HomeMy WebLinkAboutRelease #32
TEMECULA PUBLIC FINANCING AUTHORITY RELEASE NO. 32 Dated: May 21, 2009 Relating to $51,250,000 Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh
Ranch), 2006 Special Tax Bonds (the “Bonds”) Maturity (September 1) CUSIP No. Maturity (September 1) CUSIP No. Maturity (September 1) CUSIP No. 2009 87972Y BX3 2013 87972Y CB0 2026 87972Y
CM6 2010 87972Y BY1 2014 87972Y CC8 2036 87972Y CN4 2011 87972Y BZ8 2015 87972Y CD6 2012 87972Y CA2 2016 87972Y CE4 The Temecula Public Financing Authority (the “Authority”) has previously
issued its Releases Nos. 1 through 31. In addition, on February 25, 2009, the Authority issued its Annual Continuing Disclosure Report (the “Report”). This Release No. 32 does not purport
to include every item that may be of interest to owners of the Bonds, nor does it purport to present “full and fair disclosure” with respect to the Bonds within the meaning of applicable
federal and state securities laws. Capitalized terms used but not defined in this Release No. 32 have the meanings given those terms in the official statement dated April 13, 2006 relating
to the Bonds (the “Official Statement”). Foreclosure Action Relating to Nonpayment of Special Taxes Ashby USA, LLC (the “Developer”) failed to pay the two most recent installments (each,
a “Property Tax Installment”) of property taxes levied on the parcels that it owns within the project, including the Special Taxes that the Community Facilities District has levied on
such parcels. The first delinquent Property Tax Installment (including the Special Taxes) became delinquent on December 10, 2008. The amount of delinquent Special Taxes relating to the
first delinquent Property Tax Installment is equal to $1,180,188.92, excluding penalties. The second delinquent Property Tax Installment (including the Special Taxes) became delinquent
on April 10, 2009. The amount of delinquent Special Taxes relating to the second delinquent Property Tax Installment is also equal to $1,180,188.92, excluding penalties. According to
the records of the County of Riverside, the other owners of parcels within the Community Facilities District have paid the property taxes (and Special Taxes) related to such parcels.
The City Attorney has made two procedural applications in anticipation of the filing of foreclosure proceedings with respect to the first Property Tax Installment on April 8, 2009, by
filing two motions (the “Motions”) in the United States Bankruptcy Court for the District of Nevada (the “Court”). Copies of the Motions are attached to this Release No. 32 as Exhibit
A. The Motions request the Court to provide the Authority with relief regarding the applicability of the automatic stay imposed in the bankruptcy proceedings of each of USA Commercial
Mortgage Company and USA Investment Partners, LLC. The Motions have now been fully submitted and argued to the Court, and the Authority awaits the Court’s entry of appropriate orders
to provide it such relief, before the Authority files formal foreclosure proceedings in California state court against the Developer and the parcels it owns in the Community Facilities
District.
Approval by the Board of Directors of the Authority of the Amended and Restated Acquisition Agreement In Release No. 31, the Authority disclosed that the Board of Directors of the Authority
was going to consider the approval of the Amended and Restated Acquisition Agreement on May 12, 2009. On that date, the Board of Directors of the Authority considered and approved the
Amended and Restated Acquisition Agreement. In addition, the Developer has indicated that it is willing to execute the Amended and Restated Acquisition Agreement. Under the terms of
the Assignment and Agreement between the Developer and AmTrust Bank entered into at the time of the issuance of the Bonds, AmTrust Bank must consent to the execution and delivery by
the Authority and the Developer of the Amended and Restated Acquisition Agreement. The Authority and the Developer have requested this consent from AmTrust Bank and are waiting for its
response. Upon receipt of AmTrust Bank’s consent, the Authority expects that it and the Developer will execute and deliver the Amended and Restated Acquisition Agreement. Balances in
the Funds and Accounts of the Fiscal Agent Agreement As of April 30, 2009, the balances in the following funds and accounts under the Fiscal Agent Agreement were as follows: Fund or
Account Balance Administrative Expense Fund $ 324,965.15 Special Tax Fund† 4.92 Reserve Fund 3,567,986.11 Letter of Credit Reserve Fund Account 2,833,666.91 City Account of the Improvement
Fund 1,192,502.72 EMWD Account of the Improvement Fund 1,549,689.91 Public Works Administration Account of the Improvement Fund 611,504.96 Acquisition Account of the Improvement Fund
42,632,594.97 Total $ 52,712,915.65 _______________________ † Amount in Special Tax Fund does not include the most recent payment of Special Taxes by owners of parcels in the Community
Facilities District other than Ashby USA, LLC. On April 30, 2009, these amounts were held by the Auditor-Controller of the County of Riverside pending transfer to the Authority. Federal
Tax Law Implications of Delay in Expenditure of Bond Proceeds Under applicable federal tax law, the Authority is not required to spend the proceeds of the Bonds within a specific time
period. However, for the interest on the Bonds to be tax exempt, at the time the Bonds were issued, the Authority was required to reasonably expect that 85% of the proceeds of the Bonds
available for construction of the project would be spent within three years. At the time of the issuance of the Bonds, the Authority did reasonably expect that this would occur. In addition,
in connection with the issuance of the Bonds:
(1) The Authority was required to enter into binding agreements within six months of the date of issuance of the Bonds that obligated it to spend at least five percent of the proceeds
of the Bonds available for construction. The Authority did this at the time of the delivery of the Bonds when it entered into the Acquisition Agreement with the Developer. (2) The Authority
is required to use reasonable diligence to spend the proceeds of the Bonds available for construction. The Authority has used its reasonable diligence and continues to use its reasonable
diligence. The reason for the slow rate of expenditure of Bond proceeds available for construction is the result of the unforeseen circumstances that occurred following the issuance
of the Bonds. (3) From and after the date which is three years after the date of issuance of the Bonds, the Authority is required to either invest the unspent Bond proceeds available
for construction at a yield that is less than the yield on the bonds, or make yield reduction payments to the Internal Revenue Service. From and after April 27, 2009, the Authority is
complying with this requirement. Steps by Beneficial Owners to Augment Transmission of Notices Owners of the Bonds should be aware of steps that they can take to augment the transmission
of notices with respect to the Bonds. In order to be assured of receiving notice, beneficial owners of the Bonds may wish to ascertain that the nominee who holds the Bonds for their
benefit has agreed to obtain and transmit notices to the beneficial owners, or in the alternative, beneficial owners may wish to provide their names and addresses to the Authority and
request that copies of future notices be provided directly to them. Such requests should be sent to: Temecula Public Financing Authority c/o Richards, Watson & Gershon 355 South Grand
Avenue, 40th Floor Los Angeles, California 90071 Attn: Peter Thorson or may be sent by e-mail to pthorson@rwglaw.com. Any requests to receive any prior Releases by the Authority should
be made to the same address or e-mail. Concluding Matters. ANY SUBSEQUENT STATEMENTS REGARDING THE BONDS, OTHER THAN A STATEMENT MADE BY THE AUTHORITY IN AN OFFICIAL RELEASE OR SUBSEQUENT
NOTICE AND/OR FILED WITH THE MUNICIPAL SECURITIES RULEMAKING BOARD OR A NATIONALLY RECOGNIZED MUNICIPAL SECURITIES INFORMATION REPOSITORY, ARE NOT AUTHORIZED BY THE AUTHORITY. THE AUTHORITY
SHALL NOT BE RESPONSIBLE FOR THE ACCURACY, COMPLETENESS OR FAIRNESS OF ANY SUCH UNAUTHORIZED STATEMENT. THIS OFFICIAL RELEASE MAY CONTAIN INFORMATION MATERIAL TO BONDOWNERS AND DOES
NOT PURPORT TO CONTAIN ALL MATERIAL INFORMATION WITH RESPECT TO THE BONDS OR THE FINANCIAL CONDITION OF THE COMMUNITY FACILITIES DISTRICT. THE INFORMATION CONTAINED IN THIS OFFICIAL
RELEASE IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS.
EXHIBIT A MOTIONS
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