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HomeMy WebLinkAboutRelease #37 TEMECULA PUBLIC FINANCING AUTHORITY RELEASE NO. 37 Dated: May 7, 2010 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. 2010 87972Y BY1 2013 87972Y CB0 2016 87972Y CE4 2011 87972Y BZ8 2014 87972Y CC8 2026 87972Y CM6 2012 87972Y CA2 2015 87972Y CD6 2036 87972Y CN4 The Temecula Public Financing Authority (the “Authority”) has previously issued its Releases Nos. 1 through 36. In addition, on February 26, 2010, the Authority issued its Annual Continuing Disclosure Report (the “Report”). This Release No. 37 does not purport to include every item that may be important 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. 37 have the meanings given those terms in the official statement dated April 13, 2006 relating to the Bonds (the “Official Statement”). Nonpayment of Special Taxes and Implications of FDIC Receivership According to the records of the County of Riverside, Ashby USA, LLC (the “Developer”) failed to pay the most recent 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, and, as a result, these property taxes (and Special Taxes) became delinquent on April 10, 2010. The amount of such delinquent Special Taxes is equal to $1,179,993.25, 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. Under the terms of the Fiscal Agent Agreement, the Treasurer of the Authority must send or cause to be sent a notice of delinquency to the Developer within 45 days from when the Treasurer makes the determination that the Developer is delinquent in the payment of Special Taxes. In addition, the Authority must commence foreclosure proceedings within 90 days of such determination. The Treasurer made this determination on April 27, 2010. The City Attorney is in the process of preparing the formal notice of delinquency to the Developer. Because AmTrust Bank is subject to the receivership of the Federal Deposit Insurance Corporation (the “FDIC”), the FDIC’s policies regulate when AmTrust Bank may pay the Special Taxes and whether the Authority may foreclose on the Developer’s parcels in the Community Facilities District. The Authority does not know how the FDIC will interpret those policies in the case of these delinquent Special Taxes and the Authority is planning to send a letter to the FDIC to seek clarification of its position. If the FDIC determines that its policies do not provide for AmTrust Bank to pay the delinquent Special Taxes and do not permit the Authority to foreclose on the related parcels, then, notwithstanding the terms of the Fiscal Agent Agreement, the Authority may have no effective right or remedy to require AmTrust Bank or the Developer to pay the delinquent Special Taxes until the FDIC no longer serves as receiver of AmTrust Bank. If this occurs, the Authority would be required to use amounts on deposit in the Reserve Fund or in the Letter of Credit Reserve Fund Account to pay scheduled debt service on the Bonds. -2-Notices of Foreclosure under Deed of Trust in favor of USA Investment Partners, LLC On March 22, 2010, First American Title Insurance Company, acting as a debt collector, filed Notices of Default and Election to Sell under Deed of Trust (the “Notices”), relating to a foreclosure of parcels the Developer owns in the Community Facilities District. Based on the Notices, the Authority is unable to determine whether the Notices relate to all or only some of the parcels that the Developer owns in the Community Facilities District. The Notices state that the foreclosure relates to a Deed of Trust (“Deed of Trust”), dated May 1, 2001, executed by the Developer in favor of USA Investment Partners, LLC. The Notices state that the Developer executed the Deed of Trust in connection with a note for the original principal amount of $4,250,000 and that the unpaid principal balance of $9,186,227.01 became due and payable on December 31, 2007. The Notices state that, as of March 5, 2010, the total amount of the obligation owed by the Developer that the Deed of Trust secures is $18,378,267.42. Although the Authority is aware of the original note that the Developer executed in the original principal amount of $4,250,000, the Authority is not aware of any of the other circumstances surrounding the amount of such obligation that the Developer owes, the Notices or the foreclosure. Balances in the Funds and Accounts of the Fiscal Agent Agreement As of April 30, 2010, the balances in the following funds and accounts under the Fiscal Agent Agreement were as follows: Fund or Account Balance Administrative Expense Fund $ 171,614.32 Special Tax Fund 659,600.50 Roripaugh Ranch Program Fund 793,538.49† Reserve Fund 3,599,682.78 Letter of Credit Reserve Fund Account 2,841,523.06 City Account of the Improvement Fund 807,751.63 EMWD Account of the Improvement Fund 1,563,420.63 Public Works Administration Account of the Improvement Fund 476,458.19 Acquisition Account of the Improvement Fund $29,225,365.75 _______________________ † Amounts in this fund represent penalties collected with payments of delinquent Special Taxes. Amounts in this fund may be used to pay costs related to the Community Facilities District. 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 -3-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 FILED WITH THE MUNICIPAL SECURITIES RULEMAKING BOARD, 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.