804 1,775.00- 11,525.00 40378 11/14/96 001365 RIVERSIDE CO. ENVIRONME PERMIT:COMM REC CENTER 190-182-999-5250 408.00 40378 11/14/96 001365 RIVERSIDE CO. ENVIRONME PERMIT:POLAMA DEL SOL PARK 190-180-999-5250 65.00 473.00 40379 11114/96 002226 RUSSO, MARY ANNE TCSD INSTRUCTOR EARNINGS 190-183-999-5330 432.80 432.80 40380 11/14/96 000403 SHAWN SCOTT POOL & SPA POOL MAINT SRVCS - TES 190-180-999-5212 140.20 140.20 40381 11/14/96 002537 SHORECLIFF COMMUNICATIO CF:BUILDOTJT 12/2-3 D.HOGAN 001-161-999-5258 195.00 195.00 40382 11114/96 000645 SMART & FINAL, INC. SUPPLIES FOR COMMUNITY CENTER 190-184-999-5301 98.09 98.09 40383 11/14/96 002536 SMITH, ZENAIDA B. REIMB:CMBTA CF 10/30-11/2 001-140-999-5261 210.98 210.98 VOtJCHRE2 CITY OF TEMECULA PAGE 10 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOTJCHERI CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40384 11/14/96 000519 SOUTH COUNTY PEST CONTR PEST CONTROL SERVICES 190-182-999-5250 42.00 40384 11/14/96 000519 SOUTH COUNTY PEST CONTR PEST CONTROL SERVICES 340-199-701-5250 56.00 40384 11/14/96 000519 SOUTH COUNTY PEST CONTR PEST CONTROL SERVICES 190-184-999-5250 72.00 40384 11/14/96 000519 SOUTH COUNTY PEST CONTR PEST CONTROL SERVICES 190-181-999-5250 29.00 199.00 40385 11114/96 000537 SOUTHERN CALIF EDISON VARIOUS ELECT METERS 191-180-999-5319 1,209.94 1,209.94 40386 11/14/96 000291 SPEE DEE OIL CHANGE & T TCSD VEHICLE MAINT & REPAIR 190-180-999-5214 23.99 23.99 40387 11/14/96 002430 STRICKLAND, KATIE M. TCSD INSTRUCTOR EARNINGS 190-183-999-5330 112.00 112.00 40388 11/14/96 001497 T R W,INC.-INFOR14ATION CREDIT REPTS FOR RDA LOANS 280-199-999-5250 20.00 20.00 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 001-2125 367.24 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 165-2125 7.39 40389 11/14/96 001547 TEA14STERS LOCAL 911 001547 UN DUES 190-2125 74.00 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 191-2125 .92 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 192-2125 1.85 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 193-2125 13.88 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 194-2125 1.85 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 280-2125 9.25 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 300-2125 4.62 40389 11/14/96 001547 TEAMSTERS LOCAL 911 001547 UN DUES 320-2125 18.50 499.50 40390 11/14/96 002479 TELEVIDEO - SAN DIEGO VIDEO DA VIDEOTEK 210-199-650-5804 265.00 40390 11/14/96 002479 TELEVIDEO - SAN DIEGO RACK MOUNT FOR DAIS VIDEOTEK 210-199-650-5804 340.00 40390 11/14/96 002479 TELEVIDEO - SAN DIEGO BLANK PANELS-ADA VIDEOTEK 210-199-650-5804 25.00 40390 11/14/96 002479 TELEVIDEO - SAN DIEGO RACK MOUNT 210-199-650-5804 105.00 40390 11/14/96 002479 TELEVIDEO - SAN DIEGO FREIGHT 210-199-650-5804 75.00 40390 11/14/96 002479 TELEVIDEO - SAN DIEGO TAX 210-199-650-5804 56.96 866.96 40391 11/14/96 000312 TEMECULA VALLEY PLAYHOTJ COMM SRVCS FUNDING AWARD 96/97 001-100-999-5267 12,500.00 12,500.00 40392 11/14/96 000977 TEMECULA VALLEY SPECIAL COMM SRVCS FUNDING 96/97 001-100-999-5267 1,000.00 1,000.00 40393 11/14/96 000642 TEMECULA, CITY OF - FLE EMPLOYEE CONTRIBUTION TO FLEX 165-1020 166.30 40393 11/14/96 000642 TEMECULA, CITY OF - FLE EMPLOYEE CONTRIBUTION TO FLEX 001-1020 3,933.75 40393 11/14/96 000642 TEMECULA, CITY OF - FLE EMPLOYEE CONTRIBUTION TO FLEX 190-1020 596.66 40393 11/14/96 000642 TEMECULA, CITY OF - FLE EMPLOYEE CONTRIBUTION TO FLEX 193-1020 10.00 40393 11/14/96 000642 TEMECULA, CITY OF - FLE EMPLOYEE CONTRIBUTION TO FLEX 300-1020 10.00 40393 11/14/96 000642 TEMECULA, CITY OF - FLE EMPLOYEE CONTRIBUTION TO FLEX 340-1020 50.00 40393 11/14/96 000642 TEMECULA, CITY OF - FLE EMPLOYEE CONTRIBUTION TO FLEX 280-1020 166.30 4,933.01 40394 11/14/96 002538 THORNTON WINERY BANQUET FOR SISTER CITIES 001-100-999-5280 1,717.08 1,717.08 40395 11/14/96 000320 TOWNE CENTER STATIONERS OFFICE SUPPLIES 001-161-999-5220 159.45 40395 11/14/96 000320 TOWNE CENTER STATIONERS OFFICE SUPPLIES FOR PUBLIC 001-164-604-5220 303.20 462.65 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VL ADVAN 001-2510 203.95 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 001-2510 162.60 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 190-2510 34.53 VOtJCHRE2 CITY OF TEMECULA PAGE 11 11/15/96 16:57 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 192-2510 .30 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 193-2510 1.64 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 194-2510 4.20 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 340-2510 .68 40396 11/14/96 002107 TRANS-GENEIZAL LIFE INS. WIMBERLY/NOV/VOL LIFE INS 001-1170 14.40 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VL REVER 001-2510 211.15- 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 001-2510 169.80 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 190-2510 34.53 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 192-2510 .30 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 193-2510 1.64 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 194-2510 4.20 40396 11/14/96 002107 TRANS-GENERAL LIFE INS. 002107 VOL LIFE 340-2510 .68 422.30 40397 11/14/96 000459 TUMBLE JUNGLE TCSD INSTRUCTOR EARNINGS 190-183-999-5330 494.40 494.40 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 001-2080 2,661.03 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 165-2080 72.40 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 190-2080 733.35 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 192-2080 1.25 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 193-2080 18.75 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 194-2080 22.50 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 280-2080 75.89 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 300-2080 5.00 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 320-2080 312.50 40398 11/14/96 001065 U S C M /PEBSCO (DEF. C 001065 DEF COMP 340-2080 112.50 4,015.17 40399 11/14/96 000389 U S C N /PEBSCO COBRA) 000389 PT RETIR 001-2160 1,220.62 40399 11/14/96 000389 U S C N /PEBSCO COBRA) 000389 PT RETIR 165-2160 33.58 40399 11/14/96 000389 U S C N /PEBSCO COBRA) 000389 PT RETIR 190-2160 640.52 40399 11/14/96 000389 U S C M /PEBSCO COBRA) 000389 PT RETIR 193-2160 45.60 40399 11/14196 000389 U S C N /PEBSCO COBRA) 000389 PT RETIR 280-2160 200.86 40399 11/14/96 000389 U S C N /PEBSCO COBRA) 000389 PT RETIR 320-2160 152.46 40399 11/14/96 000389 U S C N /PEBSCO COBRA) 000389 PT RETIR 340-2160 27.80 2,321.44 40400 11/14/96 002396 U.S. LONG DISTANCE, INC LONG DISTANCE TELECOM PROVIDER 320-199-999-5208 623.82 623.82 40401 11/14/96 000325 UNITED WAY OF THE INLAN 000325 uw 001-2120 76.09 40401 11/14/96 000325 UNITED WAY OF THE INLAN 000325 uw 165-2120 1.20 40401 11/14/96 000325 UNITED WAY OF THE INLAN 000325 uw 190-2120 15.00 40401 11/14/96 000325 UNITED WAY OF THE INLAN 000325 uw 280-2120 1.21 93.50 40402 11/14/96 000332 VANDORPE CHOTJ ASSOCIATI OCT PROF PLAN CHECK SRVCS 001-162-999-5248 2,680.74 2,680.74 40403 11/14/96 001890 VORTEX DOORS DOOR MAINTENANCE REPAIR-CRC 190-182-999-5212 691.28 691.28 40404 11/14/96 001342 WAXIE SANITARY SUPPLY, BUILDING MAINTENANCE SUPPLIES 190-182-999-5212 24.78 40404 11/14/96 001342 WAXIE SANITARY SUPPLY, BUILDING MAINTENANCE SUPPLIES 190-182-999-5212 634.51 40404 11/14/96 001342 WAXIE SANITARY SUPPLY, BUILDING MAINTENANCE SUPPLIES 190-182-999-5212 71.57 40404 11/14/96 001342 WAXIE SANITARY SUPPLY, BUILDING MAINTENANCE SUPPLIES 340-199-701-5212 111.65 40404 11/14/96 001342 WAXIE SANITARY SUPPLY, WRONG ITEM RETURN 190-182-999-5212 26.26- 40404 11/14/96 001342 WAXIE SANITARY SUPPLY, FLOOR SWEEPER DAMAGED 340-199-701-5212 146.58- 669.67 VOtJCHRE2 CITY OF TEMECULA PAGE 12 11/15/96 16:57 VOIJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40405 11/14/96 WEEKS, BILLIE REFUND:TENNIS 190-183-4982 20.00 20.00 40406 11/14/96 002109 WHITE CAP MISC. MAINTENANCE SUPPLIES 001-164-601-5218 7.24 7.24 TOTAL CHECKS 1,389,044.52 VOtJCHRE2 CITY OF TEMECULA PAGE 3 11/18/96 09:48 VOtJCHER/CHECK REGISTER FOR ALL PERIODS FUND TITLE AMOUNT 001 GENERAL FUND 674,684.39 165 RDA DEV- LOW/MOD SET ASIDE 1,704.53 190 COMMUNITY SERVICES DISTRICT 29,294.08 191 TCSD SERVICE LEVEL A 926.00 193 TCSD SERVICE LEVEL C 20,080.77 210 CAPITAL IMPROVEMENT PROJ FUND 264,648.19 280 REDEVELOPMENT AGENCY - CIP 80,434.14 300 INSURANCE FUND 14,934.83 310 VEHICLES FUND 23,480.88 340 FACILITIES 541.37 TOTAL 1,110,729.18 VOtJCHRE2 CITY OF TEMECULA PAGE 1 11/18/96 09:48 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOUCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40413 11/26/96 000126 CALIFORNIA LANDSCAPE MA OCT LDSC MAINT - PARKS 190-180-999-5415 19,651.37 40413 11/26/96 000126 CALIFORNIA LANDSCAPE MA OCT LDSC MAINT -SENIOR CENTER 190-181-999-5415 245.67 40413 11/26/96 000126 CALIFORNIA LANDSCAPE MA OCT LDSC MAINT - CRC 190-182-999-5415 1,692.53 40413 11/26/96 000126 CALIFORNIA LANDSCAPE MA OCT LDSC MAINT - CITY HALL 340-199-701-5415 496.37 40413 11/26/96 000126 CALIFORNIA LANDSCAPE MA OCT LDSC MAINT - MEDIANS 191-180-999-5415 926.00 23,011.94 40414 11/26/96 000442 COMPUTER ALERT SYSTEMS SECURITY SYSTEM-CITY HALL 210-199-650-5804 5,597.00 40414 11/26/96 000442 COMPUTER ALERT SYSTEMS FIRE SYSTEM MONITORING 340-199-701-5250 45.00 5,642.00 40415 11/26/96 002342 DARNELL & ASSOCIATES, I PROF SRVCS-PW96-09 TRAFFIC 001-164-602-5248 21,759.16 40415 11/26/96 002342 DARNELL & ASSOCIATES, I CREDIT:INCORRECT BILLING 001-164-602-5248 5,000.00- 16,759.16 40416 11/26/96 001056 EXCEL LANDSCAPE OCT LDSC MAINT SLOPE AREAS 193-180-999-5415 20,080.77 40416 11/26/96 001056 EXCEL LANDSCAPE OCT LDSC MAINT -RC SPORTS PK 190-180-999-5415 7,704.51 27,785.28 40417 11/26/96 002488 FULLER FORD 97 FORD SUPERCAB PICK-UP 310-1910 21,792.00 40417 11/26/96 002488 FULLER FORD TAX 310-1910 1,688.88 23,480.88 40418 11/26/96 002468 GENERAL CONSOLIDATED PRGS PMT #2 6TH ST PARKING 280-199-804-5804 41,204.00 40418 11/26/96 002468 GENERAL CONSOLIDATED C/O PMT #2 6TH ST PARKING 280-199-804-5804 438.43 40418 11/26/96 002468 GENERAL CONSOLIDATED RETENTION W/H PMT #2 6TH ST 280-2035 4,164.24- 37,478.19 40419 11/26/96 002129 GREAT WEST CONTRACTORS, PRGS PMT #10 PARKVIEW SITE 210-190-626-5804 112,818.27 40419 11/26/96 002129 GREAT WEST CONTRACTORS, C/O PRGS PMT #10 PARKVIEW 210-190-626-5804 5,902.03 40419 11/26/96 002129 GREAT WEST CONTRACTORS, RETENTION W/H PRGS PMT #10 210-2035 11,872.03- 106,848.27 40420 11/26/96 002499 L.D. KING, INC. SEPT PROF SRVCS-1-15 BRIDGE 280-199-602-5801 18,066.00 18,066.00 40421 11/26/96 002397 LANDMARK/CALIFORNIA STA RET #10 FOR GREAT WEST CONTR. 210-1035 11,872.03 11,872.03 40422 11/26/96 001007 N P G CORP. PALA RD/79(S) A.C. OVERLAY 001-164-601-5402 22,709.00 22,709.00 40423 11/26/96 001713 NORRIS-REPKE, INC. PROF SRVCS 1ST ST BRIDGE 280-199-807-5802 20,321.90 20,321.90 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES -GENERAL 001-130-999-5246 6,713.75 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES -GENERAL 001-130-999-5246 1,473.12 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES GENERAL 001-130-999-5246 4,192.90 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES GENERAL 001-130-999-5246 34.50 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES -GENERAL 001-130-999-5246 310.00 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES GENERAL 001-130-999-5246 87.50 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES-REDEV 280-199-999-5246 2,412.50 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES - CLAIMS 300-199-999-5246 2,010.45 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES - CLAIMS 300-199-999-5246 3,232.40 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES CLAIMS 300-199-999-5246 324.00 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES GENERAL 001-130-999-5246 1,716.00 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES -GENERAL 001-130-999-5246 1,550.75 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES - CLAIMS 300-199-999-5246 1,029.80 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES - CLAIMS 300-199-999-5246 5,527.61 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES - CLAIMS 300-199-999-5246 2,860.07 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES -REDEV 280-199-999-5246 624.55 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES-LOW MOD 165-199-999-5246 1,704.53 VOtJCHRE2 CITY OF TEMECULA PAGE 2 11/18/96 09:48 VOtJCHER/CHECK REGISTER FOR ALL PERIODS VOtJCHER/ CHECK CHECK VENDOR VENDOR ITEM ACCOUNT ITEM CHECK NUMBER DATE NUMBER NAME DESCRIPTION NUMBER AMOUNT AMOUNT 40424 11/26/96 002412 RICHARDS, WATSON & GERS SEPT LEGAL SERVICES REDEV 280-199-999-5246 1,531.00 40424 11/26/96 002412 RICHARDS, WATSON & GERS CREDIT:PER CLAIM ADJUSTER 300-199-999-5246 49.50- 37,285.93 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5288 179,609.70 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5299 32,381.39 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5298 19,292.56 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5294 9,447.44 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5288 11,088.00 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5291 3,239.20 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5291 485.88 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5281 20,691.47 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5282 2,777.60 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 LAW ENFORCEMENT 001-170-999-5262 14,374.60 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 S.R.O. (K-8) 001-1230 3,239.20 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS 8/1-8/28/96 S.R.O. (HIGH) 001-1230 485.88 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5288 168,871.48 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5299 33,920.96 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5298 19,440.88 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5294 9,631.04 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5288 11,088.00 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5291 3,239.20 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5291 3,480.22 40425 11126/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-1230 3,239.20 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-1230 3,480.22 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5281 23,781.57 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5282 2,777.60 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5262 13,275.36 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 LAW ENFORCEMENT 001-170-999-5262 2.69 40425 11/26/96 000406 RIVERSIDE CO. SHERIFFIS SEPT 96 BOOKING FEES 001-170-999-5273 10,598.40 603,939.74 40426 11/26/96 000357 RIVERSIDE, COUNTY OF TR QTR 1 SIGNAL MAINT 96/97 001-164-602-5405 15,197.97 15,197.97 40427 11/26/96 000271 ROBERT BEIN, WM FROST & SEPT PROF ENG SRVCS I-15/79SO 210-165-662-5804 18,139.92 18,139.92 40428 11/26/96 002469 ROHN CONSTRUCTION, INC. PRGS PMT #1 CRC GENERATOR 210-190-139-5804 28,009.00 40428 11126/96 002469 ROHN CONSTRUCTION, INC. RETENTION W/H PMT #1 CRC GEN. 210-2035 2,800.90- 25,208.10 40429 11/26/96 000818 SIGNAL MAINTENANCE, INC SIGNAL @ RANCHO CAL RD/COSMIC 210-165-664-5804 22,246.50 40429 11/26/96 000818 SIGNAL MAINTENANCE, INC RETENTION W/H SIGNAL INSTALL 210-2035 2,224.65- 20,021.85 40430 11/26/96 002451 SKYTEC OCT PRGSS-CITY 14AINT FACILITY 210-190-144-5804 72,582.23 40430 11/26/96 002451 SKYTEC RETENTION W/H OCT PRGSS 210-2035 7,258.22- 65,324.01 40431 11/26/96 000420 TRANS-PACIFIC CONSULTAN SEPT PROF SRVCS-WESTERN BYPASS 210-165-612-5802 11,637.01 11,637.01 TOTAL CHECKS 1,110,729.18 REJISTE2 CITY OF TEMECULA PAGE 25 11/13196 16:29 LABOR DISTRIBUTION REGISTER PERIOD 18 SYST DT DOCUMENT LINE TRAN DT DESCRIPTION ACCOUNT AMOUNT 11/12/96 LD11NOV08-07 19 11/08/96 340-199-701-512 2.87 OVERTIME WAGES 1 4 - 9 6 11/12/96 LD11MOV08-07 20 11/08/96 340-199-701-512 .38 OVERTIME WAGES ;to 001 DOCUM 100,540-45+ 1,665.67 #1 65- 11/08/96 1?40,817.22 lt677 - 56 + 11/12/96 CDLNOV 14-01 1 11/14/96 Paychecks 001-2010 41 90 - 1,975.54 ACCOUNTS PAYABL 11/12/96 CDINOV 14-01 2 11/14/96 Paychecks 001-2050 25s744 - 30 + 98,564.91 ACCRUED SALARII I$l 9 1 0 11/12/96 CDLNOV 14-01 3 11/14/96 Paychecks 190-2010 6 9 - 4 3 + 971.06 ACCOUNTS PAYABI 11/12/96 CDLNOV 14-01 4 11/14/96 Paychecks 280-2010 9 1 9 2 - 245.38 ACCOUNTS PAYARI 1 7 5 - 2 3 + 11/12/96 CDINOV 14-01 5 11/14/96 Paychecks 165-2050 ;$l 9 3 - 1,676.26 ACCRUED SALARII 11/12/96 CDINOV 14-01 6 11/14/96 Paychecks 280-2050 2)9 8 7 - 9 0 + 3,492.05 ACCRUED SALARII 91 9 4 - 11/12/96 CDLNOV 14-01 7 11/14/96 Paychecks 330-2010 33.53 ACCOUNTS PAYAB ljO65- 69+ 11/12/96 CDLNOV 14-01 8 11/14/96 Paychecks 330-2050 S$2 8 0 - 828.91 ACCRUED SALARI 3#737- 43 + 11/12/96 CDLNOV 14-01 9 11/14/96 Paychecks 320-2050 2,925.05 ACCRUED SALARI 3 0 0 11/12/96 CDLNOV 14-01 10 11114/96 Paychecks 300-2050 6 1 5 - 1 4 + 615.14 ACCRUED SALARI st3 2 0 11/12/96 CDLNOV 14-01 11 11/14/96 Paychecks 165-2010 1.30 ACCOUNTS PAYAB 2#9 25 - 0 5 + 11/12/96 CDLNOV 14-01 12 11/14/96 Paychecks 190-2050 S$3 3 0 24,773.24 ACCRUED SALARI 11/12/96 CDINOV 14-01 13 11/14/96 Paychecks 340-2050 8 6 2 - 4 4 + 2,731.84 ACCRUED SALARI $$3 4 0 11/12/96 CDLNOV 14-01 14 11/14/96 Paychecks 193-2050 2,7 31 - 8 4 + 2,987.90 ACCRUED SALARI 11/12/96 CDINOV 14-01 15 11/14/96 Paychecks 192-2050 143,132-46* 175.23 ACCRUED SALARIQ4 11/12/96 CDLNOV 14-01 16 11/14/96 Paychecks 194-2050 1,065.69 ACCRUED SALARIES 11/12/96 CDINOV 14-01 17 11/14/96 Paychecks 191-2050 69.43 ACCRUED SALARIES DOCUMENT TOTAL 143,132.46 11/14/96 DATE TOTAL 143,132.46 GRAND TOTAL 383,949.68 EXP TOTAL 240,817.22 REV TOTAL .00 G/L TOTAL 143,132.46 FILE WAS CLEARED SUCCESSFULLY ITEI\4 3 APPROVAT, CITY ATTORNEY FINANCE OFFICER CITY MANAGER CITY OF TEMECULA AGENDA REPORT TO:City Manager/City Council FROM:Genie Roberts, Director of Finance DATE:November 26, 1996 SUBJECT:Liability Insurance Renewal PREPARED BY: Allie Kuhns, Senior Management AnalystA- RECOMMENDATION: That the City Council approve the City of Temecula Liability Insurance Policy Renewal with Insurance Company of the West for the period of December 1, 1996 through December 1, 1997 in the amount of $98,852. DISCUSSION: In anticipation of the City's Liability Insurance Policy with Insurance Company of the West ('ICW') expiring on December 1, 1996, staff requested that the City's liability insurance broker, Cal-Surance, market the City for liability insurance. In response to this request, Cal-Surance obtained four proposals from the following companies in the amounts listed: Insurance Company of the West - Option I* $88,647 Insurance Company of the West - Option II' $98,852 Genesis Insurance Company - Option 1 $88,489 Genesis Insurance Company - Option 11 $98,450 Insurance Company of Pennsylvania $111,450 'ICW, the City's current insurance carrier, has provided two options with fixed premiums which include vehicle liability/physical damage coverage. The first option is to continue the City's current coverage of $5 million per occurrence and $9 million aggregate for a fixed premium of $88,647. This premium is $3,283 lower than last year's quote of $91,930, even though the City has increased its exposure through claims administration and the addition of City vehicles during the 95-96 insurance period. The second option is for coverage to be increased to $10 million per occurrence and $14 million aggregate for a fixed premium of $98,852. Both of these options cover the entire year, regardless of changes in the City's operating status. Considering the City's current growth and increasing exposure, as well as the outstanding premium offered, staff recommends that the City accept Option II. Although Genesis Insurance Company's premium is slightly lower than ICW's premium for both Options I and 11, Genesis has a lower aggregate of only $5 million for Option I and $1 0 million for Option 11, compared to ICW's proposed aggregates of $10 million and $14 million for the respective options. Additionally, Genesis Insurance Company's premium is subject to increases within the period of coverage. [CW has provided outstanding coverage in the past, despite the fact that in the four years of coverage, ICW has paid over $410,000 in claims related fees and settlements. Please note that in the past four years, the City has paid only $461,000 in premiums, for a loss ratio of 89%. Based on the information provided herein, staff recommends that the City continue both liability and automobile physical damage insurance coverage through ICW, under Option 11 for increased coverage, for the period of December 1, 1996 through December 1, 1997. FISCAL IMPACT: Adequate funds have been budgeted and are available in General Fund Liability Insurance Account 300-199-999-5200 to cover the Option 11 in the amount of $98,852. Attachment: ICW Proposal INSURANCE COMPANY OF THE WEST PROPOSAL TERM:December 1, 1996 - December 1, 1997 FORMAT: Occurrence NAMED INSURED: City of Temecula Temecula Community Services District Redevelopment Agency of the City of Temecula Old Town Westside Community Facilities District Financing Authority Temecula Public Facilities Financing Corporation SELF-INSURED RETENTION ISIR): $50,000 CnVFRAr,F PREMIUM GENERAL LIABILITY INSURANCE $ 92,205 BASE LIMITS/COVERAnF MUNICIPAL GENERAL LIABILITY INCLUDED $6,000,000 per occurrence excess over SIR; $10,000,000 aggregate PUBLIC OFFICIAL'S ERRORS & OMISSIONS INCLUDED $6,000,000 per occurrence excess over SIR; $6,000,000 aggregate MUNICIPAL AUTOMOBILE LIABILITY INCLUDED (Owned, Non-Owned, & Hired Automobile) $6,000,000 per occurrence excess over SIR; $10,000,000 aggregate EXCESS LIMITS/COVERAGE MUNICIPAL GENERAL LIABILITY INCLUDED $4,000,000 aggregate PUBLIC OFFICIAL'S ERRORS & OMISSIONS INCLUDED $4,000,000 per occurrence excess, over underlying $4,000,000 aggregate MUNICIPAL AUTOMOBILE LIABILITY INCLUDED $4,000,000 per occurrence excess, over underlying No aggregate TOTAL BASIC LIABILITY INSURANCE COST $ 92,90@gi AUTOMOBILE PHYSICAL DAMAGE ENDORSEMENT 6,647 TOTAL LIABILITY INSURANCE COST $ EI\4 4 1 APPROVAL CITY ATTORNEY FINANCE DIREC CITY MANAGERI CITY OF TEMECULA AGENDA REPORT TO: City Council/City Manager FROM: Joseph Kicak, Director of Public Works/City Engineer DATE: November 26, 1996 SUBJECT:Accept Public Improvements in Tract No. 24135-1. (Northwesterly corner of Pio Pico Road at Margarita Road) PREPARED BY: Albert Crisp, Permit Engineer RECOMMENDATION: City Council ACCEPT the Public Improvements in Tract No 24135-1, AUTHORIZE the initiation of the one-year warranty period, reduction of the Faithful Performance Street and drainage, and Water and Sewer security amounts and release the Subdivision Monumentation and Traffic Signalization Mitigation securities, ACCEPT substitute securities for Faithful Performance Warranty and Labor and Materials, and DIRECT the City Clerk to so advise the Developer and Sureties. BACKGROUND: On May 14, 1991, the City Council approved Tract Map No. 24135-1, and entered into subdivision agreements with: Bedford Development Company, a California Corporation for the improvement of streets and drainage, installation of sewer and water systems, subdivision monumentation and traffic signalization mitigation fees. Accompanying the subdivision agreements were Instruments of Credit posted by Butterfield Financial Corporation in the following amounts: 1 $1,308,000 ($978,500, $132,000, and $197,500, respectively) to cover faithful performance for streets and drainage, and water and sewer improvements. 2.$654,500 ($489,500, $66,000, and $99,000, respectively) to cover labor and materials for streets and drainage, and water and sewer improvements. 3.$35,500 to cover subdivision monumentation. 4. $14,400 to cover traffic signalization mitigation fees. R:\AGDRFn96\1126\TR241351.ACC Staff has inspected and verified the public improvements. Eastern Municipal and Rancho California Water Districts have accepted their items of work. Public Works Staff therefore recommends acceptance of the public improvements, reduction in Faithful Performance security amounts to the ten-percent warranty level, and initiation of the one-year warranty period. Therefore it is appropriate to reduce the Faithful Performance security amount as follows: Streets, water and sewer improvements $1,177,200 The Faithful Performance warranty security amount will be maintained in the following amount: Streets, water, and sewer improvements $ 130,800 The developer has submitted substitute securities bonds in the appropriate amounts, with the Aetna Casualty and Surety Company as surety, as follows: Bond No. 100869980-96-035 in the amount of $130,800 for faithful performance warranty. Bond No. 100869980-96-034 in the amount of $654,500 for labor and materials. The subdivision monumentation requirements have been and Staff therefore recommends the release of the following security: Instrument of credit in the amount of $14,100 for subdivision monumentation The affected streets are being accepted into the City Maintained-Street System by City Council Resolution No. 96- at this time. The streets within the subdivision to be accepted are Calle Redondela, Corte Sagunto, and portions of Corte Cabral, Calle Vimianzo, Pio Pico, Via Barrozo, and Margarita Road. Margarita Road in this reach was a part of the County Maintained-Road System prior to incorporation and became a portion of the City Maintained-Street System by succession on December 1, 1989. FISCAL IMPACT: None ATTACHMENTS@ Location Map Substitute Securities (On file) R:\AGDRM96\1126\TR241351.ACC i5UTTE12FIE'- ,5TAr,E 00 0 VlClt4lTY A,4AP Tract No. 24135-1 Location Map NOTE: MAPS NOT TO SCALF, ITEI\4 5 APPROVAL CITY ATTO@ FINANCE DI CITY MANA CITY OF TEMECULA AGENDA REPORT TO: City Council/City Manager FROM: Joseph Kicak, Director of Public Works/City Engineer DATE: November 26, 1996 SUBJECT:Accept Public Improvements in Tract No. 24135-3. (Southeasterly corner of Santiago Road at Margarita Road) PREPARED BY: RECOMMENDATION: Igo City Council ACCEPT the Public Improvements in Tract No 24135-3, AUTHORIZE the initiation of the one-year warranty period, reduce the Faithful Performance Street, and Water and Sewer Bond amounts, release the subdivision monumentation bond, ACCEPT substitute bonds, and DIRECT the City Clerk to so advise the Developer and Surety. BACKGROUND: On January 11, 1994, the City Council approved Tract Map No. 24135-3, and entered into subdivision agreements with: KRDC, Inc. 27755 Ynez Road, Suite 202 Temecula, CA 92591 for the improvement of streets and drainage, installation of sewer and water systems, and subdivision monumentation. Accompanying the subdivision agreements were Bonds posted by Butterfield Financial Corporation in the following amounts: 1Bond No. 3S 749 225 00 in the amount of $447,500 ($308,000, $69,500, and $70,000, respectively) to cover faithful performance for streets and drainage, and water and sewer improvements. 2.Bond No. 3S 749 225 00 in the amount of $223,750 ($154,000, $34,750, and $35,000, respectively) to cover labor and materials for streets and drainage, and water and sewer improvements. 3.Bond No. 3S 749 227 00 in the amount of $35,500 to cover subdivision monumentation. Albert Crisp, Permit Engineer R:\AGDRYM1126\TRZ41353.ACC Staff has inspected and verified the public improvements. Eastern Municipal and Rancho California Water Districts have accepted their items of work. Public Works Staff therefore recommends acceptance of the public improvements, reduction in Faithful Performance Bond amounts to the ten-percent warranty level, and initiation of the one-year warranty period. Therefore it is appropriate to reduce the Faithful Performance Security amount as follows: Streets and drainage, and water and sewer improvements $402,750 The Faithful Performance warranty security amount will be maintained in the following amount: Streets and drainage, and water and sewer improvements $ 44,750 The developer has submitted substitute bonds in the appropriate amounts, with The Aetna Casualty and Surety Company as surety, as follows: Bond No. 10869980-96-036 in the amount of $44,750 for faithful performance warranty. Bond No. 10869980-96-037 in the amount of $223,750 for labor and materials. The subdivision monumentation has been completed and Staff therefore recommends release of the following bond- Bond No. S 749 227 00 in the amount of $35,500 for subdivision monumentation. The affected streets are being accepted into the City Maintained-Street System by City Council Resolution No. 96- at this time. The streets within the subdivision to be accepted are Via Alcorisa, Corte Esparza, Corte Cardenas, Corte Avalos, and portions of Via Barrozo, Corte Cabral, Calle Cataido, Santiago Road, and Margarita Road. Margarita Road in this reach was a part of the County Maintained-Road System prior to incorporation and became part of the City Maintained-Street System by succession on December 1, 1989. FISCAL IMPACT: None ATTACHMENTSE Location Map Substitute Bonds (On file) 2 R:%AGDRPr\96%1 l@1353.ACC vleIA(Iry mAp Tract No. 24135-3- Location Map NOTE: MAPS NOT TO SCALE ITEIA 6 APPROVAL CITY ATTORNEY FINANCE DIRECTO ITY MANAGER@ CITY OF TEMECULA AGENDA REPORT TO: City Council/City Manager FROM: Joseph Kicak, Director of Public Works/City Engineer DATE: August 13, 1996 SUBJECT:Acceptance of Public Streets into the City Maintained-Street System (Within Tracts No. 24135-1 and 24135-3). (Easterly of Margarita Road between Pio Pico Road and Santiago Road) PREPARED BY: Mt Albert K. Crisp, Permit Engineer RECOMMENDATION: ly City Council adopt a resolution entitled: RESOLUTION NO. 96-- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA, CALIFORNIA, ACCEPTING CERTAJN PUBLIC STREETS INTO THE CITY MAINTAINED-STREET SYSTEM (WITHIN TRACTS NO. 24135-1 AND 24135-3) BACKGROUND: The City Council approved Tracts No. 24135-1 and 24135-3 on May 14, 1991, and January 1 1, 1994, respectively, and entered into Subdivision Improvement Agreements for construction of street and drainage, and water and sewer improvements with Bedford Development Company, a California Corporation and a successor, KRDC, Inc., respectively. The City Council accepted the public improvements for both tracts on November 26, 1996, and initiated the faithful performance warranty period. The public streets now being accepted by this action are as follows: Tract No 24135-1: Calle Redondela, Corte Sagunto, and portions of Corte Cabral, Calle Vimianzo, Pio Pico, and Via Barrozo. (Margarita Road was already in the County Maintained-Road System prior to City incorporation and became part of the City Maintained-Street System by succession of December 1, 1989). Tract No. 24135-3: Via Alcorisa, Corte Esparza, Corte Cardenas, Corte Avalos, and portions of Via Barrozo, Corte Cabral, Calle Cataido, and Santiago Road(Margarita Road was already part of the County Maintained-Road System prior to City incorporation and became part of the City Maintained-Street System by succession on December 1, 1989). IL-\AGDRM%\1126\TR241351.3)0 FISCAL IMPACT: Periodic surface @I(x structural maintenance will be required every 5 to 8 years. ATTACHMENTSE Resolution No. 96- with Exhibits 'A-B", inclusive. IL-\AODRM%kII26\@1351.3M RESOLUTION NO. 96- A RESOLUTION OF TJHE CrrY COUNCIIL OF THE CrrY OF TEMECULA, CALHORNIA, ACCEPNNG CERTAIN PUBUC STREE]RS PM TJOE CrrY MAINTAINED-STREET SYSTEM (WITB[IN TRACTS NO. 24135-1 AND 24135-3) THE CrrY COUNC]IL OF TBE CrrY OF DOES RESOLVE, JOEI AND ORDER AS FOLLOWS: , @ City of Teffiecula accepted offer of dedication of certain lots for pubhc road and public uuhty purposes made by Bedford Development Company, a Cahfonna Corporation, and a successor, ICRDC, Inc. with the recordation of Tract Maps No. 24135-1 and 24135-3, respectively; and, , @ City of T the improvements wi@ Tracts No 24135-1 and 24135-3 on November 26, 1996. NOW9 RE9 BE rr RESOLVED, that the City Council of the City of Thereby accepts mto the City Mmn@-SUW System those or portions of streets offeredto and accepted by the City of Temecula described in Exhibits 'A' and 'B' attached hereto. PASSED, AFFROVED, AND ADOPRM. by the City C@ of the City of Te at a regular meeting held on the 26th day of November, 1996. Karel F. Lindemans, Mayor A=T: S.Greek, City Clerk IL-@Di"%XII26\TR241351.3M [SEAL] STATE OF CALIFORNIA COUNTY OFI]DE ss CrrY OFUIA I, June S. Greek, City Clerk of the City of Temecula, Califomia, do hereby certify dW Resolution No. 96- was duly and regularly adopted by the City Council of the City of Temecula at a regular thereof held on the 26th day of November, 1996, by the following vote: AYES:0 COUNCIIL ERS: NOES:0 COUNCIIL ERS: ABSENT:0 COUNC]IL ERS: ABSTAIN: 0 COUNC]ILMEM13ERS: IL-\AGD@%\ I 126\TF.241351.3MS EXII]Brr RAN TO RESOLUTION NO. 96- Accepting the publk offered to and accepted by the City of Temecula as indicated on Tract @ps No. 24135-1 and 24135- 39 and accepting subject public Into the City M&tained- Street System as described below: A. Those lots described as Lots 'Al through 'HI inclusive, as shown on Tract Map No. 24135-1. rded 24 May 1991, in Book 232 of Maps, Pgs 21-30 Incl., further described as follows: Lot "AN* Portion of @arita Road W "B" Portion of Pio Pico Road ][A OCR CaRe Redondela Lots ND" & OEO Corte Sagunto IA NFN Corte Cabnd ]LA "Gm Portion of CaRe Vhnianzo ][A OHN Portion of Via Barrozo B. Those lots described as lats 'Al through "I' as shown on Tract @p No. 24135-3, rded 12 January 1994, in Book 247 of @ps, Pgs 20-30 llncl., further described as follows: W "AN*Portion of Margarita Road ][id "B"Portion of Santiago Road W "CmVia Alcorisa IA "DuCorte Esparza Lot "ENPortion of Via Barrozo Lot "F"Corte Cardenas Lot 'G:Corte Avalos W OHPortion of Code Cabnd w urPortion of CaRe CaWdo ta ftW was a Nft of the County Maintaineci-@ System prior tD City incorporation and became part of the City Maintained-Sftd System by succession on December 1, 1989. IL-%AGD@M1126%TM41351.3)0 EXHIBrr "B" TO RESOLUTION NO. 96- SUBJECT ACCEPTANCE-PUBLIC STREETS MO THE CrrY NMINTAINED-STREET SYSTEM AS @ICATED BELOW: ROAD SRAGE 242 VICI#VITY MAP LEGEND STREETS OR PORTIONS OF STMETS TO BE ACCEPTED WTO CffY MAINTAINED-STREET SYSTEM NOTE:MAPS NOT TO SCALE E?A 7 APPROVAL CITY ATTORNEY FINANCE 6@RE Y MANAGER@ CITY OF TEMECULA AGENDA REPORT TO: City Council/City Manager FROM: Joseph Kicak, Director of Public Works/City Engineer DATE: November 26, 1996 SUBJECT:Accept Public Improvements in Parcel Map No. 23472 (Northwest corner Margarita Road at Rancho California Road) PREPARED BY: Albert K. Crisp, Permit Engineer RECOMMENDATION: 49 That the City Council ACCEPT public improvements in Parcel Map No. 23472, AUTHORIZE release of the faithful performance, labor and material, and subdivision monumentation bonds, and DIRECT the City Clerk to so advise the Clerk of the Board of Supervisors, the developer, and the surety. BACKGROUND: On November 14, 1989, the Riverside County Board of Supervisors entered into subdivision agreements with: Bedford Development Company 27555 Ynez Road, Suite 202 Temecula, CA 92591 for the installation of private storm drain system, public sidewalk, driveway improvements, and median island construction, and subdivision monumentation in Parcel Map No. 23472. The bonds were posted by Lumbermens Mutual Casualty Company as follows: Bond No. 3S 740 388 00 in the amount of $1,352,000 to cover private storm drain system and public improvements. Bond No. 3S 740 399 00 in the amount of $676,000 to cover labor and materials for private storm drain system and public improvements. Bond No. 3S 740 389 00 in the amount of $5,500 to cover subdivision monumentation. R:\AGD@96\1126\PM23472. The private storm drain system was constructed by the developer in accordance with the approved plans and certified by the Consultant Construction Manager approved by the Riverside County Flood Control & Water Conservation District (DISTRICT). On September 26, 1995, the City Council authorized the recommendation of reduction of the portion of the Faithful Performance bond assuring the construction of the private storm drain system as follows: Private Storm Drain System. $1,300,000 The remaining Faithful Performance bond amount was retained for the completion of the street improvements: Public sidewalk and other improvements. Bond No 3S 740 388 00 $52,000 The subdivider was required to post a Labor and Material bond to assure payment to suppliers and workers. No claims for either labor or materials were filed with the City or County or disclosed in the title report for the recent sale of the Palomar Village Center or subsequent to the City Council action acknowledging completion. On October 10, 1995, the City Council acted on Staff's recommendation and authorized the release of the Labor and Material Bonds for that portion covering the private storm drain system only as follows: Private Storm Drain System: Bond No. 3S 740 399 00 $650,000 The remaining Labor and Material bond amount was retained to assure payment of any claims for labor and materials following City Council acceptance of the public improvements: Public Sidewalk and other improvements. Bond No. 3S 740 399 00 $26,000 Sidewalk and driveway approach around the perimeter of this development (Palomar Village) have been constructed for several years with some repairs/replacement as appropriate. This work and median island construction in Margarita Road were all that remained in September 1995. The median island was modified to meet Temecula Community Services Department requirements which substituted landscaped/irrigated facilities. Public Works staff therefore recommends the acceptance of this portion of the work and the release of all faithful performance and labor and material bonds as there have been no claims made against the developer for labor and/or materials, as follows: Faithful Performance for Public Sidewalk, etc. Bond No. 3S 740 399 00 $52,000 Labor and Material for Public Sidewalk, etc. Bond No. 3S 740 399 00 26,000 The subdivision monumentation was confirmed following completion of the sidewalk and related repairs. Therefor, Staff recommends that the following bond be released: Subdivision Monumentation: Bond No. 3S 740 389 00 $5,500 The affected streets, portions of Margarita Road and Rancho California Road, are already part of the City Maintained-Street System through succession to the County of Riverside upon City Incorporation on December 1, 1989. FISCAL IMPACT: None Attachment: Location Map R:XAGD@96XI126\PM23472. sa Id ZO@ IIL 514SET 4 N.AP 'e, w 40, CB V7PO7'05-W 30' Lor 'A' ROAD 'YI7.74' f CANCI.10 (M78'O7'05'W 1OZ3-84) C,4LIFORNIA VICINITY MAP 'VOT ?'O SC.4LEPARCEL MAP NO. 23472 Location Map . ITEA4 8 I APPROVAL CITY ATTORNEY FINANCE OFFICQ CITY MANAGER CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: City Clerk/Director of Support Services DATE: November 26, 1996 SUBJECT:Award of Contract for P.C. Workstations RECOMMENDATION: 1 .Award a contract for P.C. workstations to Valley Micro Computers in the amount of $2,107.78 per unit, including sales tax, for a total purchase amount of $50,486. 2.Authorize the Mayor and City Clerk to execute all necessary agreements. 3.Appropriate $1 2,000 to the Depreciation Expense Account in the Information Systems Internal Services Fund. BACKGROUND: The City recently completed a Request for Proposal (RFP) . A total of twelve proposals were received and reviewed. The bids ranged from a low of $1,972.90 from CompUSA San Marcos to a high of $2,843.25 submitted by MCS Electronics of Temecula. Thirty-two RFP packets mailed and the following twelve vendors responded: Vendor Per Unit Quote CompUSA, San Marcos $1,631.00 plus tax Valley Micro Computers, Temecula $1,956.18 New Technologies, Santa Fe Springs $1,985.00 Western Data, Riverside $1,990.00 Golden State Trading, Brea $2,087.00 Omni Data, Riverside $2,090.00 CompuMania, Pasadena $2,125.00 4 Tech Computer Co, Lake Elsinore $2,232.16 LPS Computer Services, Escondido $1,945.00 CSCI, Inc., San Diego $2,569.00 Desktop Solutions $2,622.24 M.C.S. Electronics, Temecula $2,638.75 R:%agenda. rptcom puter. rf p Agenda Report RFP for PC Workstations Page 2. Although Comp USA submitted the lowest quote, they are unable to comply with the full three year warranty on labor which was called for in the specifications of the RFP and as a result staff agreed the bid did not meet all requirements. Valley Micro Computers provided the next lowest quote. They are a well-established, local vendor who meets all the technical and warranty requirements of the RFP. At the time we sent out the RFP's we anticipated purchasing an additional 22 units, however presently the Information Systems Division of Support Services has received requests for 24 units. FISCAL IMPACT: $50,486.72 for the required 24 units. ATTACHMENTS:Request for Proposal Scope of Work - Valley Micro Computers Equipment Purchase Agreement The cost per unit including sales tax is $2,107.78 for a total of R:kagenda. rptcom puter. rfp 2 EXHIBIT A CITY OF TEMECULA REQUEST FOR PROPOSAL SCOPE OF WORK/PROPOSAL SHEETS PART 1: EQUIPMENT SPECIFICATIONS Personal Computer Workstation, Mini-Tower Case w/250+ watt power supply Intel 166MHz Pentium Processor 32MB EDO RAM (72 pin SIMM) 512kb pipeline Burst Cache Flash BIOS Built-in PCI Master IDE controller and floppy controller Built-in two high-speed UARTS serial ports and Multimode parallel port for Standard, Enhanced (EPP) and high speed (ECP) i-,-;odes IGB EIDE hard drive 3.5" 1.44 floppy drive Trident PCI 64-bit graphics accelerator (2MB) Microsoft Serial Mouse Microsoft Natural Keyboard 17", 128OxlO24NI, .26mm Color SVGA Monitor w/tilt & swivel base 3Com Etherlink III IOBASE-T Adapter 3C509B-TP MSDOS 6.22/Windows for Workgroups APC Power Back-UPS 400VA Three year parts and labor warranty NOTE:All systems must be fully compatible with the City's existing Novell 4.1 Ethernet Network systems and be EPA Energy Star compliant. PART Ile. PRIC@ ITEM QTY UNIT PRICE TOTAL PRICE Computer equipment per 22 specifications outlined above Z1,31 Delivery IVI,4 Labor lvllq Subtotal 03@. Sales Tax 3-33@ Other Costs (please identify) TOTAL PRICE 960831 1 1 OS&ODO06 tid 1480196 0 5 EXHIBIT B EQUIPMENT PIIRCHASE AGREEMMI This Purchase Agreement ("Agreement") is made as of 12 1?96, by and between the City of Temecula ("City"), a municipal corporation, and V@ iq t@ @ py("Vendor"). In consideration of the mutual covenants and promises contained herein, theparties agree as follows: 1.Purchase nnd Sale of EQuipment. On and subject to the terms and conditions set forthin this Agreement and the Contract Documents, Vendor agrees to sell and deliver to City a @u@ //,e, e, as more particularly described in Exhibit A, Description of Equipment, attached hereto and incorporated herein as though set forth in full (hereafter "Equipment"). 2.Purchase Pdce. The Purchase Price which City agrees to pay to swe@ Vendor for the Equipment is Fo@si)c @v@,o Liollars oo),Y( o 3 The Purchase Price is final and shall be paid by City to Vendor in accordance with the following schedule: 4r P@s [Add additional language regarding unit pricing (f applicable.] 3. Representations and Warranties of Vendor. Vendor makes the following representations and warranties to City: a. Authority and Consents. Vendor has the right, power, legal capacity and authority to enter into and perform its obligations under this Agreement. No approvals or consents of any persons are necessary in connection with Vendor's execution, delivery and performance of this Agreement, except for such as have been obtained on or prior to the date hereof. The execution, delivery and performance of this Agreement by Vendor have been duly authorized by all necessary action on the part of Vendor and constitute the legal, valid and binding obligations of Vendor, enforceable against Vendor in accordance with their respective terms. b. Title and 012eratini? Conditign. Vendor has good and marketable title to all of the Equipment. All of the Equipment are free and clear of any restrictions on or conditions to transfer or assignment, and City will acquire absolute title to all of the Equipment free and clear of mortgages, liens, pledges, charges, encumbrances, equities, claims, covenants, conditions and restrictions except for such as may be created or granted by City. All of the Equipment are in good operating condition, are free of any defects, and are in conformity with the specifications, descriptions, representations and warranties set forth in the Contract Documents. Vendor is aware that City is purchasing the Equipment for use as and that City is relying on Vendor's warranties that the Equipment is fit for this purpose and the ordinary purposes for which the Equipment is normally used. @29 1 1 09 1480191 0 - 7 - 11. Indemnirication. Vendor agrees to defend, indemnify, protect and hold harmless the City, its officers, officials, employees, agents and volunteers from and against any and all claims, demands, losses, damages, costs and liability of any kind or nature which the City, its officers, officials, employees, agents or volunteers may sustain or incur or which may be imposed upon them for injury to or death of persons, or damage to property arising out of or from the Equipment or Vendor's maintenance thereof, excepting only liability arising out of the sole negligence of the City. 12.Contract Documents, d. This Agreement includes the following documents, which are by this reference incorporated herein and made a part hereof: (1) Request for Proposal dated IJoy@my /@' , 1996, attached hereto as Exhibit B; (2) Vendor's response to the Request for Proposal dated IVey@@ /->I 1996, attached hereto as Exhibit C, except for e. In the event any term or condition of the Contract Documents conflicts with or is contradictory to any term or condition of the Agreement, the terms and conditions of this Agreement are controlling. f. In the event of a conflict in terms between this Agreement, the RFP and/or the Vendor's response to the RFP, this Agreement shall prevail over the RFP and the Vendor's Response to the RFP, and the RFP shall prevail over the Vendor's Response to the RFP. 13. Remedies. The remedies and rights conferred on the City by this Agreement are in addition to and cumulative with all other remedies and rights accorded the City under law or equity. 14. Survival of Representations and Warranties. All representations, warranties, covenants and agreements of the parties contained in this Agreement shall survive the execution, delivery and performance of this Agreement. 15. Legal Responsibil*ties, The Vendor shall keep itself informed of State and Federal laws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Vendor shall at all times observe and comply with all such laws and regulations. The City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Vendor to comply with this section. 16. Assignment. This Agreement may not be assigned by Vendor without the express written consent of City. This Agreement shall be binding on, and shall inure to the benefit of, the parties to it and their respective heirs, legal representatives, successors and assigns. 17. Severab*lity. If any provision of this Agreement is held invalid or unenforceable by any court of final jurisdiction, it is the intent of the parties that all other "-"'@19 11096-00001 3&s 1480191 0 - 9 - provisions of this Agreement be construed to remain fully valid, enforceable, and binding on the parties. 18. Entire Ai!reement; Modiricat6on; Waover, This Agreement, constitutes the entire agreement between the parties pertaining to the subject matter hereof and thereof and supersedes all prior and contemporaneous agreements, representations and understandings of the parties, whether oral or written. No supplement, modification or amendment of this Agreement or the Contract Documents shall be binding unless executed in writing by all the parties. No waiver of any of the provisions of this Agreement or the Contract Documents shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. 19. Not*ces. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the third business day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, or on the first business day after being deposited with an overnight carrier for delivery the next business day, and properly addressed as follows: To Vendor at: (emo eo, /0 4 @;?rvo To City at: City of Temecula 43200 Business Park Drive P.O. Box 9033 Temecula, California 92589-9033 Attn: City Manager Any party may change its address for purposes of this paragraph by giving the other parties written notice of the new address in the manner set forth above. 20. Effects of HeadinL7s. The subject headings of the sections and subsections of this Agreement are included for convenience only and shall not affect or be considered in the construction or interpretation of any of its provisions. 21. Governing I,,,iw. This Agreement shall be construed in accordance with, and governed by, the laws of the State of California as applied to contracts that are executed and performed entirely in California. 960829 11086-00001 &as 1480191 0 - 10 - I i EI\4 9 In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the office of the City Clerk (909) 694-6444. Notification 48 hours prior to a meeting will enable the City to make reasonable arrangements to ensure accessibility to that meeting [28 CFR 35.102.35.104 ADA Title II] AGENDA TEMECULA CITY COUNCIL A REGULAR MEETING CITY COUNCIL CHAMBERS 43200 BUSINESS PARK DRIVE, TEMECULA NOVEMBER 26,1996 7:00 PM . .. ..... .. .. . .. ..... .. of: a. ounci::idursuan o::: overnme. o e: Ss on C d . . .. .. .. .. ........... . @c, an' ence e a i@ un @w I CO' p "I: f St ilffi L ot4.n'tia @L ti I .... .. at on::: one.:cass. . ..... ..... .. .. .. . . ..... .. .. W: -...Ex! g. Litioat on:::t an CHC d O:: Losses or 11 m !Merl IIVT. @:R . ....... .. w .......... ra' tt: and: @Hd i! C 0. acua: At approximately 9:45 PM, the City Council will determine which of the remaining agenda items can be considered and acted upon prior to 1 0:00 PM and may continue all other items on which additional time is required until a future meeting. All meetings are scheduled to end at 10:00 PM. Next in Order: Ordinance: No. 96-21 Resolution:No. 96-133 CALL TO ORDER:Mayor Karel Lindemans presiding Invocation:Reverend James Egea, Church of Religious Science of Temecula Valley Flag Salute:Mayor Pro Tem Birdsall ROLL CALL:Birdsall, Ford, Roberts, Stone, Lindemans PRESENTATIONS/Presentation by Western Riverside Council of Governments - PROCLAMATIONS'Draft Comprehensive Transportation Plan" Western Riverside County R:\Agenda\l 1 2696 1 ORDINANCE NO. 96-19 AN ORDINANCE OF THE CrrY COUNC]IL OF THE CffY OF TEMIECULA AMENDING C 17 OF THE CULA MUNICIPAL CODE TO MAKE TYPOGRAPHIC AND OTBER Mlt4OR CHANGES TO THE DEVELO CODE THE CITY COUNCIL OF THE CITY OF TEMECULA, STATE OF CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Finding-.- The City Council of the City of Temecula hereby makes the following findings: A.That Section 65800 of the Govemment Code provides for the adoption and administrationof zoning laws, ordinances, rules and regulations by cities to implement such general plan asmay be in effect in any such city; and B.That there is a need to amend the Development Code to ensure its clarity and completeness;and C.That this Ordinance complies with all the applicable requirements of State law and local ordinances. Section 2. The following minor typographic effors and incorrect Code references of Chapters 17.01 through 17.34 of the Temecula Municipal Code are hereby amended to read as follows: A. Section 17.02.010/Table 9.02(a) Relabel as Table 17.02(a). B. Section 17.02.020/Table 9.02(b) Relabel as Table 17.02(b). C. Section 17.02.030 Fill in the date blank with 'December 19, 1995 D. Section 17.03.010/Table 9.03a Relabel as Table 17.03(a). E. Section 17.03.020(a)(4) At the end of this item, amend Code reference from "17.01" to "17.03.090". F. Section 17.03.060 (c)(3) At the end of this item, amend Code reference from "17.03" to "17.03.090". Ords\96-19 G. Section 17.03.060(e) Replace the word 'Action' with 'Decision' in the title and amend this section to read as follows: 'Notice of decision upon an application for a Minor Exception shall be in accordance with Section 17.03.040(e) of this Development Code." H.Section 17.03.090(i) At the end of this item, amend Code reference from '17.03.040(f)'to '17.04.040(f)'. I.Section 17.04.010(a) Replace the code reference in the second sentence of the second paragraph from '17.03. 100" to " 17.03.090". J. Section 17.04.010(f) Replace the word 'Action' with 'Decision" in the title and wnend this section to read as follows: 'Notice of decision upon an application for a Conditional Use Permit shall be in accordance with Section 17.03.040(e) of this Development Code." K. Section 17.04.020 (c) At the end of this item, amend Code reference from "17.03.100" to "17.03.090". L. Section 17.04.020(f) At the end of this item, amend Code reference from "17.03.090" to "17.03.080". M.Section 17.04.030(a) In line two, replace "to those which" with 'that". N. Section 17.04.030(d)(2) In line two, after the words "is likely" add "to be". 0.Section 17.04.030(e) At the end of this item, amend Code reference from. 1117.03.09011to 1117.03.080". P. Section 17.04.040 (c) At the end of this item, amend Code reference from "17.03.100" to "17.03.090". Q. Section 17.04.040 (e) At the end of this item, amend Code reference from "17.03.100" to "17.03.090". R. Section 17.04.040 Relabel the second section 17.04.040 '(f)" to "(h)" and amend the Code reference from '17.03.090" to " 17.03.080'. S. Section 17.04.040(g) Replace the word 'Action' with 'Decision" in the title and amend this section to read as follows: 'Notice of decision upon an application for a Variance shall be in accordance with Section 17.03.040(e) of this Development Code.' T. Section 17.05.010(e) Replace the word 'Action' with 'Decision" title and amend this section to read as follows: 'Notice of decision upon an application for a Development Plan shall be in accordance with Section 17.03.040(e) of this Development Code.' Ords\96-19 2 U. Section 17.05.010(i) At the end of this item, amend Code reference from "17.03.090" to "17.03.080". V. Section 17.05.020(b) Delete " reviewed by the approval body" from the end of the last sentence. W. Section 17.05.020 (c) At the end of this item, amend Code reference from "17.03.020" to "17.03.030". X. Section 17.05.020 (i) At the end of this item, amend Code reference from "17.03.090" to "17.03.080". Y.Section 17.06.030/Table 17.06(a) Replace the '-*' for Duplex (two-family ,_2,, dwellings) in the L-1, L-2, and LM Zones with the following symbol Z.Section 17.06.030/Table 17.06(a) Replace the unnumbered '*" footnote with the following: '2 A Duplex or two family dwelling may be permitted on comer lots with a Planned Development Overlay pursuant to the provisions of Chapter 17.22. " AA. Section 17.06.050/Table 17.06(e) Add the words "and air conditioning units' after the word 'Chimneys'. BB. Section 17.06.050(e) At the end of the first sentence, add 'or building" after "property line". CC. Section 17.06.060(b)(3) Amend this subsection to read as follows: 'Street trees shall be planted along all sumts m residential areas. On any street, at least one (1) street tree shall be provided at the front of each residential lot and m street side yard, slope, landscape, and similar areas, at least (1) street tree per forty five (45) linear feet of street shall also be provided." DD. Section 17.06.070/Table 17.06(e) Should be relabeled as Table 17.06 (f). EE.Throughout Title 17 Change all references from "HTC" to "HT". FF.17.08.040/Tible 17.08 (b) Add the following lines from Table 17.08(c) to Table 17.08(b): 'Interior Side Yard, Rear Yard, and Accessory Structure" between "Yard Area adjacent to a street' and 'Yard Areas adjacent to a residentially zoned property'. GG. Section 17.08.050(g)(2)(b) At the end of this item, amend Code reference from "17.03.100" to "17.03.090". HH. Section 17.08.050(i)(1) Between 'be and 'screened' in the second sentence Ords\96-19 3 add "located on appropriate paving and be' 11. Section 17.08.050(m)(1) Add the word 'be' between "shall' and 'required". JJ. Section 17.08.060(d)(1) Replace the first sentence with the following: "Setback areas that are not used for vehicular and pedestrian access shall be landscaped." KK. Section 17.08.070frable 17.08(e) Should be relabeled as Table 17.08(d). LL. Section 17.16.020(b) At the end of this item, amend Code reference from "17.03.100" to "17.03.040". MM. Section 17.18.020(b) Replace the second sentence of this subsection with the following: 'Notice of hearings shall be given pursuant to the requirements of Section 17.03.040 of the Development Code". NN. Section 17.22.060 Delete the second "by the same procedure" in the second sentence. 00. Section 17.24.020(b) Replace the word "site" with "development" in the first sentence. PP. Section 17.24.020(b) At the end of this item, amend Code reference from "Section 17.03.020" to -Chapter 17.05". QQ. Sectionl7.24.020(d)(1)(h) Inhnetwo,change"11.2tons"to"11/2 tons". RR. Section 17.24.020(d)(4) (c) In the fourth 0, replace "; or" with SS. Sections 17.24.030(a) and 17.24.030(b) At the end of these items, amend the Code references from '17.24.010(e)" to "17.24.020(e)". TT. Section 17.24.050 (c) Between 'parking spaces' and 'and' add the following:', recreational vehicle storage areas, material storage yards,". UU. Section 17.24.060 (c) In the first sentence, replace the table reference from "17.24(c)' to "17.24(a)'. VV. Section 17.26.025 (e) At the end of this item, amend Code reference from "17.03.100" to "17.03.090". WW. Section 17.34(s) In the definition of Secondary Dwelling Unit, delete the second sentence of the definition that reads: "The floor space of an attached Secondary Dwelling Ords\96-19 4 Unit may not exceed @ (30) percent of the floor area of the living space of the primary residence nor shall the floor space of a detached second unit exceed one thousand two hundred (1,200) square feet." XX. Section 17.06.050(m)(3) Add after the comma add the following "and may not exceed thirty (30) percent of the floor area of the living space of the primary residence. " Section 3. The following minor changes to Chapters 17.01 through 17.34 of the Temecula Municipal Code are hereby amended to read as follows: A. Section 17.06.060(d)(5) Amend this Section to read as follows: 'Slope banks five feet or greater in vertical height with slopes between 5:1 and 2:1 shall, at a minimum, be irrigated and landscaped with an appropriate groundcover for erosion control. a. Slope banks five (5) feet or greater in vertical height with slopes greater than or equal to 3: 1 shall, at a minimum, be irrigated and landscaped with appropriate groundcover for erosion control and to soften their appearance as follows: 1.One fifteen (15) gallon or larger tree per each 600 square feet of slope area; 2. One (1) gallon or larger shrub for each one hundred (100) square feet of slope area; and 3.Appropriate ground cover. b. Slope b@ in excess of eight (8) feet in vertical height with slopes greater or equal to 2:1 shall also provide one five (5) gallon or larger tree per each 1,000 square feet of slope area in addition to the requirements of subsection a. above. C. All trees and shrubs shall be planted in staggered clusters to soften and vary the slope plane. Slope planting required by this Section shall include a permanent irrigation system to be installed by the developer prior to occupancy.' B.17.08.040/Table 17.08 (b) Add the following lines to the Table: NC CC HT SC PO BP Li Fence, wall or hedge screemng 6 ft 6 ft No' 6 ft 6 ft outdoor storage - Minimum allowed Height ,III or hedge screening 6 ft 8 ft 8 ft 12ft Not Fence, wai allowed 12 ft outdoor storage - Maximum Height Ords\96-19 C.17.08.040/Table 17.08 (c) Add the following lines to the Table: NC CC HT SC PO BP Li Fence, wall or hedge screening 6 ft 6 ft NO' 6 ft 6 ft allowed outdoor storage - Minimum Height Fence, wall or hedge screening 6 ft 8 ft 8 ft 12 ft Not 12 ft 12 ft allowed outdoor storage - Maximum Heijzht D. Section 17.08.060(d)(5) Amend this Section to read as follows: 'Slope banks five feet or greater in vertical height with slopes between 5: 1 and 2: 1 shall, at a minimum, be irrigated and landscaped with an appropriate groundcover for erosion control. a. Slope banks five (5) feet or greater in vertical height with slopes greater than or equal to 3:1 shall, at a minimum, be irrigated and landscaped with appropriate groundcover for erosion control and to soften their appearance as follows: 1.One fifteen (15) gallon or larger tree per each 600 square feet of slope area; 2. One (1) gallon or larger shrub for each one hundred (100) square feet of slope area; and 3.Appropriate ground cover. b. Slope banks in excess of ten (10) feet in vertical height with slopes greater or equal to 2:1 shall also provide one five (5) gallon or larger tree per each 1,000 square feet of slope area in addition to the requirements of subsection a. above. C. All trees and shrubs shall be planted in staggered clusters to soften and vary the slope plane. Slope planting required by this Section shall include a permanent irrigation system to be installed by the developer prior to occupancy.' Section 4. The land use matrix contained in Chapter 17.08/Table 17.08(a) of the Temecula Municipal Code is hereby amended as follows: A. Add the "C" symbol for Automotive Service Stations with or without an Automated Car Wash in the PO and BP Zones. Section 5. Severability The City Council hereby declares that the provisions of this Ordinance are severable and if for any reason a court of competent jurisdiction shall hold any Ords\96-19 6 sentence, paragraph, or Section of this ordinance to be invalid, such decision shall not affect the validity of the remaining parts of this ordinance. Section 6. Effective D= This Ordinance shall be in full force and effect thirty (30) days after its passage. The City Clerk shall certify to the adoption of this Ordinance. The City Clerk shall publish a summary of this Ordinance and a certified copy of the full text of this Ordinance shall be posted in the office of the City Clerk at least five days prior to the adoption of this Ordinance. Within 15 days from adoption of this Ordinance, the City Clerk shall publish a summary of this Ordinance, together with the names of the Councilmembers voting for and against the Ordinance, and post the same in the office of the City Clerk. Section 7. PASSED, APPROVED, AND ADOPTED this 12th day of November, 1996. Karel F. Lindemans, Mayor ATMT: June S. Greek, CMC, City Clerk [SEAL] Ords\96-19 7 STAT'E OF CALIFORNIA COUNTY OF RIVERSEDE) SS CrrY OF TEMECULA I, June S. Greek, City Clerk of the City of Temecula, California, do hereby certify that the foregoing Ordinance No. 96-19 was duly introduced and placed upon its first reading at a regular meeting of the City Council on the 12th day of November, 1996, and that thereafter, said Ordinance was duly adopted and passed at a regular meeting of the City Council of the City of Temecula on the 26th day of November, by the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT:COUNCILMEMBERS: June S. Greek, CMC, City Clerk Ords\96-19 8 TENAECULA COIMIMUNITY SERVICES DISTRICT -,Z=- - . I. Ir. @ il.ir EI\4 I MINUTES OF A REGULAR MEETING OF THE TEMECULA COMMUNITY SERVICES DISTRICT HELD NOVEMBER 12,1996 A regular meeting of the Temecula Community Services District was called to order at 7:52 P.M. at the Community Recreation Center, 30875 Rancho Vista Road, Temecula, California. President Ron Roberts presiding. ROLL CALL PRESENT: 5 DIRECTORS: Birdsall, Ford, Lindemans, Stone, Roberts ABSENT: 0 DIRECTORS: None Also present were General Manager Ronald E. Bradley, District Counsel Peter Thorson and District Secretary June S. Greek. PUBLIC COMMENTS None given. CONSENT CALENDAR Director Lindemans stated he would abstain on Item No. 1 since he did not attend that meeting. It was moved by Director Stone, seconded by Director Ford to approve Consent Calendar Item No. 1 as follows: 1 Minutes 1.1 Approve the minutes of October 22, 1996. The motion carried as follows: AYES: 4 DIRECTORS: Birdsall, Ford, Stone, Roberts NOES: 0 DIRECTORS: None ABSENT: 0 DIRECTORS: None ABSTAIN: 1 DIRECTORS: Lindemans DIRECTOR OF COMMUNITY SERVICES REPORT Director of Community Services Shawn Nelson stated that staff will make a full presentation on the effects of Proposition 218 on the meeting of November 26, 1996. r:\minutes.csd\l 1 1 296 -1- GENERAL MANAGERS REPORT None given. BOARD OF DIRECTORS REPORTS Director Birdsall suggested holding meetings in December on the first and third Tuesday of the month, instead of the regularly scheduled second and fourth Tuesday. Board consensus was given to hold the regularly scheduled meeting on November 26, 1996 and hold an adjourned regular meeting on December 3, 1996. ADJOURNMENT It was moved by Director Lindemans, seconded by Director Stone to adjourn at 7:58 PM to a meeting on November 26, 1996, 7:00 PM, Temecula City Hall, City Council Chamber, 43200 Business Park Drive, Temecula, California. The motion was unanimously carried. Ron Roberts, President ATTEST: June S. Greek, CMC, City Clerk/ District Secretary r:\minutes.csd\l 1 1 296 -2- IDEPARTMENTAL REPORT APPROVAL CITY ATTORNEY FINANCE DIREC'KO@ CITY MANAGER CITY OF TEMECULA AGENDA REPORT TO: Board of Directors FROM: Ronald E. Bradley, General Manager DATE: November 26, 1996 SUBJECT:Departmental Report PREPARED BY: Gail L. Zigier, Administrative Secretary-V Construction of the Parkview Fire Station began on January 3, 1996. Currently the masonry veneer on the building and the roofing tile is being installed. The grading for the on-site walkways is scheduled to be complete by the first week of December. This project is scheduled to be completed January, 1997. The Rancho California Creek Restoration Project completed construction on September 25, 1996 and is currently in the 90 day maintenance period. Sam Hicks Monument Park Improvement Project is complete and has begun the 90 day maintenance period. A contract was awarded to Skytec, Inc., for the construction of the City of Temecula Maintenance Yard facility. Construction began on September 3, 1996. The perimeter masonry walls are complete. Currently the contractor is laying masonry block at the second story level of the facility. Installation of the concrete parking lot will begin the first of December. This project is scheduled to be completed by Spring of 1997. The Alhambra Group is preparing the construction documents for second submittal for Margarita Community Park. Design review should be complete by mid-October. The first phase of the Master Plan includes parking, fighting, tot lots, picnic facilities, landscaping, irrigation, and pedestrian walkways. The bid will also include additive alternates for a roller hockey rink, tennis courts, and improvements to the adjacent school district baseball fields. A dedication ceremony was held on Tuesday, October 29, 1996, 4:00 P.M., at the Temecula Community Center. The facility is now open to the public and a wide variety of recreation programs will be offered at this facility. The City Hall Grand Opening ceremony was held on Wednesday, October 30, 1996. The final phase of tenant improvements are being completed. The 6th Street Parking and Restroom Project is currently in the grading phase. This project will be the first built as part of the Old Town demonstration block. Amenities include a restroom facility, public lockers and eighty (80) parking stalls. Additionally, the Temecula Stage Stop transportation center will begin construction and is located on this site. It is anticipated this project will be completed in February 1997. ]L%A lft,@ 12, lm REDEVELOPMENT AGENCY @'Z= 11 - .." -,t yt j@@Li EA 4 I MINUTES OF A REGULAR MEETING OF THE TEMECULA REDEVELOPMENT AGENCY HELD NOVEMBER 12, 1996 A regular meeting of the City of Temecula Redevelopment Agency was called to order at 7:58 P.M. at the Community Recreation Center, 30875 Rancho Vista Road, Temecula, California. Chairperson Patricia H. Birdsall presiding. PRESENT: 5 AGENCY MEMBERS: Ford, Lindemans, Roberts, Stone, Birdsall ABSENT: 0 AGENCY MEMBERS: None Also present were Executive Director Ronald E. Bradley, Agency General Counsel Peter Thorson and Agency Secretary June S. Greek. PUBLIC COMMENTS None given. CONSENT CALENDAR. Chairperson Birdsall removed Item No. 2 from the Consent Calendar for further discussion. Agency Member Ford suggested on Consent Calendar Item No. 4, that since this fee is a deposit and costs will be given after the project is completed, that a 1 0% contingency provision be included. Agency Member Lindemans said he would abstain on Item No. 1 since he did not attend that meeting. Agency Member Stone stated he would abstain on Items 3 and 4. It was moved by Agency Member Ford, seconded by Agency Member Roberts to approve Consent Calendar Item 1, 3 and 4, amending Item No. 4 with the amendment that a 10% contingency will be included. 1 . Minutes 1.1 Approve the minutes of October 22, 1996. The motion carried as follows: AYES: 4 AGENCY MEMBERS: Ford, Roberts, Stone, Birdsall NOES: 0 AGENCY MEMBERS: None ABSENT: 0 AGENCY MEMBERS: None ABSTAIN: 1 AGENCY MEMBERS: Lindemans Minutes.rdal 1 2696 -1- 3Adoption of a Resolution Related to the Issuance of Bonds for the Purpose of Financina Multifamily Residential Proiects 3.1Adopt a resolution entitled: RESOLUTION NO. RDA 96-20 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA RELATING TO THE ISSUANCE OF BONDS FOR THE PURPOSE OF FINANCING THE ACQUISITION OF TWO MULTIFAMILY RESIDENTIAL RENTAL PROJECTS AND RELATED FACILITIES The motion carried as follows: AYES: 4 AGENCY MEMBERS: Ford, Roberts, Lindemans, Birdsall NOES: 0 AGENCY MEMBERS: None ABSENT: 0 AGENCY MEMBERS: None ABSTAIN: 1 AGENCY MEMBERS: Stone 4il:l 5/Rancho California Road Interchange Improvements, Gas Comi2any Work Authorization Agreement with Southern California Gas Company for the Relocation of a 6" High Pressure Gas Main - Pro*ect No. PW95-1 2 4.1Approve the Interagency Agreement and authorize the Chairperson to execute the documents. 4.2Authorize payment to the Southern California Gas Company for construction fees in the amount of $23,234. 4.3 Approve a 1 0% contingency. The motion carried as follows: AYES: 4 AGENCY MEMBERS: Ford, Roberts, Lindemans, Birdsall NOES: 0 AGENCY MEMBERS: None ABSENT: 0 AGENCY MEMBERS: None ABSTAIN: 1 AGENCY MEMBERS: Stone 2Award a Professional Services Agreement to Enaineerina Resources to Perform the Old Town Utility Underaroundinci Feasibility S@ Agency Member Stone announced a conflict of interest and stepped down from the dias. Community Development Director Gary Thornhill presented the staff report. Minutes.rdal 12696 -2- Chairperson Birdsall questioned the need for this study since so much of Old Town is in a flood plain and costs for undergrounding utilities for this area would be so high. She asked Senior Planner Dave Hogan if there was a strong feeling from the Merchants Association on whether they wanted utilities undergrounded. Mr. Hogan said they were not sure and the study was to determine the feasibility. Agency Member Ford explained the Old Town Specific Plan states this study will be performed and the study is very comprehensive, outlining all existing utilities as well as determining the feasibility of undergrounding utilities. He said this study is needed whether or not the utilities are undergrounded. It was moved by Agency Member Lindemans, seconded by Agency Member Ford to approve Item No. 2 as follows: 2.1Award a Professional Services contract in the amount of $50,052 to Engineering Resources to perform the Old Town Utility Underground Feasibility Study. 2.2Authorize Chairperson and City Clerk to execute the agreement. 2.3Authorize the transfer of $30,052 from the RDA Fund Balance to Account No. 280-199-999-5248. The motion was carried as follows: AYES: 4 AGENCY MEMBERS: Ford, Lindemans, Roberts, Birdsall NOES: 0 AGENCY MEMBERS: None ABSENT: 0 AGENCY MEMBERS: None ABSTAIN: 1 AGENCY MEMBERS: Stone EXECUTIVE DIRECTOR REPORT None given. AGENCY MEMBER'S REPORTS None given. Minutes.rdal 12696 -3- ADJOURNMENT It was moved by Agency Member Lindemans, seconded by Agency Member Stone to adjourn at 8:13 PM to a meeting on November 26, 1996, 7:00 P.M., Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California. The motion was unanimously carried. Patricia H. Birdsall, Chairperson ATTEST: June S. Greek, CMC, City Clerk/ Agency Secretary Minutes.rdal 12696 -4- OLD TOWN WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY @,Z=- 11 -1@ yi - -@t- E A4 1 MINUTES OF A MEETING OF THE OLD TOWN WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY HELD NOVEMBER 12,1996 A regular meeting of the Old Town Westside Community Facilities District Financing Authority was called to order at 8:13 P.M. at the Community Recreation Center, 30875 Rancho Vista Road, Temecula, California. Chairperson Patricia H. Birdsall presiding. PRESENT: 5 BOARD MEMBERS: Ford, Lindemans, Roberts, Stone, Birdsall ABSENT: 0 BOARD MEMBERS: None Also present were City Manager Ronald E. Bradley, City Attorney Peter Thorson and Authority Secretary June S. Greek. PUBLIC COMMENTS None given. FINANCING AUTHORITY BUSINESS 1Minutes It was moved by Board Member Ford, seconded by Board Member Roberts to approve staff recommendation as follows: 1.1 Approve the minutes of the meeting of October 22, 1 996. The motion was unanimously carried, with Agency Member Lindemans abstaining. ADJOURNMENT It was moved by Board Member Stone, seconded by Board Member Roberts to adjourn at 8:13 PM to a meeting on November 26, 1996, 7:00 PM, Temecula City Hall, City Council Chambers, 43200 Business Park Drive, Temecula, California. The motion was unanimously carried. Patricia H. Birdsall, Chairperson ATTEST: June S. Greek, CMC, City Clerk/Authority Secretary Minutes.fa\l 11296 Joint 1\4eeting of the City Council, RDA & Old Town NVestside Community Facilities District Financing Authori ty ITEIA 1 0 APPRO CITY ATTORNEY DIRECTOR OF Fl CITY MANAGER CITY OF TEMECULA AGENDA REPORT TO:City Manager/City Council FROM:hawn D. Nelson, Director of Community Services DATE:November 26, 1996 SUBJECT:Final Draft Riverside Countywide Intergrated Waste Management Plan (CIWMP) PREPARED BY:Beryl Yasinosky, Development Services Analyst RECOMMENDATION:That the City Council: Adopt a resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THE FINAL DRAFT COUNTYWIDE INTEGRATED WASTE MANAGEMENT PLAN, INCLUDING THE COUNTYWIDE SUMMARY PLAN AND COUNTYWIDE SITING ELEMENT. BACKGROUND: In accordance with State regulations, and on behalf of Riverside County and its cities, the Riverside County Waste Resources Management District has submitted the final draft of the Countywide Integrated Waste Managment Plan (CIWMP), Countywide Summary Plan and Countywide Siting Element to each jurisdiction for local adoption. The Final Draft CIWMP has been prepared in compliance with the State of California Waste Management Act of 1989 (AB 939), and in cooperation with the Solid Waste Advisory Council/Countywide Local Task Force, Coachella Valley Association of Governments and the Western Riverside Council of Governments. Upon final approval by the California Integrated Waste Management Board, the CIWMP will establish comprehensive guidelines for the existing and future countywide solid waste management system in order to reflect new or changed local and regional issues. The Final Draft CIWMP is composed of the Countywide Summary Plan and Countywide Siting Element. The Summary Plan includes the countywide goals, policies and objectives for integrated waste managment planning; a description of the administrative structure for preparing and maintaining the Summary Plan; a description of current solid waste management practices; a summary of the SRRE'S, HHWE'S, and NDFE's for Riverside County and its 24 cities; and a discussion of the countywide programs, how they will be structured, administered and financed. The Siting Element includes the identification and description of those areas that R.\yasisinobk\ciwmpdra.ft 111296 will be used for the development of adequate disposal facilities for solid waste that has first been reduced through source reduction, reuse, recycling and composting. FISCAL IMPACT: No fiscal impacts are anticipated with the adoption of the Final Draft CIWMP, Countywide Summary Plan and Countywide Siting Element. ATTACHMENTS: 1 . Resolution to Adopt the Final Draft CIWMP. 2.Letter from Riverside County Waste Resources Management District. 3L-Nywisimbk\c ft 111296 RESOLUTION NO. 96-- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CULA APPROVING THE FINAL DRAFT COUNTYWI]DE INTEGRATED WASTE MANAG PLAN, INCLUDING THE COUNTYWI]DE SUMMARY PLAN AND COUNTYWI]DE SITING EL T. WHEREAS, the California Integrated Waste Management Act of 1989 ("Act"), being Division 30 of the Public Resources Code ("PRC") of the Sate of California (commencing with 40000), was added by Chapter 1095, Statutes of 1989 (Assembly Bill 939); and, , the ACT, as amended requires local jurisdictions to prepare integrated waste management plans that promote waste management practices that include, in order of priority, source reduction, reuse, recycling and composting, and environmentally safe land disposal and/or transformation; and, , PRC 40900, et seq., describe requirements to be met by local jurisdictions in developing and implementing integrated waste management plans; and, WHEREAS, PRC 41750 through 41770 require the County of Riverside ("County") and its cities to each prepare and submit to t he California Integrated Waste Management Board ("CIWNM") a Countywide Integrated Waste Management Plan ("CIWMP"), which includes a Source Reduction and Recycling Element ("SRRE") from the County and each city, a Household Hazardous Waste Element (" ") from the County and each city, a Nondisposal Facility Element ("NDFE") from the County and each city, a Countywide Siting Element, and a Countywide Summary Plan; and; , the Riverside County Waste Resources Management District ('WRMD"), on behalf of the County and in cooperation with the Solid Waste Advisory Council/Countywide Local Task Force ("LTF"), which includes representation from the Coachella Valley Association of Government ("CVAG"), the Western Riverside Council of Governments ("@COG"), and cities in the County, have prepared the CIWMP, composed of the Countywide Summary Plan and the Countywide Siting Element; and, WHEREAS, the Countywide Summary Plan includes the identification and description of solid waste management practices in the County, programs and facilities found in the SRRES, , and NDFEs for the County and each city in the County, and countywide programs; and, WHEREAS, the Countywide Siting Element includes the identification and description of those areas that will be used for the development of adequate disposal capacity; and, p:\nisep\ciwmpres.o96 the LTF held two duly noticed public hearings; one on the Preliminary Dr-aft on February 15, 1996 and another on the Revised Pre Draft C on July 18, 1996; and, WHEREAS, the Final Draft C dated September 1996, reflects revisions to the Revised Preliminary Draft CIWMP, dated May 1996, and incorporates comments that were received from the LTF, CVAG, VMCOG, the cities, and other agencies and interested parties during the 45-day public comment period from June 10, 1996 through July 25, 1996 and responses to those comments; and WHEREAS, the CIWMP must be approved by the County and a majority of the cities within the County, in accordance with PRC 417.60; and, WHEREAS, each city of the County must act upon the Final Draft CIWMP within 90 days of receipt of the Final Draft C or it shall be deemed approved by the city; and, , a copy of the Final Draft C has been circulated to the County and its cities, the LTF, the Local Enforcement Agency ("LEA"), NMCOG, CVAG, and other agencies and interested parties, in accordance with California Code of Regulations ("CCR") 18780; and, , the LTF prepared written comments on the Fmal Draft at it meeting held on October 17, 1996 and submitted these comments to the County, WRMD, each city in the County, and the C, in accordance with CCR 18781; and, , aninitial study for Environmental Assessment Number 37011 ("EA NO. 37011 ") was prepared by to evaluate the C , composed of the Countywide Summary Plan and the Countywide Siting Element, pursuant to the requirements of the California Environmental Quality ACT ("CEQA") (PRC 21000 et seq.) and the Riverside County Rules to Implement CEQA ("Rules"); and, prepared a Negative Declaration, pursuant to 15070 of the CEQA Guidelines, on the basis that the C , composed of the Countywide Summary Plan and the Countywide Siting Element, will not have a significant effect on the environment, and circulated a Notice to Adopt a Negative Declaration to each city in the County for comment during the period of June 17, 1996 to July 25, 1996; and; WHEREAS, on November 12, 1996, the City Council of the City of Temecula held a duly noticed public hearing to consider the Final Dr-aft C in accordance with PRC 41793; now, therefore, BE IT RESOLVED, FOUND, DET AND ORDERED by the City Council of the City of Temecula, State of California, in regular session assembled on November 12, 1996 that the previous recitals are correct. p:\rwep\ciwmpres.o96 BE IT FUR RESOLVED by the City Council that it hereby approves the Final Draft , composed of the Countywide Summary Plan and the Countywide Siting Element. BE IT FUR RESOLVED that this resolution shall take effect upon consent by the City Council of the City of Temecula. PASSED, APPROVED AND ADOPTED this 12th day of November, 1996. CITY OF TENMCLTLA Karel F. Lindemans, Mayor A=T: June Greek, City Clerk [SEAL] p:\nucp\ciwmpme.o96 STATE OF CALR-FORNIA COUNTY OF ]]DE SS CITY OF TEMIF-CULA I, June S. Greek, City Clerk of the City of Temecula, do hereby certify that Resolution No. was duly and regularly adopted by the City Council of the City of Temecula at a regular meeting thereof held on the 12th day of November, 1996 by the following vote: AYM: COUNC ERS: NOES: COUNC ERS: ABSENT: COUNC ERS: June S. Greek, City Clerk p:\rusep\ciwmpres.o96 Riverside County Waste Resources Mana-gement District RoberiA. Nelson, Chief F-recutive Officer September 18, 1996 Ron Bradley, City Mana-er City of Temecula 43200 Business Park Drive P.O. Box 9033 Temecula, CA 92589-90'13 SEP 2 0 1996 RE: Final Draft Riverside Countywide Integrated Waste Manaaement Plan (CIWi'vlP) Dear Mr. Bradley: In accordance with Section 18783 of the California Code of Regulations (CCR), the Final Draft Riverside Countywide Integrated Waste Management Plan (C ), including the Final Draft Countywide Summary Plan and Final Draft Countywide Sitina Element, is beina forwarded for local adoption by the City Council of your city. The Final Draft C includes the comments which were received on the Revised Preliminary Draft C and District responses to these comments; revisions based on the Solid Waste Advisory Councfl/Local Task Force (LTF) meetina, on July 18, 1996; and corrections identified by District staff while preparing the Final Draft c@P. Public Resources Code Section 41721 requires that each city shall act upon the sitina element within 90 days of receipt of the element. Accordina to Section 18783 of the CCR, failure to act upon the document is deemed to be an approval by the city. During this 90-day period which ends on December 20, 1996, each city is requested to take the following actions in compliance with Sections 18782 and 18783 of the CCR: 1.Publish a notice in a local newspaper of general circulation at least 30 days in advance of the scheduled public hearing for the purpose of adopting the Final Draft C 2.After considering all public conunents, each city within the county shall by resolution, either approve or disapprove the Final Draft C A sample resolution is attached to assist your jurisdiction in preparing for a final approval action. If a jurisdiction disapproves the Siting Element or the Summary Plan, the jurisdiction shall aive written notification of the deficient areas in the document to the LTF, the County Board of Supervisors and the California Intecrated Waste Mana-ement Board (C@B)within 'DO days of disapproval. Notify the District re-ardin- the action taken by the city. During the 90-day action period, the LTF will submit written comments on the Final Draft CIWMP to the District, cities within the county, each reoional aaency within the county and the @CIWMB. These written comments are required within 45 days of receipt of the Final Draft 1995 Market Street 6 Riyerside. CA 92.501-1719 o (909) 275-1370 0 Fax (909) 275-1374 0 Fax (909) 275-1334 ea C The LTF meetin- on October 17, 1996, has been scheduled for approving written comments which will then be forwarded to the cities for their consideration. At the close of the 90-day period, the F@ Draft CIWMP, along with the Negative Declaration for Environmental Assessment (E.A.) No. 37011 will be considered by the Board of Supervisors. Within 30 days of the local adoption of the Final Draft C -the District shall submit copies of the C to the C for approval. It should be noted that the CIWMB staff have indicated that the CIWMB will not take final action on the C until all components of the Plan have been completed. Cities, which have not yet completed their jurisdiction's Source Reduction Recycling Element (SRRE), Household Hazardous Waste Element (HHWE), and/or Nondisposal Facility Element (NDFE), are encouraged to complete the document's review process with the C@B to ensure that final action can be taken on the CIWMP. The Final Draft C is bound in a three-ring binder to allow the document to be copied for the City Council and staff. When final adoption has occurred, copies of resolutions and the Notice of Determination for E.A. No. 37011 will be forwarded to the cities so that they may insert these resolutions into the document and have a copy of the Final C , as adopted. Any questions on the C should be directed to the District, to the attention of Stacey Hubbard or Katherine Gifford at (909) 275-4366, Fax No. (909) 275-1334. Thank you for your assistance in this matter. Sincerely, Senior Planner KG:nc, cc: Phyllis Ruse F:\@ta\plng\ciwmp\admin\finalact.let Pkg I Enclosures: C@P, Sample Resolution I.1 EA4 1 1 APPROVAL CITY ATTORNE'V FINANCE DIREC CITY MANAGE CITY OF TEMECULA AGENDA REPORT TO:City Manager/City Council FROM:Shawn D. Nelson, Director of Community Services June Greek, Director of Support Services DATE:November 26, 1996 SUBJECT:Special Tax Election - Community Services, Parks, Recreational Facilities and Programs, Street Lighting Services and Landscaping PREPARED BY:Phyllis L. Ruse, Development Services Administrator RECOMMENDATION:That the City Council: 1.Adopt an ordinance by a 4/5 vote entitled: ORDINANCE NO. 967_ AN ORDINANCE OF THE CITY OF TEMECULA, CALIFORNIA, LEVYING A SPECIAL TAX TO FINANCE THE OPERATION, MAINTENANCE AND SERIACING OF PUBLIC PARKS AND RECREATIONAL FACILITIES, RECREATIONAL AND COMMUNITY SER%ACES PROGRAMS, MEDIAN LANDSCAPING, ARTERIAL STREET LIGHTS AND TRAFFIC SIGNALS. 2.Adopt a resolution entitled: RESOLUTION NO. 96-- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ORDERING, CALLING AND GI'WNG NOTICE OF A MUNICIPAL ELECTION TO BE HELD IN THE CITY OF TEMECULA ON TUESDAY, MARCH 4,1997, FOR SUBMISSION TO THE VOTERS OF A MEASURE RELATING TO THE LEVY OF A SPECIAL TAX TO FINANCE THE OPERATION, MAINTENANCE AND SERVICING OF PUBLIC PARKS AND RECREATIONAL FACILITIES, RECREATIONAL AND COMMUNITY SERVICES PROGRAMS, MEDIAN LANDSCAPING, ARTERIAL STREET LIGHTS AND TRAFFIC SIGNALS. X-\ZIG \AG 18 N 20.19% 3.Adopt a resolution entitled: RESOLUTION NO. 96-_ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA, REQUESTING THE SERVICES OF THE COUNTY REGISTRAR OF VOTERS TO CONDUCT A MUNICIPAL ELECTION TO BE HELD ON TUESDAY, MARCH 4,1997. 4.Adopt a resolution entitled: RESOLUTION NO. 96@ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA AUTHORIZING ITS MEMBERS TO FILE A WRITTEN ARGUMENT REGARDING A CITY MEASURE. 5.Adopt a resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR CITY MEASURES SUBMITTED AT MUNICIPAL ELECTIONS 6.Appropriate $36,000 from the unappropriated General Fund Balance to Account No. 001-120-999-5225. BACKGROUND: On November 5, 1996, the electorate of the State of California approved Proposition 218 (Prop 218), also known as the "The Right to Vote on Taxeso initiative. This state constitutional amendment significantly changes the method in which jurisdictions may levy and collect revenues for a number of public services. Specifically for the City of Temecula, Proposition 218 will significantly affect the Temecula Community Services District. The Temecula Community Services District (TCSD) was duly formed at the time of City incorporation by a majority of the electorate and in accordance with Community Services District Law. The TCSD is comprised of six (6) service levels, identified as follows: 1.Community Services, Parks and Recreation. 2.Service Level A - Arterial Street Lights, Medians, and Traffic Signals. 3.Service Level B - Residential Street Lights. 4.Service Level C - Perimeter Landscaping and Slope Maintenance. 5.Service Level D - Recycling, Refuse Collection, Composting and Street Sweeping. 6. Service Level R - Emergency Road Maintenance. The City Aftomey and staff have analyzed Prop 21 8 to determine how the initiative VAII affect the method in which the TCSD levies and collects revenues to continue to provide these services to City residents. As a result, the TCSD will be affected in the following manner IL-\ZIG@\AG@19 Nov@ 20, 19% Communb Services, Parks and Recreation and Service Level A - Prop 218 provides that the TCSD may not levy charges or assessments for general governmental services which provide a benefit to the public at large. Since the public parks and recreational facilities and recreational and community services programs provided by the TCSD are made available to the public at large, they may no longer be financed through the collection of charges or assessments beginning with the 1997-98 fiscal year (except to the extent that such charges have been pledged for debt repayment). A legal alternative under Prop 218 to such charges or assessments is a special tax to generate such revenues which must be adopted by a 2/3 majority of the voters voting at the election. Service Levels B. C. D. & R - Prop 218 will not affect the TCSD's current method of levying and collecting these rates and charges, so long as they remain at the same rate. Any increase will require the TCSD to give mailed notice of the increased charge to each affected property owner and to hold a public hearing on the increase. The increase would be subject to a majority protest by the majority of owners subject to the charge, and, except for Service Level D, would also be subject to voter approval by those subject to the charge. As a result of this analysis, it is recommended that the TCSD continue to provide services and collect revenues for Service Levels B, C, D, and R in accordance With the information outlined above. It is further recommended that the City Council call for a municipal election on March 4, 1997, of the registered voters of the City of Temecula to impose a special tax to continue providing park and recreational facilities operations and maintenance, recreation and community services programs, arterial street lights, traffic signal maintenance, and median maintenance. The special tax will act as a transfer funding mechanism and will merely replace the rate and charge currently imposed. The tax amount per equivalent dwelling unit (EDU), method of determining benefit, and actual levy on property will remain exactly as it has been in the past. The TCSD will abandon the collection of the rate and charge and substitute it with collection of the special tax. Passage of the special tax will require a two-thirds (2/3) approval of the registered voters. Any proposed future increase to the special tax will require another election and the same two-thirds (2/3) approval of the electorate. Prop 218 will affect the collection of charges by the TCSD beginning on July 1, 1997, therefore, if the TCSD is to continue uninterrupted operations, the special election must be held prior to the end of this fiscal year. FISCAL IMPACT: Cost of the municipal election is $36,000. The current operating budget for Community Services Parks and Recreation and Service Level A is $3,744,862 of which $2,921,654 is generated through the TCSD rate and charge process. Pursuant to Prop 218, the $501.600 that the TCSD pays for debt service on the bonds sold to finance the construction of the Temecula Community Recreation Center are exempted from this initiative. Therefore, a total of $2,420,054 annually to the TCSD is impacted by Prop 218. At this time, no other funding source has been identified to provide for the continuance of these services. The successful passage of a special tax would allow the TCSD to continue to provide the current level of service for parks, recreational programs, special events, arterial street lighting, traffic signals, and median maintenance. Failure to pass the special tax would significantly reduce and/or eliminate many recreation programs and special events, as well as reduce hours of operation or close various parks and recreation facilities. An example of the city-vade special events provided by the TCSD include the Fourth of July Parade and Fireworks Show, the Holiday Parade, the Easter Egg Hunt, and the Breakfast with Santa and Snow Frolic. The City's recreation and community services programs include youth and adult sports, recreation classes and activities, youth and child development programs, teen recreation programs, senior citizen services, and a wide variety of drop-in recreation services. Finally, the City currently has eighteen (1 8) parks and several recreation IL-\ZIG@\AG@18 Nov 20,19% facilities includ ing the Temecula Community Recreation Center, Amphitheater, and Aquatics Complex, the Old Town Temecula Senior Center, the Temecula Community Center, the Temecula Elementary School Pool, and the Temecula Skate Park and Roller Hockey Rink. Also, lighting for all arterial streets and traffic signals as well as the maintenance of all medians throughout the City are also included in this special tax All of these services, programs and facilities are currently funded through the TCSD rate and charge process. ATTACHMENTS:Ordinance Levying Special Tax Resolution Calling for a Municipal Election Resolution Requesting Services of County Registrar Resolution Filing a Wriften Agreement Resolution Filing a Wriften Rebuttal R.\Z[G@\AG 18 Nov@ 20, 19% ORDINANCE NO. 96- AN ORDINANCE OF THE CITY OF TEMECULA, CALIEFORNIA, LEVYING A SPECIAL TAX TO FINANCE THE OPERATION, ANCE AND SERVICING OF PUBLIC PARKS AND RECREATIONAL FAC RECREATIONAL AND CO SERVI[CES PROG 9 MEDL4N LANDSCAPING, ARTERIAL STREET LIGHTS AND TRAMC SIGNAIS THE CITY COUNCIL OF THE CITY OF TEMECULA9 CALIFORNIA DOES Y ORDAIN AS FOLLOWS: Section 1. Pursuant to the authority of Article XI, Section 7 of the California Constitution, Government Code Section 37100.5, and other applicable law, there is hereby levied and assessed a special tax by the City of Temecula on each parcel of property in the City of Temecula for each fiscal year, commencing with fiscal year 1997-98. Section 2. The maximum amount of said special tax for each fiscal year shall be $74.44 per single-family residential dwelling unit, $55.83 per multi-family residential dwelling unit, $148.88 per acre of vacant property in a residential zone, $297.76 per acre of vacant property in a non-residential zone, $446.64 per acre of non-residential improved property, and $37.22 per acre for agricultural uses. Section 3. The special tax imposed by this ordinance shall be collected in the same manner, on the same dates, and shall be subject to the same penalties and interest as other charges and taxes fixed and collected by the County of Riverside on behalf of the City of Temecula. Said special tax, together with all penalties and interest thereon, shall constitute a lien upon the parcel upon which it is levied unfil it has been paid, and said special tax, together with all penalties and interest thereon, shall, until paid, constitute a personal obligation to the City of Temecula by the persons who own the parcel on the date the tax is due. SectionA. The revenue raised by the special tax imposed by this ordinance shall be placed in a special fund to be used only for the purposes of operating, maintaining, and servicing public parks and recreational facilities, recreational and community services programs, median landscaping, arterial street lights and traffic signals throughout the City of Temecula and administrative expenses incurred by the City in connection therewith. R:%zigiorgkordinfox. I November 20,1996 Section 5. The City Council, by three (3) affumative votes, is empowered to establish the amounts of the special tax levy annually each fiscal year, in amounts not to exceed the maximum amounts specified in Section 2 of this ordinance, as is required to provide an adequate level of service in accordance with the purposes set forth in this ordinance. Sectio@. The City Council shall be empowered to amend this ordinance by three (3) affirmative votes of the members thereof for the purposes of carrying out the general purposes of this ordinance in order to conform to state law that permits the County Tax Collector, or other proper official, to couect a special tax such as is levied by this ordinance in conjunction with County taxes or in order to assign duties pursuant to the ordinance to other officers. Secti@. No section of this ordinance shall be construed to permit, and the City Council is expressly prohibited from, increasing the amounts of the special tax imposed by this ordinance beyond the maximum amounts set forth in this ordinance. Section 8. A property owner subject to the special tax may appeal the amount of the special tax to be levied on such property owner's property pursuant to standards and procedures established by resolution of the City Council. Secti@ If a property owner subject to the special tax believes that payment of the special tax during a specific fiscal year would create a hardship for that property owner during that fiscal year, such property owners may appeal the levy by filing a hardship appeal pursuant to standards and procedures established by resolution of the City Council. Sectio@. The special tax imposed by this ordinance shall not be imposed upon a federal or state governmental agency or another local governmental agency or upon any parcel of property that is exempt from the special tax imposed by this ordinance pursuant to any provision of the Constitution or any paramount law. Secti@. If any provision of this ordinance or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdic- tion, such invalidity or unconstitutionality shall not affect any other provision or applications, and to this end the provisions of this ordinance are declared to be severable. The City Council, and the electorate by referendum, do hereby declare that they would have adopted this ordinance and each section, subsection, sentence, clause, phrase, part or portion thereof, irrespective of the fact that any one or more sections, subsections, clauses, phrases, parts or portions thereof, be declared invalid or unconstitutional. Section 12. This ordinance, or any provisions thereof other than those provisions, if any, which provide for modification by the City Council of the City of Temecula, may only be amended or repealed by approval of two-thirds (2/3) of the voters voting on the ordinance or provisions thereof at any initiative or referendum election. R:\ziglerg\ordinfox. 1 2 November 20, 1 996 'Rectoon 13 - The Temecula Community Services District currently operates, maintains and services public parks and recreational facilities, recreational and community services programs, median landscaping, arterial street lights and traffic signals within the City of Temecula. These services must be continued without interruption in order to protect the public health, safety and welfare of the residents therem and the general public. The adoption of Proposition 218 by the voters of the State of Califomia has brought into question the ability of the Temecula Community Services District to continue imposing rates and charges to finance such services. Unless a special tax is imposed to finance such services, the City may lack sufficient funds to continue such services. This ordinance would convert certain existing Temecula Community Services District rates and charges to a tax. Imposition of a special tax requires two-thirds voter approval. Therefore, it is necessary to determine, at the earliest date possible prior to July 1, 1997, whether a special tax shall be levied upon parcels within the City to finance such services. In order for the ordinance to be placed on the ballot for the next county-administered election on March 4, 1997, the City must submit the ordinance to the County of Riverside prior to the date of the next regular City Council meeting. Because of the County's deadline, there is insufficient time for the City Council to have two readings of the ordinance prior to its adoption and submission to the County. It is therefore urgent that this ordinance be adopted immediately to prevent an interruption in services to be provided to residents of the City. An interruption in such service is of great public concern in that inadequate maintenance of public park and recreational facffities and street lighting and landscaping and curtailment of recreational and community services programs, may endanger the health, welfare and safety of schoolchildren, motorists, and residents of the City. This ordinance is necessary for the immediate preservation of the public health, safety and welfare, declares the facts constituting the urgency, and is passed by at least a four-fifths vote of the City Council. Accordingly, this measure is adopted immediately upon introduction pursuant to Government Code Section 36934. Sectio@. This ordinance shall be referred to, and shall be effective only if approved by two-thirds (2/3) majority of the voters voting at an election to be held on March 49 1997, and shall go into effect ten (10) days after the City Council has, by resolution, declared that this ordinance was approved by two-thirds (2/3) of the voters voting thereon. Sectio@. The City Clerk shall ce@ to the passage and adoption of this ordinance and shall cause same to be published as required by law. PASSED, APFROVED AND ADOV= by the City Council of the City of Temecula this 26th day of November, 1996. Karel F. Lindemans, Mayor ATTEST: June S. Grwk, City Clerk R:%zigieFg%ordinfox. 1 3 Novwnber 20, 1996 RESOLUTTON NO. 96- A RESOLUTTON OF TIHE CITY COUNCIL OF THE CITY OF TEMECULA ORDERING, CALLING AND GWWG NOTTCE OF A MUNICIPAL ELECTTON TO BE HEID IN THE CITY ON TUESDAY, MARCH 4,1997, FOR SUBMLSSION TO THE VOTERS OF A URE RELATING TO THE LEVY OF A SPECL4,L TAX TO FINANCE THE OPERATTON,, ANCE AND SERVICING OF PUBLIC PARKS AND RECREATTONAL FAC 9, RECREATTONAL AND COMMUNITY SERVICES PROGRANLS, MMIAN LANDSCAPING, ARTERIAL STREET LIGHTS AND TRAMC SIGNAIS THE CITY COUNC]IL OF THE CITY OF TEMECULA HEREBY FINDS, RESOLVES,,DECLARES,DE AND ORDERS AS FOLLOWS: Sectio" Pursuant to the requirements of Article XHIA, Section 4 of the California Constitution, there is hereby called and ordered to be held in the City on Tuesday, March 4, 1997, a municipal election for the purpose of submitting to the qualified voters of the City a proposition authorizing the City to impose a special tax within the City to fmance the operation, maintenance and servicing of public parks and recreational facilities, median landscaping, arterial street lights and traffic signals commencing with fiscal year 1997-98. Section 2. The proposition to be submitted to the voters shall be substantially as follows: PARKS, RECREATTON,, LANDSCAPING AND L]IGHTING REPLAC TAX: Shall Ordinance No. of the City of Yes Temecula be adopted which would replace the existing Temecula Community Services District Rates and Charges for the maintenance, operation and servicing of public parks, recreational facilities, No recreational and community services programs, median landscaping, arterial street lights and traffic signals throughout the City with a special tax at the same existing rate which shall only be used for those EMses? Sectio@ The text of the proposed ordinance to be submitted to the voters is attached hereto and incorporated herein by reference. The @ of tax, the rate of tax, and the method of collection are stated therein. R:OGLERG\RESOFOX.2 No 20,1996 Sectio@ The pors for the election @ be open at seven o'clock a.m. of the day of the election and shall remam open continuously from that time until eight o'clock p.m. of the same day when the pors shall be closed, except as provided in Elections Code Section 14401. Section 5. In all particulars not recited in this Resolution, the election shau be held and conducted as provided by law for holding City elections. Section 6. Notice of the time and place of holding the election is hereby given and the City Clerk is hereby autho@, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law. Secti@ The Registrar of Voters of the County of Riverside is hereby authorized to canvass the returns of the municipal City election. Sectio@ Pursuant to Elections Code Section 10002, the Board of Supervisors of the County of Riverside is hereby requested to issue instructions to the County Registrar of Voters and aU County officers charged with duties g to the statewide election to take any and all steps necessary for the holding of the consolidated election, including the preparation of necessary materials. Secti@ The City shau reimburse the County of Riverside for services performed when the work is completed and upon presentation to the City of a properly approved bfll. Section 10, The City Council hereby directs the City Clerk to transmit a copy of the measure to the City Attorney. The City Attorney shau prepare an impartial analysis of the measure showing the effect of the measure on the existing law and the operation of the measure. The impartial analysis shau be filed by the date set by the City Clerk for the filing of primary arguments. Section 1 1 - The City Council, the officers and staff of the City and the City's legal counsel are hereby authorized and directed to take such further action as may be necessary or appropriate in preparing for and conducting the election. R:XZIGLERG%RESOFOX.2 2 [4o 20,1996 RESOLUTION NO. 96- A RESOLUTION OF T]EIE CITY COUNCIL OF THE CITY OF AUTHORIZINGNS ERS TO F.ELE A ARG REGARDING A CITY URE THE CITY COUNCEL OF T]EIE CITY OF CULA HEREBY FINDS, RESOLVES, DECLARES, DE AND ORDERS AS FOLLOWS: Sectiml. The City Council called a municipal City election to be held in the City on March 4, 1997 at which time there will be submitted to the qualified electors of the City the following measure: PARKS, RECREATION, LANDSCAPING AND LIGHTING REPLAC TAX: Shall Ordinance No. of the City of Yes Temecula be adopted which would replace the existing Temecula Community Services District Rates and Charges for the maintenance, operation and servicing of public parks, recreation facilities, recreational and community services programs, median landscaping, No arterial street lights and traffic signals throughout the City with a speci 'at the same existing rate which shau only be used for those purposes? Section 2. 'fhe City Council hereby authorizes: Karel Lindemans, Mayor Pat Birdsall, Mayor Pro Tem Ron Roberts, Councilmember Steven Ford, Councilmember Jeff Stone, Councilmember as members of said body, to file the written argument in favor of the City measure set forth in Section 1 above in accordance with applicable provisions of the California Elections Code and to change said argument until and including the date fixed by the Registrar of Voters of the County of Riverside after which no arguments for or against said City measure may be submitted. R:%ziglorgXmsofox.1 1 14o 20, 1996 PASSED, APPROVED AND ADOPRED by the City Council of the City of Temecula this 26th day of November, 1996. Karel F. Lindemans, Mayor ATREST: June S. Greek, City Clerk R:kziglargkrosafox.1 2 No 20, 1996 RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA, REQUESTING THE SERVICES OF THE COUNTY REGISTRAR OF VOTERS TO CONDUCT A MUNICIPAL ELECTION TO BE HELD ON TUESDAY, MARCH 4,1997. WHEREAS, the City Council of the City of Temecula, California, called a Municipal Election to be held on Tuesday, March 4, 1997, for the purpose of submitting to the voters a measure relating to the levy of a special tax to finance the operation, maintenance and servicing of Public Parks and Recreational Facilities, Recreational and Community Services Programs, Median Landscaping, Arterial Street Lights and Traffic signals. @REAS, it is desirable that the Municipal Election be held on March 4, 1997 and that the county election department of the County of Riverside canvass the returns of the Municipal Election and that the election be held in all respects as if there were only one election; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEMECULA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: Section 1. That pursuant to Elections Code Section 10002 of the Elections Code of the State of California, the Registrar of Voters of the County of Riverside is hereby requested to conduct the Municipal Election on Tuesday, March 4, 1997, for the purpose of submitting to the voters a measure relating to the levy of a special tax to finance the operation, maintenance and servicing of Public Parks and Recreational Facilities, Recreational and Community Services Programs, Median Landscaping, Arterial Street Lights and Traffic signals. Section 2. That, except for those services routinely conducted by the City Clerk, delegation is hereby made to the county elections department of the powers and duties of the elections officer for the City of Temecula to conduct said election in accordance with all applicable laws and procedures. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. Section 3. That, in all particulars not recited in this Resolution, said election shall be held and conducted as provided by law for holding municipal elections in said City. Section 4. That the City of Temecula recognizes that additional costs will be incurred by the County, and agrees to reimburse the County for such additional costs. Section 5.That the Registrar of Voters of the County of Riverside is hereby authorized, instructedand directed to give such further or additional notice of said election, in the time form and manneras required. Resos\96-Consol.97 -I- Section 7. That the City Clerk is hereby directed to file a certified copy of this Resolution with the Board of Supervisors, the county elections department of the County of Riverside and with the County Clerk. Section 8. The City Clerk shall certify to the passage and adoption of this resolution. PASSED, APPROVED AND ADOF'TED, this 26th day of November, 1996. Karel H. Lindemans, Mayor ATTEST: June S. Greek, CMC City Clerk [SEAL] STATE OF CALIFORNIA) COUNTY OF RIVERSIDE) ss CITY OF TEMECULA ) 1, June S. Greek, City Clerk of the City of Temecula, California, do hereby certify that Resolution No. 96- was duly and regularly adopted by the City Council of the City of Temecula at a regular meeting thereof held on the 26th day of November, 1996, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: June S. Greek, City Clerk, CMC Resos\96-Consol.97 -2- ITEN4 12 APPROVA'L CITY ATTORNEY- FINAIICE OFFIC CITY MANAGER CITY OF TEMECULA AGENDA REPORT TO:City Manager/City Council FROM:Genie Roberts, Director of Finance DATE:November 26, 1996 SUBJECT:First Reading on an Ordinance Amending the Municipal Code Sections Relating to Purchasing Prepared by: Allie Kuhns, Senior Management AnalystA RECOMMENDATION:Read by title only and introduce an ordinance entitled ORDINANCE NO. 96-_ AN ORDINANCE OF THE CITY COUNCIL ADDING SECTIONS 3.28.245 AND 3.28.305 TO AND AMENDING SECTIONS 3.28.140, 3.28.150, 3.28.290 AND 3.32.050 OF THE TEMECULA MUNICIPAL CODE RELATING TO THE SOLICITATION OF PROPOSALS FOR THE PURCHASE OF SUPPLIES AND EQUIPMENT AND THE AWARD THEREOF ON THE BASIS OF HIGHEST QUALITY AND COST EFFECTIVENESS, REVISING ADVERTISING REQUIREMENTS, AND ESTABLISHING THE CITY MANAGER'S AUTHORITY TO APPROVE PURCHASE, SERVICE AND CONSTRUCTION CONTRACTS. DISCUSSION: The City of Temecula's ordinance governing purchasing was adopted in 1990, and has not been revised since that time. Although the existing ordinance provides general purchasing guidance, it does not specifically address the differences in procedures which should be used in purchasing different types of requirements (supplies, equipment, professional services, public works contracts, etc.). The City's Purchasing Manual provides the guidelines for staff to use in processing City purchases. This manual has been revised to provide more specific procedures and guidelines based on the type of purchase to be made (see attached draft). Specific changes to procedures include the following: More thorough explanation of types of purchases, including limits of authority and documentation required. Step-by-step procedures based on type of purchase. New proposed thresholds for approvals/quotes/back-up. Justification/explanation for not going with a low quote. Evaluation process for Requests for Proposals (RFP's). Departments' roles defined throughout. Although the Purchasing Ordinance does not include the details of the Manual, the proposed ordinance revisions ensure that the Purchasing Manual is consistent with the Municipal Code. FISCAL IMPACT: None. Attachment:Ordinance No. 96- Purchasing Manual Draft (without attachments) ORDINANCE NO 96- AN ORDINANCE OF THE CITY COUNCIL ADDING SECTIONS 3.28.245 AND 3.28.305TO AND AMEENDING SECTIONS 3.28.140@ 3.28.150, 3.28.290 AND 3.32.050 OF THE TEMIECULA MUNICIPAL CODE RELATING TO THE SOLICITATION OF PROPOSALS FOR THE PURCHASE OF SUPPLIES AND EQUIPM[ENT AND THE AWARD THEREOF ON THE BASIS OF HIGHEST QUALITY AND COST EFFECTIVENESS, REVISING ADVERTISING REQUIREMENTS, AND ESTABLISHING THE CITY MANAGER'S AUTHORITY TO APPROVE PURCHASE, SERVICE AND CONSTRUCTION CONTRACTS THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Section 3.28.245 is hereby added to the Temecula Municipal Code to read as follows: "3.38.245Requests for Proposals for the Purchase of Supplies and Equipment In recognitionof the complex and technical nature of supplies and equipment the City requires and the wide variations in options and cost factors affecting the purchase of supplies and equipment, the City may, as an alternative to the formal bidding requirements of this Chapter, solicit proposals for the purchase of supplies and equipment and award the purchase to the proposal which best serves the needs of the City and provides the City with the highest quality and cost effectiveness based on the following factors (which are listed without any implication of priority): A.The extent to which the proposal meets the needs of the City for the equipment or supplies; B.The quality of the equipment or supplies proposed; C.The overall cost to the City of the proposal, including, but not limited to, pricing of the equipment or supplies, delivery schedule, terms of payment, warranties, maintenance requirements, and required site preparation; D.The experience and qualifications of vendor submitting a proposal to successfully meet the requirements for the equipment or supplies; 961114 1108 1 tid 1480281 0 E.Previous performance of the vendor submitting a proposal in providing similar equipment or supplies; F.Financial ability of the vendor submitting the proposal to provide the equipment or supplies to the City; G.Vendor's conformity to the specifications for the equipment or supplies set forth in the request for proposal; and H.Such similar factors as may be specifically included in the request for proposal. SECTION 2. Section 3.28.140 of the Temecula Municipal Code is hereby amended to read as follows: "3.28.140. Notice Inviting Formal Bids or Requests for Proposals "Notices inviting formal bids or requests for proposals for the purchase of supplies or equipment shall include a general description of the supplies or equipment to be purchased, shall state where the bid documents and specifications or requests for proposals may be obtained, and the tiltne and place for the opening of the bids or proposals. " SECTION 3. Section 3.28.150 of the Temecula Municipal Code is hereby amended to read as follows: "3.28.150. Published Notice for Formal Bids or Requests for Proposals "Notices inviting formal bids or requests for proposals shall be published one time at least ten days prior to the date of opening of the bids or proposals in a newspaper of general circulation within the City. The City Manager may waive the publication requirements of this Section if he or she finds that requirements for publication would not likely increase the number or quality of bidders or proposers beyond those on the approved vendor list. " Section 5. Section 3.28.290 of the Temecula Municipal Code is hereby amended to read as follows: "3.28.290 Exceptions to competitive bidding requirement. "Notwithstanding any provision of this chapter to the contrary, the formal bidding procedures and requirements shall not be required in any of the following instances: 961114 1108 1 tid l48M81 0 - 2 - A.When the estimated amount involved is less than two thousand five hundred dollars ($2,500); B.When the equipment or supplies can be obtained from only one vendor; C.The City Manager may authorize the purchase of materials, supplies, equipment and services where an emergency is deemed to exist and it is determined that service involving the public health, safety or welfare would be interrupted if the normal procedures were followed, provided that all emergency purchases which would otherwise require formal bidding procedures made pursuant to this section shall be submitted to the City Council for ratification at the next regular council meeting after the purchase is authorized; D.Contracts for personal, professional and consultant, and maintenance services; E.Any agreement involving acquisition of supplies, equipment or services entered into with another governmental entity. " SECTION 5. Section 3.28.305 is hereby added to the Temecula Municipal Code to read as follows: "Section 3.28.305 Authority of City Manager to Enter Into Contracts "The City Manager is authorized to enter into contracts for the purchase of supplies or equipment or contracts for personal, professional, consultant, and maintenance services where the amount of such contract does not exceed ten thousand dollars, or such other amount as the Council may designate by resolution; provided, there exists an unencumbered appropriation in the fund account against which the expense is to be charged. Where the amount of any such contract exceeds ten thousand dollars, or such other amount as the Council may designate by resolution, the contract shall be approved by the City Council. " SECTION 6. Section 3.32.050 of the Temecula Municipal Code is hereby amended to read as follows: "Section 3.32.050 Delegation of Authority to Award Informal Contracts "The City Manager is authorized to award bids and enter into informal construction contracts pursuant to this Chapter where the amount of such 961114 11086MMI tid 1480281 0 - 3 - contract does not exceed twenty five thousand dollars ($25,000.00), or such other amount as the Council may designate by resolution; provided, there exists an unencumbered appropriation in the fund account against which the expense is to be charged. Where the amount of any such contract exceeds twenty five thousand dollars ($25,000.00), or such other amount as the Council may designate by resolution, the contract shall be approved by the City Council. SECTION 7. The City Council hereby declares that the provisions of this Ordinance are severable and if for any reason a court of competent jurisdiction shall hold any sentence, paragraph, or section of this Ordinance to be invalid, such decision shall not affect the validity of the remaining parts of this Ordinance. SECTION 8. The City Clerk shall certify to the passage of this ordinance and shall cause the same to be published in the manner required by law. PASSED AND APPROVED this day of 1996. KAREL LINDEMANS MAYOR ATTEST: JUNE S. GREEK CITY CLERK %1114 1108 1 tid l4W281 0 - 4 - STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF TEMECULA 1, JUNE S. GREEK, City Clerk of the City of Temecula, do hereby certify that the foregoing Ordinance No. 96- was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the day of 1996. That thereafter, said Ordinance was duly adopted and passed at a regular meeting of the City Council on the - day of 1996, by the following vote, to wit: AYES:COUNCILMEMBERS: NOES:COUNCILMEMBERS: ABSENT:COUNCILMEMBERS: ABSTAIN:COUNCILMEMBERS: JUNE S. GREEK CITY CLERK APPROVED AS TO FORM: PETER M. THORSON CITY ATTORNEY 961114 1108 1 tid 14W281 0 - 5 - CITY OF TEMECULA PURCHASING MANUAL POLICIES AND PROCEDURES Revised December 1996 CITY OF TEMIECULA PURCHASING AL TABLE OF CONTENTS SECTION 1: GENERAL INFORMATION A. Purpose 1 B. Purchasing Responsibilities 1 C.Department Responsibilities 2 D.Overview of Purchasing Procedures 3 SECTION2: GENERAL PURCHASING GUIDELINES BASED ON TYPE OF PURCHASE 2.1 PURCHASE OF EQUIPMENT, MATERIALS, AND SERVICES4 A.General Procedures Based on Purchase Amount 4 B.Approval Authority Based on Purchase, Amount 5 C.Documentation Required Based on Purchase Amount 5 D. Step-by-Step Procedures for Purchasing Equipment, Materials, and Services 6 1. Purchases Which Require No Back-Up Documentation 6 2. Purchases Which Require Three (3) Quotes 7 3. Purchases Which Require a Request for Proposals (RFP) 8 4. RFP Process 9 2.2 PROFESSIONAL SERVICES CONTRACTS 12 A. General Procedures Based on Purchase Amount 12 B. Request for Qualifications 12 C. Approval Authority Based on Purchase Amount 12 D. Documentation Required Based on Purchase Amount . . : 12 E. Step-by-Step Procedures for Purchasing Professional Services 13 2.3 MAINTENANCE SERVICE REQUIREMENTS 14 A. General Procedures Based on Purchase Amount 14 B. Approval Authority Based on Purchase Amount 14 C. Documentation Required Based on Purchase Amount 14 D.Step-by-Step Procedures for Public Works/TCSD Maintenance Service Contracts 15 2.4PUBLIC WORKS CONSTRUCTION PROJECTS 16 A.General Procedures Based on Purchase Amount 16 B.Approval Authority Based on Purchase Amount 16 C.Required Documentation Based on Purchase Amount 16 D. General Guidelines for Public Works Construction Projects over $25,000 17 E.Step-by-Step Purchasing Procedures for Public Works Construction Projects over $25,000 19 i CITY OF TEMECULA PURCHASING MANUAL TABLE OF CONTENTS (CONTINUED) 2.5VENDORS WHOSE VENDING EQUIPMENT/FACILITIES PROVIDE A BENEFIT OR SERVICE TO THE CITY 22 2.6 END OF YEAR CLOSEOUT FOR PURCHASING 22 SECTION 3: EXCEPTIONS TO STANDARD PURCHASING PROCEDURES A. Emergent Requirements 23 B. Sole Source Requirements 23 C. Open Purchase Orders for Recurring Requirements 24 D. Requirements Not Covered by Purchase Orders 24 1 . Petty Cash Purchases 24 2. Travel Advances/Reimbursements 25 3. Check Requests 25 4. City Credit Card 26 SECTION 4: INSURANCE REQUIREMENTS 27 SECTION 5: DELIVERY OF GOODS AND SERVICES 28 A. Removal of Rejected Deliveries 29 ATTACHMEENTS City of Temecula Purchasing Ordinance A Process for Inputting a Requisition in the Eden Accounting System B Sample Requisition C Sample Purchase Order D Procedures for Informal Bidding Process - City Maintenance Divisions E Sample Agreement for Consultant Services F Sample Equipment Purchase Agreement G Sample Request for Proposals Announcement H Sample Request for Proposals Cover Ixtter I Sample Request for Proposals Document J Insurance Requirements/For-rns K City Clerk Procedure CCL-002: Bid Procedures L Sample Bid Packet for Public Works Construction Contracts over $25,000 M City of Temecula Travel Policy N Receiving Procedures 0 ii CITY OF TEMECUIA PUIIZCHASING MANUAL SECTION 1: GENERAL MORMATION A. PURPOSE This Purchasing Manual provides policies and guidelines for City employees to follow in purchasing goods and services. The mission of the Purchasing Division is to provide the highest level of customer service by maintaining good working relationships with both requesting departments and vendors who provide goods/services. The City's goal in purchasing is to obtain merchandise and services of the highest quality at the lowest price within specified time lines. B.PURCHASING RESPONSIBI]LITEES Becausepurchasing is critical to the proper administration of all City functions, the overall successof the purchasing operation lies not only with the Purchasing Division, but also with each department. The Purchasing Division's responsibilities are derived directly from the need to ensure all department purchasing requirements are filled timely and cost effectively. These responsibilities are to: 1 . Adhere to the policies and guidelines set forth herein; 2.Contact vendors for quotes, clarifications, requirement status, and questions, as appropriate; 3 .Know how/where to find the sources, availability and the delivery time of the various materials, equipment, or services ordered; 4.Provide a three day maximum turn around (ftom the time the requisition is approved at the department level) on purchase orders; 5.Question purchases which do not appear to conform to the policies and guidelines established herein; 6.Bring to the attention of the Director of Finance those purchases which do not conform to the procedures established herein; CRFY OF TEMECULA PURCHASING MANUAL 7.Review Requests for Proposals (RFP's) for compliance with purchasing policies and procedures; and, 8.Review all requisitions to ensure completeness, which includes ensuring all back-up documentation has been provided. C. DEPARTMEENT RESPONSEBI]LITIES In the purchasing process, it is each department's responsibility to: 1 .Adhere to the policies and guidelines set forth herein, particularly with respect to obligating the City for purchases without a purchase order in place; 2.Bring to the attention of the Purchasing Manager or Director of Finance those emergent requirements which require manual purchase orders to be put in place prior to the vendor being given authorization to provide goods or services; 3.Consider the lead time necessary for the Purchasing Division to obtain items ordered, and to plan requests accordingly to avoid rush orders and increased costs; 4.Prepare specifications for contracts or purchase orders that require engineering or technical background; 5.Be specific and complete, including equivalent brand or model numbers when available, when describing items requested; 6.Prepare Requests for Proposals (RFP's) based upon the boiler plate format provided in this Purchasing Manual (see Attachment J); 7.Provide complete back-up documentation with all requisitions; and, 8. Provide sources for purchases where possible. 2 CITY OF TEMECULA PURCHASING MANUAL D. OVERVEEW OF CITY PURCHASING PROCEDURES Generally, this manual covers four (4) procedures which are utilized for purchasing supplies, services, and equipment for the City. These are: Purchases for equipment, materials, and services Purchases for professional services Purchases for City maintenance services (TCSD/Public Works) Public Works Construction Projects NOTE. SuppUes, services or equipment, unless agreed to be an emergency by the Purchasing Manager or Director of Knance, are not to be obtained before these procedures are followed. Emergency purchase orders will be processed the same day ofnodce,providingallproperdocumentationissubmitted. Purchasesdeterininedto be non-emergency shall be processed routinely with daily requisition processing. The City's purchasing procedures focus on practicing "buy Temecula first" whenever possible. Local vendors are solicited directly when known to provide the required supplies, services, or equipment. Additionally, in evaluating prices for quotes or proposals, local vendors are given a one percent (1 %) credit to reflect the sales taxes from which the City will receive a direct benefit. 3 CRFY OF TEMECULA PURCHASING MANUAL SECTION 2: GENERAL PURCHASING GUIDELINES BASED ON TYPE OF PURCHASE The responsibility for the implementation of the City's Purchasing Ordinance Section 3.28 (Attachment A) has been delegated by the City Manager to the Director of Finance and Purchasing Manager. All requirements for goods or services are processed through the Purchasing Division, without exception. The City Manager or designee has final approval authority of all City purchases. NOTE.If a purchase is made without a purchase order in place, then the individual who has obligated the Government funds may be liable for payment of the purchase, since the appropriate authority did not approve the expenditure. Additionally, paymentfor all invoices which are submittedfor goods or services received by the City without having been approved by the appropriate authority via a purchase order will be routed to the City Managerfor approval SECTION 2. I: PURCHASE OF EQUIPMENT, MATERIALS, AND SERVICES A. General Procedures Based on Purchase Amount This category covers all City requirements except for Professional Services Contracts, Public Works/TCSD Maintenance requirements, and Public Works construction contracts. Purchase AmountsPurchasing Procedurea Up to $2,500Outright purchase with no quotes required $2,501 to $10,000Informal quote procedures using a minimum of three quotes is required Over $10,000Formal advertising/RFP procedures required 4 CITY OF TEMECULA PURCHASING MANUAL B.Approval Authority Based on Purchase Amount Purchase AmountsApproval Authority up to $1,000Department Director/Purchasing Manager up to $10,000Director of Finance Review/City Manager Approval Over $10,000City Council C.Documentation Required Based On Purchase Amount Purchase AmountsReg.uired Documentation Up to $2,500Requisition signed by the Deparftnent Director or authorized representative $2,501 to $10,000Requisition signed by the Department Director or authorized representative, minimum of three (3) quotes, or sole source justification memo Over $10,000Requisition signed by the Department Director or authorized representative, City Council staff report and minute order signed by the City Clerk, copy of executed contract (if applicable) or signed vendor proposal 5 CrrY OF TEMECULA PURCHASING MANUAL D.Step-by-Step Procedures for Purchasing Equipment, Materials, and Services 1.PURCHASES WHICH REQUIRE NO BACK-UP DOCUMENTATION (UP TO $2,500) a.Department identifies supplies, services or equipment required. b.Department purchasing representative inputs the requisition into the Eden System (instructions for operating the Eden System are included in Attachment B), and prints the requisition (see Attachment C for sample requisition). c.Department purchasing representative obtains department director approval signature on the requisition and routes the approved requisition to the Purchasing Division. d.The Purchasing Division receives the approved requisition and routes the package through the appropriate approval authority delineated above, depending on the type of purchase and total purchase amount. e.The Purchasing Manager ensures all appropriate signatures are on the requisition and then approves the purchase in Eden. Once the requisition is approved in Eden, a purchase order can be printed (see Attachment D for sample purchase order). f.The Purchasing Division prints the purchase order and forwards all documentation to an accountant in the Finance Department for account encumbrance verification. Once approved by the accountant, the Purchasing Division reviews the purchase order package, signs in the "Reviewed by" block, and routes the package to the Purchasing Manager for final approval signature. g.The Purchase Order is distributed as follows: Whfte- Purchasing Division Canary- Finance Department Accounts Payable Division Pink- Originating Department Goldenrod- Vendor NOTE.- Eachdepartinent'spurchasingrepresen@veisresponsibleformailingthe goldenrod copy of the purchase order to the vendor, unkss prior arrangements have been made with the Purchasing Division. 6 CITY OF TEMECULA PURCHASING MANUAL 2.PURCHASES WHICH REQUIRE THREE (3) QUOTES ($2,501 UP TO $10,000) a.Department identifies supplies, services, or equipment required. b.Department purchasing representative identifies a minimum of three sources for the requirement. c.Department purchasing representative contacts the three vendors by telephone or fax, and receives three quotes for the requirement. Department purchasing representative documents all quotes received, as well as all "no quote" responses. d.Department purchasing representative determines which vendor has the lowest, qualified quote (can meet all City requirements for delivery, quality, etc.). e.Department purchasing representative inputs the requisition into the Eden System (instructions for operating the Eden System are included in Attachment B), and prints the requisition (see Attachment C for sample requisition). f.Department purchasing representative obtains and attaches all required back-up documents, obtains department director approval signature on the requisition, and routes the approved requisition to the Purchasing Division. NOTE.- Depa=ent purchasing representative must allach all quote documentation to the requisition when routing the requisition to the Purchasing Division. If the Department determines that the low quote cannot meet the City's requirements, documentation of why the Department has ekcted not to go with the low quote must be attached. g.The Purchasing Division receives the approved requisition and routes the package through the appropriate approval authority delineated above, depending on the type of purchase and total purchase amount. h.The Purchasing Manager ensures all appropriate signatures are on the requisition and then approves the purchase in Eden. Once the requisition is approved in Eden, a purchase order can be printed (see Attachment D for sample purchase order). 7 CRFY OF TEMECULA PURCHASING MANUAL i.The Purchasing Division prints the purchase order and forwards all documentation to an accountant in the Finance Department for account encumbrance verification. Once approved by the accountant, the Purchasing Division reviews the purchase order package, signs in the "Reviewed by" block, and routes the package to the Purchasing Manager for final approval signature. j.The Purchase Order is distributed as follows: White- Purchasing Division Canary- Finance Department Accounts Payable Division Pink- Originating Department Goldenrod- Vendor NOTE.- Eachdepartment'spurchasingrepresentadveisresponsibleformailingthe goldenrod copy of the purchase order to the vendor, unless prior arrangements have been made with the Purchasing Division. 3. PURCHASES WHICH REQUIRE REQUESTS FOR PROPOSALS (RFP) Purchases which require a Request for Proposals (RFP) to be issued are those which must be advertised and competed in the open market. These requirements generally fall into the following categories: a.Equipment, materials, and service requirements over $10,000 b. Public Works/TCSD maintenance service requirements over $25,000 A boiler plate RFP is provided in Attachment J. Departments should use this document to obtain proposals for purchases which require the City to advertise and compete a requirement in the open market. The Department shall careftilly review and revise the boilerplate RFP to fit the particular needs of the proposal. While all of the standard provisions are included in the boilerplate RFP, not all will be applicable to each proposal. ExcgpAgn: Biggy-Backing on an Existing Contract The RFP process need not be used if there is an existing contract in place for the same requirement. 7his existing contract must be between the vendor and a public agency, and must have been awarded on a competitive basis in order to be consideredfor 'Piggy- backing 8 CRFY OF TEMECULA PURCHASING MANUAL 4. RFP PROCESS (OVER $10,000) The following are guidelines to be adhered to in the RFP process: a.Department identifies the requirement and determines that an RFP must be issued based on the value of the requirement. b.Deparunent fills in the appropriate blanks of the RFP boiler plate, and makes any changes specific to the requirement so that the document flows. Departments may seek assistance from the Purchasing Manager or Purchasing Division in completing the RFP. c.Department defines the scope of work to be included in as an attachment to the RFP. d.Department submits the proposed RFP to the Purchasing Division for review. e.Purchasing Division reviews the document for compliance with purchasing policies and procedures, and makes recommendations to the Department. f.Purchasing Division prepares a cover letter for the RFP. This letter will be signed by the Purchasing Manager (see Attachment I for sample cover letter). g.Department prepares an advertisement, if required, to be signed by the City Clerk (see Attachment H for sample advertisement). Advertising the requirement may be waived by the City Manager if a deparunent can provide an adequate number of sources to solicit for proposals. The required number of adequate sources is based on the nature of the requirement, and will be determined by the City Manager. NOTE. 7he kad time for an ad to be placed in the newspaper is three days. 7he proposed ad must be turned in to the City Clerk Depan'ment no later than 12: 00 p.m. three days prior to the desired advertisement date. h.DeparUnent notifies the City Clerk Deparunent, and provides the advertisement document and a copy of the RFP so that the requirement can be publicly advertised in the newspaper or on the Internet. The City Clerk Department will provide a closing date for the RFP, which date should be a minimum of ten days from the date of advertisement. NOTE.- Purchases in this section shall be publicly adverfised a minimum of one dme to satisfy the open market competition requirement. 9 CITY OF TEMECULA PURCHASING MANUAL i.All RFP's will be collected by the City Clerk Department, and will be turned over to the requiring Department once the closing date and time have elapsed. j.Once the requiring Department receives all RFP's submitted, an evaluation committee will convene to evaluate the proposals. The recommended members of this committee should consist of a minimum of three (3) individuals, including a technical representative, a purchasing representative, and a representative from the department initiating the RFP. k.After the Committee has come to a consensus as to the most qualified, lowest priced proposal, the Department initiating the requirement will prepare a staff report and contract document to present to the City Council for approval. Note that although a proposal is the lowest priced, it may not necessarily be the best qualified to meet the City's needs. Consequently, if the Committee does not find the lowest priced proposal to be the best qualified overall, then the final evaluation should clearly document why the City is not recommending award to the lowest priced proposal. 1.After the City Council has approved the requirement and all appropriate signatures have been obtained, the Department purchasing representative inputs the requisition into Eden (see Attachment B for requisition input procedures). m.Department purchasing representative inputs the requisition into the Eden System (instructions for operating the Eden System are included in Attachment B), and prints the requisition (see Attachment C for sample requisition). n.Department purchasing representative obtains and attaches all required back-up documents (copy of executed agreement, Council staff report and action agenda), obtains department director approval signature on the requisition, and routes the approved requisition to the Purchasing Division. o.The Purchasing Division receives the approved requisition and routes the package through the appropriate approval authority delineated above, depending on the type of purchase and total purchase amount. p.The Purchasing Manager ensures all appropriate signatures are on the requisition and then approves the purchase in Eden. Once the requisition is approved in Eden, a purchase order can be printed (see Attachment D for sample purchase order). 10 CITY OF TEMECULA PURCHASING MANUAL q.The Purchasing Division prints the purchase order and forwards all documentation to an accountant in the Finance Departinent for account encumbrance verification. Once approved by the accountant, the Purchasing Division reviews the purchase order package, signs in the "Reviewed by" block, and routes the package to the Purchasing Manager for final approval signature. r.The Purchase Order is distributed as follows: White- Purchasing Division Canary- Finance Department Accounts Payable Division Pink- Originating Department Goldenrod- Vendor NOTE. Eachdepartinentpurchasingrepresentativeisresponsibleformailingthe goldenrod copy of the purchase order to the vendor, unless prior arrangements have been made with the Purchasing Division. CITY OF TEMECULA PURCHASING MANUAL SECTION 2.2 PROFESSIONAL SERVICES CONTRACTS A. General Procedures Based on Purchase Amount Selection of a vendor for professional services purchase orders/contracts is based on qualifications, regardless of the dollar amount of the contract or purchase order to be awarded. Likewise, sole source selections for professional services are pen-nissible, and do not require back-up documentation to justify the selection. B. Request for Qualifications There may be instances where the City desires to seek out qualified consultants to develop a scope of work, where no pricing information is required. In these instances, a Request for Qualifications is distributed to a mailing list of consultants and/or publicly advertised to solicit participation. The format is similar to the Request for Proposals; however, the statement of work is modified to provide the consultants general criteria under which their qualifications should be submitted. The significance of using this format in lieu of a request for proposals is that consultants need not provide a "full blown" presentation, which includes pricing, in order for an agreement to be awarded. Once qualified consultants have been identified, departments should include the top five consultants in the Request for Proposal process to ensure competitive pricing is provided by the consultants. C.Approval Authority Based On Purchase Amount Purchase Amounts@roval Authority up to $1,000Department Director/Purchasing Manager $1,001 to $10,000Director of Finance Review/City Manager Approval Over $10,000City Council D.Documentation Required Based On Purchase Amount Purchase AmountsRequired Documentation up to $10,000Requisition signed by the Department Director or authorized representative, a scope of work signed by the vendor listing requirements, and a professional services agreement approved by the City Manager (see Attachment F for sample agreement) 12 CITY OF TEMECULA PURCHASING MANUAL Over $10,000 Requisition signed by the Department Director or authorized representative, City Council staff report and minute order signed by the City Clerk, copy of executed professional services agreement (see Attachment F for sample agreement) E. Step-by-Step Procedures for Purchasing Professional Services Purchases for professional services are generally broken down into two categories: under $10,000 and over $10,000. 1. PURCHASES UNDER $10,000 Those purchases for professional services which are under $10,000 follow the procedures outlined in Section 2. 1. D. 1, with the exception that a "scope of work" and executed professional services agreement must be attached to the requisition so that both the City and the vendor know what is expected from the work. 2. PURCHASES OVER $10,000 Purchases for professional services which exceed $10,000 will generally adhere to the following procedures: a.Department identifies professional services requirement, and a vendor (usually a consulting firm) who is able to successfully complete the requirement. b.Department obtains from the vendor a proposal which contains both the scope of work to be performed and the price to complete the work. c.Deparunent prepares a professional services agreement to present to the City Council (see Attachment F for sample agreement). d.After City Council approval is obtained, Department purchasing representative inputs the requisition into Eden, prints the requisition, and obtains the appropriate Director approval. e.Department purchasing representative then routes the requisition, including the back-up documentation required by Section 2.2.C, to the Purchasing Division. f.The remaining steps are covered in Section 2. 1. D above. 13 CrrY OF TEMECULA PURCHASING MANUAL SECTION 2.3 MAINTENANCE SERVICE REQUIREMENTS A.General Procedures Based on Purchase Amount These are requirements from the Public Works and TCSD Maintenance Divisions which support City operations. Purchase Amounts Purchasing Procedures Up to $5,000 Outright purchase with no quotes required $5,001 to $25,000 Informal quote procedures using a minimum of three quotes is required Over $25,000 Formal advertising/RFP procedures required B.Approval Authority Based on Purchase Amount Purchase AmountsApproval Authority up to $1,000Purchasing Manager up to $10,000Director of Finance Review/City Manager Approval Over $10,000City Council C.Documentation Required Based on Purchase Amount Purchase AmountsReg.uired Documentation Up to $5,000Requisition signed by the Department Director or authorized representative $5,001 to $10,000Requisition signed by the Department Director or authorized representative, minimum of three (3) quotes, or sole source justification memo 14 CrrY OF TEMECULA PURCHASING MANUAL $10,001 to $25,000Requisition signed by the Department Director or authorized representative; minimum of three (3) quotes, or sole source justification memo; City Council staff report and minute order signed by the City Clerk, copy of executed contract (if applicable) or signed vendor proposal Over $25,000Requisition signed by the Department Director or authorized representative; City Council staff report and minute order signed by the City Clerk; copy of executed agreement and/or signed vendor proposal; all insurance/bond documentation required by the contract. D. Step-by-Step Procedures for Pubfic Works/TCSD Maintenance Service Contracts Purchases under $25.M Public Works and TCSD maintenance service requirements under $25,000 follow the procedures delineated in Attachment E to identify a vendor to provide the services. Once the vendor has been identified, the Department purchasing representative inputs the requisition into Eden, prints the requisition and obtains Director approval, and attaches the scope of work to the requisition prior to routing the requisition to the Purchasing Division for processing. The remaining steps for Public Works/TCSD maintenance services purchases are covered in Section 2. 1 -D above. Purchases over $25,000 Maintenance service purchases over $25,000 may follow either the RFP procedures in Section 2. 1-D above, or the formal bidding procedures which cover Public Works construction projects, as outlined in Section 2.4-E below. 15 CITY OF TEMECULA PURCHASING MANUAL SECTION 2.4: PUBLIC WORKS CONSTRUCTION PROJECTS - (IN ACCORDANCE WITH THE PUBLIC CONTRACTS CODE) A.General Procedures Based on Purchase Amount Purchase AmountsPurchasing Procedures Up to $25,000No quotes required $25,000- $75,000Informal quote procedures in accordance with Public Contracts Code Over $75,000Formal bid procedures in accordance with the Public Contracts Code B.Approval Authority Based on Purchase Amount Purchase AmountsApl2roval Authority up to $1,000Purchasing Manager $1,001 to $25,000Director of Finance Review/City Manager Approval Over $25,000City Council C.Required Documentation Based on Purchase Amount Purchase AmountaReg.uired Documentation Up to $5,000Requisition signed by the Department Director or authorized representative, and a scope of work listing requirements (no contract required) $5,001 to $25,000Requisition signed by the Department Director or authorized representative, minimum of three (3) quotes, or sole source justification memo 16 CITY OF TEMECUILA PURCHASING MANUAL Over $25,000 Requisition signed by the Department Director or authorized representative, City Council staff report and minute order signed by the City Clerk, copy of executed agreement and/or signed vendor proposal, and all insurance/bond paperwork required by the contract NOTE. InforinalBidsproceduresforpublicconstructionprojectsintheamountof$25,000 or less may be performed by City employees by force account, by negotiated contract, or by purchase order. D.General Guidelines for Public Works Construction Projects Over $25,000/Formal Bid Procedures In accordance with the Public Contracts Code, all Public Works construction projects must follow formal bid procedures. The City of Temecula conducts all formal bid procedures in accordance with City Ordinance, Chapter 3.32 of the Temecula Municipal Code, which covers Public Works Contracts (see Attachment A); and in accordance with City Clerk Policies and Procedures (see Attachment L). Formal bids are those which are publicly advertised (e.g., via newspaper ads) for a minimum of ten days in order to maximize competition in the bidding process. Formal bid contracts are normally awarded by the City Council to the lowest responsible bidder. If attempts are made to obtain formal bids but no bids are received, the City is authorized to negotiate for a written proposal and make recommendations to the City Council based on these findings. Contractors submitting formal bids for Public Works Construction Projects over $25,000 shall comply with requirements for the bid as set forth in the Notice Inviting Bids and the Plans and Specifications for the Project. T bidding requirements may differ for each project. For the convenience of City staff in completing the bid process, a portion of the more general bidding requirements normally included in the Notice Inviting Bids are set forth below: 1.Bids must be transmitted in a sealed envelope indicating on the outside of the envelope the name of the vendor, bid number, and the date and hour of the specified opening. 2.All bids must be signed by a responsible officer or employee of the firm submitting the bid. Obligations assumed by such signature must be fulfilled. Additionally, submission of a signed bid will be interpreted to mean thaf the bidder has agreed to all of the terms and conditions set forth in the bid package. 17 CITY OF TEMECULA PURCHASING MANUAL 3.All prices and notations must be typewritten or written in ink. No erasures will be permitted. Mistakes may be crossed out and corrections made adjacent. All corrections must be initialed by person signing the quotation. 4.Bids submitted may be withdrawn by written or telegraphic request received by the City Clerk before the hour set for opening. After such hour, a bid may not be withdrawn, except as provided in the Public Contracts Code. 5 .Contractors are expected to meet or exceed the required specifications in the bid submitted. Thus, if a bid does not comply with the required specifications, contractor shall attach to the bid a complete detailed itemization and explanation for each deviation or variation from the specifications, as to how the bid is equivalent to the specification. If a bid does not meet the required specifications, then the bid will be determined to be nonresponsive and will be disqualified from consideration for award. Likewise, absence of any such itemization and explanation shall be understood to mean that the bid proposed meets all required specifications. Contractor shall comply with provisions of the Public Contracts Code pertaining to equivalents. 6.Taxes shall be the responsibility of the bidder. 7.Unless otherwise requested by the bid packages, samples of items shall be furnished free of expense to the City and, if not destroyed by tests, will upon request be returned to the contractor/vendor at the contractor/vendor's expense. 8.In case of default by the awarded contractor, the City may procure the work, materials or service from other sources. The City may deduct any excess cost from any unpaid balance due the contractor, or may bill for same at City's discretion. The prices paid by the City in such events shall be considered the prevailing market price at the time of purchase. 9.The contractor shall defend, indemnify, protect, and hold the City, its officers, agents, servants and employees harmless from liability of any nature of kind due to the use of any copyright, or un-copyrighted composition, secret process, patented or unpatented inventions, articles or appliance furnished or used under the bid. 10.The successful contractor will not be held liable for failure or delay in performance if prevented or materially hindered by fire, strike, or act of God. However, if it is determined that the contractor is unable to perform, the City reserves the right to reject the bid and to select another contractor/vendor. 18 CITY OF TEMECULA PURCHASING MANUAL 11.The work, labor and materials which the bidder proposes to furnish to the City must comply in all respects with the appropriate equipment and safety regulations of all Federal, State and local regulatory commissions, whether such equipment or safety features have been specifically outlined or required in these specifications or not. 12.The bidder shall, upon demand, present to the City all necessary certificates, licenses and permits as required by Federal, State and local regulations, as necessary, to perform the work and deliver materials provided to the City. This includes, but is not limited to, the City of Temecula Business License. 13.Bids are subject to acceptance at any time within 30 days after the opening of same, unless otherwise stipulated in the bid package. 14.Conflict of Interest: Submission of a bid certifies that no City employee, whose position in the City enables him or her to influence any award of a contract, is employed by the contractor or has any financial interests in transactions resulting from award of the bid. E.Step-by-Step Purchasing Procedures for Public Works Construction Projects Over $25,000/Formal Bid Procedures For all formal bid procedures, refer to City Clerk Procedures #002 (Attachment L), and Sample Bid Packet for Public Works Construction Contracts over $25,000 (Attachment M). 1 .Prior to going out to bid for Public Works Capital Project requirement, the Public Works Department must obtain City Council approval for the requirement, unless waived by the City Manager. To accomplish this, the Director of Public Works prepares a staff report requesting that the City Council authorize plans and specifications for the project, and provide authorization to go out to bid. This staff report must include identification of the unencumbered funding source for the project based on the Capital Improvement Program Budget, and authorization for expenditure of these funds. 2.Once approved by the City Council, the Project Manager will request a bid number from the City Clerk's Department. This is used as the official project number throughout the life of the project. 3 .The Public Works Engineering Division, Connnunity Services District, and/or outside design services contractor, will prepare plans and specifications. 19 CITY OF TEMECULA PURCHASING MANUAL 4.Plans and specifications will be reviewed by: a.Director of Public Works b.Building and Safety Inspection Division c.City Attorney d.Affected utilities for conflicts and/or relocations 5.The Project Manager will reproduce plans and specifications, and will deliver them to Public Works and Community Services District, as applicable. At that point, Public Works and/or Community Services District will prepare the actual Request for Proposal (RFP), which will include the proposed contract document. 6.Once the Plans and Specifications have been prepared, the document is forwarded to the Risk Manager for review of all insurance requirements and endorsements. After all documents are determined to be ready for bidding, the entire package is mailed to all vendors who have purchased bid packages and are on the department's mailing list. After the initial mailing is completed, both the package and mailing list are forwarded to the City Clerk's Office to allow additional vendors to purchase the bid package. The City Clerk's Office will maintain the list of plan holders. NOTE. Thedepartinentini@ngthebidpackageisresponsiblefordisoibutingthepackage to Plan Rooms (with an invitation to bid), and to appropriate City staff. If an addendum is issued by the Project Manager, all plan holders will receive the addendum mailed by the City Clerk's Office by cehified mail. 7.After the bid opening and final evaluation of bids, a successful contractor is chosen, and a staff report recommending award is presented to the City Council for approval. Once Council approval is obtained, two (2) original contract documents are mailed to the successful contractor for execution. Once executed, these documents are sent to the City Clerk to obtain Mayor and City Attorney signatures. 8.After the document is executed, the contract package is returned to the Purchasing Manager for review, to ensure that the appropriate subsequent documentation (insurance certificate, bid bond, performance bond, etc.) is submitted to the City by the successful contractor/vendor. Two (2) originals of these documents, the Contractor's original and the City's original, must be provided. Final authorization for commencement of services will not be given until this purchasing review process is complete. 9.The City Clerk will retain one (1) original, and provide one photocopy each to the appropriate Department Director(s) and to the Purchasing Division. 20 CrrY OF TEMECULA PURCHASING MANUAL 10.After the contract package is determined to be complete, the Project Manager will hold a pre-construction meeting with the contractor and issue a "Notice to Proceed". One (1) copy of the notice will be sent to the City Clerk and to the Purchasing Division with an expected partial payment cash flow schedule. 11.All preliminary liens and stop notices received by any department are to be forwarded immediately to the City Clerk, with a copy to the Accounts Payable Division of the Finance Department. The Public Works will retain one copy of all liens and stop notices, and will provide a memo to the Finance Department to ensure withholding of stop notice amounts from progress payments. 13.All claims (damage to citizen's cars, utility company facilities, etc.) are to be forwarded immediately to the City Clerk, with a copy to the Risk Manager. 14.Upon completion of construction and review by the Director of Public Works, the Project Manager will prepare a project Summary Report and Notice of Completion for City Council approval. The Summary Report briefly states that the project was built according to approved plans and specifications and includes project start and completion dates, statement of changes authorized by the City, original contract amount, and final contract amount. The staff report will also request that the City Clerk be authorized to execute and record the "Notice of Completion" with the County Recorder. 15.The City Clerk will file the Notice of Completion with the County Recorder. A copy of the recorded document is then provided to the Finance Department and Engineering Department. 16.Thirty-flve (35) days after recordation, the City Clerk releases all bonds and the Finance Department releases the retention, if there are no liens or stop notices against the project. 17.One year after acceptance of the project, the maintenance bond is released, if maintenance has been satisfactory. 21 CITY OF TEMECULA PUP,CHASING MANUAL SECTION 2.5 VENDORS WHOSE VENDING EQUIPMEENT/FACILITIES PROVIDE A BENEFIT OR SERVICE TO THE CITY In many instances, the City has been afforded the opportunity to employ vendors who profit from conducting business while providing a benefit or service at no cost to the City. Such businesses include vending machines and push cart vendors. Although the City does not pay to employ these vendors, due to the competitive business market, it is the City's responsibility to ensure that the maximum benefit is achieved from their employment. Consequently, these vendors will be required to compete to conduct business in the City in a process similar to the quotes/request for proposal processes. The primary difference will be that instead of award being based partially on the cost to the City, that portion of the evaluation will be based on the monetary benefit to the City (e.g., rebates, low cost to citizens, etc.). SECTION 2.6: END OF YEAR CLOSEOUT FOR PURCHASING Each year during the month of May, the Purchasing Division notifies all departments that all standard requirements must be input into Eden by June lst to allow the Purchasing Division enough time to close out all purchase orders which will not be rolled over into the new fiscal year. This is intended only to include routine requirements which can be anticipated based on daily operations. It is not intended to include emergent requirements, purchases related to Capital projects, or those requirements which could not be anticipated. Likewise, if a requirement arises after June lst, deparhnents absolutely must notify the Purchasing Division and must ensure that a requisition is in place prior to funds being obligated to a vendor. Failure to do so may result in invoices not being processed timely, since there would be no mechanism in place to indicate that an invoice and required payment may be forthcoming. Additionally, due to the new fiscal year starting, it becomes imperative that all purchases be identified prior to June 30th, so that any prior fiscal year invoices are paid out of the prior year's budget allocation. 22 CITY OF TEMECULA PURCHASING MANUAL SECTION 3: EXCEPTIONS TO STANDARD PURCHASING PROCEDURES In some cases, it is neither practical nor desirable to use standard purchasing procedures. T'hese exceptions are listed below: A. Emergent Requirements In cases of emergency, purchases exceeding $2,500 are exempt from the standard purchasing procedures outlined above. However, each purchase determined to be "emergent" by a department must be validated and authorized by the Purchasing Manager or Director of Finance prior to the purchase being made. Additionally, emergent purchases exceeding $10,000, ($25,000 for Public Works Construction Contracts), may be approved by the City Manager, with ratification by the City Council after the purchase has been made. Approved emergent requirements will be expedited the same day, provided that all required documentation is received by the Purchasing Division. Non-approved emergent requirements (i.e., those for which invoices are received and the Purchasing Division has no knowledge of the emergency requirement), will be processed routinely, requiring approval by the City Manager. B. Sole Source Requirements In those circumstances where there is only one vendor due to proprietary rights or other limitations, a purchase may be made to that vendor without having to use standard purchasing procedures. However, if there is even a remote possibility that another vendor exists, then every measure possible should be taken to obtain more than one quote for the requirement. Sole source requirements should be clearly identified in block 15 of the requisition document by the department purchasing representative. 23 CRFY OF TEMECULA PURCHASING MANUAL C. Open Purchase Orders for Recurring Requirements In circumstances where a department has a recurring requirement (routine vehicle maintenance, office supplies, etc.), an "open" purchase order may be used to enable the department to obtain the supplies or services without having to go through the requisition process each time. An open purchase order is set up with a "not to exceed" amount, and with specific staff members authorized to place orders against it. It is the department purchasing representative's responsibility to track all orders placed against an open purchase order, so that when it appears that the purchase order is going to run out, a new one can be processed prior to the old one expiring. The advantage of an open purchase order is that a department has the flexibility of obtaining recurring services quickly. The disadvantages of an open purchase order are that departments must track purchases closely to ensure funding is available on the purchase order, and that funds are encumbered once the purchase order is approved. An open purchase order can be for any amount. However, if a department desires to exceed $2,500, then three quotes must be obtained in accordance with procedures established in this manual. If there is a variety of items which will be ordered against this purchase order, and all of them cannot be identified at the time the requisition is being processed, then the department purchasing representative should identify a minimum of 10 most commonly ordered items and obtain pricing for those items. This will satisfy the requirement for quotes. Sources for open purchase orders should be reviewed by the deparunent purchasing representative on an annual basis to ensure competitive pricing. Obtaining quotes using the methodology in the paragraph above will satisfy this requirement for annual review. D. Requirements Not Covered by Purchase Orders The following are requirements which are not covered by purchase orders: 1.PETTY CASH PURCHASES When the value of a purchase is $50 or less, the item may be purchased using the Petty Cash Fund. Petty Cash may be used either to reimburse an employee for personal funds expended, or may be used as a cash advance for a purchase to be made. All Petty Cash purchases must be approved by the appropriate Deparunent Director prior to funds being disbursed. Forms must be completely filled out, including proper account coding. Reimbursement forms are available from the cashier's office. 24 CITY OF TEMECULA PURCHASING MANUAL In those cases where an employee is being reimbursed for funds already expended, an original receipt or proof of expenditure must be provided with the Petty Cash form prior to funds being disbursed. If no original receipt is available, then a signed memo from the appropriate Department Director providing an explanation of the expenditure may suffice for reimbursement. If the funds are being advanced, then the employee making the purchase must provide the original receipt or proof of expenditure no later than the close of the next business day following the date of receipt of the petty cash advance. Failure to comply with this provision may result in funds not being advanced to the delinquent department in the future. NOTE. Pettycashmaybeapprovedforpurchasesinexcessof$50onlywithpdorapproval from either the Director of Knance or designated fynance Department representative. Employeesshouldnotexpectautomaticapprovalforreimbursement of any petty cash expenditure. 2. TRAVEL ADVANCE/REIMBURSEMENTS Complete procedures for travel are provided in the City of Temecula Travel Policy (see Attachment N). 3. CHECK REQUESTS Check requests are not intended to take the place of a purchase order, and will not be used to circumvent purchasing procedures. Departments can submit a Request for Check for items that include the following: a.Payment for an Instructor b.Escrow Services c.Refunds of deposits made with the City d.Refunds due from overpayments e.Payments for claims f.Fees to other agencies based on agreements/construction projects/etc. g.Any exceptions with prior approval by the Director of Finance NOTE. Invoices for tuition, dueslmeetings for professional assoc@ons, subscriptions to magazinesljournalslnewspapersletc., travel, airfare, and conferences may be submitted for payment without a check request or purchase order. 25 CRFY OF'FEMECULA PURCHASING MANUAL 4. CITY CREDIT CARD Complete policy and procedures for using City credit cards are provided in the City of Temecula Travel Policy (see Attachment N). 26 CITY OF TEMECULA PURCHASING MANUAL SECTION 4: INSURANCE REQUIREMENTS Vendors making delivery or providing services on City premises shall carry liability insurance and Worker's Compensation coverage as required by the State of California. Additionally, contract documents may require specific insurance requirements which must be satisfied prior to commencement of services. All insurance endorsements shall be forwarded to the City's Risk Manager for review prior to the commence of work. Once the documentation is determined to be satisfactory, the originals will be filed with the original contract documents in the City Clerk's office. Procedures for the City's insurance requirements are provided in Attachment K. Since insurance requirements may vary based on the nature of the purchase, the Risk Manager may add, delete, or reduce the level of insurance required on a case by case basis. NOTE: AU insurance cemflcates must name City of Temecula as additional insured in order to satisfy insurance requirements. Additionally, if the term of insurance expires prior to issuance of a Notice of Completion, then it is the responsibility of the Project Manager to ensure that a new CerWflcate of Insurance is received to cover the tenn of the project, and is forwarded to the Risk Managerfor review. 27 CITY OF TEMFCULA PURCHASING MANUAL SECTION 5: DELIVERY OF GOODS AND SERVICES Prompt delivery and efficient service are essential. Delivery shall be made complete as ordered in accordance with schedules established at the time the purchase order is placed. Failure to furnish such delivery and service will constitute a breach of the conditions of the Purchase Order. In such a case of default, the City may procure the goods/services from another source and may charge the contractor/vendor for any excess costs incurred. Delivery of items ordered for use in City Hall shall be made to a central receiving location as specified within City Hall (see attachment 0 for Receiving Procedures). For all off-site deliveries, purchase orders should specify the site to which the delivery is to be made with a point of contact, if possible. Vendors shall deliver each order in one (1) shipment whenever possible. A partial shipment of an order may be rejected, at the Purchasing Manager's option, unless specifically authorized on the order. It is the responsibility of each department purchasing representative to ensure purchases are received in the quantities ordered. The Purchasing Division will not track the delivery of a purchase order unless prior arrangements are made between the department purchasing representative and the Purchasing Division. In accepting award of a purchase order, the vendor guarantees to make delivery of all items on the purchase order. Likewise, if the items are not readily available, it is the vendor's responsibility to see that all items are obtainable from any other source having the items in stock. Each item furnished shall be new, without deterioration, and ready for use in accordance with the latest specifications provided by the manufacturer, unless otherwise specified. On all items furnished, final inspection and acceptance/rejection will be by the City. Final inspection shall be conclusive except with respect to latent defects or fraud. Additionally, final inspection and acceptance/rejection of each item will be made as soon as practical. NOTE.Failure to inspect and acceptlreject an item shall be construed as acceptance by the City of items which are not in compliance with specifications. If, after acceptance, the City suspects that an item is not in compliance, then the City may submit samples of products of doubtful composition andlor physical details to a qualified commercial laboratory for testing. In cases of non-compliance, the cost of such testing will be paid by the vendor. 28 CITY OF TEMECULA PURCHASING MANUAL The City reserves the right to request samples for testing the products on which the vendor has quoted. These products shall be fumished to the City's Purchasing Manager by the vendor at no cost to the City. A. Removal of Rejected Deliveries Upon notification of rejection of a delivery, the contractor/vendor shall promptly remove rejected materials at the vendor's expense. The City will not be responsible for rejected products, including the cost of the product and its removal. 29 E 13 -OAIV 1480 TERRAciTA DRIVE - SAN BERNARDINO, CA 92404 - (909) 886-7408 - FAx (909) 886-7529 MOBILE (909) 31777744 - E-MAIL: mcdcon@ix.netcom.com Rr VERSIDE COUNTY @RGOVERNMENTAL AGENCIF PREL@ARY ANALYSIS November 13, 1996 SOME PRELINffNARY CO@NTS 1. Is it broken2 It's not necessarily clear that the three-agency system is fatafiy flawed and must undergo basic restructuring. Certainly, there are perceptions of problems, and a number of relationsb;ps could be improved. On the other hand, from an outside observer's standpoint, good work is occurring on many fronts, and the separation of functions by agency - while understandably fiusttating to various participants (and satisfying to others) - appears to be productive. Some "fixes" may be possible in relatively easy fashion within the existing structure. Conversely, this may be the time to consider more sweeping change. The perceived advantages within a merger of reduced decision-maker time, lower budgetary costs, and clarity of organization all need to be examined. 2. CVAG and the Desert, CVAG is structured,- enjoys support, and has a track record which would enable it to accrue additional responsibilities and independence with success. A few strategic issues and conditions exist, which @ll be discussed in a separate section. The question here is a countywide, intergovenunental policy one, as well as the attendant statewide political precedents involved. For much of this paper, the choices are West County in nature; CVAG can be held out and dealt with separately. See the larger discussion presented later in this paper. 3. VYRCOG eenesis, It's useful to remember the initiation of @COG. RCTC considered the choice of expanding its purview into more comprehensive and long range planning functions, and determined that it preferred to focus on the more immediate and irnplementable transportation improvements. Thus, RCTC and the body politic supported the creation of VIRCOG as a full Western County COG to address those needs, and WRCOG has done so quite admirably. There is inescapably some overlap; these matters could presumably be handled with a tightened MOU. Reversal of this earlier judgement to separate is certainly in order, but should be considered with history in mind. 4.Functional analysis, The discussion to date has been dominated by concerns of agency merger "Quality Services Specializing In Regional, Transportadon, 'and Intergovernmental Agencies; Public-Private Ventures; City Governments" and political representation. We should really start with a consideration of function: What do we want to see done? And then, what is the best way to handle it? Having determined the support for areas of interest, there are organizational and political ways to accorrolish the mission. 5. Keel2 strengths, Presuming that continuity of the functions now pursued by the agencies is desired, any restructuring should be conducted with the goal of assuring that functional continuity Will not be impaired. Form should follow structure. We should not change organizationally or politically for the sake of organizational change or presumed clarity alone. There are ways to do this in a recreated organization. If WRCOG performs valuable functions in both transportation planrfing (comprehensive, long range, modeling)'as well as many generalist planning and consensus-building efforts, let's retain these attributes, either in the existing or a changed organizational matrix. Similarly, if @CTC has a commendable record in real-time transportation improvements, both highway and rad, we should retain and even build upon that asset. 6. Look to the future, In addition to considering function and dealing with political realities, any reorganization should place the county in the most advantageous position for several future events. Most often mentioned is renewal of Measure A. Analysis is now under way, but the options would seem to include both a countywide vote or separate area votes. Untfl the answer is clear, some means of maintaining the countywide option should be preserved. Another consideration is the STIP. Size typically equals strength; some scheme that produces perceived countywide impact should be preferred. Other lobbying efforts at the federal, state, and regional level could also benefit from collective strength. 7. Meetings, Participants in the first meeting all expressed a desire to hold down meetings. At first blush, combined organizations would seem to hold promise of fewer meetings. On the other hand, a larger and more multi-functional organization would probably find it necessary to create- strong policy conunittees (as witness SCAG and SANBAG), and the net meeting requirements for elected officials may not necessarily diminish. Thoughtful analysis should be accorded this topic. 8. Personnel and Budgets, Similarly, it seems a priori apparent that a merged organization would save costs, particularly in the realm of high level staffand support functions. In general, this is probably true, But the relative savings may not necessarily be that significant, and the detailed costs should be further determined. Budget savings then need to be balanced against other perceived positive or negative aspects of reorganization. Key human assets should be preserved. 9. Membershil2-and voting, Given the political imperatives involved, this topic has assumed high visibility (perhaps too high ... it needs to be balanced against functional analysis). After review of a number of models around the region and the state, the consultant is persuaded that these concerns can be adequately satisfied under any options on the table, including the status quo. These questions need not be a first order priority. See later expanded discussion. 10. Ley-al steps, Similarly, after review, the consultant is satisfied that the functional and organizational desires ultimately determined upon can be accomplished through a range of 2 implementing and legal steps ranging from inter-agency agreements to various levels of legislation. Again, concerns over legal accomplishment should not be a driving issue. See later expanded discussion. I 1. Statewide m@lAs presented during the initial October joint meeting, the organizational models from elsewheregive us scant guidarce and comfort. The quht is quite varied. We are left to our own devices toorganize Riverside County as we see best. 12. Add agencies/functions, Incorporation of the transit agencies into some revised structure has not been directly considered at this point, but obviously is a possibility (as in Los Angeles 'and Orange Counties). The suggestion has also been made that future consideration of expanding the functions of RCTC, or its successor, to include toU road authority or other construction/operation capabilities should not be precluded and, in fact, operdy contemplated. 13. Multi-focused agengy ("Holding Compan@'). An interesting option, to be ffifther considered, is the sort of meet-all-desires-in-one concept afforded by creating of an overall, skeleton, umbrella agency (the "holding company") with several operating divisions. This may hold, promise. See later expanded discussion. ORG@ATIQNAL OPTIONS Presented here are a variety of options which could be suggested, with some brief conunents on each. 1. Status quo with clafified agreements All three agencies are retained. However, if there is confusion or disagreement over functions and relationships, or a common desire to expand responsibilities, these fines of relationship can be redefined with new MOUS. RCTC has existing MOU's with both CVAG and @COG; however, they date back, and there appears to be - at least from some participants - either confusion or. outright lack of agreement over functions. This is particularly true with those functions that overlap, such as transportation planning between RCTC and ARCOG and Measure A administration between RCTC and CVAG. Reasonable people can work out these relationships; they would have to be determined, at least tacitly, in any restructuring effort. So this option calls for successfully accomplishing that exercise. Other expressed concerns, such as those of membership, inter-agency relationships, and perceived attention paid to sub-geographic areas, would also have to be worked out over time, 2. RCTC expanded membership count@de This option meets a need expressed by some participants that universal membership by all cities and all five Supervisors on RCTC would provide more equitable representation, particularly when 3 dealing with transportation finance. However', as presented here, it begs the question of relationship with the other two agencies, and does not speak to functions. It also ignores questions of proportionate membership and weighted voting, which would probably become a necessary component. What would then happen to CVAG and @COG? Would it in fact lead to a feeling of fairness in project funding? In some ways, this option poses more questions than it answers. See, however, the use of this same option in the "Holding Company" concept. 3. CVACI splits RCTC expanded membership West County his option and that following both presume that CVAG attains independent status, and then focus upon alternative models in West County. As noted later under Legal and Im]2]ementation St=, CVAG's separation could possibly be accomplished either through internal agreements under existing law or with a change of statute, or both. To make this option truly work, and avoid unnecessary complications, Palo Verdes would need to come into some relationship with CVAG. In this option, RCTC's membership is expanded to include all West County jurisdictions. Would CVAGanddesertmembersthenbedeleted? Quiteprobably. Wouldquestionsofproportionate membershipandvotingwithintheexpandedWestCountyRCTCberaised? Probably. The optiondoesnotspeakoffunctions. Whatwouldoccurrela6vetoWRCOG'swo'rk? Wouldit wither away? Would West County elected officials be willing to attend two meetings with I 00% membership, even if the need for two agencies and a clear acceptance of differing functions were agreed upon? if we presume in this option that V*RRCOG is subsumed by RCTC, all of the questions of function, internal organization, and elective official committees need to be answered. In any case, this option would clearly need major state legislation. 4. CVAG sr)lit: NWCOWOT newly named agenry) as West Cou= ap-eni4 In this option, CVAG again is separated, and the same considerations apply. Within the West County, WRCOG - which already has I 00% membership, although by voluntary JPA agreement - is designated by statute as the CTC (as is the case with SANBAG and SANDAG), and RCTC as it now exists is eliminated. Essentially, the same questions as in the prior option continue to apply: membership, voting, functions, committee organization, etc. In both cases, major ex@nation of functions, staffing, leadership, and budget would need to be conducted and satisfactorily concluded. As a variation, since organizational loyalty, stature, and egos are inevitably involved, the resulting joint organization could be newly created and newly named. (The consultant played with some names, but gave up at this point!) This suggestion is more than cosmetic; such sensitivities are 4 important and deserve attention. 5. Holding Company This is a rather unique and creative approach witch perhaps attempts to be "all things to all p(.@.ople", and yet upon examination has serious attractiveness. In this case, RCTC, perhaps renamed to indicate its new role, continues to exist as an umbrella agency and "holding company", but with a more limited and carefully defined role and a less intense meeting and operational schedule. Its leadership and staffing are more limited and perhaps drawn in part from the underlying operating companies. The "operating comp@es" would continue to be CVAG and WRCOG, plus a West Valley transportation implementing company which could probably be the old RCTC wearing its Measure A hat: the Riverside County Transportation Authority. Tlis structure would also adapt well to including the two transit agencies, RTA and Sunfine, if that course were chosen. What would be the membership of RCTC in this construct? It would lend itself to either the full- county I 00% membership option (with appropriate voting arrangements) or to a "federated" structure, in which the operating companies would each supply a certain amount of members to the holding company Board. It is contemplated that the RCTC-holding company would probably meet only quarterly or less. Relationships and functions wi@ the operating companies would have to be developed. One of the Executive Directors of the operating companies could double as the holding company staff chief A major advantage of this arrangement is the continuity for state purposes of a single CTC (even though internally its responsibilities would be divided) and for bond purposes, as well as future renewal, of the Measure A role. It would also allow for countywide approaches to the SAFE callbox program and other desired countywide ministerial functions, perhaps such as TDA. Legislation of some degree would probably be needed but, because of continuation of a single countywide titular CTC and with presumed agreement among all Riverside parties, may not be difficult to achieve. CVAG AND nM DESERT CVAG has a long history and a capable political and staff organization, and can take over whatever functions may be assigned. The decision is political, at both the county and state levels. Does the county wish to bifurcate transportation geograpMcaUy? Would the county lose strength in the regional, state, and national funding arena? Is the state ready to fragment counties in the transportation setting? A nagging problem is the Palo Verde area. Would it be wise to further fragment into a third, and very small, area? The situation would be very much improved if Palo Verde would agree to fall 5 under a CVAG umbrella, so that structurally there would only be two agencies. We understand that may be ready to occur. Measure A pass-throughs are assured by the Ordinance-, but certain concurrences must be made by RCTC and an annual budgetary allocation for administration is taken, a proportionate part of which is bome by the CVAG area. What would be the responsibilities and overhead costs under a CVAG split? State and federal funds are programmed through a very complex and politically sensitive process by Caltrans, RCTC, SCAG, and the CTC, known as the STIP, witch itself is threatened with major change. Smaller areas within the state tend not to do as well; it also takes a significant staff conunitment to "play the game" effectively. A sub-allocated STIP fund estimate would have to be developed either internally within the county or by the CTC (would require legislation). A STIP game plan would need to be developed, but this is doable. The Local Transportation Fund/TDA disconnect is perhaps the most difficult political and financial constraint to a CVAG split, if the area were to insist upon redressing this imbalance of source generation to expenditure as a condition of any new arrangement. This would result in a loss to RTA of over$ I million. NEMBERSHIP AND VOTRNG Much attention has been given to this subject. It appears that all concerns can be met through various devices (political agreements, of course, would have to be reached). The subject can be approached in several ways: Membership, Representation can simply be handled through appropriate allocations of membership, without resorting to special voting patterns of proportionality or vetoes. CVAG and WRCOG already have I 00% membership of their respective jurisdictions, whereas RCTC has a defined statutory membership which is periodically challenged as not being adequately representative. . If a desire exists for I 00% West County membership, the simple.answer is to designate ARCOG by statute as the CTC (as was the case with SANBAG). The alternative is to enlarge RCTC's mernbersmp (and probably drop the public member). In the case of the "Holding Company", two options present themselves. lie countywide umbrella agency could either be composed of 100% countywide membership (in which case some kind of proportional voting or geographic vetoes would probably be called for), or it could be "federated" with a certain number of members from each "operating company" agency coming together to constitute the Board of the Holding Company. Votiniz, Apart fro@ or together with, membership as a determinant of equity, various forms of voting arrangements can be developed to afford perceived fairness and 6 protection. On the positive side, proportional voting schemes such as that of the San Diego Association of Governments (SANDAG) can be created. In this case, when use of the tool is called for, jurisdictions are allocated certain votes based upon some index: population, tax generation, etc. Caps can be applied to limit excessive weight. The second most popular option is to create split votes, where both (or more) sides must vote afftrmatively to approve.a result. The splits are created to accommodate perceived future differences among groups of parties: city v. county, geographical areas, small cities v. large, different kinds of "operating comp@es", etc. What this really creates is a veto opportunity. It can create an impasse, where actions viewed by one party as disadvantageous can be halted. But it cannot create positive resolutions. Who is to be prote@? In Riverside's case, several potential interests could be at issue: the County goverrunent, the City of Riverside, other larger cities, CVAG v. Western County, various subareas within Western County, W RCOG v. RCTC as "operating companies", etc. These concerns would need to be sorted out. In the most positive framework, of course, no such artificial devices would be needed; one vote per member (Question:County Supervisors?) would be deemed appropriate. Fiscal p A perceived complaint within Riverside County relates to inequities over time in the progranuning of Measure A, STIP, @d possibly TDA funding. One alternative which has been suggested, which could even be applied to a status quo organizational setting, is to require that -Lhe recipient area COGs (CVAG and WRCOG) must concur with RCTC before programming could go further. In the case of WRCOG, a subarea arrangement could even be applied within differing West County. areas (although this begins to fragment very finely). The likely result of this approach would be logrolling and dilution of the available funding, making meaningful projects much more difficult. Presentation of this option should not be interpreted as a recommendation. LEGAL AND UALEMENTATION STF-PS One given in this entire exercise is the need to maintain an effective legal stance relative to Measure A, including both bonded indebtedness already in place and future bonding actions which may be taken. RCTC legal counsel and bond counsel need to be kept involved. The strategic considerations relative to a successor to Measure A, while not strictly a legal matter, are also paramount. An assumption has been in effect that state legislation will be necessary to effect almost any desired restructuring conclusion; a related concern is that the legislature has, to date, been unwilling to subdivide a county. More intense legal brainstorming suggests that this may not' necessarily need to be the case; significant change could be enacted by intra-county jurisdictional - agreement and contract, with sufficient assurance to the "minority" party that a change in politics would not threaten the initial agreement. We continue to work on this concept. It would 7 probably be useful, and perhaps necessary, to have statutory language affirming these delegation rights on behalf of RCTC. But, from the state's vantage point, the titular responsible party would st@ be a single county agency, making it politically easier. AWle it may, from the standpoint of full disclosure and thus political openness, be desirable to have a fully written bill developed by the January 24 Legislative Counsel date, it is also pe@tly feasible (and arguably equally politically saleable) to simply put a "spot" bill in place, and thereby buy several more months of time. We need some additional sage Sacramento advice, and will attain it. NEXT STEPS TO BE CONSRDERED Following this meeting, a number of steps would seem to be i@ order: 1. Consider the various options presented. However, they should be viewed in terms of objective data yet to be developed: 2. Study, debate, and determine functions to be conducted. (not necessarily by today's organizations). 3.Analyze staffing patterns, comparing today's org@tions to the preferred model(s). 4.Analyze budget costs in a similar pattern, including any perceived overlapping or duplicative costs and elements of indirect overhead. 5. Consider transition steps over a period of time. 6. Gain further advice on legal and legislative needs. Rivorgll/13 8 ]ODF- COUNTY TRANspoRTATION COMMSSION TELECOPY COVER SHEET CkCito DATE: TO: FAX FRC)L NO. OF PAGES (INCL COVER): COMENTS! 0, ANY PROBLEMS VATH TRANSMISSION, PLEASE CALL (909) 787-7141. FAXED BY: DATE & TIME: U Avenue, SuMe 100 # C w=i (IM) M-7141 4 Ft^X MO M-"= RIVERSFDE COUNTY TRANSPORTA riON COMMISSION DATE:November 13, 1996 TO:Riverside County Transportation Commission FROM:Jack Reagan, Executive Director SUBJECT:Finding of Necessity to Amend Measure A Plan to Reflect New Cities During the October 9th joint RCTC, CVAG, WRCOG meeting we distributed materials from the Measure A ballot measure which included the map. Since the ballot measure was before voters concurrent with formation of the new cities of Murrietei and Temecula, which could not be anticipated, it references that area as "Rancho California". Continuing to exhibit that map is a legitimate point of irritation to elected officials from those two cities. However, it is part of the voter approved Measure A Expenditure Plan which can only be amended based upon a finding of necessity by the Commission, approval by the County Board of Supervisors, and concurrence by a majority of the cities which also represent a majority of the incorporated population of the county. ' Based upon a literal reading of Measure A as approved by voters, I believe an action by the Commission to find it necessary to amend the plan to revise the map to reflect the formation of new cities would. be appropriate. Presumably, such an amendment would not only deal with the current mislabeling of the cities of Murrieta and Temecula, but would also enable the Commission to make future map revisions should voters approve formation of new cities or disincorporation of existing cities, STAFF RECOMMENDATION: That the Commission make a finding of necessity to amend the Measure A Expenditure Plan to authorize revision to the Measure A plan map to reflect any voter approved changes to municipal incorporation subsequent to voter approval of Measure A in November 1988. ORDINANCE MO. %-I AN ORDINANCE OF THE wE couz4TY nt.ANSPORTATION co@ssioNimnATING AND APPROVING mEAsuRF- 4'Apl EXPENDUM PLAN NO. I on November 8, 1999, Ordinance No. 99-1 enacting a one-half percent oW tax was @ved by the voters of Riverside County; and WHEREAS, an E e Plan was adopted along with Ordinance No. 89-1 designating the mumer in which sales tax revenues would be allocated; and S, the Commission has d ad that the Expenditure Plan needs to be am@d to reflect changed circ=mcek s@caby the ration of a number of cities subsequent to adoption of the E@ture Pim and WHEREAS, Ordinance No. 99-1 and Public Utififies Code S@on 240302 require that any chanps to the a Plan be initiated by the Commission based on a finding of necessity; and WHEREAS, this @diture PLU Amendment must be approved by the County of Riverside and by a majority of the @es constituting a majority of the incorporated population of the County prior to beco@ effective, NOW, THEREFORE, the Riverside County Transportation Comnii@on hereby ordains as follows-. n I - The nup show* the major highway, ad@, connnuter rail and transit projects to be fimded by the rmd tran@on and use tax C'Map") is hereby replaced with the Map attached hereto as Exhibit "A." The sole purpose of this anrienchnent is to depict the presence and location of the cities of Calimesa and M@eta, which were incorporated subsequent to adoption of the Expenditure P@ and the city name c@e from @ho California tD Temecula. NomMrsubst@@gestothL.,Maparthereby')ntoTidedoraLdopted. The following facts support a finding of necessity for this amendment: [to be @ed by Commission) This Supervisors of the County of Plan Amendment must be approved by the Board of de &W by a majority of the cities con@ting a majority of the incorporated population Once so approved bY the Cour4 aM the cities, this Expenditure Plan Amendment will immediately become @ve t @er action of the Cornmssion. APPROVED-. TED AND APPROVED BY; EDE COUNTY- TRANSPORTATION CONMSSION de County By: Board of Su rs Alex C@d, Chair (Ar. shown on on) APPROVED:REVIEVAM AND RECO ED FOR APPROVAL: By: Cities of de County Jack Executive Dir=or (As shown on @bed resolutions) APPROVED AS TO FORM: By- Bcs Best & Mew LLP CounW, Rivuside County Tnunportation Comniismon la" S@Lf- RESOLTMON NO. A RESOLLMON OF TIIE BOARD OF SUPERVISOR-S OF THE COUNTYOF AUTHO 0 APPROVAL Of TBIE RIVERS]IDE COUNTY TRANSPORTATIO14 COMMSSIONS TO ORDINANCE NO. 88-1 the Riverside County Transportation Commission (the "Commission") has @ed Plan No. to amend the @diture plan adopted as pwt of No. 98-1. WHEREAS, the Board of SuWAsors of-the County of Riverside (the "Boarcr) hereby determines that it is in the best int.@s of the County of Riverside that Expenditure Plan Amendiviciit No. be approved; and t he Board WWs and incorporates in @ Resolution afl findings rnade in Expenditure Plan Amendment No. - ; and AS, the Board pummm to Swfion 240302 is required to approve the Amendment. NOW, THEREFORF-, the Board hereby m-solves as follows: The Board approves Expenditure Plan Amendmezit No. Adopted this day of 199-, Board of Supervisors Riv@de County 14536 SRMLURION NO. A RE$OLIMONOF THE CrrY OIF AG AMOVAL OF THE RIVERSME COUNTY TRANSPORTATION cobmsslolfs -TO ORDINANCIE NO. 99- I the de County T@@on Commission (the "Commi@ff') hu adopted Ex re Plan Anandment No. to afnend the expenditure plan draft as part of the Co@s@s Ordinance 14o. 88-1. AS, @ City of (tM 'City") hereby d nes that it is in the best int of the City @ Expenditure Plan Am No. be approved, and the City adopts and 'mcorporates in this Resolution all findings made in 0 plan ent No. and S, a @ority of the cities consd@g a majority of the incorporated popumon pummt to Section 240302 is ieg@ to approve the Amendment. NOW, THEREFORE, the City hereby resolves as follows,. The City approves Expenditure Plan Amendment No. Adopted this day of 199 City of 14LVF DEPARTI\4ENTAL REPORTS APPROVAL CITY ATTORNEY DIRECTOR OF FIN* CITY MANAGER CITY OF TEMECULA AGENDA REPORT TO:City Manager/City C@ncil FROM:Debbie Ubnoskir, Planning Manager DATE:November 26, 1996 SUBJECT:Monthly Report RECOMMENDATION:Receive and File Discussion:The following is a summary of the Community Development Department's Planning Division caseload and project activity for the month of October 1996: Caseload Activity: The Department received 8 applications for administrative cases and 8 applications for public hearing cases for the month of October. The following are the public hearing cases: Conditional Use Permits 1 Minor Conditional Use Permits 2 Development Plan (with CEQA) 4 Revised Parcel Map (after 2 years) 1 8 Total Ongoing Proiectso Old Town Streetscage Improvement Projecto The Redevelopment of the Sixth Street Parking Lot is under construction and estimated to be complete within 60 days with a 60 day maintenance period. Staff is reviewing a scope of work prepared by Flour-Daniel for development of the construction plans for the Streetscape and storm drain improvements. Murdy Ranch Specofic Plan and Environmental Impact Reports Staff is awaiting re- submittal of the draft SP and EIR. Staff will review and determine if the screen check draft EIR can be circulated and SP can be set for Development Review Committee (DRC) meeting. R:WONTHLY.@19%\NOV.WPD 11/19/% Ub Roripaugh Ranch Specifoc Plans The Planning Commission held a public workshop on September 11, 1995 and directed the applicant to reduce the density and the total number of units as well as to be more sensitive to the surrounding land use by increasing the buffer area and providing a transition of lot sizes. The Commission provided additional direction to the applicant. No future hearing date has been established. Temecula Shuttles After the completion of the grading on the Sixth Street parking lot, Temecula Shuttle will begin the construction of their facility. The anticipated ground breaking is set for November 1, 1996. Sign Ordinance: The first Draft of the Ordinance has been reviewed by the committee. Public Workshops and Planning Commission hearings started in October. Staff is currently meeting with the EOC and a number of commercial real estate brokers and agents and reviewing the proposed ordinance. New Projects Trend* The Department is currently processing or in preliminary discussions with eight to ten different applicants for new industrial and warehouse facilities within the city. New applications include a 300 unit apartment complex and a Golden Corral Restaurant. Design Guidelones: The Planning Commission is concluding their review. When finished, this will be forwarded to the City Council. R:%MONTHLY.RM19%NNOV.W]?D 11/19/96 k% 2 ATTACHMENT NO. I REVENUE STATUS REPORT IL-\MO Y.RM19%\NOV.WPD 11/19/% IZ 3 REVPRIN2 CITY OF TEMECULA PAGE 1 11/19/96 08:43:40 REVENUE STATUS REPORT OCTOBER 1996 001 GENERAL FUND 161 PLANNING ACCOUNT DESCRIPTION ADJUSTED OCTOBER 1996-97 BALANCE % COL ESTIMATE REVENUE REVENUE 4101 AMENDED FINAL MAP 4102 APPEALS 4103 CERT. OF LAND DIV. COMPLIANCE 4104EXTENSION OF TIME 4105SINGLE FAMILY TRACTS 4106MULTI-FAMILY TRACTS 4107PARCEL NAPS 4108LOT LINE ADJUSTMENT 4109MINOR CHANGE 4110PARCEL MERGER (2-4 LOTS) 4111RECORDABLE SUBDIVISION NAPS 4112REVERSION TO ACREAGE (5+LOTS) 4113SPECIAL SERVICE LETTER 4114SECOND UNIT PERMITS 4115CHANGE OF ZONE 4116CONDITIONAL USE PERMIT 4117CONSISTENCY CHECKS 4118GENERAL PLAN AMENDMENT 4119PLOT PLAN 4120PUBLIC USE PERMIT 4121REVISED PERMIT 4122SETBACK ADJUSTMENT 4123SPECIFIC PLAN 4124SUBSTANTIAL CONFORMANCE 4125TEMORARY OUTDOOR EVENT 4126TEMPORARY USE PERMIT 4127VARIANCE 4128ZONING INFORMATION LETTER 4129CEQA (INITIAL STUDIES) 4130CEQA ENVIROMENT IMPACT REPORT 4131DEVELOPMENT AGREEMENT 4132GEOLOGY CEQA 4133GEOLOGY ORD. 547 APZ 4134LAFCO 4135PARCEL 14AP/WAIVER 4136MERGER 4137AMENDED FINAL TRACT/PAR. MAP 4138CERTIFICATE OF CORRECTION 4139CONDO TRACT MAP 4140REVERSION TO ACREAGE 4141LOT REVISION AFTER CHECK 4142LOT LINE ADJUST. PLAN CHECK 4143CERT. OF CORRECT. PLAN CHECK 4144CERT. OF COMPLIANCE PLAN CHECK 4145COND. CERT. OF COMPL. PLN. CK. 4146CERT. OF PAR. MERGER PLAN CK .00 .00 .00 .00 702.00 .30 .30 701.70 0.0 3,348.00 .00 .00 3,348.00 0.0 6,750.00 .00 352.00 6,398.00 5.2 9,396.00 3,946.75 12,970.00 3,574.00- 138.0 6,590.00 .00 .00 6,590.00 0.0 7,173.00 674.00 5,528.20 1,644.80 77.1 2,300.00 230.00 1,380.00 920.00 60.0 470.00 .00 459.00 11.00 97.7 1,000.00 .00 .00 1,000.00 0.0 .00 .00 .00 .00 392.00 .00 .00 392.00 0.0 .00 .00 .00 .00 1,483.00 .00 .00 1,483.00 0.0 10,984.00 .00 .00 10,984.00 0.0 15,108.00 4,442.00 10,347.00 4,761.00 68.5 5,735.00 .00 .00 5,735.00 0.0 8,256.00 .00 .00 8,256.00 0.0 19,075.00 15,436.00 41,042.85 21,967.85- 215.2 .00 .00 295.00- 295.00 *** 11,261.00 .00 .00 11,261.00 0.0 528.00 .00 .00 528.00 0.0 9,254.00 .00 .00 9,254.00 0.0 880.00 370.00 3,515.00 2,635.00- 399.4 .00 558.00 1,704.00 1,704.00- *** 2,640.00 .00 .00 2,640.00 0.0 2,952.00 .00 .00 2,952.00 0.0 .00 .00 .00 .00 15,904.00 3,725.50 9,526.50 6,377.50 59.9 6,202.00 .00 .00 6,202.00 0.0 16,000.00 .00 .00 16,000.00 0.0 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 1,000.00 1,000.00- .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 REVPRIN2 CITY OF TEMECULA PAGE 2 11/19/96 08:43:40 REVENUE STATUS REPORT OCTOBER 1996 001 GENERAL FUND 161 PLANNING ACCOUNT DESCRIPTION ADJUSTED OCTOBER 1996-97' BALANCE % COL ESTIMATE REVENUE REVENUE 4147 VACATIONS PLAN CK .00 .00 .00 .00 4148 DOCUMENT PROCESSING .00 .00 .00 .00 4149 CONDEMNATION PLAN CHECK .00 .00 .00 .00 4150 REVERSION TO ACRE. PLAN CHECK .00 .00 .00 .00 4151 PARCEL 14AP PLAN CHECK .00 .00 .00 .00 4152 TRACT 14AP PLAN CHECK .00 .00 .00 .00 4153 AMENDED 14AP PLAN CHECK .00 .00 .00 .00 4154 4TH & SUBS. SUBMITTALS .00 .00 .00 .00 4155 FENA STUDY REVIEW .00 .00 .00 .00 4156 LOMA REVIEW .00 .00 .00 .00 4157 DRAINAGE STUDY REVIEW .00 .00 .00 .00 4169 IMPROVE INSPECTION ON-SITE .00 .00 .00 .00 4170 K-RAT STUDY FEES 1,480.00 .00 .00 1,480.00 0.0 4175 FAST TRACK PLANNING .00 .00 .00 .00 4180 FORMA FAST TRACK .00 .00 .00 .00 4200 IN HOUSE PLAN CHECKS .00 1,100.00 4,270.00 4,270.00- 4206 ANNEXATION FEES 710.00 .00 .00 710.00 0.0 4226 TEMPORARY USE PERMIT .00 .00 .00 .00 4260 ACCESSORY WIND ENERGY .00 .00 .00 .00 4261 LARGE FAMILY DAY CARE .00 .00 .00 .00 4262 HAZARDOLJS WASTE FACILITY .00 .00 .00 .00 4369 LAND DIV UNIT MAP 374.00 .00 187.00 187.00 50.0 4370 LANDSCAPE PLAN CHECK 15,296.00 6,890.00 19,240.00 3,944.00- 125.8 REVENUE TO DATE 182,243.00 37,372.55 111,226.85 71,016.15 61.0 GENERAL FUND 182,243.00 37,372.55 111,226.85 71,016.15 61.0 REVPRIN2 CITY OF TEMECULA PAGE 3 11/19/96 08:43:40 REVENUE STATUS REPORT OCTOBER 1996 GRAND TOTALS DESCRIPTION ADJUSTED OCTOBER 1996-97 BALANCE % COL ESTIMATE REVENUE REVENUE REVENUE TO DATE 182,243.00 37,372.55 111,226.85 71,016.15 61.0 GRAND TOTALS 182,243.00 37,372.55 111,226.85 71,016.15 61.0 REVPRIN2 CITY OF TEMECULA PAGE 4 11/19/96 08:43:40 REVENUE RECAP REPORT OCTOBER 1996 DESCRIPTION ADJUSTED OCTOBER 1996-97 BALANCE % COL ESTIMATE REVENUE REVENUE 001-161 PLANNING 182,243.00 37,372.55 111,226.85 71,016.15 61.0 GRAND TOTALS 182,243.00 37,372.55 111,226.85 71,016.15 61.0 APPROVAL CITY AT FINANCI CITY M@ CITY OF TEMECULA AGENDA REPORT TO: City Council/City Manager FROM: Joseph Kicak, Director of Public Works/City Engineer DATE: November 26, 1996 SUBJECT:Public Works Monthly Activity Report RECOMMENDATION: Attached for City Council's review and filing is the Department of Public Works' Monthly Activity Reports for October, 1996. r:\agdrpt@trpt/aip CAPITAL @ROVEMEENT PROJECTS Monthly Activity Report NOVEMEBER, 1996 Submitted by: Joseph Kicak Prepared by: Don Spagnolo Date:November 14, 1996 1.WORK UNDER CONSTRUCTION: 1.1-15/Winchester Road Interchange Modifications* The con has paved the new northbound exit ramp and auxiliary lane which will be open to traffic by the end of November. Construction of the framework for the new Winchester Road Bridge will be completed by the end of November. Placement of steel reinforcement for Winchester Road Bridge will begin the first part of November. The contractor is currently installing storm drain systems and replanting damaged landscape areas. 2- Flre Station #84: InsWktion of the masonry veneer on the building is nearly complete. The roofing tile is currently being installed on the east and west wings of the building. Wall insulation is complete with interior drywall work underway. Grading is bing performed for the on-site walkways scheduled for the third week of November. Project completion is scheduled for early January. 3.Walcott Corrid= The con has completed most of the mass grading and is currently ins@g the water main on Walcott Lane. Also, the contractor is preparing the areas where the storm drain head wall structures are to be insWIed. The second phase of the water line installation, which will be along Calle Chapos/CaUe Girasol is anticipated to begin by the end of November. The contractor expects to complete the entire project in June, 1997. 4. Sam Hickq Mont@ Park bnprovement aq*ect: The City conducted a wa&ffirough and prepared a punch list of items to be corrected by November 5th after the contractor indicated the improvements were completed. The contractor is currently correcting the deficiency items. The 90-day maintenance period is anticipated to begin the second week of November. The project includes the construction of a concession/resbwm facility, gazebo, lighting, and various park amenities. S. Traffic Signskl at Route 791,9 nnd AUrgarfta Road/Redhmiwk Parkw= The underground work, pole foundation and wiring work has been completed. Caltrans has agreed to allow the signal poles, maswms and all the other equipment to be installed and to place the signal on flashing red until the roadway improvements are completed. 6. Interim Trafric Signitiat Route 79S and Pala Road: The contractor has contacted Caltrans representatives to begin installation of the left-tum arrow and relocation of the two poles necessary to widen the southwest comer to provide for wide right turn movements. Upon completion of this work, left turns from 79(S) to Pala Road will be protected. Monthly A cdvfty Report November 14, 1996 Page 2 7- Interim Traffic Signal sit Route 79S and @ Paz Street: All the underground work and pole foundation work has been completed. The contractor is scheduled to install the poles and mastarms the week of November 25. This signal will provide a left-tum affow for vehicles turning from 79(S) to la Paz Road. 8.North/South Restroom Facilitn Thecontractor is in the process of completing the punch list items and is scheduled to complete theitems by the IM week of November. Tlus project consists of up grading the restroom facilities to meet A.D.A. requirements, which also includes the installation of an asphaltic handicap parldng stall just north of the facility. 9. Sports Park Creek Restor.2tion: The improvements were completed by the contractor on September 25. And is presently in the 90-day maintenance period. The project consisted of the construction of gabion channel bank protection, landscaping, irrigation, subdrain lines, and walkway paving along the channel south of the Sports Park. 10, EmerLency Generator: The contractor has completed the construction of the block wall enclosure along with the installation of s@ drainage and landscaping improvements. Delivery of the 25OKW generation and 1,000 gallon fuel tank is anticipated the first week of December. The project also includes the installation of electric-powered winches for the gym backboards. Installation of the winches is planned for the third week of November. The project includes installing an emergency generator at the Community Recreation Center to provide power for emergency operations. The project is scheduled for completion in mid-December. 11, Cfty--Wide Traffic Control Device Inventory The consultant is currently processing the collected data and input to the computer. Field measurements are also in progress. This project is scheduled to be competed by mid-December. 12, Traffic Signal at Rancho Califomia and Cosm*c Drive: AR the underground work, detective loops and pole foundations have been installed. The Contractor is currently waiting to receive some minor equipment including the traffic controller. This signal is expected to be in operation by mid-December. 13, City Ma*ntenance Facffity: The facility located behind city hall has been under construction since September 3. The contractor has completed the perimeter masonary waus and is presently laying masonry block above the second story for the maintenance building. Completion of the masonry work is anticipated by the last week of November. The contractor will then begin installation of the concrete parldng area around the building. This project is scheduled for completion on mid- February. r.%m Wp%ASVw@ Monthly Acdvfty Report November 14, 1996 Page 3 14, City Wide Inteffigent Trafflc Manag=nt Sygm Phase I of this federally funded project has been completed. Conduits between the city hall and Lyndie Lane were installed as part of Phase I. Phase ][I of this project will install cable between the existing @c signals and upgrade the controller cabinets. Plans and specifications for the Phase I[[ are nearing completion and will be ready for bid adverting. H. B]II) 1. Acoustic Panels at the CRC G=: The architect has completed the design of the acoustical wall and ceiling panels, which includes extending the existing wall pads at both ends of the basketball court for the ball players. The project will be bid to as to not interfere with basketball schedule. M.WORK IN DESIGN: 1. 1-15/Rancho Cnl*fornia Road Tnterchange Modefication-.R! Roadway plans will be resubmitted to Caltrans (District 8) on Friday, November 22 for final approval. The structural plans have already been approved and signed by Caltrans Division of Structures. The Construction Cooperative Agreement has been approved by the City Council. 2. 1-19/Overland Drive Overcross*na Tmj)rovements-, The structural plans were approved and signed by Caltrans Division of Structures. Roadway plan comments were received by the consultant on September 10 and the roadway plans win be resubmitted to Caltrans (Distdct 8) on Friday, November 22 for final approval. The Construction Cooperative Agreement has been approved by the City Council. 3. Margarita Commtinity Park-, The architect has completed revision's for the first plan check and will submit for second review during the second week of November. Ile project includes picnic areas, a tot play area, restwm @ties, and open md areas. The development of two ball fields on school district property, two lighted tennis courts, and one lighted hockey facility will be as add-altemates. 4. Traffic Signal at SR-79S and Redford Coiirt Caltrans has reviewed the plans and provided comments to the design consultant. The signal plans will be revised and are scheduled to be resubmitted to Caltrans for 2nd plan check by the end of November. 5. Traffic Signal at MarL7arita Road & Solana Way The preliminary design for this interim @c signal has been completed. This signal will uUw the existing equipment which are currently stored in the city yard. The anticipated completion date for this project is Feb@ of 1997. r:@pt%ap%a@.mw Monthly Acdvity Report November 14, 1996 Page 4 6. FY95-96 Pavement Managment System The consultant has returned the first plan check back to the City for review which will be completed by the week of November 18. This project includes removing and reconstructing the a.c. pavement and providing only an overlay in some areas on Rancho Vista Road, Solana Way, and La Serena Way. 7. FY96-97 Pavement Manavement Proposals have been received from the prospective consultants. Reviewing of the proposals win be completed by the end of November. A consultant agreement to provide the design services Wm be presented to the City Council at the next earliest meeting. S. Contract Services for Trafftc Signals & Agency Owned Street Ugbts Staff has received two @c signal and street lighting maintenance proposals and are in the process of reviewing and evaluating the proposals. 9. Pavement msinsi Syqem rate Staff has received four pavement management consultant proposals and are in the process of reviewing them to determined the best qualified consultant to perform this work. %dpWSVw.nw LAND DEVELOPMENT MONTHLY ACTIVITY REPORT SPECIAL PROJECTS OCTOBER 1996 Submitted by: Joseph Kicak Prepared by: Ronald J. Parks Date:November 15, 1996 1. PWSS-07 - Phase I Western ftpass Corradore The bridge engineers are in the process of designing the Western Bypass Corridor Bridge. The design of the improvements associated with the portion of Western Bypass Corridor from Vincent Moraga Drive to Rancho California Road are also underway. We are waiting for a response from Riverside County Flood Control and Water Conservation District on our second plan check submittal of the storm drain plans. 2. PW95-08 - Forst Street Extension, The design of the improvements associated with the First Street Extension is underway at similar stage and schedule to the Western Bypass Corridor design. 3. PW95-26 - 6th Street Parking Prg_iacts Construction is ongoing. There were unknown underground utilities that had to be removed. Therefore construction of improvements along Front Street is delayed however, the completion date of the project is on schedule. 4.PW96-05 - Pra-iect Study Report (PSR) And Prg.ject Report (PR) For Ultimate Interchange Improvements at Interstate 15/State Routa 79 South (1-15/SR79S)a The alternatives of the 1-15/SR79S ultimate interchange configurations with the consent of the impacted property owners and in compliance with Caltrans' and FHWA's requirements, standards and specifications were presented to Caltrans for review. Detailed analyses will be carried upon receipt of Caltrans concurrence. r:\m=hpt\dcv\96\Oc@r co im CD W CL w U) o@0 0 z z to at CIL q Ct to %- V- cm .40, LU w 0) CL Mc C4 a 4ow 4* ui w LL .i I<- 0 0 C"41 (L 0 co 40 do n 94t et Cli CL w CO) C4 00 4 CZ 40* v. x LU to L) Ca 0 I- C-4 CO) -i 0 z 0 C4 44 v- in so m C4 0 IQ co CD 0 CD Re IL C,4 44 C4 Lo C4 x u v. LU U) U. Vo- C,4 40 44 co U. 0 z 0 :E z LU oi it z w 0 CL U , WL LU :E 0 CL F- m CL a 0 z x i z z CJ ;= 0 w LU :E F- IL IL CL w CL ui z 0 Z LL. -i w w U. I m m o v- C4 Cl)' MEMORANDUM TO:<_ Joseph Kicak, Director of Public Works/City Engineer FROM:64P Brad Buron, Maintenance Superintendent DATE:November 4, 1996 SUBJECT: Monthly Activity Report - October, 1996 The following activities were performed by Public Works Department, Street Maintenance Division in- house personnel for the month of October, 1996: 1. SIGNS A. Total signs replaced 3 B. Total signs installed 51 C. Total signs repaired 1 TREES A. Total trees trimmed for sight distance and street sweeping concerns 132 Ill. POTHOLES A. Total square feet of potholes repaired 94 IV.CATCH BASINS A. Total catch basins cleaned 42 V.RIGHT-OF-WAY WEED ABATEMENT A. Total square footage for right-of-way abatement 62,962 VI.GRAFFITI REMOVAL A. Total locations 8 B. Total S.F. 1,916 Vil. STENCILING A.0 new and repainted legends B. 0 L.F. of red curb new and repainted R:NROADSXACTPMOS%IO.OCT rh MONTHLY ACTIVITY REPORT - October, 1996 Page No. 2 Also, City Maintenance staff responded to 27 service order requests ranging from weed abatement, tree trimming, sign repair, A.C. failures, litter removal, and catch basin cleanings. This is compared to 16 service order requests for the month of September, 1996. The Maintenance Crew has also put in 89 hours of overtime which includes standby time, special events and response to street emergencies. I.P.S. STRIPING AND STENCILING COMPANY has completed the following 0L.F. of new and repainted striping 0 L.F. of sand blasting The total cost for I.P.S. striping services was $0.00 compared to $0.00 for September, 1996. PESTMASTER SERVICES has completed the followings - 0 - S.F. of right-of-way weed control, total cost $0.00 compared to $0.00 for September, 1996. The total cost for Street Maintenance performed by Contractors for the month of October, 1996 was $204,859.64 compared to $7,286.00 for the month of September, 1996. Account No. 5402 $204,859.64 Account No. 5401 0.00 Account No. 999-5402 0.00 cc: Don Spagnolo, Principal Engineer - Capital Projects R.%AOADSVACTRPT\DGNIO.OCT rh STREET MAINTENANCE CONTRACTORS The following contractors have performed the following projects for the month of October, 1996. DATE STREET/CHANNEL/BRIDGE DESCRIPTION OF WORK IOTAL COST ACCOUNT# ............... . .................................................. ................. ............... ............... ........... ... 10/30/96 Citywide ROW Tree Removal & Stump Grind 1 EA 5402 Trimming, Removals & Class 1 Trims 16 EA Root Pruning Root Prunes 5 EA TOTAL COST $1675.00 ......... . . ............. ................ .. . .............. LT:. Oct 1996 Citywide A.C. Repairs Total A.C. Remove & Replace 61,203 SF 5402 Project #PW96-10 Total A.C. Overside Drain Repairs 461 SF Total A.C. Overlays 23,817 SF Total A.C. Berm Remove & Replace 2,216 Total A.C. Berm Installation 325 LF TOTAL SF 88,022 TOTAL A. C. 1,703 TONS TOTAL COST $180,475.64 ............................ .............................. .. .................................. ............ .. . .............................. ....... .. . ........... . ....... ... .......... 10/29/96 Pala Road Between Hwy 79 A.C. Remove & Replace 10222 SF 5402 (S) & Bridge Deck A.C. Overlay 27,495 SF Citywide TOTALSF 28,717 TOTAL A.C. 250 TONS TOTAL COST $22,709.00 TOTAL AMOUNT ACCT #5402 $204, R:YW %10.OCT rh W) cn In lw lw ICDD Ca P- z U9 9 0 0 r, @ 0 C4 at I I W) PIL cq PZ Go f- CD C4 Ca 3f w CD 4t G& C', C4) ' 0 Cl) 0 IL S2 IL 2 0 Go IR sag -i Cs ci in g 4 4m CD n C4 E 9 W) In 0 a 4m G* CD w @ GO C4 (4 CD C,4 cr o ('4 40 0 M. 40 IK ul 0 0 M. la LU u 0 iu P- UA IL UJ a 0 oils U I= no W LU Cs 0 LU 0 IL U, 0 >. U6 a Z,Ilb U. 0 Om z -j ui ul ui I- Z 0 CL w LU w LU us LU 0 NE to CY LU i2 LU U. w 0 Z z ui I= z 0 z 0. ui 0 0 LU LU 0 LU z il E W Ca U. U. 0 z z i2 :F z w V- U) W) q) W) 8 8 N 0 i 9 V- P- M W V- s CD V- 40 ?- v- v- CD C-F) qt CD I% V-t ok C-4 C,4 - co CO) W) 0; v C,4 (4 Clf) co 9 W) %K co z r- 0) cn t- Cd o; co W) E 0 z E ig co) a. ------------------------------- OOCDOO 0 000 0 m 0 0 0 0 C-3 (4 w 0 C04D 0 0 CD LU CD 0 Cf) LU -i t- 40 (L cn M CD 017 co OOWQS 0 0 0 8 0 0 8 w m Is W 0 co 8 8 t- cn w CD oo ci C,4 -i CD coi v- v- 0 41 40 LLJ LU >- -j OPOOO 0 0 0 0 0 0 0 0 0 0 0 co 0 0 V, cn a m 0 C) CD CO 00 0 cn CO z W) Ln C) 40 40 Z ei w v- I- 40 40 z 0 rL U- LU 0 u 'e- z u- 4( u- Si z Z I- -1 ui Co ui rr = rL IDl 0 &CO 0 42 z w- o l- a cut U @l C) a .v w a ici w A co 0 ISO @l 10 DEPARTMENT OF PUBLIC WORKS ROADS DIVISION OCTOBER, 1996 GRAFFITI REMOVAL .................. ........... %-.-.%,.......,..,............................................................@.@ ............ ............................... ............ ............................... 10-08-96 Moraga Road @ Margarita Removed 350 S.F. of Graffiti 10-15--96 Hwy. 79 South @ I- 1 5 Removed 6 S.F. of Graffiti 10-16-96 Calle Medusa E/O Kahwea Road Removed 10 S.F. of Graffiti- 10-24-96 Temecula Community Center Removed 80 S.F. of Graffiti 10-24-96 Main Street Bridge Removed 1,000 S.F. of Graffiti- 10-31-96 28550 Pujol Removed 300 S.F. of Graffiti 10-31-96 28735 Pujol Removed 20 S.F. of Graffiti 10-31-96 28741 Pujol Removed 150 S.F. of Graffiti TOTAL LOCATIONS 8 TOTAL S.F. REMOVED 1,916 R:\ROAMWKCMPLTD\96\10.GRA lw4lv@(4 'WOO94 m a m I @ m m i a @ Ci . Ci C,4 00 00 tn 00 en r- 00 C,4 C4 00 t% CA C4 C,4 t- tn C,4 4C-4 -4 -4 - ui - 0 - c EL LLI 03 U. - c3t - woo ww owo 00 am CL - ui LL. :z CD CD CD CD ml Ul cm 00 W) C,4 WI W) C4 en rA DEPARTMENT OF PUBLIC WORKS ROADS DIVISION OCTOBER, 1996 RIGHT-OF-WAY WEED ABATEMENT . ....... ..... ........................ ......... . . .......... T. .......... . ........ A I . ....... . ..... ... . 10-08-96 Area #4 Abated 325 S.F. R.O.W. Weeds 10-08-96 Jefferson S/0 City Limits Abated 21,100 S.F. R.O.W. Weeds 10-09-96 Area #4 Abated 502 S.F. R.O.W. Weeds 10-10-96 Area #4 Abated 1,520 S.F. R.O.W. Weeds 10-16-96 Area #4 Abated 95 S.F. R.O.W. Weeds 10-17-96 Area #4 Abated 480 S.F. R.O.W. Weeds 10-18-96 Santiago W/O Margarita Abated 15,000 S.F. R.O.W. Weeds 10-22-96 Front S/0 Abated 1,000 S.F. R.O.W. Weeds Rancho California Road 10-23-96 Front N/0 Abated 2,300 S.F. R.O.W. Weeds Rancho California Road 10-24-96 Front S/0 Abated 20,000 S.F. R.O.W. Weeds Rancho California Road 10-28-96 Area #4 Abated 640 S.F. R.O.W. Weeds TOTAL SQUARE FEET R.O.W. WEED ABATEMENT 62,962 R:\ROADS\@TD\96NIO.ViM DEPARTMENT OF PUBLIC WORKS ROADS DIVISION OCTOBER, 1996 R.O.W. TREE TRIMMING .. ........... ....... .. .......... .. .............. . ............. %............. .. ::: ... . ......... ......... . . ................... ... . .................... ......... . ........ .. . ....................... . .......... I 10-07-96 Nicolas Road Trimmed 8 Trees 10-08-96 Area #4 Trimmed 5 Trees 10-09-96 Area #4 Trimmed 10 Trees 10-10-96 Area #4 Trimmed 13 Trees 10-16-96 Quiet Meadows @ Santiago Road Trimmed 1 Tree 10-16-96 Rancho California Road E/O Cosmic Dr. Trimmed 22 Trees 10-16-96 Area #4 Trimmed 3 Tree 10-17-96 Area #4 Trimmed 10 Trees 10-23-96 Front N/0 Rancho California Road Trimmed 32 Trees 10-24-96 Front N/0 Rancho California Road Trimmed 25 Trees 10-28-96 30252 Milano Road Trimmed 3 Trees TOTAL TREES TRIMMED 132 R:NROADM@@IO.TrR DEPARTMENT OF PUBLIC WORKS ROADS DIVISION OCTOBER,1996 SIGNS ...... ....... ........... .......................... . . . . . ........ .. .... ... ... ............... ..... .. . .. . . .. . ................ .................................. ET 10-07-96 Olympic Way Replaced Street Name Sign 'T.C.' 10-07-96 Nicholas Road @ Roripaugh Replaced R-1 'Stolen' 10-09_96 N. General Kearney Replaced R-1 'Graffiti' @ La Colima 10-11-96 Ynez Road N&S/0 Winchester Replaced 2 Adopt-A-Street Signs 10-14-96 City Hall Installed 7 Signs 10-17-96 City Hall Installed 4 Signs 10-18-96 City Hall Installed 6 Signs 10-21-96 Rancho California Road Installed R-34, 2 Type 'N' 29 Delineators E/O Margarita TOTAL SIGNS REPLACED 3 TOTAL SIGNS INSTALLED 51 TOTAL SIGNS REPAIRED 0 R:\ROADS\VM@TD\96\IOAW IT, h@1\4- 1 APPROVAL CITY ATTORNEY DIR. OF FI CITY MANAC CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Ronald E. Bradley, City Manager DATE: November 26, 1996 SUBJECT:Financings for Old Town Area Public Improvements and the Western Bypass Corridor - Formation of Old Town/Westside Improvement Authority RECOMMENDATION:That the City Council adopt the resolution entitled: RESOLUTION NO. 96- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA AUTHORIZING FORMATION OF A JOINT EXERCISE OF POWERS AUTHORITY WITH THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA, AND DIRECTING CANCELLATION OF AMENDMENT TO JOINT COMMUNITY FACILITIES AGREEMENT BACKGROUND: In September of 1995, the City of Temecula and the Redevelopment Agency of the City of Temecula entered into a joint exercise of powers agreement creating the Old Town/Westside Improvement Authority (the "Improvement Authority"), in order to accommodate a proposed financing structure for public improvements in the Old Town area of the City and for the Western Bypass. In April of this year, the Improvement Authority was terminated by the City and the Agency because at that time it appeared that the Improvement Authority was no longer required to assist in the financing. It now appears that the Improvement Authority is needed to assist in the proposed financing, in order to raise additional monies necessary to complete the public improvements intended to be financed with bond proceeds. It is intended that the Improvement Authority will issue bonds to public investors and use the proceeds of the bond issue to purchase the Old Town/Westside Community Facilities District Financing Authority (the "CFD Authority") bonds at a premium thereby raising additional monies (by reason of the premium) for public improvements in an efficient manner not otherwise available by the CFD Authority. Staff now recommends that the Improvement Authority be reestablished by execution of a new joint exercise of powers agreement by the City and the Agency, which agreement is identical to the agreement previously cancelled. R.-IAgenda.rptiFinance. OTI 11115196 City Council Agenda Report - Old Town Public Improvements November 26, 1996 Page 2 The Resolution also provides for the cancellation of an amendment to a Joint Community Facilities Agreement with the Old Town/Westside Community Facilities District Financing Authority, because the guarantee referenced therein will now be provided directly to the Redevelopment Agency. Staff recommends cancellation of the amendment to avoid confusion regarding the guarantees to be provided relative to the construction of the public improvements. Finally, the Resolution provides for the extension of the Joint Community Facilities Agreement because the agreement may expire due to a delay in the issuance of the Bonds. Staff recommends approval of an extension of the agreement pending issuance of the Bonds. Attachments:Resolution Old Town/Westside Improvement Authority Joint Exercise of Powers Agreement R: lAgenda.rprIFinance. OTI 11115196 RESOLUTION NO. 96 A RESOLUTION OF THE CITY COUNCEL OF THE CITY OF TEMECULA AUTHORIZING FORMATION OF A JOINT EXERCISE OF POWERS AUTHORITY WITH THE REDEVELOPM[ENT AGENCY OF THE CITY OF TEMECULA@ AND DUTECTING CANCELLATION OF AMEENDMEENT TO AND EXTENSION OF JOINT COMMUNITY FACILITIES AGREEMENT @REAS, the City of Temecula (the "City") and the Redevelopment Agency of the City of Temecula (the "Agency") desires to assist in the provision of public capital improvements in the Old Town and the Westside areas of the City, as contemplated by the respective Specific Plans for such areas heretofore approved by separate ordinances of the City Council;. WHEREAS, in connection with such assistance, the City and the Agency propose to form a joint exercise of powers authorities pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code, to exercise the powers of the City and the Agency, and to enable the use of financing techniques that may reduce local borrowing costs, and to otherwise promote the greater use of existing and new financial instruments and mechanisms, all in accordance with the financing of some of the improvements by the Old Town/Westside Community Facilities District Authority (the "CFD Authority"); and WHEREAS, a form of joint exercise of powers agreement between the City and the Agency creating the Old Town/Westside Improvement Authority (the "Joint Powers Agreement"), has been filed with the City Clerk, and the City Council, with the aid of City staff, have reviewed the Joint Powers Agreement; and WHEREAS, on June 11, 1996, the City and the CFD Authority executed an Amendment No. 1 to Joint Community Facilities Agreement (the "Amendment"), amending the Joint Community Facilities Agreement, dated April 23, 1996, between the City and the CFD Authority (the "JFK Agreement"), to provide for a guarantee of completion of certain improvements; and WHEREAS, it is now expected that a guarantee of the character referred to in the Amendment will be provided directly to the Agency, so that the City now desires to cancel the Amendment in order to avoid any inconsistency with the intent of the party providing the guarantee; and WHEREAS, the JFK Agreement may expire in accordance with its terms because the CFD Authority has not yet issued the bonds referenced therein and the City desires to extend the term of the JFC Agreement as necessary in connection with the construction of the improvements identified therein and their acceptance by the City. R:\Resos\resos.96\FomiJPA NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Temecula as follows: Section 1. Formation of Joint Powers Authority. The City Council hereby authorizes the officers and staff members of the City to assist in the organization of a joint exercise of powers authority between the City and the Agency to be known as the "Old Town/Westside Improvement Authority." The City Council hereby approves and authorizes the Mayor to execute and deliver and the City Clerk to attest the Joint Powers Agreement forming said joint exercise of powers authority, in the form on file with the City Clerk together with any changes therein deemed advisable by the City Attorney, the approval of such changes to be conclusively evidenced by the execution and delivery by the City of the Joint Powers Agreement. Section 2. Cancellation of Amendment. The Amendment is hereby canceled, subject to the adoption by the CFD Authority of a resolution canceling the Amendment. Section 3. Extension of JFC ALreement, The City Manager is hereby authorized and directed to execute an amendment to the JFC Agreement extending its term as necessary in connection with the construction and acceptance by the City of the improvements referenced therein, such amendment to be in a form acceptable to Bond Counsel and the City Attorney. Section 4. Official Acti=. The Mayor, City Manager, City Clerk and all other officers of the City are hereby authorized and directed to take all actions and do all things necessary or desirable hereunder with respect to the formation of said joint exercise of powers authority, the cancellation of the Amendment and the extension of the JCL Agreement, including but not limited to the execution and delivery of any and all agreements, certificates, instruments and other documents, which they, or any of them, may deem necessary or desirable and not inconsistent with the purposes of this Resolution. PASSED, APPROVED AND ADOPTED, by the City Council of the City of Temecula, at a regular meeting held on the - day of November, 1996. Karel F. Lindemans, Mayor ATTEST: June S. Greek, CMC/City Clerk Authority Secretary [SEAL] R:\Resos\resos.96\FonnJPA STATE OF CALIFORNIA) COUNTY OF RIVERSIDE) SS CITY OF TEMECULA ) I, June S. Greek, City Clerk of the City of Temecula, HEREBY DO CERTIFY that the foregoing Resolution No. 96-- was duly adopted at a regular meeting of the Board of Directors of the Old Town/Westside Improvement Authority on the day of November, 1996, by the following roll call vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: June S. Greek, CMC/City Clerk Agency Secretary R:\Resos\resos.96\FonnJPA OID TOWN/WESISIDDE ZMO AUTHORrrY JOINT EXERCISE OF POWERS AGREEMENT This Agremmt (the 'Joint Exercise of Powers Agreement"), dated November 26, 1996, is by and between the City of Temecula, a municipal corporation and public body, corporate and politic duly organized and existing under the laws of the State of Califomia (the 'City'), and the Redevelopment Agency of the City of Temecula, a public body corporate and politic duly organized and existing under the laws of the State of Califomia (the 'Agency'). SETH: WHEREAS, agencies formed under Articles 1-4 (commencing with Section 6500) of Chapter 5, Division 7, Tide I of the Govemment Code of the State of California (the 'Act') are penmtted to provide financing for any of their members or other local public agencies m the State of Califomia in connection with the acquisition, construction and improvement of public capital improvements, woriang capital requirements or insurance programs of such members or other local agencies; and AS, the City and the Agency wish to form an agency under the Act for the purpose of providing an entity which can assist in providing financing for public capital improvements in the Old Town Area and the Westside Area of the City and for other purposes which are authorized under the Act. NOW, ORE, in consideration of the above premises and of the mutual promises herein contained, the City and the Agency do hereby agree as follows: ARTICLE I DE ONS Section 1.01. 'Definitions. Unless the context otherwise requires, the words and terms defined in this Article shall, for the purpose hereof, have the meanings herein specified. 'Ace means ArtLcies I ffimgh 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Govemment Code of the State of California. 'Agreement' means this Joint Exercise of Powers Agreement, as originally entered into or as amended from time to time. 'Authority' means the Old Town/Westside Improvement Authority established pursuant to Section 2.02 of this Agreement. R:\Citauy\ .&St ,,Board" means the Board of Directors of the Old Town/Westside Improvement Authority referred to in Section 2.03. "Bond Law" means the Marks-Roos @ Bond Pooling Act of 1985, being Article 4 of the Act commencing with Section 6584), as now m effect or hereafter amended, Article 2 of the Act as now in effea or amended, or any other law available for use by the Authority in the authorization and issuance of bonds to provide for the financing of Obligations, Worldng Capital Requirements, Public Improvements and/or liability or insurance needs of any Public Agency. "Bond Purchase Agreement" means an agreement between the Authonty and the City, the Agency or any Financing Authority, pursuant to which the Authority agrees to purchase Obligations from the City, the Agency or such Financing Authority, as the case may be. "Bonds' means bonds, notes or other obligations of the Authority issued pursuant to the Bond Law or pursuant to any other provision of law which may be used by the Authority for the authorization and issuance of bonds, notes or other obligations. 'Directors' means the representatives of the City appointed to the Board pursuant to Section 2.03. Tinancing Authority' means any joint exercise of powers authority created under the Act pursuant to a joint exercise of powers agreement between the City and the Agency, including, but not limited to, the Old Town/Westside Community Facilities District Financing Authority. "Fiscal Yeae man the period from July I in any calendar year to and including June 30 in the succeeding calendar year. 'Members' means the City and the Agency. 'Obligations' has the meaning given to the term 'Bonds' in Section 6585(c) of the Bond Law. .Public Agency' means any public agency authorized by the Act to enter into a joint exercise of powers agreement with the City and the Agency. "Public improvements" has the meaning given such term in Section 6585(g) of the Bond Law. .Secretary' means the Secretary of the Authority appointed pursuant to Section 3.01. 'Treasuree means the Treasurer of the Authority appointed pursuant to Section 3.02. R:%Citatty\otwpw.agt 2 uworldng Capital Requirements" means the requirements of any Public Agency for funds to be used by, or on behalf of, such Public Agency for any purpose for which such Public Agency may borrow money pursuant to Section 53852 of the Govemment Code of the State of Califomia. ARTICLE H GENERAL PROVISIONS Section 2.01. E=se. This Agreement is made pursuant to the Act providing for the joint exercise of powers common to the City and the Agency, and for other purposes as permitted under the Act, the Bond Law and as agreed by one or more of the parties hereto. The primary pu rpose of this Agreement is to provide for the fmancing of Public Improvements or Obligations in connection with the installation of public infrastructure improvements in the Old Town Area and the Westside Area of the City, through the acquisition by the Authority of such Public Imp.rovements and/or the purchase by the Authority of Obligations of the City, the Agency or any Financing Authority pursuant to Bond Purchase Agreements and/or the lending of funds by the Authority to the City, the Agency or any Financing Authority. Section 2.02. C- of Authority. Pursuant to the Act, there is hereby created a public entity to be known as the "Old Town/Westside Improvement Authority". The Authority shall be a public entity separate and apart from the City, the Agency and any Fumcing Authonty, and shall administer this Agreement. Section 2.03. Board of T)irectors. The Authority shall be administered by a Board of Directors consisting of five (5) Directors, unless and until such number is changed by amendment of dus Agreeinent. The D@rs of the Authonty @ be comprised of the members of the City Concil of the City. The Board shall be called the 'Board of Directors of the Old Town/Westside Improvement Authority'. AR voting power of the Authority shall reside in the Board. Section 2.04. MeetinLys of the Bmd. (a) Regular Meetings. The Board @ provide for its regular meetings; provided, however, that at last one regular meeting shall be held each year. The date, hour and place of the holding of regular meetings shall be fixed by resolution of the Board and a copy of such resolution shall be filed with the City and the Agency. (b) Special Meetings. Special meetings of the Board may be called in accordance with the provisions of Section 54956 of the Govemment Code of the State of California. (c) Call, Notice and Conduct of Meetings. AU meetings of the Board, including without limitation, regultr, adjourned regular and special meetings,, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act of the Govemment Code of the State of @fomia. R:\Citatty@w.agt 3 Section 2.05. Actions @. The Secretary shall cause to be kept records, consistent with City policy, of all actions taken by the Board at all meetings of the Board and shall, as soon as possible after each meeting, make such records available for inspection by each Director and the Members. Section 2.06. VotinLy. Each Director shall have one vote. Section 2.07. QuQrum; @uird Votes; A- - -g. Directors holding a majority of the votes @ constitute a qwrum for the transaction of business, except that less than a quorum may adjourn from time to time. ne affirmative votes of at least a majority of the Directors present at any meeting at which a quorum is present shall be rquired to take any action by the Board. Section 2.08. @s. IU Board may adopt, from time to time, such bylaws, rules and reg@ons for the conduct of its meetings as the Board may deem necessary or advisable for the purposes hereof. ARTTCLE III OMCERS AND EMIPLOYEES Section 3.01. r-hai==, Executive Director and S The City Manager and the City Clerk are hereby designated as the Executive Director and Secretary, respectively, of the Authority. The Board shall select a Chairperson from among its members who shall serve as Chairperson until such person is no longer a City Concilmember or a new Chairperson is appointed by the Board. The officers shall perform the duties normal to said offices. 'Me Chauperson or the Executive (or any odw person autho@ by resolution of the Board) shall sip con@ on behalf of the Authority, and the Chairperson shall perform such other duties as may be imposed by the Board. The Executive Director shall administer the day-to-day affairs of the Authority and shall execute the policies and directives of the Board. The Secretary shall countersign all contracts signed by the Chairperson or the Executive Director on behalf of the Authority (unless otherwise specified by resolution of the Board), perform such other duties as may be imposed by the Board and cause a notice of this Agreement to be filed with the Secretary of State pursuant to the Act. Section 3.02. Treasurer and Auditor. Pursuant to Section 6505.6 of the Act, the City Treasurer is hereby designated as the Treasurer of the Authonty and the City Finance Director is hereby designated as the Auditor of the Authority. The Treasurer shall be the depositary, shall have custody of all of the accounts, funds and money of the Authority from whatever source, shall have the duties and obligations set forth in Sections 6505 and 6505.5 of the Act and shall assure dw @ @ be strict accountability of all funds and reporting of all receipts and disbursements of the Authority. As provided in Section 6505 and Section 6505.6 of the Act, the Auditor shall make arranagments with a certified public accountant or firm of certified public accountants for the annual audit of accounts and records of the Authority, which audit may be combined with any R:\Ciwq\@.agt 4 audit of the accounts and records of the City, the Agency and/or any Financing Authority. Section 3.03. Officers in C-harLye of Rer-ords. Funds and Accounts. Pursuant to Section 6505.1 of the Act, the Treasurer shall have charge of, handle and have access to all accounts, funds and money of the Authority and all records of the Authority relating thereto; and the Secretary shall have charge of, handle and have access to all other records of the Authority. Section 3.04. Find Persons HavinLy Access to Au - Records. From time to time, the Board may designate persons, in addition to the Executive Director, the Secretary, the Treasurer and the Auditor, having charge of, handling or having access to any records, funds or accounts or any Public Improvement of the Authonty, and the respective amounts of the official bonds of the Executive Director, the Secretary, the Treasurer and the Auditor and such other persons pursuant to Section 6505.1 of the Act. Section 3.05. @al Adviwi. The City Attorney shall act as the legal advisor of the Authority, and shall perform such duties as may be prescribed by the Board. Section 3.06. (Mer @W=. The Board shall have the power by resolution to appoint and employ such other consultants and independent contractors as may be necemq for the purposes of this Agreement. AU of the @eges and immunities from liability, exemption from laws, ordinances and rules, all pension, relief, disability, workers' compensation and other benefits which apply to the activities of officers, agents, or employees of a public agency when performing their respective @ons shall Voy to the officers, agents or employees of the Authority to the same degree and extent while engaged m the performance of any of the functions and other duties of such officers, agents or employees under this Agreement. None of the officers, agents, or employees directly employed by the Board shall be deemed, by reason of their employment by the Board to be employed by the City or the Agency or, by reason of their employment by the board, to be subject to any of the requirements of the City or the Agency. Section 3.07. Aq.-.i-.tmt Officffs. The Board may by resolution appoint such assistants to act in the place of the Secretary or other officers of the Authority (other than any Director), and my by resolution provide for the appointment of additional officers of the Authority who may or may not be Directors, as the Board shall from time to time deem appropriate. R:\Citauykotwpw.agt 5 ARTICLE IV PO Section 4.01. C-icneral Powers. The Authority shall exercise the powers granted to it under the Act, including but not limited to the powers set forth in the Bond Law and the powers of each of the Members as may be necessary to the accomplishment of the purposes of this Agreement, subject to the restrictions set forth in Section 4.04. As provided in the Act, the Authority shall be a public entity separate from the City, the Agency and any Financing Authority. Section 4.02. Power to . The Au@ty shall have all of the powers provided in the Act and in the Bond Law, including the power to issue Bonds thereunder. Section 4.03. @fic Powers. Ile Authority is hereby authorized, on its own name,,to do all acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following: (a)to make and enter into contracts; (b)to employ agents or employees; (c)to acquire, construct, manage, maintain or operate any Public Improvement, includmg the common power of the City and the Agency to acquire any Public Improvement by the power of eminent domain or any other lawful means; (d)to sue and be sued in its own name; (e)to issue Bonds and otherwise to incur debts, liabilities or obligations; provided, however, that no such Bond, debt, liability or obligation shall constitute a debt, liability or obligation of the City, the Agency or any Financing Authority; (f)to apply for, accept, receive and disburse grants, loans and odw assistance from any agencyof the United States of America or of the State of Califomia; (g)to invest any money m the Umury pummt to Section 6505.5 of the Act winch is not requn-ed for the immediate necessities of the Authority, as the Authority determines is advisable, in the same manner and upon the same conditions as local agencies, pursuant to Section 53601 of the Government Code of the State of Califomia; (h) to apply for letters of credit or other form of fimcial guarantees in order to secure the repayment of Bonds and enter into agreements in connection therewith; (i)to carry out and enforce all the provisions of this Agreement; R:\Citatty\otwpw.agt 6 0) to make and enter into Bond Purchase Agreements and any other agreements, assignments and documents of any nature whatsoever as may be necessary or convenient in the exercise of its powers hereunder or under the Act; (k) to purchase Obligations of or to make loans to the City, the Agency or any Financing Authority for the purposes hereof, or to refinance indebtedness incurred by the City, the Agency or any Financing Authority in connection with any of the purposes hereof-, and (1) to exercise any and all other powers as may be provided in the Act or in the Bond Law. Section 4.04. Restrictions on Exercise of Powers. The powers of the Authority shall be exercised m the manner provided m the Act and m the Bond Law, and, except for those powers set forth in the Bond Law, shall be subject (in accordance with Section 6509 of the Act) to the restrictions upon the manner of exercising such powers that are imposed upon the City in the exercise of similar powers. Section 4.05. Ob]iLations of Auth@. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of the City, the Agency or any Financing Authority. Section 4.06. Non-Iiahilily for Obhonfions of Authority. No Member, Director, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or prermum or interest on any obligations of the Authority or be subject to any personal liability or accountability by reason of any obligations of the Authority; but nothing herein contained shall relieve any such Member, Director, officer, agent or employee from the performance of any official duty provided by law or by the instruments authorizing the issuance of any obligations of the Authority, ARTTCLE V CONTRI]BUTTONS; ACCOUNTS AND REPORTS; FUNDS Section 5.01. r-ontributim. The Members may in the appropriate circumstance when reqww h : (a) make contributions from their ftmunes for the purposes set forth herem, (b) make payments of public funds to defray the cost of such purposes, (c) make advances of public funds for such purposes, such advances to be repaid as provided herein, or (d) use its personnel, equipment or property m lieu of other contributions or advances. The provisions of Government Code Section 6513 are hereby incorporated into this Agreement by reference. R:\Citatty\otwpw.agt 7 Section 5.02. Accoiint-.:ind Ra=-.. To the extent not covered by the duties assigned to a trustee chosen by the Authority, the Treasurer shall establish and maintain such funds and accounts as may be required by good accounting practice or by any provision of any trust agreement entered into with respect to the proceeds of any Bonds issued by the Authority, The banks and records of the Authority in the hands of a trustee or the Treasurer shall be open to inspection at all reasonable times by representatives of the Members. Wi@ 180 days after the close of each Fiscal Year an annual report of all financial activities for such Fiscal Year shall be presented to the Members, to the extent such activities are not covered by the report of such trustee. The trustee appointed under any indenture or trust agreement shall establish suitable funds, furnish fmancial reports and provide suitable accounting procedures to carry out the provisions of sad trust agreement. Said trustee may be given such duties in said indenture or trust agreement as may be desirable to carry out this Agreement. Section 5.03. @. Subject to the applicable provisions of any instrument or agreement which the Authority may enter into, which may provide for a trustee to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall receive, have custody of and disburse Authority funds as nearly as possible in accordance with generally accepted accounting practices, and shall make the disbursements required by dus Agreement or to carry out any of the provisions or purposes of this Agreement. Section 5.04. Annual 'RudLyet and Adminiqtmtive'Pxpcn@. The Board may adopt a budget for admunstrattve expenses, wluch shall uiclude all expenses not included in any financing issue of the Authority, on or about July Ist of each year. The estimated annual administrative expenses of the Authority shall be allocated in such budget by the Authority to the Members and/or any Financing Authority in such proportion as the Board shall determine. In the absence of any such de on such allocation shall be made and charged to each Financing Authonty in proportion to the principal wnount of Bonds of each such Financmg Authority purchased by the Authority. ARTICLE VI TERM Section 6.01. I=. This Agreement shall become effective, and the Authority shall come into existence, on the date of execution and delivery hereof, and this Agreement and the Authority shall thereafter continue in full force and effect for at least forty (40) years (unless earlier by the Members and any then Associate Members), but in any event so long as either (a) any Bonds remaining outstanding or any material contracts to which the Authority is a party remain in effect, or (b) the Authority shall own any interest in any Public Improvements. Section 6.02. Dis=ition of Assets. Upon termination of this Agreement, all property of the Authority, both rwl and personal, shall be conveyed to the City. R:\Citatty\otwpw.agt ARTICLE VIDI MLSCELLANEOUS ]PROVISIONS Section 7.01. Notices. Notices hereunder shall be in writing and shall be sufficient if delivered to the notice address of each party hereto for legal notices or as otherwise provided by a party hereto in writing to each of the other parties hereto. Section 7.02. Section @dinv.-.. AR section headings in this Agreement are for convetuence of reference only and are not to be cons@ as modifying or governing the language in the section refeffed to or to defme or limit the scope of any provision of this Agreement. SectK)n 7.03. . Whenever m tins Agreement any consent or approval is required, the same shall not be unreasonably withheld. Section 7.04. Uw Governing. This Agreement is made in the State of California under the Constitution and laws of the State of California, and is to be so construed. Section 7.05. Amendments. This Agreement may be amended at any time, or from time to time, except as @ted by conma with the owners of the Bonds issued by the Authority or by app@le regulations or laws of any jurisdiction having authority, by one or more supplemental agreements executed by both of the parties to this Agreement either as required m order to caffy out any of the provisions of this Agreement or for any other purpose, including without limitation addition of new parties (including any legal entities or taxmg areas heretofore or hereafter created) in pursuance of the purposes of this Agreement. Section 7.06. Enforcement by Au - . The Authority is hereby autho@ to take any or all legal or equitable actions, including but not limited to injunction and specific performance, necessary or permitted by law to enforce this Agreement. Section 7.07. Severability. Should any part, term or provision of this Agreement be decided by any court of competent jurisdiction to be @al or in conflict with any law of the State of California, or otherwise be rendered unenforceable or ineffectual, the validity of the remaining portions or provisions shan not be affected thereby. Section 7.08. lqiiccegsorg. This Agreement shall be binding upon and shall inure to the benefit of the successors of the City or the Agency, respectively. Neither the City or the Agency may assign any right or obligation hereunder without the written consent of the other, R:\Citatty\otwpw.agt 9 IN WrrNEsS F, the parties hereto have caused tius Agreement to executed and attested by their proper officers thereunto duly authorized and their official seals to be hereto affixed, on the day and year set opposite the name of each of the parties. CrrY OF TEMECULA Date: November 1996 By: Mayor ATREST: By: June S. Greek, CMC, City Clerk REDEVELOPMENT AGENCY OF THE CrrY OF TEMECULA\ Date: November 1996 By: Chairperson ATMT: By: June S. Greek, CMC, Agency Sec.retary/City Clerk R:\Citatty\otwpw.agt 10 ITEI\4 2 APPROVAL CITY ATTORNEY DIR. OF FINANQE. CITY MANAGER REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA AGENDA REPORT TO: Agency Members FROM: Ronald E. Bradley, Executive Director DATE: November 26, 1996 SUBJECT:Financing for Old Town Area Public Improvements and the Western Bypass Corridor - Formation of Old Town/Westside Improvement Authority and Accept Guarantees for Completion of Old Town Public Improvements RECOMMENDATION: 1Adopt a resolution entitled: RESOLUTION NO. RDA 96- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA AUTHORIZING FORMATION OF A JOINT EXERCISE OF POWERS AUTHORITY WITH THE CITY OF TEMECULA 2.Adopt a resolution entitled: RESOLUTION NO. RDA 96- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA ACCEPTING GUARANTEES FOR THE COMPLETION OF PUBLIC IMPROVEMENTS FOR THE OLD TOWN TEMECULA AREA BACKGROUND: In September of 1995, the City of Temecula and the Redevelopment Agency of the City of Temecula entered into a joint exercise of powers agreement creating the Old Town/Westside Improvement Authority (the "Improvement Authority"), in order to accommodate a proposed financing structure for public improvements in the Old Town area of the City and for the Western Bypass. In April of this year, the Improvement Authority was terminated by the City and the Agency because at that time it appeared that the Improvement Authority was no longer required to assist in the financing. R.,lAgenda.RptIRDA-Finan. OTI 11126196 Redevelopment Agency of Temecula Agenda Report - Old Town Public Improvements November 26, 1996\ Page 2. It now appears that the Improvement Authority is needed to assist in the proposed financing, in order to raise additional monies necessary to complete the public improvements intended to be financed with bond proceeds. It is intended that the Improvement Authority will issue bonds to public investors and use the proceeds of the bond issue to purchase the Old Town[Westside Community Facilities District Financing Authority (the 'CFD Authority") bonds at a premium, thereby raising additional monies (by reason of the premium) for public improvements in an efficient manner not otherwise available by the CFD Authority. Staff now recommends that the Improvement Authority be reestablished by execution of a new joint exercise of powers agreement by the City and the Agency, which agreement is identical to the agreement previously canceled. Guarantee of completion of Public Improvements - the Agency and T.Z.B.G., Inc. Entered into an Owner Participation Agreement on August 31, 1995, which was amended on March 26, 1996. The OPA, as amended provides for the Agency to contribute $7,458,550. To the Old Town Entertainment Project and the Developer is required to construct certain Public Improvements for the Old Town area. The amendment also changed the name of the Developer to Temecula Entertainment Valley, Inc. Section 4.2.E. of the OPA provides that the Agency is not required to make its contribution to the project unless the Developer provides the Agency with agreements guaranteeing the completion of the Public Improvements. These guarantee agreements are now in place. The Public Improvements described in the OPA will be funded by the bonds to be issued by the Old Town/Westside Community Facilities District Financing Authority ("CFD). The City of Temecula will acquire the rights of way for the roadway improvements and provide certain design services on behalf of the CFD. Construction of the Public Improvements will be managed by Fluor Daniel, Inc., pursuant to a Construction Management and Supervision Agreement with the CFD. In addition to the obligation of the Developer under the OPA to complete the Public Improvement and be responsible for all cost overruns, a number of additional assurances and guaranties are to be in place for completion of the Pubic Improvements if unforseen events affecting construction occur: (1)The construction budget being funded by the bonds to be issued by the Old Town/Westside Community Facilities District Financing Authority provides for an uncommitted construction contingency of $700,000.00; (2)Fluor Daniel, Inc., the Construction Manager retained by the CFD has guaranteed to complete construction of the Public Improvements for a fixed price and within a specific time schedule, except for change orders required by the construction contracts or increase costs due to environmental (3)Fluor Daniel will maintain builder's risk insurance on the Public Improvements being constructed which would protect against destruction of the Public Improvements during construction by the perils of fire, lightening, riot and civil commotion, explosion, smoke, hail windstorm, earthquake and flood; R: lagenda. RptiRDA-Finan. OTI 11126196 Redevelopment Agency of Temecula Agenda Report - Old Town Public Improvements November 26, 1996 Page 3. (4)The Developer, Old Town Entertainment, LLC, will guarantee the completion of the Public Improvements, except for the Western Bypass, up to the amount of $7.5 million (which amount represents the Agency's contribution to the project) including the specific costs not guaranteed by Flour Daniel or covered by insurance, and will back up the guarantee with a commitment to maintain sufficient private financing funds to be available for completion of the Public Improvements in a amount equal to the difference between the uncompleted value of the guaranteed improvements and $7.5 million; (5)In the event the proceeds of the builders risk insurance policy and the guarantee of the Old Town Entertainment LLC are insufficient to meet the contingency occurring, Fluor Daniel, Inc., will contribute the amount of its construction management fee up to the amount of $1.1 million to meet the contingency; (6)Fluor Corporation, the international parent company of Fluor Daniel, Inc., will guarantee the obligations of Fluor Daniel, Inc. Staff recommends the Agency Board adopt the attached resolutions accepting these guarantees and finding that they satisfy the requirements of Section 4.2.E. of the OPA. Attachments: 1.Resolution -Old Town/Westside Improvement Authority Joint Exercise of Powers Agreement 2.Resolution - Accepting Guarantees for Completion of Public Improvements R.-lAgenda. RptIRDA-Finan. OTI 11126196 RESOLUTION NO. RDA 96- A RESOLUTION OF THE REDEVELOFMENT AGENCY OF TJE[E CITY OF TFZvl]ECUIA AUIHORIIZING FORMAT]ION OF A JOINT EXERCISE OF PO AUIHORITY WrM THE CITY OF ULA WHEREAS, the Redevelopment Agency of the City of Temecula (the -Agency-) and the City of Temecula (the 'City') desire to assist in the provision of public capital improvements in the Old Town and the Westside areas of the City, as contemplated by the respective Specific Plans for such areas heretofore approved by separate ordinances of the City Council; , in connection with such assistance, the Agency and the City propose to form a joint exercise of powers authority pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code, to exercise the powers of the Agency and the City, and to enable the use of financing techniques that may reduce local borrowing costs, and to otherwise promote the greater use of existing and new financial instruments and mechanisms, all in connection with the financing of some of the improvements by the Old Town/Westside Community Facilities District Financing Authority; and WHEREAS, a form of joint exercise of powers agreement between the Agency and the City creating the Old Town/Westside Improvement Authority (the 'Joint Powers Agreement'), has been filed with the Secretary of the Agency, and the members of the Governing Board of the Agency, with the aid of Agency staff, have reviewed the Joint Powers Agreement. NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the Redevelopment Agency of the City of Temecula as follows: Section 1. Formation of Joint Powers Author4. The Governing Board of the Agency hereby authorms the officers and staff members of the Agency to assist in the organization of a joint exercise of powers authority between the Agency and the City, to be known as the 'Old Town/Westside Improvement Authority.' The Governing Board of the Agency hereby approves and authorizes the Chairperson to execute and deliver and the Secretary to attest the Joint Powers Agreement forming said joint exercise of powers authority, in the form on file with the Secretary together with any changes therein deemed advisable by counsel to the Agency, the approval of such changes to be conclusively evidenced by the execution and delivery by the Agency of the Joint Powers Agreement. Section 2. Official Acfion-,. The Chairperson, Executive Director, Secretary and all other officers of the Agency, are hereby authorized and directed to take all actions and do all things necessary or desirable hereunder with respect to the formation of said joint exercise powers Resos.Rda\012.Rda 1 authority, including but not limited to the execution and delivery of any and all agreements, certificates, instruments and other documents, which they, or any of them, may deem necessary or desirable and not inconsistent with the purposes of this Resolution. PASSED, APFROVED AND ADOPRED, by the Goveming Board of the Redevelopment Agency of the City of Temecula at a regular meeting held on the 26th day of November, 1996. Patricia H. Birdsall, Chairperson ATTEST: June S. Greek, CMC Agency Secretary/City Clerk [SEAL] Resoa.Rda\012.Rda 2 STATE OF CALIEFORNIA COUNTY OF RI -VERSI]DE ss CrrY OF ULA I, June S. Greek, City Clerk of the City of Temecula, hereby do certify that the foregoing Resolution No. RDA 96- was duly adopted at a regular meeting of the Goveming Board of the Redevelopment Agency of the City of Temecula on the 26th day of November, 1996, by the following roll call vote: AYES: AGENCY ERS: NOES: AGENCY ERS: ABSENT:AGENCY MEMBERS: June S. Greek, CMC Agency Secretary/City Clerk Resos.Rda\012.Rda 3 OID TOWN/WESTSI]DE D4PRO AUrIHORrrY JOINT EXERCISE OF PO AG Agreement (the 'Joint Exercise of Powers Agreement'), dated November 26, 1996, is by and between the City of Temecula, a municipal corporation and public body, corporate and pohtic duly organized and existing under the laws of the State of Califoniia (the 'City'), and the Redevelopment Agency of the City of Temecula, a pubhc body corporate and pohtic duly organized and existing under the laws of the State of Califon-da (the 'Agency). SETH: S, agencies formed under Articles 1-4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the 'Act') are penmtted to provide g for any of their me4rnbers or other local pubhc agencies m the State of Cahfornia m connection with the acquisition, construction and improvement of pubhc calntal improvements, worlnng capital requirements or msurance programs of such members or other local agencies; and S, the City and the Agency wish to form an agency under the Act for the purpose of providing an entity which can assist in providing fimcing for public capital improvements m the Old Town Area and the Westside Area of the City and for other purposes which are authorized under the Act. NOW, ORE, m of the above premises and of the mutual prormses herein contained, the City and the Agency do hereby agree as follows: ARTTCLE I Section 1.01. TWnitiong. Unless the context otherwise require, the words and terms defmed in this Article shau, for the purpose hereof, have the meamngs herein specified. 'Act' means Articles 1 @gh 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California. 'Agreement' means this Joint Exercise of Powers Agreement, as orig@y entered into or as amended from time to dme. 'Authonty' means the Old Town/Westside Improvement Authonty established pursuant to Section 2.02 of this Agreement. R:\Citatty\otwpw.agt '@' means the @ of Directors of the Old Town/Westside Improvement Authority referred to in Section 2.03. 'Bond Law' means the Marks-Roos @ Bond Pooling Act of 1985, being Article 4 of the Act (connnencmg with Section 6584), as now m effect or hereafter amended, Article 2 of the Act as now in effect or amended, or any other law available for use by the Authority in the authorization and issuance of bonds to provide for the fimcing of Obligations, Worldng Capital Requirements, Public Improvements and/or liability or insurance needs of any Public Agency. 'Bond Purchase Agreonent' means an agreement between the Authonty and the City, the Agency or any Financing Authority, pursuant to which the Authority agrees to purchase Obligations from the City, the Agency or such Financing Authority, as the case may be. 'Bonds' means bonds, notes or other obligations of the Authority issued pursuant to the Bmd Law or pursuant to any other provision of law which may be used by the Authority for the authorization and issuance of bonds, notes or other obligations. 'Directors' means the representatives of the City appointed to the Board pursuant to Section 2.03. 'Financing Authority' means any joint exercise of powers authority created under the Act pursuant to a jomt exercise of powers agreement between the City and the Agency, including, but not limited to, the Old Town[Westside Commumty Facilities Distnct Fumcing Authonty. 'Fiscal Year' means the period from July I in any calendar year to and including June 30 in the succeeding calendar year. 'Members' means the City and the Agency. 'Obligations' has the meaning given to the term 'Bonds' in Section 6585(c) of the Bond Law. .Public Agency' means any public agency autho@ by the Act to enter into a joint exercise of powers agreement with the City and the Agency. 'Public Improvements' has the meaning given such term m Section 6585(g) of the Bond Law. .Secretary' means the Secretary of the Au@ty appointed pursuant to Section 3.01. 'Treasurer' means the Treasurer of the Authority appointed pursuant to Section 3.02. R:\C@\otwpw.agt 2 "NVorldng CapitEd Requirements' means the requirements of any Public Agency for funds to be used by, or on belwf of, such Public Agency for any purpose for which such Pubhc Agency may borrow nxxiey pursuant tD Section 53852 of the Government Code of the State of California. ARTICLE H GENERAL FROVLSIONS Section 2.01. E=se. This Agreement is made pursuant to the Act providing for the jomt ex== of powers common to the City and the Agency, and for other purposes as permitted under the Act, the Bond Law and as agreed by one or more of the parties hereto. The primary purpose of this Agreement is to provide for the financing of Public Improvements or Obligations in connection with the installation of public infrastructure improvements in the Old Town Area and the Westside Area of the City, through the acquisition by the Authority of such Public Improvements and/or the purchase by the Authority of Obhgations of the City, the Agency or any Fmancmg Authonty pursuant to Bond Purchase Agreements and/or the lendmg of funds by the Authority to the City, the Agency or any Financing Authority. Section 2.02. C@on of Anth(Aly. Pursuant to the Act, there is hereby created a public entity to be known as the 'Old Town/Westside Improvement Authority'. The Authority shall be a public entity separate and apart from the City, the Agency and any Financing Authority, and administer this Agreement. Section 2.03. %ard of 'Director-.. The Authority shau be administered by a Board of consisting of five (5) , unlm and untd such number is changed by amendment of this Agreement. The Directors of the Authority @ be comprised of the members of the City Conc.d of the City. IU Board @ be called the -Board of D rs of the Old Town/Westside Improvement Authonty'. All voting power of the Authonty shar reside m the Board. Section 2.04. Meetingg of the %ard. (a) Regular Meetmgs. The Board ftfl provide for its regular meetings; provided, however, dw at last one regular meetmg shau be held each year. The date, hour and p@ of the holding of regular meetings shafl be fixed by resolution of the Board and a copy of such resolution shall be filed with the City and the Agency. (b) Special Meetings. Special meetings of the Board may be caued in accordance with the provisions of Section 54956 of the Government Code of the State of California. (c) CaU, Notice and Conduct of Meetings. AR meetings of the Board, including without hnutation, regulu, adjourned regulir and Wwlg meetings,. shau be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act of the Government Code of the State of California. IL-\C@@.&O 3 Section 2.05. Actionq Tsil-an. The Secretary @ cause to be kept records, consistent with City pohcy, of aR actions taken by the Board at aU meetmgs of the Board and @, as soon as posuble after each meetmg, make such records available for invwtion by each Director and the Members. Section 2.06. Voting. Each Director shall have one vote. Section 2.07. Qu=m; @uird Votes; A- - s. Directors holding a majority of the votes @ constitute a quorum for the transaction of business, except that less dm a quorum may adjourn from time to time. The affirmative votes of at least a majority of the Directors present at any meeting at which a quorum is present shau be rquired to take any action by the Board. Section 2.08. @s. The Board may adopt, from time to time, such bylaws, rules and regulations for the conduct of its meetings as the Board may deem necessary or advisable for the purposes hereof. ARTTCLEM OFFTCERS AND YM Section 3.01. @i tive Nrector 2ind S The City Manager and the City Clerk are hereby designated as the Executive Director and Secretary, respectively, of the Authority. The Board @ select a Chairperson from among its members who @ serve as Chairperson until such person is no longer a City Concilmember or a new Chairperson is appointed by the Board. The officers @ perform the duties normal to said offices. The or the FxecutLve D=W (or any odw pemn autho@ by resolution of the Board) shau sign om@ on behalf of the Authonty, and the Aa perform such other duties as may be imposed by the Board. The Executive Director @ administer the day-to-day affairs of the Authority and shall execute the policies and directives of the Board. The Secretary shall countersign all contracts signed by the Chairperson or the Executive Director on behalf of the Authority (unless otherwise speci@ by resolution of the Board), perform such other duties as may be imposed by the Board and cause a notlce of this Agreement to be filed with the Secretary of State pursuant to the Act. Section 3.02. Treasurer and Auditor. Pursuant to Section 6505.6 of the Act, the City Treasurer is hereby designated as the Treasurer of the Authonty and the City Fuiance Director is hereby designated as the Auditor of the Authonty. The Treasurer @ be the depositary, shau have custody of aU of the accounts, @ and money of the Au@ty from whatever source, shau have the duties and obligations set forth in Sections 6505 and 6505.5 of the Act and shall assure that @ shau be stnct accountability of all funds and reporting of aR receipts and disbursements of the Authority. As provided in Section 6505 and Section 6505.6 of the Act, the Auditor @ make arranagments with a certified pubhc accountant or fhm of certified pubhc accountants for the annual audit of accounts and records of the Authority, which audit may be combined with any R:NCitatty\otwpw.&St 4 audit of the accounts and records 6f the City, the Agency and/or any Financing Authority. Section 3.03. Officen in Chargc of Records, Funds and Accoiints. Pursuant to Section 6505.1 of the Act, the Treasurer shall have charge of, handle and have access to all accounts, funds and money of the Authority and afl records of the Authority relating thereto; and the Secretary shau have charge of, handle and have access to aU other records of the Authonty. Section 3.04. 'Rondina q 14avina Accm to A Records. From time to time, the Board may designate persons,, in ad(htion to the Executive Director, the Secretary, the Treasurer and the Auditor, having charge of, handling or having access to any records, funds or accounts or any Public Improvement of the Authority, and the respective amounts of the official bonds of the Executive Director, the Secretary, the Treasurer and the Auditor and such other persons pursuant to Section 6505.1 of the Act. Section 3.05. L&Pal Adviwi. The City Attomey shau act as the legal advisor of the Authority, and shau perform such duties as may be prescribed by the Board. Section 3.06. (Mer Fmpja=. The Board shau have the power by resolution to appoint and employ such other consultants and independent contractors as may be necessary for the purposes of this Agreement. AU of the privileges and immunities from liability, exemption from laws, ordinances and rules, aR pension, relief, dl%bihty, workers' compensation and other benefits wluch apply to the activities of officers, agents, or employees of a pubuc agency when performing their tive functons @ apply to the officers, agents or employees of the Authonty to the same degree and extent while mmed in the perf of any of the functions and other duties of such officers, agents or employees under tlus Agreement. None of the officers, agents, or employees directly employed by the Board shau be deemed, by reason of their employment by the Board to be employed by the City or the Agency or, by reason of their employment by the board, to be subject to any of the requirements of the City or the Agency. Section 3.(Y7. Aggi,@nt Officen. The Board may by resolution appoint such assistants to act in the place of the Secre@ or other officers of the Authority (other than any Director), and my by resolution provide for the appointment of additional officers of the Authonty who may or may not be Directors, as the Board shau from time to time deem appropriate. R:\Citatty\otwpw.agt 5 ARTICLE IV PO Section 4.01. Gen@ Powers. The Authority @ exercise the powers granted to it under the Act, including but not limited to the powers set forth in the Bond Law and the powers of each of the Members as may be necessary to the accomplishment of the purposes of this Agreement, subject to the restrictions set forth in Section 4.04. As provided in the Act, the Authonty @ be a public entity from the City, the Agency and any Fumcmg Authonty. Section 4.02. Power to . The Authority shau have aU of the powers provided in the Act and in the Bond Law, including the power to issue Bonds thereunder. Section 4.03. Powen. The Authority is hereby autho@, on its own name, to do aU acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following: (a)to make and enter mto contracts; (b)to employ agents or employms; (c)to acquire, construct, manage, @tain or operate any Public Improvement, includmg the common power of the City and the Agency to acquire any Pubhc Improvement by the power of eminent domam or any other lawful means; (d)to sue and be sued m its own name; (e) to issue Bonds and to incur debts, @ilities or obligations; provided, however, that no such Bond, debt, Unity or obligation shau constitute a debt, liability or obligation of the City, the Agency or any Fumcmg Authonty; (f) to apply for, accept, receive and disburse grants, loans and other assistance from any agency of the United States of America or of the State of Califoniia; (g)tD invest any money in the MM pursmt to Section 6505.5 of the Act which is not required for the necessities of the Authority, as the Authority determines is advisable, in the same nmw and upon the same conditions as local agencies, pursuant to Section 53601 of the Government Code of the State of California; (h) to apply for letters of credit or other form of financw guarantees m order to secure the repayment of Bonds and enter mto agreements m connection therewith; (i)to carry out and enforce aU the provisions of this Agreement; R:\C@\otwpw.agt 6 0)to make and enter into Bond Purchase Agreements and any other agreements, assignments and documents of any nawm whatsoever as may be n or convenient in the exercise of its powers hereunder or under the Act; (k)to purchase Obligations of or to make loans to the City, the Agency or any Fg Audmty for the purposes hereof, or to refinance indebtedness mcuffed by the City,the Agency or any Fmancing Authority m connection with any of the purposes hereof-,and (1) to exercise any and aR other powers as may be provided in the Act or in the Bond Law. Section 4.04. R@ctiong on Exemise of Powers. The powers of the Authority shau be exercised m the manner provided in the Act and in the Bond Law, and, except for those powers set forth m the Bond Law, shall be subject (m accordance with Section 6509 of the Act) to the restrictions upon the manner of exercising such powers that are imposed upon the City m the exercise of simil-ir powers. Section 4.05. Oblipqtiong Of Authority. The debts, @ilities and obligations of the Authority shau not be the debts, liabilities and obligations of the City, the Agency or any Financing Authority. Section 4.06. Non-T-ighility for Oblicatinng of No Member, Dimtor, officer, agent or employee of the Authonty shau be @viduauy or personally hable for the payment of the principal of or premium or interest on any obligations of the Authority or be subject to any personal liability or accountability by reason of any obligations of the Authority; but nothing herein contained @ relieve any such Member, Di=tor, officer, agent or employee from the performance of any officw duty provided by law or by the instruments authorwng the issuance of any obhptions of the Authority, ARTICLE V CONTRIEBUTIONS; ACCOUNTS AND REPORTS; FUNDS Section 5.01. rnntrihiitinng. The Members may in the appropriate circumstance when -req@ hermmder: (a) make contributions from thw ftnunes for the purposes set forth herem, (b) make payments of pubhc funds to defray the cost of such purposes, (c) make advances of public funds for such purposes, such advances to be repaid as provided herein, or (d) use its personnel, equipment or property in lieu of other contributions or advances. The provisions of Govemment Code Section 6513 are hereby incorporated into this Agreement by reference. R:\Cita"\otwpw.agt 7 Section 5.02. Accoiintq and go=. To the extent not covered by the duties assigned to a trustee chosen by the Authority, the Treasurer shall estabhsh and mainwn such funds and accounts as may be required by good accounting pmfice or by any provision of any trust agreement enWW mtovnth respect to the proceeds of any Bonds issued by the Authonty, Tbe' books and records of the Authority in the hands of a trustee or the Treasurer shar be open to inspection at all reasonable times by representatives of the Members. Wi@ 180 days after the close of each Fiscal Year an annual report of aR financw activities for such Fiscal Year @ be presented to the Members, to the extent such activities are not covered by the report of such trustee. The trustee appointed under any indenture or trust agreement @ establish suitable funds, furnish financial reports and provide suitable accounting procedures to carry out the provisions of said trust agremmt. Swd may be given ma duties m said indenture or trust agreement as may be d@ble to carry out this Agreement. Section 5.03. @. Subject to the applicable provisions of any instrument or agreement winch the Audionty may enter mto, which may provide for a trustee to receive, have custody of and disburse Authority funds, the Treasurer of the Authority @ receive, have custody of and disburse Authority funds as nearly as possible in accordance with generally accepted accounting pmfices, and shau make the disbursements required by this Agreement or to carry out any of the provisions or purposes of this Agreement. Section 5.04. Annual 'RudLyet and Administmtive 1Px=ses. The Board may adopt a budget for admim@ve expenses, winch shau lwlude aU expenses not included m any financing issue of the Authority, on or about July lst of each year. The estimated annual administrative expenses of the Authonty shau be a.Uocated in such budget by the Authority to the Members and/or any Financing Authority in such proportion as the Board shau determine. in the absence of any @ determmfton such allocation @ be made and charged to each Fmancmg Authonty m proportion to the principal ainount of Bonds of each such Fmancmg Authonty purchased by the Authority. ARTICLE VI TERM Section 6.01. I=. This Agreement shau become effective, and the Authority come into existence, on the date of execution and delivery hereof, and this Agreement and the Authority shall thereafter continue in fuU force and effect for at least forty (40) years (unless earher temunated by the Members and any then Associate Members), but m any event so long as eidw (a) any Bonds remaining outstanding or any material contracts to which the Authority is a party remain in effect, or (b) the Authonty shau own any interest m any PubUc Improvements. Section 6.02. 'DisMqition of Assets. Upon termination of this Agreement, aU property of the Authority, both real and personal, @ be conveyed to the City. R:\Citatty\otwpw.agt 8 ARTICLE VH MLSCELLANEOUS PROVISIONS Section 7.01. Notices. Notices hereunder @ be in writing and shau be sufficient if delivered to the notice address of each party hereto for legal notices or as otherwise provided by a party hereto in writing to each of the other parties hereto. Section 7.02. Section Headinv,-q. All section headings in this Agreement are for convenience of reference only and are not to be as modifymg or govermng the language in the section refeffed to or to define or Umit the scope of any provision of this Agreement. Section 7.03. Consent. Whenever in this Agreement any consent or approval is required, the same @ not be unreasonably withheld. Section 7.04. @w GoveminLy. This Agreement is made in the State of Califomia under the Constitution and laws of the State of Califomia, and is to be so cons@. Section 7.05. A @@jmftltlz. This Agreement may be amended at any time, or from time to hm, ex@ as h=Wd by con@ @ the owners of the Bonds issued by the Authority or by applicable regulations or laws of any jurisdiction having authority, by one or more supplemental agreements executed by both of the parties to tlus Agreement rather as reqmred m order to caffy out any of the provmm of this Agreen=t or for any other purpose, including without hmitation addition of new parues (mcludmg any legal entlties or taxing areas heretofore or h created) in pursuance of the purposes of this Agreement. Section 7.06. lRn t by - . The Authority is hereby autho@ to take any or all lepl or equitable actions, including but not limited to injunction and specific performance, necessary or permitted by law to enforce this Agreement. Section 7.07. S . Should any part, term or provision of this Agreement be domded by any court of competent j on tD be iftg or in conflict with any law of the State of Cahfonua, or otherwise be unenforceable or ineffectual, the vahdity of the remaimng portions or provisions @ not be affected thereby. Section 7.08. Successors. This Agreement shau be binding upon and shar inure to the benefit of the successors of the City or the Agency, respectively. Neither the City or the Agency may assign any nght or obligation hereunder without the written consent of the other, R:\C@\otwpw.aSt 9 IN WTRNESS F, the parbes hereto have caused dm Agreemmt to executed and attested by their proper officers thereunto duly autho@ and @ official seals to be hereto affixed, on the day and year set opposite the name of each of the pudes. CrrY OF ULA Date: November 1996 By: Mayor ATTEST: By: June S. Greek, CMC, City Clerk R D'F-VELOP AGENCY OF THE CrrY OF TEMECULA\ Date: November 1996 By: CMWson ATMT: By: June S. Greek, CMC, Agency Secretary/City Clerk R:\C@\otwpw.agt 10 RESOLUTION NO. RDA %- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA ACCEPTING GUARANTEES FOR THE COMPLETION OF PUBLIC IMPROVEMENTS FOR THE OLD TOWN AREA THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The Redevelopment Agency of the City of Temecula does hereby find, determine and declare as follows: a. On August 31, 1995 the Agency and T.Z.B.G., Inc. ("Participant") entered into that certain Owner Participation Agreement ("OPA"). Among other provisions, the OPA provides for the development of the Old Town Entertaim-nent Project and requires the Participant to construct and install certain public improvements as specified in the Description of Public Improvements, Exhibit No. 3 of the OPA ("Public Improvements"). The OPA further provides that the Participant would assume sole and full responsibility and all financial risk for financing the land acquisition, design, construction, and operation of the Public Improvements to be constructed and installed in strict accordance with the provisions of the OPA. Under the OPA, Agency would contribute $5,987,700 to the Project. b. On March 26, 1996, the Agency and Participant entered into that certain agreement entitled "First Amendment to Owner Participation Agreement" ("First Amendment"). The First Amendment: (1) Amends Section 4.2 to provide that the Agency will make an additional contribution to the Project of $1,470,850, representing the amount of assessments for the Western Bypass for certain property owners not related to the Project which the Agency agreed to pay on their behalf, bringing the Agency's contribution to the Project to $7,458,550; (2) refmes to the description of the Public Improvements in the Description of Public Improvements, Exhibit 3 to the First Amendment; (3) provides for Agency consent to the assignment of Participant's obligations to design, install and construct the Public Improvements and Participant's right to receive payment for certain Design Work in the event of termination of the OPA prior to the commencement of the construction of the Public Improvements to Fluor Daniel Temecula and the assumption of such obligations by Fluor Daniel Temecula; (4) provides for the conveyance by the Agency to the Participant of certain real property owned by the Agency at 41953 Main Street, Temecula; and (5) approves a change in name of the Participant from "T. Z. B.G., Inc. " to "Temecula Entertainment Valley, Inc. " As used in this Resolution, the term "OPA" shall mean the original Owner Participation Agreement, dated as of August 31, 1995, as amended by the First Amendment to the Owner Participation Agreement, dated as of March 26, 1996. R:\Resos\Resos.96\guarantee C. The Amendment to Section 4.2 E. of the original OPA revised the timing and conditions precedent to the Agency making its combined contribution of $7,458,550 to the Project, as such contribution is qualified by the terms of the OPA. Section 4.2 E. of the OPA, as amended, specifically provides: "E.Agency shall pay the sum specified in Subparagraph A [$7,458,550, as qualified by the terms of the OPA] to Participant upon ten (10) business days notice following completion of the following events, . . . .: Ill. The financing for the Entertainment Facilities has closed or the Agency determines in its sole and unfettered discretion that commitments are in place that assure its closing; and "2.The Participant provides the Agency with fully executed agreements guaranteeing in a form acceptable to the Agency that (I) the Public Improvements will be built, and (ii) providing that an indemnity or indemnities shall be provided in favor of the Agency to the effect that those parties performing work on the Public Improvements will defend, indemnify and hold harmless the Agency from claims arising from the design and construction of the Public Improvements, which agreements for the Public Improvements will be consistent with the provisions of this Article. " d. The Public Improvements described in the OPA will be funded by the bonds to be issued by the Old Town/Westside Community Facilities District Financing Authority ("CFD"). The City of Temecula will acquire the rights of way for the roadway improvements and provide certain design services on behalf of the CFD. Construction of the Public Improvements will be managed by Fluor Daniel, Inc., pursuant to a Construction Management and Supervision Agreement with the CFD. In addition to the obligation of the Developer under the OPA to complete the Public Improvement and be responsible for all cost overruns, a number of additional assurances and guaranties are in place to provide for completion of the Public Improvements if unforseen events affecting construction occur: (1)The construction budget being ftmded by the bonds to be issued by the Old Town/Westside Community Facilities District Financing Authority provides for a uncommitted construction contingency of $700,000.00; (2)Fluor Daniel, Inc., the Construction Manager retained by the CFD has guaranteed to complete construction of the Public R:\Resos\Resos.96\guarantee Improvements for a fixed price and within a specific time schedule, except for change orders required by the construction contracts or increased costs due to environmental subsurface conditions, goverrmental actions, or events of force majeure; (3)Fluor Daniel will maintain builder's risk insurance on the Public Improvements being constructed which would protect against destruction of the Public Improvements during construction by the perils of fire, lightening, riot and civil commotion, explosion, smoke, hail, windstorm, earthquake, and flood; (4)The Developer, Old Town Entertainment, LLC, will guarantee the completion of the Public Improvements, except for the Western Bypass, up to the amount of $7.5 million (which amount represents the Agency's contribution to the Project) including the specific costs not guaranteed by Fluor Daniel or covered by insurance, and will back up the guarantee with a commitment to maintain sufficient private fmancing funds to be available for completion of the Public Improvements in an amount equal to the difference between the uncompleted value of the guaranteed improvements and $7.5 million; (5)In the event the proceeds of the builders risk insurance policy and the guaranty of the Old Town Entertainment LLC are insufficient to meet the contingency occurring, Fluor Daniel, Inc., will contribute the amount of its construction management fee up the amount of $ 1. 1 million to meet the contingency; (6)Fluor Corporation, the international parent company of Fluor Daniel, Inc., will guarantee the obligations of Fluor Daniel, Inc. Section 2. The Board of Directors of the Agency hereby approves that certain agreement with Old Town Entertairunent LLC entitled "Letter Guarantee to Construct Public Improvements" in substantially the form attached hereto as Exhibit A, and directs and authorizes the Chairperson to execute said agreement on behalf of the Agency subject to such changes in form as may be approved by the Executive Director and the General Counsel. Section 3. The Board of Directors of the Agency hereby finds that upon the execution and approval of the guaranties described in Section l.d. of this Resolution, the requirements of Section 4.2 E. of the OPA, as amended, will be satisfied. R:\Resos\Resos.96\guarantee Section 4. The Secretary shall certify the adoption of this Resolution. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Redevelopment Agency of the City of Temecula on 1996. Patricia H. Birdsall Chairperson ATTEST: June S. Greek, CMC Agency Secretary [SEAL] STATE OF CALIFORNIA COUNTY OF RIVERSIDE Ss CITY OF TEMECULA 1, June S. Greek, Secretary of the Redevelopment Agency of the City of Temecula, do hereby certify that the Resolution No. 96- was duly and regularly adopted by the Board of Directors of the Redevelopment Agency of the City of Temecula at a regular meeting thereof, held on 1996, by the following vote, to wit: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT:BOARD MEMBERS: ABSTAIN:BOARD MEMBERS: June S. Greek Agency Secretary R:\Resos\Resos.96\guarantee NOV.21.1996 12:40PM COX, CASTLE, NICHOLSON, LLP, NO.2825 P. 2/4 Nov@ 11, 19% TO:Old Town/W@ Community Facilities D@ot Irmancing AwWty 43174 Emims Pait Drive T , Call@ 92590 City of T la 43174 Businou Park Drive Temecula, Cal&rnia M90 Redevelopmw A@ of the City of T a 43174 Business Park Drive T la, Cal@a 92590 RE: Gummy to Co@ct Public improv Ladies and G@a=: Mm lWcMop, Apney of the City of Temecula (the "Agmcy") and T.Z.B.O., I=., Utfornia co@iou, now @ as T la EnterWn@ Valley. Inc., a Cali@ tion (collectively, 'TEV'), I= an Owner Participation dmd August 31, 1996, as amended by the padu in the A to Owna PiMcipadon A on March 26, 1996 (Collectively,the 'OPA'). Under the tkms Of the OPA, TEV speed w dasip, acq@ Ind, coamct and WWIall Public Improv (m that term b in the OPA) at In sole @ cost and axpem in co with the terms of the OPA. PurthermoM TEV @ to be solely 'No for all cm uvwmns or expenses incurred In building the Public Impr oments in excess rebponia ov of the A@'s contribution of $7,458,550. Pursuant to the Wm of the OPA, TEV was p to resign to Fluor Daniel, Inc. ('Floor Daniel'), and Fluor Daniel could inume, TEV's obl@ to design, insWI and construct the Public Impirovemcnis. Consaqu=dy. h is co@lated that Fluor Daniel will antw I= a Construction t and Supervision Aoxmmnt and the Suppl&mtal Letter Agromea (coll@vely, die NCNMAN) with ftOldT eMWe Conimunity Fwflitie$ District Financing Authority Community Facilities District No- I (the mauthority), the form of which CMSA has boa @ndally agreed to by the parties themo. UMa the CMSA, Fluor Daniel is oblisaged to @m wW propme, on behalf of the Authority, contmts that the Authority shall enter tm with dWy qualified wW I co to desip, w&aer, construct, Install, test wW irmpea dw Public fmprovmcnts. Pursuant tD the Draft Suppimmal Letter Agreement (the "Suppimental'), the form of which is substantially @ upon by the parties, Fluor Daniel shall manage the construction of the Public Improvements such that dw costs paid to contractors shall not exmw $17,289,202 and dmt Fluor Daniel shall bear any =m in excess of did amount, subject to the term of the CMSA. 4 NOV.21.1996 12:40PM COI, CASTLE, NICHOLSON, LLP, NO.2825 P. 3/4 T mm Guar@ to Construct Public Impmvamts Nov@ 21, 1996 Page 2 Purdiamore, Fluor Cotpornion, a Delaware corporation ("Flwrm), is cdmmplaft @bg into a goorata (the uCkL&rwm*) with the Auftrity guamteeins Fluor D@,s obi@n under CMSA with f@ to the, codpladon of the Public Improv As a result of the foregobg, the guarantee of Fluor Daniel under the CMSA oW the auarmw of IFloor are both subjea w the @ of the CMSA. PursuwX to the tornm of the CMSA, a force majoure evat which causes a delay In or failure of performance by Fluor Daniel "I not constitute an avow of ddmlt. Specifically, Section 7. 10 of Om CMSA provides: Any delays in or failure of performance by the Authority or [Fhior Daniel, Lu.), other dm pa@ of money, "I not constitute ftbuit bom@ if and to dw axwt such delays or fabura of @rrnanm are caused by occurr@ beyond the reasonable control of die Authority or [Fluor Danielj, is the cue may be, including but not @ited to: acts of God or the public enemy; expiropdatkm of confiscation of war; r"Wn or s@ or damage resulting therefrom; fim, goods, explosions, aoc-ldmu-, @ or strikes or other oon@ wa of workman, whether direct or iiad@ or any , whether or not of the same class or kind as those spedflcwly Am named, which are not within the control of the Authority or [Fluor DmW] vely. and which by the @ise of reasonable, diligme, the Authority or (fluor Danid). respeaivdy, Is unable to prevem. [Fluor DaWel's] scheduled completion d*W3) required under this [CMSAI Ag"wmwA shall be adjusted to amount for any force majoure delay.... Consequently, dw suaraw of Fluor Daniel under the CMSA wW the Guiir@ of Fluor do Dot COVK AO]2@rmum due to a force mvjeut* event- To mi@ the co@uencu of a fbrw mideure @ Fluor Dodel, pursuam to die CMSA, hu agreed to procure insurance for Vmified pedla such as fire, lightning. riot and civil Ion, explosion, Make., hall. wbWsWM @qu@, and flood. Such imurmm will imure *o Publk hvrov=mts eD &a ikil ins=We value of the prop", subjed to a $10,000 deductible (except *a the deductible for @quake shall be $100,000 and the deductible kr flood shall be $25,000). The City, the Old TowalWamide Community Facilities District F@ing Authority Community Facilities DiWict No. I (Old Town Area Pub] lc ImprovemoM) and the Authority will be named as &Widonal inturaft. In order to satisfy tM City and the Ag6ncy that die Public am will be chid and paid for upon the occurrom of ik force majeure event no comw by insurance, TEV agran th@ upon @ation, the Old Town Entertaiment, LLC (the "LLCO), will agree to do aff of the following, on behalf of TEV: 1.7'he LLC will pay all insurance premiums on do insurance @IbW above. @Nt ZM73 4 facilities; ocomplianc4 with any order or request of any gov authority; au of NOV.21.1996 12:41PM COI, CASTLE, NICHOLSON, ILP. NO.2825 P. 4/4 I asset G w Co Public lmvmvmmts Novembw 21, 1996 Pap 3 2. The L.LC will guarantee the wmplation of the Public Improv to de wm of the OPA, it bft understood that insurance proceed$, to the extent available, will be applied any fows of the LIZ . 3. Any rem&Wng r@ of completing the Public to (excluding ffic Western Bypass) not co@ by the Fluor Danid guarantee under the CMSA, Om Fluor Gu@ce, or shall be guaranteed by the LLC in an =sent not to exceed $7.5 million. El such Sur@, the LLC shall cov@ that: A.The Public Improvw=ts will be wmplood prior to the private lmprovemem. B.As of any datd, the amount of undrawn private fi shall be at la= equal to sm es@ed cost of completing the Public Improv (excluding the W Bypau). provided that the amount of private financing required to be left undrawn purnast to this letter Guaranty shall not excew S7.S million. C-The LLC shall c@ to the Agency on a monthly basis lncludwg a doco tion that the undrawn private financing @ the test In Rom B mwve. it is understood, however, that the LLC r es the right to @ whmver dacm mmsary In its sole discretion with its equity and debt Invaders to mitigate rlmk of the guarantee, Including, but not limited to. force majeure insurance, c @, or @by financial commitments, provided such arrangements &to not inconsistent with the terms of this low guarantee. ULA ENTERTAINMENT VALLEY, INC. By: Title: RM@ 2M MM 4 ITEIN4 3 I APPROVAL CITY ATTORNEY DIR. OF FINAN(ZE CITY MANAGER OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY AGENCY REPORT TO: Board Members FROM: Ronald E. Bradley, City Manager DATE: November 26, 1995 SUBJECT:Financing for Old Town Area Public Improvements and the Western Bypass Corridor - Sale of Bonds and Construction Management Agreement RECOMMENDATION: 1Adopt a resolution entitled: RESOLUTION NO. FA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWNFWESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY APPROVING SALE OF BONDS TO THE OLD TOWNFWESTSIDE IMPROVEMENT AUTHORITY AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS 2.Adopt a resolution entitled: RESOLUTION NO. FA 96- A RESOLUTION OF THE OLD TOWN WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY APPROVING A CONSTRUCTION MANAGEMENT AND SUPERVISION AGREEMENT WITH FLUOR DANIEL, INC. AND A GUARANTEE WITH FLUOR CORPORATION R:lAgenda RptIFA-fianan-oti 11126195 Old Town/Westside Facilities District Financing Authority Agenda Report - Financing Public Improvements and the Western Bypass Corridor, Sale of Bonds and Construction Management Agreement November 26, 1996 Page 2. DISCUSSION: On June 11, 1996 the Old Town/Westside Community Facilities Financing Authority (the "Authority") authorized the issuance of its 1996 Special Tax Bonds (the "Bonds") and approved related documents. The resolution listed above approves the sale of the Bonds to the Old TownA'Vestside Improvement Authority (the "JPA"), the documents necessary to the issuance and sale of the Bonds, and an "Official Statement" in connection with the sale of bonds by the JPA (the proceeds of which would be used to purchase the Bonds) to prospective investors. The Official Statement contains detailed information regarding the proposed financing and the related projects, and it is important for all Authority Board members to review the Official Statement and inform Staff of any misstatements, omissions or misleading statements therein known to the Board members. The Resolution also provides for the cancellation of an amendment to a Joint Community Facilities Agreement with the City of Temecula, because the guarantee referenced therein will now be provided directly to the Redevelopment Agency of the City of Temecula. Staff recommends cancellation of the amendment to avoid confusion regarding the guarantees to be provided relative to the construction of the public improvements. Finally the Resolution provides for the extension of all of the Joint Community Facilities Agreements to which the Authority is a party, as these agreements have expired or may expire because the Bonds have not yet been issued. These agreements provide for other public agencies to acquire the Bond-financed facilities when they are completed. Staff recommends approval of extensions of the cancellation date of these agreements pending issuance of the Bonds. Construction Management Agreement The Authority has authorized the issuance of the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds to fund the construction of certain public improvements in the Old Town Area ("Public Improvements"). Anticipating the need for a construction manager to supervise and manage the construction of the Old Town Area Public Improvements, and prior to the formation of the Authority, the City of Temecula and the Redevelopment Agency of the City of Temecula circulated requests for proposals for construction management services for this project to four of the largest construction management firms in Southern California, in accordance with the authority of Government Code Sections 4526 and 4528. Proposals were received from Centex Golden Construction Company, Fluor Daniel, Inc., Kajima International, Inc. And Snyder Langston. The proposals were evaluated on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the construction management services required for the Public Improvements in accordance with the authority of Government Code Section 4526. On April 25, 1 996, the R.-IAgenda RptIFA-fianan-oti 11126195 Old Town/Westside Facilities District Financing Authority Agenda Report - Financing Public Improvements and the Western Bypass Corridor, Sale of Bonds and Construction Management Agreement November 26, 1996 Page 3. Board authorized the City Manager/Executive Director to initiate negotiations with Fluor Daniel, Inc. for construction management services for the Old Town Area Public Improvements as specifically authorized by Government Code Section 4528, determining the Fluor Daniel, Inc. Was the best qualified firm to perform construction management services for the Public Improvements. In accordance with the provisions of Government Code Section 4528, the City Manager/Executive Director has negotiated the terms of the Construction Management and Supervision Agreement ("CMSA") on behalf of the Authority. The CMSA provides that Fluor Daniel will perform construction management services for the Authority in supervising the construction of the Public Improvements. The agreement spells out the public bidding procedures which Fluor Daniel will implement and manage. Fluor Daniel will guarantee the price and timely completion of the construction contracts except for change orders approved by the Authority, force majeure, government actions or environmental sub-surface conditions. Fluor Daniels' parent company, Fluor Corporation, will guarantee Flour Daniels' performance. The cost of the construction management services will be paid from the proceeds of the bond issue which will be repaid in turn by special taxes levied against the Developer. Staff recommends the Board adopt the resolution approving the CMSA. Attachments:Resolutions (2) Fiscal Agent Agreement Bond Purchase Agreement - Local Agency Bonds Bond Purchase Contract - JPA Bonds Official Statement Construction Management Agreement Supplemental Letter Agreement Guarantee R. lagenda RptiFA-fianan-oti 11126195 RESOLUTION NO. FA 96- A RESOLUTTON OF I BOARD OF DUTECTORS OF THE OID TOWN/WESTSI]DE CO FACIILMES DISTRICT FINANCING AUTHORITY APPROVING SALE OF BONDS TO THE OILD TOWN/WESTS]IDE 0 AUTHORrrY, AND APFROVING OTHER RELATED DOC S AND ACITONS WHEREAS, this Board of Directors of the Old Town/Westside Community Facilities District Financing Authority (the 'Authority') has conducted proceedings under and pursuant to the M@Roos Community Facilities Act of 1982, as amended (the 'Act'), to form the Old Town Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) (the 'District), to authorize the levy of special taxes upon the land within the District, and to issue bonds secured by said special taxes to fmance certain facilities; and WHEREAS, this Board of Directors, as legislative body of the District, authorized the issuance of bonds of the Authority for the District in the original principal amount of $27,500,000 designated 'Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds' (the 'Bonds'), pursuant to the Act and a Resolution entitled "A Resolution of the Board of Directors of the Old Town/Westside Community Facilities District No. 1, Approving and Directing the Execution of a Fiscal Agent Agreement, and Approving Amendment to Joint Community Facilities Agreement and Other Related Documents and Actions,' adopted June 11, 1996 (the 'Prior Resolution'); and WHEREAS, there has been submitted to this Board of Directors a revised fi@ agent agreement (the 'Fiscal Agent Agreement') providing for the issuance of the Bonds, for and on behalf of the District, and this Board of Directors, with the aid of its staff, has reviewed the Fiscal Agent Agreement and found it to be in proper order, and now desires to approve the Fiscal Agent Agreement; and S, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds as contemplated by the Prior Resolution and this Resolution and the documents referred to herein exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act; and WHEREAS, the City of Temecula and the Redevelopment Agency of the City of Temecula have heretofore entered into a Joint Exercise of Powers Agreement establishing the Old Town/Westside Improvement Authority (the "JPA"); and Resos.Fa\Resos.%\O&.FA S, the JPA proposes at this time to issue its revenue bonds (the 'JPA Bonds') for the purpose of providing funds to purchase the Bonds; and WHEREAS, the JPA proposes to sell the JPA Bonds to Stone & Youngberg, LLC (the 'Underwriter') pursuant to the terms of a Bond Purchase Agreement (the 'Bond Purchase Agreement') by and among the JPA, the Authority and the Underwriter, and the Underwriter proposes to offer the JPA Bonds to the investing public by means of a preliminary official statement (the 'Preliminary Official Statement'); and WHEREAS, there has been submitted to this Board of Directors at this meeting a form of bond purchase contract for the purchase by the JPA from the Authority of the Bonds (the 'LoW Agency Bond Purchase Contract'), and this Board of Directors has duly considered the transactions on the part of the Authority and the District contained in such document and wishes at @ time to approve said tranwdon in the public interests of the Authority and the District; and , it appears that each of said documents and instruments which are now before this meeting is in appropriate form and is an appropriate document or instrument to be executed and delivered for the purpose intended; and WHEREAS, on June 11, 1996, the City of Temecula (the 'City') and the Authority executed an Amendment No. 1 to Joint Community Facilities Agreement (the 'Amendment'), arnending the Joint Community Facilities Agreement, dated April 23, 1996, between the City and the Authority, to provide for a guarantee of completion of certain improvements; and WHEREAS, it is now expected that a guarantee of the character referred to in the Amendment will be provided directly to the Redevelopment Agency of the City of Temecula, so that the Authority now desires to cancel the Amendment in order to avoid any inconsistency with the intent of the party providing the guarantee; and , in addition to the Joint Community Facilities Agreement with the City, the Authority also entered into similar agreements with the Eastern Municipal Water District, the Rancho Cahforina Water Distnct and the Riverside County Flood Control and Water Conservation District which agreements have expired by their terms or may expire prior to the issuance of the Bonds, because the Bonds have not yet been issued, and the Authority now desires to extend the term of those agreements as necessary in connection with the construction and acceptance by such entities of the improvements identified therein. NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Old Town/Westside Community Facilities District Financing Authority as follows: Section 1. of Fiscal ALent A"wment. The Board of Directors hereby approves the Fiscal Agent Agreement in the form on file with the Secretary. The Executive Director (or, in his absence, the Treasurer) is hereby authorized and directed to execute the Fiscal Agent Resos.Fa\Resos.96\09.FA 2 Agreement, for an in the name and on behalf of the Authority and the District, in such form, together with any addition thereto or changes therein deemed necessary or advisable by such officer upon consultation with Bond Counsel and the General Counsel to the Authority. The proceeds of the Bonds shall be applied by the Authority for the purposes and in the amounts as set forth in the Fiscal Agent Agreement. The Board of Directors hereby authorizes the delivery and performance by the Authority of the Fiscal Agreement. Section 2. Delivery of the Bonds. The Bonds, when executed, shall be delivered to the Fiscal Agent for authentication. The Fiscal Agent is hereby requested and directed to authenticate the Bonds by executing the Fiscal Agent's certificate of authentication and registration appearing thereon, and to deliver the Bonds, when duly executed and authenticated, to the JPA or its order in accordance with written instructions executed on behalf of the Authority by the Executive Director (or, in his absence, the Treasurer), which instructions such officer is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver to the Fiscal Agent. Such instructions shall provide for the delivery of the Bonds to the JPA or its order m accordance with the @ Agency Bond Purchase Contract, upon payment of the purchase price therefore. Section 3. Salc of Bonds. The Board of Directors hereby approves the sale of the Bonds to the JPA. The Local Agency Bond Purchase Contract, in the form on file with the Secretary, be and the same is hereby approved, and the Executive Director (or, in his absence, the Treasurer) is hereby authorized and directed to execute the Local Agency Bond Purchase Contract in said form, with such changes, insertions and omissions as may be approved by such official; provided that the principal amounts of the Bonds does not exceed the amount set forth in the Prior Resolution, and the net interest cost of the Bonds is not in excess of 1 1 %. The Board of Dnwtors hereby finds and determines that the sale of the Bonds at negotiated sale as contemplated by the Local Agency Bond Purchase Contract will result in a lower overall cost. Section 4. Sale of JPA Bonds. The Board of Directors hereby approves the sale of the JPA Bonds by the JPA by negotiation with the Underwriter. The Bond Purchase Agreement, in the form on file with the Secretary, be and the same is hereby approved, and the Executive Director (or, in his absence, the Treasurer) is hereby authorized and directed to execute the Bond Purchase Agreement in said form, together with such changes, insertions and omissions as may be approved by such official; provided,that the principal amount of the JPA Bonds does not exceed $32,000,000, the Underwriter's discount on the JPA Bonds does not exceed 3.5 %, and the net interest cost of the JPA Bonds is not in excess of 9 %. Section S. Official Statement. The Board of Directors hereby approves the portions of the preliminary official statement for the JPA Bonds (the 'Preliminary Official Statement') describing the Fiscal Agent Agreement, the District, the Bonds, the Authority and any actions or activities of the Authority or the District, in the form on file with the Secretary, together with any Resos.Fa\Rosos.96\08.FA 3 changes therein or additions thereto deemed advisable by the Executive Director. The Board of Directors authorizes and directs the Executive Director (or, in his absence, the Treasurer), on behalf of the Authority and the District, to deem "fmal" pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the 'Rule') the Preliminary Official Statement prior to its distribution by the Underwriter. The Underwriter, on behalf of the Authority and the District, is authorized and directed to cause the Preliminary Official Statement to be distributed to such municipal bond broker- dealers, to such banldng institutions and to such other persons as may be interested in purchasing the JPA bonds therein offered for sale. The Executive Director (or, in his absence, the Treasurer) is authorized and directed to assist the JPA in causing the Preliminary Official Statement to be brought into the form of final officw statement (the 'Find OfficW Statement), and, if requested by the Underwriter, to execute said Final Official Statement and a statement that the facts contained in the Final Official Statement, and any supplement or amendment thereto (which shall be deemed an original part thereof for the purpose of such statement) which relate to the Fiscal Agent Agreement, the District, the Bonds, the Authority and any actions or activities of the Authority or the District were, at the time of sale of the JPA Bonds, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the Bonds, and does not, as of the date of delivery of the JPA Bonds contain any untrue statement of material fact with respect to the Authority or the District or omit to state material facts with respect to the Authority or the District required to be stated where necessary to make any statement made therein not misleading in the light of the circumstances under which it was made. The execution and delivery by the Authority of the Final Official Statement, which shall include such changes and additions thereto deemed advisable by the Executive Director and such information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, shall be conclusive evidence of the approval of the Final Official Statement by the Authority. The Final Official Statement, when prepared, is approved for distribution in connection with the offering and sale of the JPA Bonds. Section 6. Cancellation of Amendment. The Amendment is hereby canceled, subject to the adoption by the City of a resolution also canceling the Amendment. Section 7. Extension of Joint Community Facilities ALreements. The officers of the Authority are hereby authorized and directed to negotiate and execute extensions to the Joint Community Facilities Agreements to which the Authority is a party, as necessary or desirable in connection with the sale of the Bonds and the construction and acceptance by the other public agencies of improvements with the proceeds thereof, such extensions to be executed by the Executive Director and in a form acceptable to Bond Counsel and General Counsel to the Authority. Resos.Fa\Resos.96\08.PA 4 Section 8. Official Actims. AR actions heretofore taken by the officers and agents of the Autho-rity with respect to the establishment of the District and the sale and issuance of the Bonds and the JPA Bonds are hereby approved, confirmed and ratified, and the proper officers of the Authonty are hereby authorized and directed to do any and all thmgs and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds and the JPA Bonds, and the cancellation of the Agreement, in accordance with this Resolution, the Prior Resolution, and any certificate, agreement, and other document described in the documents herein approved. Section 9. Effective Date. This resolution shall take effect from and after its adoption. PASSED, APPROVED AND ADOPRM, by the Board of Directors of the of the Old Town/Westside Community Facilities District Financing Authority at a regular meeting held on the 26th day of December, 1996. Patricia H. Birdsall, Chairperson ATTEST: June S. Greek, CMC City Clerk/Authority Secretary [SEAL] Resos.F&\Resoo.96\08.FA 5 STAT'E OF CALIFORNIA ) COUNTY OF RIVERSIDE SS CrrY OF TEMECULA I, June S. Greek, City Clerk of the City of Temecula, HEREBY DO CERTIFY that the foregoing Resolution No. FA 96- was duly adopted at a regular meeting of the Board of Directors of the Old Town/Westside Community Facilities District Financing Authority on the 26th day of December, 1996, by the following roll call vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT:BOARD MEMBERS: ABSTAINED: BOARD MEMBERS: June S. Greek, CMC City Clerk/Agency Secretary Resos.F&\Rews.96\08.FA 6 RESOLUTION NO. FA 96-- A RESOLUTION OF THE OLD TOWN/WESTS]IDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY APPROVING A CONSTRUCTION MANAGEMENT AND SUPERVISION AGREEMENT WITH FLUOR DANEEL, INC. AND A GUARANTEE WITH FLUOR CORPORATION THE BOARD DIRECTORS OF THE OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The Board Directors of the Old Town/Westside Community Facilities District Financing Authority ("Authority") does hereby find, determine and declare as follows: a. The Authority has authorized the issuance of the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds" to fund the construction of certain public improvements in the Old Town Area ("Public Improvements"). b. Anticipating the need for a construction manager to supervise and manage the construction of the Old Town Area Public Improvements, and prior to the formation of the Authority, the City of Temecula and the Redevelopment Agency of the City of Temecula circulated requests for proposals for construction management services for this project to four of the largest construction management firms in Southern California, in accordance with the authority of Government Code Sections 4526 and 4528. C. Proposals were received from Centex Golden Construction Company, Fluor Daniel, Inc., Kajima International, Inc., and Snyder Langston. d. The proposals were evaluated on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the construction management services required for the Public Improvements in accordance with the authority of Government Code Section 4526. e. On April 25, 1996, the Board authorized the City Manager/Executive Director to initiate negotiations with Fluor Daniel, Inc. for construction management services for the Old Town Area Public Improvements as specifically authorized by Government Code Section 4528, determining that Fluor Daniel, Inc., was the best R: resos\res os. 96\consungm. oti 1 qualified firm to perform construction management services for the Public Improvements. f. In accordance with the provisions of Government Code Section 4528, the City Manager/Executive Director has negotiated the terms of the Construction Management and Supervision Agreement ("CMSA") on behalf of the Authority. 9. In accordance with the provisions of Government Code Sections 4526 and 4528, the Board finds that Fluor Daniel, Inc., is the best qualified firm to perform construction management services for the Old Town Area Public Improvements. h. All contracts for construction of the Public Improvements will contain a clause requiring the contractor to pay prevailing wages in accordance with Labor Code Sections 1700, et seq. i. The CMSA requires public bidding of all components of the project for which competitive bids are required by California law, in accordance with the specific bidding procedures set forth in Exhibit A to the CMSA. The bidding procedures set forth in Exhibit A are in general compliance with the applicable provisions of the Public Contracts Code for cities. The Board finds that to the extent competitive bidding in accordance with the Public Contracts Code is required for the Public Improvements, strict compliance with the applicable provisions of the Public Contracts Code would be unavailing and would not produce an advantage, and the advertisement for competitive bids would thus be undesirable, impractical, and impossible. The land use approvals for the Old Town Entertainment Project require completion of the Public Improvements prior to the issuance of a certificate of occupance for the Project. The Public Improvements will in many areas be constructed adjacent to the Project and will affect access to the Project during construction, thus requiring a close coordination between the contractors working on the Project and the Public Improvements. The procedures set forth in Exhibit A of the CMSA do in fact provide for public bidding as the construction manager is required to obtain six to eight competitive bids for each matter to be bid and the bid shall be awarded on the basis of the highest quality and lowest price for the Authority. Section 2.The Board of Directors of the Old Town/Westside Community Facilities District Financing Authority hereby approves those certain agreements relating to the management of the construction of the Public Improvement entitled (1) "Construction Management and Supervision Agreement Between the Old Town/Westside Community Facilities District Financing Authority and Fluor Daniel, Inc., a California corporation, " (2) the "Supplemental Ixtter Agreement" between the Old Town/Westside Community Facilities District Financing Authority and Fluor Daniel, Inc., a California corporation, and (3) the "Guarantee" between the Old Town/Westside Community Facilities District Financing Authority and Fluor Corporation, a Delaware corporation, all in substantially the forms attached hereto as Exhibits A, B, and C, and directs and authorizes the Chairperson to execute R:resoskresos.96\@nsungm.oti 2 said agreements on behalf of the Authority, subject to such changes in form as may be approved by the Executive Director and the General Counsel. Section 3. The Secretary shall certify the adoption of this Resolution. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Old Town/Westside Community Facilities District Financing Authority on 1996. Patricia H. Birdsall Chairperson ATTEST: June S. Greek, CMC Authority Secretary [SEAL] STATE OF CALIFORNIA COUNTY OF RIVERSIDE Ss CITY OF TEMECULA I, June S. Greek, Secretary of the Old Town/Westside Community Facilities District Financing Authority, do hereby certify that the Resolution No. 96- was duly and regularly adopted by the Board of Directors of the Old Town/Westside Community Facilities District FinancingAuthority at a regular meeting thereof, held on , 1996, by the following vote, to wit: AYES:BOARDMEMBERS: NOES:BOARDMEMBERS: ABSENT-BOARDMEMBERS: ABSTAIN:BOARDMEMBERS: June S. Greek, CMC Authority Secretary R:resos\resos.96\constmgm.oti 3 RESOLUTION NO. I ATTACHMENTS 30043-01 JHHW:PJT:cra 08/28/95 J1877 04/03/96 05/19/96 10/21/96 11/04/96 FISCAL AGENT AGREEMENT by and between OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY and FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION as Fiscal Agent Dated as of December 1, 1996 Relating to: Old TowuMestside Community Facilities District Financing Authority Community Facflities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds TABLE OF CONTENTS ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 1.01. Authority for this Agreement 2 Section 1.02. Agreement for Benefit of Bondowners 2 Section 1.03. Definitions 2 ARTICLE 11 THEBONDS Section 2.01. Principal Amount 10 Section 2.02. Terms of Bonds 10 Section 2.03. Redemption 11 Section 2.04. Form of Bonds 13 Section 2.05. Execution of Bonds 13 Section 2.06. Transfer of Bonds 13 Section 2.07. Exchange of Bonds 13 Section 2.08. Bond Register 14 Section 2.09. Temporary Bonds 14 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen 14 Section 2.11. Lin-dted Obligation 14 Section 2.12. No Acceleration 15 ARTICLE III ISSUANCE OF BONDS Section 3.01. Issuance and Delivery of Bonds 16 Section 3.02. Application of Proceeds of Sale of Bonds 16 Section 3.03. Improvement Fund 16 Section 3.04. Special Tax Fund 17 Section 3.05. Administrative Expense Fund 18 Section 3.06. Costs of Issuance Fund 18 Section 3.07. Validity of Bonds 19 ARTICLE IV SPECIAL TAX REVENUES; BOND FUND AND RESERVE FUND Section 4.01. Pledge of Special Tax Revenues 20 Section 4.02. Bond Fund 20 Section 4.03. Reserve Fund 22 ARTICLE V OTHER COVENANTS OF THE AUTHORITY Section 5.01. Punctual Payment 24 Section 5.02. Limited Obligation 24 Section 5.03. Extension of Time for Payment 24 Section 5.04. Against Encumbrances 24 Section 5.05. Books and Records 24 Section 5.06. Protection of Security and Rights of Owners 24 Section 5.07. Compliance with Law, Completion of Project 24 Section 5.08. Private Activity Bond Lin-dtation 24 Section 5.09. Federal Guarantee Prohibition 25 Section 5.10. Collection of Special Tax Revenues 25 @fion 5.11. Further Assurances 26 Section 5.12. No Arbitrage 26 Section 5.13. Maintenance of Tax-Exemption 26 Section 5.14. Covenant to Foreclose 26 Section 5.15. No Additional Bonds 27 Section 5.16. Public Access to Project 27 Section 5.17. Continuing Disclosure 27 Section 5.18. Special Taxes 27 ARTICLE VI INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY Section 6.01. Deposit and Investment of Moneys in Funds 29 Section 6.02. Rebate of Excess Investment Earnings to the United States 30 Section 6.03. Limited Obligation 30 Section 6.04. Liability of Authority 30 Section 6.05. Employment of Agents by Authority 31 ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent 32 Section 7.02. Liability of Fiscal Agent 32 Section 7.03. Information 33 Section 7.04. Notice to Fiscal Agent 33 Section 7.05. Compensation, Indemnification 34 ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.01. Amendments Permitted 35 Section 8.02. Owners' Meetings 35 Section 8.03. Procedure for Amendment with Written Consent of Owners 35 Section 8.04. Disqualified Bonds 36 Section 8.05. Effect of Supplemental Agreement 36 Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments 36 Section 8.07. Amendatory Endorsement of Bonds 37 ARTICLE IX MISCELLANEOUS Section 9.01. Benefits of Agreement Lin-dted to Parties 38 Section 9.02. Successor is Deemed Included in All References to Predecessor 38 Section 9.03. Discharge of Agreement 38 Section 9.04. Execution of Documents and Proof of Ownership by Owners 39 Section 9.05. Waiver of Personal Liability 39 Section 9.06. Notices to and Demands on Authority and Fiscal Agent 39 Section 9.07. Partial Invalidity 40 Section 9.08. Unclaimed Moneys 40 Section 9.09. Applicable Law 40 Section 9.10. Conflict with Act 40 Section 9.11. Conclusive Evidence of Regularity 40 Section 9.12. Payment on Business Day 40 Section 9.13. Counterparts 40 EXHIBIT A - FORM OF BOND FISCAL AGENT AGREEMENT THIS FISCAL AGENT AGREEMENT (the "Agreement") is made and entered into as of December 1, 1996, by and between the Old Town/Westside Community Facilities District Financing Authority, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the "Authority") for and on behalf of the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) (the "District"), and First Trust of California, National Association, a national banking association, duly organized and existing under the laws of the United States of America with a corporate trust office located in Los Angeles, California, as fiscal agent (the "Fiscal Agent"). WITNESSETH: WHEREAS, the Board of Directors of the Authority has formed the District under the provisions of the MeRo-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the California Government Code) (the "Act") and Resolution No. 96-02 of the Board of Directors of the Authority adopted on April 23, 1996; WHEREAS, the Board of Directors of the Authority, as the legislative body with respect to the District, is authorized under the Act to levy special taxes to pay for the costs of facilities to be financed by the District and to authorize the issuance of bonds secured by said special taxes under the Act; WHEREAS, under the provisions of the Act, on June 11, 1996, the Board of Directors of the Authority adopted its Resolution No. (the "Resolution"), which resolution, among other matters, authorized the issuance of the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds (the "Bonds") in the aggregate principal amount of not to exceed $27,500,000 upon the security of the unpaid special taxes and provided that said issuance would be in accordance with the Act and this Agreement, and authorized the execution hereof; WHEREAS, it is in the public interest and for the benefit of the Authority, the District, the persons responsible for the payment of special taxes and the owners of the Bonds that t e Authority enter into this Agreement to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, the disposition of the special taxes securing the Bonds and the administration and payment of the Bonds; and WHEREAS, the Authority has determined that all things necessary to cause the Bonds, when authenticated by the Authority for the District and issued as in the Act, the Resolution and this Agreement provided, to be legal, valid and binding and special obligations of the Authority for the District in accordance with their ten-ns, and all things necessary to cause the creation, authorization, execution and delivery of this Agreement and the creation, authorization, execution and issuance of the Bonds, subject to the terms hereof, have in all respects been duly authorized. NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: ARTICLE I STAT'UTORY ALTMORITY AND DEFINMONS Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the Act and the Resolution. Section 1.02. Agreement for Benefit of Bondowners. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the Authority shan be for the equal benefit, protection and security of the Owners. All of the Bonds, without regard to the time or tijrnes of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent may become the owner of any of the Bonds in its own or any other capacity with the same rights it would have ff it were not Fiscal Agent. Section 1.03. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to "Articles", "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words "herein", "hereof", "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Government Code. "Administrative E2Menses" means any or all of the following: the fees and expenses of the Fiscal Agent or the Trustee (including any fees or expenses of their respective counsel), the expenses of the Authority in carrying out its duties hereunder (including, but not limited to, the levying and collection of the Special Taxes) including the fees and expenses of its counsel, an allocable share of the salaries of City or Authority staff directly related thereto and a proportionate amount of City and Authority general administrative overhead related thereto, and all other costs and expenses of the Authority, the City, the JPA or the Fiscal Agent incurred in connection with the discharge of their respective duties hereunder, or under the Indenture and, in the case of the Authority or the City, in any way related to the administration of the District. "Administrative Exl2ense Fund" means the fund by that name established by Section 3.05(A) hereof. "Agieement" means this Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the provisions hereof. "Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds due in such Bond Year. "Auditor" means the auditor/tax collector of the County of Riverside. "Authoritx" means the Old Town/Westside Community Facilities District Financing Authority, and any successor thereto. 2 "Authorized Officer" means the Authority's Executive Director, the Authority's Treasurer, the Authority's Secretary, the Director of Public Works of the City or any other officer or employee authorized by the Board of Directors of the Authority or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer. "Bond Counsel" means any attorney or firm of attorneys acceptable to the Authority and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities. "Bond Fund" means the fund by that name established by Section 4.02(A) hereof. "Bond Register" means the books for the registration and transfer of Bonds maintained by the Fiscal Agent under Section 2.08 hereof. "Bond Year" means the one-year period beginning on September lst in each year and ending on the day prior to September lst in the following year except that the first Bond Year shall begin on the Closing Date and end on August 31, 1997. "Bonds" means the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds at any time Outstanding under this Agreement or any Supplemental Agreement. "Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the state in which the Fiscal Agent has its corporate trust office are authorized or obligated by law or executive order to be closed. "Capitalized Interest Account" means the account by that name established by Section 4.02(A) hereof. "C " means the City of Temecula, California. c t4 "Closing Date" means the date upon which there is a physical delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Continuing Disclosure Agieement" means that certain Continuing Disclosure Agreement by and between the Authority and the Fiscal Agent, as Fiscal Agent and Dissemination Agent, dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Cost of Issuance" means items of expense payable or reimbursable directly or indirectly by the Authority or the JPA and related to the authorization, sale and issuance of the Bonds and the JPA Bonds, which items of expense shall include, but not be limited to, printing costs, costs of reproducing and binding documents, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee, fees and expenses of Fiscal Agent's counsel, expenses incurred by the Authority, the JPA or the City in connection with the issuance of the Bonds and the JPA Bonds and the establishment of the District, special 3 tax consultant fees and expenses, preliminary engineering fees and expenses, Bond (underwriter's) discount, legal fees and charges, including bond counsel, financial consultants' fees, charges for execution, transportation and safekeeping of the Bonds and the JPA Bonds and other costs, charges and fees in connection with the foregoing. "Cost of Issuance Fund" means the fund by that name established by Section 3.06(A) hereof. "Debt Service" means the scheduled amount of interest and amortization of principal payable on the Bonds during the period of computation, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "District" means the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements), formed pursuant to the Act and the Resolution of Formation. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security--State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California but only ff at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. The Fiscal Agent shall have no duty in connection with the determination of Fair Market Value other than to follow the investment directions of the Authority in an Officer's Certificate. "Federal Securities" means any of the following which are non-carable and which at the time of investment are legal investments under the laws of the State of California for funds held by the Fiscal Agent, as shall be certified by the Authority to the Fiscal Agent: (i) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the United States Department of the Treasury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America, including, without limitation, such of the foregoing which are commonly referred to as "stripped" obligations and coupons; or (ii) any of the following obligations of the following agencies of the United States of America: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial ownership issued by the Farmers Home Administration, (c) participation certificates issued by the General Services Administration, (d) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, (e) project notes issued by the United States Department of Housing and Urban Development, and (f) public housing notes and bonds guaranteed by the United States of America. 4 "Fiscal Agent" means the Fiscal Agent appointed by the Authority and acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01. "Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive. "Improvement Fund" means the fund by that name created by and held by the Fiscal Agent pursuant to Section 3.03(A) hereof. "Indenture" means the Indenture of Trust, dated as of December 1, 1996, between the JPA and First Trust of California, National Association, as trustee, pursuant to which the JPA Bonds were issued. "Indel2endent Financial Consultant" means any consultant or firm of such consultants appointed by the Authority or the Treasurer, and who, or each of whom: (i) is judged by the Treasurer to have experience in matters relating to the issuance and/or administration of bonds under the Act; (ii) is in fact independent and not under the domination of the Authority; (iii) does not have any substantial interest, direct or indirect, with or in the Authority, or any owner of real property in the District, or any real property in the District; and (iv) is not connected with the Authority as an officer or employee of the Authority, but who may be regularly retained to make reports to the Authority. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service", 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service", 65 Broadway, 16th Floor, New York, New York 10006; Moody's Investors Service "Municipal and Government", 99 Church Street, New York, New York 10007, Attention: Municipal News Reports; Standard & Poor's Corporation "Called Bond Record", 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such services providing information with respect to called bonds as the Authority may designate in an Officer's Certificate delivered to the Fiscal Agent. "Interest Payment Dates" means March 1 and September 1 of each year, commencing March 1, 1997. "IPA!'means the Old Town/Westside Improvement Authority. "IPA Bonds" means the Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area). "Officer's Certificate" means a written certificate of the Authority signed by an Authorized Officer of the Authority. "Ordinance" means any ordinance of the Authority levying the Special Taxes. "Original Purchaser" means the JPA, as the first purchaser of the Bonds from the Authority. "Outstanding", when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.04) all Bonds except: (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds paid or deemed 5 to have been paid within the meaning of Section 9.03; and (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Authority pursuant to this Agreement or any Supplemental Agreement. "Owner" or "Bondowner" means any person who shall be the registered owner of any Outstanding Bond. "Participating Underwriter" shall have the meaning ascribed thereto in the Continuing Disclosure Agreement. "Permitted Investments" means the following, but only to the extent that the same are acquired at Fair Market Value and are otherwise permitted under the California Government Code: (i)Federal Securities; (ii)obligations of states or of any political subdivisions thereof, provided that the paymentof principal thereof and interest thereon is fully secured by obligations described in(i) above; (iii)any of the following obligations of federal agencies not guaranteed by the United States of America: (a) debentures issued by the Federal Housing Administration; (b) participation certificates or senior debt obligations of the Federal Home Loan Mortgage Corporation or Farm Credit Banks (consisting of Federal Land Banks, Federal Intermediate Credit Banks, or Banks for Cooperatives); (c) bonds or debentures of the Federal Home Loan Bank Board established under the Federal Home Loan Bank Act, bonds of any federal home loan bank established under said act and stocks, bonds, debentures, participations or other obligations of or issued by the Federal National Mortgage Association, the Student Loan Marketing Association, the Government National Mortgage Association and the Federal Home Loan Mortgage Corporation; and bonds, notes or other obligations issued or assumed by the International Bank for Reconstruction and Development, with a member bank or banks of the Federal Reserve System; (iv) interest-bearing demand or time deposits (including certificates of deposit) in federal or State chartered savings and loan associations or in federal or State banks (including the Fiscal Agent or its affiliates), provided that: (a) in the case of a savings and loan association, such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation, or the unsecured obligations of such savings and loan association shall be rated in a Rating Category (as defined in the Fiscal Agent Agreement), and (b) in the case of a bank, such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation, or the unsecured obligations of such bank (or the unsecured obligations of the parent bank holding company of which such bank is the lead bank) shall be rated in a Rating Category; (v) written repurchase agreements with any bank, savings institution or trust company (other than the Fiscal Agent) which is insured by the Federal Deposit Insurance Corporation, or with any broker-dealer with retail customers which falls under Securities Investors Protection Corporation protection, provided that such repurchase agreements are fully secured by Federal Securities or obligations of any agency of instrumentality of the United States of America and provided further that (a) such collateral is held by the Fiscal Agent or any agent acting solely for the Fiscal Agent during the term of such repurchase agreement, (b) such collateral is not subject to liens or claims of third parties, (c)such collateral has a market value (determined at least once every 14 days) at least 6 equal to the amount invested in the repurchase agreement, (d) the Fiscal Agent has a perfected first security interest in the collateral, (e) the agreement shall be for a term not longer than 270 days and (f) the failure to maintain such collateral at the level required in (c) above will require the Fiscal Agent to liquidate the collateral; (vi) taxable money market fund portfolios restricted to obligations with average maturities of one year or less issued or guaranteed as to payment of principal and interest by the full faith and credit of the United States of America and repurchase agreements collateralized by such obligations (such funds may include funds for which the Fiscal Agent, its affiliates or subsidiaries provide investment advisory or other management services); (vii) commercial paper having original maturities of not more than 365 days and rated in a Rating Category; (viii) bankers acceptances rated in a Rating Category, endorsed and guaranteed by banks described in clause (v) of this definition; (ix) obligations the interest on which is excluded from gross income for purposes of federal income taxation under Section 103 of the Code and which are rated in a Rating Category; (x) the Local Agency Investment Fund of the State of California ("LAIF"), created pursuant to section 16429.1 of the California Government Code, to the extent the Fiscal Agent is authorized to register such investment in its name, provided that the Fiscal Agent may restrict investments in the LAIF ff required to keep monies available for the purposes of this Agreement; and (xi) guaranteed investment contracts, the provider of which (or a guarantor of its obligations thereunder) is rated "AA" or "Aa" or better by Standard & Poor's Ratings Services ("S&P") or Moody's Investors Service ("Moody's") at the time of execution of such contract. Such contract must be collateralized with securities described in the above definitions (i) through (iii). AU such collateral to be held by the Fiscal Agent or a third party custodian, with a market value of at least 102% of the principal invested, andin a form acceptable to the Fiscal Agent and the Treasurer. Provided, however, that (1)moneys invested thereunder may be withdrawn without penalty, premium, or charge, forreasons in the bond documents, upon not more than seven day's notice; (2) the agreement is not subordinated to any other obligation of such agreement provider; (3) the same guaranteed interest rate wifl be paid on any future deposits made to restore the reserve to its required amount, provided such replenishment is delivered to the contract or agreement provider within six months of the date of withdrawal; (4) the Fiscal Agent will receive an opinion of counsel that such agreement is an enforceable obligation of such company; (5) the agreement provides that the agreement provider must promptly notify the Fiscal Agent if the ratings assigned by Moody's or S&P to its long-term unsecured debt obligations or claims-paying ability, as applicable, is suspended, withdrawn or reduced by either Moody's or S&P; and (6) the Fiscal Agent shall withdraw all amounts held under such contract or agreement following receipt by an officer of the Fiscal Agent responsible for administration of its duties hereunder of any written notice of suspension, withdrawal or reduction of either of such ratings to a level below the two highest rating categories (without regard to plus (+) or minus designations) by Moody's or S&P. "Principal Office" means the corporate trust office of the Fiscal Agent at 550 South Hope Street, 5th Floor, Los Angeles, California 90071, Attention: Corporate Trust Division; provided, 7 however, for the purpose of maintenance of the Registration Books and surrender of Bonds for payment, transfer or exchange such term means the office at which the Fiscal Agent conducts its corporate agency business, or such other or additional offices as may be designated by the Fiscal Agent. "Proceeds" when used with reference to the Bonds, means the face amount of the Bonds, plus accrued interest and premium, if any, less original issue discount and less proceeds from the sale of the Bonds deposited in the Reserve Fund. "Pro ' ject" means the facilities more particularly described in Exhibit A to the Resolution of Intention. "Rate and Method of A1212ortionment" means the Rate and Method of Apportionment of the Special Taxes for the Di4fict as set forth in Exhibit A to the Resolution of Formation, as it may be amended from time to time. "Rating Categ@" means one of the two highest rating categories then in effect under the rating systems of Moody's Investors Service or Standard and Poor's Ratings Services, without regard to plus or minus sign or numerical or other Qualifying designation. "Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date. "Registration Books" means the records maintained by the Fiscal Agent pursuant to Section 2.08 for the registration and transfer of ownership of the Bonds. "Re@ations" means temporary and permanent regulations promulgated under the Code. "Reserve Fund" means the fund by that name established pursuant to Section 4.03(A) hereof. "Reserve Requirement" means, as of any date of calculation, an amount equal to the lesser of (i) maximum Annual Debt Service, (ii) one hundred twenty-five percent (125%) of average Annual Debt Service, or (iii) ten percent (10%) of the initial principal amount of the Bonds issued hereunder. The Reserve Requirement as of the Closing Date is $ "Resolution" means Resolution No. . authorizing the issuance of the Bonds, adopted by the Board of Directors of the Authority on June 11, 1996. "Resolution of Formation" means Resolution No. 96-02, adopted by the Board of Directors of the Authority on April 23, 1996. "Resolution of Intention" means Resolution No. 95-02, adopted by the Board of Directors of the Authority on September 12, 1995. "Securities Del2ositories" means The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4171 or 4190; Midwest Securities Trust Company, Capital Structures-Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax-(215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in an Officer's Certificate delivered to the Fiscal Agent. 8 "Sl2ecial Tax Fund" means the fund by that name established by Section 3.04(A) hereof. "Sl2ecial Tax Prel2ayments Account" means the account by that name within the Bond Fund established by Seciion 4.02(A) hereof. "Sl2ecial Tax Revenues." means the proceeds of the Special Taxes received by the Authority, including any scheduled payments and any prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien, but shall not include interest and penalties on foreclosure of the lien of Special Taxes in excess of the rate of interest payable on the Bonds. "Si2ecial Taxes" means the special taxes levied within the District pursuant to the Act, the Ordinance and this Agreement. "Sul2l2lemental Agreement" means an agreement the execution of which is authorized by a resolution which has been duly adopted by the Authority under the Act and which agreement is amendatory of or supplemental to this Agreement, but only if and to the extent that such agreement is specifically authorized hereunder. "Treasurer" means the Finance Director of the City, acting as Treasurer of the Authority. "Trustee" means the entity acting in such capacity under the Indenture. 9 ARTICLEII TIHEBONDS Section 2.01. Principal Amount; Designation. Bonds in the aggregate principal amount of Million Thousand Dollars ($ -) are hereby authorized to be issued by the Authority for the District under and subject to the terms of the Resolution and this Agreement, the Act and other applicable laws of the State of California. The Bonds shall be designated the "Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds". Section 2.02. Terms of Bonds. The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The Bonds shall be dated the Closing Date, shall be in the original principal amount of $ shall mature on September 1, 2026, and shall bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rate of % per annum. Interest on the Bonds shall be payable on each Interest Payment Date to the person whose name appears on the registration books maintained by the Fiscal Agent as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Fiscal Agent mafled by first class mail, postage prepaid, on each Interest Payment Date to the Owner at the address of such Owner as it appears on the registration books maintained by the Fiscal Agent as of the preceding Record Date; provided, however, that at the written request of the Owner of at least $1,000,000 in aggregate principal amount of Outstanding Bonds filed with the Fiscal Agent prior to any Record Date, interest on such Bonds shall be paid to such Owner on each succeeding Interest Payment Date by wire transfer of immediately available funds to an account in the United States designated in such written request (any such written request shall remain in effect until rescinded in writing by such Owner). Principal of and premium (if any) on any Bond shall be paid by check upon presentation and surrender thereof, at maturity or the prior redemption thereof, at the Principal Office of the Fiscal Agent. The principal of and interest and premium (if any) on the Bonds shall be payable in lawful money of the United States of America. Notwithstanding the foregoing, so long as the Bonds are registered in the name of the Trustee (on behalf of the JPA), principal of and interest on the Bonds (including the final interest payment upon maturity or earlier redemption), shall be transferred by the Fiscal Agent to the Trustee, on behalf of the JPA as Owner of the Bonds, by wire transfer or other appropriate intrabank transfer method as is deemed appropriate by the Fiscal Agent. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (b) it is authenticated on or before February 15, 1997, in which event it shall bear interest from the Closing Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. "CUSIP" identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds, and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and pay for the Bonds. In addition, failure on the part of the Authority or the Fiscal Agent to use 10 such CUSIP numbers in any notice to Owners shall not constitute any violation of the Authority's contract with such Owners and shall not iinpair the effectiveness of any such notice. All Bonds paid by the Fiscal Agent pursuant to this Article shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds and, upon written request of the Authority, issue a certificate of destruction thereof to the Authority. Section 2.03. RedemptiorL (A) Redemption Dates. (i) The Bonds are subject to redemption prior to their stated maturities on any Interest Payment Date on or after September 1, 2001, as a whole or in part, upon payment from any source of funds available for that purpose, including, but not limited to, prepayments of Special Taxes (and transfers from the Reserve Fund to the Bond Fund under Section 4.03(F) in connection therewith), at a redemption price determined in accordance with Section 4.03 of the Indenture, together with accrued interest thereon to the date fixed for redemption. (ii) The Bonds are subject to mandatory sinking payment redemption in part on September 1, _, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking payments as follows: Redemption Redemption Date Sinking Date Sinking (Sel2tember 1) Payment (Sel2tember 1) P@ent 1997 2012 1998 2013 1999 2014 2000 2015 2001 2016 2002 2017 2003 2018 2004 2019 2005 2020 2006 2021 2007 2022 2008 2023 2009 2024 2010 2025 2011 2026 (maturity) The amounts in the foregoing table shall be reduced in such manner as determined under Section 4.03 of the Indenture, as a result of any prior partial redemption of the Bonds pursuant to Section 2.03(A)(i) above or Section 2.03(A)(iii) below. In such event and upon written request of the Fiscal Agent, the Authority shall furnish the Fiscal Agent with a revised sinking payment schedule. (iii) The Bonds are subject to mandatory redemption in part, on any Interest Payment Date, from amounts transferred from the Improvement Fund to the Bond Fund pursuant to Section 3.03(D)(i) at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, and a premium determined in accordance with Section 4.03 of the Indenture. 11 (B) Notice to Fiscal Agent. The Authority shall give the Fiscal Agent and the Trustee written notice of any expected redemption of Bonds pursuant to subsection (A)(i) or (iii) above not less than sixty (60) days prior to the applicable redemption date. (C) Priority of Redeml2tion. Whenever provision is made in this Agreement for the redemption of less than all of the Bonds, the Fiscal Agent shall select the Bonds to be redeemed from among the Bonds, in any manner which the Fiscal Agent in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 portions and such portions shall be treated as separate Bonds which may be separately redeemed. (D) Purchase of Bonds in lieu of Redeml2fion. In lieu of redemption under Section 2.03(A) above, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase prior to the selection of Bonds for redemption, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase. (E) Redeml2tion Procedure by Fiscal AL-ent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories and to one or more Information Services, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books in the Principal Office of the Fiscal Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. Such notice shall state the redemption date and the redemption price and, ff less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and Bond number of each Bond to be redeemed or shall state that an Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that au of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. Notwithstanding the preceding two paragraphs, so long as the JPA is the sole Owner of the Bonds, no notice of redemption need be given pursuant to this Section 2.03(E). Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, of the Bonds being redeemed with the proceeds of such check or other transfer. Upon surrender of Bonds redeemed in part only, the Authority shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the Authority, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds. (F) Effect of Redeml2tion. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the Bonds so 12 called for redemption shall have been deposited in the Bond Fund, such Bonds so called shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and no interest shall accrue thereon on or after the redemption date specified in such notice. Section 2.04. Form of Bonds. The Bonds, the form of Fiscal Agent's certificate of authentication and the form of assignment, to appear thereon, shall be substantially in the forms, respectively, set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement, the Resolution and the Act. Section 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the Authority by the facsimile signatures of its Chairperson and Secretary who are in office on the date of adoption of this Agreement or at any time thereafter, and the seal of the Authority shall be impressed, imprinted or reproduced by facsimile signature thereon. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds to the Owner, such signature shall nevertheless be as effective as ff the officer had remained in office until the delivery of the Bonds to the Owner. Any Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such Bond shall be the proper officers of the Authority although at the nominal date of such Bond any such person shall not have been such officer of the Authority. Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A executed manually and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered hereunder have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Agreement. Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the Authority. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate principal amount. No transfers of Bonds shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for redemption. Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such exchange shall be paid by the Authority. The Fiscal Agent shall collect from the Owner requesting such exchange any tax or other governmental charge required to be paid with respect to such exchange. 13 No exchanges of Bonds shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has.been selected for redemption. Section 2.08. Bond Register. The Fiscal Agent will keep or cause to be kept, at its Principal Office sufficient books for the registration and transfer of the Bonds which books shall show the series number, date, amount, rate of interest and last known Owner of each Bond and shall at all times be open to inspection by the Authority during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided. The Authority and the Fiscal Agent will treat the Owner of any Bond whose name appears on the Bond register as the absolute Owner of such Bond for any and all purposes, and the Authority and the Fiscal Agent shall not be affected by any notice to the contrary. The Authority and the Fiscal Agent may rely on the address of the Bondowner as it appears in the Bond register for any and all purposes. Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the Authority, and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Bond shall be executed by the Authority upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder. Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled by it and destroyed by the Fiscal Agent. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, ff such evidence be satisfactory to it and indemnity for the Authority and the Fiscal Agent satisfactory to the Fiscal Agent shall be given, the Authority, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Authority may require payment of a sum not exceeding the actual cost of preparing each new Bond delivered under this Section and of the expenses which may be incurred by the Authority and the Fiscal Agent for the preparation, execution, authentication and delivery. Any Bond delivered under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement. Section 2.11. Limited Obligation. AR obligations of the Authority under this Agreement and the Bonds shall be special obligations of the Authority, payable solely from the Special Tax 14 Revenues and the funds pledged therefore hereunder. Neither the faith and credit nor the taxing power of the Authority (except to the limited extent set forth herein) or the State of Calffomia or any political subdivision thereof is pledged to the payment of the Bonds. Section 2.12. No Acceleration. The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section shall in any way prohibit the prepayment or redemption of Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of this Agreement under Section 9.03 hereof. 15 ARTICLE III ISSUANCE OF BONDS Section 3.01. Issuance and Delivery of Bonds. At any time after the execution of this Agreement, the Authority may issue the Bonds for the District in the aggregate principal amount set forth in Section 2.01 and deliver the Bonds to the Original Purchaser. The Authorized Officers of the Authority are hereby authorized and directed to deliver any and an documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of the Bonds and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser. Section 3.02. Application of Proceeds of Sale of Bonds. The proceeds of the purchase of the Bonds by the Original Purchaser shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date as follows (for record keeping purposes, the Fiscal Agent may establish such accounts as may be necessary to reflect such (A) Deposit in the Bond Fund $ (being an amount equal to the accrued interest on the Bonds paid on the Closing Date by the Original Purchaser). (an amount equal to the initial Reserve transfer of proceeds): (B) Deposit in the Reserve Fund $ Requirement). (C)Deposit in the Costs of Issuance Fund an amount equal to $ (D)Deposit in the Improvement Fund an amount equal to $ (E)Deposit in the Capitalized Interest Account an amount equal to $ (F)Transfer to the Treasurer for deposit by the Treasurer in the Administrative Expense Fund an amount equal to $ Section 3.03. Improvement Fund. (A) Establishment of Improvement Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds, Improvement Fund, to the credit of which deposits shall be made as required by clause (D) of Section 3.02, Section 3.03(C), Section 3.06(B), Section 4.02(C) and Section 4.03(C) or (C). Moneys in the Improvement Fund shall be held by the Fiscal Agent for the benefit of the Authority, shall be disbursed, except as otherwise provided in subsection (D) of this Section, for the payment or reimbursement of costs of the Project or Costs of Issuance. (B)Procedure for Disbursement. Disbursements from the Improvement Fund shall be made by theFiscal Agent upon receipt of an Officer's Certificate which shall: (i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made, that the disbursement is a proper expenditure from the 16 Improvement Fund and the person to which the disbursement is to be paid along with such person's address; and (ii) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting disbursement. (C) Investment. Moneys in the Improvement Fund shall be invested in accordance with Section 6.01. Interest earnings and profits from the investment of amounts in the Improvement Fund shall be retained by the Fiscal Agent in the Improvement Fund, to be used for the purposes of such fund. (D) Closing of Fund. Upon the filing of an Officer's Certificate stating that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, or t at construction of the Project effectively has been abandoned, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund for application to (i) if the amount to be so transferred is equal to or in excess of $25,000, the redemption of the Bonds pursuant to Section 2.03(A)(iii) on the next Interest Payment Date for which notice of redemption can timely be given under Section 2.03(E) said transfer to be made in an amount equal to an authorized denomination of the Bonds, or (ii) if the amount to be so transferred is less than $25,000, and any amount in excess of an authorized denomination of the Bonds that would otherwise have been transferred under the preceding clause (i), the payment of scheduled debt service on the Bonds in accordance with Section 4.02. Following such transfer, the Improvement Fund shall be closed. Section 3.04. Special Tax Fund. (A) Establishment of S12ecial Tax Fund. There is hereby established as a separate fund to be held by the Treasurer, the Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds, Special Tax Fund, to the credit of which the Authority shall deposit, immediately upon receipt, all Special Tax Revenues received by the Authority and any amounts required by Section 3.05 (B) and 4.02 (E) to be deposited therein. Moneys in the Special Tax Fund shall be held in trust by the Authority for the benefit of the Authority and the Owners of the Bonds, shall be disbursed as provided below and, pending and disbursement, shall be subject to a hen in favor of the Owners of the Bonds. (B)Disbursements. (i) Proceeds of General Levies. From time to time as needed to pay the obligations of the District, but no later than five (5) Business Days before each Interest Payment Date, the Treasurer shall withdraw from the Special Tax Fund and (except as provided in clause 3.04(B)(ii) below) transfer (a) to the Reserve Fund an amount, taking into account amounts then on deposit in the Reserve Fund, such that the amount in the Reserve Fund equals the Reserve Requirement, and (b) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any expected transfers from the Capitalized Interest Account, and the Reserve Fund to the Bond Fund pursuant to Sections 4.02(B)(ii), and 4.03(C)(ii) and (G), such that the amount in the Bond Fund equals the principal, premium, if any, and interest due on the Bonds on the next two Interest Payment Dates with respect to Special Tax Revenues received during the period from September 1 through the last day of February in any Fiscal Year, and on the next Interest Payment Date with respect to Special Tax Revenues received during the period from March 1 through August 31 in any year; provided that no such transfer shall exceed the amount then available to be transferred from the Special Tax Fund. All other amounts then in the Special Tax Fund shall, immediately following the foregoing transfers, be deposited by the Treasurer in the Administrative Expense Fund. 17 (ii) Prepayments of Special Taxes. Notwithstanding the foregoing, as soon as possible after the receipt by the Authority of any Special Tax Revenues constituting prepayments of Special Taxes, but no later than ten (10) Business Days after such receipt, the Treasurer shall withdraw such amounts from the Special Tax Fund and transfer such amounts to the Fiscal Agent for deposit by the Fiscal Agent to the Special Tax Prepayments Account of the Bond Fund for use in redeeming Bonds on the next date for which notice of redemption can timely be given under Section 2.03(A)(i) pursuant to Section 2.03(E). (C) Investment. Moneys in the Special Tax Fund shall be invested in accordance with Section 6.01. Interest earnings and profits resulting from such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes thereof. Section 3.05. Administrative Expense Fund. (A) Establishment of Administrative Expense Fund. There is hereby established as a separate fund to be held by the Treasurer, the Community Facflities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds, Administrative Expense Fund, to the credit of which deposits shall be made as required by Sections 3.02(F) and 3.04(B). Moneys in the Administrative Expense Fund shall be held in trust by the Treasurer for the benefit of the Authority, and shall be disbursed as provided below. (B) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by the Treasurer and paid to the Authority or its order upon receipt by the Treasurer of an Officer's Certificate stating the amount to be withdraw, that such amount is to be used to pay an Administrative Expense, and the nature of such Administrative Expense. Annually, on the last day of each Fiscal Year, commencing with the Fiscal Year ending June 30, 1997, the Treasurer shall withdraw any amounts then remaining in the Administrative Expense Fund that have not been allocated to pay Administrative Expenses incurred but not yet paid, and which are not otherwise encumbered and transfer such amounts to the Special Tax Fund. (C) Investment. Moneys in the Administrative Expense Fund shall be invested in accordance with Section 6.01. Interest earnings and profits resulting from said investment shall be retained by the Treasurer in the Administrative Expense Fund to be used for the purposes of such fund. Section 3.06. Costs of Issuance Fund. (A) Establishment of Costs of Issuance Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds, Costs of Issuance Fund, to the credit of which a deposit shall be made as required by clause (C) of Section 3.02. Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance. (B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by the Treasurer and delivered to the Fiscal Agent concurrently with the delivery of the Bonds. The Fiscal Agent shall pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition, or upon 18 receipt of an Officer's Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent shall maintain the Cost of Issuance Fund for a period of 180 days from the date of delivery of the Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Improvement Fund. (C) Investment. Moneys in the Cost of Issuance Fund shall be invested in accordance with Section 6.01. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the Cost of Issuance Fund to be used for the purposes of such fund. Section 3.07. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the completion of the acquisition of the Project or upon the performance by any person of his obligation with respect to the Project. 19 ARTICLE IV SPECIAL TAX REVENUES; BOND FUND AND RESERVE FUND Section 4.01. Pledge of Special Tax Revenues. The Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Special Tax Revenues and all moneys deposited in the Bond Fund (including the Capitalized Interest Account and the Special Tax Prepayments Account therein), the Reserve Fund and, until disbursed as provided herein, in the Special Tax Fund. The Special Tax Revenues and all moneys deposited into said funds (except as otherwise provided herein) are hereby dedicated to the payment of the principal of, and interest and any premium on, the Bonds as provided herein and in the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with Section 9.03. Amounts in the Administrative Expense Fund, the Costs of Issuance Fund and the Improvement Fund are not pledged to the repayment of the Bonds. The facilities financed with the proceeds of the Bonds are not in any way pledged to pay the debt service on the Bonds. Any proceeds of condemnation or destruction of any facilities financed with the proceeds of the Bonds are not pledged to pay the debt service on the Bonds and are free and clear of any hen or obligation imposed hereunder. Section 4.02. Bond Fund. (A) Establishment of Bond Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds, Bond Fund to the credit of which deposits shall be made as required by clause (A) of Section 3.02, Section 3.03 (D), Section 3.04(B)(i), Section 4.03 and any other amounts required to be deposited therein by this Agreement or the Act, and within said fund a Special Tax Prepayments Account to the credit of which deposits shall be made as required by Section 3.04(B)(ii). There is also hereby established as a separate account to be held by the Fiscal Agent, the Capitalized Interest Account, to the credit of which deposits shall be made as required by clause (E) of Section 3.02. Moneys in the Bond Fund and the accounts therein shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. (B)Disbursements. (i) Bond Fund Disbursements. On each Interest Payment Date, and following any transfers required pursuant to Section 4.02(B)(ii) and 4.02(B)(iii) below and Sections 3.03(D), 3.04(B)(i) and (ii), and 4.03(C), (E), (F) and (G) in connection with such Interest Payment Date, the Fiscal Agent shall withdraw from the Bond Fund and pay to the Owners of the Bonds the principal of, and interest and any premium, then due and payable on the Bonds, including any amounts due on the Bonds by reason of the sinking payments set forth in Sections 2.03(A)(ii) or a redemption of the Bonds required by Sections 2.03(A)(i) or (iii). Notwithstanding the foregoing, amounts in the Bond Fund as a result of a transfer pursuant to Section 3.03(D)(ii) shall be used to pay the principal of and interest on the Bonds prior to the use of any other amounts in the Bond Fund for such purpose. 20 In the event that amounts in the Bond Fund are insufficient for the purpose set forth in the preceding paragraph, the Fiscal Agent shall withdraw from the Reserve Fund to the extent of any funds therein amounts to cover the amount of such Bond Fund insufficiency. Amounts so withdrawn from the Reserve Fund shall be deposited in the Bond Fund. If, after the foregoing transfers, there are insufficient funds in the Bond Fund to make the payments provided for in the first sentence of the first paragraph of this Section 4.02(B)(i), the Fiscal Agent shall apply the avaflable funds first to the payment of interest on the Bonds, then to the payment of principal due on the Bonds other than by reason of sinking payments, and then to payment of principal due on the Bonds by reason of sinking payments. Any sinking payment not made as scheduled shall be added to the sinking payment to be made on the next sinking payment date. (ii) Capitalized Interest Account Disbursements. On or before each Interest Payment Date, the Fiscal Agent shall withdraw from the Capitalized Interest Account and transfer to the Bond Fund, the following amounts: Date Amount February 28, 1997 $ August 31, 1997 $ February 28, 1998 AU remaining amounts on deposit in the Capitalized Interest Account (iii) S12ecial Tax Prep!iyments Account. Moneys in the Special Tax Prepayments Account shall be transferred by the Treasurer to the Bond Fund as provided in Section 3.04(B)(ii) hereof, to be used for the redemption of Bonds on the next date for which notice of redemption of Bonds can timely be given under Section 2.03(A)(i), and notice to the Fiscal Agent can timely be given under Section 2.03(B), and shall be used to redeem Bonds on the redemption date selected in accordance with Section 2.03. (C) Investment. Moneys in the Bond Fund, the Capitalized Interest Account and the Special Tax Prepayments Account shall be invested in accordance with Section 6.01. Interest earnings and profits resulting from investment of amounts in the Bond Fund and the Special Tax Prepayments Account shall be retained in the Bond Fund and the Special Tax Prepayments Account, respectively, to be used for the purposes of such fund and account, as applicable. Interest earnings and profits resulting from investment of amounts in the Capitalized Interest Account shall be transferred on each Interest Payment Date, or on any other date at the written request of the Treasurer, to the Improvement Fund. (D) State Rel2or"n . If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bonds, or ff funds are withdrawn from the Reserve Fund to pay principal and/or interest on the Bonds, the Fiscal Agent shall notify the Authority and the Treasurer in writing of such failure or withdrawal, and the Treasurer shall notify the California Debt Advisory Commission of such failure or withdrawal within 10 days of the failure to make such payment or the date of such withdrawal. (E) Excess. On each Interest Payment Date, any excess moneys remaining in the Bond Fund following the payment of debt service on the Bonds on such Interest Payment Date, shall be transferred to the Special Tax Fund. 21 Section 4.03. Reserve Fund. (A) Establishment of Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds, Reserve Fund to the credit of which a deposit shall be made as required by clause (B) of Section 3.02, which deposit is equal to the initial Reserve Requirement, and deposits shall be made as provided in Section 3.04(B). Moneys in the Reserve Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of principal of, and interest and any premium on, the Bonds and shall be subject to a hen in favor of the Owners of the Bonds. (B) Use of Reserve Fund. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the provisions of this Section, for the purpose of redeen-ting Bonds from the Bond Fund. (C) Transfer of Excess of Reserve Requirement. Whenever, on or before any Interest Payment Date, or on any other date at the request of the Treasurer, the amount in the Reserve Fund exceeds the Reserve Requirement, the Fiscal Agent shall provide written notice to the Treasurer of the amount of the excess and shall transfer an amount equal to the excess from the Reserve Fund to (i) so long as the Improvement Fund has not theretofore been closed pursuant to Section 3.03(D), to the Improvement Fund, or (ii) if the Improvement Fund has been closed, to the Bond Fund to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with Section 4.02. (D) Transfer for Rebate Pug2oses and Foreclosure Costs. Amounts in the Reserve Fund shall be withdrawn, at the written request of the Treasurer, for purposes of (i) making payment to the federal government to comply with Section 6.02 and/or (ii) to pay costs of foreclosure of delinquent Special Taxes as provided in clause (C) of the third paragraph of Section 5.14. (E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall transfer the amount in the Reserve Fund to the Bond Fund to be applied, on the next succeeding Interest Payment Date to the payment and redemption, in accordance with Section 4.02 or 2.03, as applicable, of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Bond Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred to the Authority to be used for any lawful purpose of the Authority. Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to this Section 4.03(E) until after (i) the calculation, pursuant to Section 6.02, of any amounts due to the federal government following payment of the Bonds and withdrawal of any such amount under Section 4.03(D) for purposes of making such payment to the federal government, and (ii) payment of any fees and expenses due to the Fiscal Agent. (F) Transfer U12on S12ecial Tax Prel2ayment. Whenever Special Taxes are prepaid and Bonds are to be redeemed with the proceeds of such prepayment pursuant to Section 2.03(A)(i) and 4.02(B)(iii), a proportionate amount in the Reserve Fund (determined on the basis of the principal of Bonds to be redeemed and the then outstanding principal of the Bonds) shall be 22 transferred on the Business Day prior to the redemption date by the Fiscal Agent to the Bond Fund to be applied to the redemption of the Bonds pursuant to Section 2.03(A)(i). (G) Investment. Moneys in the Reserve Fund shall be invested in accordance with Section 6.01. On or before each Interest Payment Date, interest earnings and profits resulting fromsaid investment shall be transferred by the Fiscal Agent to (i) so long as the Improvement Fundhas not theretofore been closed pursuant to Section 3.03(D), to the Improvement Fund, or (ii)ff the Improvement Fund has been closed, the Bond Fund, to be used by the Fiscal Agent for the purposes of such fund, but any such transfer shall be made only to the extent that following such transfer the amount on deposit in the Reserve Fund equals the then Reserve Requirement. 23 ARTICLEV OTHER COVENANTS OF THE AUTHORM Section 5.01. Punctual Payment. The Authority will punctually pay or cause to be paid the principal of and interest and any premium on, the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds. Section 5.02. Limited Obligation. The Bonds are limited obligations of the Authority on behalf of the District and are payable solely from and secured solely by the Special Tax Revenues and the amounts in the Bond Fund, the Reserve Fund and the Special Tax Fund created hereunder. Section 5.03. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the Authority shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the Authority, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of an of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. Section 5.04. Against Encumbrances. The Authority will not encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and hen herein created for the benefit of the Bonds, except as permitted by this Agreement. Section 5.05. Books and Records. The Authority will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Authority, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund and the Special Tax Fund and to the Special Tax Revenues. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Fiscal Agent and the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing. Section 5.06. Protection of Security and Rights of Owners. The Authority will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of an persons. From and after the delivery of any of the Bonds by the Authority, the Bonds shall be incontestable by the Authority. Section 5.07. Compliance with Law, Completion of Project. The Authority will comply with all applicable provisions of the Act and law in completing the financing of the Project. Section 5.08. Private Activity Bond Limitation. The Authority shall assure that the proceeds of the Bonds are not so used as to cause the JPA Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code. 24 Section 5.09. Federal Guarantee Prohibition. The Authority shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the JPA Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code. Section 5.10. Collection of Special Tax Revenues. The Authority shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including without @tation, the enforcement of delinquent Special Taxes. On or about July 1 of each year, the Fiscal Agent shall provide the Treasurer with a notice stating the amount then on deposit in the Bond Fund. The receipt of such notice by the Treasurer shall in no way affect the obligations of the Treasurer under the following three paragraphs. Upon receipt of such notice, the Treasurer shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. In computing the amount of Special Taxes to be levied, the Treasurer shall take into account funds available in the Bond Fund, the Special Tax Fund and the Capitalized Interest Account to make the payment of debt service on the Bonds due on the Interest Payment Dates occurring in the next calendar year, along with any transfers of investment earnings pursuant to Sections 4.03(C) and 3.03(C) to the Bond Fund expected to occur on such Interest Payment Date. The Treasurer shall effect the levy of the Special Taxes from time to time during each Fiscal Year in accordance with the Ordinance Levying Taxes. Specifically, the Treasurer shall compute the amount of Special Taxes to be so levied each Fiscal Year before the final date on which the Auditor will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the next secured or unsecured, as applicable, real property tax roll. Upon the completion of the computation of the amounts of the levy, the Treasurer shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Special Taxes so levied shall be payable and be collected in the same manner and at the same time and in the same installment as the taxes on property levied on the tax roU are payable, and have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the taxes levied on the tax roll. In the event that the Treasurer determines to levy all or a portion of the Special Taxes by means of direct biring of the property owners within the District the Treasurer shall, not less than forty-five (45) days prior to each Interest Payment Date, send bills to the owners of interests in the real property located within the District subject to the levy of the Special Taxes for Special Taxes in an aggregate amount necessary to meet the financial obligations of the District due on the next Interest Payment Date, said bills to specify that the amounts so levied shall be due and payable not less than thirty (30) days prior to such Interest Payment Date and shall be delinquent if not paid when due. In any event, the Authority shall fix and levy the amount of Special Taxes within the District required for the timely payment of principal of and interest on any outstanding Bonds of the Authority becoming due and payable, including any necessary replenishment or expenditure of the Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the Administrative Expenses, and shall take into account any prepayments of Special Taxes theretofore received by the Authority. The Special Taxes so levied shall not exceed the maximum amounts as provided in the Rate and Method of Apportionment. The Treasurer is hereby authorized to employ consultants to assist in computing the levy of the Special Taxes hereunder and any reconciliation of amounts levied to amounts received. The fees and expenses of such consultants and the costs and expenses of the Treasurer 25 (including a charge for City staff time) in conducting its duties hereunder shall be an Administrative Expense hereunder. Section 5.11. Further Assurances. The Authority will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in this Agreement. Section 5.12. No Arbitrage. The Authority shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, ff such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the JPA Bonds would have caused the JPA Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Section 5.13. Maintenance of Tax-Exemption. The Authority shall take all actions necessary to assure the exclusion of interest on the JPA Bonds from the gross income of the owners of the JPA Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the JPA Bonds. Section 5.14. Covenant to Foreclose. The Authority shall use its best efforts to determine, on or about July lst of each year, whether or not all Special Taxes levied in the prior fiscal year have been received by the Authority; and, consequently, whether any delinquencies in payment of Special Taxes exist. Pursuant to Section 53356.1 of the Act, the Authority hereby covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced within 150 days following the date of notice to the Authority of a delinquency (or knowledge of a delinquency by reason of the determination pursuant to the preceding paragraph), and thereafter diligently prosecute, an action in the superior court to foreclose the hen of any Special Tax or instalhnent thereof not paid when due. The Treasurer shall notify the City Attorney, as general counsel to the Authority, of any such delinquency of which it is aware, and the City Attorney shall commence, or cause to be commenced, such proceedings. Notwithstanding any provision of the Act or other law of the State to the contrary, in connection with any foreclosure related to delinquent Special Taxes: (A) The Authority, or the Fiscal Agent, is hereby expressly authorized to credit bid at any foreclosure sale, without any requirement that funds be placed in the Bond Fund or otherwise be set aside in the amount so credit bid, in the amount specified in Section 53356.5 of the Act or such lease amount as determined under clause (B) below or otherwise under Section 53356.6 of the Act. (B) The Authority may permit, in its sole and absolute discretion, property with delinquent Special Tax payments to be sold for less than the amount specified in Section 53356.5 of the Act, if it determines that such sale is in the interests of the Bondowners. The Owners, by their acceptance of the Bonds, hereby consent to such sale for such lesser amounts (as such consent is described in Section 53356.6 of the Act), and hereby release the Authority, its officers and its agents from any liability in connection therewith. (C) The Authority is hereby expressly authorized to use amounts in the Reserve Fund to pay costs of foreclosure of delinquent Special Taxes. Upon receipt of any payment in respect of any such delinquency, the Authority should direct the Fiscal 26 Agent to use the available moneys first to replenish any deficiency in the Reserve Fund and then to make a deposit to the Bond Fund. Section 5.15. No Additional Bonds. The Authority shall not issue any additional bonds secured by a pledge of the Special Taxes or any amounts in any funds or amounts established hereunder. Section 5.16. Public Access to Project. The Authority shall provide or cause to be provided access to members of the general public to an portions of the Project financed with the proceeds of the Bonds that constitute physical facilities. Said access shall not grant priority to any one person over that of another person, and shall be subject to any applicable Authority ordinance, rule or regulation. Section 5.17. Continuing Disclosure. (a) The Authority hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Indenture, failure of the Authority to comply with the Continuing Disclosure Agreement shall not be considered a default by the Authority on the Bonds or of any other provision of this Agreement; however, at the request of any Participating Underwriter or the holders of at least 25% aggregate principal amount of Outstanding Bonds to, and in either case upon receipt of satisfactory indemnity by, the Fiscal Agent, the Fiscal Agent shall, or in any event the Participating Underwriter or any Bondholder may, take such actions as may be necessary and appropriate to compel performance by the Authority of its obligations under the Continuing Disclosure Agreement, including seeking mandate or specific performance by court order. (b) Not later than October 30 of each year, commencing October 30, 1997 and until the October 30 following the final maturity of the Bonds, the Treasurer shall supply the following information to the California Debt and Investment Advisory Commission ("CDIAC"): (a) the principal amount of Bonds outstanding, (b) the balance in the Reserve Fund, (c) the balance in the Capitalized Interest Account, (d) the number of parcels in the District which are delinquent with respect to their special tax payments, the amount that each parcel is delinquent, the length of time that each has been delinquent and when foreclosure was commenced for each delinquent parcel, (e) the balance in the Improvement Fund, and (f) the assessed value of all parcels in the District subject to the levy of the Special Taxes as shown on the most recent equalized roll. The Authority shall in no event be liable to any Bondowner or any other person or entity in connection with any error in any such information. (c) Until the final maturity of the Bonds, the Treasurer shall notify CDIAC by mail, postage prepaid, to the extent required by CDIAC, within 10 days of (i) any failure to pay principal and interest due on the Bonds on any scheduled payment date, or (ii) any withdrawal of funds from the Reserve Fund to pay principal or interest on the Bonds. (d) The provisions of Section 5.17(b) and (c) shall be amended to reflect any applicable change in Section 53359.5(b) or (c) of the Act, without any action by the Authority or the Fiscal Agent. Section 5.18. Special Taxes. (a) The Authority may consent to a reduction in the maximum Special Taxes that may be levied in the District, without any requirement for notice to or the consent of the Owners or the Fiscal Agent, so long as such taxes are reduced proportionately and the maximum Special Taxes shall at all times be able to be levied in an amount equal to at least 115% of maximum annual Debt Service in each year that the Bonds are Outstanding. 27 (b) In connection with any refunding of the Bonds, the Authority win in its sole and absolute discretion, consider the propriety of lowering Special Taxes in future years if such refunding results in a lower interest rate on the refunding bonds than was in effect on the Bonds prior to such refunding 28 ARTICLEVI TMENTS; DISPOSMON OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY Section 6.01. Deposit and Investment of Moneys in Funds. Moneys in any fund or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. The Officer's Certificate shall contain a certification to the Fiscal Agent that the investments being directed are Permitted Investments as required hereunder. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments described in clause (vi) of the definition thereof or in Federal Securities which by their terms mature prior to the date on which such moneys are required to be paid out hereunder. Moneys in any fund or account created or established by this Agreement and held by the Treasurer shall be invested by the Treasurer in any lawful investments that the Authority may make or in any Permitted Investment, which in any event by their terms mature prior to the date on which such moneys are required to be paid out hereunder. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts. Whenever in this Agreement any moneys are required to be transferred by the Authority to the Fiscal Agent, such transfer may be accomplished by transferring a like amount of Permitted Investments. The Fiscal Agent or the Treasurer may act as principal or agent in the acquisition or disposition of any investment. The Fiscal Agent or its affiliates may act as sponsor, agent manager or depository with regard to any Permitted Investment. Neither the Fiscal Agent nor the Treasurer shall incur any liability for losses arising from any investments made pursuant to this Section. Except as otherwise provided in the next sentence, the Authority shall direct or make investments hereunder such that all investments of amounts deposited in any fund or account created by or pursuant to this Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Agreement or the Code) at Fair Market Value. The Authority shall direct or make investments hereunder such that investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Code and (unless valuation is undertaken at least annually) investments in the Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Code). Investments in any and all funds and accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent or the Treasurer hereunder, provided that the Fiscal Agent or the Treasurer, as applicable, shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement. The Fiscal Agent shall sell at the highest price reasonably obtainable, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the ftmd or account to which such investment security is credited and neither the Fiscal Agent nor the Treasurer shall be liable 29 or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith. The Authority acknowledges that regulations of the Comptroller of the Currency grant the Authority the right to receive brokerage confirmations of security transactions to be effected by the Fiscal Agent hereunder as they occur. The Authority specifically waives the right to receive such notification to the extent permitted by applicable law and agrees that it will instead receive monthly cash transactions statements which include detail for the investment transactions effected by the Fiscal Agent hereunder; provided, however, that the Authority retains its rights to receive brokerage confirmation on any investment transaction requested by the Authority. Section 6.02. Rebate of Excess Investment Earnings to the United States. The Authority shall take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, ff any, to the federal government, to the extent that such section is applicable to the JPA Bonds. The Authority shall direct the Fiscal Agent to withdraw such amounts from the Reserve Fund pursuant to Section 4.03(D) as necessary to make any required rebate payments, and pay such amounts to the federal government as required by the Code and the Regulations. In the event of any shortfall in amounts available to make such payments under Section 4.03(D), the Treasurer shall make such payment from any amounts available in the Administrative Expense Fund or from any other available funds of the Authority. Any fees or expenses incurred by the Authority under or pursuant to this Section 6.02 shall be Administrative Expenses. In order to provide for the administration of this Section 6.02, the Treasurer may provide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the Treasurer may deem appropriate and in addition, and without limitation of the provisions of Sections 7.01 and 7.02, the Treasurer may rely conclusively upon and be fully protected from all liability in relying upon the opinions, determinations, calculations and advice of such agents, attorneys and consultants employed hereunder. Section 6.03. Limited Obligation. The Authority's obligations hereunder are limited obligations of the Authority on behalf of the District and are payable solely from and secured solely by the Special Tax Revenues and the amounts in the Special Tax Fund, the Bond Fund (including the Capitalized Interest Account therein) and the Reserve Fund created hereunder. Section 6.04. Liability of Authority. The Authority shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The Authority shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The Authority shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions covenants or agreements of the Fiscal Agent herein or of any of the documents executed by the Fiscal Agent in connection with the Bonds, or as to the existence of a default or event of default thereunder. In the absence of bad faith, the Authority, including the Treasurer, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Authority and conforming to the requirements of this Agreement. The Authority, including the Treasurer, shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. 30 No provision of this Agreement shall require the Authority to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Special Tax Revenues) in the performance of any of its obligations hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Authority may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Authority may consult with counsel, who may be the Authority Attorney, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Authority shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactory established, if disputed. Whenever in the administration of its duties under this Agreement the Authority shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Authority, be deemed to be conclusively proved and established by a certificate of the Fiscal Agent or other appropriate agent or consultant, and such certificate shall be full warrant to the Authority for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Authority may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 6.05. Employment of Agents by Authority. In order to perform its duties and obligations hereunder, the Authority and/or the Treasurer may employ such persons or entities as it deems necessary or advisable. The Authority shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities. 31 ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent. First Trust of California, National Association, at its corporate trust office in Los Angeles, California is hereby appointed Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section, shall be the successor to such Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. The Authority may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.01, combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent may at any time resign by giving written notice to the Authority and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the Authority shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective only upon acceptance of appointment by the successor Fiscal Agent. If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Fiscal Agent shall have given to the Authority written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent or any Bondowner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, ff any, as such court may deem proper, appoint a successor Fiscal Agent. Neither the Authority nor the Treasurer shall act as Fiscal Agent hereunder. Section 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the Authority, and the Fiscal Agent assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. 32 In the absence of bad faith, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement; but in the case of any such certificates or opinions by which any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement. Except as provided above in this paragraph, Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement, upon any resolution, order, notice, request, requisition, Officer's Certificate, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Fiscal Agent shall not be liable for any error of judgment made in good faith by a responsible officer unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, ff it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Fiscal Agent may become the owner of the Bonds with the same rights it would have ff it were not the Fiscal Agent. Section 7.03. Information. The Fiscal Agent shall provide to the Authority such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the Authority shall reasonably request, including but not limited to quarterly statements reporting funds held and transactions by the Fiscal Agent. The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Bond Fund, the Escrow Fund, the Improvement Fund, the Reserve Fund and the Costs of Issuance Fund. Such books of record and accounts shall upon reasonable prior notice at all times during business hours be subject to the inspection of the Authority and the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing. Section 7.04. Notice to Fiscal Agent The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, requisition, Officer's Certificate, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper 33 parties. The Fiscal Agent may consult with counsel, who may be counsel to the Authority, with regard to legal questions, and the opinion or advice of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Fiscal Agent shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorfly established, if disputed. Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the Authority, and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 7.05. Compensation, Indemnification. (A) The Authority shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Agreement, but the Fiscal Agent shall not have a lien therefor on any funds at any time held by it under this Agreement. The Authority further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful n-dsconduct. (B) The Authority shall pay to the Trustee the amounts, and indemnify the Trustee in the manner, provided in Section 8.05 of the Indenture. (C) The obligation of the Authority under this Section 7.05 shall survive resignation or removal of the Fiscal Agent under this Agreement, resignation or removal of the Trustee under the Indenture and payment of the Bonds and the JPA Bonds and discharge of this Agreement and the Indenture, but any monetary obligation of the Authority arising under this Section shall be limited solely to amounts on deposit in the Administrative Expense Fund. 34 ARTICLEVIIII MODIFICATIONORAMENDMENTOFTMSAGREEMENT Section 8.01. Amendments Permitted. This Agreement and the rights and obligations of the Authority and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.04. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the Authority to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the Authority of any pledge or lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), or reduce the percentage of Bonds required for the amendment hereof. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. This Agreement and the rights and obligations of the Authority and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes: (a) to add to the covenants and agreements of the Authority in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the Authority; (b) to make modifications not adversely affecting any outstanding series of Bonds of the Authority in any material respect; (c) to make such provisions for the purpose of curing any ambiguity, or of curing, coffecting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the Authority may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights of the Owners of the Bonds; and (d) to make such additions, deletions or modifications as may be necessary or desirable to assure the exclusion from gross income, for purposes of federal income taxation, of interest on the Bonds. Section 8.02. Owners' Meetings. The Authority may at any time call a meeting of the Owners. In such event the Authority is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof, and to fix and adopt rules and regulations for the conduct of said meeting. Section 8.03. Procedure for Amendment with Written Consent of Owners. The Authority and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.01, to take effect when and as provided in this Section. A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Fiscal Agent to each Owner of Bonds 35 Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided. Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 9.04. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the Authority shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the Authority and the Owners of all Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period. Section 8.04. Disqualified Bonds. Bonds owned or held for the account of the Authority, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VIII. Upon written request, the Authority shall specify to the Fiscal Agent those Bonds disqualified pursuant to this Section 8.04. Section 8.05. Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Agreement of the Authority and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments. The Authority may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the Authority, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the Authority may select and designate for that purpose, a suitable notation shall be made on such Bond. The Authority may 36 determine that new Bonds, so modified as in the opinion of the Authority is necessary to conform to such Owners' action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds. Section 8.07. Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. 37 ARTICLE IX A&SCELLANEOUS Section 9.01. Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the Authority, the Fiscal Agent and the Owners, any right, remedy, claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent. Notwithstanding the foregoing, the Trustee shall be a third party beneficiary of this Agreement, solely for the purposes of Section 7.05(B) hereof. Section 9.02. Successor is Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the Authority or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the Authority or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 9.03. Discharge of Agreement. The Authority shall have the option to pay and discharge the entire indebtedness on all or any portion of the Bonds Outstanding in any one or more of the following ways: (a) by well and truly paying or causing to be paid the principal of, and interest and any premium on, such Bonds Outstanding, as and when the same become due and payable; (b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in Sections 4.02 and 4.03 is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or (c) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal Securities in such amount as the Authority shall determine as confirmed by Bond Counsel or an independent certified public accountant will together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in Sections 4.02 and 4.03, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal interest and redemption premiums) at or before their respective maturity dates. If the Authority shall have taken any of the actions specified in (A), (B) or (C) above, and ff such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the Authority, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in this Agreement and all other obligations of the Authority under this Agreement with respect to such Bonds Outstanding shall cease and terminate. Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the foregoing, the obligations of the Authority to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, to pay all amounts owing to the Fiscal Agent pursuant to Section 7.05, and otherwise to assure that no action is taken or failed to be 38 taken ff such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, shall continue in any event. Upon compliance by the Authority with the foregoing with respect to all Bonds Outstanding, any funds held by the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent, which are not required for the purposes of the preceding paragraph, shall be paid over to the Authority and any Special Taxes thereafter received by the Authority shall not be remitted to the Fiscal Agent but shall be retained by the Authority to be used for any purpose permitted under the Act. Section 9.04. Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books. Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Authority or the Fiscal Agent in good faith and in accordance therewith. Section 9.05. Waiver of Personal Liability. No Boardmember, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 9.06. Notices to and Demands on Authority and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the Authority may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Authority with the Fiscal Agent) as follows: Old Town/Westside Community Facilities District Financing Authority c/o City of Temecula 43200 Business Park Drive P. 0. Box 9033 Temecula, California 92589-9033 Attention: Finance Director Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Authority to or on the Fiscal Agent may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Fiscal Agent with the Authority) as follows: 39 First Trust of California, National Association 550 South Hope Street, Suite 500 Los Angeles, California 90071 Attn:Corporate Trust Division Section 9.07. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The Authority hereby declares that it would have adopted this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Agreement may be held illegal, invalid or unenforceable. Section 9.08. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payments of such principal, interest and premium have become payable, if such moneys was held by the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the Authority as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Authority for the payment of the principal of, and interest and any premium on, such Bonds. Section 9.09. Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Section 9.10. Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Act as in effect on the Closing Date, the provision of the Act shall prevail over the conflicting provision of this Agreement. In such event the Fiscal Agent shall be provided an opinion of counsel specifying the modifications to this Agreement, and the Fiscal Agent shall incur no liability for its failure to comply with any requirement of the Act until it has been so notified. Section 9.11. Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes. Section 9.12. Payment on Business Day. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be taken pursuant to this Agreement is other than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required and no interest shall accrue for the period after such date. Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. 40 IN WITNESS WHEREOF, the Authority has caused this Agreement to be executed in its name and the Fiscal Agent has caused this Agreement to be executed in its name, all as of December 1, 1996. OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY, for and on behalf of OLD TOWN/WEST'SIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 1 (OLD TOWN AREA PUBLIC IMPROVEMENTS) By: Executive Director FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Fiscal Agent By: Authorized Signatory ATTEST: By: Authorized Signatory 30043-0 I:JI877 41 @Brr A FORMOFBOND No. $ UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 1 (OLD TOWN AREA PUBLIC IMPROVEMENTS) 1996 SPECIAL TAX BOND ESTRATE MATURITYDATE September 1, 2026 REGISTERED OWNEIL- PRINCIPAL AMOUNT: BOND DATE CUSIEP December . 1996 DOLLARS The Old Town/Westside Community Facilities District Financing Authority (the "Authority") for and on behalf of the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) (the "District"), for value received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be collected in the District or amounts in the funds and accounts held under the Agreement (as hereinafter defined), to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from the Bond Date shown above, or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 1997, at the interest rate set forth above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to the registered owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the principal corporate trust office of First Trust of California, National Association (the "Fiscal Agent"), or as otherwise provided in the Agreement. Interest on this Bond shall be paid by check of the Fiscal Agent mailed on each interest payment date to the registered owner hereof as of the close of business on the 15th day of the month preceding the month in which the interest payment date occurs (the "Record Date") at such registered owner's address as it appears on the registration books maintained by the Fiscal Agent, or upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to an account in the United States designated by such registered owner in such writtenrequest, or as otherwise provided in the Agreement. This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $ approved by the qualified electors of the District on April 23, 1996 pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311, et seq., of the California Government Code (the "Mello-Roos Act") for the purpose of financing public facilities Exhibit A Page 1 (the "Project"), and is one of the series of Bonds designated "Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds" (the "Bonds"). The creation of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the Board of Directors of the Authority of the Old Town/Westside Community Facilities District Financing Authority on June 11, 1996 (the "Resolution"), and the Fiscal Agent Agreement, dated as of December 1, 1996, between the Authority and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. The Resolution is adopted under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California. Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on this Bond are payable solely from the annual special tax authorized under the Mello- Roos Act to be collected within the District (the "Special Tax") and certain funds held under the Agreement. The Authority has covenanted in the Agreement to foreclosure the lien established under the Act in respect of delinquent Special Taxes. In the Agreement, the Bondowners, including the Owner of this Bond by reason of the acceptance of this Bond, consent to a credit bid by the Authority or the Fiscal Agent, without posting monies, at a foreclosure sale, to the sale of delinquent property at less than the amount specified in Section 53356.5 of the Act as determined by the Authority and to the use of moneys in the Reserve Fund to pay foreclosure costs. The Owner of this Bond expressly consents to the foregoing as embodied in Section 5.14 of the Agreement and, by acceptance of this Bond, grants its consent under Section 53356.6 of the Act to foreclosure sales in accordance with said Section of the Agreement. Interest on this Bond shall be payable from the interest payment date next preceding the date of authentication hereof, unless (i) it is authenticated on an interest payment date, in which event it shall bear interest for such interest payment date, or (ii) such date of authentication is after a Record Date but on or prior to an interest payment date, in which event interest will be payable from such interest payment date, or (iii) such date of authentication is prior to the first Record Date, in which event interest will be payable from the Bond Date shown above; provided however, that ff at the time of authentication of this Bond, interest is in default hereon, this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment hereon. Any tax for the payment hereof shall be limited to the Special Tax, except to the extent that provision for payment has been made by the Old Town/Westside Community Facilities District Financing Authority, as may be permitted by law. The Bonds do not constitute obligations of the Old Town/Westside Community Facilities District Financing Authority for which said Authority is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. The Bonds may be redeemed prior to maturity, in whole or in part, at the option of the Authority on September 1, 2001 or an any interest payment date thereafter, upon at least 30 days, but not more than 60 days, prior written notice mailed to the registered owners at the addresses appearing on the bond registry books, at the following redemption prices, expressed as a percentage of par value, together with accrued interest to the date of redemption: Redeml2tion Dates Redeml2tion Prices September 1, 2001 or March 1, 2002 102.0% September 1, 2002 or March 1, 2003 101.0 September 1, 2003 and any Interest Payment 100.0 Date thereafter Exhibit A Page 2 The Bonds are subject to mandatory sinking payment redemption in part on September _, and on each September'l thereafter to maturity, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking payments as follows: Redemption Redemption Date Sinking Date Sinking (Sel2tember ]I @ent (Sel2tember 11 Pqyment 1997 2012 1998 2013 1999 2014 2000 2015 2001 2016 2002 2017 2003 2018 2004 2019 2005 2020 2006 2021 2007 2022 2008 2023 2009 2024 2010 2025 2011 2026 (maturity) The Bonds are subject to mandatory redemption on any Interest Payment Date prior to maturity, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from certain amounts transferred from the Improvement Fund to the Bond Fund under the Agreement. Notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner, to the extent and subject to the provisions of the Agreement. The Bonds are issuable as fully registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges, ff any, provided in the Agreement, Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate principal amount and maturity of Bonds of other authorized denominations. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its n-tanual signature upon the certificate of authentication endorsed hereon. No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such owner's order. The Fiscal Agent shall require the registered owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for redemption. The Agreement and the rights and obligations of the Authority thereunder may be modified or amended as set forth therein. Exhibit A Page 3 The Bonds are not general obligations of the Authority, but are limited obligations payable solely from the revenues and funds pledged therefor under the Agreement. Neither the faith and credit of the Authority or the State of California or any political subdivision thereof is pledged to the payment of the Bonds. This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and manually signed by the Fiscal Agent. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond does not exceed any debt limit prescribed by the laws or Constitution of the State of California. IN WITNESS WHEREOF, Old Town/Westside Community Facilities District Financing Authority has caused this Bond to be dated December 1, 1996, to be signed by the facsimile signature of its Chairperson and countersigned by the facsimile signature of its Secretary. OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY BY: Chairperson [S E A LI ATTEST: Secretar y Exhibit A Page 4 FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the Resolution and the Agreement which has been authenticated on FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Fiscal Agent By: Authorized Signatory ASSIGNMENT FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer unto (Name, address and Tax identification Number of Assignee) the within-mentioned registered Bond and hereby irrevocably constitutes and appoint(s) attorney, to transfer the same on the books of the Fiscal Agent with full power of substitution in the premises. Dated: Signatures Guaranteed: Note: Signature(s) must be guaranteed by an eligible Note: The signatures on this Assignment must guarantor. correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. Exhibit A Page 5 30043-01 JHHW:PJT:cra 10/21/96 J2368 11/04/96 BOND PURCHASE AGREEMENT by and between the OLD TOWN/WESTSIDE COMMUNITY FACILrnES DISTRICR FINANCING AUT'HORITY and the OLDTOWN/WEST'SIDEIWROVEMENTAUTHORM Dated as of December 1, 1996 Relating to: Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) and Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. I (Old Town Area Public Improvements) 1996 Special Tax Bonds BOND PURCHASE AGREEMENT THIS BOND PURCHASE AGREEMENT (this "Bond Purchase Agreement"), dated as of December 1, 1996, is by and between the OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY, a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), and the OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the "Local Agency"). WITNESSETH: WHEREAS, the Authority is a joint exercise of powers authority duly organized and existing under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act"), and is authorized pursuant to Article 4 of the Act (the "Bond Law") to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations to provide financing or refinancing for public capital improvements of local agencies within the State of California; and WHEREAS, the Local Agency has authorized the issuance of its $ principal amount of Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds (the "Local Agency Bonds"), under the Fiscal Agent Agreement, dated as of December 1, 1996 (the "Fiscal Agent Agreement"), by and between the Local Agency and First Trust of California, National Association, as fiscal agent (the "Fiscal Agent"), for the purpose of financing public improvements in the City of Temecula, California; and WHEREAS, the Authority has authorized the issuance of its bonds, designated as the Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area), in the aggregate principal amount of $ (the "Authority Bonds"), to be issued under an Indenture of Trust, dated as of December 1, 1996 (the "Indenture"), by and between the Authority and First Trust of California, National Association, as trustee (the "Trustee"), and under the Bond Law for the purpose of providing the funds required to acquire the Local Agency Bonds; and WHEREAS, the Authority and the Local Agency have found and determined that the sale of the Local Agency Bonds to the Authority will result in substantial public benefits to the Local Agency; and WHEREAS, the Authority and the Local Agency desire to enter into this Bond Purchase Agreement providing for the purchase and sale of the Local Agency Bonds by the Local Agency to the Authority and containing the other agreements herein set forth. NOW, THEREFORE, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Authority and the Local Agency agree as follows: 1. All terms not herein defined shall have the meanings given such terms in the Indenture. 2. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Local Agency hereby commits to sell to the Authority and hereby sells to the Authority, and the Authority hereby commits to purchase from the Local Agency and does hereby purchase from the Local Agency, with the proceeds of the Authority Bonds deposited in the Program Fund, all of the Local Agency Bonds at a purchase price of $ . The Local Agency Bonds will be in the principal amounts, be subject to sinking fund redemption, bear the annual interest rates and be sold at the purchase prices set forth in Exhibit A attached hereto and hereby made a part hereof. 3.The Local Agency confirms that there are no substantial conditions precedent to the issuanceby the Local Agency and to the sale (as provided herein) and the delivery to the Authority ofthe Local Agency Bonds. 4.The Local Agency hereby specifies December _, 1996, as the date of closing of the purchase of the Local Agency Bonds hereunder (the "Closing Date"). The Local Agency Bonds shall be registered in the name of the Trustee, as assignee of the Authority and in its capacity as trustee for the Authority Bonds pursuant to the Indenture. On the Closing Date, the Local Agency shall issue and deliver the Local Agency Bonds to the Trustee upon payment by the Trustee, on behalf of the Authority, to the Local Agency or its order of the purchase price of the Local Agency Bonds in the aggregate amount of $ . Said purchase price shall be paid by the Trustee, on behalf of the Authority, solely from the proceeds of sale of the Authority Bonds pursuant to the terms of the Indenture. 5. The Local Agency Bonds shall be as described in the Official Statement dated December _, 1996, relating to the Authority Bonds (the "Official Statement"), and shall be issued and secured under the provisions of the Fiscal Agent Agreement, approved by a Resolution adopted by the Local Agency on June 11, 1996, as confirmed by the Resolution adopted by the Local Agency on November . 1996 (collectively, the "Resolution"), and related proceedings authorizing the issuance of the Local Agency Bonds (the "Proceedings"). The Local Agency Bonds and interest thereon will be payable from annual special taxes levied and collected in accordance with the Fiscal Agent Agreement, the Resolution and the Proceedings. The interest rate on the Local Agency Bonds shall not exceed 12% per annum and shall be as set forth in the Fiscal Agent Agreement, the costs of issuance of the Authority Bonds and the Local Agency Bonds shall be as specified in the Fiscal Agent Agreement, the required reserves for the Local Agency Bonds shall be as specified in the Fiscal Agent Agreement and the procedures to be used in the case of default shall be as specified in the Fiscal Agent Agreement and the Indenture. 6. Any action under this Bond Purchase Agreement taken by the Authority, including payment for and acceptance of the Local Agency Bonds, and delivery and execution of any receipt for the Local Agency Bonds and any other instruments in connection with the closing on the Closing Date, shall be valid and sufficient for all purposes and binding upon the Authority, provided that any such action shall not impose any obligation or liability upon the Authority other than as may arise as expressly set forth in this Bond Purchase Agreement. 7. It is a condition to the Local Agency's sale of the Local Agency Bonds and the obligation of the Local Agency to deliver the Local Agency Bonds to the Authority, and to the Authority's purchase of the Local Agency Bonds and the obligations of the Authority to accept delivery of and to pay for the Local Agency Bonds, that the entire aggregate principal amount of the Local Agency Bonds authorized to be issued by the Fiscal Agent Agreement shall be delivered by the Local Agency, and accepted and paid for by the Authority, on the Closing Date. 2 8.The Local Agency has furnished some, but not all, of the information contained in the OfficialStatement and hereby authorizes the use of that information by the Authority in connection withthe public offering and sale of the Authority Bonds. 9.The Local Agency represents and warrants to the Authority that: (a) The Local Agency is a joint exercise of powers authority, duly organized and existing under the laws of the State of California, and has, and on the Closing Date will have, full legal right, power and authority (i) to enter into this Bond Purchase Agreement, (ii) to adopt or enter into the Proceedings, (iii) to issue, sell and deliver the Local Agency Bonds to the Authority as provided herein, and (iv) to carry out and consummate the transactions on its part contemplated by this Bond Purchase Agreement, the Proceedings and the Official Statement; (b) The Local Agency has complied, and will on the Closing Date be in compliance in all respects, with the Proceedings; (c) By official action of the Local Agency prior to or concurrently with the acceptance hereof, the Local Agency has duly adopted the Resolution, has duly authorized and approved the execution and delivery by the Local Agency of, and the performance by the Local Agency of the obligations contained in, the Fiscal Agent Agreement, the Local Agency Bonds and this Bond Purchase Agreement, and has duly authorized and approved the performance by the Local Agency of its obligations contained in the Resolution and the other Proceedings, and the consummation by it of all other transactions on its part contemplated by the Official Statement; (d) The execution and delivery of this Bond Purchase Agreement and the Local Agency Bonds, the adoption of the Resolution and the adoption or entering into of the other Proceedings, and compliance with the provisions of each thereof, and the carrying out and consummation of the transactions contemplated by the Official Statement, will not conflict with or constitute a breach of or a default under any applicable law or administrative regulation of the State of California or the United States, or any applicable judgment, decree, agreement or other instrument to which the Local Agency is a party or is otherwise subject; (e) To the knowledge of the Local Agency, at the time of the Local Agency's acceptance hereof and at all times subsequent thereto up to and including the Closing Date, with respect to information describing the Local Agency and the Proceedings conducted by the Local Agency, the Official Statement does not and will not contain any untrue statement of a material fact or 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 n-dsleading; (f) Except as described in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending or, to the knowledge of the Local Agency, threatened, wherein an unfavorable decision, ruling or finding would: (i) affect the creation, organization, existence or powers of the Local Agency or the titles of its members and officers to their respective offices, (ii) enjoin or restrain the issuance, sale and delivery of the Local Agency Bonds, the levy and receipt of the Special Taxes which secure the Local Agency Bonds, or the pledge thereof under the Fiscal Agent Agreement, (iii) in any way question or affect any of the rights, powers, duties or obligations of the Local Agency with respect to the moneys pledged or to be pledged to pay the principal of, premium, if any, or interest on the Local Agency Bonds, (iv) in any way question or affect any authority for the issuance of the Local Agency Bonds, or the validity or enforceability of the Local Agency Bonds, the Fiscal Agent Agreement or the other Proceedings, or (v) in any way question or affect this Bond Purchase Agreement or the transactions contemplated by this Bond Purchase 3 Agreement, the Official Statement, Fiscal Agent Agreement, the other documents referred to in the Official Statement, or any other agreement or instrument to which the Local Agency is a party relating to the Local Agency Bonds; (g) The Local Agency will furnish such information, execute such instruments and take such other action in cooperation with the Authority, as the Authority may reasonably request, to qualify the Authority Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Authority may designate, and will assist, if necessary therefor, in the continuance of such qualifications in effect as long as required for the distribution of the Authority Bonds; provided, however, that the Local Agency shall not be required to qualify as a foreign corporation or to file any general consents to service of process under the laws of any state; (h) The issuance and sale of the Local Agency Bonds is not subject to any transfer or other documentary stamp taxes of the State of California or any political subdivision thereof; (i) The Local Agency has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Local Agency is a bond issuer whose arbitrage certifications may not be relied upon; and (j) Any certificate signed by any official of the Local Agency authorized to do so shall be deemed a representation and warranty by the Local Agency to the Authority as to the statements made therein. 10. If between the date of this Bond Purchase Agreement and the date ninety (90) days after the Closing Date an event occurs which is materially adverse to the purpose for which the Official Statement is to be used which is not disclosed in the Official Statement, the Local Agency shall notify the Authority of such fact. ii. At 8:00 A.M., Pacific Time, on the Closing Date, or at such other time or on such other date as is mutually agreed by the Local Agency and the Authority, the Local Agency will deliver the Local Agency Bonds to the Trustee, on behalf of the Authority, in definitive form, duly executed, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Authority will accept such delivery and pay the purchase price of the Local Agency Bonds, as referenced in paragraph 1 hereof, but solely from the available proceeds referenced in paragraph 4 hereof, by wire transfer or other funds which are good funds on the Closing Date payable to the order of the Fiscal Agent under each Fiscal Agent Agreement. Delivery and payment, as aforesaid, shall be made at such place as shall have been mutually agreed upon by the Local Agency and the Authority. 12. The Authority has entered into this Bond Purchase Agreement in reliance upon the representations, warranties and agreements of the Local Agency contained herein and to be contained in the documents and instruments to be delivered on the Closing Date, and upon the performance by the Local Agency of its obligations hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Authority's obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Local Agency Bonds shall be subject to the performance by the Local Agency of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, and shall also be subject to the following conditions: (a) The representations and warranties of the Local Agency contained herein shall be true and correct on the date hereof and on and as of the Closing Date, as ff made on the Closing Date; 4 (b)On the Closing Date the Proceedings shall be in full force and effect, and shall not have beenamended, modified or supplemented, and the Official Statement shall not have been amended,modified or supplemented, except in either case as may have been agreed to by both the Authority and the Original Purchaser; (c) As of the Closing Date, all official action of the Local Agency relating to the Proceedings shall be in full force and effect, and there shall have been taken all such actions as, in the opinion of Jones Hall Hill & White, A Professional Law Corporation, bond counsel ("Bond Counsel"), shall be necessary or appropriate in connection therewith, with the issuance of the Authority Bonds and the Local Agency Bonds, and with the transactions contemplated hereby, all as described in the Official Statement; (d) The Authority shall have the right to terminate the Authority's obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Local Agency Bonds by notifying the Local Agency of its election to do so ff, after the execution hereof and prior to the Closing Date: (i) either the marketability of the Authority Bonds or the market price of the Authority Bonds, in the opinion of the Authority, has been materially and adversely affected by any decision issued by a court of the United States (including the United States Tax Court) or of the State of California, by any ruling or regulation (final, temporary or proposed) issued by or on'behalf of the Department of the Treasury of the United States, the Internal Revenue Service, or other governmental agency of the United States, or any governmental agency of the State of California, or by a tentative decision with respect to legislation reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or by legislation enacted by, pending in, or favorably reported to either the House of Representatives or the Senate of the Congress of the United States or either house of the Legislature of the State of California, or formally proposed to the Congress of the United States by the President of the United States or to the Legislature of the State of California by the Governor of the State of California in an executive communication, affecting the tax status of the Authority or the Local Agency, their property or income, their bonds (including the Authority Bonds) or the interest thereon, or any tax exemption granted or authorized by the Bond Law; (ii) the United States shall have become engaged in: hostilities which have resulted in a declaration of war or national emergency, or there shall have occurred any other outbreak of hostilities, or a local, national or international calamity or crisis, financial or otherwise, the effect of such outbreak, calamity or crisis being such as, in the reasonable opinion of the Authority, would affect materially and adversely the ability of the Authority to market the Authority Bonds (it being agreed by the Authority that there is no outbreak, calamity or crisis of such a character as of the date hereof); (iii) there shall have occurred a general suspension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by the United States, New York State or California State authorities; (iv) there shall have occurred a withdrawal or downgrading of any rating assigned to any securities of the Local Agency by a national municipal bond rating agency; (v) any Federal or California court, authority or regulatory body shall take action materially and adversely affecting the ability of a developer to proceed with the development as contemplated by the Official Statement; or (vi) an event described in paragraph 11 hereof occurs which in the opinion of the Authority requires a supplement or amendment to the Official Statement; and (e)On or prior to the Closing Date, the Authority shall have received each of the following documents: (1) Opinion or opinions, in form and substance satisfactory to Bond Counsel, dated as of the Closing Date, of Bond Counsel to the Local Agency approving the validity of the Local Agency Bonds; 5 (2) A letter or letters of Bond Counsel, dated the date of the Closing and addressed to the Authority, to the effect that the opinion referred to in the preceding subparagraph (1) may be relied upon by the Authority to the same extent as if such opinion were addressed to it; (3) A supplementary opinion or opinions, dated the date of the Closing and addressed to the Authority, of Bond Counsel to the effect that (i) this Bond Purchase Agreement has been duly authorized, executed and delivered by, and, assuming due authorization, execution and delivery by the Authority, constitutes a legal, valid and binding agreement of the Local Agency enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy and insolvency proceedings or by the application of equitable principles if equitable remedies are sought; and (ii) the Local Agency Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; (4) A certificate or certificates dated the Closing Date, addressed to the Authority, signed by a Local Agency official having knowledge of the facts to the effect that: (i) The representations and warranties of the Local Agency contained herein are true and correct in all material respects on and as of the Closing Date as ff made on the Closing Date; ' (ii) Except as described in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending or threatened, wherein an unfavorable decision, ruling or finding would: (A) affect the creation, organization, existence or powers of the Local Agency, or the titles of its members and officers to their respective offices, (B) enjoin or restrain the issuance, sale and delivery of the Local Agency Bonds, the levy or collection of the special taxes or any other moneys or property pledged or to be pledged under the Fiscal Agent Agreement, or the pledge thereof, (C) in any way question or affect any of the rights, powers, duties or obligations of the Local Agency with respect to the moneys and assets pledged or to be pledged to pay the principal of, premium, if any, or interest on the Local Agency Bonds, (D) in any way question or affect any authority for the issuance of the Local Agency Bonds, or the validity or enforceability of the Local Agency Bonds or the Proceedings, or (E) in any way question or affect this Bond Purchase Agreement or the transactions on the part of the Local Agency contemplated by this Bond Purchase Agreement, the Proceedings, the Official Statement or the documents referred to in the Official Statement; (iii) The Local Agency has complied with all agreements, covenants and arrangements, and satisfied all conditions, on its part to be complied with or satisfied hereunder, under the Resolution and under the Fiscal Agent Agreement on or prior to the Closing Date; and (iv) To the best of its knowledge, no event affecting the Local Agency has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is necessary to disclose therein in order to make the statements with respect to the Local Agency or the Local Agency Bonds not misleading in any respect; 6 (5) An opinion or opinions, dated the Closing Date and addressed to the Authority, of the City Attorney, that, except as described in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending or threatened, wherein an unfavorable decision, ruling or finding would: (i) affect the creation, organization, existence or powers of the Local Agency, or the titles of its members and officers to their respective offices; (ii) enjoin or restrain the issuance, sale and delivery of the Local Agency Bonds, the receipt of special tax revenues or any other moneys or property pledged or to be pledged under the Proceedings or the pledge thereof; (iii) in any way question or affect any of the rights, powers, duties or obligations of the Local Agency with respect to the moneys and assets pledged or to be pledged to pay the principal of, premium, if any, or interest on the Local Agency Bonds; (iv) in any way question or affect any authority for the issuance of the Local Agency Bonds, or the validity or enforceability of the Local Agency Bonds; or (v) in any way question or affect this Bond Purchase Agreement or the transactions on the part of the Local Agency contemplated by this Bond Purchase Agreement, the Official Statement or the documents referred to in the Official Statement; and (6) Such additional legal opinions, certificates, instruments and documents as the Authority may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the Local Agency's representations and warranties contained herein and of the statements and information contained in the Official Statement. In addition to the foregoing, the Local Agency shall on the Closing Date provide the Proceedings, certified by authorized officers of the Local Agency as true copies and as having been adopted or executed (as applicable), with only such amendments, modifications or supplements as may have been agreed to by the Authority. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Authority, but the approval of the Authority shall not be unreasonably withheld. Receipt of, and payment for, the Local Agency Bonds shall constitute evidence of the satisfactory nature of such as to the Authority. The performance of any and all obligations of the Local Agency hereunder and the performance of any and all conditions contained herein for the benefit of the Authority may be waived by the Executive Director of the Authority in his sole discretion. If the Local Agency shall be unable to satisfy the conditions to the obligations of the Authority to purchase, accept delivery of and pay for the Local Agency Bonds cont ' ained in this Bond Purchase Agreement, or if the obligations of the Authority to purchase, accept delivery of and pay for the Authority Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate, and neither the Authority nor the Local Agency shall be under further obligation hereunder, except that the respective obligations of the Local Agency and the Authority set forth in paragraphs 13 and 14 hereof shall continue in full force and effect. 13. The Authority shall be under no obligation to pay, and the Local Agency shall pay all expenses of the Local Agency and the Authority incident to the performance of the Local Agency's and the Authority's obligations hereunder including, but not limited to: (i) the cost of the preparation of, and all other costs of issuance of, the Local Agency Bonds and the Authority Bonds; (ii) the fees and disbursements of Bond Counsel; and (iii) the fees and disbursements of accountants, advisers and of any other experts or consultants retained by the Local Agency or the Authority. 7 14. The Authority and the Local Agency hereby confirm that the purchase of the Local Agency Bonds by the Authority hereunder will not violate any of the restrictions set forth in Section 6592.5 of the Bond Law. 15. The Local Agency hereby agrees to pay, from amounts in the Administrative Expense Fund established under the Fiscal Agent Agreement, all costs of administration of the Authority and the Trustee related to the Authority Bonds. 16. This Bond Purchase Agreement is made solely for the benefit of the Local Agency and the Authority (including their successors and assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Local Agency's representations, warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of: (i) any investigations made by or on behalf of the Authority or the Trustee, or (ii) delivery of and payment for the Local Agency Bonds pursuant to this Bond Purchase Agreement. The agreements contained in this paragraph and in paragraph 15 hereof shall survive any termination of this Bond Purchase Agreement. 17. This Bond Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but an such counterparts shall together constitute but one and the same instrument. 18. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceabihty shall not affect any other provision hereof. 19. The validity, interpretation and performance of this Bond Purchase Agreement shall be governed by the laws of the State of California. IN WITNESS WHEREOF, the Authority and the Local Agency have each caused this Bond Purchase Agreement to be executed by their duly authorized officers all as of the date first above written. OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY By Executive Director OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY By Executive Director 30043-Ol:j2368 8 EXMBrr A Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds Maturity: 1, Interest Rate: % Purchase Price: $ Sinking Fund @ents Date Date Amount Amount Exhibit A Page 1 [11/19/96 DRAFIF] PURCHASE CONTRACT 1996 Old Town/Westside Improvement Authority 43174 Business Park Drive Temecula, California 92590 Old Town/Westside Community Facilities District Financing Authority 43174 Business Park Drive Temecula, California 92590 Re: $ Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) Ladies and Gentlemen: The undersigned, Stone & Youngberg LLC (the "Underwriter"), offers to enter into this Purchase Contract (the "Purchase Contract") with the Old Town/Westside Improvement Authority (the "Authority") which, upon your acceptance of this offer, will be binding upon you and upon the Underwriter. This offer is made subject to the acceptance by the Authority of this Purchase Contract on or before 5:00 p.m. on , 1996 and, if not so accepted, will be subject to withdrawal by the Underwriter upon written notice to the Authority delivered to the Authority at any time prior to such acceptance. 1. Upon the terms and conditions and in reliance upon the respective representations, warranties and covenants herein, the Underwriter hereby agrees to purchase from the Authority, and the Authority hereby agrees to sell to the Underwriter, all (but not less than all) of $ aggregate principal amount of Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (the "Bonds"), at the purchase price (the "Purchase Price") of $ - (equal to the par amount of the Bonds of $ less an Underwriter's discount of $ less original issue discount of $ plus accrued interest of $ as set forth in Appendix A hereto. The Bonds are authorized to be issued under the Marks-Roos Local Bond Pooling Act of 1985, as amended, and shall be as described in, and shall be secured under and pursuant to, the Indenture of Trust, dated as of 1996 (the "Indenture"), by and between [L252424.51 [11/19/% DRAFF] the Authority and First Trust of California, National Association, as trustee (the "Trustee"), substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by the Authority and the Underwriter. Capitalized terms used herein that are defmed in the Indenture shall have the same meanings when used herein. The Bonds are being issued to provide funds to acquire from Old Town/Westside Community Facilities District No. I (Old Town Area Public Improvements) (the "CFD Financing Authority") the 1966 Special Tax Bonds (the "Local Agency Bonds'). The Authority shall, concurrently with the delivery of the Bonds and the receipt of the purchase price therefor, purchase the Local Agency Bonds from the CFD Financing Authority pursuant to the provisions of the Indenture and a Bond Purchase Agreement, dated as of 1, 1996, by and between the City and the Authority (the "Bond Purchase Agreement"). The Local Agency Bonds will be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, commencing at Section 53311, et seq., of the California Government Code (the "Act") and Resolution No. adopted by the Board of Directors of the Authority acting as the legislative body of the District (the "CFD Resolution"). The Local Agency Bonds are being issued to provide new moneys for the acquisition and/or construction of certain public improvements (the "Improvements"). The Bonds will be issued pursuant to the terms of a Fiscal Agent Agreement (the "Fiscal Agent Agreement"), dated as of @ 1996 between the CFD Financing Authority and First Trust of California, National Association, as fiscal agent (together with any successor fiscal agent serving as such under the Fiscal Agent Agreement, the "Fiscal Agent"). 2. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the offering prices set forth on the cover of the Final Official Statement described below. 3. (a) The Authority agrees to deliver to the Underwriter as many copies of the Official Statement dated the date hereof, relating to the Bonds (as supplemented and amended from time to time, the "Final Official Statement") as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4) of Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Authority agrees to deliver such Final Official Statements within seven (7) business days after the execution hereof. The Underwriter agrees to deliver a copy of the Final Official Statement to each of its customers purchasing Bonds no later than the settlement date of the transaction. The Underwriter agrees to deliver to at least one nationally-recognized municipal securities information depository the Final Official Statement, immediately upon receipt thereof. (b)The Authority has authorized and approved the distribution of the Preliminary Official Statement relating to the Bonds dated , 1996 (the "Preliminary Official Statement"), and hereby authorizes and approves the distribution of the Final Official Statement (the Final Official Statement, the Preliminary Official Statement and any amendments or supplements that may be authorized by the Authority for use with respect to the sale of the Bonds are herein refeffed to collectively as the "Official [L252424.51 2 [11/19/% DRAM Statement"), consents to their distribution and use by the Underwriter and authorizes the execution of the Final Official Statement by a duly authorized officer of the Authority. The Authority has deemed the Preliminary Official Statement fmal as of its date, within the meaning of Rule 15c2-12. 4.The Authority represents, warrants and covenants to the Underwriter that: (a) The Authority is a joint exercise of powers authority duly organized and validly existing under the Constitution and laws of the State of California (the "State"), and has the full legal right, power and authority to (i) adopt the resolutions creating the Authority (the "Authority Resolutions"), (ii) enter into and perform its duties under this Purchase Contract, the Bond Purchase Agreement and the Indenture, (iii) issue, execute, authenticate, sell and deliver the Bonds to the Underwriter as provided herein, and (iv) carry out and consummate all other transactions on its part contemplated by each of the aforesaid documents (such documents together with the Final Official Statement are collectively refeffed to herein as the "Authority Documents"), and the Authority has complied with all provisions of applicable law, including the Act, in all matters relating to such transactions. (b) The Authority has duly authorized (i) the execution and delivery of the Bonds and the execution, delivery and due performance by the Authority of its obligations under the Authority Documents, (ii) the distribution and use of the Preliminary Official Statement and execution, delivery and distribution of the Final Official Statement, and (iii) the taking of any and all such action as may be required on the part of the Authority to carry out, give effect to and consummate the transactions on its part contemplated by such instruments. All consents or approvals necessary to be obtained by the Authority in connection with the foregoing have been received, and the consents or approvals so received are still in full force and effect. (c) The Authority Documents (other than the Final Official Statement), when executed and delivered by the Authority and the other respective parties thereto, will constitute legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally. (d) When delivered to the Underwriter, the Bonds will have been duly authorized, executed, issued and delivered by the Authority and will constitute legal, valid and binding limited obligations of the Authority enforceable against the Authority in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally, and will be entitled to the benefit and security of the Indenture. (e)The information relating to the Authority contained in the Preliminary Official Statementis, and as of the date of Closing such information in the Final Official [L252424.51 3 [11/19/% DRAFI] Statement will be, true and correct in all material respects, and the Preliminary Official Statement does not as of its date and the Final Official Statement will not as of the Closing Date contain any untrue or misleading statement of a material fact relating to the Authority or omit to state any material fact relating to the Authority, the District or the City necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (f) If, at any time prior to the earlier of (i) receipt of notice from the Underwriter that Final Official Statement is no longer required to be delivered under the Rule or (ii) 90 days after the Closing, any event known to the officers of the Authority participating in the issuance of the Bonds occurs with respect to the Authority as a result of which the Final Official Statement as then amended or supplemented includes an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Authority shall promptly notify the Underwriter in writing of such event. Any information supplied by the Authority for inclusion in any amendments or supplements to the Final Official Statement will not contain any untrue or misleading statement of a material fact relating to the Authority, City or the District or omit to state any material fact relating to the Authority, City or the District necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (g) To the best knowledge of the officer of the Authority, the execution and delivery of the Authority Documents, nor the consummation of the transactions on the part of the Authority contemplated herein or therein or the compliance by the Authority with the provisions hereof or thereof will conflict with, or constitute on the part of the Authority a violation of, or a breach of or default under, (i) any material indenture, mortgage, commitment, note or other agreement or instrument to which the Authority is a party or by which it is bound, (ii) any provision of the Constitution of the State or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the Authority (or the members of the Board of Directors or any of its officers in their respective capacities as such) is subject. (h) The Authority has never been in default at any time, as to principal of or interest on any obligation which it has issued, including those which it has issued as a conduit for another entity, which default may have an adverse effect on the ability of the Authority to consummate the transactions on its part under the Authority Documents, except as specifically disclosed in the Official Statement; and other than the Indenture, the Authority has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the Special Taxes. (i) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending with respect to which the Authority has been served with process or, to the best knowledge of the official of the Authority executing this Purchase Contract, threatened, which (i) affects or seeks to prohibit, restrain or enjoin the execution or delivery of the Bonds, the payments to be made CL252424.51 4 111/19/% DRAFI] to the Authority pursuant to the @cal Agency Bonds or the use of the Official Statement or the execution or delivery by the Authority of the Authority Documents, (ii) affects or questions the validity or enforceability of the Bonds or any of the Authority Documents, (iii) questions the tax-exempt status of the interest payable on the Bonds, or the completeness or accuracy of the Official Statement, or (iv) questions the power of the Authority to enter into or perform its obligations under any of the Authority Documents, or the existence or powers of the Authority, or the title to office of any official of the Authority. 0) Any certificate signed by an official of the Authority authorized to execute such certificate and delivered to the Underwriter in connection with the transactions contemplated by the Authority Documents shall be deemed a representation and warranty by the Authority to the Underwriter as to the truth of the statements therein contained. (k) The Authority has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. (1) The Authority will cooperate with the Underwriter in qualifying the Bonds for offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriter may reasonably request; provided, however, that the Authority shall not be required to consent to suit or to service of process, or qualify to do business, in any jurisdiction. The Authority consents to the use by the Underwriter in the course of its compliance with the securities or Blue Sky laws of the various jurisdictions of the Authority Documents, subject to the right of the Authority to withdraw such consent for cause by written notice to the Underwriter. (m) The Authority agrees to comply with the provisions of the Continuing Disclosure Certificate. 5. ReRresentations, Warranties and Covenants of the CFD FinanciLig Authorily. The CFD Financing Authority represents and warrants to the Underwriter and the Authority that: (a) The CFD Financing Authority is a joint exercise of powers authority, organized and validly existing under and by virtue of the laws of the State, and is duly organized and validly existing as a community facilities district under the laws of the State of California, including the Act, with the Board of Directors of the CFD Financing Authority acting as the its legislative body, and has full legal right, power and authority to (i) enter into and perform its duties under this Purchase Contract, the Bond Purchase Agreement, the Fiscal Agent Agreement and the Construction Management and Supervision Agreement by and between the CFD Financing Authority and Fluor Daniel, Inc. (collectively, the "CFD Financing Documents"), (ii) issue, execute, authenticate, sell and deliver the Local Agency Bonds, and (iv) carry out and consummate all other transactions on its part contemplated by such documents. CL252424.51 5 [11/19/% DRAM (b) The CFD Financing Authority has duly authorized (i) the execution and delivery of the Local Agency Bonds and the performance of its obligations under such documents, (ii) the distribution of the Final Official Statement in connection with the sale of the Bonds, and (iii) the taking of all action required by the CFD Financing Authority to carry out the transactions on its part contemplated by the CFD Financing Documents. (c) The CFD Financing Documents, when executed and delivered by the CFD Financing Authority and the other respective parties thereto, will constitute the legal, valid and binding obligations of the CFD Financing Authority enforceable against the CFD Financing Authority in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally. (d) When delivered to the Authority, the Local Agency Bonds will have been duly authorized, executed, issued and delivered by the CFD Financing Authority and will constitute legal, valid and binding limited obligations of the CFD Financing Authority enforceable against the CFD Financing Authority in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally, and will be entitled to the benefit and security of the Fiscal Agent Agreement. (e)The distribution of the Official Statement has been duly authorized by the CFD Financing Authority and the information contained within the Official Statement which describes the CFD Financing Authority is true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. For purposes of the Rule, the CFD Financing Authority has deemed fmal the Preliminary Official Statement prior to its use and distribution by the Underwriter, except for the information specifically permitted to be omitted therefrom pursuant to paragraph (b)(1) of the Rule. (f)The CFD Financing Authority agrees that, if at any time within 90 days from the Closingany event occurs as a result of which the Final Official Statement as then in effect wouldinclude any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading, the CFD Financing Authority shall reasonably cooperate with the Underwriter in the preparation of an amendment or supplement to the Final Official Statement which will correct such statement or omission. The CFD Financing Authority agrees to so amend or supplement the Final Official Statement and shall effect such amendment or supplement whenever requested by the Underwriter when in the reasonable judgment of the Underwriter such amendment or supplement is required. The CFD Financing Authority shall promptly advise the Underwriter of the institution of any action, suit, proceeding, inquiry of investigation seeking to prohibit, restrain or otherwise affect the use of the Final Official Statement in connection with the offering, sale or distribution of the Bonds or the Local Agency Bonds. [L252424.51 6 [11/19/% DRAFN (g) To the best knowledge of the officer of the CFD Financing Authority, the execution and delivery of the CFD Financing Documents, nor the consummation of the transactions on the part of the CFD Financing Authority contemplated herein or therein or the compliance by the CFD Financing Authority with the provisions hereof or thereof will conflict with, or constitute on the part of the CFD Financing Authority a violation of, or a breach of or default under, (i) any material indenture, mortgage, commitment, note or other agreement or instrument to which the CFD Financing Authority is a party or by which it is bound, (ii) any provision of the Constitution of the State or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the CFD Financing Authority (or the members of the Board of Directors or any of its officers in their respective capacities as such) is subject. (h) There is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory entity having jurisdiction over the CFD Financing Authority required for the execution and delivery of the CFD Financing Documents or the consummation by the CFD Financing Authority of the CFD Financing Documents or the consummation by the CFD Financing Authority of the transactions contemplated herein or therein, which has not been duly obtained or made on or prior to the date hereof. The CFD Financing Authority agrees to file in a timely manner all filings in connection with the Local Agency Bonds required by the California Debt Advisory Commission and the Internal Revenue Service. (i) There is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or governmental or public entity pending with respect to which the CFD Financing Authority has been served with process or, to the best knowledge of the person signing this Purchase Contract on behalf of the CFD Financing Authority, threatened against the CFD Financing Authority which (i) affects or seeks to prohibit, restrain or enjoin the execution or delivery of the Local Agency Bonds or the use of the Official Statement or the execution or delivery by the CFD Financing Authority of the CFD Financing Documents, (ii) affects or questions the validity or enforceability of the Local Agency Bonds or any of the CFD Financing Documents, (iii) questions the tax-exempt status of the interest payable on the Local Agency Bonds, or the completeness or accuracy of the Official Statement, or (iv) questions the power of the CFD Financing Authority to enter into or perform its obligations under any of the CFD Financing Documents, or the existence or powers of the CFD Financing Authority, or the title to office of any official of the CFD Financing Authority. 0) The CFD Financing Authority agrees to comply with the provisions of its Continuing Disclosure Certificate. (k) Any certificate signed by any official of the CFD Financing Authority designated in the CFD Financing Authority Resolutions and delivered to the Underwriter in connection with the transactions contemplated by the Official Statement and this Purchase Agreement shall be deemed to be a representation and warranty by the CFD Financing Authority to the Underwriter as to the statements made therein. [L252424.51 7 [11/19/% DRAFT] (1) The CFD Financing Authority has not been notified of any existing or proposed listing by the Internal Revenue Service to the effect that the CFD Financing Authority is a bond issuer whose arbitrage certifications may not be relied upon. 6. At 9:00 a.m. on , 1996 or at such other time and/or date as shall have been mutually agreed upon by the Authority and the Underwriter, the Authority will deliver, or cause to be delivered, to the Underwriter the Bonds, by book-entry duly executed and authenticated by the Trustee together with the other documents hereinafter mentioned; and the Underwriter will accept such delivery and pay the Purchase Price of the Bonds by delivering to the Trustee for the account of the Authority a check payable in federal funds or making a wire transfer in federal funds payable to the order of the Trustee. The activities relating to the fmal execution and delivery of the Bonds and the Indenture and the payment therefor and the delivery of the certificates, opinions and other instruments as described in Section 8 of this Purchase Contract shall occur at the offices of Jones Hall Hill & White, a, Professional Law Corporation, San Francisco, California. The payment for the Bonds and simultaneous delivery of the Bonds to the Underwriter is herein referred to as the "Closing." The Bonds will be delivered in @written form, in denominations of one Bond for each maturity of the Bonds, each in the applicable form in the Fiscal Agent Agreement and each registered in the name of Cede & Co., and will be made available for checking and packaging by the Underwriter at such place in San Francisco, California, as the Underwriter and the Trustee shall agree not less than 24 hours prior to the Closing. 7. The Underwriter shall have the right to cancel its obligations to purchase the Bonds if between the date hereof and the date of Closing: (a) the House of Representatives or the Senate of the Congress of the United States, or a committee of either, shall have pending before it, or shall have passed or recommended favorably, legislation introduced previous to the date hereof, which legislation, if enacted in its form as introduced or as amended, would have the purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the Authority under the Indenture or upon interest received on obligations of the general character of the Bonds or the Local Agency Bonds, or of causing interest on obligations of the general character of the Bonds, or the Local Agency Bonds, to be includable in gross income for purposes of federal income taxation, and such legislation, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; or (b) a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported or reported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or be enacted or a decision by a federal court of the United States or the United States Tax Court shall have been rendered, or a ruling, release, order, CL252424.51 8 [11/19/% DRAFN regulation or official statement by or on behalf of the United States Treasury Department, the Internal Revenue Service or other governmental agency shall have been made or proposed to be made having the purpose or effect, or any other action or event shall have occurred which has the purpose or effect, directly or indirectly, of adversely affecting the federal income tax consequences of owning the Bonds, including causing interest on the Bonds or the Local Agency Bonds to be included in gross income for purposes of federal income taxation, or imposing federal income taxation upon revenues or other income of the general character to be derived by the Authority under the Indenture or upon interest received on obligations of the general character of the Bonds, or the Bonds and also including adversely affecting the tax-exempt status of the Authority under the Code, which, in the opinion of the Underwriter, materially adversely affects the market price of or market for the Bonds; or (c) legislation shall have been enacted, or actively considered for emctrnent with an effective date prior to the Closing, or a decision by a court of the United States shall have been rendered, the effect of which is that the Bonds or the Local Agency Bonds, including any underlying obligations, or the Indenture, as the case may be, is not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (d) a stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds or the Local Agency Bonds, including any underlying obligations, or the execution and delivery of the Indenture or Fiscal Agent Agreement as contemplated hereby or by the Final Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (e) any event shall have occurred or any information shall have become known to the Underwriter which causes the Underwriter to reasonably believe that the Final Official Statement as then amended or supplemented includes an untrue statement of a material fact, or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (f) there shall have occurred any outbreak of hostilities or any national or international calamity or crisis, including a fmancial crisis, the effect of which on the fmancial markets of the United States is such as, in the reasonable judgment of the Underwriter would material adversely affect the market for or market price of the Bonds; or [L252424.51 9 [11/19/% DRAYII (g) there shall be in force a general suspension of trading on the New York Stock Exchange, the effect of which on the fmancial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or (h)a general banking moratorium shall have been declared by federal, New York or State authorities; or (i) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the Authority; or 0) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; or (k) the New York Stock Exchange or other national securities exchange, or any govenunental authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, underwriters. 8. Printing Conditions. The satisfaction of the following shall be conditions precedent to the Underwriter's agreement to print the Preliminary Official Statement and price the Bonds (collectively, the "Printing Conditions"), and shall continue to be true and correct at the time of the Closing: (a) Pfivate bond issue. The Authority, the CFD Financing Authority and the Underwriter shall have received the latest drafts of the contemplated financing documents for the private fmancing (as such financing is described in the Official Statement), including all exhibits thereto and documents referred to therein (collectively, the "Private Financing Documents "), which shall be in form and content such that the Authority, the CFD Financing Authority and the Underwriter can reasonably determine all material terms and conditions of the loan contemplated thereby. (b) Status of Development Approvals. The Authority and the Underwriter shall have received satisfactory evidence that (a) fmal maps for the Project will be ready to be recorded on the Closing Date, and (b) building permits will be ready to be issued for all major components of the Project (subject to the payment of applicable fees, contemplated to be made on the Closing Date). [subject to change after overview of development approvals provided by Developer] (c) Organizational Documents. Old Town Entertainment LLC, a Delaware limited liability company ("Developer"), shall have delivered to the Underwriter and the Authority copies of its formation documents. [L252424.51 10 [11/19/% DRAFrj (d) FOrm and Content of Certificates and Opinions. All parties required by this Purchase Contract to deliver certificates and opinions on the Closing Date shall have agreed to the form and content of each such certificate and opinion. (e) Certificate. The Developer shall have executed and delivered to the Authority and the Underwriter a certificate substantially in the form attached as Exhibit A hereto. (f) Consent of Appraiser. Brown, Chudleigh, Schuler and Associates (the "Appraiser") shall have delivered to the Authority and the Underwriter a certificate granting its consent to include its summary of the Appraisal (as defined herein) in the Preliminary and Final Official Statements. (g)Consent of Special Tax Consultant. Berryman & Henigar shall have delivered to theAuthority and the Underwriter a certificate granting its consent to include their report onthe Rate and Method of Apportiorunent of Special Taxes in the Preliminary and Final Official Statements. By execution of this Purchase Agreement, the Underwriter and the Authority acknowledge that all Printing Conditions have been satisfied or waived. 9. The obligations of the Underwriter to purchase the Bonds shall be subject (i) to the receipt by the Authority, the CFD Financing Authority and the Underwriter of a certificate in form and substance as set forth in Exhibit A attached hereto of the Developer (or such other officer or official of the Developer as the Underwriter, and its counsel may approve), dated as of the date hereof, (ii) to the performance by the Authority and the CFD Financing Authority of their obligations to be performed hereunder at and prior to the Closing, (iii) to the accuracy as of the date hereof and as of the time of the Closing of the representations and warranties of the Authority and the CFD Financing Authority herein and the Developer in its Certificate delivered on the date hereof, and (iv) to the following additional conditions, including the delivery of such documents as are enumerated herein in form and substance satisfactory to Munger, Tolles & Olson, counsel to the Underwriter: (a) At the time of Closing, (i) the Authority Documents and the CFD Financing Documents shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, and (ii) the Authority shall have duly adopted and there shall be in full force and effect such resolutions as, in the opinion of Jones Hall Hill & White, A Professional Law Corporation, as bond counsel ("Bond Counsel"), shall be necessary in connection with the transactions on the part of the Authority contemplated hereby. (b) Receipt of the Bonds at or prior to the Closing. The terms of the Bonds, delivered, shall in all instances be as described in Final Official Statement. CL252424.51 11 [11/19/% DRAF7] (c) At or prior to the Closing, the Underwriter shall receive the following documents in such number of counterparts as shall be mutually agreeable to the Underwriter and the Authority: (i) A fmal approving opinion of Bond Counsel dated the date of Closing, in substantially the form set forth in Exhibit C hereto. (ii) A Letter of Bond Counsel addressed to the Underwriter and dated the date of Closing, in substantially the same form set forth in Exhibit D hereto,and including a statement therein or in a separate letter to the effect that Bond Counsel's final approving opinion may be relied upon by the Underwriter to the same extent as if such opinion were addressed to the Underwriter. (iii) An opinion of the attorney to the Authority , addressed to the Underwriter and the Authority,dated the date of Closing, in substantially the form set forth in Exhibit E hereto. (iv)An opinion of the Counsel to the Developer, addressed to the Underwriter andthe Authority,dated the date of Closing, in substantially the same form as ExhibitF hereto. (v)An opinion of Counsel to the Underwriter, dated the date of the Closing, in substantially the form set forth in Exhibit G hereto. (vi) An opinion of counsel to the CFD Financing Authority, addressed to the Underwriter and the Authority, dated the date of Closing, in substantially the form set forth in Exhibit H hereto. (vii) An opinion of counsel to the Trustee dated the date of closing in substantially the form set forth in Exhibit I hereto. (viii) The Final Official Statement executed on behalf of the Authority by a duly authorized officer. (ix)Certified copies of the Authority Resolutions. (x)Certified copies of the CFD Resolutions. (xi)Specimen Bonds. (xii)A letter from the Appraiser addressed to the Authority and the Developer, in which consent is given to the use of its Appraisal Report dated as of , 1996, in the Official Statement and the references to the fmn in the Official Statement, and a statement to the effect that (i) the Appraisal Report attached to the Official Statement as Appendix _ fairly and accurately describes the [L252424.51 12 [11/19/% DRAFI] values of the properties appraised and (ii) such fmn has no reason to believe that the statements in the Official Statement, insofar as such statements purport to summarize certain portions of the Appraisal Report, contain any untrue or misleading statement of a material fact or omit to state a material fact necessary to make the statements made therein not misleading. (xiii) A certificate of the Authority, dated the date of Closing, in substantially the for-in set forth in Exhibit J hereto. (xiv) A certificate of the Developer, dated the date of Closing, in substantially the form set forth in Exhibit B hereto. (xv) A certificate of the CFD Financing Authority, dated the date of Closing, in substantially the form set forth in Exhibit K hereto. (xvi) A certificate of the Trustee, dated the date of Closing, in substantially the form set forth in Exhibit L hereto. (xvii)A certificate of Berryman & Henigar, dated the date of Closing, in substantially theform set forth in Exhibit J hereto. (xviii)Evidence that Federal Form 8038 has been executed by the Authority and will be filed with the Internal Revenue Service. (xix) Evidence satisfactory to the Underwriter that the Private Bond Financing has closed or will close concurrently with the Closing. (xx) Delivery of duly authorized and executed copies of the Construction Agreement, the Guarantee of Fluor Daniel, Inc. of the Construction Agreement and the Guarantee of Fluor Corporation of the Owner's Participation Agreement, as amended. (xxi) Certificates of Fluor Daniel and Fluor Corporation with respect to the matters set forth in Exhibit N attached hereto [and opinions of counsel of Fluor as to certain matters]. (xxii) Such additional legal opinions, certificates, proceedings, instruments and other documents as Counsel to the Underwriter, Bond Counsel, or the Authority's attorney may reasonably request to evidence compliance by the Authority, the CFD Financing Authority and the Developer with legal requirements, the truth and accuracy, as of the date of Closing, of the representations of the Authority, the CFD Financing Authority and the Developer herein contained and the due performance or satisfaction by the Authority, the CFD Financing Authority and the Developer at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by it. CL252424.51 13 [11/19/96 DRAFrj If the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Purchase Contract, or if the obligations of the Underwriter to purchase and accept delivery of the Bonds shall be terinimted for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter nor the Authority shall be under further obligation hereunder; except that the respective obligations to pay expenses, as provided in Section 11 hereof shall continue in full force and effect. 10. All representations, warranties and agreements of the Authority hereunder shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter, and shall survive the Closing. 11. The Authority shall pay or cause to be paid, solely from the proceeds of the Bonds, all reasonable expenses incident to the performance of its obligations under this Purchase Contract, including, but not limited to, delivery of the Bonds, costs of printing the Bonds, the Preliminary and Final Official Statements, any amendment or supplement to the Preliminary or Final Official Statement and this Purchase Contract, fees and disbursements of Bond Counsel, Underwriter's Counsel, the Authority's and the CFD Financing Authority's attorney and consultants, including the fees and expenses of the special tax consultant, and fees of the Trustee and Fiscal Agent. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds, the California Debt Advisory Commission fee and fees and disbursements in connection with the qualification of the Bonds for sale under the securities or "Blue Sky" laws of the various jurisdictions and the preparation of "Blue Sky" memoranda. 12. Any notice or other communication to be given to the Authority under this Purchase Contract may be given by delivering the same in writing at its address set forth above, and any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to Stone & Youngberg LLC, 15260 Ventura Boulevard, Sherman Oaks, California 91403, Attention: Mr. John D. McAlister, Vice President. 13. This Purchase Contract is made solely for the benefit of the Authority and the Underwriter (including the successors or assigns of the Underwriter) and no other person, including but not limited to any purchaser of the Bonds or the Developer, shall acquire or have any right hereunder or by virtue hereof. 14. This Purchase Contract shall be governed by and construed in accordance with the laws of the State of California. [L252424.51 14 [11/19/% DRAFII 15. This Purchase Contract shall become effective upon the Authority's acceptance hereof. Very truly yours, STONE & YOUNGBERG LLC By: Title: Accepted and agreed to as of the date first above written: OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY By: Title: OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY By: Title: [L252424.51 15 APPENDIX A [11/19/% DRAFM Maturiiy Date Principal Interest Rate Appendix A [L252424.51 [11/19/% DRAFI] EXHIBIT A FORM OF CERTIFICATE OF DEVELOPER AT PRINTING The undersigned, the [title of authorized representative] of Old Town Entertainment LLC, a Delaware limited liability company (the "Developer"), hereby makes the following representations, warranties and covenants as of the date hereof to and for the benefit of Old Town/Westside Improvement Authority (the "Authority") and Stone & Youngberg LLC (the "Underwriter"), in connection with the pricing of the Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (the "Bonds") (capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Bond Purchase Contract related to the Bonds): I . The Developer is a limited liability company duly formed and validly existing under the laws of the State of Delaware. 2. The Developer is duly qualified to transact business in the State of California. The Developer has full power and authority to own or lease its property, including, without limitation, the property on which the Development and Project (as defined in the Official Statement) is to be constructed (the "Property"), to carry on its business as presently being conducted and as contemplated to be conducted by the [insert names of material documents to which Developer is a party], and to execute, deliver, and perform its obligations under the foregoing documents (collectively, the "Developer Documents"). 3. Attached hereto are fully executed, true, correct and complete copies of the limited liability company agreement of the Developer and a resolution of the Developer authorizing the Developer to enter into the Developer Documents. The foregoing documents have not been amended or supplemented and are in full force and effect as of the date hereof. 4.The Developer has provided the information set forth in the Preliminary Official Statementdescribing the Developer, the Development and Project, and the Underwriter is authorizedto use such information in the distribution of the Preliminary Official Statement and the FinalOfficial Statement. Such information about the Developer, the Development and Project aspresently set forth in the Preliminary Official Statement is true and correct and does not contain any untrue statement of material fact or omit to state any fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which such statements were made, not misleading in any material respect. 5.Except as set forth in the Preliminary Official Statement, there is no action, suit, proceeding,inquiry or investigation by or before any court, governmental agency, public board Exhibit A Page 1 CL252424.51 [11/19/% DRAFN or body pending or, to the best of the Developer's knowledge threatened against the Developer (nor, to the best of the Developer's knowledge, is there any basis therefor), which (i) affects or seeks to prohibit, restrain or enjoin the issuance, sale or delivery of the Bonds or the use of the Preliminary Official Statement or the execution and delivery of the Developer Documents, (ii) affects or questions the validity or enforceability of the Bonds, (iii) questions the tax-exempt status of the Bonds or the completeness or accuracy of the Preliminary Official Statement, or (iv) questions the power of the Developer to carry out the transactions contemplated by the Developer Documents or the power of the Developer to own, construct, equip or operate its portion of the Development. IN WITNESS WHEREOF, the undersigned authorized officer of the Developer has executed this certificate and agreement this - day of , 1996. OLD TOWN ENTERTAINMENT LLC, a Delaware limited liability company By: Its: Exhibit A Page 2 [L252424.51 EXHIBIT B [11/19/96 DRAFI] FORM OF CERTIFICATE AND AGREEMENT OF DEVELOPER AT CLOSING The undersigned, the [title of authorized representative] of OLD TOWN ENTERTAINMENT LLC, a Delaware limited liability company (the "Developer"), hereby makes the following representations, warranties, covenants and agreements as of the date hereof to and for the benefit of Old Town/Westside Improvement Authority (the"Authority") and Stone & Youngberg LLC (the "Underwriter"), in connection with the issuance and sale of $aggregate principal amount of the Old Town Entertaimnent/Westside Improvement Authority 1996 Local Agency Revenue Bonds (the "Bonds") (capitalized terms used herein and not otherwise defmed shall have the meanings ascribed to them in the Bond Purchase Contract related to the Bonds): 1. The Developer is a limited liability company duly authorized to execute and deliver [insert names of material documents to which Developer is a party] (collectively, the "Developer Documents"), and that the signature below is that of a duly authorized representative of the Developer. 2. The Developer is duly qualified to transact business in the State of California. The Developer has full power and authority to own or lease its property, including, without limitation, the property on which the Development and Project (as defmed in the Official Statement) is to be constructed (the "Property"), to carry on its business as presently being conducted and as contemplated to be conducted by the Developer Documents, and to execute, deliver, and perform its obligations under the foregoing documents. 3. The information about the Developer, the Development and Project contained in the Official Statement, as the same may be supplemented or amended with the written approval of the Underwriter and the Developer, is true and correct and does not contain any untrue statement of material fact or omit to state any fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which such statements were made, not misleading in any material respect. The information submitted by the Developer to the Underwriter in connection with the preparation of the Official Statement was, and is as of this date, true and correct; provided, however, that the Developer makes no representation as to the accuracy of projected or estimated information provided by the Developer and contained in the Official Statement except to represent that such information is the good faith estimate or projection of the Developer as to the matters set forth therein. Exhibit B Page 1 CL252424.51 [11/19/% DRAFI] 4. The execution, delivery and perfon-nance by the Developer of the obligations contained in the Developer Documents have been duly authorized by all necessary action on the Developer's part. 5. Upon the execution and delivery thereof by the Developer and the other parties thereto, the Developer Documents will constitute legally valid and binding obligations of the Developer, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally, and except that it makes no representation as to the availability of specific performance or other equitable remedies. 6. If at any time, within 90 days from the date hereof, any event shall have occurred which might cause the Official Statement to contain any untrue statement of material fact or omit to state any fact necessary to make the statements therein not misleading in any material respect, the Developer shall notify the Issuer and the Underwriter. In addition, the Developer shall promptly advise the Underwriter of the institution of any action, suit, proceeding, inquiry or investigation of which he has any knowledge seeking to prohibit, restrain or otherwise affect the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. The Developer shall @sh the Underwriter any information concerning the Developer which the Underwriter might reasonably request in connection with any amendment of or supplement to the Official Statement. 7. The execution and delivery of the Developer Documents by the Developer and perfon-nance by the Developer of its obligations thereunder will not conflict with, or constitute a breach of, or default under any indenture, mortgage, deed of trust, lease, note, commitment, agreement or other instrument or obligations to which the Developer is a party or by which the Developer or any of its properties is bound, or under any law, rule, regulation, judgment, order or decree to which the Developer or any of its properties are bound which breach might have a material adverse effect on its ability to perform under the Developer Documents. The Developer is not now in material default under any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency or any document, instrument or commitment to which the Developer is subject or in the payment of the principal of, or premium or interest on, or otherwise in default with respect to, any bonds, notes or other obligations which the Developer has issued, assumed or guaranteed as to payment of principal, premium or interest. 8. Except as has been previously disclosed to the Underwriter, there is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the best of the Developer's knowledge threatened against the Developer (nor, to the best of the Developer's knowledge is there any basis therefor), which (i) affects or seeks to prohibit, restrain or enjoin the issuance, sale or delivery of the Bonds or the use of the Official Statement or the execution and delivery of the Developer Documents, (ii)affects or questions the validity or enforceability of the Bonds, (iii) questions the tax-exempt Exhibit B Page 2 (L252424.51 [11/19/% DRAFM status of the Bonds or the completeness or accuracy of the Official Statement, or (iv) questions the power of the Developer to carry out the transactions contemplated by the Developer Documents or the power of the Developer to own, construct, equip or operate its portion of the Development. 9. The Developer has made all filings with and received all approvals, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction which are necessary to permit the Developer to perform its obligations under the Developer Documents, to commence performance of its obligations under the Developer Documents, to own the Property and cause construction of the Development to commence. 10. Any certificate signed by an authorized representative of the Developer and delivered to either or both of the Underwriter or the Issuer in connection with the transactions contemplated by the Developer Documents or the Official Statement shall be deemed to be a representation and warranty by the Developer to the Underwriter and the Issuer as to the statements made therein. 11. The representations and warranties made by the Developer contained in the Developer Documents and in the Certificate of Developer at Printing are true and correct as if made on the date hereof. 12. [The Private Bond Finance Documents (as defined in the Certificate of Developer at Printing) have been executed and delivered by the Developer and the Private Bond Underwriter named therein and are in full force and effect. The Private Bond Finance Documents are valid and binding agreements of the Developer and are enforceable in accordance with their respective terms. Fully executed copies of the Private Bond Finance Documents have been delivered by the Developer to the Underwriter as of the date hereof.] All conditions precedent to the Private Bond Underwriter's obligation to purchase the bonds ("Private Bonds") offered under the Private Bond Finance (as defmed in the Certificate of Developer at Printing) (the "Conditions Precedent"), other than [consider whether any legitimate exceptions], have been fully performed in accordance with the requirements of the Private Bond Finance Documents. The Developer has delivered to the Underwriter evidence of satisfactory completion of all Conditions Precedent to the Private Bond Underwriter's purchase of the Private Bonds. 13. The Developer shall indemnify and hold harmless the Underwriter and the Underwriter's officers, directors, employees, counsel and agents and each person who controls the Underwriter within the meaning of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (collectively, the "Securities Acts"), against any and all losses, claims, damages, liabilities, costs and expenses (including without Iiinitation fees and disbursements of counsel and other expenses) incurred by them or any of them in connection with investigating or defending any loss, claim, damage, liability or any suit, action or proceeding, joint or several, to which they or any of them may become subject under the Securities Acts, or any other federal or state law or regulation, at common law or otherwise, Exhibit B Page 3 [L252424.51 [11/19/% DRAFN insofar as such losses, claims, damages, liabilities, costs and expenses (or any suit, action or proceeding in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Official Statement or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission of a 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; provided, however, that Developer shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, (i) any information contained in the "Underwriting" section of the Final Official Statement, (ii) any information relating to the Authority or the City in the Final Official Statement, or, (iii) information in Appendices [A, B, or F]; and provided further that the Developer shall have no obligation to indemnify or hold harmless any or all indemnities hereunder for any or all losses, claims, damages or liability that arise from or are the result of willful misconduct by any or all of such indemnities. This indemnity shall be in addition to any liability which the Developer may otherwise have. Promptly after receipt by any party entitled to indenu-iification under this paragraph 13 (each, an "Indemnitee") of notice of the commencement of any claim, suit, action, investigation or proceeding, such Indemnitee shall, if a claim in respect thereof is to be made against the Developer under this paragraph 13, deliver to the Developer in writing notice of the commencement thereof; but the omission to so notify the Developer shall not relieve the Developer from any liability which it may have to any Indemnitee otherwise than under this paragraph 13 or from any liability under this paragraph 13 unless the failure to provide notice prejudices the defense of such claim, suit, action, investigation or proceeding. In case any such action is brought against any Indemnitee, and it notifies the Developer, the Developer shall be entitled to participate in, and to the extent that it may elect by written notice delivered to the Indemnitee promptly after receiving the aforesaid notice from such Indemnitee, to assume the defense thereof, with counsel satisfactory to such Indemnitee; provided, however, if the defendants in any such action include both the Indemnitee and the Developer and the Indemnitee shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnitees which are different from or additional to those available to the Developer, the Indemnitee or Indemnitees shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnitee or Indemnitees. Upon receipt of notice from the Developer to such Indemnitee of its election to assume the defense of such action and approval by the Indemnitee of counsel, the Developer shall not be liable to such Indemnitee under this paragraph 13 for any legal or other expenses subsequently incurred by such Indemnitee in connection with defense thereof unless (i) the Indemnitee shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the Developer shall not, in connection with any action indemnified against hereunder, be liable for the fees and expenses of more than one separate firm of attorneys at any point in time representing the Indemnitees to such action), (ii) the Developer shall not have employed counsel satisfactory to the Indemnitee to represent the Indemnitee within a reasonable Exhibit B Page 4 CL252424.51 [11/19/96 DRAFN time after notice of commencement of the action, or (iii) the Developer has authorized the employment of counsel for the Indemnitee at the expense of the Developer. 14. [The Developer has deemed the Preliminary Official Statement fmal as of its date (within the meaning of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 ("Rule 15c2-12")), provided, however, that the foregoing representation as to fmality of the form of the Preliminary Official Statement does not include statements and information contained therein relating to the Authority or the CFD Financing Authority. For the 25-day period commencing with the "end of the underwriting period" (as defined in Rule 15c2-12), the Developer (i) will not participate in the issuance of any amendment of or supplement to the Final Official Statement to which, after being furnished with a copy, the Authority, the CFD Financing Authority or the Underwriter shall reasonably object in writing or which shall be disapproved by their respective counsel, and (ii) if any event relating to or affecting the Authority, the CFD Financing Authority, the Underwriter, or the Developer or the proposed Development shall occur as a result of which it is necessary, in the opinion of counsel for the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to an initial purchaser of the Bonds, the Developer will forthwith prepare and furnish to the Underwriter and the Authority a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter and its counsel) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to an initial purchaser, not misleading. All costs of preparing any necessary amendment or supplement to the Official Statement pursuant to this paragraph 14 shall be bome by the Developer. For the purposes of this paragraph 14, during the 25-day period the Developer will furnish such information with respect to itself and/or the Project as the Underwriter and the Authority may from time to time reasonably request. The "end of the underwriting period" (as defined in Rule 15c2-12) shall be deemed to be the Closing Date, unless the Underwriter provides to the Developer written notice to the contrary.] 15. There are no claims, disputes, suits, actions or contingent liabilities among, by, or between the members of the Developer which would be reasonably likely to have a material adverse effect on the Developer, the Development or the Project. 16. The information furnished to the Appraiser and the Special Tax Consultant (as such parties are identified in the Official Statement) or to any of the other parties hereto by the Developer for use in the Official Statement, including Appendices [C, D, E and G thereto], was and is true and correct and Developer has no reason to believe that any of the assumptions made or used by the Appraiser or the Special Tax Consultant are inaccurate or misleading. 17. All of the real property within the Development, as of the Closing, is owned in fee by the Developer except as identified in the Official Statement. Exhibit B Page 5 [L252424.51 [11/19/% DRAFN 18. Add specific representations about the Development and Project, construction, environmental perniits, etc. IN WITNESS VMEREOF, the undersigned authorized officer of the Developer has executed this certificate and agreement this _ day of , 1996. OLD TOWN ENTERTAINMENT LLC a Delaware limited liability company By: Its: Accepted and Agreed: STONE & YOUNGBERG LLC By: Vice President OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY By: Executive Director Exhibit B Page 6 [L2S2424.Sl EXHIBIT C [11/19/% DRAFI] [date] Old Town/Westside Improvement Authority 43174 Business Park Drive Temecula, California 92590 OPINION: $ Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) Members of the Board of Directors: We have acted as bond counsel in connection with the issuance by the Old Town/Westside Improvement Authority (the "Authority") of its 1996 Local Agency Revenue Bonds (the "Bonds") pursuant to the Marks-Roos Local Bond Pooling Act of 1985, as amended, and Resolution No. adopted by the Board of Directors of the Authority on , 1996 (the "Resolution"), an Indenture, dated as of , 1996 (the"Indenture"), by and between the Authority and First Trust of California, National Association, as Trustee. We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Authority contained in the Resolution and in the certified proceedings and certifications of public officials and others fumished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: I . The Authority and the CFD Financing Authority are duly created and validly existing as joint exercise of powers authorities, with the power to adopt the Authority Resolutions and the CFD Resolutions, enter into the Indenture and Fiscal Agent Agreement and perform the agreements on its part contained therein and issue the Bonds. 2. The Indenture has been duly entered into by the Authority and constitutes a valid and binding obligation of the Authority enforceable upon the Authority. Exhibit C Page I CL252424.51 [11/19/96 DRAFrl 3. The Fiscal Agent Agreement has been duly entered into by the CFD Financing Authority and constitutes a valid and binding obligation of the CFD Financing Authority, enforceable upon the CFD Financing Authority. 4. Pursuant to the Act, the Indenture creates a valid lien on the ftmds pledged by the Indenture for the security of the Bonds. 5.The Fiscal Agent Agreement creates a valid lien on the ftmds pledged by the Fiscal AgentAgreement for the security of the Local Agency Bonds. 6.The Bonds and the Local Agency Bonds have been duly authorized, executed and delivered by the Authority and the CFD Financing Authority, respectively, and are valid and binding limited obligations of the Authority, payable solely from the sources provided therefor in the Indenture and the Fiscal Agent Agreement, respectively. 5 . The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defmed for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinions set forth in the preceding sentence are subject to the condition that the Authority comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Bonds in order that such interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California. T'he rights of the owners of the Bonds and the enforceability of the Bonds, the Resolution and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, Exhibit C Page 2 [L252424.51 EXHIBIT D [11/19/% DRAF]rj [Supplemental Opinion from Jones, Hall] [to come] [L252424.51 Exhibit D EXHIBIT E [11/19/% DRAFI] [Utterhead of Counsel to the Authority] [date] Old Town/Westside Improvement Authority 43174 Business Park Drive Temecula, California 92590 Stone & Youngberg LJC 15260 Ventura Boulevard Sherman Oaks, California 91403 Re:$ Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) Dear Ladies and Gentlemen: I am the attorney for Old Town/Westside Improvement Authority (the "Authority") and have acted as such in connection with the sale of the above-referenced Bonds, which are being delivered and sold pursuant to a Purchase Contract dated 1996 (the "Purchase Contract") among Stone & Youngberg LLC (the "Underwriter"), the CFD Financing Authority and the Authority. Any capitalized terin used herein and not defmed shall have the meaning assigned to it in the Purchase Contract. In this connection, I have reviewed and examined certain proceedings and documents with respect to the Bonds, and such records, certificates and other documents as I have considered necessary or appropriate for the purposes of this opinion. Based on such review and such other considerations of law and fact as I believe to be relevant, I am of the opinion that: 1 . The Authority is a joint exercise of powers authority duly organized under the laws and Constitution of the State of California. 2.The Authority Resolutions were duly adopted at a meeting of the Board of Directors of theAuthority which was called and held pursuant to law and in accordance with Exhibit E CL252424.51 Page 1 [11/19/96 DRAFI] all applicable open meeting laws and at which a quorum was present and acting at the time of the adoption of the Authority Resolutions, and the Authority Resolutions were adopted by a majority vote of all members of the Board of Directors. 3. The execution and delivery by the Authority of the Authority Documents and the Purchase Contract and the performance of its obligations thereunder do not and will not result in a violation of any provision of, or in default under, the laws of the State of California or, to the best of my knowledge, any agreement or other instrument to which the Authority is a party or by which it or its property is bound. 4. There are no legal or governmental actions, proceedings, inquiries or investigations pending with respect to which the Authority has been served with process or to my knowledge threatened by governmental authorities or to which the Authority is a party or of which any property of the Authority is subject, except as described in the Official Statement, which, if determined adversely to the Authority, would individually or in the aggregate (i) materially and adversely affect the validity or the enforceability of the Authority Documents and the Purchase Contract, or (ii) otherwise materially or adversely affect the ability of the Authority to comply with its obligations under the Authority Documents or the Purchase Contract, or materially and adversely affect the transactions contemplated by the Official Statement to be engaged in by the Authority. 5. Based upon my experience as attorney for the Authority and on my review of and participation in the drafting of the Official Statement, I have no reason to believe that the information regarding the Authority or the District in the Official Statement contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Very truly yours, Exhibit E CL252424.51 Page 2 [11/19/96 DRAFII EXHIBIT F [Opinion of Developer's Counsel] [to come] Exhibit F [L252424.51 Page 1 EXHIBIT G [11/19/% DRAFN [Letterhead of Counsel to the Underwriter] 1996 Stone & Youngberg LLC 15260 Ventura Boulevard Sherman Oaks, California 91403 Attention:John D. McAlister Re:$ Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) Dear Ladies and Gentlemen: We have acted as your counsel in connection with your purchase from Old Town/Westside Improvement Authority (the "Authority") of 1996 Local Agency Revenue Bonds, in the aggregate principal amount of $ (the "Bonds"), pursuant to the Purchase Contract dated , 1996 (the "Purchase Contract") among you, the CFD Financing Authority and the Authority. The Bonds are issued pursuant to the Indenture, dated as of , 1996 (the "Indenture") between the Authority and First Trust of California, National Association, as trustee (the "Trustee"). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Contract. In that connection, we have reviewed certain portions of the Indenture, the Official Statement of the Authority, dated , 1996 with respect to the Bonds (the "Official Statement"), the Purchase Contract, certificates of the Authority, the Trustee, the Developer and others, the opinions referred to in Section 9 of the Purchase Contract and such other records, opinions and documents, and we have made such investigations of law, as we have deemed appropriate as a basis for the conclusions hereinafter expressed. In arriving at the conclusions hereinafter expressed, we are not expressing any opinion or view on, and with your permission are assuming and relying on, the validity, accuracy and sufficiency of the records, documents, certificates and opinions referred to above (including the accuracy of all factual matters represented and legal conclusions contained therein, including (without Iiinitation) representations and legal conclusions regarding the due Exhibit G CL252424.51 Page 1 [11/19/% DRAM authorization, issuance, delivery, validity and enforceability of the Bonds and the exclusion of interest thereon from gross income for federal income tax purposes). We have assumed that all records, documents, certificates and opinions that we have reviewed, and the signatures thereto, are genuine. Based on and subject to the foregoing, and in reliance thereon, we are of the opinion that the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. We are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Official Statement and make no representation that we have independently verified the accuracy, completeness or fairness of any such statements. However, in our capacity as counsel for the Underwriter, we met in conferences with your representatives and representatives of the Authority, the Developer, the Fiscal Agent, their respective counsel, Jones Hall Hill & White, a professional law corporation, as bond counsel, the Underwriter, Berryman & Henigar, as Special Tax Consultant, and others, during which conferences the contents of the Official Statement and related matters were discussed. Based on our participation in the above-mentioned conferences, and in reliance thereon and on the records, documents, certificates and opinions herein mentioned (as set forth above), we advise you that, during the course of our representation of the Underwriter on this matter, no information came to the attention of the attorneys in our firm rendering legal services in connection with such representation which caused us to believe that the Official Statement as of its date and as of the date of this opinion (except for any fmancial, statistical or engineering data or forecasts, numbers, charts, estimates, projections, assumptions, or expressions of opinion, any information about valuation, appraisals or environmental matters, or the Appendices, or any information about book-entry or DTC included therein, as to which we express no opinion or view) contained or contains any untrue statement of a material fact or omitted or omits 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. We are furnishing this letter to you pursuant to Section 9 - of the Purchase Contract solely for your benefit as Underwriter. Our engagement with respect to this matter has terminated as of the date hereof, and we disclaim any obligation to update this letter. This letter is not to be used, circulated, quoted or otherwise refer-red to or relied upon for any other purpose or by any other person. This letter is not intended to, and may not, be relied upon by owners of Bonds. Very truly yours, MUNGER, TOLLES & OLSON Exhibit G [L252424.51 Page 2 EXHIBIT H [11/19/% DRAFII Old Town/Westside Improvement Authority 43174 Business Park Drive Temecula, California 92590 Stone & Youngberg LLC 15260 Ventura Boulevard Shennan Oaks, California 91403 Re: $ Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) Dear Udies and Gentlemen: I am the attorney for Old Town/Westside Improvement Authority (the "Authority") and have acted as such in connection with the sale of the above-referenced Bonds, which are being delivered and sold pursuant to a Purchase Contract dated 9 1996 (the "Purchase Contract") among Stone & Youngberg LLC (the "Underwriter"), the CFD Financing Authority and the Authority. Any capitalized tenn used herein and not defmed shall have the meaning assigned to it in the Purchase Contract. In this connection, I have reviewed and examined certain proceedings and documents with respect to the Bonds, and such records, certificates and other documents as I have considered necessary or appropriate for the purposes of this opinion. Based on such review and such other considerations of law and fact as I believe to be relevant, I am of the opinion that: 1 . The CFD Financing Authority is validly existing under the laws of the State of California as a community facilities district, with full power and authority to execute and perform its obligations under the Fiscal Agent Agreement, the Purchase Contract and the Bond Purchase Agreement (collectively, the "CFD Documents"); 2.The resolution of the CFD Financing Authority authorizing the execution of the CFD Financing Documents was duly adopted at a meeting of the which was called and held pursuant to law, at which a quorum was present and acting throughout, is in full force and effect and has not been amended, modified or rescinded; Exhibit H Paty-e I [L252424.51 [11/19/% DRAFN 3. The CFD Financing Documents have been duly authorized, executed and delivered by the CFD Financing Authority and, assuming due authorization and delivery by the other parties thereto, constitute valid and binding obligations of the CFD Financing Authority, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws affecting enforcement of creditors' rights generally or by equitable principles if equitable remedies are sought; 4. The execution and delivery by the CFD Financing Authority of the CFD Financing Documents and compliance with the provisions thereof will not materially conflict with any law or agreement to which the CFD Financing Authority is subject or by which it is bound; 5. The information contained in the Official Statement under the caption "THE DISTRICT" is fair and accurate and does not fail to state any fact necessary to make the matters stated therein, in light of the circumstances under which they were made, not misleading in any material respect; 6.Nothing has come to the attention of such counsel that would indicate that the information relating to the CFD Financing Authority, the CFD Financing Documents, and the Local Agency Bonds contained in the Official Statement (excluding therefrom any fmancial and statistical data), contains any untrue statement of a material fact or omits 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; and 7. Except as may be required under blue sky or other securities laws of any state, there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory authority required in connection with the execution, delivery and sale of the Local Agency Bonds or the consunmiation by the CFD Financing Authority of the other transactions contemplated by the Official Statement or the Bond Purchase Agreement; Exhibit H Page 2 CL252424.51 EXHIBIT I [11/19/96 DRAFII Opinion of counsel to the Trustee Old Town/Westside Improvement Authority 43174 Business Park Drive Temecula, California 92590 Stone & Youngberg LLC 15260 Ventura Boulevard Sherman Oaks, California 91403 Re:$ Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) Dear Ladies and Gentlemen: We have acted as counsel to First Trust of California, National Association, in connection with the sale by the Old Town/Westside Improvement Authority (the "Authority") of 1996 Local Agency Revenue Bonds, in the aggregate principal amount of $ (the "Bonds"), pursuant to the Purchase Contract dated , 1996 (the "Purchase Contract") among Stone & Youngberg LLC, the CFD Financing Authority and the Authority. The Bonds are issued pursuant to the Indenture, dated as of , 1996 (the "Indenture") between the Authonty and First Trust of California, National Association, as trustee (the "Trustee"). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Contract. (i) The Trustee is a national banking association duly organized and validly existing under the laws of the United States of America having full power and being qualified to enter, accept and administer the trust created under the Indenture and the Fiscal Agent Agreement, and to authenticate and deliver the Bonds and the Local Agency Bonds, respectively; (ii) The Bonds and the Local Agency Bonds have been duly authenticated and delivered by the Trustee in accordance with the Indenture and the Fiscal Agent Agreement, respectively, and the Indenture and the Fiscal Agent Agreement have been duly authorized, executed and delivered by the Trustee and, assuming due authorization, execution and delivery thereof by the other respective Exhibit I Page I [L252424.51 [11/19/% DRAM parties thereto, constitute the legal, valid and binding obligations of the Trustee enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles if equitable remedies are sought; and (iii) No authorization, approval, consent or order of any governmental agency or any other person is required for the valid authorization, execution and delivery of the Indenture or the Fiscal Agent Agreement by the Trustee or the authentication and delivery of the Bonds or the Local Agency Bonds by the Trustee. Exhibit I Page 2 [L252424.51 [11/19/% DRAFrl EXHEBIT J OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY 1996 LOCAL AGENCY REVENUE BONDS CERTIFICATE OF THE OLD TOWN/WESTSEDE @ROVEMENT AUTHORITY I, , hereby certify that I am the of the Old Town/Westside Improvement Authority (the "Authority"), a public body, corporate and politic, duly organized and existing under the laws of the State of California (the State") and that as such, I am authorized to execute this Certificate on behalf of the Authority in connection with the issuance of the above-captioned Bonds (the "Bonds"). I hereby further certify on behalf of the Authority that: (1) The representations and warranties of the Authority contained in Section 4 of that certain purchase contract by and among the Authority, the CFD Financing Authority and Stone & Youngberg LLC, dated , 1996 (the "Purchase Contract") are true and correct and in all material respects as of the date hereof as if made on the date hereof, (2) The Authority has complied with all agreements, covenants and conditions to be complied with by the Authority on or prior to the date hereof under the Authority Documents; (3) To the best of my knowledge, other than as described in the Official Statement, no litigation is pending with respect to which the Authority has been served with process or threatened against the Authority (either in state or federal courts) (i) to restrain or enjoin the issuance or delivery of any of the Bonds; (ii) in any way contesting or affecting the authority of the Authority for the execution or delivery of the Bonds, or the validity of the Authority Documents; or (iii) in any way contesting the existence or powers of the Authority, as such existence or powers in any way relate to the issuance of the Bonds, or the Authority's obligations under the Authority Documents; and (4) The statements and information contained in the Official Statement concerning the Authority do not contain any untrue statement of material fact or omit to state any fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading in any material respect. Capitalized terms not defined herein shall have the same meaning as is set forth in the Purchase Contract. Exhibit J [L252424.51 Page 3 [11/19/% DRAFN IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date hereinbelow set forth. Dated: 1996 OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY By: Exhibit J [L252424.51 Page 4 [11/19/% DRAF-N EXHIBIT K OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY 1996 LOCAL AGENCY REVENUE BONDS CERTIFICATE OF THE OLD TOWN/WESTSEI)E CO FACILrrEES DISTRICT NO. 1 (OLD TOWN AREA PUBLIC IMPROVEMEENTS) 1, , hereby certify that I am the of the Old Town/Westside Community Facilities District No. 1 (Old Town Area Public Improvements) (the "CFD Financing Authority"), a public body, corporate and politic, duly organized and existing under the laws of the State of California (the State") and that as such, I am authorized to execute this Certificate on behalf of the Authority in connection with the issuance of the above-captioned Bonds (the "Bonds"). I hereby further certify on behalf of the CFD Financing Authority that: (1) The representations and warranties of the CFD Financing Authority contained in the Purchase Contract and the Bond Purchase Agreement are true and correct in all material respects on and as of the Closing Date as if made on the date of Closing; (2) Except as described in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body known to be pending or threatened, wherein an unfavorable decision, ruling or finding would: (A) affect the creation, organization, existence or powers of the CFD Financing Authority, or the titles of its members and officers to their respective offices, (B) enjoin or restrain the issuance, sale and delivery of the Local Agency Bonds, the levy or collection of the special taxes or any other moneys or property pledged or to be pledged under the Fiscal Agent Agreement, or the pledge thereof, (C) in any way question or affect any of the rights, powers, duties or obligations of the City with respect to the moneys and asserts pledged or to be pledged to pay the principal of, premium, if any, or interest on the Local Agency Bonds, (D) in any way question or affect any authority for the issuance of the Local Agency Bonds, or the validity or enforceability of the Local Agency Bonds or the transactions on the part of the CFD Financing Authority contained in the Fiscal Agent Agreement, or (E) in any way question or affect the Bond Purchase Agreement or the transactions on the part of the CFD Financing Authority contemplated by the Bond Purchase Agreement, the Official Statement or the documents to which the CFD Financing Authority is a party referred to in the Official Statement; (3) The CFD Financing Authority has complied with all agreements, covenants and arrangements, and satisfied all conditions, on its part to be complied with or satisfied Exhibit K Page 1 [L252424.51 [11/19/% DRAFT] hereunder, under the Bond Purchase Agreement and under the Fiscal Agent Agreement on or prior to the date of Closing; and (4) To the best of its knowledge, no event affecting the CFD Financing Authority has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is necessary to disclose therein in order to make the statements with respect to the CFD Financing Authority or the Local Agency Bonds not misleading in any respect. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date hereinbelow set forth. Dated: 1996 OLD TOWN/WESTSIDE COMMUNITY FACILJTIES DISTRICT NO. 1 (OLD TOWN AREA PUBLIC IMPROVEMENTS) By: Exhibit K Pacre 2 [L252424.51 EXHIBIT L [11/19/96 DRAFrj OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY 1996 LOCAL AGENCY REVENUE BONDS CERTIFICATE OF FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION I, , hereby certify that I am the of First Trust of California, National Association (the "Trustee"), a public body, corporate and politic, duly organized and existing under the laws of the United States of America and that as such, I am authorized to execute this Certificate on behalf of the Trustee in connection with the issuance of the above-captioned Bonds (the "Bonds"). I hereby further certify on behalf of the Trustee that: (1) The Trustee is duly organized and existing as a national banking association under the laws of the United States of America having the full power and authority to enter into and perfonn its duties under the Indenture and the Fiscal Agent Agreement, and to execute and deliver the Bonds and the Local Agency Bonds, respectively; (2)The Trustee is duly authorized to enter into and deliver the Indenture and the Fiscal AgentAgreement are duly authorized, executed and delivered by the other respective parties thereto,to execute and deliver the Bonds and the Local Agency Bonds; (3) The execution and delivery by the Trustee of the Bonds, the Local Agency Bonds, the Indenture and the Fiscal Agent Agreement, and compliance with the respective terms thereof, will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or, to its best knowledge, any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties (except that no representation, warranty or agreement is made by the Trustee with respect to any federal or state securities or blue sky laws or regulations) wherein such conflict, violation, breach or default would adversely affect the ability of the Trustee to perform its respective obligations under the Indenture and the Fiscal Agent Agreement; (4) There is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or, to the best of the knowledge of the Trustee, threatened against or affecting the existence of the Trustee or in any way contesting or Exhibit L Page 1 [L252424.51 [11/19/% DRAFI] affecting the validity or enforceability of the Bonds, the Local Agency Bonds, the Indenture or the Fiscal Agent Agreement, or contesting the powers of the Trustee or its authority to enter into and perform its obligations under any of the foregoing, or wherein an unfavorable decision, ruling or finding would adversely affect the Trustee or the transactions contemplated in connection with the execution and delivery of the Bonds or the Local Agency Bonds, or which, in any way, would adversely affect the validity of the Bonds, the Local Agency Bonds, the Indenture or the Fiscal Agent Agreement, or any agreement or instrument to which the Trustee is a party and which is used or contemplated for use in the Indenture or the Fiscal Agent Agreement or the consummation of the transactions contemplated in connection with the execution and delivery of the Bonds or the Local Agency Bonds; and (5) Subject to the respective provisions of the Indenture and the Fiscal Agent Agreement, the Trustee will apply the proceeds of the Bonds and the Local Agency bonds to the purposes specified in the Indenture and the Fiscal Agent Agreement, respectively. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date hereinbelow set forth. Dated: 1996 FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION By: Exhibit L Page 2 (L252424.51 EXHIBIT M [11/19/% DRAFII CERTWICATE OF SPECL4,L TAX CONSULTANT Berryman & Henigar ("Tax Consultant"), Califonua, was retained as Tax Rate Consultant and assisted in the preparation of and has reviewed the Rate and Method of apportionment of the Special Tax set forth in Exhibit B to Resolution No. of the Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements). Based upon such review, Tax Consultant hereby certifies that the Special Tax, if collected in the maximum amounts permitted pursuant to the Special Tax Formula on the date hereof, would generate at least % of the gross annual debt service on the Bonds, provided that the projected development figures of the attached Certificate of IAndowner Information and the annual debt service figures on the attached debt service schedule, which were relied upon by Tax Consultant, are substantially true and correct. Although the Special Tax if collected in the maximum amounts pursuant to the Special Tax Formula will generate at least % of the gross annual debt service payable with respect to the Bonds each year, no representation is made herein as to actual amounts that will be collected in future years. All information supplied by Tax Consultant for use in the Official Statement, dated , 1996 is true and correct as of the date of the Official Statement and as of the date hereof, subject to the proviso set forth above with respect to information provided by others. Dated: 1996 BERRYMAN & HENIGAR By Exhibit M Page 1 [L252424.51 [11/19/96 DRAFT] EXHI]BIT N CERTIFICATES AND OPINIONS OF FLUOR [TO COME] Exhibit N Page I CL252424.51 PRELIMINARY OFFICLKL STATEMIENT DATED . 1996 NEW ISSUE - BOOK-ENTRY ONLY NO RATING APPLIED FOR In the opinion ofjones Hall Hill & White, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, thatfor the purpose of computing the alternative minimum tax imposed on corporations, such interest is taken into account in determining certain income and earnings. In thefurther opinion ofbond Counsel, such interest is exemptfrom California personal income taxes. See "TAX AMTTERS" herein. S29,750,000- DRAFT OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY DRAFT 1996 LOCAL AGENCY REVENUE BONDS (OLD TOWN AREA) Dated: December 1, 1996 Due: September 1, 2026, as shown below THIS OFFICIAL STATEMENT IS FURNISHED SOLELY FOR THE PURPOSE OF CONSIDERATION BY PROSPECTIVE SOPHISTICATED PURCHASERS OF THE ABOVE-CAPTIONED BONDS WITH THE EXPERIENCE AND FINANCIAL EXPERTISE TO UNDERSTAND AND EVALUATE THE HIGH DEGREE OF RISK @RENT IN THIS @STMENT. PURCHASE OF THE BONDS WILL CONSTITUTE AN INVESTMENT SECURED SOLELY BY A PLEDGE OF PRINCIPAL AND INTEREST PAYMENTS, IF ANY, ON THE LOCAL AGENCY BONDS (DEFINED BELOW). THE PURCHASE OF THE BONDS IS AN @STMENT SUBJECT TO A HIGH DEGREE OF RISK, INCLUDING THE RISK OF NON-PAYMENT OF PRINCIPAL AND INTEREST. The Bonds are being issued by the Old Town/Westside Improvement Authority (the "Authority") to provide fiends to acquire the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. I (Old Town Area Public Improvements) 1996 Special Tax Bonds (the "Local Agency Bonds"), which will finance certain public improvements, including the first phase of a freeway bypass road and appurtenant facilities and other improvements as further described herein (the "Public Improvements") located in or adjacent to the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. I (Old Town Area Public Improvements) (the "District"). Some of the Public Improvements are being constructed in conjunction with the construction of a proposed development known as the "Old Town Temecula Entertainment Center," which is a proposed live theater and retail complex to be located in Temecula, California. The Bonds are authorized to be issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, as amended (the "Bond Law"), and will be issued pursuant to an Indenture of Trust, dated as of December 1, 1996 (the "Indenture"), between the Authority and First Trust of California, National Association, as trustee (the "Tnistee"), and a resolution of the Authority approving the Indenture. The only source of moneys to pay the debt service on the Bonds is amounts derived fi-om the collection of the Special Tax (as defmed herein) by the Old Town/Westside Community Facilities District Financing Authority (the "CFD Financing Authority") and its application to the payment of the principal and interest on the Local Agency Bonds. The Local Agency Bonds are authorized pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 5331 1 et seq. of the Government Code of the State of California), a resolution adopted by the Board of Directors of the CFD Financing Authority on June 11, 1996, and a Fiscal Agent Agreement between the CFD Financing Authority and First Trust of California, National Association, acting as the Fiscal Agent. The Local Agency Bonds are payable from proceeds of an annual Special Tax (as defined herein) to be levied on and collected from owners of real property located within the District and moneys deposited in certain funds established under the Fiscal Agent Agreement. The Bonds when issued will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company ("DTC"), New York, New York. Purchases of beneficial interests in the Bonds will be made in book-entiy-only form. The Bonds are being issued as fully registered Bonds in denominations of $100,000 or any integral multiple of $5,000 in excess thereof. Interest on the Bonds is payable on March I and September I to maturity or earlier redemption (each, an "Interest Payment Date"), commencing March 1, 1997. The Bonds are subject to optional and mandatory redemption prior to maturity as described herein. See "THE BONDS - Optional Redemption," " - Mandatory Redemption" and " - Mandatory Sinking Payment Redemption" herein. Principal of and interest on the Bonds will be payable directly to DTC as the registered owner of the Bonds by the Trustee. Disbursement of such payments to the DTC participants is the responsibility of DTC and disbursements of such payments to the beneficial owners is the responsibility of the DTC participants and the indirect participants, as more fully described herein. Any purchaser as a beneficial owner of a Bond must maintain an account with a broker or dealer who is, or acts through, a DTC Participant to receive payment of the principal of and interest on a Bond. See "THE BONDS - Book-Entry-Only System" herein. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY, THE CID FINANCING AUTHORITY, THE CITY OF TEMECULA, THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION, OR A PLEDGE OF THE FAITH AND CREDIT OF THE AUTHORITY, THE CFD FINANCING AUTHORITY OR THE CITY. THE OBLIGATION OF THE AUTHORITY TO PAY PRINCIPAL OF OR INTEREST ON THE BONDS DOES NOT CONSTITUTE AN OBLIGATION OF THE AUTHORITY FOR WHICH THE AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CID FINANCING AUTHORITY, THE CITY, OR THE AUTHORITY, BUT ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE REVENUES AND AMOUNTS PLEDGED THEREFORE UNDER THE INDENTURE. THE OBLIGATION OF THE CID FINANCING AUTHORITY TO MAKE PAYMENTS WITH RESPECT TO THE LOCAL AGENCY BONDS DOES NOT CONSTITUTE AN OBLIGATION OF THE CFD FINANCING AUTHORITY FOR WHICH THE CFD FINANCING AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION, OR FOR WHICH THE CFD FINANCING AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION, OTHER THAN THE SPECIAL TAX. THE 'Preliminary, subject to change. [L289429.81 DRAFT dated November 19, 1996 LOCAL AGENCY BONDS ARE LINUTED OBLIGATIONS OF THE CFI) FINANCING AUTHORITY PAYABLE SOLELY FROM THE SOURCES SPECIFICALLY PROVIDED IN THE FISCAL AGENT AGREEMENT. This cover page contains information for quick reference only. It is not intended to summarize all relevant parts of the Official Statement or this issue. Prospective purchased must read the entire Official Statement to obtain information essential to the making of any informed investment decision with respect to the Bonds. See the section of this Official Statement entitled "SPECIAL RISK FACTORS" for a discussion of risk factors that should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. MATURITY SCHEDULE S29,750,M % Term bmds Due September 1, 2026 - Price % (Pi= accrued intermt from December 1, 1996) The Bonds are offered when, as and if issued and received by the Underwriter, subject to the approval as to their legality by Jones Hall Hill & White, A Professional Law Corporation, San Francisco, California, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the Underwriter by Munger, Tolies & Olson, Los A ngeles. California, for the A uthority and the CFD Financing A uthorit.v by Richards, Watson & Gershom Los Angeles, California, andfor the Developer by Cox, Ca!rtle & Nicholson, LLP, Los Angeles, California. It is anticipated that the Bonds in book-entry form will be available for delivery through The Depository Trust Company in New York New York on or about December -, 1996 Stone & Youngberg LLC Dated: 1996 [L289429.81 DRAFT dated November 19, 1996 No dealer, broker, salesperson or other person has been authorized by Stone & Youngberg LLC (the "Underwriter"), the Authority or the CFD Financing Authority to give any infomation or to make any representations, other than those contained herein, in connection with the offering of the Bonds described herein, and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, the Underwriter or the CFD Financing Authority. This Official Statement does not constitute an offer to sell nor the solicitation of any offer to buy nor shall there by any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed to be a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly described herein, are intended solely as such and are not to be construed as representations of fact. The information set forth herein has been obtained from sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriter, the Authority or the CFD Financing Authority. Neither the CFD Financing Authority nor the Authority has made any independent verification of the information contained herein. The information and expression of opinions contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the Developer or the CFD Financing Authority or any other party described herein since the date hereof. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. The CFD Financing Authority and the Developer have covenanted to provide secondary market disclosure regarding certain information and'events which may occur over the life of the Bonds. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. [L289429.81 DRAFT dated November 19, 1996 $2997509000- OLD TOWN/WESTSIDE IWROVEMENT AUTHORITY 1996 LOCAL AGENCY REVENUE BONDS (OLD TOWN AREA) Authority and CFD Financing Authority Board of Directors Karel Lindemans Pat Birdsall Jeff Stone Ron Roberts Steve Ford Authority and CFD Financing Authority Officials Ronald E. Bradley, Executive Director Genie Roberts, Treasurer June Greek, Secretary SPECL4,L SERVICES Bond Counsel Jones Hall Hill & @te, A Professional Law Corporation San Francisco, California City Attorney, and General Counsel to the Authority and the CFD Financing Authority Richards, Watson & Gershon Los Angeles, California Trustee and Fiscal Agent First Trust of California, National Association St. Paul, Minnesota Special Tax Consultant Appraiser Berryman & Henigar Brown, Chudleigh, Schuler and Associates San Diego, California Torrance, California 'Preliminary, subject to change. [L289429.81 (ii) DRAFT dated Novembor 19, 1996 OMCL4L STA TABLE OF CONTENTS INTRODUCTION 1 General 1 The Authority 1 The CFD Financing Authority 1 The City 2 Authorization and Purpose of Bonds 2 Security for the Bonds 2 The District, the Development and the Project 3 Estimated Market Value 4 Redemption 5 Risk Factors 5 Continuing Disclosure 5 Limited Obligations 5 THE BONDS 6 General Provisions 6 Book-Entry-Only System 6 Registration of Exchange or Transfer 8 Mutilated, Lost, Destroyed or Stolen Bonds 8 Redemption 8 Optional Redemption 8 Mandatory Redemption 9 Mandatory Sinking Fund Redemption 9 Selection of Bonds for Redemption 10 Notice of Redemption 10 Estimated Annual Debt Service Schedule 11 SOURCES AND USES OF FUNDS 13 SECURITY FOR THE BONDS 14 Pledge Under the Indenture 14 Funds, Accounts and Flow of Funds 14 Program Fund 14 Revenue Fund, Principal Account, Interest Account and Reden4)tion Account 14 Flow of Funds 15 Reserve Fund for the Local Agency Bonds 15 Disposition and Amendment of the Local Agency Bonds 16 THE LOCAL AGENCY BONDS 16 Authorization and Purpose of Local Agency Bonds 16 General Provisions of The Local Agency Bonds 16 The District 16 The Project 17 Security for the Local Agency Bonds 17 Reserve Fund 19 Proceeds of Foreclosure Sales 19 [L289429.81 (iii) Property Ownership; Direct and Overlapping Debt 20 Land Values 22 SPECIAL RISK FACTORS 22 Risks Associated with Failure to Complete Project or Development 22 Risks Associated with Financial Failure of Development 23 Change in Management 24 Conipetition 24 Reliance on a Single Market 24 Reliance on Tourist Visitor Market 24 Local Lodging Availability and Development 24 Risks Associated with Substantial Leverage; Ability to Service Debt 25 Concentration of Ownership 25 Land Values and Appraisal 26 Lack of Operating History 26 Risks Associated with Operating Projections 27 Potential Delay and Lirnitation in Foreclosure Proceedings 27 Bankruptcy 28 Eminent Domain 29 Failure to Develop Land 30 Parity Debt; Additional Indebtedness 30 Local, State and FederO Land Use Regulations 30 Earthquakes 31 No Acceleration Provision 31 Insufficiency of Special Taxes 31 Limitations on Remedies 32 Loss of Tax Exemption 32 Hazardous Materials 32 Limitations on Tax Revenues 33 Limited Secondary Market 34 Risks Associated with Proposition 218 34 Dependence upon Fluor Daniel for Construction 34 Litigation 35 THE PROJECT 35 Description of the Project 36 Construction Management and Supervision Agreement; Limited Completion Guaranty 38 Joint Connnunity Facilities Agreements 39 Financing Plan 39 PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER 39 General 40 The Developer 40 Temecula Entertaimnent Valley, Inc 41 Fluor Daniel Temecula, Inc 41 Entrepreneurial Ente ent Corporation, Inc 41 Management of the Development 41 Officers of the Developer 41 Management Co=Wttee 42 [L289429'.81 (iv) OGDEN Ente@ent Services, Inc 42 Ownership of the Real Property 43 Old Town Core 43 Arena " Parldng u Open Space 44 Hotel/Connnercial 44 Residential/RV Park 45 Govermnental Approvals and Agreements 45 Advisory Election 45 The Specific Plans 45 Tentative and Final Maps 46 Master Conditional Use Pe@t 46 Zoning 46 The Development Agreement 46 Owner Participation Agreement 46 Envirorunental Review 47 Govermnent Envirorunental Pennits 47 Development Coniponents 48 Private Financing 50 Future Plans for the Development 51 THE AUTHORITY 51 THE CFD FINANCING AUTHORITY 52 THE CITY 52 CONCLUDING INFORMATION 53 Certain Legal Matters 53 No Rating 53 Underwriting 54 Litigation 54 Tax Matters 54 Miscellaneous 54 ENDICES: Appendix A - Summary of the Principal Legal Documents Appendix B - Rate and Method of Apportiomnent of Special Tax Appendix C - Appraisal Appendix D - Form of Opinion of Bond Counsel Appendix E - General Iffonmtion Regarding the City of Temecula Appendix F - Forms of Continuing Disclosure Certificates Appendix G - Map of District Appendix H - Old Town Temecula Operating Projection CL269429.81 (V) TABLES: Table I - Bond Debt Service Schedule Table 2 - Sources and Uses Table 3 - Debt Report [L289429.81 (vi) $2997509000- OLD TOWN/WESTSIDE IMPROVEM[ENT AUTHORITY 1996 LOCAL AGENCY REVENUE BONDS (OLD TOWN AREA) INTRODUCTION This introduction contains only a brief summary of certain of the terms of the Bonds being offered. A full review should be made of the entire Official Statement, including the cover page and the Appendices, and of all documents referenced herein, should be made by persons interested in investing in the Bonds. All statements contained in this introduction are qualified in their entirety by reference to the entire Official Statement. References to and summaries ofprovisions of the laws of the State of California or any documents referred to herein do not purport to be complete and such references are qualified in their entirety by reference to the complete provisions thereof INVESTMENT IN THE BONDS INVOLVES RISKS WHICH MAY NOT BE APPROPRIATE FOR CERTAIN INVESTORS. THEREFORE, ONLY PERSONS WITH SUBSTANTIAL FINANCIAL RESOURCES WHO UNDERSTAND THE RISKS OF INVESTMENT IN THE BONDS SHOULD CONSIDER SUCH INVESTMENT. General The purpose of this Official Statement, which includes the cover page, Table of Contents and Appendices (the "Official Statement"), is to provide certain information concerning the issuance by the Old Town/Westside Improvement Authority (the "Authority") of its 1996 Local Agency Revenue Bonds (Old Town Area) (the "Bonds") in the aggregate principal amount of $29,750,000.- The Authority The Authority is a joint exercise of powers authority organized and existing pursuant to the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title I of the California Govenunent Code (the "Act"), and that certain Old Town[Westside Improvement Authority Joint Exercise of Powers Agreement dated November _, 1996 (the "Authority Agreement"), between the City of Temecula (the "City") and the Redevelopment Agency of the City of Temecula (the "Agency"). Under applicable law, the Authority is a legal entity, separate and distinct from the City, the Agency and the CFD Financing Authority (described below), and the Authority's debts are not the debts of the City, the Agency or the CFD Financing Authority. The Authority was created for the purpose of assisting in the financing of public capital improvements in the Old Town area of the City and the Westside area of the City and for other purposes which are authorized under the Act. The Authority has no assets, and it is not expected to have any assets in the future other dm those pledged to the payment of the Bonds under the Indenture. The CFD Financing Authority The Old Town/Westside Con-ununity Facilities District Financing Authority ("CFD Financing Authority") is a joint exercise of powers authority organized and existing pursuant to the Act, and that certain Old Town/Westside Connnunity Facilities District Financing Authority Joint Exercises of Powers Agreement, dated September 12, 1995, between the City and the Agency. Under applicable law, the CFD Financing Authority is a legal entity, separate and distinct from the City, the Agency and the Authority, and the CFD Financing Authority's debts are not the debts of the 'Preliminary, subject to change. [L289429.81 DRAFT dated Novembw 19, 1996 City, the Agency or the Authority. The CFD Financing Authority was created for the purpose of forming the District (as defined below) and issue bonds therefor, and for other purposes which are authorized under the Act. The CFD Financing Authority has no assets, and it is not expected to have any assets in the future other than those pledged to the payment of the Local Agency Bonds (as defined below). The City The City incorporated under the general laws of the State of California on December 1, 1989. It is located in the County of Riverside on Interstate 15, forty-five miles south of the City of Riverside and sixty miles north of the City of San Diego. The City has no liability whatsoever with respect to the Bonds or the Local Agency Bonds. General information regarding the City is set forth in Appendix E hereto, and is intended for informational purposes only. Authorization and Purpose of Bonds The Bonds are being issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (conunencing with Section 6584) of the Act, and an Indenture of Trust dated as of December 1, 1996 (the "Indenture"), between the Authority and First Trust of California, National Association, as trustee (the "Trustee"). The Bonds are being issued to acquire the Old Town/Westside Con-ununity Facilities District Financing Authority Community Facilities District No. I (Old Town Area Public Improvements) 1996 Special Tax Bonds (the "Local Agency Bonds"). The Local Agency Bonds are being issued to finance certain public improvements (the 'Project"), including the first phase of a freeway bypass road and appurtenant facilities and other improvements as further described herein (the "Public Improvements") located in or adjacent to the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) (the "District"). See "THE PROJECT" herein. Some of the Public Improvements are being constructed in conjunction with the proposed development known as Old Town Temecula Entertainment Center (die "Development"), which is a proposed live theater and retail complex to be located in the City as more fully described under "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER" herein, and otherwise to provide public infrastructure needed for development in these areas of the City. The Local Agency Bonds will be issued by the CFD Financing Authority for the District pursuant to that certain Fiscal Agent Agreement dated as of December 1, 1996 (the "Fiscal Agent Agreement") between the CFD Financing Authority and First Trust of California, National Association, acting as the fiscal agent (the "Fiscal Agent"). Pursuant to the Fiscal Agent Agreement, the CFD Financing Authority, on behalf of the District, will make principal and interest payments with respect to the Local Agency Bonds (the 'Special Tax Revenues"), subject to the provisions of the Fiscal Agent Agreement. The Local Agency Bonds constitute a limited obligation of the CFD Financing Authority solely payable from the proceeds of an annual special tax to be levied on certain real property within the District (the "Special Tax") and amounts in certain funds held under the Fiscal Agent Agreement. The CFD Financing Authority has covenanted in the Fiscal Agent Agreement to annually reconcile Special Tax levies and Special Tax collections, and to initiate judicial foreclosure proceedings in the event of the discovery of delinquent payments of Special Taxes following such annual reconciliations. The Special Tax is to be levied according to a Rate and Method of Apportionment of Special Tax (the "Rate and Method of Apportionment") approved by a vote of the qualified electors within the District. See "THE LOCAL AGENCY BONDS" and APPENDIX B - "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX" herein. Security for the Bonds The Bonds are equally secured by a first lien on and pledge of all of the Revenues (as defined below). Payment of the principal of, premium, if any, and interest on the Bonds will be made from Revenues held in the Revenue Fund under the Indenture. The term "Revenues" includes (a) all amounts derived from or with respect to the Local Agency Bonds, including but not limited to all payments of principal thereof and interest thereon, and (b) investment income with respect to any moneys held by the Trustee in the funds and accounts established under the Indenture. The Trustee will [L289429.81 2 DRAFT dated November 19, 1996 not have any obligation or liability to the Owners to make payments of the principal of, premium, if any, or interest on the Bonds except from Revenues or other mnounts available to it under the Indenture for such purposes. Other than the proceeds of debt service paid on the Local Agency Bonds deposited to the Revenue Fund under the Indenture and accrued interest on the Bonds paid by the initial purchasers of the Bonds, it is not expected that there will be any amounts held in the funds and accounts established under the Indenture available for payment on the Bonds. There is no reserve @ established or held under the Indenture; however, a Reserve Fund providing security for payment of the Local Agency Bonds will be established under the Fiscal Agent Agreement. See "THE LOCAL AGENCY BONDS - Reserve Fund" herein. All Revenues will be deposited by the Trustee into the Revenue Fund established under the Indenture. In accordance with the provisions of the Indenture, in order to pay the principal of and interest on the Bonds, on each Interest Payment Date (as defmed below), the Trustee will transfer from the Revenue Fund and deposit into the following respective accounts within the Revenue Fund, the following arnounts in the following order of priority: (a) into the Interest Account, an amount required to cause the aggregate amount on deposit therein to equal the ainount of interest becoming due and payable on such Interest Payment Date on all outstanding Bonds; and (b) into the Principal Account, an arnount required to cause the aggregate amount on deposit therein to equal the principal arnount or the redemption price of the Bonds coming due and payable on such date. Notwithstanding the foregoing, Revenues constituting redemptions (other than scheduled sinking account redemptions) of the Local Agency Bonds will be deposited directly to the Redemption Account of the Revenue Fund and used to redeem Bonds. See "SECURITY FOR THE BONDS - Funds, Accounts and Flow of Funds" herein. Principal and interest on the Local Agency Bonds will be payable from Special Taxes and amounts held in the fund and accounts listed under the Fiscal Agent Agreement. The payment of Special Taxes will be secured by a lien on Although the unpaid Special Taxes constitute liens on of real property wi&W the District, they do not constitute a personal indebtedness of the property owners (including Old Town Entertainment, LLC (the "Developer"), the members of the Developer or any awdiates of such members). There is no ce that the Developer will be rmmcially able to pay the Special Taxes levied on property owned by the Developer or that ft will pay such Special Taxes even though financially able to do so. Payment of Special Taxes may be dependent upon the completion and rmancial success of the proposed development to occur in the District. If the development is not completed, or ff it is completed but is not @ciafly successful, the Developer or other property owners may not have the abflity to pay the Special Taxes or the inclination to pay the Special Taxes even ff fmandauy able to do so. Pursuant to the Fiscal Agent Agreement, the Fiscal Agent will establish and maintain a Reserve Fund (the "Reserve Fund"). Monies in the Reserve Fund will be held by the Fiscal Agent in trust for, and subject to a lien in favor of, the Authority, as owner of the Local Agency Bonds, as a reserve for the payment of the principal of and interest on the Local Agency Bonds. See "THE LOCAL AGENCY BONDS -- Reserve Fund" herein. The District, the Development and the Project The District encompasses approximately 163 net acres (net of public improvements and rights of way). The District consists of six distinct areas )mown as follows: (i)Old Town Core (approximately 8 acres); (ii)Arena (approximately 26 acres) (iii)Parking (approximately 19 acres) (iv)Hotel/Commercial (approximately 24 acres); (v)Residential/RV Park (approximately 17 acres); and (vi)Open Space (approximately 69.5 acres). EL289429.81 3 DRAFT dated Novembw 19, 1996 the real property within the District. While the land within the District is presently owned by various individuals and the City, Temecula Ente nt Valley, Inc. or its predecessor T.Z.B.G., Inc., a California corporation (collectively "TEV"), is in escrow to purchase all of the land within the District. Except for the Residential/RV Park property, TEV intends to close escrow on all of the property in the District simultaneously with the issuance of the Bonds. TEV then intends immediately to transfer to the Developer title to all of the property purchased, except the Hotel Commercial property (title to which is expected to be conveyed to the members of the Holding Company). TEV does not presently intend to purchase the Residential/RV Park property simultaneously with the other properties. TEV may purchase the Residential/RV Park property at some point in the future, and such purchase might or might not occur prior to April 23, 1997. If the Residential/RV Park property is not purchased by TEV on or before April 23, 1997, the Special Taxes will not be levied against that property, despite its inclusion in the District. See "THE LOCAL AGENCY BONDS -- Security fortheLocalAgencyBonds"herein. EventhoughSpecialTaxesmaybeleviedagainsttheResidential/RVParkproperty in the future (if TEV purchases it or the owner consents to be taxed), for purposes of this Official Statement, the definition of "Taxable Property" shall exclude the Residential/RV Property. See "THE LOCAL AGENCY BONDS - Security for the Local Agency Bonds" herein. Furthermore, no Special Taxes will be levied against the Open Space property because it is being dedicated for use as open space in environmental mitigation. See "THE LOCAL AGENCY BONDS - Security for the Local Agency Bonds" herein. Consequently, for purposes of this Official Statement, "Taxable Property" shall refer n@l to the Old Town Core, Arena, Parking, and Hotel/Commercial properties. The "Development" is comprised of approximately 53 acres, consisting of the Arena property, the Parking property and the Old Town Core property. See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER -- Ownership of the Property" below. The Project is comprised of various public capital improvements to be constructed in the Old Town area of the City designed to meet the requirements of the City's Old Town Specific Plan, and various public capital improvements, primarily consisting of the first phase of a new freeway bypass road, to be constructed in the Westside area of the City designed to meet the requirements of the City's Westside Specific Plan. The Project will be constructed under the supervision of Fluor Daniel, Inc. ("Fluor Daniel") pursuant to the Construction Management and Supervision Agreement between Fluor Daniel and the Authority dated as of December 1, 1996. See "THE PROJECT - Construction Management and Supervision Agreement; Limited Completion Guaranty" herein. Any representations in ffib Official Statement regarding the Development, the Developer or Fluor D@el have been provided by the Developer and Fluor Daniel, respectively, and none of the Authority, the CFD Financing Authority or the Underwriter make any representation as to the accuracy or completeness thereof. Estimated @ket Value An appraisal of the Taxable Property currently within the District (the "Appraisal") has been prepared by Brown, Chudleigh, Schuler and Associates of Torrance, California (the "Appraiser"). The Appraisal sets forth the Appraiser's conclusions and assumptions with respect to the fee simple market value, as defmed, of the District at various times. The Appraiser concluded that the fee simple market value of the Taxable Property within the District as of November 3, 1996 would be $41,700,000 with the Public Improvements in place, and would be $173,000,000 upon completion of the Development. In addition, the Appraiser concluded that the fee simple market value of the Residential/RV Park property with the Public Improvements in place would be $6,900,000. However, as discussed at "- The District, the Development and the Project" and "THE LOCAL AGENCY BONDS -- Security for the Local Agency Bonds" herein, there can be no assurance that the Residential/RV Park property will be subject to the Special Taxes or, consequently, that this property will be security for the Bonds. The Appraisal is subject to numerous conditions and stipulations which are set forth in detail in the Appraisal included as Appendix C and which should be reviewed carefully. Neither the CFD Financing Authority nor the Authority makes any representation as to the accuracy or completeness of the Appraisal. CL289429.81 4 DRAFT dated Nov*mbw 19, 1996 Redeinption The Bonds are subject to optional and mandatory redemption prior to maturity, as more fully described herein. See "THE BONDS -- Optional Redemption, Mandatory Redemption" and Mandatory Sinking Fund Redemption" herein. Risk Factors There are risks inherent in the purchase of the Bonds. See "SPECIAL RISK FACTORS" herein for a discussion of some of the risk factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the Bonds. Continuing Disclosure The Developer and the CFD Financing Authority will each independently covenant to provide certain financial information and operating data relating to themselves each year (the 'Annual Reports"), and to provide notices of the occurrence of certain other enumerated events if deemed by them to be material. The Annual Reports will be filed by the Trustee, as dissemination agent, with each Nationally Recognized Municipal Securities Information Repository certified by the Securities and Exchange Commission (the "Repositories") and a State of California ("State") repository, if any, and may also be obtained directly from the Trustee. The notices of material events will be timely filed by the Trustee, as dissemination agent with the Municipal Securities RulenmUng Board, the Repositories and a State repository, if any. The specific nature of the information to be contained in the Annual Report or the notices of material events and certain other terms of the continuing disclosure obligations are described in detail in APPENDIX F - "Forms of Continuing Disclosure Certificates. " Neither the Authority nor the CFD Financing Authority has any responsibility for enforcing the obligations of other parties described herein to provide continuing disclosures as required by the Continuing Disclosure Certificates and a failure to provide any such information is not an event of default under the Indenture or the Fiscal Agent Agreement. Limited Obligations THE BONDS DO NOT CONSTTTUT'E AN INDEBTEDNESS OF THE CFD FINANCING AUTHORITY, THE CITY OF TEMECULA, THE REDEVELOPMOENT AGENCY. OF THE CITY OF TEMECULA, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS T.HE MEANING OF ANY CONSTTTUTTONAL OR STATUTORY DEBT LEMGTATION OR RESTRICTION, OR A PLEDGE OF THE FAITH AND CREDIT OF THE AUTHORITY, THE CFD FINANCING AUTHORITY OR THE CITY. THE OBLIGATION OF THE AUTHORITY TO PAY PRINCI]PAL OF OR WMREST ON THE BONDS DOES NOT CONSTTTUTE AN OBLIGATION OF THE AUTHORITY FOR WEE[CH THE AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATTON OR FOR WE[[CH THE AUTHORITY HAS LEVEED OR PLEDGED ANY FORM OF TAXATTON. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CFD FINANCING AUTHORITY, THE CITY, OR THE AUTHORITY, BUT ARE LEMTED OBLIGATIONS OF THE AUTHORITYPAYABLESOLELYFROMTHEREVENUESANDAMOUNTSPLEDGEDTHEREFOREUNDER T]IIE INDENTURE. THE OBLIGATION OF THE CFD FINANCING AUTHORITY TO PAYMENTS WITH RESPECT TO THE LOCAL AGENCY BONDS DOES NOT CONS AN OBLIGATION OF THE CFD FINANCING AUTHORITY FOR WE[[CH THE CFD FINANCING AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATTON, OR FOR WE[ICH THE CFD FINANCING AUTHORITY HAS LEVEED OR PLEDGED ANY FORM OF TAXATTON, OTHER THAN THE SPECIAL TAX. THE LOCAL AGENCY BONDS ARE LIMITED OBLIGATIONS OF THE CFT) FINANCING AUTHORITY PAYABLIE SOLELY FROM THE SOURCES SPECMCALLY PROVIDED IN THE FISCAL AGENT AGREEM[ENT. [L289429.81 5 DRAFT datod November 19, 1996 THE BONDS General Provisions The Bonds will be issued in the aggregate principal ainount of $29,750,000', will be dated December 1, 1996, will be payable as to interest at the rate per annum set forth on the cover page hereof, payable semiannually on each March I and September I connnencing March 1, 1997 (each, an "Interest Payment Date"), and will mature on September 1, 2026. The Bonds are being delivered as fully registered bonds without coupons in the denominations of $ 100,000 each or any integral multiple of $5,000 in excess thereof. The principal of, and interest and premium, if any, on the Bonds is payable when due, by wire transfer of the Trustee to The Depository Trust Company, New York, New York ("DTC"), which will in turn remit such principal, interest and premium, if any, to its Participants (as defmed herein), which Participants will in turn remit such principal, interest and premium, if any, to the Beneficial Owners (as defmed herein) of the Bonds, all as described below under "THE BONDS - Book-Entry-Only System." In the event that the Bonds are not registered in the name of Cede & Co., as noniinee of DTC, or another eligible depository as described below, both the principal and redemption price, including any premium, on each Bond will be payable only upon surrender of such Bond at the principal corporate trust office of the Trustee in St. Paul, Minnesota, or such other office as may be designated by the Trustee (the "Trust Office"). In such event, interest on the Bonds will be payable by check of the Trustee mailed by first class mail to the registered owners of record of the Bonds (the "Owners") as of the fifteenth (15th) calendar day of the month immediately preceding the applicable Interest Payment Date (the "Record Date") at the addresses shown on the registration books maintained by the Trustee for the Bonds, or, upon written request filed with the Trustee as of a Record Date of an Owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in inunediately available funds to an account in the United States designated by such Owner in such written request. Book-Entry-Only System Unless otherwise noted, the following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of interest and other payments on the Bonds to Participants or Beneficial Owners of the Bonds, confirmation and transfer of beneficial ownership interests in the Bonds and other bond-related transactions by and between DTC, Participants and Beneficial Owners of the Bonds is based solely on information furnished by DTC to the Authority for inclusion herein. Accordingly, the Authority, the CFD Financing Authority, and Stone & Youngberg LLC (the "Underwriter") do not and cannot make any independent representations concerning these matters. When the Bonds are issued, ownership interests will be available to purchasers only through a book-entry-only system maintained by DTC. Beneficial ownership in the Bonds niay be acquired or transferred only through book entries made on the records of DTC and its Participants. If the Bonds are taken out of the book-entry-only system and delivered to owners in physical form, as described below, the following discussion will not apply. In such event, see "- General Provisions " above. DTC will act as a securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Bond certificate will be issued for the Bonds in the aggregate principal amount of the Bonds, and will be deposited with DTC. *Preliminary, subject to change. [L289429.81 6 DRAFT dated November 19, 1996 DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants (the "Participants') deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need of physical movement of securities certificates. "Direct Participants" include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship, either directly or indirectly, with a Direct Participant (the "Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (the "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confimiations 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 Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no 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 may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Redemption notices shall be sent to Cede & Co. 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. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority 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). Payment of the principal of and interest and premium, if any, on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee or the Authority, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of principal, interest and any premium to DTC is the responsibility of the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. [L289429.81 7 DRAFT dated Nov*mbw 19, 1996 With respect to Bonds registered in the name of Cede & Co., the Authority and the Trustee have no responsibility or obligation to any Partidpant or to any Beneficial Owner of such Bonds. Without Uimift the immediately preceding sentence, the Authority and the Trustee have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any beneficial ownership interest in the Bonds, (ii) the delivery to any Participant, Beneficial Owner or other person, other than DTC, of any notice with respect to the Bonds, inclu&n any notice of redemption, (iii) the payment to any Participant, Beneficial Owner or other person, other than DTC, of any amount with respect to the principal or redemption price of, or any interest on, the Bonds, or (iv) any consent given or other action taken by DTC as owner of the Bonds. The Authority and the Trustee may treat DTC as, and deem DTC to be, the absolute owner of each Bond for all purposes whatsoever, including (but not limited to) (I) payment of the principal or redemption price of, and interest on, each such Bond, (ii) giving notices of redemption and other matters with respect to such Bonds, and (iii) registerin transfers with respect to such Bonds. The Trustee shall pay the principal or redemption price of, and interest on, all Bonds only to or upon the order of DTC, and all such payments shall be valid and effective to fully satisfy and e the Authority's obligations with respect to such principal or redemption price, and interest, to the extent of the sum or sums so paid. So long as the Bonds are in book-entry-only form, all references herein to the Owners of the Bonds shall mean DTC, and not the Beneficial Owners of the Bonds. DTC may discontinue providing its service as securities depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be prepared and delivered as described in the Indenture. The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be prepared and delivered as described in the Indenture. Registmtion of Exchange or Transfer Registration of the Bonds may be transferred only upon the books kept for registration and transfer of the Bonds and Bonds may be exchanged upon surrender thereof to the Trustee together with an assignment duly executed by the registered Owner or his duly authorized attorney or legal representative in such form as is satisfactory to the Trustee. The Trustee, however, is not be required to register the transfer or exchange of any Bond (i) during the period established by the Trustee for selection of Bonds for redemption or (ii) with respect to a Bond that has been selected for redemption. The Trustee will collect from the Owner requesting such transfer or exchange any tax or other governmental charge required to be paid with respect to such transfer. Mutilated, Lost, Destroyed or Stolen Bonds If any Bond is mutilated, lost, destroyed or stolen, the Authority will execute and the Trustee will authenticate and deliver a new Bond or Bonds in replacement thereof in the same aggregate principal amount of the same interest rate and of the same maturity. In the case of a lost, stolen or destroyed Bond, the Trustee may require satisfactory indenuiification for the Authority and the Trustee prior to authenticating a new Bond. The Authority and the Trustee may charge the owners of the Bonds for reasonable fees and expenses in connection with replacing mutilated, lost, stolen or destroyed Bonds. Redemption Optional Redempdon. The Bonds maturing on or after September 1, 2007, are subject to redemption prior to their respective maturity dates as a whole or in part from any source of available funds, on or after September 1, 2006, upon payment of the following redemption prices (expressed as a percentage of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption: [L289429.81 8 DRAFT dat*d November 19, 1996 Redempfion Dates Redemidon Prices 1, 2006 through 1, 2007 102% 1, 2007 through 1, 2008 101 1, 2008 and thereafter 100 Mandatory Redempdon Upon Prepayment of Local Agency Bonds. The Bonds are subject to mandatory redemption, in whole or in part, on any Interest Payment Date on or after September 1, 2001, from and to the extent of any Principal Prepayments (as defined below), at the following respective Redemption Prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption: Redempfion Dates Redemtdon Prices 1, 2001 and 1, 2002 102% 1, 2002 and 1, 2003 101 1, 2003 and thereafter 100 The term "Principal Prepayments" means any amounts received by the Trustee representing a redemption of the Local Agency Bonds pursuant to the Fiscal Agent Agreement, consisting of the principal amount of the Local Agency Bonds being redeemed and the premium paid upon such redemption; but excluding the amount of regularly scheduled payments of principal of and interest on the Local Agency Bonds, or amounts paid as mandatory sinking fund payments or amounts representing unused improvement fund monies under the Fiscal Agent Agreement. The Bonds also shall be subject to mandatory redemption in part on any Interest Payment Date, at a redemption price equal to the principal amount thereof to be redeemed, without premium, together with accrued interest to the date fixed for redemption from the proceeds of a mandatory redenvtion of the Local Agency Bonds arising from unused improvement fund monies under the Fiscal Agent Agreement. In the event that the Fiscal Agent under the Fiscal Agent Agreement gives notice of the prepayment of any Local Agency Bonds which will produce Principal Prepayments or from amounts representing unused improvement fund monies, the Trustee will concurrently mail notice of the redemption of a like principal amount of Bonds as described above, such redemption to occur on the date fixed for such redemption of the Local Agency Bonds. The proceeds of any such redemption of the Local Agency Bonds will be applied by the Trustee to pay the redemption price of a like aggregate principal amount of the Bonds as described above on the date of such prepayment of the Local Agency Bonds. Mandatory Sinking Fund Redemption. The Bonds [maturing on September 1, I are subject to mandatory redemption in part by lot, on September 1 in each year conunencing September 1, _, from sinking fund payments made by the Authority into the Principal Account established under the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on September I in the respective years as set forth in the following table: Sinking Fund Sinking Fund Redemption Date Principal Redemption Date Principal (SgRtember 1) Amount (Sotember 1) Amount [L289429.81 DRAFT dated Noven%bw 19, 1996 In lieu of mandatory sinking fund redemption as described above, the'Trustee may apply amounts in the Principal Account to the purchase of Term Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account established under the Indenture) as may be directed by the Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Term Bonds, as set forth in a written request of the Authority. In addition, if some but not all of such Term Bonds have been redeemed pursuant to the optional redemption provisions of the Indenture, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such Term Bonds so redeemed, to be allocated among such sinking fund payments for any Term Bond on a pro rata basis in integral multiples of $100,000 as determined by the Trustee. Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less dm all of the outstanding Bonds, the Bonds to be redeemed shall be selected for reden4)tion among maturities and within a maturity by the Authority (evidenced pursuant to a Written Certificate delivered to the Trustee at least fifty (50) days prior to the redemption date or such later date as shall be acceptable to the Trustee) on such basis that the remaining scheduled payments of principal and interest on the Local Agency Bonds, together with other then available Revenues, will be sufficient on a timely basis to pay debt service on the Bonds, as shall be demonstrated in a certificate of an Independent Financial Consultant filed with the Trustee. The certificate of the Independent Financial Consultant shall specify (a) the premium, if any, to be paid by the Local Agency under the Fiscal Agent Agreement in connection with such redemption, (b) the principal amount and redemption date and price of any Bonds to be redeemed as a result of the redemption of the Local Agency Bonds, (c) the date and principal amount of any sinking fund redemption payments specified in the Indenture to be reduced as a consequence of any such redemption, and (d) the date and principal amount of any sinking fund redemption payments specified in the Fiscal Agent Agreement to be reduced as a consequence of the proposed redemption of the Local Agency Bonds. The Independent Financial Consultant's certificate shall conclude that, based upon the information supplied in clauses (a) through (d) of the preceding sentence, and in reliance upon the Trustee, the Fiscal Agent, the CFD Financing Authority and the Authority implementing the redemption of the Local Agency Bonds and the Bonds in a manner consistent with such information, the aggregate of the principal and interest due on the Local Agency Bonds which remain Outstanding (as defined in the Fiscal Agent Agreement) following such redemption will be sufficient in time and amount to timely pay the principal and interest due on the Bonds which will remain Outstanding following any redemption of the Bonds to occur under the Indenture as a result of the redemption of the Local Agency Bonds under the Fiscal Agent Agreement. In addition to the foregoing, Bonds may only be redeemed in $5,000 increments, and each Bond Outstanding following any redemption shall be in a denomination authorized under the Indenture. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same series and maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed. Nodce of Redemption. Pursuant to the Indenture, the Trustee, on behalf and at the expense of the Authority, will mail by first class mail notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Bond registration books, and to certain securities depositories and information services, at least thirty (30) but not more than sixty (60) days prior to the date fixed for redemption. However, neither failure to receive any such notice so mailed nor any defect therein will affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Any official notice of redemption must state: (i) the date of the notice, (ii) the redemption date, (iii) the redemption place, and (iv) the redemption price. Such notice must also designate the CUSEP numbers, the serial numbers of each maturity or maturities of Bonds to be redeemed (except that in the event of redemption of all of the Bonds of such [L289429.81 10 DRAFT dated Novonbw 19, 1996 maturity or maturities in whole, the Trustee will designate such maturities or the maturity in whole without referencing each individual number), and must require that such Bonds be then surrendered at the Trust Office. Estimated Annual Debt Semce Schedule The following table presents the debt service schedule for the Bonds, assuming no redemptions other than mandatory sinking payment redemptions are made, and debt service is otherwise paid when due. TABLE I BOND DEBT SERVICE SCHEDULE Total Annual Period Ending Princil2al* Interest Debt Service Mar 1, 1997 - Sep 1, 1997 - Mar 1, 1998 - Sep 1, 1998 - Mar 1, 1999 Sep 1, 1999 Mar 1, 2000 Sep 1, 2000 Mar 1, 2001 Sep 1, 2001 Mar 1, 2002 Sep1, 2002 Mar1, 2003 Sep1, 2003 Mar1, 2004 Sep1, 2004 Mar1, 2005 Sep1, 2005 Mar1, 2006 Preliminary, subject to change [L289429.81 DRAFT dated Novembw 19, 1996 Period E d@in Sep1, 2006 Mar1, 2007 Sep1, 2007 Mar1, 2008 Sep1, 2008 Mar1, 2009 Sep1, 2009 Mar1, 2010 Sep1, 2010 Mar1, 2011 Sep 1, 2011 Mar 1, 2012 Sep1, 2012 Mar1, 2013 Sep1, 2013 Mar1, 2014 Sep1, 2014 Mar 1, 2015 Sep1, 2015 Mar1, 2016 Sep1, 2016 Mar1, 2017 Sep1, 2017 Mar1, 2018 Sep1, 2018 Mar1, 2019 Sep1, 2019 Mar1, 2020 Sep1, 2020 Mar1, 2021 Sep1, 2021 Mar1, 2022 Sep1, 2022 Mar1, 2023 Sep1, 2023 Mar1, 2024 Sep1, 2024 Mar1, 2025 Sep1, 2025 Mar1, 2026 Sep1, 2026 TOTALS Preliniinary, subject to change. CL289429.81 PrinciRal* Interest -Debt Service 12 DRAFT &W Novembw 19, 1996 SOURCES AND USES OF FUNDS The following table describes the estimated sources and application of the funds in connection with the sale of the Bonds and the Local Agency Bonds. TABLE 2 ESTIMATED SOURCES AND USES OF BOND PROCEEDS The Bonds Sources of Funds: Principal Amount of Bonds $ Plus: Accrued Interest $ Less: Underwriter's Discount $ Total: $ Uses of Funds: Prograin Fund $ Interest Account of the Revenue Fund' $ Total: $ The Local Agency Bonds Sources of Funds: $ Principal Amount of Bonds $ Plus Original Issue Preniium $ Total: $ Uses of Funds: hwrovement Fund $ Reserve Fund $ Costs of Issuance Fund $ Administrative Expense Fund $ Capitalized Interest Acct of Bond Fund $ Total: $ Represents accrued interest on the Bonds paid on the Closing Date. [L289429.81 13 DRAFT dated November 19, 1996 SECLTRrrY FOR TIIE BONDS Pledge Under the Indenture The Bonds are equally secured by a first lien on and pledge of all of the Revenues. Payment of the principal of, premium, if any, and interest on the Bonds will be made from Revenues held in the Revenue Fund under the Indenture. The term "Revenues" includes (a) all amounts derived from or with respect to the Local Agency Bonds, including but not limited to all payments of principal thereof and interest thereon, and (b) investment income with respect to any moneys held by the Trustee in the funds and accounts established under the Indenture. The Trustee will not have any obligation or liability to the Owners to make payments of the principal of, premium, if any, or interest on the Bonds except from Revenues or other amounts available to it under the Indenture for such purposes. Other then the proceeds of debt service payable on the Local Agency Bonds deposited to the Revenue Fund under the Indenture, it is not expected that there will be any amounts held in the funds and accounts established under the Indenture available for payment on the Bonds. There is no reserve fund established or held under the Indenture; however, a Reserve Fund providing security for payment of the Local Agency Bonds will be established under the Fiscal Agent Agreement. Failure to pay principal and interest on the Local Agency Bonds will result in a default in payment on the Bonds. For a more complete discussion of some of the risks associated with an investment in the Bonds, see "SPECIAL RISK FACTORS" herein. The Trustee, pursuant to the Indenture, will receive payments of principal of, premiums, if any, and interest on the Local Agency Bonds for the benefit of the Owners of the Bonds. All such payments received by the Trustee shall be promptly deposited into the Revenue Fund established prior to the Indenture. See "- Funds, Accounts and Flow of Funds" below and APPENDIX A - "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - THE INDENTURE." The Bonds do not constitute an indebtedness of the Authority or the CFD Financing Authority within the meaning of any constitutional or statutory limitations, but are payable solely from the Revenues described above. The Authority has no assets, other than as pledged under the Indenture for the security of the Bonds. The general fund of the City, the Agency, the CFD Financing Authority or the Authority is not liable, and the credit of the City, the CFD Financing Authority or the Authority is not pledged, for the payment of the interest on or principal of the Bonds. The Owners of the Bonds shall never have the right to require or compel the exercise of the forfeiture of any property of the City, the Agency, the District, the CFD Financing Authority or the Authority, or the use of any funds of the City, the Agency, the District or the CFD Financing Authority to pay the Bonds or the interest thereon or to make any sinking fund or other payments provided in the Indenture. Funds, Accounts and Flow of Funds The Bonds are also secured by a first lien on and pledge of the moneys on deposit in the funds and accounts established and maintained under the Indenture. There is no separate reserve fimd or account under the Indenture to secure payment of the Bonds. The following are brief descriptions of some of the funds and accounts established under the Indenture and the application of moneys on deposit therein. Program Fund. The Program Fund is established under the Indenture to be held and administered by the Trustee. On the date of issuance of the Bonds, the Trustee will withdraw all amounts in the Program Fund and apply such amounts to the purchase of the Local Agency Bonds in accordance with the Indenture. Revenue Fund, lWncipdAccount, InterestAccount and Redempdon Account. The Revenue Fund, the Principal Account, the Interest Account and the Redemption Account are established under the Indenture to be held and administered by the Trustee. All Revenues will be promptly deposited by the Trustee upon receipt thereof in the Revenue Fund. To the extent available, the Trustee shall collect all Revenues promptly as such Revenues become due and payable, and shall enforce and cause to be enforced, subject to the terms of the Indenture, all rights of the Trustee under and with respect to the Local Agency Bonds. Moneys on deposit in the Revenue Fund will be tmmfeffed to the Interest Account, [L289429.81 14 DRAFT dated Novembw 19, 1996 the Principal Account and the Redemption Account to be applied to the payment of principal and interest on the Bonds as the same becomes due and payable, all in accordance with the terms of the Indenture. Pursuant to the Indenture, the Authority has assigned and transferred in trust to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the Revenues and all of the right, title and interest of the Authority in the Local Agency Bonds. The Trustee shall be entitled to and shall receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. To the extent available, the Trustee shall collect all Revenues promptly as such Revenues become due and payable, and shall enforce and cause to be enforced all rights of the Trustee under and with respect to the Local Agency Bonds. Pursuant to the terms of the Fiscal Agent Agreement, the Local Agency Bonds are secured by the Special Taxes received by the CFD Financing Authority. The Special Tax Revenues, if timely paid in full, will in the aggregate be equal to the amount necessary for the Trustee to pay the principal and interest with respect to the Bonds due and payable on each Interest Payment Date. All Special Tax Revenues received by the Trustee will be promptly deposited in the Revenue Fund. These payments constitute, in effect, the sole source of funds to pay debt service on the Bonds. F7ow of Funds. On each Interest Payment Date, the Trustee will transfer from the Revenue Fund, and deposit into the following respective accounts within the Revenue Fund, the following amounts in the following order of priority: (a) into the Interest Account, an amount required to cause the aggregate amount on deposit therein to equal the amount of interest becoming due and payable on such Interest Payment Date on all outstanding Bonds; (b) into the Principal Account, an amount required to cause the aggregate amount on deposit therein to equal the principal amount of the Bonds coming due and payable on such date; (c) into the Redemption Account an amount equal to the principal and premium on any Bonds to be redeemed on such date; and (d) all remaining amounts to the Surplus Fund. All monies in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds redeemed prior to maturity). All monies in the Principal Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal of all Bonds at the maturity thereof. All monies in the Redemption Account will be used and withdrawn by the Trustee to pay the principal of and premium, if any, on any Bonds upon the redemption thereof. Promptly upon the deposit of amounts into the Surplus Account, the Trustee shall remit such amounts to the Treasurer, to be used by the Treasurer (i) to make transfers to the Treasurer to be used by the CFD Financing Authority for deposits to the Special Tax Fund (as defined in and established under the Fiscal Agency Agreement), in order to reduce the Special Taxes levied in the current or the succeeding Fiscal Year upon the properties which are subject to Special Taxes to pay the principal and interest on the Local Agency Bonds, or (ii) for any lawful purpose of the Authority. Reserve Fund for the Load Agency Bonds Pursuant to the Fiscal Agent Agreement, the Fiscal Agent will establish and maintain the Reserve Fund. Monies in the Reserve Fund will be held by the Fiscal Agent in trust for, and subject to a lien in favor of, the Authority, as owner of the Local Agency Bonds, as a reserve for the payment of the principal of, and interest and any premium on, the Local Agency Bonds. See 'THE LOCAL AGENCY BONDS - Reserve Fund" herein. [L289429.81 15 DRAFT doW Nov 19,1996 Disposidon and Amendment of the Local Agency Bonds The Trustee shall not sell or otherwise dispose of the Local Agency Bonds, or any interest therein, unless either (a) there shall have occurred and be continuing an Event of Default under the Indenture; or (b) the proceeds derived by the Trustee from such sale or other disposition are sufficient to enable the Trustee to redeem or release all of the Outstanding Bonds in accordance with the terms of the Indenture. Neither the Trustee nor the Authority shall consent or agree to consent to any amendment or modification of the Fiscal Agent Agreement or the Local Agency Bonds, unless the Authority shall have obtained, and caused to be filed with the Trustee, (a) if applicable, the report of an Independent Financial Consultant stating that such amendment or modification will not materially adversely impair the interests of the Bond Owners under the Indenture, and will not cause a reduction in the amount of Revenues required to pay debt service on the Bonds, and (b) an opinion of Bond Counsel stating that such amendment or modification will not materially adversely impair the interests of the Bond Owners under the Indenture, and will not cause interest on the Bonds to be includable in gross income of the Bond Owners for federal income tax purposes. The Trustee and the Authority may conclusively rely on such report of the Independent Financial Consultant and Opinion of Bond Counsel and shall, in each case, be protected in relying thereon. TTIE LOCAL AGENCY BONDS Authorization and Purpose of Local Agency Bonds The Local Agency Bonds are being issued pursuant to the Mello-Roos Connnunity Facilities Act of 1982, as amended, conunencing at Section 5331 1, et seq., of the California Government Code (the "Mello-Roos Act"), and a Fiscal Agent Agreement, dated as of December 1, 1996 (the "Fiscal Agent Agreement"), between the CFD Financing Authority for and on behalf of the District, and First Trust of California, National Association, as fiscal agent (the "Fiscal Agent"). The Bonds are being issued to finance the construction and acquisition of the Public Improvements (defined below). The Mello-Roos Act was enacted by the California legislature to provide an alternate method of funding certain public capital facilities and services. Once duly established, a community facilities district is a legally constituted governmental entity within defined boundaries, with the legislative body of the related local agency acting on its behalf. Subject to approval by a two-thirds vote of the voting qualified electors of the community facilities district and compliance with provisions of the Mello-Roos Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness. General Provisions of The Local Agency Bonds The Local Agency Bonds will be issued in the aggregate principal amount of $ will be dated the Closing Date, will mature on September 1, 2026, and shall bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rate of % per annum. Interest will be payable on March 1 and September 1 of each year, commencing March 1, 1997 (the "Interest Payment Dates"). It is the intent of the Authority that the interest and principal due with respect to the Local Agency Bonds will at all tiines equal the principal and interest due with respect to the Bonds. See "SECURITY FOR THE BONDS -- Funds, Accounts and Flow of Funds" herein. The District Pursuant to the Mello-Roos Act, on September 12, 1995, the Board of Directors of the CFD Financing Authority adopted a resolution stating its intent to establish the District, to authorize the levy of special taxes (the 'Special Taxes" or the "Special Tax") on certain land within the boundaries of the District, and to have the District incur bonded indebtedness in an amount not to exceed $27,500,000. Following a public hearing conducted pursuant to the Mello-Roos Act, on April 23, 1996, the Board of Directors adopted a resolution establishing the District (the "Resolution of Formation") and calling a special election to submit to the qualified electors of the District the propositions authorizing a levy of the Special Taxes and the incurring of bonded indebtedness. On April 23, 1996, at an election held pursuant to the Mello-Roos Act, the landowners who comprised the qualified electors of the District voted by more than a % vote to authorize the District to incur bonded indebtedness in an arnount not to exceed $27,500,000 and approved the levy of [L289429.81 16 DRAFT daud Novenibw 19, 1996 Special Taxes pursuant to the Rate and Method of Apportionment set forth in the Resolution of Formation, which Special Taxes will be levied to pay the principal of and interest on the authorized and issued bonded indebtedness, and the administrative expenses of the CFD Financing Authority, the Authority and the City with respect to the District, the Bonds and the Local Agency Bonds. See "- Security for the Local Agency Bonds" below. On July 9, 1996, the CFD Financing Authority annexed certain property to the District, following a vote of the affected landowners. The District encompasses approximately 163 net acres (net of public improvements and rights of way) and consists of six distinct areas known as: (i) Old Town Core; (ii) Arena; (iii) Parking; (iv) Hotel/Conunercial; (v) Residential/RV Park; and (vi) Open Space. While the land within the District is presently owned by various individuals and the City, TEV is in escrow to purchase all of the land within the District. Except for the Residential/RV Park property, TEV intends to close escrow on all of the property in the District simultaneously with the issuance of the Bonds. TEV then intends irmnediately to transfer to the Developer title to all of the property purchased except the Hotel Commercial property (title to which is expected to be conveyed to the members of the Holding Company). With regard to the Residential/RV Park property, TEV ma purchase the property simultaneously with the other properties or at some time in the future, but the property, if purchased, will not be transferred to the Developer. The Project The Local Agency Bonds are being issued to finance the construction and acquisition of certain public capital improvements located within or in the vicinity of the District designed to meet the requirements of the City's Old Town Specific Plan, and the first phase of a freeway bypass road and appurtenant facilities designed to meet the requirements of the City's Westside Specific Plan (collectively, the "Public hWrovements"). The construction and acquisition of the Public Improvements is referenced herein as the "Project." The Project is being undertaken to provide public infrastructure needed for development in the Old Town and Westside areas of the City, including the Development, and to meet other needs of the City. The Development is a proposed live theater and retail complex. The Development is described in greater detail under "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER" herein. The completion of the construction and the financial success of the Development will affect the ability and willingness of the landowners in the District to pay the Special Taxes. The Project will be constructed under the supervision of Fluor Daniel, an affiliate of the Developer, pursuant to the Construction Management Agreement described below. Fluor Daniel and Fluor Corporation, its parent company, also will provide a limited guaranty of the completion of the Project. See "THE PROJECT - Construction Management and Supervision Agreement; Limited Completion Guaranty" herein. Security for the Local Agency Bonds The Local Agency Bonds are secured by the proceeds of the Special Taxes received by the CFD Financing Authority, including any scheduled payments and any prepayments thereof, interest and penalties thereon, and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of Special Taxes to the amount of said lien and interest and penalties thereon (collectively, "Special Tax Revenues"), subject to certain claims for Administrative Expenses. The Special Taxes are exempt from the tax rate limitations of California Constitution Article XMA pursuant to Section 4 thereof as a "special tax' authorized by a two-thirds vote of the qualified electors of the District. Consequently, the CFD Financing Authority has the power and is obligated, pursuant to the covenants contained in the Fiscal Agent Agreement, to cause the levy and collection of the Special Tax annually in an amount determined according to the Rate and Method of Apportionment, attached hereto as APPENDIX B -- "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX," up to the maximum permitted by the Rate and Method of Apportionment. The Special Taxes thus levied and collected will be used to pay the principal of and interest on the Local Agency Bonds, the Administrative Expenses due or coming due, plus the amount, if any, necessary to replenish the Reserve Fund to an amount equal to the Reserve Requirement established by the Fiscal Agent Agreement. A maximum Special Tax that may be levied in any fiscal year on any respective Taxable Property in the District has been established for the District. See APPENDIX B - "RATE AND METHOD OF APPORTIONMENT OF CL289429.81 17 DRAFT dead No 19,1996 SPECIAL TAX" attached hereto. Based upon the representations of the Special Tax Consultant for the District, the aggregate maximum Special Tax in any fiscal year regardless of the level of development within the District is always at least 120% [confirm] of scheduled annual debt service on the Local Agency Bonds for such fiscal year. Under the Rate and Method of Apportionment, the District is divided into Zone A and Zone B. Zone A contains the properties known as the "Old Town Core," "Arena" and "Parking," and Zone B contains the properties known as "Hotel/Connnercial," "Residential/RV Park" and "Open Space." See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER -- Ownership of the Property. " The property within Zone B is not scheduled for development in the initial phases of the Development. See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER - Future Plans for Development. " Each year, the Treasurer will determine the Special Tax Requirement. Of this requirement, up to eighty-five percent (85 %) will be allocated to buildings on Taxable Property within the District, on a per square foot basis, up to the maximum building special tax rate. The remaining annual Special Tax Requirement will be allocated to Taxable Property within the District, on a per square foot basis, up to the maximum land special tax, subject in any event to the application of an Alternative Special Tax. During the period that no buildings are yet constructed on the Taxable Property within the District, the maximum land special tax rate when properly applied to all Taxable Property within the boundaries of the District will generate a minimum [100%] coverage of the annual Special Tax liability in any fiscal year. Because all the improvements are initially scheduled to be constructed on Zone A, it is anticipated that upon completion of the Development, approximately 85% of the Special Tax Requirement Cie., all of the building special tax) will be levied on Zone A and the remaining approximately 15% will be levied on Zone B. The Treasurer will also levy 100% of any Zone A delinquencies on Zone A and 100% of any Zone B delinquencies on Zone B. Because the Special Tax allocation allows the imposition of up to 120% of the annual debt service on the Local Agency Bonds as described in the preceding paragraph, the Special Tax payable by Zone A could be increased to compensate for any delinquencies on Zone B. However, because the Rate and Method of Apportionment allocates the majority of the tax burden to the Taxable Property containing buildings (which the Developer anticipates will be Zone A), the Special Taxes payable by Zone B could not fully cover any delinquencies in Zone A. Under the terms of the Fiscal Agent Agreement, the Authority may consent to a reduction in the maximum Special Taxes that may be levied in the District, without any requirement for notice to or the consent of the Owners or the Fiscal Agent, so long as such taxes are reduced proportionately and the maximum Special Taxes shall at all times be able to be levied in an amount equal to at least 120 % of maximum annual debt service on the Local Agency Bonds in each year that the Local Agency Bonds are Outstanding. It is expected that the Treasurer will levy the Special Taxes by means of direct billing of the property owners within the District subject to the Special Taxes. Not less than forty-five (45) days prior to each Interest Payment Date, the Treasurer will send bills to the owners of interests in the real property located within the District subject to the levy of the Special Taxes, for Special Taxes in an aggregate amount necessary to meet the financial obligations of the District due on the next Interest Payment Date, said bills to specify that the amounts so levied shall be due and payable not less than thirty (30) days prior to such Interest Payment Date and shall be delinquent if not paid when due. The CFD Financing Authority shall fix and levy, to the extent permitted under applicable law, the amount of Special Taxes within the District required for the timely payment of principal of and interest on any outstanding Local Agency Bonds of the CFD Financing Authority becoming due and payable, including any necessary replenishment or expenditure of the Reserve Fund for the Local Agency Bonds and an amount estimated to be sufficient to pay the Administrative Expenses, and shall take into account any prepayments of Special Taxes theretofore received by the CFD Financing Authority. The Special Taxes so levied shall not exceed the maximum amounts as provided in the Rate and Method of Apportioranent and permitted under applicable law. The Treasurer may, alternatively, effect the levy of the Special Taxes from time to time on the County secured real property tax roll. In such event, each year upon the completion of the computation of the amounts of the levy, the Treasurer shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next secured real property tax roll. The Special Taxes so levied shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable, and have the same priority, become delinquent at the same tixnes and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property. [L289429.81 1 8 DRAFT datod November 19, 1996 Although the Special Tax will constitute a lien on property subject to taxation within the District, it does not constitute a personal indebtedness of the owners of such property. There is no assurance that the owners will be financially able to pay the annual Special Tax or that they will pay such = even if financially able to do so. The risk of the Developer or other property owners not paying the annual Special Tax is more fully described in "SPECIAL RISK FACTORS -- Insufficiency of Special Taxes." While successful completion of the Project can be expected to increase the fair market value of real property within the District, no assurance can be given that the Project will be completed or that values estimated in the Appraisal can or will be maintained during the period of time that the Local Agency Bonds are outstanding. Moreover, the full value projected under the Appraisal upon completion of the Development will occur only if and when the Development is complete and operational. The District has no control over the amount of additional indebtedness that may be issued in the future by other public agencies, the payment of which, through the levy of a = or an assessment, is on a parity with the Special Taxes. See "SPECIAL RISK FACTORS - Parity Debt; Additional Indebtedness." The Rate and Method of Apportionment applies to property in the District only if purchased by TEV. It is anticipated that the Old Town Core, Arena, Parking, Hotel/Commercial and Open Space properties will be purchased by TEV simultaneously with the closing of the Bonds. TEV does not presently intend to acquire the Residential/RV Park property, on or before April 23, 1997, although it retains the right to do so. Pursuant to the Rate and Method of Apportionment, if the Residential/RV Park property is not purchased by TEV on or before that date, the Special Taxes will not be levied against the property, despite its inclusion in the District. The definition of "taxable property" under the Rate and Method of Apportionment also excludes, among other things, any land owned, conveyed or irrevocably offered for dedication and accepted by a public agency . It is anticipated that the Open Space will be dedicated to a public agency in environmental mitigation and, therefor, no Special Taxes will be levied against the Open Space property. Consequently, for purposes of ffib Official Statement, "Taxable Property" shaff refer only to the Old Town Core, Arena, Par@, and Hotel/Commercial properties and purchasers of the Bonds should not assume that any other property will be subject to the levy of Special Taxes as security for the Local Agency Bonds. THE OBLIGATION OF THE CFD FINANCING AUTHORITY TO MAKE PA S WITH RESPECT AUTHORITY FOR WEE[CH THE CFD FINANCING AUTHORITY IS OBLIGATED TO LEW OR PLEDGE ANY FORM OF TAXATION, OR FOR WHICH THE CFD FINANCING AUTHORITY HAS LEVEED OR PLEDGED ANY FORM OF TAXATION, OTHER THAN THE SPECIAL TAX. THE LOCAL AGENCY BONDS ARE LIMITED OBLIGATIONS OF THE CFT) FINANCING AUTHORITY PAYABLE SOLELY FROM THE SOURCES SPECIFICALLY PROVI]DED IN THE FISCAL AGENT AG Reserve Fund In order to further secure the payment of principal of and interest on the Local Agency Bonds, the Fiscal Agent is required, upon delivery of the Local Agency Bonds, to deposit an amount equal to the initial Reserve Requirement in the Reserve Fund. Amounts in the Reserve Fund will be invested in Permitted Investments which may include a guaranteed investment contract. The Reserve Requirement is defined in the Fiscal Agent Agreement as an amount equal to $ . Amounts in the Reserve Fund are to be used to pay the principal and interest due on the Local Agency Bonds at @ maturity and upon prior redemption, and also may be used (i) to pay debt service on the Local Agency Bonds to the extent other moneys are not available for that purpose, (ii) to pay any amounts owing to the federal govenunent in respect of the rebate provisions of the Code, and (iii) to pay costs of foreclosure of the Special Tax lien for unpaid Special Taxes. See APPENDIX A - "SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS -- Fiscal Agent Agreement - Funds and Accounts - Reserve Fund" attached hereto. Proceeds of Foreclosure Sales A potential source of funds to pay debt service on the Local Agency Bonds is the proceeds received following a judicial foreclosure sale of land within the District resulting from a landowner's failure to pay the Special Tax when due. Pursuant to Section 53356.1 of the Mello-Roos Act, in the event of any delinquency in the payment of any Special Tax or receipt by the District of Special Taxes in an amount which is less than the Special Tax levied, the CFD Financing [L289429.81 19 DRAFT dated November 19, 1996 TO THE LOCAL AGENCY BONDS DOES NOT CONS AN OBLIGATION OF THE CFD FINANCING Authority may order the institution of a superior court action to foreclose the lien securing such unpaid Special Taxes within specified time limits. In such an action, the real property subject to the unpaid Special Tax may be sold at a judicial foreclosure sale. Under the Mello-Roos Act, the commencement of judicial foreclosure following the non-payment of a Special Tax is not mandatory. However, the CFD Financing Authority has covenanted for the benefit of the owners of the Local Agency Bonds that the CFD Financing Authority will commence judicial foreclosure proceedings against parcels with delinquent Special Taxes within 150 days following the date of notice to the CFD Financing Authority of a delinquency and diligently pursue such proceedings to completion. The CFD Financing Authority has agreed to use its best efforts to determine, on or about July lst of each year, whether or not all Special Taxes levied in the prior fiscal year have been received by the CFD Financing Authority. Notwithstariding any provision of the Mello-Roos Act or other law of the State to the contrary, in connection with any foreclosure related to delinquent Special Taxes: (a) the CFD Financing Authority, or the Fiscal Agent, is expressly authorized in the Fiscal Agent Agreement to credit bid at any foreclosure sale, without any requirement that funds be placed in the Bond Fund or otherwise be set aside in the amount so credit bid, in the amount specified in Section 53356.5 (requiring a foreclosure sale in a specified minimum amount) of the Mello-Roos Act or such lesser amount as determined under clause (b) below or otherwise under Section 53356.5 of the Act; (b) the CFD Financing Authority may permit in its sole and absolute discretion, property with delinquent Special Tax payments to be sold for less than the amount specified in Section 53356.5 of the Mello-Roos Act, if it determines that such sale is in the interests of the owners of the Local Agency Bonds, who by their acceptance of the Local Agency Bonds consent to such sale for such lesser amounts (as such consent is described in Section 53356.6 of the Mello-Roos Act), and the owners of the Local Agency Bonds have released the CFD Financing Authority, its officers and its agents from any liability in connection therewith; and, (c) the Authority is expressly authorized in the Fiscal Agent Agreement to use amounts in the Reserve Fund to pay costs of foreclosure of delinquent Special Taxes. See APPENDIX A - "SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS - Fiscal Agent Agreement - Covenants of the CFD Financing Authority" attached hereto. If the Reserve Fund is depleted, there could be a delay in principal and interest payments to the Owners of the Bonds by reason of a delay in payment of the Local Agency Bonds pending prosecution of the foreclosure proceedings and receipt by the District of the proceeds of the foreclosure sale, if any. See "SPECIAL RISK FACTORS - Potential Delay and Limitation in Foreclosure Proceedings. " Neither the District nor the CFD Financing Authority has any obligation to acquire any lot or parcel of property sold at the foreclosure sale if there is no other purchaser at such sale. The Mello-Roos Act provides that upon foreclosure the Special Tax will have the same lien priority as is provided for ad valorem real property taxes. Property Ownership; Direct and Overlapping Debt The land within the District which will be owned by the Developer or its direct or indirect affiliates is referenced herein as the "Property." Ownership of the Property is described herein under "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER -- Ownership of the Property. " The Special Tax and any penalties thereon will constitute a lien against the taxable land on which they will be annually imposed until they are paid. Such lien is on parity with all special taxes and special assessments, and is co-equal to and independent of the lien for the general property taxes, regardless of when they are imposed on the same property. Pursuant to the Mello-Roos Act, the Special Tax has priority over all existing and future private liens imposed on the taxable property within the District. Set forth below is a statement of direct and overlapping public debt for the City of Temecula (the "Debt Report") prepared by California Municipal Statistics, Inc. The Debt Report includes only such information as has been reported to California Municipal Securities, Inc., by the issuers of the debt described therein and by others. The Debt Report includes all direct and overlapping debt for all property located in the City; it is not limited to land within the District. The Debt Report is included for informational purposes only. Neither the Authority nor the CFD Financing Authority makes any representation as to its completeness or accuracy. CL289429.81 20 DRAFT dated Novefftm 19, 1996 TABLE 3: DEBT REPORT CITV OF TEMECULA 199"6 Assessed Valuation: $2,564,074,688 (after deducting $569,412,382 redevelopment incremental valuation) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/30/96 Metropolitan Water District 0.319 1,929,615 Eastern Municipal Water District, I.D.Is Nos. 25 & U8 100. & 87.039 7,019,232 Temecula Unified School District 71.231 35,049,214 (1) Temecula Unified School District Community Facilities District No. 89-3 100.000 27,460,000 City of Temecula 100.000 0 Rancho California Water District, Rancho Division 69.904 7,982,593 Rancho California Water District, Santa Rosa Division 4.717 1,250,897 Rancho California Water District, Community Facilities District No. 88-3 100.000 7,780,000 Riverside County Community Facilities District No. 88-12 100.000 17,650,000 Riverside County 1915 Act Bonds (Estimated) Various 89,117,150 Hemet Valley Hospital District 2.654 17,649 TOTAL DIRECT AND OVERLAPPING TAX ASSESSMENT DEST $ 195,256,350 OVERLAPPING GENERAL FUND OBLIGATION DEBT: Riverside County General Fund Obligation 4.424% 20,732,412 Riverside County Board of Education Certificates of Participation 4.424 974,480 Riverside County Flood Control and Water Conservation District General Fund Obligations 5.248 109,946 Temecula Unified School District Certificates of Participation 71.231 8,704,426 Temecula Community Services District Certificates of Participation 100.000 4,910,000 TOTAL GROSS OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 142,138,790 Less:Temecula Unified School District Certificates of Participation (self-supporting from tax increment revenues) -4,840,146 TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 137,298,644 GROSS COMBINED TOTAL DEBT $ 337,395,140 (2) NET COMBINED TOTAL DEBT $ 332,554,994 Ratios to Assessed Valuation: Direct Debt 0.00% Total Direct and Overlapping Tax and Assessment Debt 7.62% Gross Combined Total Debt 13.16% Net Combined Total Debt 12.97% SHARE OF AUTHORIZED AND UNSOLD GENERAL OBLIGATION BONDS: Metropolitan Water District $149,000 Rancho California Water Distrkt Rancho Division $ 7,265,737 Rancho California Water District, Santa Rosa Division $866,087 Eastern Municipal Water District, I.D. No. U8 $4,571,060 Temecula Unified School District $17,509,782 (3) (1)Excludes share of $8,100,000 obligation bonds dated 8/l/96. (2)Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. (3) Includes share of $8,100,000 general obligation bonds dated 811/96. STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/96: $0 1995-96 TYPICAL TOTAL TAX RATE (TRA 13-004): 1.16643 (Special Assessment Rate .3000) Source.- Califemia Municipal Statistics, Inc. [L289429.8) 21 DRAFT dated Novonvbw 19, 1996 Land Values The value of the real property within the District is a critical factor in determining the investment quality of the Local Agency Bonds, and, hence, the Bonds. If a property owner defaults in the payment of Special Taxes, the CFD Financing Authority's only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax; the Special Tax is not a personal obligation of the owners of the Property or any lender thereof. An appraisal of the Taxable Property currently within the District (the "Appraisal") has been prepared by Brown, Chudleigh, Schuler and Associates of Torrance, California (the "Appraiser"). The Appraisal sets forth the Appraiser's conclusions and assumptions with respect to the fee simple market value, as defmed, of the Taxable Property in the District at various times. The Appraiser concluded that the fee simple market value of the Taxable Property within the District as of November 3, 1996 would be $41,700,000 with the Public hwroveinents in place, and would be $173,000,000 upon completion of the Development. In addition, the Appraiser concluded that the fee simple market value of the Residential/RV Park property with the Public Improvements in place would be $6,900,000. However, as discussed at "-- The District, the Development and the Project" and "THE LOCAL AGENCY BONDS - Security for the Local Agency Bonds" herein, there can be no assurance that the Residential/RV Park property will be subject to the Special Taxes or, consequently, that this property will be security for the Bonds. The Appraisal is subject to certain conditions and stipulations which are set forth in detail in the Appraisal included as Appendix C and which should be reviewed carefully. None of the Authority, the CFD Financing Authority, the District or the Underwriter make any representation as to the accuracy or completeness of the Appraisal. SPECL4,L RISK FACTORS Investment in the Bonds involves risks which may not be appro@ for certain investors. The following is a discussion of certain risk factors which should be considered, in addition to other matters set forth herein, in evaluating the Bonds for investment. The information set forth below does not purport to be an exhaustive @ of the risks and other considerations which may be relevant to an investment in the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. The occurrence of one or more of the events discussed herein could adversely affect the ability or ess of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in the inability to make fWl and pimctual payments of debt service on the Local Agency Bonds, which in turn could result in the inability to make full and pimctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely affect the value of the property in the District. Risks Associated with Failure to Complete Project or Development Failure to complete the Project or the Development, or substantial delays in the completion of the Project or the Development due to litigation, the inability to obtain required funding or other causes may reduce the value of the property within the District. Estimations regarding the sufficiency of the Special Taxes set forth herein have been made based in part on the assumption that the Development will be completed as planned and that the land values described in the Appraisal will be realized as a result of such completion. See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER" and APPENDIX C - "APPRAISAL" herein. Any construction project entails significant risks, including cost overruns, shortages of materials or skilled labor, labor disputes, unforeseen enviroranental or engineering problems, work stoppages, fire and other natural disasters, construction scheduling problems and weather interferences, any of which, if they occurred, could materially delay construction or result in a substantial increase in costs to the Developer. As part of its desip-build contract, Fluor Daniel will assume certain risks, including those related to cost overruns and shortages of materials. To the extent that the [@89429. 81 22 DRAFT @ Nov 19,1996 completion of the Project or the Development is materially delayed, operational results of the Developer will be materially and adversely impacted. In addition, any cessation or delay in the proposed Development is likely to adversely affect projected land values within the District which could in turn (i) adversely affect the willingness and ability of the owners of land within the District to pay the Special Taxes when due, and, (ii) reduce the proceeds which could be collected at a foreclosure sale in the event that the Special Taxes are not paid when due. Payments of principal of and interest on the Local Agency Bonds are derived almost exclusively from the Special Tax Revenues. While the Local Agency Bonds are being issued to fumce the Project, the remainder of the Development will be financed through private financing sources. In particular, the Developer anticipates obtaining a commitment for (a) approximately $60,000,000 of debt to be secured by a first deed of trust on the property within the District, and (b) approximately $22,000,000 of debt to be secured by a second deed of trust on the property within the District. This private financing will close, if at all, concurrently with the issuance of the Bonds (collectively, the "Private Financing") and is a condition precedent to the willingness of the Authority to issue the Bonds. See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER - Private Financing." However, in the event that this Private Financing is insufficient to complete the Development, or if Developer defaults in any of its covenants prior to the full release of these funds, there is no assurance that the Developer will be able to raise additional capital. If the Developer is unable to raise sufficient capital to complete the Development, the entire Development may fail and such failure would have a negative impact on the land values within the District and on the ability and willingness of the Developer to pay Special Taxes. Risks Associated with Financial Failure of Development It is possible that, even if the Project and the Development are completed, the Development could fail to generate the amount of revenue needed to cover debt service and operational costs. The completion and operation of the Development is dependent on a number of factors, many of which are outside of the Developer's control, including prevailing economic conditions and financial, business, regulatory and other factors affecting the Developer's operations and business. Any significant increases in the construction budget or delays in completing the construction and opening of the Development could materially and adversely affect the operating results of the Developer and could result in the inability of the Developer and other affiliated owners of land within the District, if any, to make required Special Tax payments and/or payments of interest and principal on the Private Financing. Estimations regarding the sufficiency of the Special Taxes set forth herein have been made based in part on the assumption that the Development will generate sufficient revenue to cover these costs, and that the land values described in the Appraisal will be realized as a result of such successful operation. See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER" and APPENDIX C - "APPRAISAL" herein. However, there are no assurances that the Development will generate this level of revenue. Failure of the Development to generate this level of revenue could affect projected land values within the District. For example, the Appraisal's conclusion of land value of $173,000,000 for the Taxable Property (upon completion of the private and public improvements) gives "primary consideration" to the discounted cash value approach, and that approach depends heavily on certain assumptions regarding the Development's future income. These assumptions, in turn, are based in part on the income generated by three live entertainment projects that the Appraisal deemed similar. The ability of the Development to achieve these income assumptions, however, is uncertain. Failure of the Development to generate this level of revenue also could (i) adversely affect the willingness and ability of the owners of land within the District to pay the Special Taxes when due, and, (ii) reduce the proceeds which could be collected at a foreclosure sale in the event that the Special Taxes are not paid when due. Payments of principal of and interest on the Local Agency Bonds are derived primarily from the Special Tax Revenues, and payment of principal and interest on the Bonds are derived solely from payments on the Local Agency Bonds. [L289429.81 23 DRAFT dated November 19, 1996 Change in Management Temecula Entertairunent Valley, Inc. ("TEV") is a member of the Temecula Entertainment, LLC (the 'Holding Company'), which in turn is a member of Developer. Mr. Zev Buffman is the principal owner of TEV. Mr. Buffnian is also the Chief Executive Officer of the Developer. Mr. Buffman has extensive experience in the production of live entertairunent and the development of live entertainment venues. See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER - The Developer" herein. The Developer has entered into an employment agreement with Mr. Buffman which provides for five years of continuous service. The Developer will also obtain a key man life insurance policy on the life of Mr. Buffman in the amount of $10 million, of which the Developer shall be the sole beneficiary . For a variety of reasons, TEV may cease to be a member of the Holding Company and/or Mr. Buffman may cease to be the Chief Executive Officer of the Developer. The Appraisal expressly notes that management is a key element in the success of the Development, and that. it asstunes that Mr. Buffhian will be personally involved to a "great extent." Thus, severance of TEV from the Holding Company and/or of Mr. Buffman from his role as the Chief Executive Officer of the Developer could have an adverse affect on the Development and thereby create a diminution in the value of the real property within the District. Competition A total of 52 professional venues meeting certain criteria lie within the 100-mile radius surrounding Temecula. These venues have a combined total seating capacity of 150,000 seats. There are currently four live theater venues, offering 9,671 seats, within a 35-mile radius of the Development (the Primary Market), and 24 live theater venues, offering 57,202 seats, within a 35 to 60 mile radius (the Secondary Market). The 11,050 seats at the Development will represent a significant addition to the combined supply in the Primary and Secondary Market. Management believes that its marketing and price strategies give the Development a competitive advantage over these other venues. However, there can be no assurance that management's marketing and/or pricing strategies will be successful in attracting sufficient visitors to the Development to make it financially viable. Reliance on a Single Market It is anticipated that the Development will be heavily dependent upon the patronage of persons living within a 100- mile radius of the Development for recurring operational revenue. Any downturn in the economy of the region, a major natural disaster or the entrance of new competitors into the Development's market or the expansion of existing competitors, could have a material adverse effect on the Developer's results of operations. Reliance on Tounst Visitor Market The Operating Projection assumes significant tourist attendance at the Development. Approximately 47% of the Development's projected attendance in the first year is attributable to tourism attendance (782,000 visitors). Based upon the 78.2 million visitors to Southern California in 1994, this represents an assumption of a I % capture rate, which the Developer believes to be a conservative assumption. However, there can be no assurance that the Development will appeal to the tourist visitor market. An inability to attract such visitors could materially and adversely affect the operating results of the Developer. Local Lodging Availability and Development Hotel room availability has been a critical component to the success of comparable live theater developments such as those in Branson, Myrtle Beach, Pigeon Forge, and Nashville. There are approximately 15 lodging facilities providing approximately 1,000 rooms within a 20-mile radius of the Development. Current occupancy rates average approximately 60 percent. While plans for the Development itself do not include a hotel, it is anticipated that TEV or the other members [L289429.81 24 DRAFT daud November 19, 1996 of the Holding Company may ultimately contract with a third party operator to construct a hotel at or near the Development. See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER - Future Plans for Development." No assurance can be given, however, that any such hotel project will be completed. Management believes that its primary customer market is not dependent on overnight lodging given the project's location in Southern California. However, to the extent overnight lodging is a necessary component in attracting visitors, there can be no assurance that local lodging, including the previously discussed anticipated hotel development near the Development, will be adequate to attract and retain the number of visitors estimated in the assumptions to the fmancial projections. Risks Associated with Substantial Leverage; Ability to Service Debt Following the closing of the Bonds and the Private Financing, the Developer will be highly leveraged and will be dependent to a significant extent upon the successful completion and operation of the Development for coverage of its debt service. Successful completion of related public infrastructure, including some of the Public Improvements, will also be important. The consequences of the Developer's leverage include, but are not limited to, the following: (i) a substantial portion of the Developer's cash from operations must be dedicated to the payment of interest on the Developer's indebtedness, (ii) the Developer's ability to obtain additional debt fmancing in the future for working capital, capital expenditures, development financing or other purposes may be limited, and (iii) the Developer will be vulnerable, and may have difficulty responding, to adverse changes in the economy and the Developer's business. In addition, the failure by the Developer to comply with numerous restrictive covenants contained in the debt agreements may result in an event of default which, if not cured or waived, could have a material adverse effect on the Developer and its operations. Any of the foregoing could have a material adverse affect on the ability of the Developer to meet its obligations to pay the Special Taxes and/or repay the Private Financing. If the Developer were unable to generate sufficient cash from its future operations to pay the Special Taxes and repay the Private Financing or to satisfy any other debt service requirements, or to pay its debts as they mature, the Developer would be required to explore alternatives, such as seeking additional debt or equity financing, reducing or delaying capital expenditures or selling material assets or operations. No assurance can be given that the Developer would be successful in implementing any of these alternatives, if necessary. Concentration of Ownership TEV, an affiliate of the Developer, is in escrow to purchase all of the land within the District. Simultaneously with the issuance of the Bonds, TEV intends to obtain sufficient funds from the Private Financing to close each of these escrows except the Residential/RV Park property. TEV then intends innnediately to transfer to the Developer title to all of the property purchased, except the Hotel Commercial property (title to which is expected to be conveyed to the members of the Holding Company). See ""PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER -- Private Financing. " Thus, innnediately following the issuance of the Bonds, all of the land within the District except the Residential/RV Park property is expected to be owned by the Developer. See "INTRODUCTION -- The District, the Development and the Project" herein. There may be subsequent transfers of ownership of the property within the District prior to the completion of the Development. However, until any such transfers occur, the timely payment of the Bonds will depend primarily on the willingness and ability of the Developer to pay when due the Special Taxes. The lack of diversity in the obligation to pay Special Taxes presents significant risk to owners of the Bonds. Failure of the Developer to pay when due the annual Special Taxes could result in the rapid, total depletion of the Reserve Fund prior to replenishment from the resale of property upon foreclosure or otherwise. In that event, there could be a default in the payments of principal of, and interest on, the Local Agency Bonds and, consequently, a default on the Bonds. See "- Potential Delay and Limitation in Foreclosure Proceedings" below. [L289429.81 25 DRAFT datod Novembor 19, 1996 Land Values and Appraisal The value of the property within the District is a critical factor in determining the investment quality of the Bonds. If a property owner within a District is delinquent in the payment of the Special Taxes, the CFD Financing Authority's only remedy is to conunence foreclosure proceedings in an attempt to obtain funds to pay the Special Taxes. Consequently, reductions in land values due to a downturn in the economy, physical events such as earthquakes or floods, stricter land use regulations or other events will adversely impact the security underlying the Special Taxes. The Appraiser has estimated the value of all Taxable Property within the District, on the basis of certain definitions, assumptions and liniiting conditions contained in the Appraisal Report, including the assumed completion of the Public Improvements . See APPENDIX C - "APPRAISAL" herein. The Authority and the CFD Financing Authority make no representation as to the accuracy or completeness of the Appraisal, and purchasers of the Bonds should review the complete Appraisal appended hereto. The Appraisal assumes that the Local Agency Bonds will be issued for the purpose of constructing the Project, and that the Development of which the Project is a part will proceed as planned. There can be no assurance that the Project or the Development will be completed in a timely manner or that they will be completed at all. Although approximately $of the total principal amount of Local Agency Bonds will be used for financing costs and approximately $of Local Agency Bonds proceeds for reimbursements to the City and Developer for prior engineering and certain other expenses, the Appraiser also assumes that the issuance of the Local Agency Bonds will add a corresponding value to the property. Other than as reflected generally in the discount rate used, the Appraisal does not specifically address any possible negative impact which could occur by reason of failure to timely complete the assumed improvements, any future litigation, future slow growth or no growth voter initiatives, the presence of hazardous materials, the obtaining of future permits or approvals, the listing of endangered species or the determination that habitat for endangered or threatened species exists within the district or other similar situations. Prospective purchasers of the Bonds should not assume that the Taxable Property within the District could be sold for the appraised amount described above at a foreclosure sale for any applicable delinquent Special Taxes. For example, it is unlikely that common ownership would be maintained through foreclosure sales of multiple delinquent parcels because at foreclosure each parcel must be sold separately for the Special Tax lien claims against it and multiple parcels may not be foreclosed in a single "bulk" foreclosure sale. In addition, no assurance can be given that, should a parcel with delinquent Special Tax payments be foreclosed upon and sold for the amount of the delinquency, any bid will be received for such property or, if a bid is received, that such bid will be sufficient to pay all such delinquent taxes. In addition, the Fiscal Agent Agreement permits the CFD Financing Authority to credit bid at a foreclosure sale without posting cash, and to otherwise make a bid in an amount lower than the delinquent Special Taxes if it determines that such a bid is in the interests of the Local Agency Bondowner. See APPENDIX C - "APPRAISAL" for a description of other assumptions made by the Appraiser. Lack of Operating History The Developer's activities have been limited to development activities arid, as a result, the Developer has had no revenues or earnings to date. Upon conunencement of operations, the Development will be a new entity that has no operating history. Accordingly, the operations of the Development will be subject to all of the risks inherent in the establishment of a new business enterprise, including success in attracting customers, the ability to obtain sufficient talent or the availability of adequately trained personnel, as well as having no proven ability to market and operate a new venture in the Temecula market where neither the Developer nor any of its managing team has previously conducted business. Although the Developer's management is experienced in theater and arena management and operations, it has not had the responsibility of overseeing the operations of a project identical to the Development. [L289429.81 26 DRAFT dated November 19, 1996 Risks Associated with OperadW Projections The Operating Projection for Old Town Temecula sets forth certain expected cash flow coverages for the Old Town Temecula (Zone A) for the projection period. See APPENDIX H - "OLD TOWN TEMECULAoPERAnNG PROJECTION. " The Operating Projection contained herein, while presented with numerical specificity, is based upon a number of estimates and assumptions which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Developer. The Operating Projection included herein represent the Developer's best estimate, as of the date hereof, of the Developer's results of operations for the three years following the Development's grand opening. The projection is based upon a number of assumptions with respect to future business strategies and operating performance which are subject to change and any of which may not materialize, and unanticipated events may occur which could affect the actual results achieved by the Developer during the period covered by the projections. There wifl usually be differences between the projected results and actual results because events and - do not occur as expected, and those differences may be material. For example, the projection is based, among other things, on the significant assumptions set forth therein, including by way of example, the assumptions that during the first year of the Development's operation, approximately 1.7 million people will visit the Development, and that the Wild West Arena, the Opera House and the Cabaret collectively will host 1,079 performances at an average occupancy of over 50 %. In the event that these and other significant events do not occur, the ability of the Developer to pay the Special Taxes could be adversely affected. Prospective purchasers of the Bonds should not assume that the projected operating results of the Development will be indicative of the actual results, and are cautioned not to place undue reliance on the projection. The projection included herein was not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants or generally accepted accounting principles. Moreover, none of the Underwriter, the Authority, the CFD Financing Authority or the independent auditors for the Developer have compiled or examined the projection and accordingly, do not express any opinion or any other form of assurance with respect thereto, assume no responsibility for and disclaim any association with the Operating Projection. Potential Delay and Limitation in Foreclosure The payment of property owners' taxes and the ability of the CFD Financing Authority to foreclose the lien of a delinquent unpaid Special Tax in accordance with its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State relating to judicial foreclosure. See '-- Bankruptcy" below. Under current law, a judgment debtor (i.e., the property owners) has at least 140 days from the date of service on the judgment debtor of the notice of levy on the interest in real property to be sold in which to redeem the property to be sold. If a judgment debtor fails to so redeem and the property is sold, his only remedy is an action to set aside the sale, which must be brought within ninety days of the date of sale. If, as a result of such an action a foreclosure sale is set aside, the judgment is revived, the judgment creditor (i.e., the District) is entitled to interest on the revived judgment as if the sale had not been made. (Section 701.680 of the California Code of Civil Procedure.) No assurance can be given that a judgment ordering foreclosure will be granted or that the real property subject to sale or foreclosure will be sold. The Mello-Roos Act does not require the CFD Financing Authority to purchase or otherwise acquire any lot or parcel of property to be sold if there is no other purchaser at such sale, nor does the Mello- Roos Act specify the priority relationship between the Special Tax and other taxes and assessments. The Fiscal Agent Agreement, however, does specify that the Special Tax will have the same lien priority as for ad valorem property taxes in the case of delinquency. In addition, potential investors should be aware that judicial foreclosure proceedings are not summary remedies and can be subject to significant procedural and other delays caused by crowded court calendars and other factors beyond [L289429.81 27 DRAFT dat*d No 19,1996 the control of the CFD Financing Authority. Potential investors should assume that, under current conditions, it is estimated that a judicial foreclosure of the lien of Special Taxes will take up to two or three years from initiation to the time of the foreclosure sale. At a Special Tax lien foreclosure sale, each parcel will be sold for not less dm the "minimum bid amount" which is equal to the sum of all delinquent Special Tax installments, penalties and interest thereon, costs of collection (including reasonable attorneys' fees), post-judgment interest and costs of sale; unless, as permitted by the Fiscal Agent Agreement, the CFD Financing Authority determines in its discretion that a lower minimum bid amount is in the best interests of the owners of the Local Agency Bonds. Each parcel is sold at foreclosure for the amounts secured by the Special Tax lien on such parcel and multiple parcels may not be aggregated in a single "bulk' foreclosure sale. Delays and uncertainties in the Special Tax lien foreclosure process create significant risks for Bondholders. High rates of Special Tax payment delinquencies which continue during the pendency of protracted Special Tax lien foreclosure proceedings, could result in the rapid, total depletion of the Reserve Fund prior to replenishment from the resale of property upon foreclosure. In that event, there could be a default in payments of the principal of, and interest on, the Local Agency Bonds. See "- Concentration of Ownership" above. Bankruptcy The payment of Special Taxes and the ability of the District to foreclose the lien of delinquent unpaid Special Taxes may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State relating to judicial foreclosure. In addition, the prosecution of a foreclosure action could be delayed due to crowded local court calendars or legal delaying tactics. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified, as to the enforceability for the various legal instruments, by reference to bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished, the amount and priority of any Special Tax lien could be modified if the value of the property falls below the value of the lien. If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a property owner could result in a delay in procuring Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Local Agency Bonds and the possibility of delinquent tax installments not being paid in full. On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Gl=ly Marine Industries. In that case, the court held that ad Valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property. Although the court upheld that priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be "administrative expenses" of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclose on the property and retain all the proceeds of the sale except the amount of the pre- petition taxes. According to the court's ruling, as @nistrative expenses, post-petition taxes would be paid, assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be defeffed. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise), it would at that time become subject to current ad valorem taxes. The Mello-Roos Act provides that the Special Taxes are secured by a continuing lien which is subject to the same lien priority in the case of delinquency as ad valorem taxes. No case law exists with respect to how a bankruptcy court would treat the lien for the Special Taxes levied after the filing of a petition in bankruptcy. The GIMly case is controlling precedent on bankruptcy courts in the State. If the GlasRIv precedent was applied to the levy of the Special Taxes the amount of such taxes received from parcels in bankruptcy could be reduced. EL289429.81 28 DRAFT dated November 19, 1996 Eminent Domain The City of Temecula is in the process of acquiring from third parties approximately 5.69 acres of real property within or in the vicinity of the District to be utilized as public rights-of-way for the Public Improvements. The City has entered into voluntary agreements of sale with various third party property owners pursuant to which the City has agreed to purchase approximately 54 % of the property required for the rights-of-way. The City is hopeful that it also will enter into voluntary agreements with the owners of the remaining approximately 3.06 acres. In the event that the City is not able to agree on mutually acceptable prices with these remaining owners, however, the City will consider whether to adopt a resolution of necessity which, if adopted, would initiate the process to obtain title to the property through condemnation pursuant to the provisions of California Eminent Domain Law. The City is not contractually obligated to adopt a resolution of necessity nor to initiate eminent domain proceedings. There are a number of defenses that property owners can raise in a condemnation action, if one is filed. The property owners may challenge the City's "right to take" the subject property, in which case the property owner would argue that the City does not have a valid legal purpose to obtain the property or has failed to comply with certain substantive and procedural prerequisites to the filing of an eminent domain action. If a property owner challenges the City's "right to take" their property and the Court determines that the City does not have such a right, the City would not be able to obtain title to the property through condemnation. If a "right to take" challenge is asserted as a defense to the eminent domain action, the City would not be able to take immediate possession of the property pending ffiw determination of the right to take issue. If the City fails to obtain title to the properties required for the rights-of-way for the Public Improvements, such failure would have a material and adverse iiinpact on the Development because the properties are necessary to the vehicular and pedestrian circulation plans, which are conditions of approval of the land use entitlements of the Development. The Developer has not budgeted any funds for revising the plans for the Development in the event that the pedestrian or circulation plans for the area are revised due to the failure to obtain title to the land presently targeted for such uses, and there can be no assurances that the Developer would be able to raise such additional funds or that the conditions of approval would be modified. The main issue in any condemnation action which might be filed over the subject properties would be whether the compensation offered by the City represents the fair market value of such property. If the parties cannot agree upon the purchase price for the property, the Eminent Domain Law requires that the court or a jury, at the option of the property owner, determine the fair market value of the property and the condemning authority must pay that value if it desires to obtain title to the property. Under certain circumstances the condemning authority may also be required to pay the attorney fees and appraiser fees of the property owner. The condemning authority must also pay relocation benefits and the property owner may also claim pre-condemnation damages for the actions of the condemning authority prior to the filing of the condemnation action. The Developer has agreed to reimburse the City for the collective purchase price, relocation benefits and costs of acquisition and eminent domain litigation for all of the property to be used for public rights-of-way. [Developer to insert discussion regarding amount the Developer has budgeted, total amount that it expects to pay without condemnation, and $400,000 property acquisition condnency]. The Developer believes that, even if a court determines that the acquisition price that the City must pay exceeds the amount budgeted, the contingency will be sufficient to cover these potentially higher prices. However, there can be no assurances that the court will not determine that the fair market value of the property or other damages to be paid to the property owner is significantly higher than the Developer or the City presently believes, and there can be no assurances that the Developer would be able to pay these higher purchase prices. In the event that the Developer does not have sufficient funds to reimburse the City for the condemnation values determined by any future court, the City will not acquire title to the property and the City might be liable for precondemnation damages, damages for abandonment of the condemnation action and the property owner's attorneys fees in defending the action, which costs would be the responsibility of the Developer. As discussed above, such failure to acquire these properties would have a material and adverse impact on the Development. [L289429.81 29 DRAFT dated November 19, 1996 Faffure to Develop Land Land development is subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with the layout and design of developments, the nature and extent of improvements, construction activity, land use, zoning, school and health requirements, as well as numerous other matters. The Developer has secured many of the approvals, penrnits and government entitlements necessary to construct the Development and the Project. However, there is always the possibility that additional approvals required for the completion of the Development or the Project will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such agency approval or satisfy such govennnental requirements would adversely affect planned land development. See "PROPOSED DEVELOPMENT OF OLD TO@ TEMECULA ENTERTAINMENT CENTER - - Governmental Approvals and Agreement" and "-- Government Envirom-nental Permits" herein. In addition to reducing the ability and/or willingness of the owners of the land proposed to be developed within the District to make the Special Tax, when due, a reduction of the development potential of such land could adversely affect land values and reduce the proceeds which could be collected at a foreclosure sale in the event that such taxes are not paid when due. See "- Land Values and Appraisal" above. In addition, a delay or disruption in the planned development in the District could adversely affect the willingness and ability of the property owners within the District to pay the Special Taxes levied therein. Parity Debt; Additional Indebtedness The ability of an owner of land within the District to pay the Special Taxes could be affected by the existence of other taxes and assessments imposed upon =able parcels within the District. The District is located within two existing assessment districts. The Developer reports that the aggregate annual assessment installments payable by the property owners in the District in fiscal year 1994-95 with respect to these assessment districts total approximately $1200. The Developer reports that there have been no delinquencies with respect to the payment of any of these assessment installments. See also "THE LOCAL AGENCY BONDS - Property Ownership; Direct and Overlapping Debt" herein, which sununarizes the current direct and overlapping debt for the City, portions of which also impact the District. In addition, the City and other public agencies whose boundaries overlap those of the District, without the consent of the CFD Financing Authority, and in certain cases without the consent of the owners of the land within the District, could impose additional taxes or assessment liens on the property within the District in order to finance public improvements or services to be located or provided inside of or outside of such areas. The liens created on the property within the District, through the levy of such additional taxes or assessments, may be on a parity with the liens of the Special Taxes. The imposition of additional liens on a parity with the Special Taxes may reduce the ability or willingness of the landowners within the District to pay the Special Taxes and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes or the principal of and interest on the Local Agency Bonds when due. The CFD Financing Authority has covenanted that, except for bonds issued to refund the Local Agency Bonds, it will not issue additional iridebtedness payable from the Special Taxes. See APPENDIX A -- "S Y OF THE PRINCIPAL LEGAL DOCUMENTS -- The Fiscal Agent Agreement" attached hereto. Local, State and Federal Land Use Regulations The completion of the Project and the opening of the Development will be contingent upon, among other things, the Developer's receipt of all required licenses, permits and authorizations. The scope of the approvals required for a project of this nature is extensive, including, without limitations state and local land-use permits, building and zoning permits, health and safety permits, and liquor licenses. IL289429.81 30 DRAFT dated Novembw 19, 1996 There can be no assurance that land development operations within the District will not be adversely affected by future government policies, including, but not limited to, governmental policies which directly or indirectly restrict or control development. During the past several years, citizens of a number of local communities in California have placed measures on the ballot designed to control the rate of future development. In addition, State and federal regulatory agencies have increasingly expanded their involvement in local land use matters through increased regulatory enforcement of various envirorunental laws, including the Endangered Species Act, the Clean Water Act and the Clean Air Act, among others. Such regulations can substantially impair the rate and amount of development without requiring just compensation unless the effect of the regulation is to deny all economic use of the affected property. In addition, unexpected changes or concessions required by local, regulatory and state authorities could involve significant additional costs and could delay or prevent the completion of construction or the opening of all or part of the Development. There can be no assurance that the Developer will receive the necessary permits, licenses and approvals for the construction and operation of the Development that it has not yet obtained, or that such permits, licenses and approvals will be obtained within the anticipated time fraine. Potential investors should assume that any event that significantly impacts the ability to develop land within the District could cause the land values within the District to decrease substantially and could affect the willingness and ability of the owners of land to pay the Special Taxes when due or to proceed with Development. Earthquakes The District, like all California conununities, may be subject to unpredictable seismic activity. The occurrence of seismic activity in the District could result in substantial damage to properties in the District which, in turn, could substantially reduce the value of such properties and could affect the ability or willingness of the property owners to pay their Special Taxes when due. No Acceleration Provision Neither the Indenture nor the Fiscal Agent Agreement contain a provision allowing for the acceleration of the Bonds or the Local Agency Bonds in the event of a payment default or other default under the terms of the Bonds, the Indenture, the Local Agency Bonds or the Fiscal Agent Agreement. Insufficiency of Special Taxes Special Tax Revenues could be insufficient to pay the Local Agency Bonds either due to non-payment of the amounts levied or because acreage within the District becomes exempt from taxation due to title being transferred to a public agency. In order to pay debt service on the Local Agency Bonds, it is necessary that the Special Taxes levied against property within the District be paid in a timely manner. Should the Special Taxes not be paid on time, the District has established a Reserve Fund to be used to pay debt service on the Local Agency Bonds to the extent other fimds are not available therefor. Under the Fiscal Agent Agreement, the District is obligated to maintain in the Reserve Fund an amount equal to the Reserve Requirement. However, if property owners default in the payment of Special Taxes, the Reserve Fund could be depleted quickly with no immediate source of funds to replenish it. The Mello-Roos Act provides that if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Mello-Roos Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment which requires payment of the lien from the proceeds of the eminent domain award. The constitutionality and operation of these provisions of the Mello-Roos Act have not been tested. If for any reason property subject to the Special Tax becomes EL289429.81 3 1 DRAFT dated Novembw 19, 1996 exempt from taxation by reason of ownership by a non-taxable entity such as the federal government or another public agency, the Special Tax will be reallocated to the remaining taxable properties within the District subject to the limitation of the maximum authorized levy, and the inability to increase the levy of amounts between zones of the District. Any reallocation, to the extent possible, would result in the owners of such property paying a greater amount in the Special Tax and could have an adverse iiinpact upon the timely payment of the Special Tax. The CFD Financing Authority has covenanted to institute foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the Local Agency Bonds. See "SECURITY FOR THE BONDS -- Proceeds of Foreclosure Sales" for provisions which apply in the event foreclosure is required and which the CFD Financing Authority is required to follow in the event of delinquency in the payment of the Special Taxes. However, such proceedings would not be applicable in the case of land which becomes owned by a public agency. MOREOVER, IF A SUBSTANTIAL PORTION OF LAND WITHIN THE DISTRICT BECAME EXEMPT FROM THE SPECIAL TAX BECAUSE OF PUBLIC OWNERSHIP, OR OTHERWISE, THE MAXIMUM SPECIAL TAX WHICH COULD BE LEVIED UPON THE REMAINING LAND MIGHT NOT BE SUFFICIENT TO PAY PRINCIPAL OF AND INTEREST ON THE LOCAL AGENCY BONDS WHEN DUE AND A DEFAULT MAY OCCUR WITH RESPECT TO THE PAYMENT OF SUCH PRINCIPAL AND INTEREST. Lunitations on Remedies The enforceability of the rights and remedies of the Owners of the Bonds and the Trustee, and the obligations incurred by the Authority, the CFD Financing Authority, the Developer and the various lenders described herein may be subject to the following: the Federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may lin-dt the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitations, or modification of their rights. Loss of Tax Exemption As discussed in this Official Statement under the caption "TAX MATTERS, " interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued, as a result of future acts or omissions of the Authority in violation of its covenants in the Indenture or the CFD Financing Authority in violation of the provisions of the Fiscal Agent Agreement. Should such an event of taxability occur, the Bonds are not subject to special redemption or acceleration and will remain outstanding until maturity or until redeemed under one of the other redemption provisions contained in the Indenture. Hazardous Materials While government taxes, assessments and charges are a conunon claim against the value of a taxed parcel, other less common claims may be relevant. One of the most serious in terms of the potential reduction in the value that may be realized to pay the Special Tax is a claim with regard to a hazardous substance. In general, the owners and operators of a taxed parcel may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1989, sometijrnes referred to as "CERCLA" or "Superfund Act," is a well-known one of these laws, but California laws with regard to hazardous substances are also stringent and somewhat similar. Under many of these laws, the owner (or operator) is obligated to remediate hazardous substances on, under or about the property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance; however, an owner (or operator) who [L289429.81 32 DRAFT dated November 19, 1996 is not at fault may seek recovery of its damages from the actual wrongdoer. The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, may be to reduce the marketability and value of the parcel, because the purchaser, upon becoming an owner, may become obligated to remedy the conditionjust as is the seller. The appraised values referred to in this Official Statement do not take into account the possible reduction in marketability and value of any of the taxed parcels by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the parcel. None of the Authority, the CFD Financing Authority or the Developer are aware that the Developer, as the prospective owner of any of the taxed parcels, or any other person, has such a current liability with respect to any of the taxed parcels. However, it is possible that such liabilities do currently exist and that the Authority, CFD Financing Authority and the Developer are not aware of them. Further, it is possible that liabilities could arise in the future with respect to any of the taxed parcels resulting from the existence on the parcel of a substance presently classified as hazardous but which has not been released, or the release of which is not presently threatened, or that liabilities may arise in the future resulting from the existence on a parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the development of a taxed parcel or the value thereof that is realizable upon a delinquency. Limitations on Tax Revenues On June 6, 1978, California voters approved Proposition 13, a statewide initiative relating to the taxation of real property which added Article XM A to the California Constitution. Among other things, the Proposition: (a) limited ad valorem property taxes on all real property to one percent (I %) of the full cash value of the property; (b) exempted existing voter approved bonded indebtedness from the I % limitation; (c) defined "full cash value" as the Assessor's appraised value of real property as of June 1, 1975, adjusted by changes in the Consumer Price Index - not to exceed 2% per year; (d) permitted establishment of a new "full cash value" when there is new construction or a change in ownership; (e) permitted the reassessment, up to the June 1975 value, of property which was not current on the 1975-76 assessment roll; (f) required counties to collect the I % property tax and to apportion "according to law to the districts within the counties"; (g) prohibited new ad valorem taxes on real property, or sales taxes, or transaction taxes, on the sale of real property; (h) permitted the imposition of special taxes by local agencies, other than those prohibited, by a two-thirds (2/3) vote of the "qualified electors" of such agencies; and (i) required a two-thirds (2/3) vote of all members of both houses of the Legislature for any changes in State taxes which would result in increased revenues. On June 3, 1986, California voters approved Proposition 46 which amended Article XHI A to provide that the one percent (I %) limitation on ad valorem taxes shall not apply to ad valorem taxes or special assessment to pay interest and redemption charges on any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978 by two-thirds of the votes cast by voters voting at the election for the taxes or assessment. Article XIII A provides that each county will levy the maximum ad valorem property tax permitted by Article XIH A and will distribute the proceeds to local agencies in accordance with an allocation formula based, in part, in pre-Article Xffl A ad valorem property tax rate levies by local agencies. The ad valorem tax revenues are distributed to local agencies, according to an allocation system enacted by Statutes of 1979, Chapter 282, as amended. Under this law, local public entitles receive property tax revenues in proportion to their relative tax rates prior to the enactment of Article XIII A subject to certain modifications for cities, counties and school districts and to various adjustments in succeeding years. Several lawsuits have been filed in various California Superior Courts claiming that Article XHI A's two-tiered tax assessment system is unconstitutional. The California Court of Appeal has in each case held that Article XM A is not violative of the constitutional provisions cited. In Nordlinger v. Hahn, decided June 18, 1992, the United States Supreme Court affirmed a decision of the California Court of Appeal, Second Appellate District, which had held that Article Xffl A does not violate the equal protection guarantees of the United States Constitution. [L289429.91 33 DRAFT dated November 19, 1996 The Special Tax is a special tax approved by voters of the District in accordance with the procedures set forth in Section 4 of Article XM A. The CFD Financing Authority has not pledged any taxes other than the Special Taxes to the repayment of the Local Agency Bonds and, given the limitations on ad valorem property taxes imposed by Article XIII A, does not expect any ad valorem taxes to be available to repay the Local Agency Bonds. State and local government agencies in California and the State of California itself are subject to annual Plappropriation limits" imposed by Article XIH B of the State Constitution. Article XM B prohibits government agencies and the State from spending "appropriations subject to limitation" in excess of the appropriations limit imposed. "Appropriations subject to limitation" are authorizations to spend "proceeds of taxes", which consist of tax revenues, certain state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed "the cost reasonably bome by such entity in providing the regulation, produce or service." No limit is imposed on appropriations of funds which are not "proceeds of taxes', such as appropriations for debt service on indebtedness existing or authorized before January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, reasonable user charges or fees and certain other nontax funds. Since the Local Agency Bonds constitute indebtedness authorized by the voters of the District, it is not necessary to treat the Special Taxes as "appropriations subject to limitation. " Notwithstanding this fact, the Mello-Roos Act permits, and the qualified electors in the District have approved, an annual appropriations limit for the District of $27,500,000. Limited Secondary Market There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Although the CFD Financing Authority and the Developer have conunitted to provide certain statutorily-required fumcial and operating information, there can be no assurance that such information will be available to Bondowners on a timely basis. The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, the absence of a credit rating for the Bonds or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price. Risks Associated with Proposition 218 [To be drafted] Dependence upon Fluor Daniel for Construction In accordance with the Construction Management Agreement, described further at "THE PROJECT - Construction Management and Supervision Agreement; Limited Completion Guaranty" herein, Fluor Daniel, an affiliate of a member of the Developer, has agreed to act as the CFD Financing Authority's construction manager for the construction of virtually all of the Public kvroveinents. None of the Authority, the CFD Financing Authority or the Underwriter makes any representation or gives any assurance with respect to the ability of Fluor Daniel or the Developer to arrange for the construction of the Public improvements to be financed with Local Agency Bond proceeds, or the ability of any contractor or subcontractor to complete any work related thereto. [L289429.81 34 DRAFT d&W N 19, 1996 The risks associated with reliance on Fluor Daniel are mitigated somewhat by the Limited Completion Guaranty provided by Fluor Corporation. The Limited Completion Guaranty, however, is a guaranty only that Fluor Daniel will perform its obligations under the Construction Management Agreement. The Construction Management Agreement has several important conditions and lin-dtations to Fluor Daniel's obligation to complete the Public Improvements on schedule and on budget. See "THE PROJECT - Construction Management and Supervision Agreement; Limited Completion Guaranty" herein. In the event that any of these conditions occur or limitations apply, Fluor Daniel and Fluor Corporation could have no ftirther obligation to ensure that the Project is completed on schedule or on budget. In such event, the Project could be materially delayed and/or the CFD Financing Authority may not have sufficient funds to complete the Public improvements. Litigation The Developer and its principals are currently parties to a lawsuit entitled Pratt v. City of Temecula, Riverside Superior Court Case No. 280260 (the "Litigation"), which seeks to set aside certain amendments to land use approvals previously obtained by the Developer for the construction of the Development. The original approvals required that certain road improvements be completed before the first certificate of occupancy could be issued for the Development and that a fmal subdivision map be recorded before any grading permit could be issued. The amendments to these approvals (the "Amendments') deferred the time in which the road improvements must be completed to up to 24 months after the issuance of the first grading permit, in exchange for which the Developer agreed to enter into a secured agreement to ensure the construction of the improvements. The Amendments also deleted the condition requiring that a final subdivision map act recorded prior to the issuance of any grading permit. Petitioners in the Litigation are attempting to avoid the Amendments. If the petitioners obtain all of the relief sought in their petition, the Amendments would be vacated and construction of the Development would be subject to the original conditions. Vacation of the Amendments would deprive the Developer of certain cost savings. It is unlikely that the petitioners would be entitled to obtain any monetary relief beyond court costs or attorneys fees. On October 25, 1996, the trial on this matter was held and the Court ruled in favor of the City and the City Council, finding that the City Council "proceeded in the manner required by law in approving the modifications in the conditions of approval for the Temecula Entertainment Center concerning the timing of grading and the timing of the Rancho California Road/1-15 improvements and the decision to approve those modifications is supported by substantial evidence. " The Court dismissed the Temecula Redevelopment Agency, Zev Buffman and Eugene Hancock finding that they are not proper parties to the action and no cause of action can be brought against them, and made some other procedural rulings. The judgment was executed by the Court on November 4, 1996 and notice of the entry of judgment was served on the parties on November 12, 1996. Subject to the exceptions described in Rule 2 of the California Rules of Court, parties to litigation must file an appeal of the judgment in the case on or before the earliest of the following dates: (1) sixty (60) days after the date of mailing by the clerk of the notice of entry of judgment; (2) sixty (60) days after the date of service of the notice of entry of judgment by a party to the action; or (3) 180 days after the entry of judgment. THE PROJECT The Project will be constructed within or in the vicinity of the District. The District is located in the City of Temecula to the west of Interstate 15. The District is divided into Zone A and Zone B for purposes of levying the Special Tax. See the maps contained in APPENDIX B - "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES" attached hereto. The purpose of the District is to finance the Public Improvements in conjunction with the proposed Development, described further below at "PROPOSED DEVELOPMENT OF OLD TOW'N TEMECULA ENTERTAINMENT CENTER" and otherwise to allow for further development with the City. The Public Improvements [L289429.81 35 DRAFT dated November 19, 1996 will serve and be available for use by owners, guests, and invitees of the Development as well as adjacent commercial properties and residents of the City, and will at all times be available for use by members of the general public on a nonexclusive basis. Most of the proceeds from the sale of the Local Agency Bonds will be used to finance the construction and acquisition of the Public Improvements which constitute the Project. The construction of the Project will be managed by Fluor Daniel (the "Construction Manager") pursuant to the terms of a Construction Management and Supervision Agreement dated as of December 1, 1996 (the "Construction Management Agreement") between the Construction Manager and the CFD Financing Authority. See "- Construction Management and Supervision Agreement; Limited Completion Guaranty" below. Description of the Project The following is a general description of the Public In43rovements, together with the estimated costs thereof, such costs being based upon information provided by the Developer derived from analysis by the Developer of bids for some of the work related to construction of the Public Improvements. No assurance can be given that the actual costs of the Public Improvements will be equal to such estimates, or that there will be sufficient funds to complete the Public Improvements, if the actual costs thereof are in excess of the estimates of the Developer. But see "- Construction Management and Supervision Agreement; Limited Completion Guaranty" below. [L289429.81 36 DRAFT dated November 19, 1996 TABLE 3 PUBLIC IMPROVEMENTS -- DESCRIPTION AND ESTIMATED COSTS* Western Bypass Corridor-Construct a 4-lane roadway from Interstate 15 to $10,006,000 Vincent Moraga Drive, including a bridge over Murrieta Creek and traffic signalization at the intersection of Front Street, with grading only from Vincent Moraga Drive to Rancho California Road First Street Improvements-Realign and construct the intersection of the four-lane 4,081,000 street improvements on First Street from Front Street to the Western Bypass Corridor, to include a bridge over Muffieta Creek; and install traffic signals at Front Street Old Town Sewer, Water System and Storm Drain System-Design and construct a 2,473,000 2.6 million gallon per day lift station and related sewer lines; design and construct a water main and appurtenances with sufficient capacity for all fire protection requirements; and, design and construct a storm drain system in Third and Sixth Streets. with outlets into Murrieta Creek Old Town Gateway Landscaping Project and Old Town Demonstration Block/ 728,000 Streetscape-Design and install landscaping along the west side of Front Street from Rancho California Road to the Old Town post office and plan and construct streetscape and public signage for the core of Old Town Subtotal (subject of Limited Completion Guaranty by Fluor Corp.) 17,288,000 Land acquisition 2,600,000 Western Bypass design, environmental costs, and permit and inspection fees 1,971,000 Total $21,859,000 Estimate of Costs prepared by Fluor Daniel Total construction costs to be paid by the CFD Financing Authority for all Public Improvements may not exceed, in any event, monies available to pay the purchase prices thereof on deposit in the Improvement Fund. In addition, the Project includes (i) the costs of engineering, design, acquisition of land and/or public easements, planning, insurance, legal and accounting expenses and coordination related to the above-listed facilities, (ii) costs of issuance for the Local Agency Bonds and the Bonds, and (iii) administrative fees of the City, the CFD Financing Authority, the District and the Fiscal Agent related to the Local Agency Bonds. EL289429.81 37 DRAFT dated Navomber 19, 1996 Constniction Management and Supe@ion Agreement; Limited Completion Guaranty The Redevelopment Agency of the City of Temecula (the "Agency") and TEV, through its successor T.Z.B.G., Inc. a California corporation, entered into an Owner Participation Agreement, dated August 31, 1996, as amended by the parties in the Amendment to Owner Participation Agreement on March 26, 1996 (collectively, the "OPA"). See "PROPOSED DEVELOPMENT OF OLD TOWN TEMECULA ENTERTAINMENT CENTER -- Governmental Approvals and Agreements - Owner Participation Agreement" herein. Under the terms of the OPA, TEV agreed to design, acquire land, construct and install all Public Improvements at its sole risk, cost and expense in accordance with the terms of the OPA. TEV also agreed to be solely responsible for all cost overruns or expenses incurred in building the Public Improvements in excess of the Agency's contribution of $7,458,550. Pursuant to the terms of the OPA, TEV was permitted to assign to Fluor Daniel, and Fluor Daniel could assume, TEV's obligation to design, install and construct the Public Improvements. It is contemplated that Fluor Daniel will enter into a Construction Management and Supervision Agreement and Supplemental Letter Agreement (collectively, the "Construction Management Agreement") with the CFD Financing Authority, the form of which has been substantially agreed to by Fluor Daniel and the CFD Financing Authority. As presently drafted, the Construction Management Agreement would provide that the CFD Financing Authority would issue the Local Agency Bonds and use the proceeds from the sale thereof to pay the costs of the design, construction and installation of the Public Improvements. However, the CFD Financing Authority does not intend to design and construct the Public Improvements itself; therefore, the Construction Management Agreement provides that Fluor Daniel will negotiate and prepare, on behalf of the CFD Financing Authority, contracts that the CFD Financing Authority will enter into with duly qualified and licensed contractors to design, engineer, construct, install, test and inspect the Project. The CFD Financing Authority will fund construction of the Public improvements with monies deposited to the Improvement Fund from the proceeds of the Local Agency Bonds. Fluor Daniel will manage the administration of those contracts and the applications for payments from the professionals to the CFD Financing Authority, and Fluor Daniel will receive a management fee for its services. As presently drafted, the Construction Management Agreement provides that Fluor Daniel shall manage the construction of the Public Improvements such that the costs paid by the CFD Financing Authority to contractors shall not exceed $17,288,202 (the "Fixed Cost"), and Fluor Daniel shall bear any costs in excess of the Fixed Cost, subject to the terms of the Construction Management Agreement. However, this agreement to bear costs in excess of the Fixed Cost is subject to certain limitations. First, it is anticipated that the Developer will guaranty the completion of the Public Improvements, up to a maximum liability of $7,500,000, and the Construction Management Agreement provides that the assets of the Developer shall be exhausted before Fluor Daniel shall be obligated to bear any excess construction costs. Second, Fluor Daniel's agreement to pay excess costs does not apply to the extent that such costs are due to environmental subsurface conditions, governmental actions or events which qualify under the force majeure exception (collectively, the "Non Guaranteed Costs"). The "force majeure" exception provides that certain delays or failures of performance shall not constitute a default thereunder if such delays or failures are caused by occurrences beyond the reasonable control of the applicable party and if the applicable party was unable to prevent the delays or failures through the exercise of reasonable diligence. Third, Fluor Daniel shall not be liable for any costs in excess of the Fixed Cost to the extent that change orders are allowed under the contractors' contracts which increase or decrease the Fixed Cost. Fourth, in no event shall Fluor Daniel's liability for costs in excess of the Fixed Cost exceed the lesser of (i) the amount which Fluor Daniel has received as management fees under the Construction Management Agreement, or (ii) One Million Dollars ($1,000,000). As presently drafted, the Construction Management Agreement also provides that Fluor Daniel shall guaranty that the Public Improvements shall be completed no later than sixteen months after the issuance of the Bonds, subject to (i) delays caused by environmental subsurface conditions, goverrunental actions or events which qualify under the force CL289429.81 38 DRAFT dat*d November 19, 1996 majeure exception of the Construction Management Agreement, and (ii) any changes in tiine in the contractors' contracts pursuant to the change order and/or force niajeure provisions of said contracts. The Construction Management Agreeinent may be terminated by either party with the consent of the other, and by the CSD Financing Authority upon an event of default as described therein. Furthermore, it is also contemplated that Fluor Corporation, a Delaware corporation ("Fluor"), will provide a guaranty (the "Limited Completion Guarantee") to the Authority which will guaranty Fluor Daniel's full and complete performance of its obligations under the Construction Management Agreement. Joint Community Facilities Agreements The public improvements included within the Project will ultimately be owned and operated by agencies other than the CFD Financing Authority. Pursuant to the requirements of the Mello-Roos Act, the CFD Financing Authority has entered into joint community facilities agreements with each of the participating agencies that ultimately will own and operate portions of the Project, including agreements with the City, the Eastern Municipal Water District, the Rancho California Water District and the Riverside County Flood Control and Water Conservation District. The agreements provide, in effect, that the respective public agency will not accept dedication of the respective improvements until they are fully installed, inspected and paid for, and are otherwise acceptable to the applicable public agency. Financing Plan The financing plan anticipates that the Local Agency Bonds will be issued to finance the construction of Public Improvements. The Special Tax will be levied on and collected from each parcel in the District subject to the Rate and Method of Apportioranent as set forth in APPENDIX B - "RATE AND METHOD OF APPORTIONMENT OF SPECIALTAX"attachedhereto. See"LOCALAGENCYBONDS-SecurityfortheLocalAgencyBonds"fora@er description of the Special Tax. The Special Tax is to be iinposed on the properties subject to the Special Tax within the District at rates which, within the liniits of the Maximum Special Tax, will be sufficient to pay the interest on and principal of and minimum sinking fund account payments for and redemption premiums, if any, on the Local Agency Bonds as they become due and payable and to replenish the Reserve Fund to the Reserve Requirement and to pay all Adniinistrative Expenses as they become due and payable in accordance with the provisions in the Fiscal Agent Agreement. The debt service on the Local Agency Bonds is scheduled to be sufficient in time and arnount to pay debt service on the Bonds. It is currently anticipated that the components of the Public hwrovements to be financed with proceeds of the Local Agency Bonds deposited into the improvement Fund will be completed approximately fifteen (15) months after the issuance of the Bonds and the Local Agency Bonds. A number of factors, including cost overruns, inclement weather, and labor strikes, could result in delays or postponements of the construction of certain of the Public hmrovements. PROPOSED DEVELOP OF OLD TOWN CULA ENT7,RT CENTER The information provided in this section "PROPOSED DEVELOPMENT OF OLD TOWN TEMECL7LA ENTERT NT CENTER" has been included because ft may be considered relevant to an informed evaluation and =Wysis of the Bonds. Although planning for the development of Old Town Temecula is at an advanced stage, actual construction of unprovements has not commenced, and no assurance can be given that the proposed Development wffl occur as described herein. No assurance can be given that development of the land within the District will occur, or that it will occur in a timely name or in the configuration or intensity described herein, or that any landowner or Developer described herein wffl obtain or retain ownership of any of the lmd within the District. [L289429.81 39 DRAFT dated Noven*w 19, 1996 The following information has been supplied by the Developer and others and none of the Authority the CFD Fmancmg Authority or the Underwriter make any representation as to its accuracy or completeness. The inclusion of the following information in this Ofridal Statement should not be construed to suggest that the Special Taxes levied on property owned by the Developer that will be used to pay the Local Agency Bonds are recourse obligations against the Developer, any member of the Developer, or any affiliate of any member. The Special Taxes are secured by Hens on the real property within the District. There is no assurance that the Developer or any other owner will be @daby able to pay the special taxes levied on property owned by the Developer or that the Developer or any other owner will pay such speciw taxes even though financially able to do so. The Local Agency Bonds are secured solely by the Special Taxes received by the CFD Financing Authority and deposited to the Bond Fund and certain other amounts on deposit with the Fiscal Agent. General The proposed development known as "Old Town Temecula Entertainment Center" (the "Development") is planned to consist of approximately 265,000 square feet of facilities to be located on approximately 53 acres of property to be owned by Developer or its direct or indirect affiliates (the "Property") in Temecula, California (the "City"). The City is approximately 85 miles southeast of Los Angeles, 45 miles south of Riverside, and 60 miles north of San Diego. The City is located near the intersection of Interstate 15 and Interstate 215, which services approximately 27 million vehicles annually. The City and surrounding areas within 35 miles of the City currently have a population of approximately 2 million. The Development as currently planned will be centered around a 2,000 seat outdoor town square park venue, Festival Square, to be located in the heart of Old Town Temecula. The Development buildings will match the late 19th century Wild West Architecture of the existing Old Town area. The heart of the Development will consist of three live indoor theater venues with a combined capacity of 3,850 seats that the Developer (as defined below) plans to construct around and near Festival Square, and a Wild West Arena with a maximum seating capacity between 6,000 and 7,200 (depending on configuration) that the Developer plans to construct at the western end of the Development. As currently planned, the Development will incorporate restaurants, a virtual reality simulation theater, a giant-screen IMAX/rWERKS- type movie theater, a video game center and retail space around and amongst the live theaters with the objective of providing visitors with a complete entertainment experience. The Developer's plans for each portion of the Development are described in detail below. The Developer Old Town Entertainment, LLC, a Delaware limited liability company (the "Developer'), will be formed for the purpose of acquiring the Property, and owning, constructing, developing and managing the Development. Temecula Entertairanent, LLC (the "Holding Company') will be formed to hold an 85 % interest in the Developer. Ownership of the remaining 15 % of the Developer has been reserved for the Subordinated Note investors. See "- The Private Financing" below. The Holding Company is expected to be owned by Temecula Entertainment Valley, Inc. ("TEV"), Fluor Daniel Temecula, Inc. ("Fluor Temecula"), and Entrepreneurial Entertainment Corporation, Inc. ("EEC") (collectively, the "Members"), who are contributing $8.7 million, $10 million, and $2.9 million, respectively, to the Holding Company's capitalization. Of TEV's contribution, approximately $7.5 million will be funded by the Agency, in partial consideration for TEV's agreement to build certain public improvements. Such payment by the Agency will constitute taxable income to TEV. The Limited Liability Company Agreements to form the Developer and the Holding Company have not yet been @ized. With respect to those ten-ns relating to distributions from the Holding Company, the Members currently [L289429.81 40 DRAFT &W Novembw 19, 1996 contemplate that such distributions would be made approximately as follows: (a) initial distributions would be made proportionately (excluding the portion of the TEV contribution funded by the Agency) until all Members have received a return of capital, (b) next, distributions would be made in accordance with certain agreed ratios (which would allocate relatively more to Fluor Temecula) until Fluor Temecula receives a 25% internal rate of return on its investment, and (c) thereafter, distribution-; would be made in accordance with another set of certain agreed ratios. The Members are considering raising additional capital, either ainong themselves or through another person or entity, which has delayed the final organization of the Holding Company. Additional information regarding the Members follows: Teynecula Entertainment Valley, Inc. TEV (formerly known as T.Z.B.G. Inc., a California corporation) was formed in 1995 for the sole purpose of developing the Development. TEV's principal owner is Mr. Zev Buffhm. See "- Management" below. Fluor Daniel Temecula, Inc. Fluor Daniel Temecula, Inc., is wholly owned by Fluor Daniel. Fluor Daniel is one of the world's largest engineering and construction firms. Fluor Daniel has more than 50 offices and locations on six continents that work for an average of 700 clients on more than 2,000 projects throughout the world. Fluor Daniel employs approximately 17,000 professionals and approximately 23,000 skilled craftworkers, and has been involved in both single phases and the entire construction of many complex projects. Fluor Daniel is the principal subsidiary of Fluor Corporation, a California corporation ("Fluor"). Fluor, a NYSE- listed company (FLR) which has an A2/A+ credit rating, has a market capitalization of approximately $5.2 billion, and sales for the twelve months ending April 30, 1996 of $10.0 billion, indirectly will be the largest shareholder in the Holding Company. Entrepreneurial Entertainment Corporation, Inc. Entrepreneurial Entertaimnent Corporation, Inc. is one of a diverse group of businesses owned by Duane R. Roberts. The focus of his strategically linked companies includes hotel, apartment and other real estate operations, including the national historic landmark Mission hm hotel in Riverside, California, over 8,000 apartment units in Oklahoma, Texas and Kansas, several shopping centers in California, food manufacturing, financial investments and numerous other equity investments. Management of the Development Officers of the Developer The Developer's senior management are listed below: 0 Zev Buffum - Chief Executive Officer Zev Buffnian has 37 years of experience in live entertainment, ranging from major Broadway show production activities to multi-theater management and operations, including major outdoor amphitheater construction and operation. Mr. Buffman's background in venue development began in 1960 when he created "Vintage 60' and co-produced it for Broadway with veteran Broadway producer David Merrick. Since then, Mr. Buffhm has acted as producer of 41 Broadway shows, two London shows and over 250 touring productions. Over the years, Mr. Buffhian's Broadway productions have earned 27 Tony Award nominations. In 1988, he becarne a founding [L289429.81 41 DRAFT dated November 19, 1996 general partner of the National Basketball Association's Miami Heat basketball team and spearheaded the negotiations with the City of Miami for the construction of the 15,350-seat Miami Arena. Mr. Buffinan will assume responsibility for all operations and the creative elements of the Development including the development and creation of live entertairunent products. 0 R. Dennis Finfrock - Chief Ope@ Ofricer Mr. Finfrock joined the Developer in 1996 as Chief Operating Officer. Prior to joining the Developer, Mr. Finfrock opened and acted as General Manager of the 17,000 seat multi-purpose MGM Grand Garden Arena in Las Vegas, Nevada from 1992 to 1995. From 1976 to 1992, Mr. Finfrock was employed by the University of Nevada Las Vegas and served, among other things, as Executive Director of the Thomas and Mack Center and Sam Boyd Silver Bowl and as Interim Athletic Director. Mr. Finfrock is currently serving as President of the International Association of Assembly Managers o Paul C. Sundeen - Chief Financial Officer Mr. Sundeen joined the Developer in 1996 as Chief Financial Officer. Prior to joining the Developer, Mr. Sundeen was with Price Waterhouse LLP for 29 years, the last 18 years as a partner. While with Price Waterhouse, Mr. Sundeen established and was the partner-in-charge of the firm's Riverside, California office for 10 years. Mr. Sundeen was also the partner-in-charge of the firm's Salt Lake City, Utah office for three years. Mr. Sundeen's experience includes accounting, auditing, fmancial reporting and business consulting for goverrunental units, and public and private companies in a variety of industries. Management Commiuee The Developer anticipates fomiing a Management Conunittee consisting of at least three members to whom the senior executives will report. The initial Management Committee members are named below. Additional Management Committee members may be appointed with the approval of the Members. Name A@e Position Zev Buffhian 62 Chairman Duane R. Roberts 59 Member Darrell E. Waters 46 Member Messrs. Buffinan and Roberts are discussed above. Mr. Waters is president of Fluor Daniel's Commercial & Institutional Operating Company. OGDEN Entertainment SeMces, Inc. The Developer intends to enter into a Management Agreement with OGDEN Entertainment Services, Inc. ("OGDEN") to provide full facility management and food and beverage service supervision for the Development. OGDEN is a subsidiary of OGDEN Corporation, which is listed on the New York Stock Exchange under the ticker symbol "OG. " Under the present draft of the Management Agreement, OGDEN's services to the Development will include pre-opening services relating to the operations of the Development, and post-opening operations services such as events scheduling and marketing, supervision of maintenance, ticket sales and provision of security services. OGDEN is a comprehensive provider of public assembly facility management and related services for arenas, amphitheaters, civic and convention centers, theaters and racetracks. OGDEN provides its clients with a complete facility services program to accomplish the broad array of activities that comprise the overall operation of a public assembly CL289429.81 42 DRAFT dated November 19, 1996 facility such as the Development. The services program offered to facilities by OGDEN includes management and operation of concessions, booking and scheduling entertainment and other attractions, marketing and sales, advertising and public relations, ticket distribution operations, crowd and event management, car parking operations, building operations and maintenance support services. OGDEN currently manages over 140 entertainment facilities located in North America, South America, Europe and Australia. Representative OGDEN clients include the Target Center in Minneapolis, the Great Western Forum in Los Angeles, the Arrowhead Pond in Anaheim and The Greek Theatre in Los Angeles. It is anticipated that OGDEN will agree, under the Management Agreement, not to provide concert and live entertainment booking services for any venue with up to 10,000 seats that are located within a 60-mile radius of the Development. Ownership of the Real Property The District encompasses approximately 163 net acres (net of public improvements and rights of way) and consists of six distinct areas know as follows: (i)Old Town Core (approximately 8 acres); (ii)Arena (approximately 26 acres); (iii)Parking (approximately 19 acres); (iv)Hotel/Commercial (approximately 24 acres); (v)Residential/RV Park (approximately 17 acres); and (vi) Open Space (approximately 69.5 acres). While the land within the District is presently owned by various individuals and the City, TEV is in escrow to purchase all of the land within the District. Except for the Residential/RV Park property, TEV intends to close escrow on all of the property in the District simultaneously with the issuance of Bonds and innnediately transfer title to all of the property purchased to the Developer. TEV does not presently intend to purchase the Residential/RV park property siznultaneously with the other properties; it will retain an option to acquire the property in the future, however, and the property, if purchased, will not be transferred to the Developer. The "Development" is comprised of approximately 53 acres, consisting of the Arena property, the Parking property and the Old Town Core property. Old Town Core The portion of the Property lmown as "Old Town Core" consists of approximately eight (8) acres comprised of multiple parcels owned by approximately twenty-four (24) different individuals (the "Old Town Owners"). TEV is in escrow with each of the Old Town Owners to purchase each property. The cumulative purchase price for the Old Town Core Property is approximately $5,900,000. As described above, TEV intends to close these transactions simultaneously with the sale of the Bonds and the Private Financing, and then immediately transfer title to the Developer. The Developer plans to construct the Opera House, the Palace Cabaret Theater, the Little Theater, Festival Square, the virtual reality and giant screen theaters, the game center and the retail and restaurant portions of the Development on the Old Town Core Property. For further description of these facilities, see "- Development Components" below. Although portions of the Old Town Core are presently improved, the Developer intends to demolish these improvements as part of its plan for the construction of the Development Components. [L289429.81 43 DRAFT dated Novembw 19, 1996 Arena The portion of the Property known as "Arena" consists of approximately 26 acres owned by John F. Firestone, an individual ("Firestone"), and located west of the Old Town Core. Firestone is currently in escrow with Hancock Development Company, Inc., a California corporation ("HDC") to sell the Arena Property. HDC has entered into a Memorandum of Understanding dated November 10, 1995 (the "MOU") with TEV and Escrow Instructions dated January 16, 1996 (die "Arena Escrow Instructions") with TEV which provide for the sale by HDC of the Arena Property to TEV irmnediately upon HDC's acquisition of the Arena Property from Firestone. The purchase price for the Arena Property is $3,500,000. Simultaneously with the issuance of the Bonds, TEV will purchase the Arena and then immediately transfer title to the Developer. The Developer plans to construct the Wild West Arena on the Arena Property. For further description of the Wild West Arena, see "-- Development Components" below. Parking The portion of the Property known as "Parking" consists of approximately 19 acres comprised of five lots owned by Firestone, which are adjacent to the Arena Property. Pursuant to escrow instructions dated January 29, 1996 (the "Parking Escrow Instructions"), TEV is currently is escrow with Firestone to acquire the Parking Property. Pursuant to the Parking Escrow Instructions, TEV will pay $650,000 in cash for the Parking property, and also, immediately after taking title and utilizing funds from the Private Financing, shall satisfy certain outstanding debts in the approximate amount of $1,446,000 which are presently secured by two liens on the property. The Developer plans to construct parking facilities on the Parking Property. Open Space The portion of the Property known as "Open Space" consists of approximately 69.5 acres owned by Firestone and located west of the Old Town Core. Firestone is currently in escrow with HDC to sell the Open Space. The MOU and certain escrow instructions dated January 16, 1996 (the "Open Space Escrow Instructions") between HDC and TEV provide for the sale by HDC of the Open Space to TEV immediately upon HDC's acquisition of the Open Space. The Developer currently anticipates that upon acquisition, the Open Space Property will be donated, dedicated, or otherwise used by a public agency to mitigate wildlife protection concerns and to satisfy conditions for receipt of environmental permits. See "- Government Environmental Permits" below. The Open Space Property shall not be subject to the Special Tax and hence should not be considered security for the Local Agency Bonds. See "THE LOCAL AGENCY BONDS -- Security for the Local Agency Bonds" herein. HotellContmercial The real property known as "Hotel/Conunercial" consists of approximately 24 acres owned by Firestone, and located west of the Old Town Core. Firestone is currently in escrow with HDC to sell the Hotel/Commercial Property. The MOU and certain escrow instructions dated January 16, 1996 (the "Hotel/Conunercial Escrow Instructions") between HDC and TEV provide for the sale by HDC of the Hotel/Conunercial Property to TEV immediately upon HDC's acquisition of the Hotel/Commercial Property from Firestone. Pursuant to the MOU and the Hotel/Commercial Escrow Instructions, the purchase price for the Hotel/Commercial Property is $1,500,000 (the "Hotel/Connnercial Purchase Price"). The Hotel/Commercial Purchase Price is payable pursuant to a promissory note executed by the Developer in favor of HDC (the "Hotel/Commercial Note"). The Hotel/Commercial Note is secured by a deed of trust on the Conmiercial portion of the Hotel/Conunercial Property. The Hotel/Cominercial Note matures on June 1, 2002. [L289429.83 44 DRAFT dated November 19, 1996 The Members of the Holding Company currently plan to construct a hotel on the Hotel/Commercial Property, but such construction is not included within the current phase of financing for the Development and there can be no assurances that the Members will construct a hotel on the property. See "- Future Plans for the Development" below. ResidentialIRV Park The portion of the Property known as "Residential" consists of approximately 17 acres owned by Firestone, and located west of the Old Town Core. Similar to the Arena and the Hotel/Commercial Property, Firestone is currently in escrow with HDC to sell the Residential/RV Park Property. The MOU and certain escrow instructions dated January 16, 1996 (the "Residential Escrow Instructions") between HDC and TEV provide for the sale by HDC of the Residential Property to TEV immediately upon HDC's acquisition of the Residential/RV Park Property from Firestone. Pursuant to the MOU and the Residential Escrow Instructions, the Developer's purchase price for the Residential/RV Park Property will equal HDC's cost to acquire the Residential/RV Park Property. Pursuant to the MOU, the Developer may defer the purchase of the Residential/RV Park Property upon provision of certain additional security to HDC as set forth in the MOU. TEV does not presently intend to acquire the Residential/RV Park property simultaneously with the acquisition of the other properties . Although TEV retains the right to acquire this property in the future, there can be no assurances that TEV will acquire this property. Hence, the Residential/RV Park property should not be considered as security for the Local Agency Bonds. See "THE LOCAL AGENCY BONDS - Security for the Local Agency Bonds" herein. In the event that TEV does acquire this property, it has indicated a desire to construct a recreational vehicle park thereon. Govemmental Approvals and Agreements AdWsory Election On March 10, 1995, the City held an advisory election pursuant to which the registered voters in the City had the opportunity to vote to approve the concept of the Old Town Entertainment Center. The ma ority of the citizens voting at the advisory election approved the Old Town Entertainment Center. 77te Specific Plans The portion of the Development that is bordered by Rancho California Road on the north, Interstate 15 on the east and Santiago Road, First Street on the south and Pujol Road on the west is included in the Old Town Temecula Specific Plan (the "Old Town Specific Plan"). The property within the Old Town Specific Plan, which contains over twenty historic buildings, is the historic and cultural center of the City. The City Council approved the Old Town Specific Plan on February 22, 1994 pursuant to Ordinance No. 94-05 and Resolution No. 94-13. An amendment to The Old Town Specific Plan revising the sign ordinance standards was approved by the City on January 23, 1996 pursuant to Ordinance No. 96-01 and Resolution No. 96-03. As currently planned, the portion of the Development within the Old Town Specific Plan will include the Opera House, the Palace Cabaret Theater, the Little Theater/Studio, the virtual reality simulation theater, the giant-screen IMAX/IWERKS-type movie theater, the game center, and restaurant and retail space, all centered around the Festival Square. The property within the Old Town Specific Plan is also a part of the Temecula Redevelopment Project Area 1988-1 (the "Redevelopment Project Area"), and is the subject of an Owner Participation Agreement (as described further below). The portion of the Development that lies west of Pujol Street is governed by the Westside Specific Plan, which was adopted by the City Council as Ordinance No. 95-08 on June 27, 1995 (the "Westside Specific Plan"). As currently planned, the Wild West Arena and parking facilities will be constructed on the property within the Westside Specific Plan. [L289429.81 45 DRAFT dat*d November 19, 1996 The portion of the Development that lies within the Westside Specific Plan is the subject of a Development Agreement (as described further below). Tentative and Final Maps Tentative Tract Map No. 28011 (the "Tentative Map") was approved by the City Council on June 23, 1995 pursuant to Resolution No. 95-5 1. Master Conditional Use Pe@t The City's Planning Department approved a master conditional use permit (the "MCUP") for the Development on June 23, 1995 pursuant to Resolution No. 95-50. The MCUP relates to the area generally bounded by Sixth Street, First Street, Murrietta Creek and Interstate 15, and permits cabaret theaters, restaurants, saloons, an opera house, a television/radio station, virtual reality theaters, a quick draw area and offices to be constructed in that area. Zoning On June 13, 1995, the Developer applied for a change of zone for the Residential Property from R-A-20 (residential/agricultural) to S-P (specific plan) pursuant to Planning Application No. 95-0003. The zone change was approved pursuant to Ord. No. 95-09. 7'he Development Agree?nent The Development Agreement, by and between the City and Hancock Development Company, a California corporation, and John F. Firestone (collectively, the "Original Developer"), dated August 31, 1995, and recorded November 6, 1995, was adopted by the City pursuant to Ordinance No. effective as of August 31, 1995. The Development Agreement was recorded in the official records of Riverside County, California on November 6, 1995. The City and the Original Developer entered into the Development Agreement pursuant to California Govenunent Code Section 65864 et M. (the "Development Agreement Law"). The Development Agreement grants the Original Developer certain vested rights to develop the portion of the Development located in the Westside Specific Plan in accordance with City approvals and the terms of the Development Agreement. While Development Agreement Law provides that a developer can obtain a vested right to develop its real property pursuant to a validly executed development agreement, California courts have not yet considered the Development Agreement Law's enforceability. Consequently, although the Development Agreement purports to provide the Developers with a vested right to build the Development as currently planned, there can be no assurances that a court would uphold the Development Agreement Law if challenged. Owner Participation Agree?nent TEV and the Agency entered into an Owner Participation Agreement dated as of August 31, 1995, and amended pursuant to an Amendment to Owner Participation Agreement dated March 26, 1996 (collectively, the "OPA") to govern the redevelopment of a portion of the Property that is within the Old Town Specific Plan. The OPA effectuates the Agency's Redevelopment Plan for the Temecula Redevelopment Project Area 1988-1 (the "Redevelopment Plan"). The OPA contains provisions governing the terms and scope of development of that portion of the Project and the Development that are within the Old Town Specific Plan, including: 0a construction schedule stating that TEV will begin construction of the Project promptly upon receipt of (i) satisfactory financing for the Development, (ii) payment from the Agency in the amount of $7,458,550 (the [L289429.81 46 DRAFT dated November 19, 1996 "Agency Contribution"), and (iii) ownership of the portion of the real property to be redeveloped pursuant to the OPA; 0an agreement that the Agency will assume responsibility and financial risk for the land acquisition, design andconstruction of (i) the Main Street Bridge improvements (to be constructed in the Agency's discretion), (ii) theSixth Street parking improvements, and (iii) Main Street facades and non-conforming sign removal; 0 an agreement that the Agency Contribution will be used to towards development of the Project, subject to the terms and conditions of the OPA; and an agreement that a user charge of 8-3/4 % will be implemented for each ticket sold for the Development, and that the user charge (i) may be committed or pledged by TEV to the fmancing or refinancing of the Development, if necessary, for a period of 35 years from the date of closing of the financing of the Development, (ii) will be paid to the Agency, beginning in the 36th year and concluding at the end of the 50th year, as additional consideration and return for the Agency Contribution, in an amount up to $2,000,000 per year (such ceiling to be increased by a percentage equal to the average ticket price increase each year beginning in the 37th year, with any excess user charges above the amount due the Agency to be paid to TEV), (iii) the collection of the user charges shall be suspended for such period of time as there is in effect a valid admissions tax upon tickets or admissions to the events in the Development imposed by State or local authorities, and (iv) may be assigned by the Agency, or otherwise paid pursuant to the OPA, to the City. Environmental Review On June 13, 1995 the City Council considered and certified an Enviroinnental Impact Report (PI Application No. PA95-0031) (the "EIR") for the Development in accordance with the California Environmental Quality Act (Public Resources Code Section 21000 et M.). The EIR addresses potential environmental impacts associated with the Development, and serves as the "master" environmental document for the review of subsequent applications for the Development, such as site plans and maps. All future development applications must be consistent with the design, intent, density, use and development standards analyzed in the EIR and embodied in the Old Town Specific Plan and the Westside Specific Plan; otherwise, additional environmental review may be required. Government Environmental Pernuts The Developer must obtain certain government environmental permits, certifications and agreements ("Environmental Permits") from the United States Fish & Wildlife Service (the "Service"), the Army Corps of Engineers (the "Corps"), the California Department of Fish and Game (the "Department"), and the Regional Water Quality Control Board (the "Board"), before conunencing or completing construction of certain of the improvements comprising the Project and the Development. Failure to obtain any such approvals could adversely affect land development operations, and any delays in receiving the approvals could delay the timely completion of the Project and the Development. United States Fish & Wildlife SerWce - 10A Pemzit. It is illegal to harin or disturb any animals, plants or other living organisms in their habitat that have been listed as an endangered species by the Service under the Federal Endangered Species Act without a permit from the Service. A survey of the District was conducted to detect federally listed species, species proposed for listing, and critical habitat that may be affected by the proposed Development. The survey detected two pairs of the California gnatcatchers, a 'federally listed endangered species" on the District, and determined that the District contains native coastal sage scrub habitat. Based upon such survey, the Service and the Commission have informed the Developer that a Section 10A permit must be issued by the Service before construction of the Development can conunence. [L289429.81 47 DRAFT dated November 19, 1996 The Developer has completed the negotiations over the content of the IOA permit with the Service and all procedural requirements have been fulfilled. The Developer is @izing the text of the agreement with the Service which will implement all of the conditions necessary. It is presently anticipated that the IOA permit will be issued in late November or early December. The issuance of the IOA permit requires that the Developer purchase and set aside a habitat dedicated to the California gnatcatcher as compensation for the impact within the project site. The Developer plans to donate approximately 200 acres of property including all of the Open Space for creation of the habitat and establish an endowment for its long-term management. Army Corps of Engineers - 404 Permit. If proposed development will involve the discharge of dredged or fill material into wetlands or other waters of the United States, the developer must first obtain from the Corps a permit, or a determination that the development is not within the Corps' jurisdiction before the developer can begin construction. It has been determined that the Old Town First Street Bridge and the Western Bypass portions of the Project require a 404 Permit before construction may begin. The City submitted applications for the First Street Bridge and Western Bypass portions of the Project, and received the 404 Permit for the Western Bypass portion in July 1996, and the First Street Bridge portion in August, 1996. State Department of Fish and Game - 160111603 Agreement. A property owner must execute a " 1601/1603 Agreement" with the Department when development activities will affect wildlife or strearnbeds regulated by the Department. The Developer entered into such an agreement with regard to both the Western Bypass portion of the Project and the First Street Bridge portion of the Project in August 1996. Regional Water Quality Control Board - Section 401 Certification. If a proposed development will affect the waters of the United States, the developer must obtain a certification from the Board that the development will not create a source of pollution, or a waiver of such certification. The Section 401 certification, or the waiver of such, is a condition of obtaining the Army Corps of Engineers Section 404 Permit. In July 1996, the Developer obtained waivers from the Board as to both the Western Bypass portion of the Project and the First Street Bridge portion of the Project. Development Components The contemplated theater venues include the "Wild West Arena" that the Developer plans to construct at the western end of the Development, and the "Opera House," "Palace Cabaret Theater," and "Little Theater" that Developer plans to construct around and near an outdoor town square park venue known as "Festival Square. " As currently planned, the Development will incorporate a virtual reality simulation theater, an interactive video game center, a giant-screen IMAX/IWERKS-type movie theater and parking, as well as a 7,000-square foot themed restaurant and approximately 14,000 square-foot food court in the Festival Square area and 20,000-square feet of theatrical/westem theme oriented retail space. Wild West Arena. The Wild West Arena will consist of an all-purpose, approximately 100,000-square foot arena, adjacent to the primary parking facility at the west end of Old Town's Main Street atop an elevated plateau. It is anticipated that the Wild West Arena will initially be built with permanent seating capacity for 4,800 for sporting events, such as hockey and rodeos, including 360 corporate box seats. The arena will have sufficient space to acconunodate an additional 1,200 temporary seats, which can be made a permanent installation in the future. Additionally, the seating capacity of the Wild West Arena will expand for concert events by placing up to 1,200 seats on the floor area of the Arena that is typically in use during sporting events, rodeos, etc. The design of the Wild West Arena provides the large capacity and flexibility necessary for the presentation of a wide variety of events. The Wild West Arena will include four food and five merchandise outlets. The Developer believes a number of family shows and sporting events would be appropriate in the Wild West Arena, including the circus, ice shows, gospel and religious performances, championship wrestling, boxing, hockey and [L289429.81 48 DRAFT dated Novembor 19, 1996 basketball. The Developer is also planning to present a championship rodeo each fall and other rodeo and bull riding events. Opera House. The Opera House will be an approximately 55,000-square foot proscenium theater located in the Festival Square area of the Development. The Opera House will have a total seating capacity of 2,200, comprised of 1,400 orchestra floor seats and 800 balcony seats (including 100 corporate box seats). The stage will be 5,790 square feet including apron and wings. The Developer plans to present touring Broadway shows, touring Sunday Pops concerts, orchestras, dance troupes, showcase performances by nationally known performers and guest speakers at the Opera House. Palace Cabaret Yheater. The Palace Cabaret Theater will be an approximately 32,000-square foot, cabaret-style theater with 1,450 seats on one level, with 500 of these seats capable of a buffet dinner being served. The remaining patrons will be served drinks and snacks. Wait staff will complete service prior to commencement of each perfommce, but will continue to serve beverages. It is anticipated that the Developer will present intimate concerts with mid-level stars, all-star ice shows, newly discovered talent, a speaker series and small musical productions at the Palace Cabaret Theater. The stage will be 5,000 square feet including forestage and wings. Little 7heater. The Little Theater is planned to be an approximately 5,000-square foot, 200-seat theater with flexible staging capabilities. The Little Theater will serve several project needs: daytime children's theater shows; nostalgia stars in simple concerts or presentations; breakfast, lunch and dinner meetings and tributes in a cafe setting with a stage; conununity and university regional productions of plays and musicals; as well as rehearsals and meetings. Most importantly, this "convertible" theater will house the editing and control booth serving the Little Theater, the Opera House, the Palace Cabaret and Festival Square and will be sufficiently soundproofed to be the Development's recording and video facility. This facility, to be known as "The Old Town Studios and Production Center," will also be rented to visiting artists who wish to rehearse and record during their stay in Temecula. Festival Square. Festival Square has been designed to be the central gathering point of the Development and will consist of a 21,000-square foot outdoor festival facility with a total capacity of 2,000 people, where musicians, singers, bands and dancers will present concerts free of charge during the peak hours of the Development. The Developer, however, also plans to offer a series of gated, paid festivals at Festival Square, potentially including jazz concerts, dance competitions, symphonies, and mariachi galas. The Developer plans to sell tickets for the gated Festival Square events for afternoon and evening "shifts", which will give Festival Square a total daily capacity of 4,000 people. Virtual Reality Simulation 7heater, Interactive Center and Giant Screen 77zeater. The Development will include a 24-seat virtual reality simulation theater, a 300-seat giant screen IMAX\AWRKS-type theater and a 5,300-square foot interactive center, comprising a total of approximately 20,230 square feet. It is anticipated that the virtual reality simulation theater will contain 24 moving seats, and the shows will feature action scenes from classic motion pictures. The theater will have a significant pre-show plaza where patrons can purchase food, beverages and novelty items while waiting for shows to begin. The Developer anticipates that patrons will often be entertained by costumed actors having a "connection" to the film or the theme of the Old Town environment. The Developer is accepting bids from the three major producers of virtual reality rides to develop the virtual reality simulation theater. The specially designed virtual reality simulation theater will include high definition film or video and seats that move in synchronicity with the action on the screen for the four-minute ride. A three hundred seat giant screen theater will occupy the space adjacent to the pre-show plaza and near the simulation theater. Short films (15-20 n-dnutes) will be shown on the enormous screen ranging from a trip through the Grand Canyon to balloon rides across the Rockies. The screen will also be able to display traditional 35nun films, allowing the theater to double as a regular cinema. [L289429.81 49 DRAFT dated November 19, 1996 The interactive center at the Development is planned to include 75 state-of-the-art video game units within 5,300 square feet of space. The interactive center is essentially an advanced video arcade for children, similar to those incorporated into casinos and adult-oriented entertainment facilities throughout the country. Parking. As part of the development of the Development, the Developer will construct approximately 2,800 to 3,000 paved parking spaces, adjacent to the Wild West Arena, that will provide convenient access to all venues at the Development. Certain of the land owned by the Developer (i.e. the Parking property) is sufficient to add over 1,000 parking spaces inunediately next to the Development as need arises. The parldng spaces will be easily accessible from the Western Bypass providing direct freeway access, and will be targeted to visits of two hours or longer. The Western Bypass will connect Interstate 15 at the Highway 79 South exit south of the Complex with Rancho California, the next major road connection to Interstate 15 north of the Complex. The Developer expects that a large portion of the visitors to the Development will arrive by automobile, and plans to charge a daily parking fee for automobiles and motor coaches. Shuttle buses will be available to transport visitors from and to the parking area. On weekends, a themed trolley will operate between the main parking area and Festival Square. OGDEN will manage and supervise the parking operations at the Development. In addition, the City has stated that it will iznpose short-term street parking restrictions in the Old Town area, effectively requiring Development patrons to use the parking areas at the Development. There can be no assurances that construction of the Development wfll commence or reach completion as described above or within the Developer's currently anticipated time frame. The design and engineering of the Development is at the initial stage, and subject to change. Additionally, the Developer must obtain certain govenmmental approvals and permits to construct each component of the Development. The plans for the Development may be affected by the Developer's failure to obtain the n approvals and permits. See "SPECL4,L RISK FACTORS - Risks Associated with Faffure to Complete Project or Development," Failure to Develop Land" and Local, State and Federal Land Use ReguMons." Private Financing The Development will be funded by equity investments from TEV, Fluor Temecula and EEC, through the Holding Company, totalling $21.6 million, plus $86 million of debt financing that the Developer is seeking to raise from institutional investors. Fluor Daniel will provide a $61.6 million guaranteed price, design-build construction contract and completion guarantee as the construction manager for the Development. The total estimated cost of developing, constructing and opening the Development is $103.6 million, including accrued interest. The debt financing is anticipated to consist of $60 million of Senior Notes, $22 million of Subordinated Notes, and a $4 million working capital credit facility (the "Revolver"). The proceeds from the $60 million Senior Notes are anticipated to be drawn down by the Developer periodically during the eighteen month construction period, conunencing in the fourth or fifth month of the construction period, but in any event only after full funding of the Subordinated Notes. The Developer will be required to set aside and not draw down an interest reserve sufficient to cover interest payments on the Senior Notes during the first eighteen (18) months after closing. During the construction period, the Developer will use any available excess cash to reduce periodically the principal balance of the Senior Notes. This cash sweep will terminate at the end of the construction period. The Senior Notes will be secured by a first perfected security interest in the real property (except that the property in the District shall be subject to the first lien for the Special Taxes) and certain other assets of the Developer, including all Member interests in the Developer. The Senior Notes will be governed by a note agreement which will incorporate standard affirmative and negative covenants, including without limitation prohibitions against additional debt, limitations on dividends, change of control provisions, minimum net worth maintenance requirements, cash flow coverage maintenance requirements and other material restrictions. The Senior Notes will have a term of six years. [L289429.81 50 DRAFT dmftd November 19, 1996 The first $12,000,000 of the $22 million Subordinated Notes proceeds are anticipated to be drawn down at the closing, with the remaining $10,000,000 to be drawn no more than 90 days thereafter. The Developer will be required to set aside and not draw down an interest reserve sufficient to cover interest payments on the Subordinated Notes during the first eighteen (18) months after closing. The Subordinated Notes will be secured by a second perfected security interest in the real property (except that the property in the District shall be subject to a superior lien for the Special Taxes) and certain other assets of the Developer. The Subordinated Notes will be governed by a note agreement which will incorporate standard affirmative and negative covenants, including without limitation prohibitions against additional debt, limitations on distributions, change of control provisions, minimum net maintenance requirements, cash flow coverage maintenance requirements and other material restrictions. The Subordinated Notes will have a term of seven years. The holders of the Subordinated Notes also shall receive Class B Member interests representing a 15 % interest in the capital, profits, losses and distributions of the Developer. (The sole Class A Member shall be the Holding Company.) The Class B Member interest is subject to certain complex put and call provisions which are exercisable at any time more than five years after the closing. The $4 million Revolver will be used for operations after completion of the construction of the Development. Therefore, the Revolver will not be available to the Developer except after the opening of the Development. The close of the Private Financing and the issuance of the Bonds will occur, if at all, simultaneously. It is presently anticipated that, immediately prior to the closing of the Private Financing and the issuance of the Bonds, the private lender will release sufficient funds from the Private Financing escrow to allow TEV to acquire all of the land within the District that is currently in escrow except for the Residential/RV Park property. TEV will irmnediately convey the acquired property to the Developer, and the documents securing the Private Financing will be recorded. Concurrently therewith or inunediately thereafter, the issuance of the Bonds and the closing of the Private Financing will occur. Future @ for the Development It is contemplated that fewer than one-half of the visitors to the Development will stay overnight in the inunediate area because a significant number of the visitors will be within easy driving distance from their homes or accommodations due to the large number of other attractions in Southern California. However, the availability of reasonably priced lodging facilities is an important factor affecting the overall success of the Development. Within the immediate area, there are about 1,000 rooms currently available. Although the Members currently have no formal plans to construct a hotel, the Members have retained a consultant to conduct a hotel feasibility study for construction on the Hotel/Conunercial property adjacent to the Development. The hotel or any of the anticipated effects therefrom have not been incorporated in any of the financial projections included herein. THE AUTHORUY The Authority is a joint exercise of powers authority organized and existing under and pursuant to the provisions of Act. The Authority was created for the purpose of providing an entity which can assist in providing fmancing for public capital improvements in the Old Town area and Westside area of the City and for other purposes which are authorized under the Act. The Authority is an independent legal entity, separate and distinct from the City, the Agency and the CFD Financing Authority, and none of the City, the Agency or the CFD Financing Authority are liable for payment of any obligations of the Authority. [L289429.81 5 1 DRAFT dated November 19, 1996 The Authority is governed by a five member Board of Directors which consists of all members of the City Council of the City. The members of the Board of Directors of the Authority and the expiration dates of their respective terms of office are listed below. Board Member Karel F. Lindemans Patricia H. Birdsall Jeffrey E. Stone Ronald H. Roberts Steven J. Ford EMiration of Term November 1999 November 1997 November 1997 November 1997 November 1999 The Authority has no assets and no general liability on the Bonds. The Bonds are payable solely from the Revenues and other assets pledged therefore under the Indenture. The Authority has no activities other than as described herein with respect to the Bonds. THE CFD FINANCING AUTHORITY The CFD Financing Authority is a joint exercise of powers authority organized and existing under and pursuant to the Act. The CFD Financing Authority was created for the purpose of providing an entity which can assist in providing financing for public capital improvements in the Old Town area of the District by means of the formation of a conununity facilities district, and for other purposes which are authorized under the Act. The CFD Financing Authority is an independent legal entity, separate and distinct from the City, the Agency and the Authority, and none of the City, the Agency or the Authority are liable for payment of any obligations of the CFD Financing Authority. The CFD Financing Authority is governed by a five member Board of Directors which consists of all members of the City Council of the City. The members of the Board of Directors of the CFD Financing Authority and the expiration dates of their respective terms of office are listed below. Board Member Karel F. Lindemans Patricia H. Birdsall Jeffrey E. Stone Ronald H. Roberts Steven J. Ford Eairation of Tenn November 1999 November 1997 November 1997 November 1997 November 1999 The Local Agency Bonds are not general obligations of the CFD Financing Authority, but are payable solely from amounts pledged under the Fiscal Agent Agreement. The CFD Financing Authority has no assets and no activities other than with respect to the Local Agency Bonds and the District as described herein. THE CffY The City incorporated under the general laws of the State of California on December 1, 1989. It is located in the County of Riverside on Interstate 15, forty-five miles south of the City of Riverside and sixty miles north of the City of San Diego. [L289429.81 52 DRAFT dated November 19, 1996 Neither the City nor the Redevelopment Agency of the City has any liability whatsoever with respect to the Bonds, the Local Agency Bonds, the Indenture, the Fiscal Agent Agreement or the Construction Management Agreement. General information regarding the City is set forth in Appendix E hereto, and is intended for informational purposes only. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE CID FINANCING AUTHORITY, THE CITY OF TEMECULA, THE REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA, THE STATE CONSTITUTIONAL OR STATUTORY DEBT LEMTATION OR RESTRICTION, OR A PLEDGE OF THE FAITH AND CREDIT OF THE AUTHORITY, THE CID FINANCING AUTHORITY, THE AGENCY OR THE CITY. THE OBLIGATION OF THE AUTHORITY TO PAY PRINCEPAL OF OR @REST ON THE BONDS DOES NOT CONSTITUTE AN OBLIGATION OF THE AUTHORITY FOR WE[ICH THE AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WE[[CH THE AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CID FINANCING AUTHORITY, THE AGENCY, THE CITY, OR THE AUTHORITY, BUT ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM TIRE REVENUES AND AMOUNTS PLEDGED THEREFORE UNDER TIIE MENTLTRE. THE OBLIGATION OF THE CFI) FINANCING AUTHORITY TO MAKE PAYMENTS WITH RESPECT TO THE LOCAL AGENCY BONDS DOES NOT CONSTITUTE AN OBLIGATION OF THE CID FINANCING AUTHORITY FOR WEACH TIIE CID FINANCING AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION, OR FOR WEE[CH THE CID FINANCING AUTHORITY HAS LEVEED OR PLEDGED ANY FORM OF TAXATION, OTHER THAN THE SPECIAL TAX. THE LOCAL AGENCY BONDS ARE LIMITED OBLIGATIONS OF THE CID FINANCING AUTHORITY PAYABLE SOLELY FROM THE SOURCES SPECIFICALLY PROVIDED IN THE FISCAL AGENT AGREEMENT. CONCLUDING INFORMATION Certain Legal Matters Jones Hall Hill & White, A Professional Law Corporation, San Francisco, California, Bond Counsel, will render an opinion as to the validity of the Bonds, the form of which opinion is set forth in Appendix D. Payment of the fees and expenses of Bond Counsel is contingent upon the sale and delivery of the Bonds. Certain legal matters will be passed upon for the Underwriter by Munger, Tolles & Olson, Los Angeles, California, for the Developer by Cox, Castle & Nicholson, LLP, Los Angeles, California, and for the Authority and the CFD Financing Authority by Richards, Watson & Gershon, Los Angeles, California. Richards, Watson & Gershon also acts as City Attorney and Special Counsel to the Agency. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally and by equitable remedies and proceedings generally. No Ra@ The Authority has not and does not contemplate making an application to any rating agency for the assigranent of a rating to the Bonds or the Local Agency Bonds. [L289429.81 53 DRAFT dated Nove@r 19, 1996 OF CALIFORNIA OR ANY OF ITS POLMCAL SUBDIVISIONS WITHN THE G OF ANY Underwriting The Bonds are being purchased for reoffering by Stone & Youngberg LLP (the "Underwriter"). The Underwriter has agreed to purchase the Bonds at a discount from the initial public offering price equal to $ . The Purchase Agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions. The Underwriter may offer and sell Bonds to certain dealers and others at a price different than the offering price stated on the cover page hereof. The offering price may be changed from time to time by the Underwriter. Litigation To the Authority's knowledge, there is no action, suit or proceeding known by the Authority to be pending or threatened, restraining or enjoining the execution or delivery of the Bonds or the Indenture, or in any way contesting or affecting the validity of the foregoing or any proceedings of the Authority taken with respect to any of the foregoing. @ile there is litigation related to the Development, this litigation is not expected to have any impact on the issuance of the Bonds. See "SPECLKL RISK FACTORS - Litigation" herein. [Add Proposition 218 disclosure] Tax Mafters In the opinion of Jones Hall Hill & White, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however, to the qualifications described below, under existing law, interest payable on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, provided, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defmed for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The opinions set forth in the preceding paragraph are subject to the condition that the Authority and the CFD Financing Authority comply with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied subsequent to the delivery of the Bonds in order that such interest be, or continue to be, excluded from gross income for federal income tax purposes. The Authority and the CFD Financing Authority have covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of delivery of the Bonds. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes. Owners of the Bonds should also be aware that the ownership or disposition of, or the accniw or receipt of interest on, the Bonds, may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other dm as expressly described above. Miscellaneous The quotations from, and sunumies and explanations contained herein of the Indenture, the Fiscal Agent Agreement and other statutes and documents do not purport to be complete, and reference is made to such documents, the Indenture, the Fiscal Agent Agreement, and statutes for full and complete statements of their provisions. CL289429.81 54 DRAFT dated November 19, 1996 This Official Statement is submitted only in connection with the sale of the Bonds by the Authority. All estimates, assumptions, statistical information and other statements contained herein, while taken from sources considered reliable are not guaranteed by the Authority, the CFD Financing Authority or the District. The information contained herein should not be construed as representing all conditions affecting the Authority, the CFD Financing Authority the District or the Bonds. Any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, are intended as such and not as representations of fact. No representation is made that any of such statements made will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract or agreement between the Authority or the Underwriter and the purchasers or the owners of any of the Bonds. The execution and delivery of this Official Stateinent has been duly authorized by the Authority and the CFD Financing Authority. OLD TOWN/WESTSIDE IMPROVEMENT AUTHOIUW DRAFT By: Executive Director OLD TOWN/WESTSIDE COMMUNITY FACILITIES DISTRICT FINANCING AUTHORITY DRAFT By: Executive Director [L289429.81 55 DRAFT daftd Novomber 19, 1996 APPENDIX A SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS [TO BE PROVIDED BY BOND COUNSEL) CL289429.81 A-1 APPENDIX B RATE AND METHOD OF APPORTIONM[ENT OF SPECIAL TAX [L289429.81 B-1 MAR-25-96 MON 16:49 CITY OF BEAUMONT FAX NCi 9098458483 P. 02 rr B RATE AND MMOD OF APPOR17O.LWEN'T OF SPECLA.L TAXES OLD TOMWmEsTsIDE co Iry r. A DMMCT F CINGAUTHORITY Community Fa District No. I (Old Town Area Public @rovements) A special tax @ be l@ed on each P=el of limd wi@ tza Old TOwnAVMWdc Community Fwffities District Finmcing Authoritv ity Fw&ties District No. I (Old Town Am public lmprov=c=) (the "Distnct"), and coll@ amrding to the Special Tax Liability dad by the RMonsible Party of the Old TowwWmwde Commurlih. F@es Di@ct F Authoritv (the "Authority") through the appji@on of the ' following P@ures. AU of the propert,v within the District, unless ot ex by law or the @ss @sions of the nft and mcthod of apporuonrn= @@ below, sbwl be @ to the em= and in the Mwded below. It is intended dw all special taxes applicable to Pa=13 be cLIlwW in the same er and at the same tlme as ordinary ad Nlalorem property @ and that sr,=W taxes so Imcd vviu be subjea to the s=e pawtics and proced@ sale and lien priority in case of d@uency as is -@ded for ad valorem @ subject to any forjudicial fbrcclommwith rthan" in any Fiscal Agent A t for any Bonds of @ Auth@ty for the Di stnct. N@thstanding the forego@ the Authority mirv collect the special twm3 at such other @.; or in @ other ma=er as necessary or convenient to sadsf3r the obligations of the Di@ct. SPECIAL TAX ZONIE A 'Me maidm= special tax that may be levied in the Fiscal Year ending June 30, l@ on amy ParceL designated as Zone A on the @ shown h@ as E.-chibit 1. shall not the == of-. (i) Mit. um building special tax rate of $1 7.00 *a-building square:foot. multiplied times the sum of the Building Floor Area for all buildings on the P@- plus (ii)The muhum land special tax rate of SI 5.00 per land square fo@ multiplied times the Land Area of the Parcel. ..cm 1 %21 T" I:L Lgm Di M -25-96 MON 16:50 CITY OF BEAUMONT FAX NCi. V0098458483 P. 03 ZONE B Theial umspec' taxdWmaybeleviedintbeFiscali'tw@ngJune3O,l996onany Parcel, deman@ as Zone B on the map sh@ as Exhibit 1, SWI not the sum of.. (i)The @=m building sp@ tmx rate of $17.00 per building square foM plus multiplied @es thc3um of the Building Floor Area for all b on dw p@. (ii) The =I=dsPecialtax@of$IS.OC)ocrlandsquarefootm tip tim the Land Area of the Parcel. ul lied es The spccial tax for Zone A and Zone B shall be levied a=Wly. The um @al = aiid the maxunwm land special tmc for Zone A and Zone 3 shall in =6 Fiscal Yew from the maximum sp@ tax for theFi3CalYear ending Tune 30, 1996 by 2%, compo armuauy. A P=6 shall be subject to the um special ta,.K for not more than 40 years. Ih no ewnt sW the rnaximum mmial tax on any Pa=l used for =ri%@ @dcntud purpose any limi@on imposed under Section 53321 of the Califorrgs ent Code. ASSIGN TO CATEGOREES; AN.NUAL TAX CATEGOREES On or about July I of each yew, but in any in wfflcient time to include the jeW of @at taxes On the COuntY's sec@ tax TOIL the Responsib la Party shall d e fbr @ Parcel within the Distnct, wh@er or not such Pami is Taxable and whether =6 p@ is designated as Zone A or Zone B. Parcels subject to l@ --, Hall be ed based upon &e records of the County r as of the January 1 p La @ jWy 1. LEVY The Responsible Pany sW then determine the as- Specud Tax Liabilay for dw F@ Yewr-ommen6% such July 1, and l@ on each Parcel which is Taxable as follows: Step 1:c dw Building Floor Area fbr carh rl-qmtive P@ which is Tamble ProPeM, and the total Building Floor Area for all Parcels which are then Twmble in the DistricL Step 2. C the amual building tax Me by dividing an amount equal to 850/0 of the SPe6al Tax Liability, by the totd Building Fleor Area for all Parcels which we then Twmble Propaty. ..'CM 1 %21 TAM IZ 19% MM-25-96 MON 16:50 CITY OF BEAUMONT FAX NC,. 9098458483 P.04 Step.3:Multiply the total Building Floor Area for ca.-di r P@ whirh is Tauble Prop@ by tw lesser of (i) the a=ual building tax or the um buildmg sP@ tax @ for Zone A and Zone B, :for the Fiscal Yea commencing such July 1. Step 4: D the Land Area for each i?@ of T=ble Property m ttle DMct and dw total Land Area for all P@s which am the. ra=blc step 5: Calculate the annual land tax raw as the lesser of. m the @CL (i)(the sum of the SpwW Tax Liabilitv le3s the total o-f the funds gcn@ for all Parcels which are then T@le irct)em under Step 3 above), divided by the toW Land Area (by square rootage.-) for all P@s wi-ch are then Tiumblc Property; or (ii) the um land SP@ tax:for Zon-t A and Zone B, for F@ Y= such July 1. Step 6:Multiply the L=d Area for ewh Pamel whi&, is T@le propem by the land tax rwe d nod under Step s. Step 7-COlculate the sum of the building tax (from Step 3) and dw land tax (from Step 6-) for ear-h P2rcel which is T=6le Propwty. PREPAY S SPecial tax PrePsYme= may be niade for proPeM subj@ tO the levy Of the special taxes. A @cular Parcel may prepay the s@ @ Provided @ au @onzed Bonds that are to be imed, hm been =cd. AnY PROP" owner in the Districr, that tDprcM the a=lltnl sp@ taxes on a p@cul-z Parcel shaii notify the Respo=ble P@ in ofsuch not less than 90 days prior to an PaYmeM date for dw Bonds and the prepaymew must be made not less than 45 days prior to such payment -Ilc following must be applied for a pi wment of a pwftcular Parcel: -U= I MI r&m @ 12, IM MM-25-96 MON 16:51 CITY OF BEAUMOIIT FAX NC,. 9098458483 P.05 A. ne p cnt amount for a P@cular Parcel shall I)e cal bY the ROP@ble Party, as follows- I -Compute the sp@ tax for such P=el bv ttio total special tax for the then Fi=W Yew. 2.'Me PrL*PaYmem amount is computed by dividing the swud tlx:for the p@ by dw totlg qmial tax for all prop=es for the than cm=m Fi@ yew wi@ dw District, and multiplying the mWu by the amount of any 0 Bon&. Th8resultshaUbero=deduptothentoorp-stfmtho@dollws($5,,Ooo); provided however, that if the Authonty is @,mcw with c= of spmg tax for more than One Pamal at the same time, then the total ents Aa be ar')Ount shall be rmmded up to the 3-Tbc PrePRYMCM amount calculated in (2) abcrve for a p@cular P@ will be (a) ;re @ leased in the amount o:t ri) applicable rcdmption @@ if @v, on the Bmk (ii) an amount d ed by the RenoWbic pm%y to offm any @em the amount needed to pay on the Bonds and the amount datived fmm the re'eM of the pm*d., tmc pending em r an of such Bonds,, and (iii) amount d by tile ble pwiy to pay for the applicable A@ni Expenses to providc such In epayrncm and (b) for any redu@on m Bond msma due to the prepaymcmt 4.D on of the total amO= n@ by tile Respo=ible PwV @ be conclusive, absent est car. B. The P=cl with r to which PrcPaYment is @e must not be del in any pay,n=i, of special @ Mousey l@ed the Di@cL Mt SW not reheve any prop" O@Ir from p@ those @ @.-hich have @me @ md P"ble, and a NTotice Of C@on of S@ Tax Lien shall not be mwrded ui"st any Pa=l Pursuant to CaUf@a Gov=mem Code S@-in $3344, @l all s@ to that Parcel have been paid. D ONS Ad@istmti,ve Expemes me= any or all of the followine;: the few and of &c F@ Agent (including any fees or Of Its COMW), the e3-.7p=m afthe Authonty and the City in can-ving out their respective duties with r to the Di=icL (including, but not limited to, dw -WM 1 9621 tf= Ir@ D4 aggreg Izated and the PROP nmest five thousand dollars ($5,000). MAR-25-96 MON 16:52 CITY OF BEAUMONT FAX NC, 9098458483 P. 06 IM and collection Of the Special @) @uding the fe4n and CVMM of their t counse4 any few Of the COuntY re@ to the District or the collection of sp@ @ an allocable @ Of the salaries of the Authonty and the City r---aff dirwdy rclued the= imd a PrOPOmOnate amount of Authority and the City gen@ adm!nl overhead re@ any amounts paid by the Auth@ or the City, vely, from its mm fimds @ respect to the Disincz or the Bonds, and all @ cons and elthe Authority, the City or the F@ Agent m in w=c=on vnth ffie c of@ reep@ duties @ the Fiw4 Agem A ant and, in the case of the Authority and the City, in any way re@ to on of the District Authority means the Old Town/Westside Community Facilities District Finimcing A@ty. ]3onds means any bonds of the Authority issued for the Divrtct under Mello-Roos Con==ity FacilWes Act of 1992, as amended, autho@ to be issued under the Resolu6on of ca. Buflding Floor Area means the area included within the surrounding ==or walls of a bwlding, including each floor of multiple story buildinm @usive c@ vent @ and courts ( hem as open and unobstructed to the sky). 'ne Building Floor Area will be d bythe Responsible PwW by reference to City or County approved E-uilding ph= or other such docum@on as the Responsible P@ shall e. C'tty me= the City of TamwW& County meant the County ofriverside. Debt SwWm for @ F@ Year, is the total annual principal and interest payable on the Bonds during the cal@ @ wiuch commences in @ Fiscal Year, less any cap any other amounts rmmmng 'm the bond f=d held under th,! Fi@ Agmt A end of the @ous Fiscal Yew available to @ such payme=. and as ofthe District means the Old Town/W@de Co ty F@iti,= Djudct F'MatIC4 Authority Con=unit.v Facilities District No. I (Old Town Area Public Improveme=). F'acsd Agent means the Fiscal Asent desi under the F:scal Arent cnt. F'@ Agent Agreement means the agreement by that name! approved by the Resolution of er, and as it nW be amended and/orsupplamented.fn.-im time-to time. Year mma the period @g on July I and @g t%,Ie follo@g J=e 30. ml t&m F@ 12. 19% as n whole Parcel means any Co@ MAR-25-96 MON 16:52 CITY OF BEAUMONT FAX NCI. 9098458483 P.07 Land Area means the measure of area o:f a P@ in scl@ feet of l@ rounded up to the Oes Pmel Or @on thereof that a within @ boundaries of &c Distnr-t based on the equal@ tax rolls of the County. Raolugon of Issuance is any Resolution adopted by the Authm* @@ the i Boncit. smmce of Rmponsible P" is any Mm or p wtio the Authaiity may appoint fim time to to C'OmPutlr- the leW Of the @ vnthin dm Dimnct S Tax Liability for my ]Fiscal Ye8r is an amount sufficient to pay Debt Service for Fiscal Yew, A for Sur ,h F@ yew,, an amol= 3, as ad by the @onsible Party, to offset proj@ tax delinquencies ti= may occur in such Fiscal year based on prior Fiscal Year delinquencies and to oth replenish any r fund for the BOnl* md idl PaYmcats required to be made m the applicable Fiscal Yew under dw Fi@ Agent A ent for the Bonds and any supplcmc= th Tamble PROP@ AWI mom all real Property within the boundaries of the Dimirt tba is in fee by T.Z.B.O., i= or BFD/OTEP, a Caffornia corporaton, at any @c the of the resolution of formauon for the Di@ct and dw daft dw is one yew after the adopticm of the resolution of fo@M @d[ed howgm, that the following propem shall be fim *e tax (i) any @ property em Is from ==on by @ (ii) any acres of land cOn@ Or invvocably o:ff@ for dedicafion to and ed by a public agency, including but not @ted to, the f@ go =% the Stme of .a and any local gom=cntal and (iii) land which is a public right-of-way or which is an unmaimed @ ent On for other than the purpose Set @ ;n the e ant as thou parcels the boundaries of the Di@ct that are not in @ B, as &hmm On the mV @ @bit 1 h@n. Zone B is designated as those P@'within the boundaries of the as shown on the Map desi=,qted Exhibit I h@. imp@cal its Zone A is d@ ..X= 1 %21 t&m P@ 12, IM APPENDIX C APPRAISAL [L289429.81 C-1 I- APPRAISAL Old Town Westside Improvement Authority Community Facilities District Zones A and B Temecula, Califoniia BROWN, CHUDLEIGH, SCHULER, AND ASSOCIATES REAE E:STATE APPRAISA" - @NXT SIRUD@ LAWRENCE E. BROWN, MAI, CRE (1942-1990) WALTER H. CHUDLEIGH, 111, MAI GREGORY S. SCHULER CHRISTOPHER T. DONALDSON, 144AI MARK S. DIMARCO DEAN A. lk4YERS COLETTE J. SHERSOURNE GARY M. EDWARDS WAYNE TURNER ANDREW E. ALTPFORT November 15, 1996 Mr. Ron Bradley City Manager CITY OF TEMECULA 43200 Business Park Drive Temecula, California 92589-9033 Reference:Restricted Appraisal Report of the Old Town Westside Improvement Authority Community Facilities District Zones A and B, Temecula, California. Our File No. 191 1. Dear Mr. Bmdley: In response to your request, we have personally examined and appraised the property comprising the Old Town Westside Improvement Authority Community Facilities District Zones A and B located in Temecula, California. The purpose of this restricted appraisal report is to provide you with our opinion relative to the market values of the fee simple interest in the subject property. This is a restricted appraisal report which is an update to the self- contained narrative report dated April 29, 1996. By reference the prior appraisal is hereby made a part of this restricted report. It should be specifically noted that this restricted report cannot be properly understood without referring to the matters and opinions expressed in the original appraisal. As agreed, this restricted appraisal focuses primarily upon the following: 0Clarification of the total property included in the updated analysis when compared to the prior appraisal. *Details outlining the specific changes to the development plan in terms of total square footage and/or seating capacity. 0Presentition of the revised opinions of value resulting from the changes in the overall development plan. MOUNTAIN STATES OFFICE: 1500 E. KEARNS. SUITE E-303 - PARK CITY. UTAH 94060 - (901) 649-0238 NORTHWEST OFFICE: 50 SW PINE STREET. SUITE 200 - PORTLAND. OREGON 97204 - (503) 224-6791 SOUTHERN CALIFORNIA OFFICE: 3939 CARSON STREET. SUITE 3 JO - TORRANCE. CALI]FORNIA 90503-6704 - (310) 340-4788 NORTHEAST OFFICE: 127 WASHINGTON "ENUE - NORTH H"EN. CONNECTICUT 06473-1715 - (203) 234-9749 WESTERN REGION OFFICE: 744 CARDLEY "ENUE. SUITE loo - MEDFORD. OREGON 97504-6124 - (541) 772-9566 - FACSIMILE (341) 773-6314 Mr. Ron Bradley November 16, 1996 Page 2 As requested, the value conclusions stated in this restricted appraisal are based upon the following: 0Value of the subject property assuming the public improvements to be funded by the proposed bond issue are completed and in place. The property is divided into two zones within the district, Zone A and Zone B. 0Value of the total project assuming completion of all public and private improvements. This value assumes completion of the building components to be constructed on site within Zone A, with Certificate of Occupancy based upon market conditions as existing as of the date of value. The opinions of market values formulated in this analysis are predicated on the following assumptions: I .The property boundaries, proposed uses, and areas as indicated on the maps and specifications provided previously are assumed to be correct. This also pertains to the information provided concerning the changes to the development plan which have resulted in revised square footage and seating capacity figures for the private improvements. 2.The public improvement cost estimates provided in this analysis are the same as those outlined in the original appraisal and are assumed to be correct and applicable as of the date of value. 3.The value formulated for the total project assuming completion of both the public and private improvements is based in large measure, upon the developer's experience in the operation of live entertainment venues, in addition to the developer's commitment to adequately market the project. 4.The proposed roadway improvements for the area as specified in the Western Bypass Corridor development plan will be implemented according to plans and schedules. 5 .The subject property was physically reinspected on November 2-3, 1996. The opinions of market values included in this report are stated assuming economic conditions as existing on November 3, 1996. Mr. Ron Bradley November 16, 1996 Page 3 Purpose of Appr@al The purpose of this restricted appraisal is to set forth our opinion relative to the market values of the fee simple interest in the property comprising the Old Town Westside Improvement Authority Community Facilities District Zones A and B located in Temecula, California. It is our understanding that the intended use of this appraisal will be to provide a basis of market values for the underwriting of the Community Facilities District Mello-Roos bond issue. The bond issue will provide financing for the proposed public improvements to be installed concurrent with the development, and will become a lien against the property within the district. Property Rights Appraised The fee simple interest in the property comprising the Old Town Westside Improvement Authority Community Facilities District Zones A and B located in Temecula, California will be appraised herein. The market values of the fee simple interest in the subject property assiune the proposed public improvements to be funded by the Mello-Roos bond issue are completed and in place. Definitions The following definitions are pertinent to this appraisal. Fee Simple Interest Fee simple interest, in valuation terms, is defined as "absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the goverrunental powers of taxation, eminent domain, police power, and escheat." It is an inheritable estate. Source:The A12=isal of Real Ea= The Appraisal Institute, Tenth Edition, 1992. Mr. Ron Bradley November 16,1996 Page 4 Definition of Market Value "T'he most probable price which a property should bring in a competitive and open market under all conditions requisite to ta fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: I . Buyer and seller are typically motivated; 2.Both parties are will informed or well advised, and acting in what they consider their best interests; 3. A reasonable time is allowed for exposure in the open market; 4.Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and 5.The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." 'The App@sal Foundation, Uniform Standards of Pmfessional Appraisal Practice- pp. 7-8 (1995). Mr. Ron Bradley November 16,1996 Page 5 Date of Value The opinions and matters expressed in this restricted appraisal report are stated assuming conditions as existing on November 3, 1996, the date of property inspection. Scope of the Appraisal The scope of the appraisal process included procedures which were of major importance in the valuation of the Old Town Westside Improvement Authority Community Facilities District Zones A and B. The components which form the basis of the valuation process included the following: I .Discussions in order to accurately identify the appraisal problem and the objective of the assignment. 2.A preliminary study was conducted in order to determine what information would be required and the sources of the information: i.e., development consultants; title companies; architectural, planning, and engineering representatives; real estate agencies; etc. 3.General data relating to the southern California region and the area economy, and specific data relating to the immediate subject area and the property itself were then assembled. 4.An in-depth analysis of the demographic trends in the subject region was conducted. This information was necessary in forming conclusions as to the intermediate and long-term growth prospects and economic stability of the region. 5.Based upon the specialized nature of the Old Town Temecula Entertainment Center to be developed on-site, the property was valued based y upon the cost and income approaches. The cost approach provides an indication of the estimated replacement cost of the project as well as an indication of land value. The income approach focuses on the revenue-generating capacity of the project components. 6.Information was assembled in regard to sales of similar commercial land parcels considered useful in the determination of land value for the subject. Mr. Ron Bradley November 16, 1996 Page 6 7.Information was also reviewed which pertains to similar live theater entertaim,nent complexes located throughout the country. The most comparable projects identified were personally inspected previously and are discussed in detail in the original appraisal report. 8.'Me usefulness and applicability of the data collected were analyzed and adjustments were made, where appropriate, based upon comparison to the subject project. 9.The results of the various valuation approaches were thoroughly examined, and a reconciliation, or correlation, of final values was concluded. 10.A complete self-contained appraisal report was previously prepared in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP), with supporting information subsequently categorized and placed into our job file. The supporting information is available for review upon request. This restricted appraisal report essentially represents an update to the original appraisal with the prior appraisal hereby considered a part of this restricted report by reference. Property Description Location The land for the Old Town Temecula Entertainment Center is comprised of two noncontiguous development sites located in the downtown section of the city of Temecula in Riverside County, California. The Main Core Site represents an assemblage of parcels located in the "Old Town" section of the city of Temecula. The noncontiguous Wild West Arena site is located farther to the west beyond the existing terminus of Main Street. Size and Shat)e The land which will support the entertaim-nent complex is comprised of two noncontiguous development areas which are irregular in shape, and contain a total of 54.87 acres, or 2,390,121 square feet. Reference is made to the plat maps presented in the original report which provide a graphic depiction of the development areas which represent the subject property. It should be noted that the subject includes 21.05 acres of land located adjacent to the north of the arena site designated as future parking area. This acreage has been included in the land area specified above. Reference is made to the following table which provides a list of the existing parcels comprising the subject property and the indicated square foot size of each respective Mr. Ron Bradley November 16,1996 Page 7 parcel. This portion of the subject property comprises the land located within Zone A of the district. Land Area Assessor Parcel No. Owner Sq. Ft. Main Core Site 922-032-015 Westhaven Veterinary 6,969 922-032-020 Chilcote 3,484 922-032-021 Dixon 3,920 922-032-022 Dixon 7,405 922-032-028 Dixon 15,681 922-034-019 Saline 3,920 922-034-020 Saline 3,920 922-034-028 Miles 7,840 922-034-029 City of Temecula 7,840 922-034-030 Futcher 3,920 922-034-031 Futcher 3,920 922-034-032 McKay 7,840 922-034-033 Brose 3,920 922-034-034 Brose 3,920 922-041-008 Moramarco 20,908 922-041-009 Moramarco 3,920 922-041-010 Moramarco 3,920 922-041-011 Santamaria 6,969 922-041-012 Santamaria 7,840 922-041-013 Gomez 7,840 922-041-014 Timberlake 7,840 922-042-004 Weaver 16,117 922-042-005 Weaver 6,969 922-044-004 Sever 14,810 922-044-017 Pascoe 10,454 922-044-018 Pond 6,969 922-044-019 Keen 7,405 922-044-020 Pascoe 6,969 922-044-021 Sterbenk 6,969 922-044-022 Tomac Engineering 14,810 Subtotal Main Core Site 235,208 Mr. Ron Bradley November 16,1996 Page 8 Assessor Parcel No. Owner Sq. Ft. Wild West-Arena Site Portion 940-310-013, 940-320-001, 002, 003 Firestone 1,237,975 Adjacent Land (Parkino 940-310-045 through 048 Firestone 916-938 Total Zone A Land Area Acres 54.87 Additional land located along the Western Bypass Corridor will be included in future phases of the project. This land, which is proposed for future development with a hotel among other ancillary uses, is located within the portion of the district commonly designated as Zone B - This property totals approximately 124.7 acres, or, 5,43 1,941 square feet. Reference is made to the plat map presented in the original report which provides a graphic depiction of the parcels which comprise the Zone B property located within the district. These parcels are identified on the map as follows: Zone B Parcel Owner SQ., Ft. A&B Firestone 98,018 c Firestone 847,242 D Firestone 240,887 E Firestone 764,478 F (Open Space) Firestone 2,916,778 G (Open Space) Firestone - 564,538 Total Zone B Land Area I Acres @7 Mr. Ron Bradley November 16,1996 Page 9 It should be noted that Zone B Parcels F and G, which total approximately 80 acres, are to be dedicated as open space in regard to the overal I development plan for the district. As a result, the remaining "developable" Zone B property which is valued in this study totals 44.78 acres, or 1,950,625 square feet. Parcel E which represents 17.55 acres of the developable acreage may ultimately be acquired separately and as requested has been valued as a separate Zone B parcel in this report. Property Description The following description of proposed improvements is based upon the original review of limited construction specifications in addition to recent conversations with representatives of the subject development company pertaining to the changes to the overall development plan. General PrQiect Desc The proposed improvements compromising the Old Town Temecula Entertainment Center consist of a live entertainment complex which is proposed to initially include approximately 267,122 square feet of building structures located on slightly less than 35 acres. Live theaters represent the core element of the project, offering f6ur venues with a revised total seating capacity of 1 1,05 0. Three of the theaters are to be developed around the Festival Square, where special events will be held throughout the year. These three live venues are to include the Opera House with 2,200 seats, a Cabaret Theatre with 1,450 seats, and Little Theatre with 200 seats. The fourth live venue will be the Wild West Arena, which is proposed to include an average seating capacity divided between shows and concerts of 7,200. The arena site is located west of the Old Town Main core site, beyond the terminus of Main Street. The arena will primarily accommodate rodeo and horse shows, as well as live concert performances, an ongoing Wild West show, and sporting events. Additional facilities in the form of two theme restaurants, an interactive complex, a retail center, and other ancillary structures are to be included in the initial phase of the project. The following table provides a summarization of the primary components of the Old Town Temecula Entertainment Center. The building square footages and proposed seating capacity are representative of the revised figures for these components as of the date of value. Mr. Ron Bradley November 16, 1996 Page I 0 Old Town Temecula Entertairunent Center Improvement Summary Sq. Ft. Seating Component Bldg. Area Capacity Opera House 54,881 2,200 Cabaret Theatre 35,100 1,450 Little Theatre 5,530 200 Wild West Arena 108,676 7,200 2 Theme Restaurants 20,875 515 Interactive Complex 20,230 A. VimW Realty 24 B. Large Screen 300 C. Game Center 75 Festival Square (Open Area) 2,000 Su=rt Fac@ Retail Center 20,000 -- Ticket OfficeNisitor Center 1,830 -- Total 13,964 Community Facilities District Improvements It is our understanding that the intended use of this appraisal will be to provide a basis of market value for the underwriting of the Community Facilities District Mello-Roos bond issue. The bond issue will provide fi=cing for the proposed public improvements to be installed at the subject property concurrent with the development of the Old Town Temecula Ent ent Center. The bond issue, which provides fmancing for these public improvements, will become a lien against the property within the district. The proposed facilities to be funded by the bond issue are detailed in the original analysis. The facilities list and cost breakdown in the original report represent the revised distribution of funds for the Community Facilities District public improvements to be implemented at both the Old Town property and the Western Bypass Corridor. Highest and Best Use Based on our analysis of the subject property, it is our opinion that the proposed ente ent complex represents the highest and best use of the property under appraisal. There is no other apparent combination of uses which would result in a higher residual net income to the property, including all retail and/or office use. The highest and best use conclusion also Mr. Ron Bradiev November 16,1996 Page I I assumes competent and experienced management of the project. This is a highly specialized operation and it is critical particularly during the initial years. that an experienced nationally recognized operator such as the subject developer be heavily involved. The programming and attraction of "name" performers is of critical importance to the financial success of the project. In conclusion, the maximally productive use of the subject property in terms of highest and best use criteria is for the live entertairunent complex as proposed. This form of land use is consistent with the area plan; this land use is considered harmonious with the development theme in the area; the project is viewed as beneficial to the community; and substantial demand in terms of patronage from nearby major urban concentrations appears evident. Land Value By Comparison An investigation of commercial land sales in the subject market area was conducted in order to determine an appropriate market value for the subject land by the sales comparison approach. An extensive land sales search throughout the southern California region revealed no comparable land sales regarding properties which were purchased for development with live entent venues similar to the subject. As a result, an attempt was made to identify land salesrepresentative of well located, high exposure commercial sites suitable for more traditionalconunercial uses. A survey of land sales of high exposure commercial sites located within the subject region indicated that no additional significant tions have taken place since the time of our prior analysis. As a result, the comparable land sales information detailed in the original appraisal is still considered the best data available for comparison to the subject, and in our opinion, is adequate for the determination of land value for the subject. As requested, the subject land has been valued assuming completion of the proposed infrastructure improvements necessary to bring the property to a finished state. The comparable sales represent "finished" sites and have been categorized based upon their comparability to the components of the subject development which include the Main Core Site, the Wild West Arena site and adjacent parcels (parking), and the developable Zone B parcels. Based upon the land sales data reviewed, and in consideration of the features of the various components of the subject property, value conclusions on a per square foot basis consistent with the prior analysis were determined. This results in the following opinions of land value for the subject. Mr. Ron Bradley November 16, 1996 Page 12 Main Core Site (Zone Al 235,208 Sq. Ft @ $22.00/Sq. Ft. 4 Rounded to, 15,150,000 WildWestArenaSiteand-AdjacentParcels(Zon AN 2,154,913 Sq. Ft. @ $12.00/Sq. Ft. $25,858.9L6 Rounded to, $25,850,000 Total Zone A Land Value Assuming Completion of the Public Improvements $3 I.QOO.OOO Zone B Prol2eM (Developable Land Only) Parcels A through D 1, 1 86,147 Sq. Ft. @ $9.00/Sq. Ft. $10,675,323 Roundedto, 110,700,000 Parcel E (To Be Acquired at a Later Date) 764,478 Sq. Ft. @ $9-OO/Sq. Ft. $6,880,302 Rounded to, 0,000 Cost Approach The cost approach to value presented on the following pages is based upon replacement construction cost. A replacement cost estimate for each of the individual components of the subject was derived using the Marshall Valuation Service (Marshall & Swift Publication Company) PC Version, and a review of the developer supplied cost estimate. Adjustments were made where deemed appropriate, based upon our knowledge of construction costs associated with developments similar to the subject. The construction cost data as reported by Marshall & Swift was utilized primarily as the cost basis for the major components of the subject development. The Marshall & Swift cost estimates were compared to the developer supplied cost projections in order to determine reasonableness. The smaller components of the project, such as the ancillary support facilities, were valued by the cost approach based primarily upon the information supplied by the developer. A review of the costs for these particular components, based upon reported costs for structures Mr. Ron Bradley November 16, 1996 Page 13 exhibiting similar construction features, resulted in general concurrence Aith the developer supplied cost estimates. Reference is made to the cost summary and computer-generated calculation data presented on the following pages. Where appropriate, it should be noted that the direct construction costs attributable to the major components of the subject project include various items of equipment and interior theming considered necessary for the operation of these entertainment venues. In this regard, these cost items are considered relevant to the valuation of the subject by the cost approach based upon their importance to the operations of the various components of the entire project. Additionally, a reduction in the overall square footage of the project when compared to the original analysis has resulted from the adoption of the revised development plan as supplied for our analysis. In consideration of the various features of the subject development, and after application of the land value for the two development areas as concluded previously, the value of the project as indicated by the cost approach is determined to be $79,000,000. This value indication pertains to construction cost only, and is not reflective of the investment opportunity inherent in the revenue-generating capacity of the project when in operation. As a result, an income analysis of the subject was also prepared which was given most emphasis in the ultimate determination of value for the subject. Mr. Ron Bradley November 16, 1996 Page 14 Old Town Temecula Entertainment Center Cost Summary Direct Construction Cost Qpera House 54,881 Sq. Ft. @ $120/Sq. Ft. Rounded, $6,600,000 Theatre Equipment 550,000 Interior Theming 400,000 Subtotal Opera House $ 7,550,000 Cabaret 'Meatre 35,100 Sq. Ft. @ $105/Sq. Ft. Rounded, $3,700,000 Theatre Equipment 250,000 Kitchen Equipment 400,000 Interior Theming 250,000 Subtotal Cabaret Theatre 4,600,000 Little Tbeatre 5,530 Sq. Ft. @ $1 1 O/Sq. Ft. Rounded, $600,000 Theatre Equipment 150,000 Interior Theming 100,000 Subtotal Little Tbeatre 850,000 Wild West Arena 108,676 Sq. Ft. @ $48.00/Sq. Ft. Rounded, $5,200,000 Theatre Equipment 250,000 Arena Front of House Bidgs. 1,100,000 Arena Plaza 550,000 Arena Back of House Bldgs. 800,000 Subtotal Wild West Arena 7,900,000 Mr. Ron Bradley November 16, 1996 Page 15 T'heme Restaurants 10,437 Sq. Ft. @ $105/Sq. Ft. x 2 Rounded, $1,100,000 Theatre Equipment (2 Restaurants) 100,000 Kitchen Equipment (2 Restaurants) 300,000 Subtotal Theme Restaurants $1,500,000 Interactive Comi2lex 20,230 Sq. Ft. @ $105/Sq. Ft. x 2 Rounded, $2,1 00,000 T'heatre Equipment 30,000 Kitchen Equipment 150,000 Show Equipment 2,800,000 Interior Theming 50,000 Subtotal Interactive Complex 5,130,000 Retail Center 20,000 Sq. Ft. @ $45.00/Sq. Ft. 900,000 Ticket OfficeNisitor Center 1,830 Sq. Ft. @ $30-OO/Sq. Ft. Rounded, 55,000 Main Core Site Demolition 257,858 Sq. Ft. @ $1.50/Sq. Ft. Rounded, 400,000 Parking Facilities 3,500 Spaces @ $980/Space Rounded, $ 3,400,000 Festival Square Landscaping/Structures 1,000,000 Fixtures & Equipment 1,800,000 Total Direct Construction Cost $35,085,000 Nft. Ron Bradley November 16,1996 Page 16 Indirect Costs (Construction-Related) Legal, Title, Appraisal, & Feasibility Analysis @ 2% Rounded, $ 700,000 Taxes & Insurance During Construction @ 1.5% Rounded, 525,000 Total Construction-Related Indirect Cost 1,225,000 Subtotal Direct & Indirect Construction Cost $36,310,000 Indirect Costs (Development-Related) Developer's Profit & Overhead @ 20% Rounded, 7,300,000 Marketing & Promotion @ 5% Rounded, 1,800,000 Contingency @ 6% Rounded, 2,200-000 Total Development-Related Indirect Cost 11,300,000 Total Replacement Cost New $47,610,000 Less Depreciation Physical @ 0% 0 Functional @ 0% 0 Economic @ 0% 0 Total Depreciation 0 Total Depreciated Replacement Cost $47,610,000 Plus Land Value 31,000,000 Total Value As Indicated by the Cost Approach 178.61 Q.000 Rounded to, $79.QQO.OOO SECTIONAL REPORT SECTION 1 Occupancy :Theater - Live Stage 96 100 Class:Wood/Steel Frame Rank: Average Wall:921 -Stucco on Wood Frame Area: 100t Rank: Depr: Heat: 611 Package Unit Area: 100% Clim: Depr: Total Area : 54881 Number of Stories: Section I Building Perimeter : 2 Story Height : 55. Units Cost Total Base Cost 54,881 102.84 5,643,962 Exterior Wall 54,881 6.91 379,228 Heating & Cooling 54,881 8.45 463,744 Sprinklers 54,881 1.64 90,005 Basic Structure Cost 54,881 119.84 6,576,939 Superstructure: Total Superstructure Cost 6,576,939 Basement: Building Cost New 6,576,939 Extras: Replacement Cost New 6,576,939 Less Depreciation: Insurable Cash Value 6,576,939 Miscellaneous: Total 6,576,939 Cost data by MARSHALL SWIFT SECTIONAL REPORT SECTION 2 Occupancy :Theater - Live Stage 100 Class:Wood/Steel Frame Rank: Average Wall:921 -Stucco on Wood Frame Area: 100k Rank: Depr: Heat: 611 Package Unit Area: 100t Clim: Depr: Total Area : 35100 Number of Stories: Section 1 Building Perimeter : 2 Story Height : 45. Units Cost Total Base Cost 35,100 92.07 3,231,657 Exterior Wall 35,100 6.19 217,269 Heating & Cooling 35,100 7.57 265,707 Sprinklers 35,100 1.75 61,425 Basic Structure Cost 35,100 107.58 3,776,058 Superstructure: Total Superstructure Cost 3,776,058 Basement: Building Cost New 3,776,058 Extras: Replacement Cost New 3,776,058 Less Depreciation: Insurable Cash Value 3,776,058 Miscellaneous: Total 3,776,058 Cost data by MARS @ L SWIFT SECTIONAL REPORT SECTION 3 Occupancy :Theater - Live Stage -OC 100 Class:Wood/Steel Frame Rank: Average Wall:921 -Stucco on Wood Frame Area: 100*i Rank: Depr: Heat: 611 Package Unit Area: 100*i Clim: Depr: Total Area : 5530 Number of Stories: Section 1 Building Perimeter : 2 Story Height : 40. Units Cost Total Base Cost 5,530 93.48 516,944 Exterior Wall 5,530 6.29 34,784 Heating & Cooling 5,530 7.68 42,470 Sprinklers 5,530 2.30 12,719 Basic Structure Cost 5,530 109.75 606,917 Superstructure: Total Superstructure Cost 606,917 Basement: Building Cost New 606,917 Extras: Replacement Cost New 606,917 Less Depreciation: Insurable Cash Value 606,917 Miscellaneous: Total 606,917 Cost data by MARSHALL & SWIFT SECTIONAL REPORT SECTION 4 Occupancy :Horse Arena -06 100 Class: Wood/Steel Frame Rank: High Heat: 605 Hot Water Radiant Area: 100% Clim: Depr: Heat: 609 Ventilation Area: 100* Clim: Depr: Total Area : 108676 Number of Stories: Section 1 Building Perimeter 3 Story Height 50. Units Cost Total Base Cost 108,676 33.10 3,597,176 Exterior Wall 108,676 12.89 1,400,834 Heating & Cooling 217,352 0.40 86,941 Sprinklers 108,676 1.56 169,535 Basic Structure Cost 108,676 48.35 5,254,486 Superstructure: Total Superstructure Cost 5,254,486 Basement: Building Cost New 5,254,486 Extras: Replacement Cost New 5,254,486 Less Depreciation: Insurable Cash Value 5,254,486 miscellaneous: Total 5,254,486 Cost data by MARSHALL & SWIFT SECTIONAL REPORT SECTION 1 Occupancy :Restaurant !k 100 Class: Wood/Steel Frame Rank: Above Average/High Wall: 855 -Wood Siding Panels Area: 100k Rank: Depr: Heat: 611 Package Unit Area: 100t Clim: Depr: Total Area : 10437 Number of Stories: Section 1 Building Perimeter : 2 Story Height : 12. Units Cost Total Base Cost 10,437 87.20 910,106 Exterior Wall 10,437 13.50 140,900 Heating & Cooling 10,437 3.25 33,920 Sprinklers 10,437 2.37 24,736 Basic Structure Cost 10,437 106.32 1,109,662 Superstructure: Total Superstructure Cost 1,109,662 Basement: Building Cost New 1,109,662 Extras: Replacement Cost New 1,109,662 Less Depreciation: Insurable Cash Value 1,109,662 Miscellaneous: Total 1,109,662 Cost data by MARSHALL & SWIFT SECTIONAL REPORT SECTION 2 Occupancy :Theater - Cinema 74 Class: Masonry Rank: Above Average/High Occupancy :Retail Store !k 26 Class: Masonry Rank: Above Average Heat: 611 Package Unit Area: 100t Clim: Depr: Total Area : 20230 Number of Stories: Section 1 Building Perimeter : 2 Story Height : 20. Units Cost Total Base Cost 20,230 82.19 1,662,704 Exterior Wall 20,230 17.68 357,666 Heating & Cooling 20,230 4.57 92,451 Sprinklers 20,230 2.17 43,899 Basic Structure Cost 20,230 106.61 2,156,720 Superstructure: Total Superstructure Cost 2,156,720 Basement: Building Cost New 2,156,720 Extras: Replacement Cost New 21156,720 Less Depreciation: Insurable Cash Value 2,156,720 Miscellaneous: Total 2,156,720 Cost data by MARSHALL & SWIFT SECTIONAL REPORT SECTION 3 Occupancy :Retail Store 3:00 Class: Wood/Steel Frame Rank: Above Average Wall: 921 -Stucco on Wood Frame Area: 100% Rank: Depr: Heat: 611 Package Unit Area: 100% Clim: Depr: Total Area : 20000 Number of Stories: Section I Building Perimeter : 2 Story Height : 10. Units Cost Total Base Cost 20,000 38.34 766,800 Exterior Wall 20,000 4.14 82,800 Heating & Cooling 20,000 2.94 58,800 Sprinklers 20,000 2.10 42,000 Basic Structure Cost 20,000 47.52 950,400 Superstructure: Total Superstructure Cost 950,400 Basement: Building Cost New 950,400 Extras: Replacement Cost New 950,400 Less Depreciation: Insurable Cash Value 950,400 Miscellaneous: Total 950,400 Cost data by MARSHALL & SWIFT Mr. Ron Bradley November 16, 1996 Page 17 Income Approach The determination of the revenue-generating ability of the subject Old Town Temecula Entertainment Center is contingent upon the identification of reasonably achievable levels of operational occupancy, ticket pricing, and rent. An extensive analysis of similar developments was required in formulation of appropriate operational projections for the subject development. Overall, the most similar types of live entertainment projects in the country are located in Pigeon Forge, Tennessee; Branson, Missouri; and Myrtle Beach, South Carolina. Of all the live entertainment venues located throughout the country, these three particular projects exhibit the entertainment concept considered most similar to the subject Old Town Temecula Entertainment Center. In addition, current ticket pricing for selected live entertainment venues located in southern California and Las Vegas, Nevada, was reviewed. The quoted ticket prices at the comparable entertainment venues surveyed are reflective of cur-rent 1996 ticket pricing. The prices for all of the various shows at the live entertainment venues surveyed throughout the country were presented in detail in the original appraisal. Reference is made to the income approach within the narrative report which provides summaries of the comparable projects followed by a discussion of operating projections for the complex. These particular items form the basis for our income analysis which incorporates the revised square footage and seating figures provided as of the date of this valuation. Pro Forina-Stabilized Income and Exi2enses Pro Forma Stabilized Income and Expense statements for each of the operational venues at the subject have been prepared incorporating the data and assumptions outlined in this restricted report and the prior narrative appraisal. The stabilized approach is useful in visualizing the potential income-generating capacitv of the property and is an accepted valuation technique. This approach, however, is regarded as less reliable than the discounted cash flow technique which is generally more precise and is typically preferred by investors. Reference is made to the following pages which present the Pro Forma Income and Expense statements for each of the subject venues. 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Ft./Mo. x 12 563,597 Tenant Expense Reimbursement (Net Leased Premises) 151,900 Total Projected Gross Income $1,135,497 Less Vacancy & Collection Loss @ 5% Rounded to, 56,775 Projected Effective Gross Income $1,078,722 Opemting Expenses Management @ 5% Rounded, $ 53,950 Common Area Maintenance 108,000 Real Estate Taxes 38,500 Insurance 5,400 Replacement Reserves 4,500 Total Operating Expenses 210,350 Net Operating Income Capitalization $868,372 . 9.5% $9,140,758 Less Capital Deductions: Rent Loss During Fill-Up $154,000 Leasing Commissions 50,400 Tenant Improvements 48,000 Total Capital Deductions 252,400 Total Value as Indicated by the Stabilized Income Approach Roundedto, Mr. Ron Bradley November 16,1996 Page 18 Discounted Cash Flow Analysis A discounted cash flow analysis has been prepared for each of the components of the subject development. The discounted cash flow technique is typically used by knowledgeable investors of major income-producing properties such as the subject. As a result, the discounted cash flow method has been given primary consideration in our value conclusions. The assumptions upon which the analysis is based are detailed in the narrative appraisal. Where appropriate, changes in the seating capacity for the particular venues have been applied in the analysis. lr:lliii fl@i4i @0- goal sip g cli z 0; 4 r .6 9 ill-milk Rgialk V-V ok Ct Ct 2 g:g g IA a C4 i w .6 -W a gk -1@ .66 9 9 1 9 32-Eiiii gaval 9 @s foil smf mg 9 9 Is Egli I cr oi i@ C4 ei 9 g I:-9 cr cw .6 0 c; isia -CC 2 Ell] 02 9pII bil- %zinc] Ali .@i lie U'> cq C4 c@q 0 CD CD C4 C4 An c) c) qrq) r)- v. it). 0 on. C6 46 cri @ .6 @ @ 6 t-) CD cn- @v7@o-m- -t--m-om=N f, IW C4 4) CDF!C)W tn to 44 t.)Cmcjtq:@ -W@ 14 CD C-4 10 C4 40 Cb C4 0 CD &O'Mo 0 f) 0 C) 'O'n ID ,o 2l) 90) CD C4 t- e) C.) 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Ct @ @ Ct It a a 0 -. - j 1 -. -. t I I 44 r4 t4 n t4 14 to 41 N 4 0 1.0 a 0 0 .4 14 41 on In ,4 e 11 on 'o oh .4 0 c; 0 10 0 0 IA IA dp '30 0 co no- coo 'o C! t3 .04 .4 on 0 .4 0 .4 la C, a kV 14 I% IA to z M In Ai A) Ai As Al 61 Ai AS &I AS 444 4.044 444 444 Is' 'as sea BOB gas I 0. m Lr m N .04 0 .0c. to INW a- C3 'A I 10 to 0 0 0 0 In .4 tA 4p dP .0 dp 00 0 0 0 ic C! 0 co 0 0 c; c; 10 10 1.0 0 0 4h t4 .4 0 00 Co, CO, CO, 0 0 0 C! c; 0 r- t4 44 0 0 0 00 .4 0 0 0 Ct CO, o 00 C., ow, oft to b. n 4 C; r: 1; 0 .4 .04 0. 44 P4 14 Mr. Ron Bradley November 16,1996 Page 19 Conclusions Revised stabilized pro forma and discounted cash flow projections for each of the entertairunent venues have been presented in this restricted report. As stated previously, most emphasis has been placed upon the valuation of the subject entertairunent complex by the discounted cash flow analysis. This valuation method represents the approach a knowledgeable investor would most likely employ in the valuation of a specialized multi-component project such as the subject. The table presented below indicates the value of the consolidated operations of the subject to be $163,000,000. This value includes all income and expenses which are considered to be relevant for the property, including theater operations, food and beverage revenue, parking income, ticketmaster rebates, sponsorships, ticket surcharge income, merchandise income, and net income from the restaurant and retail shop leases. Entertainment Complex Value Summary Coml2onent -indicated Value Opera House $ 34,500,000 Cabaret Theatre 31,800,000 Little Theatre 3,600,000 Wild West Arena 56,500,000 Interactive Complex Virtual Reality Pavilion 7,000,000 Large Screen Theater 12,450,000 Game Center 5,800,000 Festival Square 2,850,000 Retail Center -8,550,000 Total Value $163,050,000 Rounded to, $I 63.QQQ,QQQ Mr. Ron Bradley November 16, 1996 Page 20 Correlation and Final Value Conclusion The subject project is a unique entertainment development. The project features various elements of other nationally recognized live entertainment operations combined with a good quality historic "Old West" theme. The development will build upon the existing ambiance of Old Town Temecula and tastefully incorporate state of the art theaters, restaurants, retail shops, and common areas within the existing Old Town architectural theme. By avoiding the excesses which have taken place at the other nationally recognized entertainment complexes (i.e., garish suburban sprawl and uncontrolled design and parking), it is our opinion that the subject development can establish a reputation as one of the premier quality music theater attractions in the country. Based on location, local demographics, and the potential for increased tourist traffic, we believe adequate demand for the events to be staged is present. This opinion assumes, however, an ongoing booking of first class talent and highly competent management. The development has been valued utilizing the cost and income approaches. The income approach includes both a direct capitalization method as well as a discounted cash flow analysis. The discounted cash flow technique is considered to be the most accurate and applicable for a complex property type such as the subject. This approach takes into account increases and potential revenues as well as expenses. Accordingly, the discounted cash flow analysis has been given primary consideration in the fmal valuation of the subject Old Town Temecula Entertairunent Center. Final Valuation Based upon the examinations and studies made, and as a result of our experience as real estate appraisers, opinions of market values have been formulated for the various components of the subject development. The opinions of values stated in this restricted report are predicated upon the following assumptions: IThe property boundaries, proposed uses, and areas as indicated on the maps and specifications provided previously are assumed to be correct. This also pertains to the information provided concerning the changes to the development plan which has resulted in revised square footage and seating capacity figures for the private improvements. 2.The public improvement cost estimates provided in this analysis are the same as those outlined in the original appraisal and are assumed to be correct and applicable as of the date of value. Mr. Ron Bradley November 16,1996 Page 21 3.The value formulated for the total project assuming completion of both the public and private improvements is based, in large measure. upon the developer's experience in the operation of live entertairunent venues. in addition to the developer's commitment to adequately market the project. 4.The proposed roadway improvements for the area as specified in the Western Bypass Corridor development plan will be implemented according to plans and schedules. 5.The subject property was physically reinspected on November 2-3, 1996. The opinions of market values included in this report are stated assuming economic conditions as existing on November 3, 1996. As a result of the appraisal and analysis made, and based upon the certification, limiting conditions, and assumptions stated herein, the opinion has been formed that the market values of the Old Town Westside Improvement Authority Community Facilities District Zones A and B, assuming conditions as existing on November 3, 1996, are as follows: Land Value Assuming the Public Improvements are Completed and In Place Zone A Land THIR TY-ONE MILLION DOLLARS ,U],QOO.gu Zone B Land Parcels A through D TENMILLION SEVEN HUNDRED THOUSAND DOLLARS ,UP, Z9 a 9 9-0 Zone B ]Land and Parcel E SIX MILLION NINE HUNDRED THOUSAND DOLLARS Mr. Ron Bradley November 16, 1996 Page 22 Total Project Value Assuming Completion of Both the Public and Private Improvements Zone A ONE HUNDRED SIXTY-THREE MILLION DOLLARS U61,00paw Zone B (Land Only) Parcels A through D TENMILLION SEVEN HUNDRED THOUSAND DOLL4RS = 700, 000 Zone B (Land Only) Parcel E SIXMILLION NINE HUNDRED THOUSAND DOLLARS 56,900,000 Additional data and analyses are retained in our files and available upon your authorization or request. Respectfully submitted, BROWN, CHUDLEIGH, SCHULER, AND ASSOCIATES @ @e4c GREGORY S. SCHULER California State Certified Appraiser License No. AGO 1 7213 WALTER H. CHUDLEIGH, III, MAI California State Certified Appraiser License No. AGO 1 9068 GSS:WHC:ts ASSUMPTIONS AND LIMITING CONDITIONS This report is made expressly subject to the following assumptions and limiting conditions: 1.No responsibility is assumed by the appraisers for matters which are legal in nature. 2.No opinion of title is rendered, and the property is appraised as though free of all encumbrances and the title marketable. 3.The appraisal covers the property described only, and the legal description is assumed to be correct. 4.No survey of the boundaries of the property has been made. All areas and dimensions @shed to the appraisers are assumed to be correct. 5.Information concerning market and operating data, as well as data pertaining to the property appraised, was obtained from others and/or based on observation. This information has been verified and checked, where feasible, and is used in this appraisal only if it is believed to be reasonably accurate and correct. However, such information is not guaranteed, and no liability is assumed resulting from possible inaccuracies or errors regarding such information or estimates. 6.The data contained herein comprises the pertinent data considered necessary to support the value estimate. We have not knowingly @thheld any pertinent facts, but we do not guarantee that we have knowledge of all factors which might influence the value of the subject property. Due to rapid changes in the external factors, the value estimate is considered reliable only as of the effective date of the appraisal. 7.The appraisers assume there are no hidden or unapparent conditions of the property, subsoil, or structures, that would render it more or less valuable. The appraisers assume no responsibility for such conditions, or for engineering required to discover such factors. It is assumed no soil contamination exists as a result of chemical drainage or leakage in connection with any production operations on or near the property. In addition, the existence (if any) of potentially hazardous materials, such as asbestos, used in the construction or maintenance of the improvements or @sed of on site, has not been considered. T'he undersigned appraisers acknowledge they are not qualified to render an opinion with regard to the presence of toxic materials, and recommend an environmental scientist be retained to determine the exact status of the property. No environmental impact studies were requested nor performed with regard to this appraisal, and the appraisers hereby reserve the right to alter, amend, revise, or rescind any portion of the value or opinions expressed herein based on any subsequent data discovered which could significantly impact the market value of the property. 8.The distribution of total valuation estimate in this report between land and improvements (if any) applies only under the existing or reported program of utilization. The separate valuation for land and improvements (if present) must not be used in conjunction with any other appraisal and is invalid if so used. 9.The assumption has been made that all required licenses, consents, permits, or other legislative or administrative authority, local, state, federal, and/or private entity or organization have been or can be obtained or renewed for any use considered in the value estimate. 10.The property is appraised as though operated under competent and responsible ownership and management. 11.Opinions of value contained herein are estimates. There is no guarantee, written or implied, that the subject property will sell for such amounts. It assumes there is full compliance with all applicable federal, state, local envirorunental regulations and laws unless noncompliance is stated, defined, and considered in the appraisal report. 12.It is assumed that all applicable zoning and use regulations and restrictions have been complied with unless a nonconformity has been stated, defined, and considered in the appraisal report. 13.The appraisers are not required to give testimony or to be in attendance in court or before other legal authority by reason of this appraisal without prior agreement and arrangement between the client and appraisers. 14.Disclosure of the contents of this appraisal report is governed by the By-Laws and Regulations of the Appraisal Institute. 15.Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers or the firzn with which they are connected, or any reference to the Appraisal Institute or to the MAI or RM designation) shall be disseminated to the public through advertising media, public relations media, news media, sales media, prospectus for securities, or any other public means of communication without prior written consent and approval of the appraisers. 16.The appraisers assume no responsibility for anv costs or consequences arising due to the need or the lack of need for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for flood hazard insurance. 17.The liability of the appraisers' company, its owner and staff, is limited to the Client only, and to the amount of the fee actually paid for the appraisal services rendered, as liquidated damages, if any cause of action should arise. Further, there is no accountability, obligation, or liability to any third party. The appraisers are in no way to be responsible for any costs incurred to discover or correct any deficiencies of any type present in the property; physically, financially, and/or legally. 18.The property boundaries, proposed uses, and areas as indicated on the maps and specifications provided previously are assumed to be correct. This also pe@ to the information provided concerning the changes to the development plan which has resulted in revised square footage and seating capacity figures for the private improvements. 19.The public improvement cost estimates provided in this analysis are the same as those outlined in the original appraisal and are assumed to be correct and applicable as of the date of value. 20.The value formulated for the total project assuming completion of both the public and private improvements is based, in large measure, upon the developer's experience in the operation of live entertainment venues, in addition to the developer's commitment to adequately market the project. 21.The proposed roadway improvements for the area as specified in the Western Bypass Corridor development plan will be implemented according to plans and schedules. 22.The subject property was physically reinspected on November 2-3, 1996. The opinions of market values included in this report are stated assuming economic conditions as existing on November 3, 1996. CERTIFICATION The undersigned appraisers certifv that thev have personally analvzed the propertv herein known as the Old Town Westside Improvement Authority Community Facilities District in Temecula, California; and to the best of their knowledge and belief, I . The statements of fact contained in this report are true and correct. 2.The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal unbiased professional analyses, opinions, and conclusions. 3 .We have no past, presen@ or prospective direct or indirect interest in the property that is the subject of this report and we have no personal interest or bias with respect to the parties involved. 4.Our compensation is not contingent upon the reporting of a predeterznined value or direction in value that favors the cause of the client, the amount of the value estimate, the attaimnent of a stipulated result, or the occurrence of a subsequent event. 'Me appraisal assignment was not based on a required minimum valuation, a specific valuation, or the approval of a loan. 5 .We are competent to appraise the property that is the subject of this report based on our previous experience appraising similar type properties. 6.Our analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. 7.The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 8.'Me Appraisal Institute has a policy of continuing education. This policy includes a program of voluntary recertification. "As of the date of this report, I, Walter H. Chudleigh, III, NMI, have completed the requirements under the continuing education program of the Appraisal Institute." 9.The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. 10.Walter H. Chudleigh. III, MAI, finds the content and conclusions of the appraisal and the report were performed in accordance with the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Institute. Walter H. Chudleigh III, MAI, has made a personal inspection of the subject propertv or comparable properties. Gregory S. Schuler has not personally inspected the subject property and comparable properties. 11.Dean Myers provided significant professional assistance to the persons signing this report. Respectfully submitted, BROWN, CHUDLEIGH, SCHULER, AND ASSOCIATES @ @41 GREGORY S. SCHULER California State Certified Appraiser License No. AGO 1 7213 WALTER H. CHUDLEIGH, III, MAI California State Certified Appraiser License No. AGO 1 9068 GSS:@C:ts ADDENDA 5 Subject Photographs TM Looking northwest along Third Street Looking west along Fourth Street View looking to the west along Main Street from the subject frontage within Old Town Westerly view along Third Street from near the intersection with Mercedes Street View to the east toward Interstate IS from near Fourth Street Existing terminus of Main Street immediately east of the Wild West Arena site I- Is --- - -- m View to the southwest across Main Street QUALMCANONS GREGORY S. S EDUCATION Bachelor of Science degree in Business and Marketingt Oregon State University, 1973. EMYLO Principal with Brown, Chudleigh, Schuler, and Associates, Medford, Oregon. Real estate appraiser specializing in industrial and commercial properties, 1981 to present. Pulver & Leever Commercial Real Estate, Medford, Oregon. Real estate marketing specializing in commercial and industrial sales and leasing, 1976 to 1980. PRO"SSIONAL TIONS State Certiried Appraiser in the following states: California License #AGO17213 Michigan License #1201002555 Oregon License #CDOO268 Georgia License #003805 Washington License #270-11 Nevada License #01055 Colorado License #CGO1322089 MAI Candidate: Appraisal Institute courses completed: Real Estate Appraisal Principles Basic Valuation Procedures Capitah=tion Theory and Techniques Courses 1, 2, and 3 Standards of Professional Practice (1997, 1991) Licensed Real Estate Salesperson, State of Oregon. QUALMCATIONS WALTER K CHUDLEIGH MAI EDUCATION B.A. in Economics, Brigham Young University, 1971. M[BA with specialization in Real Estate and Finance, Indiana University,, 1973. FI"LOYMMNT Brown, Chudleigh, Schuler, and Associates, PrincipaL Independent real estate appraisers and consultants providing appraisal, feasibility, and consulting services throughout the country. Principal Lawrence E. Brown & Associates, Stanford, Connecticut 1984 to 1997. Principal, Chudleigh & Company, New Haven, Connecticut. 1977 to 1984. Associate, Landauer Associates/Shattuck Company, Los Angeles, California. 1973 to 1976. COMIP "PIIJCATIONS Designed and implemented discounted cash flow, equity yield, and land development computer models applicable to real estate investment analysis. TM G AM LE G Instructor in Advanced Real Estate Valuation, Finance Department, University of Southern California, 1974 to 1976. CONTREBUTING AUTHOR "Real Estate Investment Yield as Correlated to the Rate Shown in Money and Capital Markets," The Real Estate Appraiser and Analyst. "The Application of Correlation Matrix Analysis to Real Estate Appraisal," The ARpraisal Journal. "Computer Aided Graphics for the Appraiser," The Appraisal Journal. "The Impact of the Installation of Public Sewers on Commercial Property Values," The AIRpraisal Journal. PROFESSIONAL MSMPS American Institute of Real Estate, (MAI Designation), Certified through December 1"6. Financial Management Association Member, Urban Land Institute Licensed Certified General Appraiser, State of Connecticut, NCGO37 Licensed Certified General Appraiser, State of Utah, #CGO0038645 ACADEAUC TIONS Omicron Delta Epsilon, National Economics Honorary Society, Brigham Young University, 1969. Beta Gamma Sigma, National Business Honorary Society, Indiana University, 1973. COURT EXPERIENCE Qualified as an expert witness in State and Federal courts in the following states: California Connecticut Utah Has testified in the following type cases involving commercial property: Comdemnation Bankruptcy Tax appeals Major cases are as follows: -300 property sewer assessment district in Orange, Connecticut for the municipality -400,000 square foot mixed use complex in Hartford, Connecticut for GE Credit -250,000 square foot specialty shopping center in Salt Like City in foreclosure for Equitable Life -275,000 square foot industrial park in Torrance, California for Heller, Ehrman, White, and McAufiffe, on behalf of Aldrich, Eastman and Waltch (AEW) APPENDIX D FORM OF OPINION OF BOND COUNSEL [TO BE PROVIDED BY BOND COUNSEL] [L289429.81 D-1 APPENDIX E GENERAL INFORMATION REGARDING THE CITY OF TEM[ECULA The following information is included in this Official Statement for informational purposes only. The City has no liability whatsoever with respect to the Bonds or the Local Agency Bonds. THE CITY OF TEMECULA Following a vote by the residents on November 7, 1989, the City of Temecula ("City") incorporated under the general laws of the State of California on December 1, 1989. The Temecula Community Services District ("TCSD") was also established at that time. The TCSD is responsible for providing parks and recreation services to the residents of the City, as well as street lighting and slope maintenance in certain areas of the district. Other govenunental entities, such as the State of California, the County of Riverside and various school, water and other districts also provide various levels of service within the City. However, the Temecula City Council does not have a continuing oversight responsibility over these other governmental entities. ECONOMIC CONDITION AND OUTLOOK Located on Interstate 15, the City is 45 miles south of Riverside and 60 miles north of San Diego. The City's approximately 35,650 residents are offered a broad range of housing options from apartments to luxury custom homes with the median housing price at $192,000. Temecula's economic base is anchored by a number of firms specializing in biomedical technology and supplies, high technology controllers and semi-conductors, among others. The City's retail base is also experiencing growth. During fiscal year 1990 - 91, a 429,175 square foot regional center opened and another 273,584 square feet was occupied in fiscal year 1991 - 92. Temecula is also home to twelve auto dealers including Honda, Toyota and Nissan. GENERAL INFORMATION ALgiculture. The climate and soil in the City are particularly favorable for growing avocado, grape, and citrus crops. There are currently twenty agricultural management firms in the Temecula area which manage agricultural production of thousands of acres of land owned by individual investors, partnerships and corporations. The agricultural managers apply economies of scale by combining many small and medium sized parcels of land as if these parcels were one large ranch. [L289429.81 E-1 In addition, a substantial wine industry has developed in the City and the surrounding area. Approximately 4,000 acres of land are planted with grapevines. There are currently twelve wineries which produce wine with locally grown grapes. Climate. Warm summers and moderate winters are typical of the overall City climate. Annual average precipitation is 11.58 inches and annual average temperatures range from an 80.5 degrees to a minimum annual average of 46.3 degrees. Education. The City serves one of the fastest growing school districts in the State, according to a report issued in August 1990. The Temecula Valley Unified School District has five elementary schools, two middle schools, one high school and one continuation school. The total number of students in the Temecula Valley Unified School District jumped from approximately 6,000 to 9,000 at the end of the school year in 1991. The University of California, Riverside has opened an extension center in the City and Mt. San Jacinto Community College has opened a new campus ten miles north of the City to serve the growing population. Tranortation. The City is bisected by Interstate 15 which directly connects it with San Diego and Interstate 10 leading to Los Angeles. Interstate 15 also directly connects with Highway 91 leading to Orange County and Interstate 215 leading to San Bernardino. The following charts provide additional information about the City and its environs. [L289429.81 E-2 NOV iS 196 03:iBPM P.2/ii Chy of T by U" Of ad @@ww bt Pmu uld Tna 1990 1,741,086 $ 45,661 $ 1,040,796 $195,05 $ 7,220 43,373 55t673 $ 3,135,M9 1991 7,931,203 1,470,552 3tOOO.442 8,CW,496 145,513 511,522 120,559 21,205,587 L992 13,586,731 1,424,657 2,919,900 7,254,3U7 100,423 9-A,677 111@ 2r)=,839 L993 17,9N,Z75 I,RgOg 3,6*,W S,9M,391 59,465 1,Ofd,157 44,161 30,$40,748 L994 18,M,321 Z,ln,316 3,449,405 7,45%070 101,WG 1,09,014 141,912 33,Z2,9" 1995 13,239,M 2,095,552 3,923,097 7,150,430 105,229 2,@23 347,116 34,700,480 L9% 11,246,"7 2,157,699 3,833,106 7,097,W3 95,2ZI 3,OdC455 229,451 33,758,152 NOW AIL faW Mm for an 1, IM. Sanxw: Cily of T F'@ 75 NOV iS '96 03:iSPM P.3/ii MofT Gm@ P*b cow EW I" 1990 $ 615,L52 5 97,414 7,= $ 195,3% 346,330 $82,579 $ 1,344,W 1991 1,919,70U 2$Z7,974 $15,2A7 4,293,252 1,132,293 1,254,320 17., im 3,051,171 4,404,213 1,457,874 3,100,710 3,164,247 3,77!P,781 20,987,9% 1"3 2,@183 3,952,037 2,720,393 6,438,M 3,MXZ B@,298 $ 145,723 28,411,8" 1994 2,911,112 4,201,80 1,836)452 7@PW4 41,013p9l9 6,lddSn 1,859,371 28,518,,159 1995 2,M768 3,057,103 2,421,139 7,158,$Ig 4,M,W 4,IA226 l,"3,Vn 23,203,273 199d 3,207,502 5,519,10 2.ld6,"2 7,300,LW 5,294,291 9,8",735 i,"S,665 35,318,503 Noft: aR pv find Wu for dnoo on 1, l9t9. - City of T P D 76 NOV iS 196 03,.IBPM P.4/ii Of T Md van Of T@le (v@ In Taal Not list TOWI E& Ed v YAbi2 2,=,491 $(11,913) $ 2XO,Sn S (Z7@ 2,192,651 2,1@651 im 2,626,500 (lS,3" 2,611,204 cm@ 2,SW,701, 2,590,701 im 2,904,762 Mill) 2,022,6Sl (34,149) 2,"S,502 2,949,502 1994 31=130 CM.7LO) 2,M,630 (3P,449) 2,PS9,192 2,059,182 1995 3,015,%7 (2pt9m 2,925,ml (44,0&2) 2,941,879 2,041,979 106 3,167,918 (34,277) 3,123,S41 (47,@ 3,OBS,6-M 3,OAS,626 Ntft: DaU -E k- 1, JM; SC, IWO ig smft Ih cmm off= 77 NOV i5 196 03:igPM P.5/ii Cfty of T C no B&A Depookst oW V@ ("d" in *o v@ (3) of Number of unin YWUD 232 $ 16,717 387 $ 6,407 $1,270,735 $ lM3,306 im 158 902 337 lose 1,473,713 1,4S4,"3 1"3 im 6,316 sm $0,347 1,=,"7 1,4&P,077 1"4 130 10,639 1,226 113,002 1,4",707 1,539,257 1995 162 29,223 90 85,410 1,476,339 1,677,7M 1996 136 23,572 987 93,674 1,U7,175 1,866,21S Neft, Due of (1) CiW of TV"ld;no ad Sday (2) Da?A (3)C@ Lacd Use a 79 NOV 445 '96 03:i9PM P.6/ii city d T Tax and owftppwz Bode cam v@ F@ Yar city 5@ water TAM -Rftw ni@et N."" Tahl 1991 s 1.0000 50.0492 50.4565 $ 1.5057 1992 1.0000 0.1469 0.4469 1.5937 1993 1.0000 0.0714 0.4440 1.5154 1994 I.OOW 0.0543 0.4429 1.4972 1995 i.ww 0.0685 0,4175 1.48W 1996 l.oow 0.9441 0.3720 1.4664 Note: Date of tion wu 1, 1999; or, 1990 ftn ig una@ble. Smee: Ri County Assessor's Oface 79 NOV 15 '96 03:@ P.7/ii Cft of T @pa Ownas .but 30- 19% v TOW An@ 4.12% 2,665 A& 64,904 2.ust Rml Dev 51,@ 1.60% xkpt"@l@ 32,1$D 1.00% cue, 20,146 0.61% 3BA6 IPXW"tim, I=. Dev 12,134 0,63% Pait T 1-ited Ral 14544 0.52% Pmk P@l" --hif Red@ IS,482 O.Ag% p 15.-277 0,4199 Rw@ C@ Tax Rob so NOV iS 196 03:20PM City of Temecula SW" Tax ow - - I Eirm 'Rn@p-qq @ndnn AM PM Markxt Amcrican Material LJSht Ind@ ChanneJl Commercial Co Light Ind@ Chevron USA, Itic. station Cuim Jumper P." cin & Food Mart Scrviw Station @dant CoiLporafion (fOrMerly Ad Ught IndUSaW Elank's @wm & Lumber Hardwm Store Ian W@ RV Motor V@ Dealw x @ store Lue4i I stow mmrls swm mobil oil s@SuLtion Nium of T V@ Dealer Nacm Acm Honda mokw v@ lqo= er 7cep Vehicle Dealer Chgmld Buick Geo Mokw Vebicle Dealer Pep Boys AL40 Parts St= @ Castro Pro@ul Hospitol Supply Light itidusftw Rancho Ford motor vehicle Ti @ P@y Apparel T-uset Department Store Toyota of Temecula V@ Motor V@le Source: UtL-r, de & As NOV is 196 03:2ipm P.iO/ii Cky of T Lonat EE*oyas by N of @oyea Number of t 1,577 T v@ u@ School 1,138 ow 627 Diversi@ Tempmq 413 Hudson Cue, Im. 400 PToftgonal BoVital Supply 400 Ewdii in 243 opto 22 217 SWAP in@@ I=. 210 Channdl C 199 Tom@ Crock Inn C%ff Rwrt 185 @ costm 179 T@ 175 LU04 Storce 155 Plant Moment, I=. 145 California 140 cwm Jumper 136 is 125 Si= p 120 R=bo Water Distdct 117 K-Mart Corpomdm 116 w 110 Tension En@ 106 Com's Rcmumt 100 City of Te Business 14cmw Listing 83 NOV iS '96 05:46PM P.3/3 @ of T DmoSmp It md Date Dember ip 1989 Form of pv t co ar City Area 26 V= miks s@ 200 milu City Main@ $mm 145 @ by *c County of Riv=& Number of I Numbcr of Volumes 80,000 POHM Pro ad by On County of Riverude Number of S 2 Number of Sworn Officers 42 by the County of Rivm& Number of S 3 Number of F@htm 35 Parks 18 Par@, 245 acres (142 davdoped acm) Bmployeu (Autho@ posidms) 96 N of registered voters 21,006 P 1990 8,324* 1990 25,950* 1995 39,286** 1996 41,854** Source: City Of T ts According to U.S. Census StiLte Of Califomia, L of P 84 APPENDIX F FORMS OF CONTINUING DISCLOSURE CERTIFICATES [TO FOLLOW] CL289429.81 APPENDIX G MAP OF DISTRICT @89429. 81 G-1 MR-25-96 MON 16:53 CITY OF BEAUMONT FAX NO. 9098458483 P. 08 IT I MAP OF ZONES OLD 'I"OWN/WESTSIDE COMMUNITY FACILITIES DIS-RICT FINANCING AUTIJ.ORITY COMMUNITY FACILITIES DISTPICT No. I (OLD TOWN AREA PUBLIC IMPROVEMENTS) COUNTY OF RIVERSIDE. STATE OF C,",.LiFOItNIA ZM A off am APPENDIX H OLD TOWN TEMECULA OPERATING PROJECTION CL289429.81 H-1 FINANCL4,L PROJECITON OF OLD TOWN ENTERT NT, LLC The following is a Financial Projection (the "Projection") of operations for Old Town Ente ent, LLC for each of the three years following the grand opening of the Project, which is anticipated to occtw on May 1, 1998. The Company was the sole preparer of the Projection and the Projection is as of September 30, 1996. The Projection is based on the Company's current best estimate of the results h expects, given the Company's projected assumptions described in the Summary of SiV&icant Projected Assumpbons and Accounfin Policies for the penods presented (set forth below). The Company does not intend to update or o revise the Projection to reflect events or circumstances or an'sing after the date of this OfTicial Statement or to reflect the occunrence of unanticipated events, except as required by applicable law and any continuing disclosure obligations. The Projection is based upon a number of estimates and assumptions that, while presented with numerical specificity and considered reasonable by the Company, are inherently subject to significant bminess, economic and competitive un es and co@encies, many of which are beyond the control of the Company, and upon assmnptions with respect to future business decisions which are subject to change. The Projection assumes, among other things, the Project wiD open as scheduled, wiR be successful and wiD attmct a substantial number of visitors to Temecula and a substantial nmnber of such visitors will visit the Project. The success of the Project is subject to uncertainties and confinencies beyond the Company's control. Accordingly, there can be no assurances that the projected results will be achieved. The Projection and actual results will var-y, and those variations may be material. The inclusion of the Projection herein should not be regarded as a representation by the Company or any other person that the Projection will be achieved. The Projection is provided by the Company solely for the purpose of a prospective investor in assessing the basis upon which the Company will be able to make the special tax payments associated with the Project and not for purposes of assessing equity value. Prospective investors in the Bonds are cautioned not to place undue reliance on the Projection. [L289429.81 OLD TOWN ENTERT NT, LLC PROJECTED STATEMENT OF OPERATIONS (in thousands) YEAR 1 2 3 REVENUE: Admissions $38,609 $42,367 $43,638 Touring, Recording and Television Productions 7,715 11,335 16,359 Retail, Food and Beverage 16,709 19,316 19,818 Parking, Sponsorships and Other 5,414 5,995 6,302 Total $68,447 $79,013 $86,117 COSTS AND EXPENSES: Production $22,660 $26,020 $26,800 Touring, Recording and Television Productions 6,628 9,225 13,972 Retail, Food and Beverage 7,128 8,001 8,242 Marketing and Advertising 1,984 2,181 2,247 Real Property Taxes 966 986 1,005 Community Facilities District 1,558 2,456 2,456 Parking, Sponsorships and Other 3,599 3 8@16 3,929 $44,523 $52,685 $58,651 GENERAL, ADMINISTRATIVE AND OTHER EXPENSES 5,461 6,706 69@07 EBITDA $18,463 $19,622 $20,559 [L289429.81 S Y OF SIGNIFICANT PROJECTED ASSUMPTIONS AND ACCOUNTING POLICEES For the fwg fWl three years of operations Introduction The foregoing Projection presents, to the best of management's current and actual knowledge and belief, the Project's expected results of operations for the three-year projection period, assuming the development of the Project with a grand opening on May 1, 1998. The Projection reflects management's judgment based on present circumstances of the most likely set of conditions and management's most likely course of action, to the extent such conditions or actions are anticipated to affect the results described in the Projection. Because the Company has not commenced operations and, accordingly, has not revenues, the Projection is not, and cannot be, based on actual operating results. The assumptions described herein are those that management believes are significant to the Projection or are the key factors upon which the results shown in the Projection depend. However, not all assumptions used in the preparation of these statements have been set forth herein. The Projection was prepared by management in good faith and is based upon a variety of estimates and assumptions, which though considered reasonable by management, may not be achieved and are inherently subject to significant business, economic, regulatory and competitive uncertainties and contingencies, including possible competitive responses, many of which are not within the control of the Company and are not possible to assess accurately, and upon assumptions with respect to future business decisions which are subject to change. Therefore, the actual results achieved during the projection period will vary from those set forth in the Projection, and the variations may be material. The Projection assumes, among other things, that (i) the Company will own and operate approximately 275,000 square feet of facilities located on approximately 53 acres in Temecula, California, which combine legitimate theater, live entertainment, sports, retail and dining, together with a recording studio, a theatrical production facility and television broadcast capabilities, and parking, as more specifically described in the Preliminary Official Statement; (ii) the Company will obtain all necessary licenses, permits and meet other governmental requirements and not be adversely involved with any major legal proceedings which could affect its revenues or expenses; (iii) the Company will acquire the land for the Project, complete construction and incur pre-operating costs within its budget; (iv) the Company will be able to continence operations (substantially as described in this Preliminary Official Statement) on May 1, 1998; (v) the Old Town Public Improvement Bonds will be issued and the related improvements, including two new bridges and the Western Bypass roadway, will be completed on schedule; (vi) the financing described in "Financing Structure" below is consununated; and (vii) there will be no change in generally accepted accounting principles that may have a material effect on the financial results of the Company. If such assumptions are not met, the actual results may vary from those set forth in the Projection, and the variation may be material. The Projection is as of September 30, 1996. The Company does not intend to update or otherwise revise the Projection to reflect events or circumstances existing or arising after the date hereof (other than pursuant to any continuing disclosure agreement with the issuer) or to reflect the occurrence of unanticipated events. Prospective investors in the Bonds are cautioned not to place undue reliance on the Projection. CL289429.81 -4- Methodology and Hypothetical Assumptions Method@ The Company has drawn upon the combined experience of its management expertise, supplemented by outside consultants and industry participants, to prepare this Projection. Management has reviewed, where available, infonmtion such as demographics, visitor statistics and consumer spending surveys. HyRothetical AssgMtions The Projection is based on the assumption that the Project will be developed with a grand opening on May 1, 1998, using Senior Notes in the amount of $60 million and Subordinated Notes in the amount of $22 million, with interest rates of LEBOR plus 2 % (7.625 % for the Projection period) and 12.5 % respectively. The Projection is based on the assumption that most categories of revenues and costs and expenses will increase annually at the rate of 3 % in years subsequent to year one. Summary of Significant Accounting Policies Organization Costs Organization costs are being amortized over a 5-year period. Pre-gRerating Costs and EM&nses Costs and expenses incurred that are directly related to the development of the Project, such as interest, property taxes, architectural and engineering costs, have been capitalized. General and administrative expenses have been expensed as incurred. Land, Buildings and EguiRment Land, buildings and equipment are stated at cost. Improvements and repairs which extend the life of the asset are capitalized. Maintenance and repairs are expensed as incurred. Depreciation of buildings and equipment is calculated using the straight-line method over the estimated useful life of the asset or the related lease term, whichever is shorter. Capitalized interest is estimated at $7,480,000 over the 16- month period of construction of the Project. The asset useful lives for the buildings and improvements are 39 years and for furniture, fixtures and equipment range from five to seven years. Production Costs Production costs associated with the creation of each separate production are defeffed to the opening of the production. Such costs, including set construction, props, costumes and salaries paid to the cast, crew, musicians and creative constituents during rehearsals, are then amortized based on expected revenues from each production. The carrying value of unamortized costs for each production are reviewed quarterly and, when necessary, written down to estimated net realizable value. CL289429.81 -5- Advertising Lxgenses Advertising expenses are charged to operations as incurred. Deferred Finance Costs Deferred finance costs are amortized using the interest method based on the terms of the related debt. Revenue Recognition Ticket sales and related event revenue are recognized on the date of the performance. Amounts received for sponsorships are deferred and recognized as revenue over the term of the sponsorship agreements. Income es No provision is made by the Company for federal and state income taxes, as such taxes are the responsibility of the individual members of the Company. Estimated Construction and Development Costs Constru The Project is projected to open on May 1, 1998. While the Company believes this target will be achieved, there is no assurance that the opening will occur by this date. fL289429.81 The total uses of proceeds from Members' equity contributions and the loans from inception to completion of construction and through a one-month "soft opening" are as follows (in millions): Project construction and related costs $61.6 Land acquisition 12.9 Furnitures and fixtures 0.6 Points, interest and other fmancing costs during construction 11.6 Pre-operating costs and expenses 14.5 Cash for working capital 1.4 Contingency 1.0 Total $103.6 Project Components Wild West Arena *6,000 seats Opera House 2,200 seats Cabaret 1,450 seats Little Theater 200 seats IMAX/IWERKS-type Theater 300 seats Festival Square 2,000 capacity Virtual Reality Theater 24 seats Game Center 5,300 sq. ft. Restaurants 21,000 sq. ft. Specialty Retail 20,000 sq. ft. Parking 2,900 spaces *The Wild West Arena has a seating capacity of 7,200 for concerts. Major construction projects entail significant risks; however, the Company has entered into an agreement with Fluor Daniel, an equity member of Temecula Entertainment, LLC, for a guaranteed maximum price and a guaranteed completion date for delivery of the Project. Nevertheless, adverse developments could delay the project or increase its costs. Admission Revenues Projections for the Temecula market were prepared utflizing outside and in-house market research information. The demand for live entertairanent by market area residents was estimated using a three-step analysis: (i) determine the population in the market area based on distance from the Project; (ii) assess that population's propensity to attend live theater events through consumer expenditure surveys; and (iii)estimate the share of this market the Company will attract. To estimate the Project's ability to capture a portion of the visitor market, management considered the number of visitors to the region and to individual adjacent counties, and their lengths of stay, based on information provided by the California Division of Tourism. Based on the market projections and management's marketing analysis, the size of the facilities was set. After determining the number of visitors the Project could reasonably expect to attract, the Company estimated ticket prices. Ticket prices were set based on pricing at comparable theater markets and the local market area. [L289429.81 -7- Total Market Sin Demand forecasts were derived by analyzing anticipated demand of residents living within an 100-mfle radius of the City of Temecula, as well as visitors coming from beyond the 100-mile range. The 100-mile radius was established considering that the Project is adjacent to an Interstate Freeway and that travel time to the Project would be less dm two hours. The 100-mile radius was subdivided to forecast annual demand generated in three market segments around Temecula, as follows: Market miles Driving Time Primary 0 to 35 miles 20 to 40 minutes Secondary 35 to 60 miles 40 to 70 minutes Tertiary 60 to 100 miles 70 minutes to 2 hours Market Share After projecting the size of the Temecula market, the share of this market that the Project could reasonably expect to capture was estimated based, initially, on the proportionate share of the market, in terms of theater or arena seats, that it would represent. Based on these percentages, a range for capture rates was estimated for each of the market segments, as follows: Calculated Population Proportionate Managernent's Estimated of the Share of Ca2ture Rate Market Area the Market Higher Range Lower Range Primary 1,958,700 50.0% 50% 15% Secondary 6,533,700 17.0% 20% 5% Tertiary 8,623,900 13.0% 15% 3% Based on the population in the above market segments, based on information provided by Claritas, Inc., and estimating that $23 per capital per annum is spent on live entertairunent, total expenditures on live entertainment for each of the above market segments was determined. Next, the resulting wnounts were multiplied by the capture rate above noted as being the "lower range. " This resulted in a residential demand of approximately $20 million. Domestic leisure visitors to Southern California numbered 78.2 million in 1994. Considering the number of these visitors who traveled to Riverside, San Bernardino, Los Angeles, Orange and San Diego counties, and considering the number of visitors to the various individual attractions in these counties, as well as the attractions in other parts of the country, management estimated that the Project would be able to capture between 1 % and 2 % of these visitors. Multiplying the approximate average ticket price of $20 for the live theater attractions in the Project by 782,000 (I % capture rate) yields $15.6 million. Combining the $20 million for the local market and the $15.6 million for visitors, results in ticket revenues of $35.6 million. Admission revenues for the Project include the basic ticket price, plus a ticket service fee, a facility charge and an 8 3/4 % user charge. The ticket service fee is a rebate to the Project by the company (expected to be Tickeamter) which will sell and distribute tickets. It is estimated to be $.38 per ticket. [L289429.81 -8- The facility charge is a fee which is customarily added to the ticket price and has been added to all tickets, with the exception of tickets to the Festival Square which is not enclosed. The charge is $2.00 for the Arena and $1.00 for the other venues. The user charge is a surcharge established by the Redevelopment Agency of the City of Temecula. This surcharge is available for the unrestricted use of the Project for 35 years, after which a majority of such revenue is paid to the City. The accompanying Projection reflects admission revenue of $37,703,489 in year one. A sununary of key statistics concerning the venues for year one is as follows: No. of Average Total Average Annual Occupancy Paid Ticket Venue Performances % Attendance Price Wild West Arena 195 51.8% 634,725 $18.14 Opera House 416 55.0% 503,360 20.68 Cabaret 468 55.0% 373,230 20.45 Festival Square 36 47.5% 50,670 6.88 The above occupancy percentages are averages for the first year of operation, and are based ontheassumptionthattherewillbeapproximatelyl.7millionvisitorstotheProject. TheProjectionreflects an occupancy of 35 % during the first month subsequent to the completion of construction, prior to the Grand Opening. Management estimates that the occupancy during years subsequent to the year one will be 55 %. Other Revenues In general, the assumptions regarding other revenues are based on management's experience, supplemented by outside consultants and market research information. Other revenues operations consist of revenues from food and beverage, retail and restaurant leasing, food court, parking and advertising sponsorships. Food, Beverage and Retail It is management's estimate, based on comparable revenues at other major attractions and theaters, that food and beverage and retail sales for year one, by venue, will be as follows: Average Food and Beverage Sales Average Per Og u"ied Seat Retail Sales Paid Complementary Venue Per Occupied Seat Admission Admission Wild West Arena $4.50 $5.40 $2.70 Opera House 3.95 2.15 0.90 Cabaret 3.15 6.66* 1.65 Festival Square 2.76 3.92 3.07 *The performance in the Cabaret includes dinner, beverage or snack service. [L289429.81 -9- Virtual Realiiy and IMAX/IWERKS-Me Theaters and the Game Center Management believes that the Project's visitation base will support these attractions. Ticket prices and utilization rates have been estimated by management based on comparable theaters and complexes, as follows: Ticket price/ Per Capita S2;nding Utilization Rate VimW Reality $4.00 20% IMAX/rWERKS-type Theater 4.20 20% Game Center 5.00 25% Touring Shows The Projection reflects shows produced for the Wild West Arena and the Opera House which will tour. The show produced for the Wild West Arena will perform periodically in Temecula during the year following production and will subsequently tour for 26 weeks. The show produced for the Opera House will perform in Temecula for four weeks and subsequently tour for a year before returning to Temecula. A second show will be produced during the second quarter, perform during the first month of the third quarter and subsequently tour for a year. Key statistics concerning revenues associated with 26 week tours, the Broadway revival will only tour for 26 weeks during the first year, for each show are as follows: Average Number of Total Ticket Perfomiance Performances 0 ancv Attendance Price Broadway Revival 208 55% 326,040 $34.00 Wild West Show 91 55% 750,750 $18.00 Recording and Television Productions The Projection reflects $75,000 of revenue related to renting the Old Town Studios and Production Center and $285,000 related to revenue associated with the sale of 14 recordings during the first year of operations. During the second year, the revenue increases to $1,194,800, principally representing revenue associated with the selling of 54 recordings of selected performances in the various venues. Costs and expenses associated with the recording studio are estimated to equal 40% of revenue. The Projection reflects the production of 14 shows in the television studio during year one, with related revenue of $680,000, plus $50,000 for renting the studio. During years two and three, the Projection reflects the production of 18 shows each year with related revenues of $885,800 and $912,374, respectively, plus rental income of $51,500 and $53,045, respectively. The Projection reflects no revenue from any related residuals. CL289429.81 -10- Leasing - Retail and Restaurant Based on an analysis of the retail and restaurant space in the area surrounding the Project, rent has been established at $2.75 per square foot for specialty retail, with a 15% vacancy and collection loss factor, and $2.50 for restaurant space. Food Court Included in the Project will be approximately 14,000 square feet for a Company-operated food court. Based on the number of visitors reflected in the Projection, it is management's estimate that gross revenues will be $3,555,862 during year one, with associated costs equaling 76% of that amount. Parking Management estimates that 90% of the visitors to the Project will arrive by auto with the remaining 10% by coach. It is projected that 85% of the visitors who arrive by auto will utilize the Project's parking area, while 90% of those arriving by coach will use that area. Parking fees have been estimated at $5 for autos and $10 for coaches. SRonso h@i s Management has relied on its experience together with information available from other major venues to estimate sponsorship revenue at $1.8 million for year one. Operadn Costs and Expenses Assumptions In preparing the operating costs and expenses forecasts, management has drawn upon its extensive experience together with that of outside consultants. Direct costs are estimated to be as follows: Production Costs Venue As A Percentage Of Revenue Arena 75% Opera House 70% Cabaret 70% Festival Square 45% Virtual Reality Theater 20% IMAX/IWERKS-type Theater 30% Cost of Sales Service As A Percentage Of Revenue Food and Beverage 49%* Retail 20% Parking 20% Sponsorships 10% *Includes a 5 % management fee (see management fees). [L289429.81 Other expenses include advertising and marketing expenses and general and administrative expenses. The number of attractions offered at the Project will help reduce these expenses as a percentage of revenue compared to other live entertairmment venues. Management Fees Pursuant to a management agremnent, Ogden Entertainment Services ("Ogden") will provide to the Company initial oversight and ultimately day-to-day management and food and beverage services relative to the operations of the Arena, Opera House, Cabaret Theater, Festival Square, Virtual Reality and IMAX/IWERKS-type Theaters, the Game Center and the Company-operated food court, as well as certain conunon and related functions such as parking, maintenance, security, advertising, marketing, promotion and booking. Financing Stru@ The Projection assumes that the Project will have a total development cost of $103.6 million, which will be financed partly with $21.6 million of equity. It is further assumed that the Company will issue $60 million of Senior Notes and $22 million of Subordinated Notes. It is estimated that the construction and development of the Project will result in the Company drawing all of these facilities through the opening of the Project, with the exception of the amount necessary to pay the sixth quarterly interest payment on the Senior Note, which is due 18 months from the funding of the loans; that amount will be drawn when due. The Projection reflects an average interest rate on the Senior Notes of 7.625 % (LIBOR plus 2%), plus 1.5 points. Interest is payable quarterly in arrears; the first six payments will be fimded from the net proceeds of the Notes. Principal payments equal to 50% of cash flow are due quarterly beginning two years from the date of issuance and are due in full at the end of four years from the grand opening of the Project. The Notes are secured by a first priority lien on substantially all of the assets of the Company. The original principal of the Senior Notes will be drawn monthly during construction, as needed. Once operations conunence, a $4,000,000 line of credit will provide necessary working capital. The Projection reflects an interest rate on the Subordinated Notes of 12.5 %, payable interest only, semi-annually in arrears. Transactions vnth Members Pursuant to a Continuing Services Agreement among the Members, Fluor Daniel has agreed to providenecessary professional services to provide project management, scheduling, estimating and preldesign work for the Public Improvements associated with the Project and for the Project itself. Charges forsuch services to the Project are not to exceed $1 million. Fluor Daniel has contracted to construct the Project for a guaranteed maximum price of $61.6 million, including $2.3 million for equipment. EEC (or its assigned affiliate) has been granted the right to lease a 4,500 square foot micro- brewery and a 2,500 square foot coffee house, both in the Festival Square area, at an annual lease rate of $12 per square foot. Additionally, EEC (or its assigned affiliate) will have the right to operate kiosks, throughout the Project, for certain food and beverage service. [L289429.81 -12- RESOLUTION NO. 2 ATTACHMENTS Nov. lb. 1996 8: boam CP & F No. 0836 P. 2 CONSTRUCNON MANAGEbfVff AND SMRVISION AGREEMENT Betwem TEE OLD TOWN/WMME CO FACIUTIES DISMCT FINANCING AUTHORrrY CO FACIUTIES DISTRICT NO. 1 and FLUOR DAMEL9 INC. a C&Wornia Corporaflon Nov. l@. l@@b d: b [AM @e & f No. 0836 P. 3 TABLE OF CONTENTS DEFINITIONS 1 RECrrALS 2 AR'NCLE I ENGAGEMENT AND GENERAL DUTIES OF FLUOR DANIEL AS MANAGER 3 1.1 Engagement of Fluor DanieJ as M&Mer 3 1.2 Performance of Manager 3 1.3 Manager's Personnel 3 1.4M&Mer's Responsibilities for Management Costs &W Expenses 3 ARTICLE 11 MANAGER'S RESPONSIBILITIES 3 2.1 Manager's Services 3 2.2 Progress Meetings 4 2.3 Approvals and P@ts 4 2.4Design and Eng Contracts 4 2.5Construction Contracts 4 2.6Manager's Construction Supervision 5 2.7SchWWing I . . . 5 2.8Payment Applications 6 2.9Inspections and Construction Punch List 6 2.10Safety 7 2.11Books and Records 7 2.12No As@on of Contract Responsibility 7 ARTICLE M AUTHORITY'S RESPONSIBILITIES 7 3.1 Representatives 7 3.2 Notice of Defects 7 3.3 Perfbrmance of Contracts 7 3.4 Available Funds 7 ARTICLE IV COMPENSATION OF MANAGER 7 4.1 Management Fee 7 4.2 Reimbursement for Work Previously Perfomed 7 11-6-96/70S tetoemcu Nov. 15, 1996 8: 5 1 AM CP & F No. 0836 4 ARTICLE V iNs CB 5.1 Mauger,s lnswa= 8 5.2 Audiority @a= 8 5.3 Builder's Risk Insurance 8 5.4 Waiver of Subrogation 8 ARTICLE VI TP.RMINATION 8 6.1Te n by Mutual Consew 8 6.2T tion Upon Event of Default 9 6.3Payments Upon Termination 9 ARTICLE VII NSCELLANEOUS PROVISIONS 9 7.1 Assignftnt 9 7.2 Am@ent 9 7.3 Notices 9 7.4 Auorneys' Fees 10 7.5 Entire Agrftmnt 10 7.6 Governing Law and Venue 10 7.7 Sevembility 10 7.8 No Waiver I - 10 7.9 Successors and Assips 10 7.10 Force Majewe 10 7.11 Indemnity 11 7.12 Representafions and Rem@es 11 7.13 Damgu 11 Exhibit A Public Works Bid Procedures A-1 Exhibit B Description and Cost Es@e for the project B-1 @ibit C Schedule for the Project C-1 Exhibit D Work Performed Prior to the Execution of the Agreement D-1 D'ov. lb. 199b 8:51AM CP & F No. 0836 P. 5 CONSTRUCNON MANAGEMENT AND SUPERVISION AG This CONSTRUCTION MANAGEMENT AND SUPBRVISION AGRE (the meM") is made and entered into this _ day of , 1996, by aW among the OLD TOWN/WBSTSIDE COMMUNITY FACILITIES DISTRLCT FINANCING AUTHORITY, a joint exercise of powers age=y duly org@ and existing under the laws of the State of califonda (the "Authority"), for itself and on behalf of its COMMUNITY PAC DISTRICT NO. I (OLD TOWN AREA PUBLIC MMROVEUMNTS), a community facilities district, (the"District") and FLUOR DANIEL, INC., a California corporation (the "Fluor Daniel"). DEFEQ71ONS As used in this Agreement, the following tenns sW have the following m@s: "Act" me= the Mello-Roos Community Facilities Act of 1982, as @ed, being Chapter 2.5, Part 1, Division 2, Title 5, commcming with Section 53311 of the Gov Code of the State of California. "Authority" means @ Old Town/Westside Community Facilities District @ing Authority, a joint exercise of powers agemy duly organized &W existing under the laws of the State of California. "Available Funds" me= all @ on deposit in the Improvement Fund estabhsw pursuant to that certain Fiscal Agent Agircmut, dated 1996, by and between the Authority and "Bonds" means the $ Old Town/ Westside Community Facilities District Financing Authority Conunursity Facilities District No. 1996-1 (Old Town Area Public hwrovements) 19% S@ Tax Bonds. "City" mum the City of Temecula, a municipal corporation duly organized and existing under the laws of California. "Consult=" means a person or entity duly qualified and licensed to perforin all or a portion of the design and engineering of the Project, including without lirritation, architects, landscape architects, soils engineers and civil engineers. "Consultam Contract" means each agreernem between Authority and a Consultant for the design and/or engineering of all or a portion of the Project. 'Contract" means each agreement between the Authority and any Contractor for the performance of a portion of the Project. The term Contract includes each Consultant Contract. "Contractor" means any person or entity contracting directly with the Authority to perform the various items of the Project. ne term Contractor includes each Consultant. as fiscal agent. 11-6-96/705 temcmsu 1 Nov. lb. 1995 8: 5 IAM CP & F No. 0836 P. 6 "Cost Es@" mum ftg @ s@ult of the esthmed costs of the Project based on pre, engineering studies commissioned by the Manager, a copy of which is attgcw heaw as Exhibit D. "DirwAor' shall mean the Director of the Public Works of the City, acting as the autbo@ representative of the Authority for the purposes of this Agreement. "District" means the Authority's Community Facilities District No. I ("Old Town Area Public bwrov ") formed pursuant to the provisions of the Act. "Guarmw" means that docwnent dated whereby Fluor Corporation unde@ to guarantee the performance of Fluor Daniel under this Agreemem. 'Mawer'Fluor Daniel and its successors or assigns. "Plans" means any plans, specifications, drawings, charts, working drawings or odw written material prepared with respect to the Project and, if the context of this Agreement so indicates, which have been submitted to and approved by Authority. 'Project" shall mean those public improvements described in the Owner Participation Agr by and between T.Z.B.O., Inc. and the Temecula Redevelopment Agency, as by that certain Am@om to the Owner Participation Agreement, dated Much 26, 1996, by and between T. E.V., Inc. and the Agency, a copy of which is anded hereto and incorporated herein as Exhibit B. "Public Works Bid Procedures" means those bid procedures set forth in Exhibit A. "Pablic Works Dept" means the Public Works Department of the City. "Site" means the realproperty upon which the construction and installation of the Pro ect will take place. RECITALS WHEREAS, the Authority desires to construct or cause the construction of the Project in connection with the development of the Old Town Temecula EnterW=ent Center; WHEREAS, the Authority has formed the District @ on behalf of the District, has issued the Bonds to finance, among other things, the design, engineering, construction and installation of the Project; WHEREAS, Fluor Daniel is duly licensed @ qualified to provide the Authority with construction project management services in connection with the design, engineering, construction and installation of the Project, including, but not limited to, construction project design review and evaluation, construction mobd@n and supervision, bid evaluation, project scheduhm, cost benefit analysis, claims review and negotiation, and general management and administration of the Project, wW all such work will be performed under the direction and control of a licensed architect, registered engineer or licensed general contractor, 11-6-96/70S 2 Nov. 15. 1996 8 : 52AM CP & F No. 0836 P.7 forWHEREAS, Fluor Daniel desires to perform and assume responsibility and obligations cons=WOn "d mamgmmt services On the terms AW conditions set forth herein; and WHEREAS, the Authonty has dete@ned that benefit from the seraca of a cons Projectr to insure the timely, dficient and economical completion of the Project, and ft Authoritydesires to contract with the Manager for the construction manag=m services set forth herein On'the Wmand conditions set forth herein. NOW THEREFORE, it is mutually agreed between the respective parties as follows: ARTICLE I ENGAG AND GENERAL DUTMS OF FLUOR DANIEL AS MANAGER Section 1. 1 ement of Pluox @Ll as @m. The Authority hereby engages Fluor Daniel, subject to the Wm and conditions set forth in this Agremm, to perform the duties @ obligations as Manager set forth in this Agreement and Fluor Daniel agrees to perform such duties and obligations in accordance with the terms and conditions of this Agreement. Section 1.2 P-edomiance of Card. The Manqer cov with Authority to @er the interests of the Authority by fumid* its best skill and judgmem and cooperating with Authority, the Consultant and the Contractors . Manager agrees to its @rtise, business administration and m&Memeu services and to perfonn its duties and obligations under this Agreement in an efficient, expeditious and economical manner and shall =ploy, at a minirimm, generally @ed standards and practices utilized by persons engaged in providing @ar services as am required of Consultant hereunder in meeting its obligations under this Agrement. Section 1. 3 Personnel. The Manager shall provide adequate mW experienced administrativeand construction management personnel to perform the duties and obligations of Manager as described in this Agreement, and all such services are to be performed under the direction and control of a licensed @tect, registered engineer or licensed contractor. Section 1.4 @cr's R=onsibilities for @ gsts and The Manager shall be responsible for all costs and expenses incurred in connection with the performance of the Manager's duties and obligations under @ Agreement, including, without limitation, paymnt of salaries, fringe benefit contributions, payroll taxes, withholding taxes and other taxes or levies, office overh@ expenses, travel expenses, telephone and other teleco cation expenses, and document reproduction expenses. ARTicLE n MANAGERIS RESPONSMIUTIES Section 2.1 @et's Swim- . The Manager hereby agrees to perform the construction project management services described in this Article H in connection with the Project on behalf of the Authority. It is hereby acknowledged and agreed by the Authority and the Manager, that the Manager will not design, engineer, construct, install, test or inspect any portion of the Project, but 11-6-96/705 3 t Q@VA tn Nov. lb. 1996 8: 52AM CP & F No. 0836 P. 8 sW neso@ and prepare, on MWf of the Authority, Contracts do the Authority ShWi Met into with duly qualified and licensed Contractors to design, engineer, construct, @, test and dw Projed. Section 2.2 . The Manager shall schedule and amW regular s with Authority to discuss the progress and WWuling of the design, eng , co on and msWWion of the Project and to auess Mauger's compliance with the requirm" of ft Agreement. Section 2.3 %Ws and Pe@ts. The Manager shall process in a @y man= and diligently pursue all applications, plans and maps &W all other awti to the construction and installation of the Project and obtain all approvals and @ts and o@ entitlements required by applicable govenung bodies having Jurisdiction over the, Project. Any dwges or fm lr4ed by such governing bodies in connection with such approvals and permdta may be submitted to the District as a cost of the Project. Section 2.4 and &&mm - The Manager shall contact and recommend to the Authority any Consultants whose somees are rmwed in cm=ion with the design and engineering of the Project. The Manager shall negotiate with the prospective Consultants on behalf of Authority, and shall prepare agreements to be entered into between Authority and the various prospective Consultants, which ag ra shall comply in all respects with the r of Authority and all applicable laws. The Authority acknowledges that contracts with the design VA engineering Consultants are exempt from the mqu@ts of the California Public Contracts Code pursuant to the provisions California Government Code, Section 4525 @. @ Manager shall submit all Consultant Contracts to the Director for approval and execution. If the Authority disapproves a Contract, the Director shall, within five (5) business days of thereof, provide the Manager with a written st of such disapproval outl@ the Authority's reasons for such disapproval. The Authority and Manager hereby agree that, in dw event that the Authority disapproves a Contract, repre es of the Authority and Manager shall meet and confer within forty-eight (48) hours of such disapproval to resolve any concerns that the Authority has regarding the Contract. e+e, /,V" Lohr & Contract. Thouthority b ":s 'Oes cot & A i r ect. (b) CityDesignandEngineeringWork. TheDirectorsh&Upromptlyprovide the Manager with copies of all of the design and engineering work for any portion of the Pro ect p by dw City . Section 2.5 -C-Qnstruction Contracts. (a) Public Bidding. The Manager ", on behalf of the Authority, solicit bids for all of the Contracts for any portion of the construction and installation of the Project for which competitive bids are legally required by California law in @ manner described in Exhibit A hereto. The Authority hereby authorizes wW approves the Public Works Bid Procedures set forth in Exhibit A hereto. (b)Contracts. The Manager shall be responsible for negotiating, on behalf of the Authority, all Contracts a ry for the construction and installation of the Project. The Manager 21-4-96/705 4 10. l@@o 0 : DJRM @r &, p NO. Udio F. shall prepare the Contram to be emaw m between Authority @ the various proopwdve Co n, which Contracts sMU comply in all s with the reqai of Audwrity &W @l applicable laws. The Manager sWM submit all Contracts to the Director for approval and nation. Any such cow= submitted to the Director shall be approved and executed within five (5) business days. nc Authority and the Manager agree that, once such have been executed, the Manager shall administer all such contracts on behalf of the Authority. Within three (3) days of ft award of a Contract, the successful r dW] submit its detailed consamion sawule and a detailed schedule of values for approval by the Audiority and the Manager. If die Authority disapproves a construction schedule &W/or a schedule of values, the Director shall, within five (5) business days of receipt thereof, provide the Manager with a written s of such disapproval oudin'mg the Authority's reasons for such disapproval. The Authority and Manager hereby agree that, in the event the Authority disapproves a construction sc@e an&or a e of values, rep ives of the Authority and Manager sMI mm and confer within forty-eight (48) hours of such disapproval to resolve any concerns that the Authority has regarding the construction schedule and/or schedule of values. (c)Change Orders. Manager shall make recommendations to Authority concerning ary or desirable changes to the Project, review requests for @e orders, negotiate @c orders with the Contractor, and prepare such @e orders. The Authority hereby delegates to the Manager the authority to approve and execute all @e orders on the behalf of the Authority. AU change orders shall be paid by the Authority from the Available Section 2.6 's Construction The Manager 9WI @iv*2in a compatmi and sufficient staff at the Site of the Project to monitor the progress of the Project, provide administrative mangemem and related services required to coordinate the work of the Contractors. The Manager shall review all of the Plans prepared by the City and the Consultants. The Manager shall coordinate and supervise the Contractors to ensure satis@ry performance from each of the Co rs and to guard against de@ and'deficiencies in such Contractors' work. The Manager shall notify the Authority when the requirements of a Contract are not being met and shall infonn the Director of the course of action that will be taken by the Manager if the non-performing Contractor will not take satisfactory comwve action. The Authority hereby delegates to the Manager the authority to take action on behalf of the Authority to enforce the provisions of the Contracts. The Manager shall supervise die activities of all Contractors to avoid any unnecessary duplication of effort or any unnecessary. delay in the progress of the Work. Section 2.7 S- 'Me Manger hereby agrees to use its best efforts to cause the completion of the Project and payment of all of the Contractors for the Project pursuant to the terms of this Agreement in accordance with the schedule set forth in Exhibit C hereto. The Authority and the Manager agree to cooperate and use good faith efforts to cause the completion of all of the Project within U calendar months from the closing of the Bonds. Based on the Project construction schedule prepared in connection with the bid documents, and utilizing the Contractor's construction schedules provided by each of the Contractors, the Manager sMU update and reissue the Project construction schedule as necessary to show the cuzrent conditions and revisions to the Project construction schedule. The Manager shall promptly infom the Director of any anticipated delays in the completion of the Project. II-S-96/705 5 temcmau L 'J. I a JU 0 - i iitm r ot r rio. uoio r. i u Section 2.8 Appl@om. The Authority and an manger hereby a efte that @ gmtm cm sa@ can be achieved on dw C=mts if ft AWbonty aW ft can provide the Co rs with payment @dy. To achieve =a cost savings, the Authority and the Manager agree to @ the payment schedule set forth below. (a) Invoicei s@:ted bY manager. The Idanaga aw prepare written in'VOkft On a monthly basis for all work period p=UM to the Contacts in @ prior month. The invoices sUl be accompanied by all invoices or requests for payments from Contractors. nm Mftrity hereby authorizes the Manger to submit such invoices directly to the pixg Agent for the Bonds. A copy of such invoice, shall be su to dw Authority on the um day that it is nbmitw to the FbW Agent. The, invoices dW[ provide that, if the Fiscal Agent has not received a written statement disap such invoice from the Dimaor within five (5) days, the Fiscal Agent shall pay such invoices directly to the Manager. If the Authority disapproves in invoice, the Dirmor 5MI, within five (,5) days businmu d'LYS Of receipt thereof, provide ft Fiscal Agent uW the Mmpr with a written sta of such Val outlining the Authority's reasons for such disapproval. The Authority and ft Manager hereby Ww that, m the event that the Authonty disapproves an invoice, representatives of the Authority and the Manager shall meet @ confer Widk fbrty-eight (49) hours of such disapproval to resolve any cO that the Authority has regarding the invoice. (b) PaYment to Contractors. The M@ shall make its best cffort to PrePan chmb and disburse moneys to the Contractors in accorftm with the invoices or rqmts for pa within three (3) business days. (c) Reimbursmmt to the Manager. The Authority and the Manager hereby ledge, that the Manasa may, upon occasion @ in its sole dis@on, pay the Contractors d@y and u* reimbarsmmt for such payments, The Authority hereby agrees that the Manager may subnut invoi= to the Fiscal Asent for reimbursement of the actual costs incurred by the MaWr in p@ the Contractors . Such invoices will be submitted in the manner set forth in subsection (a) @e, and shall be ac cd by the invoices or requests for payments submitted by Contractors to the Mamger. Section 2.9 ons and COnStructiQu @ List. The Manager shall conduct such Wfiodic i@ions of the Project as are to process payment invoices, to monitor cOmP@ with the r@menm of the Plans and applicable laws, codes, ordiunces and regulations. Prior to processing any Contractor's @ application for payment, the @ger shall COW= a thorough inspection of the Project or the portion of the Project, perfo=W by such C or, shall a detailed "P@ list" which @ I= any item that require installation or repair @ sbAU name *t Party responsible for ng such installation or repair. The Manner shall be responsible for 9 that all punch list work is promptly and properly completed. The Authority and the Manager acknowledge and agree din the final payment for any Portion of the Project shall not be released by the Fiscal Agent until that portion of the Project has been i and found to be completed in accordance with the approved Plans by the City or the public entity that will own and operate such portion of the Project. For those portions of the Project that will be Died by other public entities or utilities, the Manager shall be responsible for obtaining such insp=Wns and providing written evidence thereof to the DirecEor. ll-G-H/705 te=mm 6 0 11 V V. L J. L @ Z)U u I i i AIVL tIr u r NO. uoio r. 11 Section 2. 10 The Manager ftH review the ufety program developed by @ of the Co n as @@ by the Contracts and coo the @ progra= for the project. Section 2. 1 1 Records. The Manager shall mai@ on a current basis, a record copy of all of the Plans, Contracts and change orders for the Project. The er smi @ all of the record& available for review by the Authority during normal business @ upon reasonable notice, Section 2.12 No AsLi=tion of CUM AM The Manager shall not be in breach of any of its responsibilities under this Agr@t a$ a MWt of any Contmctor's breach of its Co@ between the Contractor and the Authonty. ARTICLE EII AUTHORffY'S NSIB Section 3.1 . Authority, through its employees, shall be av@le to the Manager for consultation within a reasonable period of d= (not to exceed 24 hours) after mmger requests consultation with the Authority. The Authority Aa render decisions as promptly as possible, (not to exceed 49 hours) wW @h requested infornadon expeditiously. Section 3.2 Notice of Defects. If Authority becomes aware of any fault or defect in the Project, or nonconformance of the Project with the PIM, Authority shall give prompt notice thereof to Manager. Section 3.3 ELrfomiance of Contracts. Authority shall promptly petfom all of its obligations under the Cortracts. Section 3.4 &v-ailtble ftws. Authority &hall notify the Manager of the of the Available Funds, if any, within three (3) business days following Manager's notice requesft such infomation. AR77CLE IV COMPENSATION OF @AGER Section 4.1 Em. In consideration of the @r by Manager of the services requ@ under this Agrement, Authority @ pay to Manager a fee (the "Construction Managamem Fee") in an amunt equal to twelve percent (12%) of the payments payable to any Contractors pursuant to any Contract. Payments to Manager on account of the Construction Managq= Fee shall be nude concurrently with the payment by Authority of the full construction costs (without regard to retention) to which such payments Of the Construction Management Fee relate. Section 4.2 Reimbursement for Work Previously P@@- - The Authority and the Manager acimowledge that, prior to the execution of this Agreement, the Manager has con=mcd with the design and engineering of the Project. The Authority agrees to re@e Manager for the actual costs incurred in designing and engineering the Project, as verified by the Director. The Authority 11-6-96/70S 7 t@ou 0 Li V V. L J. I J @ U0 - @ i iiivi t, r o, p NO. Udib f. l@ h@y approves the payment of the actual costs for the design ad eng work pubmw prior to the exmdon of this Agr as set for in Exhibit D hereto. The ro@ for the work fbr w@ Mmgcr has advanced funds or paid costs shall be piud from Aviulable @, as soon u such moneys are available from the issuance of Bonds. ARTICLE V INSURANCE Section S. 1 Maugcr's The Manager shall wocker's compensation employer liability insurance and Comprehensive General Public Liability Insurance with a combined single limit of not less than $3,000,000. The Authority and the City slwl be @ as an additional insured on Manager's Comprehensive Ge@ Liability Insurance but only to the m= of Muqer's obligations to indemnify the Authority and City pursuant to Section 7. 1 1. The WWars policies @U contain an endorsement providing that written notice shall be given to the Authority and the City at least thirty (30) days prior to the tenniution, cancellation or reduction of coverage in the policy. Section 5.2 Authority's Insurance. @ Authority shall Comprehensive General Public Liability Insurance with a combined single limit of not less than $3,000,000. 'Me M&Wct shall be @ as an additional insured under such policy. The Authority shall include, in all contracts issued, provisions requiring that the Contractor name Manager as an additional insured in the policies required thereunder. Section 5.3 The Manager will m*int-2,n builder'& risk insurance on the Project covering the specified pcffls of fire, 11 riot and civil commotion, explosion, moke, hail, windstorm, earthquab and @ to the full la value of the subject to a $10,000 deductible except that the deductible for @quake shall be $100,000 and the deductible for flood shall be $25,000. The City, the Authority, ft District, the and all Contractors @ be named as insureds under this insurance. Section 5,4 Waiver-o o - The Authority and tlw Manager hereby waive any @ each may have against the other on account of any loss or danage occasioned to the Authority or the Manager, u the case nay be, @sing from any loss covered by the insurance maintained under this Agreement. T'he Authority and dw Manager mb, on behalf of their @tive insurance companies, waive any right of subrogation that such insurance company may have against the Authority or the Manager, as the cue may be. The foregoing waivers of subrogation shall be operative only so long as available in the State of California and so long as such waivers do not invalidate any such policy. ARTICLE VI TE@A77ON Section 6.1 T on by MutuaL-C-ons-mi. This Agreement may be terminated by the mutual, written consent of the Authority and the Manager. 11-6-96/70S 8 temcmau 0 J. 04hm @r & p No. U836 P. 13 Section 6.2 T- ion of DebWt. In @on to any other r*b of the Authority and the Manager to terminate dds Agreement, the Authority @ have the right to te this Agreememi upon written notice to the M=M that an Event of hu occurred. Each of the fbuowing events shU constitute an "Event of DefaWt': (a)The Manager shall fail to obwxve, perform or Comply with any term, covmm, agreement or ro@tion of this A which is to be observed, pufo@ or cmglied with by the Manager ber@er if such faihn sbW continue uncured for thirty (30) days @ the Authority gives die Manager notice of any faflure @ @ifies the nu= of @ @ ' unless such other failure is not rapable of being cured within said thirty (30) cal@ day period, 'm which event @ a failure shall not constitute an Event of DefaWt if the MarAM commences curative action within said thirty (30) day period and thereafter diligently prosecutes curative action to comp@. (b) Manager shall @t any fraud, entafion, breach of fiduciary duty, wiffw misconduct or intentional breach of a provision of this Agreement. Section 6.3 a @n Term@n. Upon a t n of this Ag pursuant to 6. 1, the Authority shall pay to manager any portion of the Cons@on Management Pw earned and unpaid as of die date of termination. Upon termination pursuant to subsection 6.2, no @r payment shall be made to the Manager. AR77CLE VII MISCELLANEOUS PROVISIONS Section 7.1 . The Manager may not voluntarily or involuntarily, @y or ind@y, sell, assign, hypothecate, pledge or otherwise transfer or dispose of all or any portion of its interest in this Agreement to any third party without the prior written consent of the Authority, which may be withheld in the Authority's sole discretion. Any attempted sale, usigmnent, hypoth@on, pledge or other transfer without such consent shall be void. Section 7.2 - This Agreement may be a=nded from um to tune only by a writing executed by the Authority and the Section 7.3 &QtL=. The address of each of the parties SMI for all purposes be as set forth below, unless otherwise changed by the applicable party by notice to the other as provided herein. If to Authority: With Copy to: 11-6-96/705 9 Nov, 15, 1996 8: 55AM CP & F No. 0836 P. 14 If to @er: Any wtices, consem, offers, accep@, elections, d &W other comimnications required or provided by this A da be in vmdq or by telex, teimm, or Wm tel cation @ty providing facsimile tr ion and shall be deemed to have been duly given (1) on the due of service when personally served upon die party to whom notice is to be given, or on receipt if sew by telex or telecopy, or (b) three (3) days after being placed in the United Stan mail when properly to the party to whom notice is to be given, by first class waU, registered or certified, postage pr@, at the address @ing above, or (e) one (1) day after having been sent by telegram. Section 7.4 ' Fees. In any judicial action between the parties to enforce any of the provisions of ft Ag t or any right of any party under ft A , regardless of whether such action or pr@ng Is prosecuted to judgment @ in addition to any other remedy, the unsuccessful party WWI pay to the prevailing party all costs @ @es, including reasonable attorneys' fees, incurred dwein by the prevailing party lp Section 7.5 @ Agg This Agr constitutes the ewre agreement between the parties with respect to the subject matter hereof &W supersedes all prior agr@nts and negotiations between the parties with respect thereto. Section 7.6 GoveminglAw ud Y=. This Agreement shall be enforced, governed by, and constnted in accordance with the laws of the State of California. Section 7.7 ty. If any provision of this Agrftmnt shall be invalid or unenforceable for any reason and to any extent, the rem2inder of this shall not be affected dmreby, but shall be akreed to the greatest extent permitted by law. Section 7.9 No K&cr. No failure or delay of a party in @ exercise of any right given to such party hereunder or by law shall constitute a waiver thereof, nor @ any single or @ exerc4se of any such right preclude other @cr exercise thereof or of any other right. The waiver by a party of any breach of any provision hereof shall not be deemed to be a waiver of any subsequent breach @f, or of any breach of any other provision he=L Section 7.9 Successors vA AssigN. This Ag t shall bind and inure to the benefit of the parties and their respective successors and assigns. Section 7.10 Force Maieure. Any delays in or failure of perfomum by the Authority or Manager, other than payme& of money, ftfi not constitute default hereunder if and to the extent such delays or failures of performance are caused by o s beyond the reasonable control of the Authority or Manager, as the case, may be, including but not limited to: acts of God or the public enemy; expropriation or confimdon of facilities; complimm with any order or request of any governmental authority; act of war; rebellion or sabotage or damage resulting th@om; fires, floods, explosions, accidents; riots or strikes or other concerted acts of workmen, whether direct or indirect; or any causes. 11-9-96/70S temcmau 10 Im IIOV. l@. two d : bbam @F No. 0836 P. 15 whether of not of the same cim or kW as those specifically above @, w@ are = w@ dw control Of ft Authority Of Manager respectively, and which by the =wise of reasonable diligence, the Authority or Mauger, respectively, is =61e to prevent. Mauga's SC@cs completion @s) rcquited under @ Agreement Wmll be adjusted to account for any force mjeure delay and Mmger,s Maria Fee under Section 4.1 Of this Agreement shall likewise be adjusted by the Authority to reimburse Manager for all costs @ed in connection with or arisiog from a force majeure CVCM, including but not limited to those costs incurred in the exercise Of reasonable diligence to avoid or ty. Tiae Authority fta ind@fy, hold @ess and defend the Manager(through legal counsel approved by the Manager) from and against any and iJI liability, loss, cost , damge and attorneys' fees resulting from or ar@g out of ma& by a Co r or any subcommor of a Contractor unless such claims result from the gross negligence or wfilful misconduct Of too M&Wer. Excvt as provided in Section 5.3, the Manager @ to , hold hWWeSS, and defend the Authority (through legal counsel approved by the Authority) from &W agwost any and all liability, loss, cost, cxpeme, damage and attorneys' fees unless such @ result from or Uking out of the Authority's gross negligence or willful misconduct. The Authority shall include Mamgcr as an addifioam indemnitee in all contracts issued by the Authority. Section 7.12o ations AW @ies. Mmgcr @ no representations, COvena=, WarfUMeS, Or MMantM, express or implied, other than those expressly set forth herein or contained in the Guarantee dated . The panies' rights, liabilities, responsibilities and r@es with respect to the Services " be exclusively those expressly set forth in this AS Indemnities against, releases from, assumptions of and l@tations on liability expressed in ft Agreement, as well as waivers of subrogation rights, shall apply even in the event of the fault, negligence or strict liability of the party indemnified or released or whose liability is @ted or assumed or against whom rights of subrogation are waived and shall extend to ft officers, directors, employees, licensors, agents, partners and related entities of such party and its partners and related entifies. Section 7.13 @wes. (a) Manager aM in no event be responsible or held liable for consequentw, inr-id=W, special or indirect damages, including without I emet2tion, liability for loss of use of the Project or the District's existing property, loss of profits, interest, product or business interruption, increased costs of operations and maintenance or staffm @, flowever the swm my be caused; and (b) the Authority hereby releases, indenwifies and agrees to hold Manager @ess from any liability arising from the Authority's or Authority's assignee's, ownership, use or operation of the PrOject, Of Any Part thereof. If the Project is to be owned or operated by a person or entity other Um the Authority, the Authority shall ob@ agreement of such other person or entity to die foregoing. mitigate a force. majeure event. Section 7. 1 1 11-6-96/705 0 tiov. Lf & No. 0836 P. 16 Execumd the day and year first above vmum. NUOR DANIEL9, INC. OLD TIOWN/W=IVDF. COMMUNITY FAC DIMMCT MANANG AUTHOMW By: By: Its: Its: Executive ATTEST APPROVED AS TO LEGAL FORM AND ADEQUACY- By: Authority Counsel 12 0 NOV. l@. l@@b d : @bAM CF No. 0836 P. 17 EXMBrr A Public Wodo Did The Authority uW the Manger hereby agree that the following P@ure AO be followed prior to the award of Contracts that are subject to public bidding. I . n 0 The Manager will. after cowultgtion with the @iwi@o Authority, create a list of not less than six (6) (unless mutually agreed to by the parties to have fewer bidders) and not more than eigk (8) Contractors that are pre-qualified to bid for each Contract. The, Manage ,r will solicit bkls by mailing or delivering notices rnmting bids to those Contractors who met &e pm qualification r@ - The Manager shall provide the bid packages to any such pr&quamed Contractors revming the sam. 2. t of B a a. In order to expedite the b@ process, the Manager shall bids while fmal plans are being completed, approved &W signed. Final plans will be @ as an addendum to the original bid documents. 3 .Contra;t Enuested. The bid package will require that the Contractors will be bid an all-Wdusive lump sum price to complete the work within the time @ specified by the, Manager and the Authority. The contract sW provide @t a ten percent retention shall be held on Contractors. The retention will be released upon acceptance of the work by the appropriate agency or the City. While Contractor suggested alternatives will be encouraged, but any exclusions or exceptions to Om base bid package will constitute a non-responsive bid that may be rejected. 4. O@ of - Bids. The bids will be received and opened by the Manager and the Authority at the fim and place designated in the notice inviting bids. All bid informticm will be available for review. A final addendum may be issued to some of the bidders for tW contract pricing (typically the 2 or 3 low bidders). 5. Award of tb-c@id. The Manager nmy recomwnd @ the Authority award the bid to a party that was not the low bidder based on superior qualifications. Within three (3) days of the award of a Contract, the successful Contractor shall be required to submit its detailed construction schowe and a detailed sch@le of values for approval by the Authority and the Manager. provide any Contractors that pr"ualify with a prel bid package for the purpose of p their 11-6-96/70S tells 0 Nov, 15. 1996 8: 56AM CP & F No. 0836 P. 18 ff B @pdan nd Cost for the projea 11-6-96/70S toomau 1 0 NOV. l@. l@@b b : @bAM @e & @ No. U63b F. 19 EXHIBIT C - Sdiedule for the Projed 11-6-94/70S 1 te@u 0 NOV. l@. l@Vb d: @bAM @@ & @ No, 0836 P. 20 rr D Work Performed Prior to dw Ex@on of the 12-6-96/70S te@u 0% & No. 0836 P. 21 suppr, AL LET= AMRE TO:Old Town/Westside Community Facilities District Financing Authority 43174 Business Park Drive Temecula, California 92590 Re:Construction Management and Supervision Agreement Dated between The Old Town/Weetsid-e Community Facilities District Financing Authority Community Facilities District No. I and Fluor Daniel, Inc. Gentlemen: This letter constitutes a supplemental Agreement to the above- referenced Construction Management and Supervision Agreement (the "CMSAII). Capitalized terms used herein are as defined or used in the CMSA. Pursuant to Section 2.5 of the CMSA, Fluor Daniel is responsible for the management and administration of certain Contracts for the construction of those public improvements described in the Owner Participation Agreement. Fluor Daniel guarantees that the aggregate costs paid to the Contractors performing such Contracts shall not exceed SEVEMEEN MILLION TWO HMRED EIGHTY-EIGHT THOUSAMD TWO HMRED TWO DOLLARS ($17,288,202) (the "Fixed Price") subject to the following: a)the Fixed Price may be increased or decreased subject to any cumulative change in the price of the individual Contracts pursuant to the change order and/or force majeure provisions of said Contracts; b)the foregoing guarantee of Fluor Daniel does not apply to any increase in costs incurred by said Contractors in performing such Contracts which costs are due to environmental subsurface conditions, governmental actions or events of force majeure as defined in the CMSA and the Contracts (hereinafter collectively referred to as the "Non-Guaranteed Costs") except only as to Fluor Daniells obligations as specifically set forth in subparagraph (d) hereof; c)Old Town Entertainment LLC (the I'LLCII) by separate document will guarantee the completion of the Project and will assume the Non-Guaranteed Costs; d)only after all funds available to the LLC or assets of the LLC have been exhausted to pay for such Non-Guaranteed Costs and all amounts recoverable from the Builderls Risk insurance provided by Fluor Daniel under the CMSA have been collected will Fluor Daniel be liable for the payment of any portion of such Non-Guaranteed Costs and then only to the extent 0 Nov. l@. 199b 6 : b'tAM CP & F No. 0836 P. 22 hereinaf ter provided. Fluor Daniel, s liability for such payment shall be strictly limited to that amount which Fluor Daniel has been paid as its Construction Management Fee under the CMSA but in no event shall such liability exceed one Million one Hundred Thousand Dollars ($l,loo,ooo). Furthermore Fluor Daniel shall guarantee completion of the Project within sixteen (16) calendar months (the "Project Schedule$') from the closing of the Bonds for the Project subject to the following: a)the Project Schedule shall be increased or decreased subject to any change in the time of completion of the individual Contracts pursuant to the change order and/or force majeure provisions of said Contracts; b)the foregoing period shall be extended due to delays caused by environmental subsurface conditions, governmental actions or events of force majeure as defined in the CMSA and Contracts. The foregoing guarantees by Fluor Daniel shall be effective until completion of the Project and final payment under the terms of said Contracts. FLUOR DANIEL, INC. By Title Nov. 15. 1996 8: 57AM CP & F No. 0836 P. 23 GU HE This Guarantee is given this - - day of 1996 by Fluor Corporation, a Delaware corporation ("Guarantor"), to Old Town/Westside Community Facilities District Financing Authority, a joint exercise of powers agency duly organized and existing under the laws of the State of California (the "Authority"), for itself and on behalf of its Community Facilities District No. 1 (old Town Area Public improvements), a community facilities district (the "District") , ( the Authority and the District hereinafter referred to collectively as the "Client"). WHEREAS, Client's willingness to enter that certain Construction Management and Supervision Agreement dated (the "Contract") between Client and Fluor Daniel, Inc., a California corporation ("Contractor") is conditional upon Contractor providing adequate assurance of its ability to meet all obligations under the Contract and the Supplemental Letter Agreement thereto; and WHEREAS, Guarantor is willing to provide such assurance by guaranteeing Contractor's performance of its obligations under the Contract and Supplemental Letter Agreement thereto in order to induce Client to enter into the Contract; and NOW, THEREFORE, Guarantor hereby agrees as follows: 8-26-96/705 oldto Nov. 15. 1996 8: 57AM CP & F No. 0836 P. 24 In consideration of client's acceptance of Contractor as a service Provider and entering into the Contract: 1. Guarantor hereby unconditionally guarantees performance by Contractor of all the obligations of Contractor under the Contract and Supplemental Letter Agreement ("Contractor Obligations") , all as and when required to be performed under the contract, in all respects strictly in accordance with the terms, conditions and limitations contained in the Contract. If Contractor shall at any time default in the performance of the Contractor Obligations, Guarantor will keep, perform and observe same, as the case may be, in the place and stead of Contractor. 2. This Guaranty shall continue through the expiration of the warranty period specified in the Contract; provided, however, that if Client advises Guarantor prior to expiration of aforesaid warranty period of any claim it has against Contractor, this Guarantee shall continue as to such claim until such claim is discharged. In the event there are any such claims pending at the time of the expiration of aforesaid warranty period, Guarantor may provide a bond in a form reasonably satisfactory to Client in lieu of continuing this Guarantee. 3. Any act of Client, or its successors or assigns, consisting of a waiver of any of the terms or conditions of the Contract, or the giving of any consent to any manner or thing relating to the 8-28-96/709 2 oldto Nov. l@. i996 8: 57AM CP & F No. 0836 P. 25 Contract, or the granting of any indulgences or extensions of time to Contractor, may be done without notice to Guarantor and without releasing Guarantor from any of its obligations hereunder, provided notice of any such waiver, consent, indulgence or extension has been given to Contractor. 4. Guarantor hereby waives notice of (i) any alteration or modification of the Contract, provided such alteration or modification has been duly executed by Contractor, and (ii) notice of default or demand in the case of default, provided such notice or demand has been given to or made upon Contractor. Guarantor shall have the benefit of any modification of the obligations of Contractor under the Contract, and shall also have the benefit of any settlement, compromise, or adjustment of any claims of Client arising out of or relating to the Contract. The liability of Guarantor hereunder shall in no way be affected by and Guarantor waives any defense by reason of (a) the release or discharge of Contractor in any creditor's receivership, bankruptcy or other proceeding; (b) the impairment, limitation or modification of the liability of Contractor or the estate of Contractor in bankruptcy, or of any remedy for the enforcement of contractor's liability under the Contract resulting from the operation of any present or future provision of the Federal Bankruptcy Code or other statute or from the decision in any court; (c) the rejection or disaffirmance of the Contract in any such proceedings; (d) the assignment or transfer of the Contract by Contractor; (e) any disability of 0-23-96/70S 3 oldto Nov. 15. 1996 8: 58AM CP & F No. 0836 P. 26 Contractor; (f) the exercise by Client of any of its rights or remedies reserved under the contract or by law except as otherwise may be limited by the contract; (g) any defense based upon any lack of authority of the off icers, directors, partners or' agents acting or purporting to act on behalf of Contractor or any principal of Contractor; (h) any defense based upon Client's failure to disclose to Guarantor any information concerning Contractor's financial condition or any other circumstances bearing on Contractor's ability to pay all sums payable under the contract; and (3'.) diligence, presentment, demand, protest and notice of any kind including, but not limited to, notice of protest, dishonor, nonpayment and acceptance. Notwithstanding anything in this Guarantee to the contrary, Guarantorle. obligations under this Guarantee shall not exceed the obligations of Contractor under the Contract and Guarantor shall have the benefit of any liquidated damages provision, liability cap and any other limitations or waivers of liability or exclusive remedies provisions contained in the Contract, including, without limitation, any waiver of indirect and cons @ ential damages. 5. Guarantor further agrees that it may be joined in any action against Contractor in connection with the Contractor Obligations and recovery may be had against Guarantor in any such action. Client may enforce the obligations of Guarantor hereunder without first taking any action whatsoever against Contractor or its successors and assigns, or pursue any other remedy or apply any 8-28-t6/705 oldto Nov. 15. 1996 8: 58AM & F No. 0836 P. 27 security it may hold, and Guarantor hereby waives all right to assert or plead at any time any and all surety or other defenses in the nature thereof including, without limitation, the provisions of California Civil Code Section 2845 or any similar, related or successor provision of law. 6. This Guarantee shall inure to the benefit of client, its successors and assigns permitted under the Contract and shall be binding upon Guarantor and its successors. 7. This Guarantee shall be governed by and interpreted in accordance with the laws of the State of California. 8.Guarantor hereby represents and warrants as follows: a. Guarantor is in compliance with all laws, regulations, ordinances and orders of public authorities applicable to it. b. Guarantor is a Delaware corporation organized, validly existing in good standing under the laws of the jurisdiction of its organization, and qualified to do business in the State of California. C. The execution, delivery and performance by Guarantor of this Guaranty (i) are within the power of Guarantor, (ii) have received all necessary governmental approvals, and (iii) will 0-20-96/705 5 oldto Nov. 15. 1996 8: 58AM CP & F No. 0836 P. 28 not violate any provision of law, any order of any court or agency of government, or any indenture, agreement or any other instrument to which Guarantor is a part or by which Guarantor or its property is bound, or be in conflict with, result in a breach of or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of its property or assets. d. This Guaranty, when delivered to Client, will constitute a legal, valid and binding obligation enforceable against Guarantor in accordance with its terms. e.Financial Statements. (i) All financial statements and data that have been given to Client by Guarantor with respect to Guarantor (A) are complete and correct in all material respects as of the date given; (3) accurately present the financial condition of Guarantor on each date as of which, and the results of Guarantor's operations for the periods for which, the same have been furnished; and (C) have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby. 6-26-96/705 6 oldto Nov. 15. 1996 8: 58AM CP & F No, 0836 P. 29 (ii) All balance sheets and the notes thereto with respect to Guarantor furnished to Client disclose all materials liabilities of Guarantor, fixed and contingent, as of their respective dates. (iii) There has been no adverse change in the financial condition or operations of Guarantor since (A) the date of the most recent financial statement given to Client with respect to Guarantor, or (B) the date of the financial statements given to Client immediately prior to the date hereof, other than changes in the ordinary course of business, none of which changes has been materially adverse individually or in the aggregate. f. Guarantor is not a party to any agreement or instrument materially and adversely affecting Guarantor's ability to fulfill its obligations under this Guarantee. g. All other reports, papers and written data and information given to Client by Guarantor with respect to Guarantor are accurate and correct in all material respects and complete insofar as completeness may be necessary to give Client a true and accurate knowledge of the subject matter. h. There is not now pending against or affecting Guarantor, nor to the knowledge of Guarantor is there threatened, any 6-28-96/70S 7 oldt,o Nov. 15. 1996 8: 59AM CP & F No. 0836 P. 30 action, suit or proceeding at law or in equity 0 r by or before any administrative agency that, if adversely determined, would materially impair or affect the financial condition or operations of Guarantor or would materially and adversely affect Guarantor's ability to fulfill its obligations under this Guarantee. 9. Guarantor covenants and agrees that, so long as any part of its obligations under this Guarantee remain outstanding, Guarantor will, unless Client shall otherwise consent in writing: a. Promptly and faithfully comply with all laws, ordinances, rules, regulations and requirements, both present and future, of every duly constituted governmental authority or agency having jurisdiction that may be applicable to it. b. Maintain full and complete books of account and other records reflecting the results of its operations, in form reasonably satisfactory to Client, and furnish to Client such information about the financial condition of Guarantor as client shall reasonably request, including, but not limited to, the following information: (i) immediately upon availability, but in any case not later than sixty (60) days after the close of each fiscal year of Guarantor, (A) a balance sheet of Guarantor as at the close of such-fiscal year of Guarantor, and (B) statements of income and expense and Nov. 15. 1996 8: 59AM C? & F No. 0836 P. 31 change in financial condition of Guarantor for such fiscal year (each of the foregoing shall set forth in comparable form the corresponding figures of the previous period, shall be in reasonable detail, and shall be certified by the chief financial officer of Guarantor), and (ii) such other information or data as Client may reasonably request. 10. No amendment or waiver of any provision of this Guarantee nor consent to any departure by Guarantor therefrom shall in any event be ef f ective unless the same shall be in writing and signed by Client, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on Guarantor shall in any case entitle it to any other or further notice or demand in similar or other circumstances. 11. Any notices which Client or Guarantor may desire to give to the other under this Guarantee must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the Tinited States Mail, certified mail, postage prepaid, return receipt requested, and addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice: 6-20-96/70S 9 Nov. t5. 1996 8: 59AM CP & F No. 0836 P. 32 To Client: Public Works Department of the City of Temecula 43174 Business Park Drive Temecula, California 92590 Attention; Director of the Public Works To Guarantor: Fluor Corporation 3333 Michelson Drive Irvine, California 92698 Attention:Lawrence N. Fisher Senior Vice President-Law These addresses may be changed from time to time by written notice to the other parties given in the same manner. Any matter served on or sent to Guarantor or Client in this manner will be deemed served upon receipt at the address indicated above as established by a declaration of personal service by the person serving the notice, or in the case of delivery by a document delivery service or certified mail, by the date on the return receipt received from such entities. 12. No failure on the part of any party to exercise and no delay in exercising any right or remedy hereunder shall operate as a waiver thereof; nor shall any party be estopped to exercise any such right or remedy at any future time because of any such failure or delay; nor shall any single or partial exercise of any right or 8-20-96/70S 10 *late 0 ". EI\4 4 APPROVAL CITY ATTORNEY DIR. OF FINANCE CITY MANAGER OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY AGENDA REPORT TO: Authority Members FROM: Ronald E. Bradley, Executive Director DATE: November 19, 1996 SUBJECT:Financings for Old Town Area Public Improvements and the Western Bypass Corridor - Formation Resolution and Sale of Revenue Bonds RECOMMENDATION: That the Old Town/Westside Improvement Authority approve the respective resolutions described below: 1Adopt a resolution entitled: RESOLUTION NO. IA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY REGARDING MEETINGS, ESTABLISHING A SEAL FOR AUTHORITY, DIRECTING THE FILING OF A NOTICE OF FORMATION WITH THE SECRETARY OF STATE, AND ESTABLISHING THE RULES FOR ITS PROCEEDINGS 2.Adopt a resolution entitled: RESOLUTION NO. IA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY AUTHORIZING ISSUANCE AND SALE OF REVENUE BONDS FOR THE PURPOSE OF FINANCING ACQUISITION OF COMMUNITY FACILITIES DISTRICT BONDS (OLD TOWN AREA), AND APPROVING RELATED AGREEMENTS AND ACTIONS BACKGROUND: The City and the Agency created the Old Town/Westside Improvement Authority (the "Authority") in September of 1995, and then terminated the Authority in April of 1996 because at that time it appeared that the Authority was not needed. In order to provide additional monies to complete public improvements for the Old Town and Westside areas of the City of Temecula, it now appears that the Authority is needed to participate in the R.-lagenda.rptIFinance.IA 11126196 sale of the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds (the "CFD Bonds"). The underwriter for the CFD Bonds has determined that a sale of the CFD Bonds to the Authority, and a concurrent sale of bonds by the Authority (the "Bonds") to investors the proceeds of which will be used to purchase the CFD Bonds, will allow for an efficient sale of the CFD Bonds at a premium, thereby providing additional monies for public improvements. Staff and consultants have reviewed the new bond structure and recommend its approval as in furtherance of the purposes of the CFD Bonds. The first Resolution listed above provides for certain housekeeping matters for the Authority. The second Resolution provides for the issuance of the Bonds and approves related documents. The Bonds will be payable solely from revenues derived from the CFD Bonds, and the Authority's liability in respect of the Bonds will be limited to such revenues. Neither the CFD Bonds nor the Bonds are obligations of the City of Temecula or the Redevelopment Agency of the City of Temecula. The Official Statement described in the second Resolution listed above contains detailed information regarding the proposed Bond issue. Authority Boardmembers should review the Official Statement and inform Staff of any misstatements, omissions or misleading statements therein known to the Boardmembers. It is expected that the Bonds will be offered for sale later this month, with the Bond closing to occur by the end of December. Attachments: Resolutions Indenture of Trust Bond Purchase Agreement - Local Agency Bonds (Document attached to Item No. 3) Bond Purchase Contract - JPA Bonds (Document attached to Item No. 3) Official Statement - (Document attached to Item No. 3) R. lagenda.rptiFinance.IA 11126196 O'3PTO S04/96 It-$ OT'4T.L AE As A.Ll'dOH,LaY Dxioxvxi-E joid.Lsia sailiiiova ;Zl@oc) aals.Leam/m4o.L ario NOIXydoddoo Idonlid -T41.xo; lee aAoqeuTeastj isxtj aqvp OtTi ;o se eeluexvnf) sttll polnoexe s-eq zoluL*aL,,nE) ljoaUgHt4 SSZ=jt4 NI 'APOula,x xO Z%IBTL 'Bt[10 Aue ;O OBTD.I;Dxs 8ti4 .70 ;09.zetll astozaxe is-qqxn; xo a;aqlo Aue eprLTD9-xd asPunG-xGlq APsm9a 9ESO 'ON WV69:8'% 9661 'Si 'AON RESOLUTION NO. IA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN/WESTSEDE IMPROVEMENT AUTHORITY REGARDING MEETINGS, ESTABLISHING A SEAL FOR THE AUTHORITY, DUTECTING THE FILING OF A NOTICE OF FORMATION WITH THE SECRETARY OF STATE, AND ESTABLISHING THE RULES FOR ITS PROCEEDINGS WHEREAS, the City of Temecula (the "City") and the Redevelopment Agency of tile City of Temecula (the "Agency") have adopted resolutions authorizing the formation of a joint powers authority under Articles 1-4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California to be known as the "Old Town/Westside Improvement Authority" (the "Authority"), and the execution of a joint exercise of powers agreement in connection therewith; and WHEREAS, the City and the Agency have executed said agreement and the Authority, being duly formed, now desires to take certain actions relative to its administration as set forth below. NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Old Town/Westside Community Facilities District Financing Authority as follows: Section 1. Rep-ular Me@. The regular meetings of the Board of Directors of the Authority shall hereafter be held anrmally on the first Tuesday of July at the hour of 7:00 o'clock p.m. If any regular meeting falls on a holiday, such regular meeting shall be held on the next Tuesday which is a business day at the same hour. Section 2. S=ial Meetines. The Chairperson of the Authority may, when it is deemed expedient, and shall, upon the written request of two (2) Board members of the Authority, call a special meeting of the Authority for the purpose of transacting the business designated in the call. At such special meeting, no business shall be considered other than as designated in the call. Section 3. Posting Azendas/Notices. The Secretary of her authorized representative shall post an agenda for each regular Authority meeting or a notice for each special Authority meeting containing a brief description of each item of business to be transacted or discussed at the meeting together with the time and location of the meeting. Agendas/notices shall be posted in the same place or places as agendas are posted for meetings of the City Council of the City at least 72 hours in advance of each regular meeting and at least 24 hours in advance of each special meeting. The Secretary shall maintain a record of such posting. Section 4. Meetin2 PI=. All meetings of the Board of Directors shall be held at the regular meeting place of the City Courr-il of the City, unless the Board of Directors shall adjourn to or fix another place of meeting in a notice to be given thereof, or unless prevented by flood, fire or other disaster. Said regular meeting place is hereby fixed and established at the City Council Chambers, Temecula City Hall, 43200 Business Park Drive, Temecula, California. R: IResosIResos. 96ISeal.IA 11126196 Section 5. Rules of Proceedings. (a) Public Meetings: All legislative sessions of the Board of Directors, whether regular or special, shall be open to the public. At every regular meeting, members of the public shall have an opportunity to address the Authority on matters within the Authority's subject matter jurisdiction. Public input and comment on matters on the agenda shall be heard when the matter regularly comes up on the agenda. Public input and comment on matters not otherwise on the agenda shall be made during the "open time for public urgency matters. " The Chairperson or presiding officer may limit the total amount of time allocated for public discussion on particular issues and/or the time allocated for each individual speaker. (b) Quorum: Three (3) of the members of the Board of Directors shall constitute a quorum for the transaction of business. 0 Method of Action: The Board of Directors shall act only by ordinance, Resolution or motion, which, to become effective, shall be adopted by the affirmative vote of not less than a majority of the members of the Board of Directors present and voting. (d) Manner of Voting: Voting on formal resolutions, matters as to any federal, state, county or city agency, and on such other matters as may be requested by a majority of the Board members, shall be by roll call or call vote, and the ayes, noes and members present not voting shall be entered upon the minutes of such meeting, except on the election of officers, which may be by ballot. (e) Adjournment: The Board of Directors may adjourn any regular, adjourned regular, special or adjourned special meeting to a time and place specified in the order of adjournment. Less than a quorum may so adjourn from time to time. If all members are absent from any regular or adjourned regular meeting the Secretary may declare the meeting adjourned to a stated time and place and shall cause a written notice of the adjournment to be given in the same manner as provided for special meetings, unless such notice is waived as provided for special meetings. A copy of the order or notice of adjournment shall be conspicuously posted on or near the door of the place where the regular, adjourned regular, special or adjourned special meeting was held within 24 hours after the time of the adjournment. When a regular or adjourned regular meeting is adjourned as herein provided, the resulting adjourned regular meeting is a regular meeting for all purposes. When an order of adjournment of any meeting fails to state the hour at which the adjourned meeting is to be held, it shall be held at the hour specified for regular meetings. (f) Hearings - Continuance: Any hearing being held, or notice or ordered to be held, by the Board of Directors at any meeting may by order or notice of continuance be continued or re-continued to any subsequent meeting of the Board of Directors in the same manner and to the same extent set forth for the adjournment of meetings; provided, that if the hearing is continued to a time less dm 24 hours after the time specified in the order of notice of hearing, a copy of the order or notice of continuance of hearing shall be R: IResosIResos. 96iSeal. IA 11126196 posted immediately following the meeting at which the order or declaration of continuance was adopted or made. Section 6. Contracts e Affmments. All contracts or agreements on behalf of the Authority shall be signed by the Chairperson or the Executive Director, and countersigned by the Secretary, after having been authorized to do so by action of the Board of Directors, unless otherwise specifically provided by Resolution of the Board of Directors. Any contract or agreement involving less than ten thousand dollars ($10,000) may be executed by any of such officers without the need for any approval by the Board of Directors. Section 7. &g. The Authority shall have an Official Seal consisting of two (2) concentric circles with the words "Old Town/Westside Improvement Authority" within the outer circle and the date of formation of the Authority within the inner circle. The Secretary shall obtain the Seal at the Authority's expense and shall have custody of the Seal. Section 8. Secret= of State. Bond Counsel to the Authority is hereby directed to file a notice of the formation of the Authority with the Secretary of State of the State of California, as required by Sections 6503.5 and 53051 of the California Govenunent Code. Section 9. Office and Mailing Address. The office of the Authority is hereby fixed at Old Town/Westside Improvement Authority, c/o City of Temecula, 43200 Business Park Drive, Temecula, California. The official mailing address is hereby fixed and established at Old Town/Westside Improvement Authority c/o City of Temecula, P.O. Box 9033, Temecula, CA, 92589-9033, Attention: Executive Director. PASSED, APPROVED AND ADOPTED, by the Board of Directors of the Old Town/Westside Improvement Authority at a regular meeting held on the 26th day of November, 1996. Patricia H. Birdsall, Chairperson ATTEST: June S. Greek, CMC/City Clerk Authority Secretary [SEAL] R:lResos@Resos. 96ISeal.IA 11126196 STATE OF CALIFORNIA) COUNTY OF RIVERSIDE) SS CITY OF TEMECULA ) I, June S. Greek, City Clerk of the City of Temecula, HEREBY DO CERTIFY that the foregoing Resolution No. FA 96- was duly adopted at a regular meeting of the Board of Directors of the Old Town/Westside Improvement Authority on the 26th day of November, 1996, by the following roll call vote: AYES:BOARD MEMBERS: NOES:BOARD MEMBERS: ABSENT-BOARD MEMBERS: ABSTAIN:BOARD MEMBERS: June S. Greek, CMC/City Clerk Agency Secretary R: @ResostResos. 96@Seal. IA 11126196 RESOLUTION NO. IA 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OLD TOWN/WESTSEDE EMPROVEMENT AUTHORRFY AUTHORIZING ISSUANCE AND SALE OF REVENUE BONDS FOR THE PURPOSE OF FINANCING ACQUISITION OF COMMUNITY FACILITIES DISTRICT BONDS (OLD TOWN AREA), AND APPROVING RELATED AGREEMIENTS AND ACTIONS @REAS, the Old Town/Westside Community Facilities District Financing Authority (the "Local Agency") has determined to issue its Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds (the "Local Agency Bonds") in order to finance public improvements in the Old Town and Westside areas of the City of Temecula. WHEREAS, the Local Agency has requested that the Old Town/Westside Improvement Authority (the "Authority") issue its revenue bonds (the "Bonds") and use the proceeds thereof to acquire the Local Agency Bonds, and the Authority is authorized to issue the Bonds for such purpose under Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 Title I of the California Government Code (the "Bond Law"); and @REAS, the Board of Directors of the Authority wishes at this time to authorize all proceedings relating to the issuance of the Bonds to acquire the Local Agency Bonds to provide moneys for the construction of certain public improvements, and to approve the execution and delivery of all agreements and documents relating thereto. NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Old Town/Westside Improvement Authority as follows: Section 1. Findings and Determinations. Pursuant to the Bond Law, the Board of Directors hereby finds and determines that the issuance of the Bonds will result in savings in effective interest rates, bond underwriting costs and bond issuance costs and thereby result in significant public benefits to the Local Agency within the contemplation of Section 6586 of the Bond Law. Section 2. Issuance of Bondsa Approval of Indenture, The Board of Directors hereby authorizes the issuance of the Bonds under and pursuant to the Bond Law, in the maximum principal amount of $32,000,000. The Bonds shall be issued pursuant to an Indenture of Trust (the "Indenture") by and between the Authority and a trustee to be designated by the Executive Director. The Board of Directors hereby approves the Indenture in the form on file with the Secretary. The Board of Directors hereby authorizes and directs the Executive Director (or, in his absence, the Treasurer) to execute and deliver, and the Secretary to attest and affix the seal of the Authority to, the Indenture in such form, together with any changes therein or additions thereto deemed advisable by such officer upon consultation with Bond Counsel and legal counsel to the Authority, the execution by such officer of the Indenture to constitute conclusive evidence of his approval of any such changes or additions. The Board of Directors hereby authorizes the delivery and performance of the Indenture. R:\NORTONLkAGENDAS%RESOSkISSUEBND.RES 11/20/96 Section 3. Purchase of Local Agency Bonds. The Board of Directors hereby authorizes and approves the purchase of the local Agency Bonds by the Authority from the @cal Agency pursuant to and in accordance with the provisions of the Bond Purchase Agreement by and between the Local Agency and the Authority (the "Community Facilities District Bond Purchase Agreement"). The Board of Directors hereby approves the Community Facilities District Bond Purchase Agreement in the form on file with the Secretary. The Board of Directors hereby authorizes and directs the Executive Director (or, in his absence, the Treasurer) to execute said form of the Community Facilities District Bond Purchase Agreement together with any changes therein or additions thereto deemed advisable by such officer upon consultation with Bond Counsel and legal counsel to the Authority, the execution by such officer of the Community Facilities District Bond Purchase Agreement to constitute conclusive evidence of his approval of any such changes or additions. The Board of Directors hereby authorizes the delivery and performance of the Community Facilities District Bond Purchase Agreement. Section 4. Sale of Bonda. The Board of Directors hereby approves the sale of the Bonds by negotiation with Stone & Younger, LLC (the "Underwriter") pursuant to the Bond Purchase Agreement (the "Authority Bond Purchase Agreement") by and among the Authority, the Local Agency and the Underwriter in the form on file with the Secretary. The Executive Director (or, in his absence, the Treasurer) is hereby authorized and directed to execute and deliver the Authonty Bond Purr-hase Agreement m such form, together with any changes therein or additions thereto approved by such officer, upon consultation with Bond Counsel and legal counsel to the Authority, such officer's execution thereof to conclusive evidence of his approval of any such additions and changes. The Authority Bond Purchase Agreement shall be executed in the name and on behalf of the Authority by the Executive Director (or, in his absence, the Treasurer), upon submission of a proposal by the Underwriter to purchase the Bonds; provided, however, that such proposal is acceptable to the Executive Director and is consistent with the requirements of this Resolution. The amount of Underwriter's discount shall be not more dm 3.4 % of the par amount of the Bonds, the principal amount of the Bonds shall not exceed $32,000,000 and the net interest cost of the Bonds shall not exceed 9.0%. Section 5. Aoroval of Official Statement. The Board of Directors hereby approves, and hereby deems nearly @ within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1034, the preliminary Official Statement relating to the Bonds, in the form on file with the Secretary. The Underwriter is hereby authorized to distribute the Official Statement (in prel and in fmal form) in connection with the sale of the Bonds. The Executive Director (or, in his absence, the Treasurer) is hereby authorized and directed to (a) execute and deliver to the purchaser of the Bonds a certificate deeming the preliminary Official Statement to be nearly final prior to the sale of the Bonds, (b) approve any changes in or additions to cause such preliminary Official Statement to be put in fmal form, and (c) execute said final Official Statement for an in the name and on behalf of the Authority. Section 6. Bond Counsel. The firm of Jones Hall Hill & White, A Professional Law Corporation, is hereby designated as Bond Counsel to the Authority for the Bonds. The Executive Director of the Authority is hereby authorized to execute an agreement with said fmn for its services with respect to the Bonds, provided that said agreement is in a form acceptable to the Executive Director. R:\NORTONL\AGENDAS\RESOS\ISSUEBND.RES 11/20/96 Section 7. Official Actions. The Chairperson, the Executive Director, the Treasurer, the Secretary and any and all other officers of the Authority are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all assigrunents, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the issuance and sale of the Bonds and any of the other transactions contemplated by the documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. Section 8. Effective D=. This Resolution shall take effect from and after its adoption. PASSED, APPROVED AND ADOPTED, by the Board of Directors of the Old Town/Westside Improvement Authority at a regular meeting held on the 26th day of November, 1996. Chairperson ATTEST: June S. Greek, CMC/City Clerk Authority Secretary [SEAL] R:\NORT'ONL\AGENDAS\RESOS\ISSUEBND.RES 11/20/96 STATE OF CALIFORNIA) COUNTY OF RIVERSIDE) SS CITY OF TEMECULA ) I, June S. Greek, City Clerk of the City of Temecula, HEREBY DO CERTIFY that the foregoing Resolution No. FA 96-- was duly adopted at a regular meeting of the Board of Directors of the Old Town/Westside Improvement Authority on the day of December, 1996, by the following roll call vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT:BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: J,une S. Greek, CMC/City Clerk Agency Secretary R:\NORT'ONL\AGENDASXRESOS\ISSUEBND.RES 11/20/96 30043-01 JHHW:PJT:cra 10/21/96 J2367 11/04/96 INDENTURE OF TRUST by and between the OLDTOWN/WESTSIDEIWROVE AUTHORM and FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Trustee Dated as of December 1, 1996 Relating to: Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) TABLE OF CONTENTS ARTICLE I DEFINITIONS; RULES OF INTERPRETATION Section 1.01. Definitions 3 Section 1.02. Interpretation 9 Section 1.03. Indenture Constitutes Contract 10 ARTICLE II THE BONDS Section 2.01. Authorization of Bonds 11 Section 2.02. Terms of the Bonds 11 Section 2.03. Transfer and Exchange of Bonds 12 Section 2.04. Registration Books 12 Section 2.05. Form and Execution of Bonds 12 Section 2.06. Authentication of Bonds 13 Section 2.07. Temporary Bonds 13 Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen 13 Section 2.09. Limited Obligation 13 Section 2.10. Book-Entry Only System 13 Section 2.11. No Acceleration 15 ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; ACQUISITION OF LOCAL AGENCY BONDS Section 3.01. Issuance of the Bonds 16 Section 3.02. Application of Proceeds of the Bonds 16 Section 3.03. Program Fund 16 Section 3.04. Validfty of Bonds 16 ARTICLE IV REDEMPTION OF BONDS Section 4.01. Redemption 17 Section 4.02. Notice of Redemption 18 Section 4.03. Selection of Bonds for Redemption 19 Section 4.04. Partial Redemption of Bonds 19 Section 4.05. Effect of Notice of Redemption 19 ARTICLE V SECURITY OF BONDS; FLOW OF FUNDS; INVESTMENTS Section 5.01. Pledge and Assignment; Revenue Fund 21 Section 5.02. Application of Revenue Fund 21 Section 5.03. Application of Interest Account 22 Section 5.04. Application of Principal Account 22 Section 5.05. Application of Redemption Account 22 Section 5.06. Application of Surplus Account 22 Section 5.07. Investment of Moneys 22 ARTICLE VI PARTICULAR COVENANTS Section 6.01. Punctual Payment 24 Section 6.02. Extension of Payment of Bonds 24 Section 6.03. Against Encumbrances 24 Section 6.04. Power to Issue Bonds and Make Pledge and Assignment 24 Section 6.05. Accounting Records and Financial Statements 24 Section 6.06. Waiver of Laws 24 Section 6.07. Collection of Revenues 25 Section 6.08. Disposition of Local Agency Bonds 25 Section 6.09. Amendment of Local Agency Bonds 25 Section 6.10. Tax Covenants Relating to Bonds 25 Section 6.11. Continuing Disclosure 26 Section 6.12. Consent to Foreclosure Provisions 26 Section 6.13. Further Assurances 26 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS Section 7.01. Events of Default 27 Section 7.02. Remedies Under Local Agency Bonds 27 Section 7.03. Other Remedies of Bond Owners 27 Section 7.04. Application of Revenues and Other Funds After Default 27 Section 7.05. Trustee to Represent Bond Owners 28 Section 7.06. Bond Owners' Direction of Proceedings 28 Section 7.07. Limitation on Bond Owners' Right to Sue 29 Section 7.08. Absolute Obligation of Authority 29 Section 7.09. Termination of Proceedings 29 Section 7.10. Remedies Not Exclusive 30 Section 7.11. No Waiver of Default 30 ARTICLE VIII THE TRUSTEE Section 8.01. Duties and Liabilities of Trustee 31 Section 8.02. Merger or Consolidation 32 Section 8.03. Liability of Trustee 32 Section 8.04. Right to Rely on Documents 33 Section 8.05. Compensation and Indemnification 34 ARTICLE IX MODIFICATION OR AMENDMENT HEREOF Section 9.01. Amendments Penrnitted 35 Section 9.02. Effect of Supplemental Indenture 36 Section 9.03. Endorsement of Bonds; Preparation of New Bonds 36 Section 9.04. Amendment of Particular Bonds 36 Section 9.05. Aftorney's Opinion Re: Supplemental Agreements 36 ARTICLE X DEFEASANCE Section 10.01. Discharge of Indenture 37 Section 10.02. Discharge of Liability on Bonds 37 Section 10-03. Deposit of Money or Securities with Trustee 38 Section 10.04. Payment of Bonds After Discharge of Indenture 38 ii ARTICLE XI MISCELLANEOUS Section 11.01. Liability of Authority Limited to Revenues 39 Section 11.02. Successor Is Deemed Included in All References to Predecessor 39 Section 11.03. Lin-dtation of Rights to Parties and Bond Owners 39 Section 11.04. Waiver of Notice; Requirement of Mailed Notice 39 Section 11.05. Destruction of Bonds 39 Section 11.06. Severability of Invalid Provisions 39 Section 11.07. Notices 39 Section 11.08. Evidence of Rights of Bond Owners 40 Section 11.09. Disqualified Bonds 40 Section 11.10. Money Held for Particular Bonds 41 Section 11.1l.. Funds and Accounts 41 Section 11.12. Payment on Non-Business Days 41 Section 11.13. Waiver of Personal Liability 41 Section 11.14. Execution in Several Counterparts 41 Section 11.15. Governing Laws 41 EXI-UBIT A - FORM OF BOND INDENTUREOFTRUST THIS INDENTURE OF TRUST (this "Indenture") dated as of December 1, 1996, is by and between the OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California (the "Authority"), and FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America and having a corporate trust office in Los Angeles, California, as trustee (the "Trustee"). WITNESSETH: WHEREAS, the Authority is a joint exercise of powers authority duly organized and existing under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act"), and is authorized pursuant to Article 4 of the Act (the "Bond Law") to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations to provide financing or refinancing for public capital improvements of local agencies within the State of California; and WHEREAS, the Old Town/Westside Community Facilities District Financing Authority (the "Local Agency") has entered into an agreement with the Authority to cause to be issued and delivered its $- Old Town/Westside Community Facilities District Financing Authority Community Facilities No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds (the "Local Agency Bonds"); and WHEREAS, the Authority has determined at this time to issue its Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area) in the aggregate principal amount of $ (the "Bonds"), all pursuant to and secured by this Indenture in the manner provided herein, for the purpose of providing funds required to acquire the Local Agency Bonds; and WHEREAS, the Bonds are to be secured by a pledge of and first lien on the revenues to be derived from the Local Agency Bonds which revenues are designed to be sufficient in time and amount to pay the principal of, premium, ff any, and interest on the Bonds as they become due and payable; and WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and to secure the payment of the principal thereof and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and WHEREAS, the Authority has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized. NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest and premium (ff any) on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the Bonds, as follows: 2 ARTICLE I DEFINRFIONS; RULES OF INTERPRERATION SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes of this Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. "Act" means Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Goverranent Code, as amended from time to time. "Authority" means the Old Town/Westside Improvement Authority, a joint powers authority organized and existing under the Act. "Authorized Representative" means: (a) with respect to the Authority, its Chairperson, Executive Director, Treasurer or Secretary, or any other Person designated as an Autfiorized Representative of the Authority by a Written Certificate of the Authority signed by its Chairperson or Executive Director and filed with the Local Agency and the Trustee; (b) with respect to the Local Agency, its Chairperson, Executive Director, Treasurer or Secretary, or any other Person designated as an Authorized Representative of the Local Agency in a Written Certificate of the Local Agency signed by its Chairperson or Executive Director and filed with the Authority and the Trustee; and (c) with respect to the Trustee, the Senior Vice President, any Vice President, any Assistant Vice President or any Trust Officer of the Trustee, and when used with reference to any act or document also means any other Person authorized to perform such act or sign any document by or pursuant to a resolution of the Board of Directors of the Trustee or the by-laws of the Trustee. "Bond Counsel" means Jones Hall Hill & White, A Professional Law Corporation, San Francisco, California or any other firm of nationally recognized bond counsel selected by the Local Agency and acceptable to the Authority and the Trustee. "Bond Law" means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Act (commencing with Section 6584), as amended from time to time. "Bond Year" means each twelve-month period beginning on 2 in any year and extending to the next succeeding _ 1, both dates inclusive; except that the first Bond Year shall begin on the Closing Date and end on 1,1997. "Bonds" means the Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area), issued in the aggregate principal amount of and authorized by, and at any time Outstanding pursuant to, this Indenture. "Business Day" means a day which is not a Saturday, Sunday or legal holiday on which banking institutions in the State of California, or in any state in which the Office of the Trustee is located, are not authorized to remain closed. "City" means the City of Temecula, and any successor thereto. "Closing Date" means the date on which the Bonds are delivered to the Original Purchaser, being December _, 1996. 3 "Continuing Disclosure Agreement" has the meaning assigned to such term in the Fiscal Agent Agreement. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Defeasance Obligations" means: (a) cash; (b) U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series ("SLGS"); (c) direct obligations of the United States Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities; (d) the interest component only, including book entries thereof, of Resolution Funding Corporation ("REFCORP") obligations which have been stripped by request to the Federal Reserve Bank of New York; (e)pre-refunded municipal bonds rated, at the time of initial investment, "Aaa" by Moody'sand "AAA" by S&P; provided, however, pre-refunded municipal bonds rated, at the timeof initial investment, by S&P only (i.e., no Moody's rating) are acceptable ff such pre-refunded municipal bonds were pre-refunded with cash, direct U.S. or U.S. guaranteed obligations or AAA rated, at the time of initial investment, pre-refunded municipal bonds; and (f) obligations of the following agencies which are backed by the fun faith and credit of the United States of America: (i) direct obligations or fully guaranteed certificates of beneficial ownership of the U.S. Export-Import Bank; (ii) certificates of beneficial ownership of the Farmers Home Administration; (iii) obligations of the Federal Financing Bank; (iv) participation certificates of the General Services Administration; (v) guaranteed Title XI financings of the U.S. Maritime Administration; and (vi) project notes, local authority bonds, U.S. goverrunent guaranteed New Communities debentures and U.S. government guaranteed housing notes and bonds of the U.S. Department of Housing and Urban Development. "Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.10. "District" means the Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements). "Event of Default" means any of the events specified in Section 7.01. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arin's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) ff the investment is traded on an established securities market (within the meaning of section 1273 of the Tax Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply 4 contract or other investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, (iii) the investment is a United States Treasury Securit@State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California, but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. "Federal Securities" means direct general obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America and CATS and TGRS), or obligations the principal of and interest on which are fully guaranteed by the United States of America. "Fiscal Agent Agreement" means the Fiscal Agent Agreement dated as of December 1, 1996, by and between the Local Agency and the Local Agency Bond Fiscal Agent, as originally executed or as thereafter amended pursuant to any duly authorized and executed amendments thereto. ,'Fiscal Year" means the twelve-month period extending from July 1 in A calendar year to June 30 of the succeeding year, both dates inclusive. "Indenture" means this Indenture, as originally executed or as it may from time to time be supplemented, modified or amended by any supplemental indenture. "Independent Financial Consultant" means any, financial consultant or firm of such financial consultants appointed by the Authority and who, or each of whom: (a) is judged by the Authority to have experience with respect to the financing of public capital improvement projects; (b) is in fact independent and not under the domination of the Authority; (c) does not have any substantial interest, direct or indirect, with the Authority, other than as Original Purchaser; and (d) is not connected with the Authority as an officer or employee of the Authority, but who may be regularly retained to make reports to the Authority. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service", 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's Investors Service "Municipal and Government," 5250 77 Center Drive, Suite 150, Charlotte, NC 28217, Attention: Municipal News Reports; Standard & Poor's Corporation "Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee. "Interest Account" means the account by that name established and held by the Trustee pursuant to Section 5.02. "Interest Payment Date" means March 1 and September 1 in each year, commencing March 1, 1997, so long as any Bonds remain Outstanding. "Local Agency" means the Old Town/Westside Community Facilities District Financing Authority, a joint powers authority organized and existing under the Act. "Local Agency Bond Fiscal Agent" means First Trust of California, National Association, or any other entity designated in accordance with the Fiscal Agent Agreement as successor fiscal agent for the Local Agency Bonds. 5 "Local Agency Bonds" means the $ aggregate principal amount of Old Town/Westside Community Facilities District Financing Authority Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds, executed and delivered under and pursuant to the Fiscal Agent Agreement. "Moody's" means Moody's Investors Service, and its successors and assigns. "Office" means such corporate trust office of the Trustee as may be designated from time to time by written notice form the Trustee to the City and the Authority, initially being First Trust of California, National Association, Corporate Trust Department, 500 South Hope Street, Suite 500, Los Angeles, CA 90071; except that, with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or agency of the Trustee at which at any particular time its corporate trust agency shall be conducted. "Original Purchaser" means Stone & Youngberg LLC, as the original purchaser of the Bonds. ,'Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.02, including Bonds (or portions of Bonds) disqualified under Section 11.09; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture. "Owner" or "Bond Owner," whenever used herein with respect to a Bond, means the Person in whose name the ownership of such Bond is registered on the Registration Books. "Participating LInderwriter" shall have the meaning ascribed thereto in the Continuing Disclosure Agreement. "Permitted Investments" means the following, but only to the extent that the same are acquired at Fair Market Value and are otherwise permitted under the California Government Code: (i)Federal Securities; (ii)obligations of states or of any political subdivisions thereof, provided that the paymentof principal thereof and interest thereon is fully secured by obligations described in(i) above; (iii)any of the following obligations of federal agencies not guaranteed by the United States of America: (a) debentures issued by the Federal Housing Administration; (b) participation certificates or senior debt obligations of the Federal Home Loan Mortgage Corporation or Farm Credit Banks (consisting of Federal Land Banks, Federal Intermediate Credit Banks, or Banks for Cooperatives); (c) bonds or debentures of the Federal Home Loan Bank Board established under the Federal Home Loan Bank Act, bonds of any federal home loan bank established under said act and stocks, bonds, debentures, participations or other obligations of or issued by the Federal National Mortgage Association, the Student Loan Marketing Association, the Government National Mortgage Association and the Federal Home Loan Mortgage Corporation; and bonds, notes or other obligations issued or assumed by the 6 International Bank for Reconstruction and Development, with a member bank or banks of the Federal Reserve System; (iv) interest-bearing demand or time deposits (including certificates of deposit) in federal or State chartered savings and loan associations or in federal or State banks (including the Trustee or its affiliates), provided that: (a) in the case of a savings and loan association, such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation, or the unsecured obligations of such savings and loan association shall be rated in a Rating Category (as defined in the Trustee Agreement), and (b) in the case of a bank, such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation, or the unsecured obligations of such bank (or the unsecured obligations of the parent bank holding company of which such bank is the lead bank) shall be rated in a Rating Category; (v) written repurchase agreements with any bank, savings institution or trust company (other than the Trustee) which is insured by the Federal Deposit Insurance Corporation, or with any broker-dealer with retail customers which falls under Securities Investors Protection Corporation protection, provided that such repurchase agreements are fully secured by Federal Securities or obligations of any agency of instrumentality of the United States of America and provided further that (a) such collateral is held by the Trustee or any agent acting solely for the Trustee during the term of such repurchase agreement, (b) such collateral is not subject to liens or claims of third parties, (c) such collateral has a market value (determined at least once every 14 days) at least equal to the amount invested in the repurchase agreement, (d) the Trustee has a perfected first security interest in the collateral, (e) the agreement shall be for a term not longer than 270 days and (f) the failure to maintain such collateral at the level required in (c) above will require the Trustee to liquidate the collateral; (vi) taxable money market fund portfolios restricted to obligations with average maturities of one year or less issued or guaranteed as to payment of principal and interest by the full faith and credit of the United States of America and repurchase agreements collateralized by such obligations (such funds may include funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other management services); (vii) commercial paper having original maturities of not more than 365 days and rated in a Rating Category; (viii) bankers acceptances rated in a Rating Category, endorsed and guaranteed by banks described in clause (v) of this definition; (ix) obligations the interest on which is excluded from gross income for purposes of federal income taxation under Section 103 of the Code and which are rated in a Rating Category; (x) the Local Agency Investment Fund of the State of California ("LAIF"), created pursuant to section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name, provided that the Trustee may restrict investments in the LAIF if required to keep monies available for the purposes ofthis Agreement; and (Xi)guaranteed investment contracts, the provider of which (or a guarantor of its obligationsthereunder) is rated "AA" or "Aa" or better by Standard & Poor's Ratings Group Services ("S&P") or Moody's Investors Service ("Moody's"), or whose obligations 7 are fully secured by collateral consisting of Federal Securities held by the Trustee or a third party collateral agent; provided that the Trustee shall be required to withdraw all funds under any such contracts upon a downgrade of the rating of the provider (or guarantor) below "A", unless full collateral is provided and the collateral is the subject of an unqualffied legal opinion to the effect that the Trustee has a first perfected security interest in such collateral (even in the event of a bankruptcy). at the time of execution of such contract. Such contract must be collateralized with securities described in the above definitions (i) through (iii). AR such collateral to be held by the Trustee or a third party custodian, with a market value of at least 102% of the principal invested, and in a form acceptable to the Trustee and the Treasurer. Provided, however, that (1) moneys invested thereunder may be withdrawn without penalty, premium, or charge, for reasons in the bond documents, upon not more than seven day's notice; (2) the agreement is not subordinated to any other obligation of such agreement provider; (3) the same guaranteed interest rate will be paid on any future deposits made to restore the reserve to its required amount, provided such replenishment is delivered to the contract or agreement provider within six months of the date of withdrawal; (4) the Trustee will receive an opinion of counsel that such agreement is an enforceable obligation of such company; (5) the agreement provides that the agreement provider must promptly notify the Trustee if the ratings assigned by Moody's or S&P to its long-term unsecured debt obligations or claims-paying ability, as applicable, is suspended, withdrawn or reduced by either Moody's or S&P; and (6) the Trustee shall withdraw all amounts held under such contract or agreement following receipt by an officer of the Trustee responsible for administration of its duties hereunder of any written notice of suspension, withdrawal or reduction of either of such ratings to a level below the two highest rating categories (without regard to plus (+) or minus (-) designations) by Moody's or S&P. "Person" means an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Principal Account" means the account by that name established and held by the Trustee pursuant to Section 5.02. "Principal Prepayments" means any amounts received by the Trustee representing a redemption of the Local Agency Bonds pursuant to Section 2.03(A)(i) of the Fiscal Agent Agreement, consisting of the principal amount of the Local Agency Bonds being redeemed and the premium paid upon such redemption, if any; but excluding the amount of regularly scheduled payments of principal of and interest on the Local Agency Bonds, or amounts paid pursuant to Section 2.03(A)(ii) or 2.03(A)(iii) of the Fiscal Agent Agreement, paid concurrent therewith. "Program Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.03. "Purchase Agreement" means the Bond Purchase Agreement dated as of December 1996, by and between the Authority and the Local Agency, relating to the acquisition by the Authority of the Local Agency Bonds. "Rating Category" means, one of the two highest rating categories then in effect under the rating systems of Moody's Investors Service or Standard and Poor's Ratings Services, without regard to plus or minus sign or numerical or other qu@g designation. "Record Date" means: (a) the fifteenth (15th) calendar day of the month preceding each Interest Payment Date, whether or not such day is a Business Day, and (b) any date established 8 by the Trustee pursuant to Section 2.02(b) as a Record Date for the payment of defaulted interest on the Bonds, ff any. "Redemption Account" means the account by that name established and held by the Trustee pursuant to Section 5.01. "Redemption Price" means the aggregate amount of principal of and premium (ff any) on the Bonds upon the redemption thereof pursuant to Section 4.01. "Registration Books" means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.04. "Revenue Fund" means the fund by that name established and held by the Trustee pursuant to Section 5.01. "Revenues" means, (a) all amounts derived from or with respect to the Local Agency Bonds, including but not limited to all payments of principal thereof and interest thereon, and (b) investment income with respect to any moneys held by the Trustee in the funds and accounts established hereunder. "S&P" means Standard & Poor's Ratings Services, and its successors and assigns. "Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190; Midwest Securities Trust Company, Capital Structures-Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax-(215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee. "Surplus Account" means the account by that name established and held by the Trustee pursuant to Section 5.02. "Tax Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable temporary and final regulations promulgated, and applicable official public guidance published, under the Tax Code. "Treasurer" means the Treasurer of the Authority. "Trustee" means First Trust of California, National Association, a corporation with trust powers, organized and existing under the laws of the State of California, or its successor or successors, as Trustee hereunder as provided in Section 8.01. "Written Certificate" and "Written Request" of the Authority or the Local Agency mean, respectively, a written certificate or written request signed in the name of the Authority by its Authorized Representative or in the name of the Local Agency by its Authorized Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. SECTION 1.02. Interpretation. 9 (a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine or feminine gender, as appropriate. (b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof. (c) All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; the words "herein...... hereof," "hereby," "hereunder" and other words of siirnflar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. SECTION 1.03. Indenture Constitutes Contract. In consideration of the purchase and acceptance of any and all of the Bonds issued hereunder by those who shall hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the Trustee and the Owners of the Bonds. The pledge made in this Indenture and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Authority shall be for the equal benefit, protection and security of the Owners of any and all of the Bonds. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Indenture. 10 ARTICLE II THEBONDS SECTION 2.01. Authorization of Bonds. The Authority hereby authorizes the issuance of the Bonds hereunder and under the Bond Law, which shall constitute special obligations of the Authority payable solely from the Revenues and other amounts pledged hereunder, for the purpose of providing a portion of the moneys to finance the acquisition by the Authority of the Local Agency Bonds pursuant to the Purchase Agreement. The Bonds shall be designated the "Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area)" and shall be issued in the aggregate principal amount of dollars ($ --------- ) - SECTION 2.02. Terms of the Bonds. (a) The Bonds shall be issued in fully registered form without coupons in denominations of $100,000 or any integral multiple of $5,000 in excess thereof, so long as no Bond shall have more than one maturity date. The Bonds shall be dated December 1, 1996, shall mature on September 1, 2026, and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rate of % per annum. Notwithstanding the foregoing Bonds may be issued or exchanged in denominations of $5,000 or any integral multiple thereof following the date on which the Treasurer provides written notice to the Trustee that an appraisal satisfactory to the Authority has been done of the property in the District (as defined In the Fiscal Agent Agreement) which indicates that the aggregate value of such property compared to the sum of the then principal amount of Bonds outstanding and any overlapping special tax or assessment liens is at least 5:1, and the Board of Directors of the Authority has, by resolution, in its sole discretion, approved such $5,000 denominations. The Trustee and the Treasurer shall have no liability by reason of said notice or appraisal, and the Owners shall not be entitled to rely. in any manner upon the values expressed in such appraisal. (b) Interest on the Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from December 1, 1996, or (iii) interest on any Bond is in default as of the date of authentication thereof,. in which event interest thereon shall be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest shall be paid on each Interest Payment Date to the Persons in whose names the ownership of the Bonds is registered on the Registration Books at the dose of business on the inunediately preceding Record Date, except as provided below. Interest on any Bond which is not punctually paid or duly provided for on any Interest Payment Date shall be payable to the Person in whose name the ownership of such Bond is registered on the Registration Books at the close of business on a special Record Date to be established by the Trustee for the payment of such defaulted interest to be fixed by the Trustee, notice of which shall be given to such Owner not less than ten (10) days prior to such special Record Date. Interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date; provided, however, that at the written request of the Owner of Bonds in an aggregate principal amount of at least $1,000,000, which written request is on file with the Trustee as of any Record Date, interest on such Bonds shall be paid on each succeeding Interest Payment Date by wire transfer in immediately available funds to such account within the United States of America as shall be 11 specified in such written request. Any such written request shall remain in effect until rescinded in writing by the respective Owner. (c) The principal of the Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof at the Office of the Trustee. Payment of principal on any Bond shall be made only upon presentation and surrender of such Bond at the Office of the Trustee. (d) The Bonds shall be subject to redemption as provided in Article fV. SECTION 2.03. Transfer and ExchangLe of Bonds. (a) Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds for a like aggregate principal amount of the same series, in any authorized denomination. The Trustee shall require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The reasonable cost of any services rendered or reasonable expenses incurred by the Trustee in connection with any transfer shall be paid by the Authority. (b) Exchange of Bonds. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same series and maturity, of other authorized denominations. The Authority may charge a reasonable sum for each new Bond issued upon any exchange. The Trustee shall require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The reasonable cost of any services rendered or reasonable expenses incurred by the Trustee in connection with any exchange shall be paid by the Authority. (c) Limitations on Transfers and Exchanges. The Trustee shall not be obligated to make any transfer of exchange of Bonds pursuant to this Section 2.03 during the period established by the Trustee for the selection of Bonds for redemption, or with respect to any Bonds selected for redemption. SECTION 2.04. Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be open to inspection by the Authority and the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as hereinbefore provided. SECTION 2.05. Form and Execution of Bonds. The Bonds shall be in substantially the form set forth in Exhibit A hereto. The Bonds shall be executed in the name and on behalf of the Authority with the facsimile signature of its Chairperson attested by the manual or facsimile signature of its Secretary. Such seal may be in the form of a facsimile of the Authority's seal and may be reproduced, imprinted or impressed on the Bonds. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority, and also any 12 Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority. SECTION 2.06. Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form set forth in Exhibit A hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture. SECTION 2.07. Teml2orary Bonds. The Bonds may, at the expense of the Authority, be issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder. SECTION 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and series in exchange and substitution for the Bond so mutflated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and destroyed. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, ff such evidence and indemnity for the Authority and the Trustee satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee, at the expense of the Owner, shall thereupon authenticate and deliver, a new Bond ' of like tenor in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall be about to mature, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds secured by this Indenture. SECTION 2.09. Limited Obligation. AR obligations of the Authority under this Indenture and the Bonds shall be special obligations of the Authority, payable solely from the Revenues and the funds pledged therefore hereunder. Neither the faith and credit nor the taxing power of the City or the State of California or any political subdivision thereof is pledged to the payment of the Bonds. SECTION 2.10. Book-Entry Only System. DTC shall act as the initial Depository for the Bonds. One Bond for each maturity of the Bonds shall be initially executed, authenticated, and 13 delivered as set forth herein with a separate fully registered certificate (in print or typewritten form). Upon initial execution, authentication, and delivery, the ownership of the Bonds shall be registered in the Registration Books kept by the Trustee for the Bonds in the name of Cede & Co., as nominee of DTC or such nominee as DTC shall appoint in writing. The representatives of the Authority and the Trustee are hereby authorized to take any and all actions as may be necessary and not inconsistent with this Indenture to qualify the Bonds for the Depository's book-entry system, including the execution of the Depository's required representation letter. With respect to Bonds registered in the Registration Books in the name of Cede & Co., as nominee of DTC, neither the Authority nor the Trustee shall have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which DTC holds Bonds as Depository from time to time (the "DTC Participants") or to any person for which a DTC Participant acquires an interest in the Bonds (the "Beneficial Owners"). Without limiting the immediately preceding sentence, neither the Authority nor the Trustee shall have any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co., or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant, any Beneficial Owner, or any other person, other than DTC, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the event the Authority elects to redeem the Bonds in part, (iv) the payment to any DTC Participant, any Beneficial Owner, or any other person, other than DTC, of any amount with respect to the principal of or interest on the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the Bonds; except that so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, any Beneficial Owner of $1,000,000 or more in aggregate principal amount of any series of Bonds who has filed a written request to receive notices, containing such Beneficial Owner's name and address, with the Trustee shall be provided with all notices relating to such Bonds by the Trustee. Except as set forth above, the Trustee may treat as and deem DTC to be the absolute Owner of each Bond for which DTC is acting as Depository for the purpose of payment of the principal of and interest on such Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bonds, for the purpose of registering transfers with respect to such Bonds, and for all purposes whatsoever. The Trustee shall pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown on the Registration Books, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to the principal of and interest on the Bonds to the extent of the sums or sums so paid. No person other than an Owner, as shown on the Registration Books, shall receive a physical Bond. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer provisions in Section 2.03 hereof, references to "Cede & Co." in this Section 2.10 shall refer to such new nominee of DTC. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the Trustee during any time that the Bonds are Outstanding, and discharging its responsibilities with respect thereto under applicable law. The Authority may terminate the services of DTC with respect to the Bonds if it determines that DTC is unable to discharge its responsibilities with respect to the Bonds or that continuation of the system of book-entry transfers through DTC is not in the best interest of the Beneficial Owners, and the Authority shall mail notice of such termination to the Trustee. 14 Upon the termination of the services of DTC as provided in the previous paragraph, and if no substitute Depository willing to undertake the functions hereunder can be found which is willing and able to undertake such functions upon reasonable or customary terms, or ff the Authority determines that it is in the best interest of the Beneficial Owners of the Bonds that they be able to obtain certificated Bonds, the Bonds shall no longer be restricted to being registered in the Registration Books of the Trustee in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or name the Owners shall designate at that time, in accordance with Section 2.03. To the extent that the Beneficial Owners are designated as the transferee by the Owners, in accordance with Section 2.03, the Bonds will be delivered to such Beneficial Owners as soon as practicable. SECTION 2.11. No Acceleration. The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section shall in any way prohibit the prepayment or redemption of Bonds under Section 4.01 hereof, or the defeasance of the Bonds and discharge of this Indenture under Section 10.01 hereof. 15 ARTICLE III ISSUANCE OF BONDS, APPLICATION OF PROCEEDS, ACQUISITION OF LOCAL AGENCY BONDS SECRION 3.01. Issuance of the Bonds. Concurrent with the execution and delivery of this Indenture, the Authority shall execute and the Trustee shall authenticate and deliver the Bonds to the Original Purchaser thereof in the aggregate principal amount of million hundred thousand dollars ($ SECTION 3.02. Application of Proceeds of the Bonds. On the Closing Date, the proceeds of sale of the Bonds shall be paid to the Trustee and deposited by the Trustee as follows: (a) The Trustee shall deposit the amount of $ constituting accrued interest received on the sale of the Bonds. (b) The Trustee shall deposit the amount of $ in the Interest Account, in the Program Fund. SECTION 3.03. Program Fund. There is hereby established a separate fimd to be known as the "Program Fund", which shall be held by the Trustee in trust. The Trustee shall make a deposit to the Program Fund on the Closing Date as specified in Section 3.02(b). On the Closing Date, the Trustee shall withdraw all amounts from the Program Fund and transfer such amounts in immediately available funds to the Local Agency Bond Fiscal Agent, for application by the Local Agency Bond Fiscal Agent as described in Section 3.02(A) of the Fiscal Agent Agreement. The ownership of the Local Agency Bonds shall be registered in the name of the Trustee upon the acquisition thereof. SECTION 3.04. Validity of Bonds. The validity of the authorization and issuance of the Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the Authority or the Trustee with respect to or in connection with the acquisition of the Local Agency Bonds. The recital contained in the Bonds that the same are issued pursuant to the constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance. 16 ARTICLE IV REDEMPTION OF BONDS SECRION 4.01.,Redemption. (a) Optional Redemption. The Bonds maturing on or after September 1, 2002 shall be subject to optional redemption in whole, or in part as provided in Section 4.03, on any Interest Payment Date on or after September 1, 2001, upon not less than forty-five (45) days prior written notice to the Trustee, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption: Redeml2tion Dates Red=tion Price September 1, 2001 and March 1, 2002 102% September 1, 2002 and March 1, 2003 101 September 1, 2003 and thereafter 100 The provisions of this subsection (a) shall not be applicable to circumstances under which the Bonds are subject to mandatory redemption pursuant to the following subsection (b) of this Section. (b) Mandatory Redemption From Principal Prepayments. The Bonds shall be subject to mandatory redemption, in whole, or in part as provided in Section 4.03, on any Interest Payment Date on or after September 1, 2001, from and to the extent of any Principal Prepayments, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption: Redeml2tion Dates Redg=fion Price September 1, 2001 and March 1, 2002 102% September 1, 2002 and March 1, 2003 101 September 1, 2003 and thereafter 100 In the event that the Local Agency Bond Fiscal Agent or the Local Agency shall provide notice of the prepayment of any Local Agency Bonds which will produce Principal Prepayments, the Trustee shall concurrently mail notice of the redemption of a like aggregate principal amount of Bonds pursuant to this subsection (b), such redemption to occur on the date fixed for such prepayment of the Local Agency Bonds. The proceeds of any such prepayment of the Local Agency Bonds shall be applied by the Trustee to pay the Redemption Price of a like aggregate principal amount of the Bonds pursuant to this subsection (b) on the date of such prepayment of the Local Agency Bonds. (c) Mandatory Redemption. (i) The Bonds shall also be subject to mandatory sinking fund redemption in whole, or in part by lot, on September 1 in each year commencing September 1, . at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on September 1 in the respective years as set forth in the following table; provided, however, that ff some but not all of the Bonds have been redeemed pursuant to subsections (a) or (b) above or (c)(ii) below, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of the Bonds so redeemed, to be allocated among maturities such that the aggregate of the principal and interest due on the Local Agency Bonds 17 which remain Outstanding following such redemption is sufficient in time and amount to timely pay the principal and interest due on the Bonds which remain Outstanding following such redemption as determined by the Authority (notice of which determination shall be given by the Authority to the Trustee and the Local Agency). Sinking Fund Sinking Fund Redemption Date Principal Amount Redemption Date Principal Amount (Sgptember 1) to be Redeemed (Sel2tember 1) to be Redeemed 1997 [to come] 2012 1998 2013 [to come] 1999 2014 2000 2015 2001 2016 2002 2017 2003 2018 2004 2019 2005 2020 2006 2021 2007 2022 2008 2023 2009 2024 2010 2025 2011 2026 (maturity) In lieu of redemption under this Section 4.01(c)(i), moneys in the Revenue Fund may be used and withdrawn by the Trustee for purchase of Outstanding Bonds, upon the filing with the Trustee of a certificate executed by an Authorized Officer of the Authority requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase. The Trustee shall be absolutely protected and shall incur no liability in relying on such certificate. (ii) The Bonds shall be subject to mandatory redemption in part on any Interest Payment Date, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest to the date fixed for redemption from the proceeds of a mandatory redemption of the Local Agency Bonds pursuant to Section 2.03(A)(iii) of the Fiscal Agent Agreement. In the event that the Local Agency Bond Fiscal Agent or the Local Agency shall provide notice of the redemption of any Local Agency Bonds under Section 2.03(A)(iii) of the Fiscal Agent Agreement, the Trustee shall concurrently mail notice of the redemption of a like aggregate principal amount of Bonds pursuant to this subsection (C)(ii), such redemption to occur on the date fixed for such redemption of the Local Agency Bonds. The proceeds of any such redemption of the Local Agency Bonds shall be applied by the Trustee to pay the Redemption Price of a like aggregate principal amount of the Bonds pursuant to this subsection (C)(ii) on the date of such prepayment of the Local Agency Bonds. SECTION 4.02. Notice of Redeml2tion. The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, and to the Securities Depositories and to one or more Information Services, at least thirty (30) but not more than sixty (60) days prior to the date fixed for redemption. Neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon from and after the date fixed for redemption. Such notice shall state the date of 18 the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities (except in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. SECTION 4.03. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Bonds shall be selected for redemption among maturities and within a maturity by the Authority (evidenced pursuant to a Written Certificate delivered to the Trustee at least fifty (50) days prior to the redemption date or such later date as shall be acceptable to the Trustee) on such basis that the remaining payments of principal and interest on the Local Agency Bonds, together with other available Revenues, will be sufficient on a timely basis to pay debt service on the Bonds, as shall be demonstrated in a certificate of an Independent Financial Consultant filed with the Trustee. The certificate of the Independent Financial Consultant shall specify (a) the premium, ff any, to be paid by the Local Agency under Section 2.03(A)(i) or (iii), as applicable, of the Fiscal Agent Agreement in connection with such redemption, (b) the principal amount and redemption date and price of any Bonds to be redeemed pursuant to Section 4.01(b) or (C)(ii) as a result of the redemption of the Local Agency Bonds, (c) the date and principal amount of any sinking fund redemption payments specified in Section 4.01 (c) (i) to be reduced as a consequence of any such redemption under Section 4.01(b) or (c)(ii), and (d) the date and principal amount of any inking fund redemption payments specified in Section 2.03(A)(ii) of the Fiscal Agent Agreement to be reduced as a consequence of the proposed redemption of the Local Agency Bonds. The Independent Financial Consultant's certificate shall conclude that, based upon the information supplied in clauses (a) through (d) of the preceding sentence, and in reliance upon the Trustee, the Local Agency Bond Fiscal Agent, the Local Agency and the Authority implementing the redemption of the Local Agency Bonds and the Bonds in a manner consistent with such information, the aggregate of the principal and interest due on the Local Agency Bonds which remain Outstanding (as defined in the Fiscal Agent Agreement) following such redemption will be sufficient in time and amount to timely pay the principal and interest due on the Bonds which will remain Outstanding following any redemption of the Bonds to occur under Section 4.01 (b) or (c) (ii), as applicable, as a result of the redemption of the Local Agency Bonds under Section 2.03(A)(i) or (iii), respectively, of the Fiscal Agent Agreement. In addition to the foregoing, Bonds may only be redeemed in $5,000 increments, and each Bond Outstanding following any redemption shall be in a denomination authorized under Section 2.02. SECTION 4.04. Partial Redeml2tion of Bonds. Upon surrender of any Bond redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered. SECTION 4.05. Effect of Notice of Redeml2tion. Notice having been mafled as aforesaid, and moneys for the redemption (including the interest to the applicable date fixed for redemption and including any applicable premium), having been set aside in the Redemption Account or any of the accounts therein, the Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date. If, on said date fixed for redemption, moneys for the redemption of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available 19 therefor on such date, and, ff notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed. AR Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of this Article IV shall be canceled upon surrender thereof and destroyed. 20 ARTICLE V SECURITY OF BONDS; FLOW OF FUNDS; INVESTMENTS SECTION 5.01. Pledge and Assignment; Revenue Fund. (a) Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and any other amounts (including proceeds of the sale of the Bonds) held in any fund or account established pursuant to this Indenture are hereby pledged by the Authority to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms and the provisions of this Indenture. Said pledge shall constitute a hen on and security interest in such assets and shall attach, be perfected and be valid and binding from and after delivery of the Bonds by the Trustee, upon the physical delivery thereof. (b) The Authority hereby transfers in trust, grants a security interest in and assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the Revenues and all of the right, title and interest of the Authority in the Local Agency Bonds, ff any. The Trustee shall be entitled to and shall corect and receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority, as agent of the Trustee, and shall forthwith be paid by the Authority to the Trustee. The Trustee also shall take all steps, actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, an of the rights of the Authority and all of the obligations of the Local Agency under and with respect to the Local Agency Bonds. (c) All Revenues shall be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the "Revenue Fund" which the Trustee shall establish, maintain and hold in trust; provided that (i) all Principal Prepayments received by the Trustee shall be deposited by the Trustee in the Redemption Account to be applied to the redemption of Bonds pursuant to Section 4.01(b), and (ii) any amount received by the Trustee upon a redemption of the Local Agency Bonds pursuant to Section 2.03(A)(iii) of the Fiscal Agent Agreement shall be deposited by the Trustee to the Redemption Account to be applied to the redemption of Bonds pursuant to Section 4.01(c)(ii). All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture. SECTION 5.02. A1212lication of Revenue Fund. The Trustee shall transfer from the Revenue Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain in trust separate and distinct from the other funds and accounts established hereunder), the following amounts at the following times in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority: (a) On each Interest Payment Date or redemption date, the Trustee shall deposit in the Interest Account an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Interest Account to equal the amount then required to make any payment pursuant to Section 5.03. (b) On each September 1, commencing September 1, 1997, the Trustee shall deposit in the Principal Account an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Principal Account to equal the 21 aggregate amount of principal (if any) coming due and payable on the outstanding Bonds at maturity on such September 1. In addition, on each September 1 on which the Bonds mature, the Trustee shall deposit in the Principal Account an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Principal Account to equal the aggregate amount of principal then coming due and payable on the Bonds. (c) On each Interest Payment Date or redemption date, the Trustee shall deposit in the Redemption Account an amount equal to the principal and any premium due on any Bonds to be redeemed pursuant to Section 4.01 on such date. (d) Following the foregoing transfers, the Trustee shall deposit in the Surplus Account all remaining amounts. SECTION 5.03. A12plication of Interest Account. Subject to the provisions of this Indenture, all amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it shall become due and payable. Any amounts on deposit in the Interest Account on any Interest Payment Date and not required to pay interest then due and payable on the Bonds shall be retained in the Interest Account and credited towards the payment of interest on the Bonds next coming due. SECTION 5.04. A1212hcation of Princil2al Account. Subject to the provisions of this Indenture, all amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal of the Bonds upon the stated maturity thereof. SECTION 5.05. A12plication of Redeml2tion Account. Subject to the provisions of this Indenture, all amounts deposited in the Redemption Account shall be used and withdrawn by the Trustee solely for the purpose of redeeming Bonds in the manner and upon the terms and conditions set forth in the respective provisions of Article IV. SECTION 5.06. A1212lication of Surplus Account. Promptly upon the deposit of amounts into the Surplus Account, the Trustee shall remit such amounts to the Treasurer, to be used by the Treasurer (i) to make transfers to the Treasurer (as defined in the Fiscal Agent Agreement) to be used by the Local Agency for deposits to the Special Tax Fund (as defined in and established under the Fiscal Agent Agreement), in order to reduce the special taxes levied in the current or the succeeding Fiscal Year upon the properties which are subject to special taxes to pay the principal of and interest on the Local Agency Bonds, or (ii) for any lawful purpose of the Authority. SECTION 5.07. Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments, as directed by the Local Agency pursuant to a Written Request delivered to the Trustee at least two (2) Business Days prior to the making of such investment. Permitted Investments may be purchased at such prices as the Local Agency shall determine. Moneys in all funds and accounts shall be invested in Permitted Investments maturing not later than the date on which such moneys will be required for the purposes specified in this Indenture. Absent timely written direction from the Local Agency, the Trustee shall invest any funds held by it in Permitted Investments described in clause (e) of the definition thereof. The Trustee may conclusively rely on such Written Request and shall be protected in relying thereon. The Trustee shall be deemed to have conclusively complied with the Fair Market Value requirement ff it invests such moneys in Permitted Investments described in clause (e) of the definition thereof in the absence of written instructions from the Authority. All interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Indenture shall be deposited in the Revenue Fund. 22 Permitted Investments acquired as an investment of moneys in any fund established under this Indenture shall be credited to such fund. Except as otherwise provided in the next sentence, all investments of amounts deposited in any fund or account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Tax Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Indenture of the Tax Code) at Fair Market Value. For purposes of any Fair Market Value determination hereunder, the Trustee shall be entitled to conclusively rely, and shall be fully protected in relying, on a Written Certificate of the Authority. Investments in ftmds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Tax Code shall be valued at their present value (within the meaning of section 148 of the Tax Code). The Trustee may act as principal or agent in the making or disposing of any investment. Upon the Written Request of the Local Agency, the Trustee shall sell or present for redemption, any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment or other disposition pursuant to this Section 5.07. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder. 23 ARTICLEVI PARTICULAR COVENANTS SECTION 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal, premium, ff any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Indenture and received by the Authority or the Trustee. SECTION 6.02. Extension of P!Iyment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds. SECTION 6.03. Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Bond Law, and reserves the right to issue other obligations for such purposes. SECTION 6.04. Power to Issue Bonds and Make Pledge and AssigLiment. The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee (subject to the provisions of Article VIII) shall at all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all Persons whomsoever. SECTION 6.05. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with trust industry standards, in which complete and accurate entries shall be made of all transactions made by the Trustee relating to the proceeds of the Bonds, the Revenues, the Local Agency Bonds and all funds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Authority and the Local Agency, upon reasonable notice during regular business hours of the Trustee. SECTION 6.06. Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law. 24 SECTION 6.07. Collection of Revenues. To the extent available, the Trustee shall conect all Revenues promptly as such Revenues become due and payable, and shall vigorously enforce and cause to be enforced all rights of the Trustee under and with respect to the Local Agency Bonds. SECTION 6.08. Disposition of Local Agency Bonds. The Trustee shall not sell or otherwise dispose of the Local Agency Bonds, or any interest therein, unless either (a) there shall have occurred and be continuing an Event of Default hereunder, or (b) the proceeds derived by the Trustee from such sale or other disposition are sufficient to enable the Trustee to redeem or defease all of the Outstanding Bonds in accordance with the terms hereof. SECTION 6.09. Amendment of Local Agency Bonds. Neither the Trustee nor the Authority shall consent or agree to consent to any amendment or modification of the Fiscal Agent Agreement or the Local Agency Bonds, unless the Authority shall have obtained, and caused to be filed with the Trustee, (a) if applicable, the report of an Independent Financial Consultant stating that such amendment or modification will not cause a reduction in the amount of Revenues required to pay debt service on the Bonds, and (b) an opinion of Bond Counsel stating that such amendment or modification win not materially adversely impair the interests of the Bond Owners hereunder, and will not cause interest on the Bonds to be includable in gross income of the Bond Owners for federal income tax purposes. The Trustee and the Authority may conclusively rely on such report of the Independent Financial Consultant and Opinion of Bond Counsel and shall, in each case, be protected in relying thereon. SECTION 6. 1 0. Tax Covenants Relating to Bonds. (a) Private Llse and Loan. The Authority shall assure that the proceeds of the Bonds are not used in a manner which would cause the Bonds to satisfy the private business tests of Section 141(b) of the Tax Code or the private loan financing test of Section 141(c) of the Tax Code. (b) Federal Guarantee Prohibition. The Authority shall not take any action or permit or suffer any action to be taken by the Trustee or otherwise if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Tax Code. (c) No Arbitrage. The Authority shall not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the Bond proceeds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date, would have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Tax Code. (d) Maintenance of Tax-Exemption. The Authority shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the owners thereof to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the Closing Date. (e) Rebate of Excess Investment Earnings to United States. The Authority shall calculate or cause to be calculated excess investment earnings with respect to the Bonds which are required to be rebated to the United States of America pursuant to Section 148(f) of the Tax Code, and shall pay the full amount of such excess investment earnings to the United States of America in such amounts, at such times and in such manner as may be required pursuant to the Tax Code. Such payments shall be made by the Authority from any source of legally available funds of the Authority, including amounts paid by the Local Agency from the Administrative Expense Fund 25 (as defined in and described under the Fiscal Agent Agreement). In order to provide for the administration of this Section 6.10, the Treasurer of the Authority may provide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the Treasurer of the Authority may deem appropriate. The Trustee shall have no responsibility to make any calculations of rebate or to independently review or verify such calculations. SECTION 6.11. Continuing Disclosure. (a) The Authority hereby covenants and agrees that it will assist the Local Agency in complying with and carrying out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Indenture, failure of the Authority to assist the Local Agency in complying with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, the Trustee may (and, at the request of any Parficipating Underwriter or the holders of at least 25% aggregate principal amount of Outstanding Bonds, shall) or any Bondholder may, take such actions as may be necessary and appropriate to compel performance by the Authority of its obligation hereunder, including seeking mandate or specific performance by court order. (b) Not later than October 30 of each year, commencing October 30, 1997 and until the October 30 following the final maturity of the Bonds, the Treasurer shall supply the following information to the California Debt and Investment Advisory Commission ("CDIAC") by mail, postage prepaid, but only to the extent required to be so supplied by CDIAC: (i) the principal amounts of the Bonds and the principal amount of the Local Agency Bonds then outstanding, (ii) that there is no separate reserve fund for the Bonds, and the balance in the reserve fund for the Local Agency Bonds, (iii) the costs of issuance, including any ongoing fees, (iv) the total amount of administrative fees collected, (v) the amount of administrative fees charged to the Local Agency Bonds, (vi) the interest earnings and terms of all guaranteed investment contracts, (vii) commissions and fees paid on guaranteed investment contracts, (viii) delinquency rates on the Local Agency Bonds, and (ix) that there is no balance in any capitalized interest account. (c) Until the final maturity of the Bonds, the Treasurer shall notify CDIAC by mail, postage prepaid, to the extent required by CDIAC, within 10 days of (i) any failure to pay principal and interest due on the Local Agency Bonds, or (ii) any withdrawal of funds from the reserve account for the Local Agency Bonds to pay principal or interest on the Local Agency Bonds. (d)The failure by the Treasurer to comply with the provisions of Section 6.11 (a), (b) or (c) shall not be an Event of Default hereunder. The provisions of Section 6.11(b) and (c) shall be amended to reflect any applicable change in Section 6599.1(b) or (c) of the California Government Code, without any action by the Authority or the Trustee. SECTION 6.12. Consent to Foreclosure Provisions. The Authority, as the purchase and owner of the Local Agency Bonds, hereby consents, for and on behalf of itself and the Owners of the Bonds, to the provisions of Section 5.14 of the Fiscal Agent Agreement, including but not limited to a foreclosure sale at a price lower than as described in Section 53356.5 of the California Government Code. The foregoing is intended to be, and shall be the consent of the owners of the Local Agency Bonds for purposes of Section 53356.6 of the California Government Code. SECTION 6.13. Further Assurances. The Authority will 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 of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture. 26 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS SECTION 7.01. Events of Default. The following events shall be Events of Default: (a) Failure to pay any installment of principal of any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise. (b)Failure to pay any installment of interest on any Bonds when and as the same shall become dueand payable. (c)Failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained (other than as specified in Section 6.11 hereof), if such failure shall have continued for a period of sixty (60) days after written notice thereof, specifying such failure and requiring the same to be remedied shall have been given to the Authority by the Trustee or the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding; provided, however, if in the reasonable opinion of the Authority the failure stated in the notice can be corrected,'but not within such sixty (60) day period, such failure shall not constitute an Event of Default ff corrective action is instituted by the Authority within such sixty (60) day period and the Authority shall thereafter diligently and in good faith cure such failure in a reasonable period of time. (d) The Authority shall commence a voluntary case under Title 11 of the United States Code or any substitute or successor statute. SECTION 7.02. Remedies Under Local A@ncy Bonds. If any Event of Default shar.occur then, and in each and every such case during the continuance of such Event of Default, the Trustee or the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding may, upon notice in writing to the Authority, exercise any and all remedies available pursuant to law or granted with respect to the Local Agency Bonds. SECTION 7.03. Other Remedies of Bond Owners. Subject to the provisions of Section 7.07, any Bond Owner shall have the right, for the equal benefit and protection of all Bond Owners similarly situated: (a) by mandamus, suit, action or proceeding, to compel the Authority and its members, officers, agents or employees to perform each and every ten-n, provision and covenant contained in this Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Authority and the fulfillment of all duties imposed upon it by the Bond Law; (b) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bond Owners'rights; or (c) upon the happening of any Event of Default, by suit, action or proceeding in any court of competent jurisdiction, to require the Authority and its members and employees to account as if it and they were the trustees of an express trust. SECTION 7.04. Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Revenues and any other funds then held or thereafter 27 received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order: (a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds and payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; (b) To the payment of the principal of and interest then due with respect to the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof ff fully paid) subject to the provisions of this Indenture, as follows: First: To the payment to the Persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and Second: To the payment to the Persons entitled thereto of the unpaid principal of any Bonds which shall have become due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate bome by the respective Bonds on the date of maturity or redemption, and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the Persons entitled thereto, without any discrimination or preference. SECTION 7.05. Trustee to Rel2resent Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to the Owners under the provisions of the Bonds, this Indenture, the Bond Law and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bond Owners, the Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction against the costs, expenses and liabilities to be incurred in compliance with such request, shall, proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee and such Owners under the Bonds, this Indenture, the Bond Law or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets pledged under this Indenture, pending such proceedings. AR rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such Bonds, subject to the provisions of this Indenture. SECTION 7.06. Bond Owners' Direction of Proceed@s. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds 28 then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction against the costs, expenses and liabilities to be incurred in compliance with such direction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bond Owners not parties to such direction. SECTION 7.07. Limitation on Bond Owners' Right to Sue. No Owner of any Bonds shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Fiscal Agent Agreement, the Bond Law or any other applicable law with respect to such Bonds, unless (a) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner or said Owners shall have tendered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and (e) no direction inconsistent with such Written Request shall have been given to the Trustee during such sixty (60) day period by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds, this Indenture, the Bond Law or other applicable law with respect to the Bonds, except in the manner herein provided, and that an proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture. SECTION 7.08. Absolute Obligation of Authority. Nothing in Section 7.07 or in any other provision of this Indenture or in the Bonds contained shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor and received by the Authority or the Trustee, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. SECRION 7.09. Termination of Proceed@s. In case any proceedings taken by the Trustee or any one or more Bond Owners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bond Owners, then in every such case the Authority, the Trustee and the Bond Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Authority, the Trustee and the Bond Owners shall continue as though no such proceedings had been taken. 29 SECTION 7.10. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise. SECTION 7.11. No Waiver of Default. No delay or omission of the Trustee or of any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient. 30 ARTICLEVIII THE TRUSTEE SECTION 8.01. Duties and Liabilities of Trustee. (a) Duties of Trustee Generally. The Trustee shall, prior to an Event of Default, and after the curing of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default known to it pursuant to Section 8.03(d) hereunder and which has not been cured, exercise such of the rights and powers vested in it by this Indenture. (b) Removal of Trustee. The Authority may, and upon Written Request of the City shall, upon thirty (30) days'prior written notice remove the Trustee at any time, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or ff at any time the Trustee shall cease to be eligible in accordance with subsection (e) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee and thereupon shall appoint a successor Trustee by an instrument in writing. (c) Resignation of Trustee. The Trustee may at any time resign by giving written notice of such resignation by first class mail, postage prepaid, to the Authority, and to the Bond Owners at the respective addresses shown on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing. (d) Appointment of Successor Trustee. Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by a successor Trustee; provided, however, -that under any circumstances the successor Trustee shall be qualified as provided in subsection (e) of this Section. If no qualified successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days following giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bond Owner (on behalf of himself and all other Bond Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (ff any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by such predecessor trustee under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such 31 successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the Authority shall mail or cause the successor Trustee to mail, by first class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to each rating agency which then maintains a rating on the Bonds and to the Bond Owners at the addresses shown on the Registration Books. If the Authority fails to mail such notice within fifteen (15) days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mafled at the expense of the Authority. (e) Local Agency Bond Fiscal Agent To Act As Trustee Hereunder. Notwithstanding anything herein to the contrary, so long as the Trustee shall be the owner of the Local Agency Bonds, no entity shall be qualified to act as the Trustee (or to act as any successor Trustee) except the Local Agency Bond Fiscal Agent. Upon any resignation or removal of the Local Agency Bond Fiscal Agent in accordance with the Fiscal Agent Agreement, such event shall automatically cause the resignation or removal of the Trustee hereunder; and upon the appointment of a successor Local Agency Bond Fiscal Agent in accordance with the Fiscal Agent Agreement, such appointment shall automatically constitute the appointment of a successor Trustee hereunder. Under no circumstances shall the Trustee be removed or resign hereunder unless the Local Agency Bond Fiscal Agent shall be removed or resign as such under and pursuant to the Fiscal Agent Agreement. In the event that the Trustee shall no longer be the owner of the Local Agency Bonds, the Trustee appointed under the provisions of this Section 8.01 in succession to the Trustee shall be a trust company, federal savings association or bank having the powers of a trust company, having (or in the case of a corporation or trust company included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state agency. If such bank, federal savings association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection the combined capital and surplus of such bank, federal savings association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section. SECTION 8.02. Merger or Consolidation. Any bank, federal savings association or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank, federal savings association or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, federal savings association or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank, federal savings association or trust company shall be eligible under subsection (e) of Section 8.01 shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. SECTION 8.03. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture or of the Bonds nor shall the Trustee incur any responsibility in respect thereof, other than as expressly stated 32 herein in connection with the respective duties or obligations of the Trustee herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee makes no representations as to the validity or sufficiency of the Indenture or of any Bonds, or in respect of the security afforded by the Indenture and the Trustee shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty with respect to: (i) the issuance of the Bonds for value; (ii) the application of the proceeds thereof except to the extent that such proceeds are received by it in its capacity as Trustee; or (iii) the application of any moneys paid to the Authority or others in accordance with the Indenture except as the application of any moneys paid to it in its capacity as Trustee. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or Willful misconduct. The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Indenture. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bond Owners, whether or not such committee shall represent the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. (c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (d) The Trustee shall not be deemed to have knowledge of any default or Event of Default hereunder unless and until it shall have actual knowledge thereof, or shall have received written notice thereof, at its Office. Except as otherwise provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of a default or an Event of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. (e) Whether or not expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Article VIII. SECTION 8.04. Right to Rely on Documents. The Trustee shall be protected and shall incur no liability in acting or refraining from acting in reliance upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument but may accept and rely upon the same as conclusive evidence of the truth and accuracy of any such statement and shall be protected in relying thereon. The Trustee may consult with counsel, who may be Bond Counsel or other counsel of or to the Authority, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith; provided, however, the 33 Trustee shall in no event delay any payment with respect to the Bonds in anticipation of any such opinion. The Trustee shall not be bound to recognize any Person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto is satisfactorily established, ff disputed. Whenever in the administration of the trusts imposed upon it -by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Authority, and such Written Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Written Certificate, and the Trustee shall be protected in relying thereon but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable. The Trustee shall have no responsibility or liability with respect to any information in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. Before taking any action under Article VII or this Article at the request of the Owners, the Trustee may require that a satisfactory indemnity bond be furnished by the Owners for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful misconduct in connection with any action so taken. AU indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee. SECTION 8.05. Coml2ensation and Indemnification. In accordance with the Fiscal Agent Agreement, the Local Agency shall pay to the Trustee from time to time all reasonable compensation for all services rendered under this Indenture, and also all reasonable expenses, including interest on advances, charges, legal and consulting fees, including arocable costs of in- house counsel, and other disbursements and those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Indenture. The Local Agency has further agreed in the Fiscal Agent Agreement to indemnify and save the Trustee harmless against any liabilities (including legal fees and expenses) which it may incur in the exercise and performance of its powers and duties hereunder and under any related documents, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its wi@ misconduct. The obligation of the Local Agency to pay the foregoing amounts and the duty of the Local Agency to indemnify the Trustee, in each case, shall survive the termination and discharge of this Indenture, the Fiscal Agent Agreement, the payment in full or defeasance of the Bonds or the removal or resignation of the Trustee, but shall be payable solely from amounts in the Administrative Expense Fund established under the Fiscal Agent Agreement. None of the provisions contained in the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers. 34 ARTICLE DC MODIFICATION OR AMENDMENT HEREOF SECRION 9.01. Amendments Permitted. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental hereto, which the Authority and the Trustee may enter into with the written consent of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding, which shall have been filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof, or extend the time of payment, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or (iii) permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of the Bond Owners to approve the particular form of any supplemental indenture, but it shall be sufficient ff such consent shall approve the substance thereof. Promptly after the execution by the Authority and the Trustee of any supplemental indenture pursuant to this section, the Trustee shall mail a notice (the fon-n of which shall be furnished to the Trustee by the Authority), by first class mail postage prepaid, setting forth in general terms the substance of such supplemental indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. This Indenture and the rights and obligations of the Authority, of the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by an indenture or indentures supplemental hereto, which the Authority and the Trustee may enter into without the consent of any Bond Owners for any one or more of the following purposes: (i) to add to the covenants and agreements of the Authority in this Indenture contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or coffecting any defective provision contained in this Indenture; (iii) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute; (iv) to modify, amend or supplement this Indenture in such manner as to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America; (v) in any other respect whatsoever as the Authority may deem necessary or desirable, provided that such modification or amendment does not materially adversely 35 affect the interests of the Bond Owners hereunder, in the opinion of Bond Counsel filed with the Authority and the Trustee; and (vi) to grant to the Trustee for the benefit of the Owners, additional rights, remedies, powers or authority. The Trustee shall not be required to enter into or consent to any supplemental indenture which adversely affects the rights, obligations, powers, privileges, indemnities, immunities provided the Trustee herein. SECTION 9.02. Effect of Sul2l2lemental Indenture. Upon the execution of any supplemental indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such supplemental indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any supplemental indenture pursuant to this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority as to any modification or amendment provided for in such supplemental indenture, and, in that case, upon demand on the Owner of any Bonds Outstanding at the time of such execution and presentation of his Bonds for the purpose at the Office of the Trustee a suitable notation shall be made on such Bonds. If the supplemental indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority, to any modification or amendment contained in such supplemental indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same interest rate and maturity. SECTION 9.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner. SECTION 9.05. Attomey's 012inion Re: Sul2l2lemental Agreements. The Trustee may obtain an opinion of counsel that any supplemental indenture complies with the provisions of this Article D( and the Trustee may conclusively rely upon such opinion. 36 ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Indenture. The Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority: (a) by paying or causing to be paid the principal of, premium, if any, and interest on the Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, in trust (pursuant to an escrow agreement), at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem all Bonds then Outstanding; or (c) by delivering to the Trustee, for cancellation by it, all of the Bonds then Outstanding. If the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority including without limitation any compensation due and owing the Trustee hereunder, then and in that case, at the election of the Authority (evidenced by a Written Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the Authority under this Indenture shall cease, terminate, become void and be completely discharged and satisfied, except for the provisions of Section 6.10(d). In such event, upon the Written Request of the Authority, and upon receipt of a Written Certificate of an Authorized Representative of the Authority and an opinion of Bond Counsel acceptable to the Trustee, each to the effect that all conditions precedent herein provided for relating to the discharge and satisfaction of the obligations of the Authority have been satisfied, the Trustee shall cause an accounting for such period or periods as may be requested by the Authority to be prepared and filed with the Authority and shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver all moneys or securities or other property held by it pursuant to this Indenture, which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption, to the Authority. SECTION 10.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any or all Outstanding Bonds (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Authority in respect of such Bonds shall cease, terminate and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04. The Authority may at any time surrender to the Trustee for cancellation by the Trustee any Bonds previously issued and delivered, which the Authority may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. 37 SECTION 10.03. Del2osit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds and accounts established pursuant to this Indenture and shall be-- (a) Lawful money of the United States of America, in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such Bonds, premium, ff any, and all unpaid interest thereon to the redemption date; or (b) Non-callable Defeasance Obligations, the principal of, premium, if any, and interest on which when due, in the opinion or report of Bond Counsel or an independent accountant selected by the Authority, will provide money sufficient to pay the principal of and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal and interest become due, provided that in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice; provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Written Request of the Authority) to apply such ftmds to the payment of such principal, premium, if any, and interest with respect to such Bonds, and provided further, in each case, which instructions the Trustee shall be entitled to rely on and shall be protected in relying thereon. SECTION 10.04. Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, any Bonds and remaining unclaimed for two (2) years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in this Indenture), if such moneys were so held at such date, or two (2) years after the date of deposit of such moneys ff deposited after said date when all of the Bonds became due and payable, shall be repaid to the Authority free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee may (at the cost of the Authority) mail, by first class mail postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof. 38 ART'ICLE)A MISCELLANEOUS SECTION 11.01. Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, neither the Authority nor any member thereof shall be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the principal of or interest on the Bonds or for any other purpose of this Indenture. SECTION 11.02. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Authority or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. SECTION 11-03. Limitation of Rights to Parties and Bond Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Authority, the Trustee, the Local Agency and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City and the Owners of the Bonds. SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the Person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Whenever in this Indenture any notice shall be required to be given by mail, such requirement shall be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail. SECTION 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee of any Bonds, the Trustee may destroy such Bonds in accordance with its retention policy then in effect. SECTION 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceabihty shall not affect any other provision of this Indenture, and this Indenture shall be construed as ff such invalid or illegal or unenforceable provision had never been contained herein. The Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. SECTION 11.07. Notices. All notices or communications herein required or permitted to be given to the Authority or the Trustee shall be in writing and shall be deemed to have been sufficiently given or served for all purposes by being delivered or sent by telecopy or by being 39 deposited, postage prepaid, in a United States mail post office letter box, addressed as follows: If to the Authority: Old Town/Westside Improvement Authority c/o City of Temecula 43200 Business Park Drive P. 0. Box 9033 Temecula, CA 92589-9033 Attention: Treasurer with a copy to: City of Temecula 43200 Business Park Drive P. 0. Box 9033 Temecula, CA 92589-9033 Attention:Finance Director If to the Trustee:First Trust of California, National Association 550 South Hope Street, Suite 500 Los Angeles, CA 90071 Attention: Corporate Trust Department SECTION 11.08. Evidence of Rights of Bond Owners. Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bond Owners in Person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any Person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Authority ff made in the manner provided in this Section. The fact and date of the execution by any Person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Person signing such request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. The ownership of registered Bonds shall be proved by the Registration Books. Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon. SECTION 11.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Authority or the Local Agency, or by any other obligor on the Bonds, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the Local Agency or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; provided, however, that the Trustee shall not be deemed to have knowledge that any Bond is owned by the Authority or the Local Agency or any such obligor or affiliate unless the Authority or Local Agency is the registered Owner thereof or the Trustee has received written notice that any other 40 registered Owner is owned by the Authority or Local Agency or such an obligor or affiliate. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the Local Agency or any other obligor on the Bonds. In case of a dispute as to such right, in any decision by the Trustee, the Trustee shall be entitled to rely upon the advice of counsel and shall be fully protected in relying thereon. Upon request, the Authority shall specify to the Trustee those Bonds disqualified pursuant to this Section 11.09. SECTION 11.10. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 but without any liability for interest thereon. SECTION 11.11. Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Owner thereof. SECTION 11.12. Payment on Non-Business Days. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day. SECTION 11.13. Waiver of Personal Liability. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or premium or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by this Indenture. SECTION 11.14. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 11.15. Governing Laws. This Indenture shall be governed by and construed in accordance with the laws of the State of California. 41 IN WITNESS WHEREOF, the OLD TOWN/WEST'SIDE IMPROVEMENT AUTHORITY has caused this Indenture to be signed in its name by its Executive Director and attested by its Secretary, and FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written. OLD TOWN/WEST'SIDE IMPROVEMENT AUTHORITY By Executive Director Attest: Secretary FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Trustee By Authorized Officer 30043-Ol:j2367 42 @BITA FORMOFBOND No. $ OLD TOWN/WESTSIDE EMPROVEN4ENT AUTHORITY 1996 LOCAL AGENCY REVENUE BOND (OLD TOWN AREA) RATE OF INTEREST: MATURM DATE: DATED DATE: CUS, % 11- 1,1996 REGISTERED OWNER: PPJNCIPAL AMOUNT: The OLD TOWN/WESTSIDE IMPROVEMENT AUTHORITY, a joint powers authority organized and existing under the laws of the State of California (the "Authority"), for value received, hereby promises to pay (but only out of the Revenues and other moneys and securities hereinafter referred to) to the Registered Owner identified above or registered assigns (the "Registered Owner"), on the Maturity Date identified above or on any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Rate of Interest identified above in like lawful money from the date hereof, which date shall be the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to - 15, 1997, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or made available for payment), payable semiannually on - 1 and 1 in each year, commencing 1, 1997 (the "Interest Payment Dates"), until payment of such Principal Amount in full. The Principal Amount hereof is payable upon surrender hereof upon maturity or earlier redemption at the corporate trust office (the "Trust Office") of First Trust of California, National Association, as trustee (the "Trustee"), in Los Angeles, California or such other place as designated by the Trustee. Interest on any Bond which is not punctually paid or duly provided for on any Interest Payment Date shall be payable to the person in whose name the ownership of such Bond is registered on the registration books at the close of business on a special record date to be established by the Trustee for the payment of such defaulted interest to be fixed by the Trustee, notice of which shall be given to such Registered Owner not less than ten (10) days prior to such special record date. Interest hereon is payable by check of the Trustee mafled by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the Registration Books of the Trustee as of the close of business on the fifteenth calendar day of the month preceding such Interest Payment Date (the "Record Date"); provided that at the written request of the registered owner of at least $1,000,000 aggregate principal amount of Bonds which written request is on file with the Trustee as of any Record Date, interest on such Bonds shall be paid on the succeeding Exhibit A Page 1 Interest Payment Date by wire transfer to such account in the United States as shall be specified in such written request. This Bond is one of a duly authorized issue of bonds of the Authority designated the "Old Town/Westside Improvement Authority 1996 Local Agency Revenue Bonds (Old Town Area)" (the "Bonds"), limited in principal amount to dollars ($___), secured by an Indenture of Trust, dated as of December 1, 1996, (the "Indenture") by and between the Authority and the Trustee. Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights thereunder of the registered owners of the Bonds, of the nature and extent of the Revenues (as that term is defined in the Indenture), of the rights, duties and immunities of the Trustee and of the rights and obligations of the Authority thereunder; and all of the terms of the Indenture are hereby incorporated herein and constitute a contract between the Authority and the Registered Owner hereof, and to all of the provisions of which Indenture the Registered Owner hereof, by acceptance hereof, assents and agrees. The Bonds are authorized to be issued pursuant to the provisions of the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended from time to time (the "Bond Law"). The Bonds are special obligations of the Authority and, as and to the extent set forth in the Indenture, are payable solely from and secured by a first lien on and pledge of the Revenues and certain other moneys and securities held by the Trustee as provided in the Indenture. All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Revenues and such other moneys and securities, and the Revenues and such other moneys and securities constitute a trust fund for the security and payment of the principal of and interest on the Bonds. The full faith and credit of the Authority is not pledged for the payment of the principal of or interest or redemption premiums (if any) on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Authority or any of its income or receipts, except the Revenues and such other moneys and securities as provided in the Indenture. The Bonds have been issued to provide funds to acquire certain community facilities district bonds (the "Local Agency Bonds") issued by the Old Town/Westside Community Facilities District Financing Authority (the "Local Agency") consisting of the Local Agency's Community Facilities District No. 1 (Old Town Area Public Improvements) 1996 Special Tax Bonds in the initial aggregate principal amount of $ . The Revenues which secure the Bonds and from which the Bonds are payable consist primarily of amounts derived from payments of principal of and interest on the Local Agency Bonds, as more fully set forth in the Indenture. The Bonds maturing on or after September 1, 2002 shall be subject to optional redemption in whole, or in part among maturities on such basis as shall be designated by the Authority in a written certificate of the Authority filed with the Trustee, on any Interest Payment Date on or after September 1, 2001, upon not less than forty-five (45) days prior written notice to the Trustee, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption: Redeml2tion Dates Red=tion Price September 1, 2001 and March 1, 2002 102% September 1, 2002 and March 1, 2003 101 September 1, 2003 and thereafter 100 Exhibit A Page 2 The Bonds shall be subject to mandatory redemption, in whole, or in part among maturities on the same basis as the Local Agency Bonds are redeemed and by lot within a maturity, on any Interest Payment Date on or after September 1, 2001, from and to the extent of any principal prepayments, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption: Redemption Dates Redmption Price September 1, 2001 and March 1, 2002 102% September 1, 2002 and March 1, 2003 101 September 1, 2003 and thereafter 100 The Bonds maturing on September 1, 2026, shall also be subject to mandatory sinking fund redemption in whole, or in part by lot, on September 1 in each year commencing September 1, . at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on September 1 in the respective years as set forth in the following table; provided, however, that ff some but not all of the Bonds have been redeemed in accordance with the preceding paragraph, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of the Bonds so redeemed, to be allocated among maturities such that the aggregate of the principal and interest due on the Local Agency Bonds which remain outstanding following such redemption is sufficient in time and amount to timely pay the principal and interest due on the Bonds which remain outstanding following such redemption as determined by the Authority (notice of which determination shall be given by the Authority to the Trustee and the Local Agency): Sinking Fund Sinking Fund Redemption Date Principal Amount Redemption Date Principal Amount (S@tember 11 to be Redeemed (Sgptember 1) to be Redeemed 1997 [to come] 2012 [to come] 1998 2013 1999 2014 2000 2015 2001 2016 2002 2017 2003 2018 2004 2019 2005 2020 2006 2021 2007 2022 2008 2023 2009 2024 2010 2025 2011 2026 (maturity) The Bonds shall be subject to mandatory redemption in part on any Interest Payment Date, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest to the date fixed for redemption from the proceeds of a mandatory redemption of the Local Agency Bonds pursuant to the excess improvement fund redemption provisions of the Fiscal Agent Agreement. In the event that the Local Agency Bond Fiscal Agent or the Local Agency shall provide notice of the redemption of any Local Agency Bonds under Section 2.03(A)(iii) of the Fiscal Agent Agreement, the Trustee shall concurrently mail notice of the redemption of a like Exhibit A Page 3 aggregate principal amount of Bonds pursuant to this subsection (C)(ii), such redemption to occur on the date fixed for such redemption of the Local Agency Bonds. The proceeds of any such redemption of the Local Agency Bonds shall be applied by the Trustee to pay the Redemption Price of a like aggregate principal amount of the Bonds pursuant to this subsection (C)(ii) on the date of such prepayment of the Local Agency Bonds. The Trustee on behalf and at the expense of the Authority shall mail (by first class mafl) notice of any redemption to the respective registered owners of any Bonds designated for redemption, at their respective addresses appearing on the registration books maintained by the Trustee, and to the securities depositories and information services specified in the Indenture, at least thirty (30) but not more than sixty (60) days prior to the redemption date; provided, however, that neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. The redemption price of the Bonds to be redeemed shall be paid only upon presentation and surrender thereof at the Trust Office of the Trustee. From and after the date fixed for redemption of any Bonds, interest on such Bonds win cease to accrue. The Bonds are issuable as fully registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges, ff any, provided in the Indenture, fully registered Bonds may be exchanged at the Trust Office of the Trustee for a like aggregate principal amount and maturity of fully registered Bonds of other authorized denominations. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Trust Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. The Authority and the Trustee may treat the Registered Owner hereof as the absolute registered owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. The Indenture and the rights and obligations of the Authority and of the registered owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or the amount of principal thereof without the express written consent of the registered owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) permit the creation of any lien on the Revenues and other assets pledged under the Indenture, or deprive the Bond owners of the hen created under the Indenture on the Revenues and such other assets, without the consent of the registered owners of all outstanding Bonds. Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Authority or its agent for registration of transfer, exchange, or payment, and any bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. It is hereby certified by the Authority that all things, conditions and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Exhibit A Page 4 Bond do exist, have happened and have been performed in due time, form and manner as required by the Constitution and statutes of the State of California and by the Bond Law and the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Constitution or statutes of the State of California or by the Bond Law. This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose, until the certificate of authentication hereon shall have been manually signed by the Trustee. Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Authority or its agent for registration of transfer, exchange, or payment, and any bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in its name and on its behalf by the facsimile signatures of its Chairperson and Secretary all as of the Dated Date identified above. OLD TOWN/WEST'SIDE IMPROVEMENT AUTHORITY By Chairperson [S E A LI Attest: Secretary TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within-mentioned Indenture and registered on the Registration Books. Date: FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as Trustee By Authorized Signatory Exhibit A Page 5 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number) the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises. Dated: Signature Guaranteed: Note:Signature(s) must be guaranteed by an eligible guarantor. Note:The signatures on this Assignment must correspond with the name(s) as Written on the face 6f the within Bond in every particular without alteration or enlargement or any change whatsoever. Exhibit A Page 6