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HomeMy WebLinkAbout012417 CC AgendaIn 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 (951) 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 REGULAR MEETING CITY COUNCIL CHAMBERS 41000 MAIN STREET TEMECULA, CALIFORNIA JANUARY 24, 2017 — 7:00 PM At approximately 9:45 P.M., the City Council will determine which of the remaining agenda items can be considered and acted upon prior to 10:00 P.M. 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 P.M. 5:30 PM - The City Council will convene in Closed Session in the Canyons Conference Room on the third floor of the Temecula City Hall concerning the following matters: 1 City Manager Annual Performance Evaluation. The City Council will meet in closed session pursuant to Government Code Section 54957 to evaluate the performance of the City Manager and establish goals and performance objectives for the next year as required by the City Manager's Employment Agreement and pursuant to Government Code Section 54957.6 to meet with its designated representatives, Mayor Maryann Edwards and City Attorney Peter Thorson, to provide direction to the designated representatives concerning the negotiation of changes, if any, to salary, compensation and/or benefits for the unrepresented employee position of City Manager. Any such changes would be approved by the Council as an Agenda Item in open session at a regular Council Meeting. 2. Labor Negotiations. The City Council will meet in closed session with its designated representatives to discuss labor negotiations pursuant to Government Code Section 54957.6. The City's designated representatives are: City Manager Aaron Adams, City Attorney Peter Thorson, Assistant City Manager Greg Butler, Director of Finance Jennifer Hennessy, Human Resources Manager Isaac Garibay and Economic Development Analyst Charles Walker. The employee organization is the California Teamsters Public, Professional and Medical Employees Union Local 911. Next in Order: Ordinance: 17-01 Resolution: 17-07 CALL TO ORDER: Mayor Maryann Edwards Prelude Music: Aubrey Chang Invocation: Pastor Dave Cope of Calvary Chapel Bible Fellowship Flag Salute: Mayor Pro Tem Matt Rahn ROLL CALL: Comerchero, Naggar, Rahn, Stewart, Edwards 1 PRESENTATIONS/PROCLAMATIONS Presentation for Reality Rally Event Presentation from Veterans of Foreign Wars to EMT of the Year Scott Gutierrez and Firefighter of the Year Anne Marie Miller PUBLIC COMMENTS A total of 30 minutes is provided for members of the public to address the City Council on items that appear within the Consent Calendar or a matter not listed on the agenda. Each speaker is limited to three minutes. If the speaker chooses to address the City Council on an item listed on the Consent Calendar or a matter not listed on the agenda, a Request to Speak form may be filled out and filed with the City Clerk prior to the City Council addressing Public Comments and the Consent Calendar. Once the speaker is called to speak, please come forward and state your name for the record. For all Public Hearing or Council Business items on the agenda, a Request to Speak form may be filed with the City Clerk prior to the City Council addressing that item. Each speaker is limited to five minutes. 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, 10 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. 1 Waive Reading of Standard Ordinances and Resolutions RECOMMENDATION: 1.1 That the City Council waive the reading of the text of all standard ordinances and resolutions included in the agenda except as specifically required by the Government Code. 2 Approve the Action Minutes of January 10, 2017 RECOMMENDATION: 2.1 That the City Council approve the City Council, Joint Meeting of the City Council/Planning Commission, and Joint Meeting of the City Council/Old Town Local Review Board action minutes of January 10, 2017. 2 3 Approve the List of Demands RECOMMENDATION: 3.1 That the City Council adopt a resolution entitled: RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A 4 Approve a Cooperative Agreement Between the City of Temecula and Nonprofit Senior Golden Years in Support of Various Senior Services Activities RECOMMENDATION: 4.1 That the City Council approve the Cooperative Agreement between the City of Temecula and nonprofit Senior Golden Years in support of various Senior Services activities. 5 Approve a Cooperative Agreement Between the City of Temecula and the Temecula Valley Genealogical Society in Support of Facility Use RECOMMENDATION: 5.1 That the City Council approve the Cooperative Agreement with the Temecula Valley Genealogical Society for in-kind services in support of Facility Use. 6 Approve the Agreement for Consultant Services with Stantec Consulting Services Inc. for the Butterfield Stage Road — Phase III, PW 15-11 RECOMMENDATION: 6.1 Approve the Agreement for Consultant Services with Stantec Consulting Services Inc., in the amount of $50,000, for professional design and engineering services in support of the Butterfield Stage Road — Phase III, PW 15-11; 6.2 Authorize the City Manager to approve Extra Work Authorizations not to exceed the contingency amount of $5,000, which is 10% of the Agreement amount. 7 Approve the First Amendment to Utility Agreement with Eastern Municipal Water District for Interstate 15 / State Route 79 South Ultimate Interchange, PW04-08 RECOMMENDATION: 7.1 That the City Council approve the First Amendment to Utility Agreement with Eastern Municipal Water District to relocate utilities for the Interstate 15 / State Route 79 South Ultimate Interchange project (Project). 3 8 Approve an Appropriation and the Agreement for Consultant Services with Michael Baker International, Inc. for Temecula Park and Ride, PW06-09 RECOMMENDATION: 8.1 Approve an appropriation from the General Fund, in the amount of $330,000 for Temecula Park and Ride, PW06-09, for additional administration, design, environmental, and site maintenance costs; 8.2 Approve the Agreement for Consultant Services with Michael Baker International, Inc., in an amount not to exceed $57,416, for additional design services; 8.3 Authorize the City Manager to approve extra work authorizations not to exceed the contingency amount of $5,741.60, which is equal to 10% of the Agreement amount. 9 Summarily Vacate Restricted Access Along a Portion of Campanula Way at Parcel 1 of Parcel Map 36461 RECOMMENDATION: 9.1 That the City Council adopt a resolution entitled: RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA TO SUMMARILY VACATE RESTRICTED ACCESS ALONG A PORTION OF CAMPANULA WAY AT PARCEL 1 OF PARCEL MAP 36461 PURSUANT TO THE AUTHORITY PROVIDED BY CHAPTER 4, PART 3, DIVISION 9 OF THE STREETS AND HIGHWAY CODE 10 Accept the Improvements and File the Notice of Completion for the Main Street Bridge Over Murrieta Creek (Replacement), PW03-05 RECOMMENDATION: 10.1 Accept the Improvements for the Main Street Bridge Over Murrieta Creek (Replacement), PW03-05, as complete; 10.2 Direct the City Clerk to File and Record the Notice of Completion. 11 Accept the Improvements and File the Notice of Completion for the Old Town Temecula Community Theater Remediation, PW12-04 RECOMMENDATION: 11.1 Accept the Improvements for the Old Town Temecula Community Theater Remediation, PW12-04, as complete; 11.2 Direct the City Clerk to File and Record the Notice of Completion. 4 12 Approve Plans and Specifications, and Authorize the Solicitation of Construction Bids for Pavement Rehabilitation Program — Margarita Road (Rancho California Road to Temecula Parkway), PW 12-11 RECOMMENDATION: 12.1 Approve the Plans and Specifications, and authorize the Department of Public Works to solicit construction bids for the Pavement Rehabilitation Program — Margarita Road (Rancho California Road to Temecula Parkway), PW12-11; 12.2 Make a finding that this project is exempt from CEQA per Section 15301, Class 1(c) of the CEQA Guidelines. 13 Approve Plans and Specifications, and Authorize the Solicitation of Construction Bids for Butterfield Stage Road at La Serena Way — Traffic Signal Installation, PW15-11TS RECOMMENDATION: 13.1 That the City Council approve the Plans and Specifications, and authorize the Department of Public Works to solicit Construction Bids for the Butterfield Stage Road at La Serena — Traffic Signal Installation, PW15-11TS (Project). ******************** RECESS CITY COUNCIL MEETING TO SCHEDULED MEETINGS OF THE TEMECULA COMMUNITY SERVICES DISTRICT, THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY, THE TEMECULA HOUSING AUTHORITY, AND THE TEMECULA PUBLIC FINANCING AUTHORITY ******************** 5 TEMECULA COMMUNITY SERVICES DISTRICT MEETING Next in Order: Ordinance: CSD 17-01 Resolution: CSD 17-01 CALL TO ORDER: President Jeff Comerchero ROLL CALL: DIRECTORS: Edwards, Naggar, Rahn, Stewart, Comerchero CSD PUBLIC COMMENTS A total of 30 minutes is provided for members of the public to address the Board of Directors on items that appear within the Consent Calendar or a matter not listed on the agenda. Each speaker is limited to three minutes. If the speaker chooses to address the Board of Directors on an item listed on the Consent Calendar or a matter not listed on the agenda, a Request to Speak form may be filled out and filed with the City Clerk prior to the Board of Directors addressing Public Comments and the Consent Calendar. Once the speaker is called to speak, please come forward and state your name for the record. For all Public Hearing or District Business items on the agenda, a Request to Speak form may be filed with the City Clerk prior to the Board of Directors addressing that item. Each speaker is limited to five minutes. CSD 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 Temecula Community Services District request specific items be removed from the Consent Calendar for separate action. 14 Approve the Action Minutes of January 10, 2017 RECOMMENDATION: 14.1 That the Board of Directors approve the action minutes of January 10, 2017. CSD DIRECTOR OF COMMUNITY SERVICES REPORT CSD GENERAL MANAGER REPORT CSD BOARD OF DIRECTORS REPORTS CSD ADJOURNMENT Next regular meeting: Tuesday, February 14, 2017, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. 6 SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY MEETING Next in Order: Ordinance: SARDA 17-01 Resolution: SARDA 17-01 CALL TO ORDER: Chairperson Maryann Edwards ROLL CALL: DIRECTORS: Comerchero, Naggar, Rahn, Stewart, Edwards SARDA PUBLIC COMMENTS A total of 15 minutes is provided for members of the public to address the Board of Directors on items that appear within the Consent Calendar or a matter not listed on the agenda. Each speaker is limited to three minutes. If the speaker chooses to address the Board of Directors on an item listed on the Consent Calendar or a matter not listed on the agenda, a Request to Speak form may be filled out and filed with the City Clerk prior to the Board of Directors addressing Public Comments and the Consent Calendar. Once the speaker is called to speak, please come forward and state your name for the record. For all Public Hearing or Agency Business items on the agenda, a Request to Speak form may be filed with the City Clerk prior to the Board of Directors addressing that item. Each speaker is limited to five minutes. SARDA 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 Successor Agency to the Temecula Redevelopment Agency request specific items be removed from the Consent Calendar for separate action. 15 Approve Recognized Obligation Payment Schedule for the Period of July 1, 2017 through June 30, 2018 (ROPS 17-18) RECOMMENDATION: 15.1 That the Board of Directors adopt a resolution entitled: RESOLUTION NO. SARDA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2017 THROUGH JUNE 30, 2018 PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH 7 SARDA EXECUTIVE DIRECTOR REPORT SARDA BOARD OF DIRECTORS REPORTS SARDA ADJOURNMENT Next regular meeting: Tuesday, February 14, 2017, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. TEMECULA PUBLIC FINANCING AUTHORITY MEETING Next in Order: Ordinance: TPFA 17-01 Resolution: TPFA 17-01 CALL TO ORDER: Chairperson Maryann Edwards ROLL CALL: DIRECTORS: Comerchero, Naggar, Rahn, Stewart, Edwards TPFA PUBLIC COMMENTS A total of 15 minutes is provided for members of the public to address the Board of Directors on items that appear within the Consent Calendar or a matter not listed on the agenda. Each speaker is limited to three minutes. If the speaker chooses to address the Board of Directors on an item listed on the Consent Calendar or a matter not listed on the agenda, a Request to Speak form may be filled out and filed with the City Clerk prior to the Board of Directors addressing Public Comments and the Consent Calendar. Once the speaker is called to speak, please come forward and state your name for the record. For all Public Hearing or Authority Business items on the agenda, a Request to Speak form may be filed with the City Clerk prior to the Board of Directors addressing that item. Each speaker is limited to five minutes. TPFA 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 Temecula Public Financing Authority request specific items be removed from the Consent Calendar for separate action. 16 Approve the Action Minutes of January 10, 2017 RECOMMENDATION: 16.1 That the Board of Directors approve the action minutes of January 10, 2017. JOINT MEETING OF THE CITY COUNCIL AND TEMECULA PUBLIC FINANCING AUTHORITY PUBLIC HEARING 17 Approve Issuance of Special Tax Bonds for the Temecula Public Financing Authority Community Facilities Districts No. 03-02 (Roripaugh Ranch) and No. 16-01 (Roripaugh Ranch Phase 2) RECOMMENDATION: 9 17.1 That the City Council hold a public hearing in accordance with Section 6586.5(a)(2) of the California Government Code with respect to the financing of public improvements by means of the issuance of community facilities district special tax bonds by the Temecula Public Financing Authority for its Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2), and adopt by a majority vote the resolution entitled: RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA MAKING FINDINGS WITH RESPECT TO AND APPROVING THE ISSUANCE OF BONDS BY THE TEMECULA PUBLIC FINANCING AUTHORITY 17.2 That the Temecula Public Financing Authority adopt by a 4/5ths vote the resolution entitled: RESOLUTION NO. TPFA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF SPECIAL TAX BONDS FOR COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2), AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS 17.3 That the Temecula Public Financing Authority adopt by a majority vote the resolution entitled: RESOLUTION NO. TPFA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF SPECIAL TAX REFUNDING BONDS RELATED TO THE TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH), APPROVING AND DIRECTING THE EXECUTION OF A FISCAL AGENT AGREEMENT AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS ADJOURNMENT OF JOINT MEETING TPFA EXECUTIVE DIRECTOR REPORT TPFA BOARD OF DIRECTORS REPORTS TPFA ADJOURNMENT Next regular meeting: Tuesday, February 14, 2017, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. 10 TEMECULA HOUSING AUTHORITY — No Meeting RECONVENE TEMECULA CITY COUNCIL CITY COUNCIL BUSINESS 18 Approve the CAFR Report for the Year Ended June 30, 2016 RECOMMENDATION: 18.1 That the City Council receive and file the City Comprehensive Annual Financial Report (CAFR) as June 30, 2016. JOINT MEETING OF THE CITY COUNCIL AND COMMUNITY SERVICES COMMISSION 19 Conduct Annual Joint Meeting Between the City Council and the Community Services Commission RECOMMENDATION: 19.1 That the City Council conduct the annual joint meeting between the City Council and the Community Services Commission. ADJOURNMENT OF JOINT MEETING DEPARTMENTAL REPORTS 20 City Council Travel/Conference Report 21 Community Development Department Monthly Report 22 Fire Department Monthly Report 23 Police Department Monthly Report 24 Public Works Department Monthly Reports BOARD/COMMISSION REPORTS CITY MANAGER REPORT CITY ATTORNEY REPORT ADJOURNMENT Mid -Year Budget Workshop: Thursday, January 26, 2017, at 8:30 AM, City Council Chambers, 41000 Main Street, Temecula, California. Next regular meeting: Tuesday, February 14, 2017, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. 11 NOTICE TO THE PUBLIC The agenda packet (including staff reports and public Closed Session information) will be available for public viewing in the Main Reception area at the Temecula Civic Center (41000 Main Street, Temecula) after 4:00 PM the Friday before the City Council meeting. At that time, the agenda packet may also be accessed on the City's website — www.temeculaca.gov — and will be available for public viewing at the respective meeting. Supplemental material received after the posting of the Agenda Any supplemental material distributed to a majority of the City Council regarding any item on the agenda, after the posting of the agenda, will be available for public viewing in the Main Reception area at the Temecula Civic Center (41000 Main Street, Temecula, 8:00 AM — 5:00 PM). In addition, such material will be made available on the City's website — www.temeculaca.qov — and will be available for public review at the respective meeting. If you have questions regarding any item on the agenda for this meeting, please contact the City Clerk's Department, (951) 694-6444. 12 PRESENTATIONS r -I City of Temecula Certificate of Recognition Presented on behalf of the City Council and the citizens of the City of Temecula to: Scott Gutierrez The City Council would like to congratulate Scott Gutierrez for receiving the EMT of the Year award. Recently, while off duty, Scott rendered aid to a civilian suffering a heart attack. Scott performed CPR and used the AED on the individual until fire personnel arrived. Scott's quick actions aided in saving the gentleman's life. Scott is a dedicated, thoughtful, and compassionate person who always gives his personal best. We are proud to recognize Scott for receiving this special honor and thank him for his dedicated service to this honorable career and for his passion to serve our communities. We wish Scott all the best in his personal and professional future. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-fourth day of January, 2017. Maryann Edwards, Mayor Randi Johl, City Clerk r -I City of Temecula Certificate of Recognition Presented on behalf of the City Council and the citizens of the City of Temecula to: Anne Marie Miller The City Council would like to congratulate Anne Marie Miller for receiving the Firefighter of the Year award. Anne Marie managed the fire explorer program in addition to her regular duties. Anne Marie is dedicated to her career and consistently goes above and beyond her duties. We are proud to recognize Anne Marie for receiving this special honor and thank her for her dedicated service to this honorable career and for her passion to serve our communities. We wish Anne Marie all the best in her personal and professional future. IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal this twenty-fourth day of January, 2017. Maryann Edwards, Mayor Randi Johl, City Clerk 1. CITY COUNCIL CONSENT Item No. 1 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Randi Johl, City Clerk DATE: January 24, 2017 SUBJECT: Waive Reading of Standard Ordinances and Resolutions PREPARED BY: Randi Johl, City Clerk RECOMMENDATION: That the City Council waive the reading of the text of all standard ordinances and resolutions included in the agenda except as specifically required by the Government Code. BACKGROUND: The City of Temecula is a general law city formed under the laws of the State of California. With respect to adoption of ordinances and resolutions, the City adheres to the requirements set forth in the Government Code. Unless otherwise required, the full reading of the text of standard ordinances and resolutions is waived. FISCAL IMPACT: None ATTACHMENTS: None Item No. 2 ACTION MINUTES TEMECULA CITY COUNCIL REGULAR MEETING CITY COUNCIL CHAMBERS 41000 MAIN STREET TEMECULA, CALIFORNIA JANUARY 10, 2017 — 7:00 PM 5:30 PM - The City Council convened in Closed Session in the Canyons Conference Room on the third floor of the Temecula City Hall concerning the following matters: 1. Conference with Real Property Negotiators. The City Council will meet in closed session pursuant to Government Code Section 54956.8 regarding real property owned by the Temecula West Village, LLC, consisting of approximately 55 acres located west of Interstate 15 and southwesterly of Temecula Parkway and Camino Estribo in the City of Temecula. The property is also known as the "South Parcel (Civic Use)" parcel within the proposed Altair Specific Plan and shown on Figure 2-2 of the Draft Environmental Impact Report for the Altair Specific Plan and related entitlements. The parties to the negotiations for the potential sale of the property to the City are: Temecula West Village, LLC, and the City of Temecula. Negotiators for the City of Temecula are: Aaron Adams, Peter Thorson, Greg Butler, and Luke Watson. Under negotiation are price and terms for the City's acquisition of the property. 2. City Manager Annual Performance Evaluation. The City Council will meet in closed session pursuant to Government Code Section 54957 to evaluate the performance of the City Manager and establish goals and performance objectives for the next year as required by the City Manager's Employment Agreement and pursuant to Government Code Section 54957.6 to meet with its designated representatives, Mayor Maryann Edwards and City Attorney Peter Thorson, to provide direction to the designated representatives concerning the negotiation of changes, if any, to salary, compensation and/or benefits for the unrepresented employee position of City Manager. Any such changes would be approved by the Council as an Agenda Item in open session at a regular Council Meeting. 3. Labor Negotiations. The City Council will meet in closed session with its designated representatives to discuss labor negotiations pursuant to Government Code Section 54957.6. The City's designated representatives are: City Manager Aaron Adams, City Attorney Peter Thorson, Assistant City Manager Greg Butler, Director of Finance Jennifer Hennessy, Human Resources Manager Isaac Garibay and Economic Development Analyst Charles Walker. The employee organization is the California Teamsters Public, Professional and Medical Employees Union Local 911. At 5:30 PM Mayor Edwards called the City Council meeting to order and recessed to Closed Session to consider the matters described on the Closed Session agenda. The City Council meeting convened at 7:04 PM Action Minutes 011017 1 CALL TO ORDER: Mayor Maryann Edwards Prelude Music: Susan Miyamoto Invocation: Pastor Scott Treadway of Rancho Community Church Flag Salute: Council Member Naggar ROLL CALL: Comerchero, Naggar, Rahn, Stewart, Edwards PRESENTATIONS/PROCLAMATIONS Presentation to Incoming/Outgoing Mayor and TCSD President Presentation of 10 -Year Service Pin to Bob Nagel and 5 -Year Service Pin to Robert (Skip) Carter Presentation of Certificate of Recognition to Rancho Christian High School California State Champions Football Team and Coaches PUBLIC COMMENTS The following individuals addressed the City Council: • Michael McCracken • Craig Puma • Bernard Budney CITY COUNCIL REPORTS CONSENT CALENDAR 1 Waive Reading of Standard Ordinances and Resolutions - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 1.1 That the City Council waive the reading of the text of all standard ordinances and resolutions included in the agenda except as specifically required by the Government Code. 2 Approve the Action Minutes of December 13, 2016 - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 2.1 Approve the City Council, Joint Meeting of the City Council/Temecula Community Services District, and Joint Meeting of the City Council/Successor Agency to the Temecula Redevelopment Agency action minutes of December 13, 2016. Action Minutes 011017 2 3 Approve the List of Demands - Approved Staff Recommendation (4-0-1, Council Member Stewart abstained) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn and Edwards with Council Member Stewart abstaining. RECOMMENDATION: 3.1 That the City Council adopt a resolution entitled: RESOLUTION NO. 17-01 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A 4 Approve the City Treasurer's Report as of November 30, 2016 - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 4.1 That the City Council approve and file the City Treasurer's Report as of November 30, 2016. 5 Approve Annual Citywide Records Retention Schedule and Records Destruction - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 5.1 That the City Council adopt a resolution entitled: RESOLUTION NO. 17-02 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING REVISIONS TO THE ESTABLISHED CITYWIDE RECORDS RETENTION SCHEDULE, THEREBY AMENDING AND RESTATING THE RECORDS RETENTION POLICY, AND APPROVING THE DESTRUCTION OF CERTAIN RECORDS 6 Approve Annual Boards and Commissions Handbook for Calendar Year 2017 - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 6.1 That the City Council approve the annual Boards and Commissions Handbook for calendar year 2017. Action Minutes 011017 3 7 Approve Annual Legislative Platform for Calendar Year 2017 - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 7.1 That the City Council approve the annual Legislative Platform for calendar year 2017. 8 Award a Consultant Services Agreement with Triad Consulting & System Design Group, LLC for Design, Vendor Selection, and Project Management Services for a Surveillance System - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 8.1 Award a three-year Consultant Services Agreement with Triad Consulting & System Design Group, LLC, in an amount not to exceed $153,150, for Design, Vendor Selection, and Project Management Services for a Surveillance System; 8.2 Authorize the City Manager to approve Contract Change Orders up to 10% of the contract amount of $15,315. 9 Adopt Resolutions and Authorize Execution of Related Agreements and Documents for the Implementation of a Local Transaction and Use Tax (Measure S) - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 9.1 Adopt a resolution entitled: RESOLUTION NO. 17-03 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA AUTHORIZING THE MAYOR TO EXECUTE AGREEMENTS WITH THE STATE BOARD OF EQUALIZATION FOR IMPLEMENTATION OF A LOCAL TRANSACTIONS AND USE TAX 9.2 Adopt a resolution entitled: RESOLUTION NO. 17-04 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA AUTHORIZING THE EXAMINATION OF TRANSACTIONS (SALES) AND USE TAX RECORDS Action Minutes 011017 4 9.3 Adopt a resolution entitled: RESOLUTION NO. 17-05 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA AUTHORIZING THE CITY MANAGER TO EXECUTE ON BEHALF OF THE CITY CERTAIN AGREEMENTS AND DOCUMENTS WITH THE STATE BOARD OF EQUALIZATION FOR IMPLEMENTATION OF A LOCAL TRANSACTIONS AND USE TAX RECESS At 7:36 PM, the City Council recessed and convened as the Temecula Community Services District Meeting, the Successor Agency to the Temecula Redevelopment Agency Meeting and the Temecula Public Financing Authority Meeting. At 7:48 PM, the City Council resumed with the remainder of the City Council Agenda. RECONVENE TEMECULA CITY COUNCIL PUBLIC HEARING 13 Amend and Adopt the 2016 California Building Codes - Approved Staff Recommendation (5-0) Council Member Rahn made the motion; it was seconded by Council Member Stewart; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 13.1 That the City Council adopt the Ordinance introduced on December 13, 2016: ORDINANCE NO. 16-12 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA AMENDING SECTIONS 15.04.010 THROUGH 15.04.080, INCLUSIVE, OF THE TEMECULA MUNICIPAL CODE TO ADOPT BY REFERENCE THE 2016 EDITIONS OF THE CALIFORNIA BUILDING CODE; CALIFORNIA MECHANICAL CODE; CALIFORNIA PLUMBING CODE; CALIFORNIA ELECTRICAL CODE; CALIFORNIA ADMINISTRATIVE CODE; CALIFORNIA ENERGY CODE; CALIFORNIA GREEN BUILDING STANDARDS CODE; CALIFORNIA HISTORICAL BUILDING CODE; CALIFORNIA EXISTING BUILDING CODE; CALIFORNIA RESIDENTIAL CODE; AND CALIFORNIA REFERENCE STANDARDS CODE; TOGETHER WITH CERTAIN AMENDMENTS, ADDITIONS AND DELETIONS TO SAID CODES City Attorney Thorson read by title only Ordinance No. 16-12. Action Minutes 011017 5 14 Amend and Adopt the 2016 California Fire Code - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Stewart; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 14.1 That the City Council adopt the Ordinance introduced on December 13, 2016: ORDINANCE NO. 16-14 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMECULA ADOPTING BY REFERENCE THE 2016 EDITION OF THE CALIFORNIA FIRE CODE BASED ON THE 2015 INTERNATIONAL FIRE CODE, IN ITS ENTIRETY, REGULATING AND GOVERNING THE SAFEGUARD OF LIFE AND PROPERTY FROM FIRE AND EXPLOSION HAZARDS ARISING FROM THE STORAGE, HANDLING AND USE OF HAZARDOUS SUBSTANCES, MATERIALS AND DEVICES, AND FROM CONDITIONS HAZARDOUS TO LIFE OR PROPERTY IN THE OCCUPANCY OF BUILDINGS AND PREMISES IN THE CITY OF TEMECULA, INCLUDING CERTAIN AMENDMENTS, ADDITIONS, AND DELETIONS, AND PROVIDING FOR THE ISSUANCE OF PERMITS AND THE COLLECTION OF FEES City Attorney Thorson read by title only Ordinance No. 16-14. 15 Consider Planning Application PA16-1657, a Major Modification Application to Allow Revisions to a Previously Approved Car Wash Generally Located at the Northwest corner of Jefferson Avenue and Del Rio Road at 28111 Jefferson Avenue - Approved Staff Recommendation (5-0) Council Member Naggar made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 15.1 That the City Council consider a resolution entitled: RESOLUTION NO. 17-06 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING PLANNING APPLICATION PA16-1657, A MAJOR MODIFICATION APPLICATION TO ALLOW REVISIONS TO A RECENTLY APPROVED CAR WASH GENERALLY LOCATED AT THE NORTHWEST CORNER OF JEFFERSON AVENUE AND DEL RIO ROAD AT 28111 JEFFERSON AVENUE (APN: 921-060-006) Action Minutes 011017 6 CITY COUNCIL BUSINESS 16 Amend the Agreement for Law Enforcement Services Between the City of Temecula and the County of Riverside Funding an Additional 11 Sworn Officers - Approved Staff Recommendation (5-0) Council Member Rahn made the motion; it was seconded by Council Member Comerchero; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 16.1 Approve the Amendment to the Agreement for Law Enforcement Services between the City of Temecula and the County of Riverside (Agreement), adjusting the police officer count; 16.2 Approve an Appropriation of $895,115 to the Police Department FY2016-17 Operating Budget, for salaries, benefits, training and equipment costs related to the additional police officer positions (for three months). 17 Selection of 2017 City Council Committees - Approved Staff Recommendation (5-0) Council Member Comerchero made the motion; it was seconded by Council Member Rahn; and electronic vote reflected approval by Council Members Comerchero, Naggar, Rahn, Stewart and Edwards. RECOMMENDATION: 17.1 That the City Council consider and appoint members to serve on various City Council Committees for calendar year 2017. JOINT MEETING OF THE CITY COUNCIL, PLANNING COMMISSION AND OLD TOWN LOCAL REVIEW BOARD 18 Conduct Annual Joint Meeting Between the City Council and the Planning Commission — Receive and file. RECOMMENDATION: 18.1 That the City Council conduct the annual joint meeting between the City Council and the Planning Commission. 19 Conduct Annual Joint Meeting Between the City Council and the Old Town Local Review Board — Receive and file. RECOMMENDATION: 19.1 That the City Council conduct the annual joint meeting between the City Council and the Old Town Local Review Board. BOARD/COMMISSION REPORTS CITY MANAGER REPORT Action Minutes 011017 7 CITY ATTORNEY REPORT City Attorney Thorson reported there were no reportable actions in regards to the Closed Session items and any actions for these items will take place in open session. ADJOURNMENT At 9:22 PM, the City Council meeting was formally adjourned to Tuesday, January 24, 2017, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. Maryann Edwards, Mayor ATTEST: Randi Johl, City Clerk [SEAL] Action Minutes 011017 8 Item No. 3 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Jennifer Hennessy, Finance Director DATE: January 24, 2017 SUBJECT: Approve the List of Demands PREPARED BY: Pascale Brown, Accounting Manager Pam Espinoza, Accounting Specialist RECOMMENDATION: That the City Council adopt a resolution entitled: RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A BACKGROUND: All claims and demands are reported and summarized for review and approval by the City Council on a routine basis at each City Council meeting. The attached claims represent the paid claims and demands since the last City Council meeting. FISCAL IMPACT: All claims and demands were paid from appropriated funds or authorized resources of the City and have been recorded in accordance with the City's policies and procedures. ATTACHMENTS: 1. Resolution 2. List of Demands RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA ALLOWING CERTAIN CLAIMS AND DEMANDS AS SET FORTH IN EXHIBIT A THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE 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, has been reviewed by the City Manager's Office and that the same are hereby allowed in the amount of $2,021,898.18. Section 2. The City Clerk shall certify the adoption of this resolution. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 24th day of January, 2017. Maryann Edwards, Mayor ATTEST: Randi Johl, City Clerk [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 17- was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 24th day of January, 2017, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: Randi Johl, City Clerk CITY OF TEMECULA LIST OF DEMANDS 12/21/2016 TOTAL CHECK RUIN: $ 478,184.87 12/28/2016 TOTAL CHECK RUN: 867,079.87 01/05/2017 TOTAL CHECK RUN: 260,833.97 12/28/2016 TOTAL PAYROLL RUN: 396,974.05 12/29/2016 TOTAL PAYROLL RUN: 18,825.42 TOTAL LIST OF DEMANDS FOR 01/24/2017 COUNCIL MEETING: $ 2,021,898.18 DISBURSEMENTS BY FUND: CHECKS: CITY OF TEMECULA LIST OF DEMANDS 001 GENERAL FUND $ 713,569.35 125 PEG PUBLIC EDUCATION & GOVERNMENT 2,400.00 135 BUSINESS INCUBATOR RESOURCE 1,389.29 140 COMMUNITY DEV BLOCK GRANT 1,550.80 150 AB 2766 FUND 1,945.47 165 AFFORDABLE HOUSING 1,074.57 190 TEMECULA COMMUNITY SERVICES DISTRICT 236,581.82 192 TCSD SERVICE LEVEL B STREET LIGHTS 73,006.90 194 TCSD SERVICE LEVEL D REFUSE RECYCLING 869.87 196 TCSD SERVICE LEVEL "L" LAKE PARK MAINT. 16,007.07 197 TEMECULA LIBRARY FUND 9,054.23 210 CAPITAL IMPROVEMENT PROJECTS FUND 324,864.85 277 CFD-RORIPAUGH 12,000.00 300 INSURANCE FUND 31,114.79 305 WORKER'S COMPENSATION 3,181.22 320 INFORMATION TECHNOLOGY 53,338.45 330 CENTRAL SERVICES 9,720.39 340 FACILITIES 36,347.38 472 CFD 01-2 HARVESTON A&B DEBT SERVICE 20.43 473 CFD 03-1 CROWNE HILL DEBT SERVICE FUND 20.43 474 AD03-4 JOHN WARNER ROAD DEBT SERVICE 20.43 475 CFD03-3 WOLF CREEK DEBT SERVICE FUND 20.43 476 CFD 03-6 HARVESTON 2 DEBT SERVICE FUND 20.43 477 CFD 03-02 RORIPAUGH DEBT SERVICE FUND 122.61 501 SERVICE LEVEL"C"ZONE 1 SADDLEWOOD 2,411.68 502 SERVICE LEVEL"C"ZONE 2 WINCHESTER CREEK 1,721.00 503 SERVICE LEVEL"C"ZONE 3 RANCHO HIGHLANDS 1,904.86 504 SERVICE LEVEL"C"ZONE 4 THE VINEYARDS 394.48 505 SERVICE LEVEL"C"ZONE 5 SIGNET SERIES 1,806.55 506 SERVICE LEVEL"C"ZONE 6 WOODCREST COUNTRY 912.25 507 SERVICE LEVEL"C"ZONE 7 RIDGEVIEW 1,230.81 508 SERVICE LEVEL"C"ZONE 8 VILLAGE GROVE 9,963.54 509 SERVICE LEVEL"C"ZONE 9 RANCHO SOLANA 115.60 510 SERVICE LEVEL"C"ZONE 10 MARTINIQUE 431.64 511 SERVICE LEVEL"C"ZONE 11 MEADOWVIEW 104.69 512 SERVICE LEVEL"C"ZONE 12 VINTAGE HILLS 4,094.26 513 SERVICE LEVEL"C"ZONE 13 PRESLEY DEVELOP. 1,725.71 514 SERVICE LEVEL"C"ZONE 14 MORRISON HOMES 742.58 515 SERVICE LEVEL"C"ZONE 15 BARCLAY ESTATES 565.07 516 SERVICE LEVEL"C"ZONE 16 TRADEWINDS 1,040.23 517 SERVICE LEVEL"C"ZONE 17 MONTE VISTA 117.50 518 SERVICE LEVEL"C"ZONE 18 TEMEKU HILLS 5,256.50 519 SERVICE LEVEL"C"ZONE 19 CHANTEMAR 2,708.76 520 SERVICE LEVEL"C"ZONE 20 CROWNE HILL 8,055.91 521 SERVICE LEVEL"C"ZONE 21 VAIL RANCH 11,695.60 522 SERVICE LEVEL"C"ZONE 22 SUTTON PLACE 223.86 523 SERVICE LEVEL"C"ZONE 23 PHEASENT RUN 349.54 524 SERVICE LEVEL"C"ZONE 24 HARVESTON 6,826.50 525 SERVICE LEVEL"C"ZONE 25 SERENA HILLS 2,257.02 526 SERVICE LEVEL"C"ZONE 26 GALLERYTRADITION 103.23 527 SERVICE LEVEL"C"ZONE 27 AVONDALE 548.89 528 SERVICE LEVEL"C"ZONE 28 WOLF CREEK 10,368.29 529 SERVICE LEVEL"C"ZONE 29 GALLERY PORTRAIT 180.95 $ 1,606,098.71 CITY OF TEMECULA LIST OF DEMANDS 001 GENERAL FUND $ 257,144.92 135 BUSINESS INCUBATOR RESOURCE 1,614.21 140 COMMUNITY DEV BLOCK GRANT 418.73 165 AFFORDABLE HOUSING 2,919.47 190 TEMECULA COMMUNITY SERVICES DISTRICT 99,235.03 192 TCSD SERVICE LEVEL B STREET LIGHTS 204.47 194 TCSD SERVICE LEVEL D REFUSE RECYCLING 1,993.79 196 TCSD SERVICE LEVEL "L" LAKE PARK MAINT. 234.68 197 TEMECULA LIBRARY FUND 977.46 300 INSURANCE FUND 1,985.53 320 INFORMATION TECHNOLOGY 30,319.58 330 SUPPORT SERVICES 4,982.50 340 FACILITIES 10,847.68 472 CFD 01-2 HARVESTON A&B DEBT SERVICE 66.42 473 CFD 03-1 CROWNE HILL DEBT SERVICE FUND 66.42 474 AD03-4 JOHN WARNER ROAD DEBT SERVICE 66.42 475 CFD03-3 WOLF CREEK DEBT SERVICE FUND 66.42 476 CFD 03-6 HARVESTON 2 DEBT SERVICE FUND 66.42 477 CFD 03-02 RORIPAUGH DEBT SERVICE FUND 398.53 501 SERVICE LEVEL"C"ZONE 1 SADDLEWOOD 80.62 502 SERVICE LEVEL"C"ZONE 2 WINCHESTER CREEK 54.09 503 SERVICE LEVEL"C"ZONE 3 RANCHO HIGHLANDS 64.14 504 SERVICE LEVEL"C"ZONE 4 THE VINEYARDS 11.62 505 SERVICE LEVEL"C"ZONE 5 SIGNET SERIES 129.85 506 SERVICE LEVEL"C"ZONE 6 WOODCREST COUNTRY 23.64 507 SERVICE LEVEL"C"ZONE 7 RIDGEVIEW 33.24 508 SERVICE LEVEL"C"ZONE 8 VILLAGE GROVE 220.79 509 SERVICE LEVEL"C"ZONE 9 RANCHO SOLANA 2.47 510 SERVICE LEVEL"C"ZONE 10 MARTINIQUE 10.11 511 SERVICE LEVEL"C"ZONE 11 MEADOWVIEW 6.67 512 SERVICE LEVEL"C"ZONE 12 VINTAGE HILLS 147.23 513 SERVICE LEVEL"C"ZONE 13 PRESLEY DEVELOP. 31.45 514 SERVICE LEVEL"C"ZONE 14 MORRISON HOMES 18.18 515 SERVICE LEVEL"C"ZONE 15 BARCLAY ESTATES 15.78 516 SERVICE LEVEL"C"ZONE 16 TRADEWINDS 36.82 517 SERVICE LEVEL"C"ZONE 17 MONTE VISTA 3.13 518 SERVICE LEVEL"C"ZONE 18 TEMEKU HILLS 136.51 519 SERVICE LEVEL"C"ZONE 19 CHANTEMAR 72.91 520 SERVICE LEVEL"C"ZONE 20 CROWNE HILL 197.99 521 SERVICE LEVEL"C"ZONE 21 VAIL RANCH 334.90 522 SERVICE LEVEL"C"ZONE 22 SUTTON PLACE 7.95 523 SERVICE LEVEL"C"ZONE 23 PHEASENT RUN 8.77 524 SERVICE LEVEL"C"ZONE 24 HARVESTON 188.33 525 SERVICE LEVEL"C"ZONE 25 SERENA HILLS 60.62 526 SERVICE LEVEL"C"ZONE 26 GALLERYTRADITION 2.55 527 SERVICE LEVEL"C"ZONE 27 AVONDALE 8.77 528 SERVICE LEVEL"C"ZONE 28 WOLF CREEK 277.79 529 SERVICE LEVEL"C"ZONE 29 GALLERY PORTRAIT 3.87 415,799.47 TOTAL BY FUND: $ 2,021,898.18 apChkLst Final Check List Page: 1 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK Check # Date Vendor 3180 12/15/2016 006887 UNION BANK OF CALIFORNIA Description Amount Paid Check Total 019000 OMERTRI LLC, LAURENT'S LE MN MTG FOR INFILL LAND USE WITH 50.00 50.00 COFFEE SHOP 180520 12/21/2016 004858 19TH HOLE GOLF CARTS Cart rental for Code Enforcement 133.00 133.00 180521 12/21/2016 000733 ABBEY PARTY RENTS LINENS FOR SISTER CITY DINNER 446.55 446.55 180522 12/21/2016 016764 ABM BUILDING SERVICES, LLC HVAC PREV MAINT: JRC 213.33 HVAC PREV MAINT: TCC 120.00 HVAC PREV MAINT: FIRE STATION 84 211.00 HVAC PREV MAINT: HARVESTON COMP/ 72.00 HVAC PREV MAINT: MAINTENANCE FAC 262.00 HVAC PREV MAINT: BIRDSALL SPORTS 133.00 HVAC PREV MAINT: FIRE STATION 73 58.00 HVAC PREV MAINT: TEMECULA COMM T 299.00 HVAC PREV MAINT: MPSC 235.00 HVAC PREV MAINT: FOOD PANTRY 29.00 HVAC PREV MAINT: CRC 800.00 HVAC PREV MAINT: TV MUSEUM 150.00 HVAC PREV MAINT: CHILDREN'S MUSED 201.00 HVAC PREV MAINT: TVE2 1,075.00 HVAC PREV MAINT: FIRE STATION - OVE 58.00 HVAC PREV MAINT: FOC 283.00 HVAC PREV MAINT: CHAPEL 50.00 HVAC PREV MAINT: LIBRARY 268.43 HVAC PREV MAINT: PARKING GARAGE 305.00 HVAC PREV MAINT: FIRE STATION 92 292.00 180523 12/21/2016 015217 AIRGAS, INC. Dry ice for experiments:Pennypickle's 10.88 180524 12/21/2016 010905 ALLIED TRAFFIC & EQUIPMENT rental items -various events 180525 12/21/2016 006915 ALLIE'S PARTY EQUIPMENT MISC RENTALS:VAR CSD SPECIAL EVENTS TABLE/CHAIR RENTAL:COLLEGE FAIR 9/ RENT CANOPY & LINENS:POLICE pechanga pueska mountain day: rental 180526 12/21/2016 004422 AMERICAN BATTERY TRAFFIC SIGNAL EQUIPMENT: PW CORPORATION TRAFFIC 180527 12/21/2016 004240 AMERICAN FORENSIC NURSES JAN '17 STAND BY FEE:POLICE (AFN) 5,114.76 10.88 2,450.00 2,450.00 59.50 4,017.99 230.43 1,287.53 5,595.45 573.43 573.43 1,248.00 1,248.00 Pagel apChkLst Final Check List Page: 2 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor Description Amount Paid Check Total 180528 12/21/2016 000101 APPLE ONE INC NOV 16 TEMP STAFF SVCS: CITY 3,911.45 3,911.45 CLERK & HR 180529 12/21/2016 018101 BARN STAGE COMPANY INC, PERFORMANCE:NYE 12/31/16 1,000.00 1,000.00 THE 180530 12/21/2016 015464 BENEVOLENT PROTECTIVE REFUND:SEC DEP:GYM RENTAL:CRC 180531 12/21/2016 004262 BIO-TOX LABORATORIES 180532 12/21/2016 014284 BLAKELY'S TRUCK SERVICE 200.00 200.00 DRUG/ALCOHOL ANALYSIS:POLICE 1,466.50 DRUG/ALCOHOL ANALYSIS:POLICE 987.00 DRUG/ALCOHOL ANALYSIS:POLICE 578.00 VEH & EQUIP MAINT SVCS: PW STREET DIV VEH & EQUIP MAINT SVCS: PW STREET VEH & EQUIP MAINT SVCS: PW STREET VEH & EQUIP MAINT SVCS: PW STREET 180533 12/21/2016 008605 BONTERRA PSOMAS 9/30-10/27 CONSULT SVCS:PECHANGA PKWY 180534 12/21/2016 003138 CAL MAT MISC ASPHALT SUPPLIES:PW STREET MAINT 180535 12/21/2016 016688 CALIFORNIA WATERSHED ENG 8/1-11/30 DSGN SVCS: FLOOD CORP CONTROLCHANN 81.08 92.81 462.80 251.82 3,031.50 888.51 927.64 927.64 92.66 92.66 7,697.00 7,697.00 180536 12/21/2016 004462 CDW, LLC ERGONOMIC KEYBOARD:PW 79.83 79.83 180537 12/21/2016 017414 CHAMBER MARKETING ADVERTISING: TEMECULA PRESENTS 1,200.00 1,200.00 PARTNERS INC 180538 12/21/2016 000137 CHEVRON AND TEXACO NOV 16 CITY VEHICLES FUEL: POLICE 1,349.24 1,349.24 DEPT 180539 12/21/2016 019468 CHS EDUCATION FOUNDATION REFUND:SEC DEP:RM RENTAL:TCC 200.00 200.00 180540 12/21/2016 019372 CITY BEAT PERFORMANCE:NYE 12/31/16 180541 12/21/2016 000442 COMPUTER ALERT SYSTEMS 180542 12/21/2016 004329 COSTCO TEMECULA #491 2,500.00 2,500.00 fire & security monitoring:var sites— 5,775.00 SMOKE DETECTOR REPAIR: THEATER MISC SUPPLIES:MPSC SUPPLIES:SKATE PARK MISC SUPPLIES/EQUIPMENT:LIBRARY SUPPLIES:HUMAN SVCS PRGRMS & EVE SUPPLIES:HIGH HOPES PROGRAM 242.00 6,017.00 218.22 207.36 176.71 38.97 249.82 891.08 Page2 apChkLst Final Check List Page: 3 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor Description 180543 12/21/2016 017542 COX, KRISTI LYN TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS Amount Paid Check Total 873.60 554.40 1,428.00 180544 12/21/2016 018491 CRONBERG PHOTOGRAPHY TCSD INSTRUCTOR EARNINGS 196.00 TCSD INSTRUCTOR EARNINGS 399.00 595.00 180545 12/21/2016 019465 CRUZ, LAURA REFUND:SEC DEP:PICNIC 200.00 200.00 RENTAL:HARVESTON 180546 12/21/2016 012614 DBX, INC. REPAIRS & MAINT OF TRAFFIC SIG EQUIP: PW 180547 12/21/2016 004192 DOWNS ENERGY FUEL & LUBRICANTS FUEL FOR CITY VEHICLES: TRAFFIC DIV FUEL FOR CITY VEHICLES: POLICE DEP FUEL FOR CITY VEHICLES: TCSD FUEL FOR CITY VEHICLES: BLDG INSPE FUEL FOR CITY VEHICLES: CODE ENFOI FUEL FOR CITY VEHICLES: PUBLIC WOF FUEL FOR CITY VEHICLES: PUBLIC WOF 10,000.00 10,000.00 241.91 44.34 430.21 123.34 22.80 676.52 565.04 2,104.16 180548 12/21/2016 002528 EAGLE GRAPHIC CREATIONS misc office supplies: council member 114.48 114.48 INC 180549 12/21/2016 002390 EASTERN MUNICIPAL WATER NOV WATER METER:32131 S LOOP RD 51.56 DIST LDSC NOV WATER METER:32131 S LOOP RD C 48.79 NOV WATER METER:32131 S LOOP RD E 115.70 216.05 180550 12/21/2016 013367 ELECTRO INDUSTRIAL SUPPLY MISC SMALL TOOLS & EQUIP: PW 249.52 249.52 TRAFFIC 180551 12/21/2016 002939 ENVIRONMENTAL SYSTEMS ARCGIS SOFTWARE RENEWAL:GIS 18,300.00 18,300.00 RESEARCH 180552 12/21/2016 015090 EVAPCO PRODUCTS, INC. DEC '16 CONDENSER WATER SYS 566.50 566.50 MAINT: CIV C 180553 12/21/2016 015330 FAIR HOUSING COUNCIL OCT 16 FAIR HOUSING SRVCS:CDBG FUNDING 180554 12/21/2016 011145 FOSTER, JILL CHRISTINE 180555 12/21/2016 018858 FRONTIER CALIFORNIA, INC. TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS NOV INTERNET SVCS:TCC DEC INTERNET SVCS:CITY HALL DEC GENERAL USAGE:SR CTR, SKATE F 1,401.82 1,401.82 1,019.20 705.60 2,054.85 144.99 289.99 129.56 3,779.65 564.54 Page:3 apChkLst Final Check List Page: 4 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor 180556 12/21/2016 000177 GLENNIES OFFICE PRODUCTS INC 180557 12/21/2016 003792 GRAINGER Description Amount Paid Check Total NOV 16 MISC OFFICE SUPPLIES: FOC 81.71 NOV 16 MISC. OFC SUPPLIES: ECON DE 40.42 NOV 16 MISC. OFFICE SUPPLIES: VAR R MISC STAGE SUPPLIES: THEATER RET'D MISC STAGE SUPPLIES: THEATEF MISC STAGE SUPPLIES: THEATER MISC STAGE SUPPLIES: THEATER MISC STAGE SUPPLIES: THEATER MAINTENANCE SUPPLIES: VAR PARKS MISC STAGE SUPPLIES: THEATER 180558 12/21/2016 019456 HARTMAN, EULALIA MICHELE REFUND:SEC DEP:RM RENTAL:TCC 180559 12/21/2016 013749 HELIXSTORM INC. IT INFRASTRUCTURE SUPPORT:INFO TECH 584.92 707.05 207.95 -207.95 100.56 10.33 197.62 73.39 10.33 392.23 150.00 150.00 1,337.50 1,337.50 180560 12/21/2016 019455 HEMETADVISORY COUNCIL REFUND:SEC DEP:RM RENTAL:CRC 200.00 200.00 180561 12/21/2016 010210 HOME DEPOT SUPPLY INC, BUILDING AND REC SUPPLIES:MRC 584.80 584.80 THE 180562 12/21/2016 003198 HOME DEPOT, THE MISC SUPPLIES:SKATE PARK 108.96 108.96 180563 12/21/2016 017334 HOUSE OF AUTOMATION INC. GATE & BAY DOOR MAINT: STA 84 GATE & BAY DOOR MAINT: STA 84 GATE & BAY DOOR MAINT: STA 84 GATE REPAIR: STA95 576.35 546.19 666.42 479.85 2,268.81 180564 12/21/2016 009135 IMPACT MARKETING & DESIGN PROMOTIONAL ITEMS: THEATER 723.73 723.73 INC 180565 12/21/2016 016564 IMPACT TELECOM NOV 800 SERVICES:CIVIC CENTER 55.82 55.82 180566 12/21/2016 015358 KELLY PAPER COMPANY, INC. paper/binding/pckg supp:central services 671.45 671.45 180567 12/21/2016 001091 KEYSER MARSTON P/E 11/30 FSCL IMP ANALYSIS: 3,187.50 3,187.50 ASSOCIATES INC CYPRESS RID 180568 12/21/2016 019466 KINSEY, PATRICE REFUND:SEC DEP:RM RENTAL:TCC 200.00 200.00 180569 12/21/2016 008456 KITZEROW, CHERYL EE COMPTR LOAN PROGRAM: KITZEROW, CHERYL 866.99 866.99 Page:4 apChkLst Final Check List Page: 5 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor Description 180570 12/21/2016 017118 KRACH, BREE B. TROPHIES/AWARDS:MPSC Amount Paid Check Total 8.10 8.10 180571 12/21/2016 004412 LEANDER, KERRY D. TCSD INSTRUCTOR EARNINGS 864.50 TCSD INSTRUCTOR EARNINGS 318.50 TCSD INSTRUCTOR EARNINGS 289.80 180572 12/21/2016 004230 LINCOLN EQUIPMENT INC EQUIPMENT:AQUATICS 364.00 180573 12/21/2016 015953 LLOYD'S DESIGNS GRAPHIC DESIGN SERVICES:TCSD 1,500.00 180574 12/21/2016 019467 LUSPIAN, JOCELYN REFUND: SECURITY DEPOSIT: TCC 200.00 180575 12/21/2016 004141 MAINTEX INC CLEANING SUPPLIES:SENIOR CENTER 60.46 CLEANING SUPPLIES: VARIOUS FACILIT 1,764.51 180576 12/21/2016 000217 MARGARITA OFFICIALS ASSN SPARK OF LOVE 370.00 TOURNMNT:SOFTBALL OFFICIAT 1,472.80 364.00 1,500.00 200.00 1,824.97 370.00 180577 12/21/2016 014392 MC COLLOUGH, JILL DENISE DEC 16 PLANTSCAPE SRVCS:CIV 500.00 CENTER DEC 16 PLANTSCAPE SRVCS: LIBRARY 200.00 700.00 180578 12/21/2016 000944 MCCAIN TRAFFIC SUPPLY INC TRAFFIC SIGNAL EQUIP: PW TRAFFIC 8,505.01 8,505.01 180579 12/21/2016 015959 MEHEULA MUSIC PERFORMANCE:NYE 12/31/16 2,000.00 2,000.00 PRODUCTIONS 180580 12/21/2016 015259 MERCURY DISPOSAL Household battery recycling program. 218.88 218.88 SYSTEMS, INC. 180581 12/21/2016 018314 MICHAEL BAKER INT'L INC. NOV CEQA STUDIES:GENERATIONS 1,050.00 1,050.00 SR HOUSING 180582 12/21/2016 019463 MICHAEL HILL AND THE LAW SETTLEMENT & RELEASE: HILL, 27,500.00 27,500.00 MICHAEL 180583 12/21/2016 013827 MIKO MOUNTAINLION, INC. REPLACE GUARDRAIL: AVE DE MISSIONS EROSION CNTRL: PARK & RIDE SITE ON EROSION CONTROL: TEM PKWY & LA P/ 3,800.00 35,558.22 7,000.00 46,358.22 180584 12/21/2016 012962 MILLER, MISTY TCSD INSTRUCTOR EARNINGS 182.00 182.00 180585 12/21/2016 016445 MKB PRINTING & PROMOTIONAL INC BUSINESS CARDS: DANFORD, ROBERT BUSINESS CARDS: COLE, THOMAS 41.67 41.97 83.64 Page5 apChkLst 12/21/2016 10:11:18AM Final Check List CITY OF TEMECULA Page: 6 Bank : union UNION BANK (Continued) Check # Date Vendor 180586 12/21/2016 017089 MORRIS-HOPKINS, BROOKE 180587 12/21/2016 009443 MUNYON, DENNIS G. 180588 12/21/2016 000845 NATIONAL LEAGUE OF CITIES 180589 12/21/2016 018099 NATIONAL SAFETY COMPLIANCE 180590 12/21/2016 015164 NATURES IMAGE, INC 180591 12/21/2016 018402 NEWSMINDED, INC 180592 12/21/2016 006140 NORTH JEFFERSON BUSINESS PARK 180593 12/21/2016 003964 OFFICE DEPOT BUSINESS SVS DIV 180594 12/21/2016 019454 OLIVAS, LYDIA 180595 12/21/2016 013198 ORTENZO-HAYES, KRISTINE 180596 12/21/2016 019451 PLANTS CHOICE 180597 12/21/2016 019437 PORTICO INSURANCE SERVICES 180598 12/21/2016 005075 PRUDENTIAL OVERALL SUPPLY Description TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS JAN - MAR '17 LIC FEE FOR OLD TOWN PARKI DIRECT MEMBER DUES:JOHL-OLSON, R. DOT TESTING: HR NOV 16 PECHANGA PKWY ENVIRON MITIGATION NOV 16 ENVIRO MITIGATION:FVP OVER( 11/6-12/3/16 NEWSPAPER DELIVERY:MPSC JAN -MAR 17 ASSN DUES 3561 #19: FV JAN -MAR 17 ASSN DUES 8358 #20: FV JAN -MAR 17 ASSN DUES 1810 #16: FV JAN -MAR 17 ASSN DUES 3561 #17: FV OFFICE SUPPLIES:HUMAN RESOURCES OFFICE SUPPLIES:HUMAN RESOURCES REFUND:BALADJ FOR VIOL. TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS REFUND:ENG GRAD DEP:LD15-0946 REFUND:APPL. CANCELLED:PA16-1359 NOV FLR MATS/UNIFORMS/TOWELS:CITY FACS Amount Paid Check Total 280.00 245.00 175.00 245.00 2,875.00 8,743.00 647.60 1,006.60 454.57 112.50 625.21 649.93 514.71 478.36 58.30 18.07 330.00 302.40 604.80 604.80 302.40 907.20 503.44 519.68 30,000.00 3,522.00 945.00 2,875.00 8,743.00 647.60 1,461.17 112.50 2,268.21 76.37 330.00 3,744.72 30,000.00 3,522.00 743.92 743.92 Page:6 apChkLst Final Check List Page: 7 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor 180599 12/21/2016 000262 RANCHO CALIF WATER DISTRICT Description Amount Paid Check Total NOV VAR WATER METERS:PW CIP 465.60 NOV VAR WATER METERS:PW JRC 154.41 NOV VAR WATER METERS:FIRE STNS 644.35 NOV COMM WATER METER:28640 PUJOI 10.46 NOV VAR WATER METERS:TCSD SVC LE 22,417.23 NOV VAR WATER METERS:PW VARIOUS 821.32 NOV VAR WATER METERS:PW FAC 4,030.57 NOV VAR WATER METERS:PW CIP 318.23 NOV VAR WATER METERS:PW OLD TOV), 785.33 NOV VAR WATER METERS:PW MAINT 268.47 29,915.97 180600 12/21/2016 011853 RANCON COMMERCE CNTR JAN -MAR '17 BUS.PRK ASSN 249.03 PH2,3&4 DUES:OVRLND JAN -MAR '17 BUS.PRK ASSN DUES:OVRI 177.27 JAN -MAR '17 BUS.PRK ASSN DUES:OVRI 198.38 JAN -MAR BUS.PRKASSN DUES:STN 73 510.71 1,135.39 180601 12/21/2016 019432 RCC CHAMBER SINGERS CHRISTMAS CAROLERS:TEAM PACE 200.00 200.00 12/14/16 180602 12/21/2016 003591 RENES COMMERCIAL WEED ABATEMENT: RIGHT-OF-WAYS 4,300.00 4,300.00 MANAGEMENT 180603 12/21/2016 000353 RIVERSIDE CO AUDITOR NOV '16 PRKG CITATION 3,142.75 3,142.75 ASSESSMENTS 180604 12/21/2016 000955 RIVERSIDE CO SHERIFF SW EXTRA PATROL SRVCS:CHRISTMAS 24,043.70 24,043.70 STN PARADE 12/2 180605 12/21/2016 000220 ROBINSON PRINTING & PRINTING SRVCS:THTR 16-17 2,315.33 2,315.33 CREATIVE MID-SEASON MAI 180606 12/21/2016 019453 ROCCO, LINDA REFUND:BALADJ FOR 30.00 30.00 OVERPMT:321286 180607 12/21/2016 004274 SAFE & SECURE LOCKSMITH LOCKSMITH SERVICE: CRC 58.32 58.32 180608 12/21/2016 009980 SANBORN, GWYNETH A. COUNTRY LIVE! @ THE MERC 12/17/16 697.50 697.50 180609 12/21/2016 017699 SARNOWSKI, SHAWNA, M Photography Services: Council Member 150.00 PRESTON PHOTOGRAPHY: ADMIN 12/7 150.00 300.00 Page:7 apChkLst Final Check List Page: 8 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor 180610 12/21/2016 018012 SAUNDERS, CATHY Description Amount Paid Check Total TCSD INSTRUCTOR EARNINGS 318.00 TCSD INSTRUCTOR EARNINGS 336.00 TCSD INSTRUCTOR EARNINGS 196.00 TCSD INSTRUCTOR EARNINGS 336.00 TCSD INSTRUCTOR EARNINGS 336.00 TCSD INSTRUCTOR EARNINGS 196.00 1,718.00 180611 12/21/2016 015457 SHAW HR CONSULTING, INC. DEC CONSULTING SRVCS: HR 805.00 SEPT-NOV CONSULTING SRVCS: HR 1,032.50 1,837.50 180612 12/21/2016 009213 SHERRY BERRY MUSIC JAZZ @ THE MERC 12/15/16 346.50 346.50 180613 12/21/2016 019452 SIBLEY, DAVID REFUND:BALADJ FOR 10.00 10.00 OVERPMT:86476 180614 12/21/2016 017594 SIMONE, DEAN PERFORMANCE:NEW YEAR'S EVE 180615 12/21/2016 000645 SMART & FINAL INC SUPPLIES:BREAKFAST W/SANTA 12/10 180616 12/21/2016 000537 SO CALIF EDISON NOV 2-29-223-9571:30395 MURR HOT SPRINGS NOV 2-30-608-9384:28582 HARVESTON C NOV 2-20-798-3248:42081 MAIN ST NOV 2-10-331-2153:28816 PUJOL ST NOV 2-02-351-5281:30875 RANCHO VIST NOV 2-30-066-2889:30051 RANCHO VISTd NOV 2-25-350-5119:45602 REDHAWK PK), NOV 2-36-122-7820:31777 DEPORTOLA R NOV 2-28-171-2620:40820 WINCHESTER OCT-NOV 2-27-560-0625:32380 DEERHOL NOV 2-31-419-2659:26706 YNEZ RD TC1 NOV 2-01-202-7330:VARIOUS LS -1 ALLNI NOV 2-36-171-5626:BUTTERFIELD/LA SEI NOV 2-29-974-7899:26953 YNEZ RD LS3 NOV 2-29-479-2981:31454 TEM PKWY TC NOV 2-05-791-8807:31587 TEM PKWY LS: 180617 12/21/2016 000537 SO CALIF EDISON TRAF SGNL INSTALL:REDHAWK PKWY/V.R.PKWY 180618 12/21/2016 001212 SO CALIF GAS COMPANY NOV 015-575-0195-2:32211 WOLF VLY RD 180619 12/21/2016 000519 SOUTH COUNTY PEST CONTROL INC PEST CONTROL SRVCS: MARG COMMUNITY PARK PEST CONTROL SRVCS: STREET MAINT PEST CONTROL SRVCS: PBSP 2,500.00 756.35 50.72 350.53 1,183.78 758.73 4,160.27 27.05 31.24 26.94 547.60 5,916.52 139.16 72,944.80 24,090.09 155.54 113.39 9,358.48 3,186.66 2,500.00 756.35 119,854.84 3,186.66 282.96 282.96 94.00 59.00 70.00 223.00 Page:8 apChkLst Final Check List Page: 9 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor Description 180620 12/21/2016 000293 STADIUM PIZZA INC REFRESHMENTS:HUMAN SERVICES PRGMS 180621 12/21/2016 016262 STEVE ADAMIAK GOLF INSTRUCTION 180622 12/21/2016 014541 STEVE'S TOWING, INC Amount Paid Check Total 158.57 158.57 TCSD INSTRUCTOR EARNINGS 336.00 TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS towing svcs - police towing svcs - police 630.00 840.00 504.00 225.00 2,310.00 220.00 445.00 180623 12/21/2016 001546 STRAIGHT LINE GLASS INSTALL PANIC HARDWARE 161.34 BOLTS:MUSEUM INSTALL PANIC HARDWARE BOLTS:MUS 156.48 180624 12/21/2016 015088 TANKO STREETLIGHTING, INC. STREET LIGHT MAINT SUPPLIES: PW 3,078.00 180625 12/21/2016 003677 TEMECULA MOTORSPORTS MOTORCYCLE 1,036.25 LLC REPAIR/MAINT:TEM.P.D. MOTORCYCLE REPAIR/MAINT:TEM.P.D. 242.36 180626 12/21/2016 016532 TEMECULAVALLEYALANO REFUND:SEC DEP:RM RENTAL:MPSC 200.00 CLUB 180627 12/21/2016 003849 TERRYBERRY COMPANY SERVICE PIN AWARDS: HR 180628 12/21/2016 010276 TIME WARNER CABLE 180629 12/21/2016 019470 TORRES, LOURDES 317.82 3,078.00 1,278.61 200.00 4,086.62 4,086.62 DEC HIGH SPEED INTERNET:29119 348.08 MARGARITA NOV HIGH SPEED INTERNET:32364 OVE 54.99 REFUND:CANCELLED SHOW:COMEDY 111.00 @ MERC 403.07 111.00 180630 12/21/2016 014866 TWM ROOFING, INC ROOF PREV MAINT SRVCS: VAR 11,380.00 11,380.00 FACILITIES 180631 12/21/2016 008977 VALLEY EVENTS, INC. RENTAL EQUIP: SANTA IN OLD TOWN 4,100.00 4,100.00 180632 12/21/2016 004794 VALLEY WINDS COMMUNITY PERFORMANCE:NEW YEAR'S EVE 750.00 750.00 180633 12/21/2016 014848 VALUTEC CARD SOLUTIONS, NOV TICKETING SRVCS: THEATER 124.00 124.00 LLC 180634 12/21/2016 018147 WADDLETON, JEFFREY L. DJ/ANNOUNCER SRVCS: PARADE 12/2 950.00 950.00 180635 12/21/2016 007987 WALMART SUPPLIES,EXHIBITS/EXPERIMENTS:PP WS SUPPLIES,EXHIBITS/EXPERIMENTS:PPV 145.00 57.76 202.76 Page9 apChkLst Final Check List Page: 10 12/21/2016 10:11:18AM CITY OF TEMECULA Bank : union UNION BANK (Continued) Check # Date Vendor Description Amount Paid Check Total 180636 12/21/2016 003730 WEST COASTARBORISTS INC 11/1-15 TREE TRIMS & 5,799.00 5,799.00 REMOVALS:HARV LAKE 180637 12/21/2016 013286 WEST SAFETY SERVICES, INC. DEC ENTERPRISE 911 SERVICE: IT 300.00 300.00 1001352 12/15/2016 019367 BANDELIN, JESSICA REFUND:SEC DEP:RM RENTAL:TCC 200.00 200.00 1001353 12/15/2016 019457 CROMWELL, JENNA REFUND:SEC DEP:RM RENTAL:CRC 200.00 200.00 1001354 12/15/2016 019458 FLANAGAN-PAULL, MOLLY REFUND:BIGFOOT'S TEEN GRAPHIC 65.00 65.00 2065.101 1001355 12/15/2016 019459 GONZALES, CHRISTINA REFUND:SEC DEP:RM RENTAL:MPSC 200.00 200.00 1001356 12/15/2016 019460 KOSMAL, SHERRY REFUND:BIGFOOT'S TEEN GRAPHIC 65.00 65.00 2065.101 1001357 12/15/2016 019461 LEEDS, SALLY REFUND:TWAS THE LIGHTS BEFORE 16.00 16.00 CHRISTMAS 1001358 12/15/2016 019462 RAVANDE, VIJETA REFUND:SEC DEP:RM RENTAL:MPSC 200.00 200.00 Grand total for UNION BANK: 478,184.87 Pagel 0 apChkLst Final Check List Page: 11 12/21/2016 10:11:18AM CITY OF TEMECULA 126 checks in this report. Grand Total All Checks. 478,184.87 Page:11 apChkLst Final Check List 12/28/2016 4:03:24PM CITY OF TEMECULA Page: 1 Bank : union UNION BANK Check # Date Vendor Description Amount Paid Check Total 3181 12/28/2016 010349 CALIF DEPT OF CHILD SUPPORT PAYMENT 1,128.45 1,128.45 SUPPORT 3182 12/28/2016 000444 INSTATAX (EDD) STATE INCOME TAXES PAYMENT 21,335.26 21,335.26 3183 12/28/2016 000283 INSTATAX (IRS) FEDERAL INCOME TAXES PAYMENT 77,670.80 77,670.80 3184 12/28/2016 000389 NATIONWIDE RETIREMENT OBRA- PROJECT RETIREMENT 2,454.08 2,454.08 SOLUTION PAYMENT 3185 12/28/2016 000246 PERS (EMPLOYEES' EMPLOYEE PERS RETIREMENT 38,669.42 38,669.42 RETIREMENT) PAYMENT 180638 12/28/2016 017321 A.M. AIR FREIGHT, INC. EXHIBIT SHIPPING:TVM 1,840.00 1,840.00 180639 12/28/2016 016764 ABM BUILDING SERVICES, LLC PREV MAINT:HVAC UNITS: CIVIC CTR 119.30 119.30 180640 12/28/2016 004802 ADLERHORST INTERNATIONAL DEC TRNG & EQUIP:POLICE K-9 UNIT 175.00 LLC 180641 12/28/2016 014170 AHERN RENTALS INC DEC TRNG & EQUIP:POLICE K-9 UNIT EQUIP RENTAL: LIGHT PARADE EQUIP RENTAL: LIGHT PARADE EQUIP RENTAL: LIGHT PARADE EQUIP RENTAL: LIGHT PARADE EQUIP RENTAL: LIGHT PARADE EQUIP RENTAL: LIGHT PARADE EQUIP RENTAL: LIGHT PARADE 175.00 350.00 2,296.10 2,194.10 2,061.50 1,809.50 1,248.10 1,130.10 914.60 180642 12/28/2016 006915 ALLIE'S PARTY EQUIPMENT PARTY RENTAL EQUIP: CHRISTMAS 431.31 DINNER SUP MISC RENTALS:VAR CSD SPECIAL EVEN 339.66 MISC RENTALS:VAR CSD SPECIAL EVEN 34.00 180643 12/28/2016 007282 AMAZON.COM, INC BOOKS/COLLECTIONS:LIBRARY 1,684.54 180644 12/28/2016 013950 AQUA CHILL OF SAN DIEGO DRINKING WATER SYS MAINT:CIVIC CTR R.O. MAINT SRVCS:MPSC DEC DRINKING WATER SVCS:IT DEC WATER SVCS:POLICE DRINKING WATER SYS SVCS:PW R.O. MAINT SRVCS:JRC 180645 12/28/2016 005946 AYERS DISTRIBUTING Filled plastic Easter eggs:2017 egg COMPANY 184.14 34.83 28.35 28.35 28.35 28.35 11,654.00 804.97 1,684.54 332.37 1,206.00 1,206.00 Pagel apChkLst Final Check List 12/28/2016 4:03:24PM CITY OF TEMECULA Page: 2 Bank : union UNION BANK (Continued) Check # Date Vendor Description Amount Paid Check Total 180646 12/28/2016 011954 BAKER & TAYLOR INC BOOK COLLECTIONS:LIBRARY 137.83 137.83 180647 12/28/2016 018101 BARN STAGE COMPANY INC, CABARET @ THE MERC 12/21/16 455.00 455.00 THE 180648 12/28/2016 017532 BUILDERS OF FAITH REFUND:SEC DEP:RM RENTAL:TCC 200.00 200.00 180649 12/28/2016 010939 CALIF DEPT OF INDUSTRIAL ASSMNT REPORT FOR FY 1,502.22 1,502.22 7/1/16-6/30/17 180650 12/28/2016 004248 CALIF DEPT OF NOV 16 DOJ FINGERPRINTING SVC: 4,157.00 JUSTICE-ACCTING VAR DEPTS NOV 16 DOJ ALCOHOL ANALYSIS: POLIC 665.00 180651 12/28/2016 000131 CARL WARREN & COMPANY NOV 16 CLAIM ADJUSTER SERVICES: 3,121.28 INC RISK MGM 180652 12/28/2016 004462 CDW, LLC 180653 12/28/2016 019247 CORTES & LEE 180654 12/28/2016 013379 COSSOU, CELINE MISC SMALL TOOLS & EQUIP:INFO 659.33 TECHNOLOGY PORT WITH REMOTE USB:FIRE PREVEN 36.66 UPGRADE FITNESS STATIONS:VAIL 8,750.00 RANCH PARK TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS 180655 12/28/2016 016724 CRAFT, CHARLENE REIMB:EMPLOYEE RECOGNITION SUPPLIES 180656 12/28/2016 014580 DANCE THEATRE COLLECTIVE DANCEXCHANGE PERFORMANCE 12/20/16 180657 12/28/2016 001393 DATA TICKET, INC. NOV 16 PARKING CITATION PROCESSING:POLIC 180658 12/28/2016 004382 DEKRA LITE INC HOLIDAY LIGHTING:OLD TOWN 2016 SEASON 1,260.00 504.00 448.00 4,822.00 3,121.28 695.99 8,750.00 2,212.00 242.80 242.80 171.50 171.50 920.89 920.89 8,752.40 8,752.40 180659 12/28/2016 017292 DELGADO, CLAUDIA REFUND:CREDIT:RM RENTAL:CRC 42.00 42.00 6/18/16 180660 12/28/2016 004192 DOWNS ENERGY FUEL & LUBRICANTS FUEL FOR CITY VEHICLES: TCSD & 281.18 CLERK FUEL FOR CITY VEHICLES:PW DEPTS 177.08 458.26 Page2 apChkLst Final Check List 12/28/2016 4:03:24PM CITY OF TEMECULA Page: 3 Bank : union UNION BANK (Continued) Check # Date Vendor 180661 12/28/2016 002390 EASTERN MUNICIPAL WATER DIST 180663 12/28/2016 001056 EXCEL LANDSCAPE, INC. Description NOV WATER METER:39569 SERAPHINA RD NOV WATER METER:39656 DIEGO DR NOV WATER METER:MURR HOT SPRING NOV WATER METER:MURR HOT SPRING DEC LDSCP MAINT SRVCS: SOUTH SLOPES DEC LDSCP MAINT SRVCS: NORTH SLOT DEC LNDSCP:CITYWIDE MEDIANS DEC LDSCP MAINT SRVCS: VAR FACILIT LNDSCP IMPROVEMENTS:VILLAGES SL( LNDSCP ENHANCEMENT:OLD TOWN IRRIG REPAIRS: VARIOUS PARKS IRRIG REPAIRS:VAIL RANCH SLOPE OVERSEEDING TURF: REDHAWK COMM IRRIG REPAIRS:VAIL RANCH PARK IRRIG REPAIRS:VAIL RANCH SLOPE IRRIG REPAIRS:SERENA PARK IRRIG REPAIRS:HARVESTON IRRIG REPAIRS:REDHAWK MEDIAN DEC LDSCP MAINT SRVCS: VAR PARKS DEC LDSCP MAINT SRVCS: VAR PARKS 180664 12/28/2016 000165 FEDERAL EXPRESS INC DEC EXPRESS MAIL SERVICES:VAR DEPTS. 180665 12/28/2016 016737 FORTRES GRAND SW SUBSCRIPTION RENEWAL:COM CORPORATION DEV KIOSK 180666 12/28/2016 002982 FRANCHISE TAX BOARD SUPPORT PAYMENT 180667 12/28/2016 018858 FRONTIER CALIFORNIA, INC. 180668 12/28/2016 003946 G T ENTERTAINMENT 180669 12/28/2016 013076 GAUDET, YVONNE M. 180670 12/28/2016 014716 GETTLER, RISA 180671 12/28/2016 015451 GREATAMERICA FINANCIAL SVCS Amount Paid Check Total 250.60 73.27 42.25 36.39 34,054.66 402.51 21, 564.33 18,194.00 10,708.73 2,010.00 1,420.00 386.10 355.51 350.50 298.21 236.89 221.72 209.68 147.38 51,727.00 48,665.00 190,549.71 74.22 74.22 153.00 153.00 150.00 150.00 DEC INTERNET SVCS:41000 MAIN ST 4,656.94 DEC INTERNET SVCS:41000 MAIN ST 2,441.67 DEC INTERNET SVCS:LIBRARY 184.99 DEC INTERNET SVCS:SENIOR CENTER 144.99 NOV INTERNET SVCS:27415 ENTERPRIE 100.77 7,529.36 DJ/ANNOUNCING: WINTERFEST 2016 500.00 500.00 TCSD INSTRUCTOR EARNINGS 931.00 931.00 CALLIGRAPHY ACTIVITY:NYE 2016 300.00 300.00 DEC LEASE FOR 16 COPIERS:CITY 520.09 520.09 HALL/OFF-S Page:3 apChkLst Final Check List 12/28/2016 4:03:24PM CITY OF TEMECULA Page: 4 Bank : union UNION BANK (Continued) Check # Date Vendor Description Amount Paid Check Total 180672 12/28/2016 013749 HELIXSTORM INC. BACKUP TAPES:INFORMATION 3,920.96 3,920.96 TECHNOLOGY 180673 12/28/2016 001013 HINDERLITER DE LLAMAS & 4TH QTR 2016 CNSLT SVCS: SALES ASSOC TAX 180674 12/28/2016 009135 IMPACT MARKETING & DESIGN THEATER: USHER UNIFORMS INC 180675 12/28/2016 011097 INCENDIO THEATER PERFORMANCE 1/6/17 29,014.59 29,014.59 710.29 710.29 3,000.00 3,000.00 180676 12/28/2016 006914 INNOVATIVE DOCUMENT NOV COPIER 5,319.49 SOLUTIONS MAINT/REPAIR/USAGE:CITY FACS NOV COPIER MAINT/REPAIR/USAGE:CIT 611.22 180677 12/28/2016 001407 INTER VALLEY POOL SUPPLY POOL SANITIZING CHEMICALS: VAR 513.54 INC POOLS 180678 12/28/2016 018352 JAMES ELLIOTT ENTERTAINMENT: THEATER 1/5/17 ENTERTAINMENT, 180679 12/28/2016 015358 KELLY PAPER COMPANY, INC. PAPER/BINDING/PCKG SUPP:CENTRAL SRVCS 180680 12/28/2016 017118 KRACH, BREE B. 180681 12/28/2016 003782 MAIN STREET SIGNS 180682 12/28/2016 017427 MATCHETT, VIVIAN 180683 12/28/2016 013443 MIDWEST TAPE LLC 5,930.71 513.54 2,500.00 2,500.00 177.07 177.07 PLAQUE: IN LOVING MEMORY OF 144.72 LINDA COLE TROPHIES/AWARDS: POOLTOURNAMEP 8.10 SIGNS & SUPPLIES:PW STREET MAINT 68.95 TCSD INSTRUCTOR EARNINGS 354.90 TCSD INSTRUCTOR EARNINGS 152.82 68.95 245.70 600.60 Misc DVD's, books on CD, audio 125.34 Misc DVDs, books on CD, audio 180684 12/28/2016 004951 MIKE'S PRECISION WELDING BASEBALL PEGS: VARIOUS SPORTS INC. PARKS 180685 12/28/2016 015507 MSDSONLINE, INC. MSDS SUPSCRIPTION: RISK MGMT 180686 12/28/2016 019472 NNA SERVICES LLC REFUND:SEC DEP CREDIT:CONF CTR A/B 38.99 164.33 1,500.00 1,500.00 1,679.00 1,679.00 150.00 150.00 Page:4 apChkLst Final Check List 12/28/2016 4:03:24PM CITY OF TEMECULA Page: 5 Bank : union UNION BANK (Continued) Check # Date Vendor 180687 12/28/2016 003964 OFFICE DEPOT BUSINESS SVS DIV 180688 12/28/2016 002105 OLD TOWN TIRE & SERVICE 180689 12/28/2016 012948 PAVEMENT COATINGS Description Amount Paid Check Total BUSINESS CARDS: COUNCIL MEMBER 121.29 OFFICE SUPPLIES:HUMAN RESOURCES 97.18 STD BUSINESS CARDS: FIRE PREVENTI 36.37 OFFICE SUPPLIES:HUMAN RESOURCES 35.45 OFFICE SUPPLIES:HUMAN RESOURCES 20.47 OFFICE SUPPLIES:HUMAN RESOURCES 20.03 OFFICE SUPPLIES:HUMAN RESOURCES 12.66 OFFICE SUPPLIES:HUMAN RESOURCES 9.36 352.81 CITY VEHICLE MAINT SVCS:PARK 370.99 370.99 RANGER NOV SRVCS:PAVEMENT REHAB -TEM 217,905.33 217,905.33 COMPANY PKWY 180690 12/28/2016 000249 PETTY CASH 180691 12/28/2016 001999 PITNEY BOWES 180692 12/28/2016 012904 PROACTIVE FIRE DESIGN 180693 12/28/2016 014494 R & R CONTROLS, INC 180694 12/28/2016 011952 RAD HATTER, THE 180695 12/28/2016 000262 RANCHO CALIF WATER DISTRICT PETTY CASH REIMBURSEMENT 999.90 999.90 12/16/16-3/15/17 RENTAL: STN 84 76.77 76.77 NOV PLANCHECK CONSULTANT: 7,874.50 7,874.50 PREVENTION REPLACE HVAC CONTROLLER: 753.82 753.82 THEATER HAT MAKING ACTIVITY: NYE 2016 1,350.00 1,350.00 DEC VAR WATER METERS:TCSD SVC LEV C NOV LNDSCP WATER METER:41951 MOF DEC VAR WATER METERS:PW YMCA NOV LNDSCP WATER METER:CALLE ELE 180696 12/28/2016 006432 RIVERSIDE COMM. COLLEGE ECON DEV FUNDING: ECON DEV DIST. 180697 12/28/2016 007136 RIVERSIDE RUBBER STAMP & RUBBER STAMP FOR POLICE DEPT. 180698 12/28/2016 004822 RIVERSIDE TRANSIT AGENCY NOV TRANSIT AGRMNT:HARVESTON SHUTTLE 180699 12/28/2016 012251 ROTH, DONALD J. TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS 10,138.03 462.63 360.86 52.00 1,250.00 14.04 11,013.52 1,250.00 14.04 1,945.47 1,945.47 567.00 504.00 1,071.00 180700 12/28/2016 004274 SAFE & SECURE LOCKSMITH LOCKSMITH SRVCS:CIVIC CENTER 11.34 LOCKSMITH SRVCS:CIVIC CENTER 11.34 22.68 Page:5 apChkLst Final Check List 12/28/2016 4:03:24PM CITY OF TEMECULA Page: 6 Bank : union UNION BANK (Continued) Check # Date Vendor 180701 12/28/2016 015364 SEASIDE ICE, LLC 180702 12/28/2016 008529 SHERIFF'S CIVIL DIV - CENTRAL 180703 12/28/2016 009213 SHERRY BERRY MUSIC 180704 12/28/2016 009746 SIGNS BY TOMORROW 180705 12/28/2016 019493 SMITH, CYNTHIA 180706 12/28/2016 000537 SO CALIF EDISON Description Amount Paid Check Total PARTIAL PMT:ICE SKATING RINK:2016 10,250.00 10,250.00 SEASON SUPPORT PAYMENT 100.00 100.00 JAZZ @ THE MERC 12/22 462.00 462.00 PUBLIC NTC POSTINGS:PLANNING 639.00 639.00 PERMIT TECH 199.00 199.00 TESTI NG:I NV#0037-1529-7764 NOV 2-00-397-5059:33340 CAMINO PIEDRA NOV 2-26-887-0789:40233 VILLAGE RD NOV 2-30-296-9522:46679 PRIMROSE AVI NOV 2-31-693-9784:26036 YNEZ RD TC1 NOV 2-29-974-7568:26953 YNEZ RD TC1 NOV 2-33-237-4818:30499 RANCHO CAL NOV 2-30-099-3847:29721 RYECREST 180707 12/28/2016 001212 SO CALIF GAS COMPANY NOV 055-475-6169-5:32380 DEERHOLLOW WAY 8,641.10 1,490.05 505.81 408.33 155.50 108.14 24.06 11, 332.99 158.09 158.09 180708 12/28/2016 002503 SOUTH COAST AIR QUALITY GENERATORANN'L RENEWAL 354.86 FEES:STN 84 FY 16/17 EMISSIONS FEES/LAST YR: STI 124.35 479.21 180709 12/28/2016 000519 SOUTH COUNTY PEST PEST CONTROL:DUCK POND 49.00 CONTROL INC PEST CONTROL SRVCS: STN 92 42.00 91.00 180710 12/28/2016 011424 STONE CREEK BIBLE CHURCH REFUND:SEC DEP:KITCHEN 200.00 200.00 RENTAL:CRC 180711 12/28/2016 010046 TEMECULA VALLEY OCT '16 BUS. IMPRV DISTRICT 139,038.18 139,038.18 CONVENTION & ASMNTS 180712 12/28/2016 019473 TEMECULA VALLEY WOMAN'S REFUND:SEC DEP CREDIT:CONF CTR 80.00 CLUB A/B REFUND:SEC DEP CREDIT:CONF CTR A/ 70.00 150.00 180713 12/28/2016 003941 TEMECULA WINNELSON PLUMBING SUPPLIES:VAR PARKS 50.11 50.11 COMPANY 180714 12/28/2016 008379 THEATER FOUNDATION, THE 2016 THEATER FOUNDATION GALA 300.00 300.00 4/9/16 Page apChkLst 12/28/2016 4:03:24PM Final Check List CITY OF TEMECULA Page: 7 Bank : union UNION BANK (Continued) Check # Date Vendor 180715 12/28/2016 010276 TIME WARNER CABLE 180716 12/28/2016 019001 ULTRASYSTEMS ENVIRONMENTAL INC 180717 12/28/2016 002110 UNITED RENTALS NORTH AMERICA 180718 12/28/2016 007987 WALMART 180719 12/28/2016 001342 WAXIE SANITARY SUPPLY INC 180720 12/28/2016 003730 WEST COAST ARBORISTS INC 180721 12/28/2016 000230 WILLDAN FINANCIAL SERVICES 180722 12/28/2016 004567 WITCHER ELECTRIC 180723 12/28/2016 018871 WONDER SCIENCE 1001359 12/22/2016 019478 AHRENS, MELISSA 1001360 12/22/2016 019479 ARRIOLA, NICOLE 1001361 12/22/2016 017190 BILBY, KERI 1001362 12/22/2016 019480 CARTWRIGHT, ALISHA 1001363 12/22/2016 013379 COSSOU, CELINE Description DEC HIGH SPEED INTERNET:FIRE STN #92 CONSULT SVCS:GENERATIONS SR HSG EQUIP RENTALS: PW STREET MAINT EQUIP RENTALS: PW STREET MAINT EQUIP RENTALS: PW STREET MAINT PURCH TOYS:FIRE SPARK OF LOVE PGRM CUSTODIAL SUPPLIES:VAR PARKS CUSTODIAL SUPPLIES:CIVIC CTR CUSTODIAL SUPPLIES: CITY FACS 12/1-15 TREE TRIMS & REMOVALS: ROW TREES 12/1-15 EMERG TREE TRIMS & REMOVAI NOV FISCAL IMPACTANALYSIS:TEM CREEK INN ELECTRICAL REPAIRS:HARVESTON COMMUNITY P ELECTRICAL MAINT SRVCS: HARV LAKE ELECTRICAL REPAIRS:CIV CTR TCSD INSTRUCTOR EARNINGS REFUND:BREAKFAST WITH SANTA 9050.102 REFUND:SOCCER SKILLS 2203.101 REFUND:DISNEY MUSICAL THEATRE HOLIDAY REFUND:DISNEY MUSICAL THEATRE HOLIDAY REFUND:HEART SAVER CPR/AED Amount Paid Check Total 180.65 2,210.00 67.46 19.39 18.18 368.49 314.03 260.06 101.89 1,421.00 180.00 5,200.00 465.00 420.00 210.00 2,268.00 28.00 131.20 100.00 200.00 50.00 180.65 2,210.00 105.03 368.49 675.98 1,601.00 5,200.00 1,095.00 2,268.00 28.00 131.20 100.00 200.00 50.00 1001364 12/22/2016 019481 EISENBERG, CAROLINE REFUND:DISNEY MUSICAL THEATRE 10.00 10.00 HOLIDAY Page:7 apChkLst Final Check List 12/28/2016 4:03:24PM CITY OF TEMECULA Page: 8 Bank : union UNION BANK (Continued) Check # Date Vendor 1001365 12/22/2016 019482 GAULT, RICHARD 1001366 12/22/2016 019483 GOYETTE, ERIKA 1001367 12/22/2016 019484 GRAUER, MONIQUE 1001368 12/22/2016 019485 GUIZAR, MERCEDES 1001369 12/22/2016 019486 HICKS, DIANA 1001370 12/22/2016 019487 HOMAN, KIMBERLY Description Amount Paid Check Total REFUND:HEART SAVER CPR/AED 100.00 100.00 REFUND:SEC DEP:RM RENTAL:TCC 100.00 100.00 REFUND:DISNEY MUSICAL THEATRE 100.00 100.00 HOLIDAY REFUND:SEC DEP:PICNIC 200.00 200.00 RENTAL:HARVESTON REFUND:DISNEY MUSICAL THEATRE 100.00 100.00 HOLIDAY REFUND:BIGFOOT'S COMPUTER CLUB 30.00 30.00 1001371 12/22/2016 019488 MACENAS, DONNA REFUND:WONDERS! SUPER CAMP #5 1001372 12/22/2016 019489 MARTIN, CHRISTINA REFUND:DISNEY MUSICAL THEATRE HOLIDAY 135.00 135.00 100.00 100.00 1001373 12/22/2016 019490 NOORZAD, CARRIE REFUND:CREDIT:PICNIC 30.00 30.00 RENTAL:RRSP 1001374 12/22/2016 017531 RANCHO FAMILY MEDICAL REFUND:SEC DEP:RM RENTAL:TCC 200.00 200.00 GROUP 1001375 12/22/2016 016527 ROWE DANCE ACADEMY REFUND:SEC DEP:RM RENTAL:CRC 200.00 200.00 1001376 12/22/2016 019491 SWANSON, MICHAEL REFUND:TEM ROD RUN 7000.381 35.00 35.00 1001377 12/22/2016 019492 TCB LEGACY LEADERSHIP REFUND:SEC DEP:RM RENTAL:CONF 150.00 150.00 CTR A/B Grand total for UNION BANK: 867,079.87 Page:8 apChkLst 12/28/2016 4:03:24PM Final Check List CITY OF TEMECULA Page: 9 109 checks in this report. Grand Total All Checks. 867,079.87 Page apChkLst Final Check List 01/05/2017 3:18:53PM CITY OF TEMECULA Page: 1 Bank : union UNION BANK Check # Date Vendor Description Amount Paid Check Total 3186 12/29/2016 000444 INSTATAX (EDD) STATE INCOME TAXES PAYMENT 2,314.77 2,314.77 3187 12/29/2016 000283 INSTATAX (IRS) FEDERAL INCOME TAXES PAYMENT 7,467.37 7,467.37 3188 12/29/2016 001065 NATIONWIDE RETIREMENT DEFERRED COMP CITY MANAGER 500.08 500.08 SOLUTION PAYMENT 180724 01/05/2017 004973 ABACHERLI, LINDI TCSD INSTRUCTOR EARNINGS 350.00 350.00 180725 01/05/2017 014170 AHERN RENTALS INC EQUIP RENTAL: LIGHT PARADE 1,232.10 EQUIP RENTAL: LIGHT PARADE 536.86 1,768.96 180726 01/05/2017 015217 AIRGAS, INC. Dry ice for experiments:Pennypickle's 18.04 18.04 180727 01/05/2017 009374 ALLEGRO MUSICAL VENTURES PIANO MAINT:MPSC 295.00 295.00 180728 01/05/2017 004422 AMERICAN BATTERY SMALL EQUIP BATTERIES: CIV 501.68 501.68 CORPORATION CENTER 180729 01/05/2017 004307 ARCH CHEMICALS, INC. DEC WATER QUALITY MAINT:HARV 3,900.00 3,900.00 LAKE/DUCK 180730 01/05/2017 018101 BARN STAGE COMPANY INC, STTLMNT: TIX: CABARET AT THE 861.00 861.00 THE MERC 12/30 180731 01/05/2017 017973 BUSINESS CENTER CENTRAL, reflective decals -taxi permit 270.00 270.00 LLC 180732 01/05/2017 018828 CASC ENGINEERING AND NOV CONST ENG SVCS: CIP PW06-09 180733 01/05/2017 002945 CONSOLIDATED ELECTRICAL DIST. 2,025.00 2,025.00 RUST BOLLARDS: OLD TOWN 3,726.00 ELECTRICAL SUPPLIES: VARIOUS PARK ELECTRICAL SUPPLIES: LIBRARY ELECTRICAL SUPPLIES: VARIOUS PARK 180734 01/05/2017 002631 COUNTS UNLIMITED INC Traffic count data collection: pw 345.60 140.40 64.80 4,276.80 440.00 440.00 180735 01/05/2017 010650 CRAFTSMEN PLUMBING & PLUMBING SRVCS: TOWN SQUARE 460.00 HVAC INC OLD TOWN PLUMBING SRVC: TCC SAFE BLDG 160.00 180736 01/05/2017 000209 CROP PRODUCTION SERVICES MAINT SUPPLIES: PW STREET MAINT 146.82 DIV MAINT SUPPLIES: PW STREET MAINT DI 26.98 620.00 173.80 Page:1 apChkLst Final Check List 01/05/2017 3:18:53PM CITY OF TEMECULA Page: 2 Bank : union UNION BANK (Continued) Check # Date Vendor 180737 01/05/2017 003945 DIAMOND ENVIRONMENTAL SRVCS Description PORTABLE RESTROOMS: LONG CANYON PARK PORTABLE RESTROOMS: RIVERTON PA PORTABLE RESTROOMS: VAIL RANCH P 180738 01/05/2017 019438 DISPEKERARTISTS INT'L INC Theater Performance: Jan 7, 2017 Amount Paid Check Total 55.88 55.88 55.88 167.64 4,650.00 4,650.00 180739 01/05/2017 004829 ELLISON WILSON ADVOCACY JAN 16 STATE LOBBYING SVCS 3,500.00 3,500.00 LLC 180740 01/05/2017 011202 EMH SPORTS USA, INC TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS 379.05 245.00 245.00 869.05 180741 01/05/2017 001056 EXCEL LANDSCAPE, INC. irrig repairs:villages:vail ranch slope 778.47 778.47 180742 01/05/2017 019450 FARO TECHNOLOGIES INC CRASH SCENE MAPPING SOFTWARE UPGRADE 1,596.00 1,596.00 180743 01/05/2017 003747 FINE ARTS NETWORK TIX: "NUTCRACKER BALLET" 49,036.57 49,036.57 12/16-12/23 180744 01/05/2017 002982 FRANCHISE TAX BOARD LEVY C# 546961500 10.73 10.73 180745 01/05/2017 018858 FRONTIER CALIFORNIA, INC. DEC INTERNET SVCS:THEATER 129.99 129.99 180746 01/05/2017 000177 GLENNIES OFFICE PRODUCTS NOV 16 MISC. OFC SUPPLIES: 295.18 295.18 INC PLANNING 180747 01/05/2017 018869 HARWE, PER REFUND:SEC DEP:RM RENTAL:MPSC 200.00 200.00 3/28/14 180748 01/05/2017 002109 HD SUPPLY CONSTR. SUPPLY MISC SUPPLIES:PW STREET MAINT 20.15 20.15 LTD DIV 180749 01/05/2017 001407 INTER VALLEY POOL SUPPLY POOL SANITIZING CHEMICALS: VAR INC POOLS 180750 01/05/2017 019085 INTERPRETERS UNLIMITED, INTERPRETER SERVICE: TEM POLICE INC. 180751 01/05/2017 000820 K R W & ASSOCIATES ENG PLAN CHECK & REVIEW SRVCS: PW 180752 01/05/2017 019122 L.A. TRAFFIC SIGNAL 456.52 456.52 24.00 24.00 2,820.00 2,820.00 Modification of traffic signal: pw cip 42,370.00 CM: CHG ORDER HAS NOT BEEN FULLY -4,761.40 37,608.60 Page2 apChkLst Final Check List 01/05/2017 3:18:53PM CITY OF TEMECULA Page: 3 Bank : union UNION BANK (Continued) Check # Date Vendor Description Amount Paid Check Total 180753 01/05/2017 000210 LEAGUE OF CALIF CITIES REGISTRATION: EDWARDS, MARYANN 25.00 25.00 1/9/17 180754 01/05/2017 004905 LIEBERT, CASSIDY & NOV HR LEGAL SVCS FOR 1,591.00 W H ITMORE TE060-#00011 NOV HR LEGAL SVCS FOR TE060-00001 490.00 180755 01/05/2017 004813 M & J PAUL ENTERPRISES INC INFLATABLE RENTALS:VAR SPECIAL 4,670.00 EVENTS 180756 01/05/2017 013982 M C I COMM SERVICE 180757 01/05/2017 018314 MICHAEL BAKER INT'L INC. 180758 01/05/2017 013443 MIDWEST TAPE LLC 2,081.00 4,670.00 DEC XXX -0714 GEN USAGE:PD MALL 34.90 ALARM DEC XXX -0346 GENERAL USAGE 33.18 68.08 OCT 16 DSGN SERVICES: PECHANGA 25,204.25 PKWY NOV DSGN SRVCS: 1-15 / SR 79 SOUTH 7,275.51 32,479.76 Misc DVD's, books on CD, audio 60.59 60.59 180759 01/05/2017 004951 MIKE'S PRECISION WELDING PUMP REPAIR: TOWN SQUARE INC. 180760 01/05/2017 012264 MIRANDA, JULIO C. 180761 01/05/2017 004040 MORAMARCO, ANTHONY J. TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS TCSD INSTRUCTOR EARNINGS 80.00 80.00 764.75 523.25 146.91 2,205.00 1,039.50 269.50 220.50 180762 01/05/2017 001986 MUZAK LLC JAN DISH NETWORK 140.85 PROGRAMING:FOC JAN DISH NETWORK PROGRAMING:FOC 62.01 180763 01/05/2017 003964 OFFICE DEPOT BUSINESS SVS OFFICE SUPPLIES: FINANCE 152.47 DIV OFFICE SUPPLIES: FINANCE 50.41 CREDIT: OFFICE SUPPLIES RETURNED/I -7.29 CREDIT: OFFICE SUPPLIES RETURNED/I -30.77 180764 01/05/2017 019474 OUR NICHOLAS FOUNDATION FY 16/17 COMMUNITY SRVC FUNDING 2,000.00 180765 01/05/2017 010338 POOL & ELECTRICAL CHEMICAL SUPPLIES:SPLASH PARK 177.96 PRODUCTS INC CHEMICAL SUPPLIES:SPLASH PARK 21.02 180766 01/05/2017 000262 RANCHO CALIF WATER DISTRICT DEC VAR WATER METERS:TCSD SVC LEV C DEC VAR WATER METERS:PW VARIOUS DEC LNDSCP WATER METER:RANCHO \ DEC VAR WATER METERS:FIRE STNS 10,237.83 1,546.55 507.95 398.67 1,434.91 3,734.50 202.86 164.82 2,000.00 198.98 12,691.00 Page:3 apChkLst Final Check List 01/05/2017 3:18:53PM CITY OF TEMECULA Page: 4 Bank : union UNION BANK (Continued) Check # Date Vendor Description 180767 01/05/2017 001592 RIVERSIDE CO INFO NOV EMERG RADIO RENTAL & TECHNOLOGY REPAIR:PD Amount Paid Check Total 2,839.80 2,839.80 180768 01/05/2017 012251 ROTH, DONALD J. TCSD INSTRUCTOR EARNINGS 224.00 224.00 180769 01/05/2017 004274 SAFE & SECURE LOCKSMITH LOCKSMITH SRVCS:CIVIC CENTER 180770 01/05/2017 017699 SARNOWSKI, SHAWNA, M PRESTON PHOTOGRAPHY:QTRLY LUNCHEON 12/14 PHOTOGRAPHY:COUNCIL MTG 12/13 PHOTOGRAPHY:NYE EVENT 12/31 12.96 12.96 150.00 150.00 150.00 450.00 180771 01/05/2017 017365 SELSTAD, LONNIE DIXIELAND @ THE MERC 12/18/16 32.17 32.17 180772 01/05/2017 009213 SHERRY BERRY MUSIC JAZZ @ THE MERC 12/29/16 2,785.00 2,785.00 180773 01/05/2017 013695 SHRED -IT US JV, LLC 11/16, 12/14 DOC SHRED SRVCS:PD 34.74 34.74 O.T.STN 180774 01/05/2017 014818 SKYFIT TECH, INC. GYM EQUIP PREV MAINT: CIVIC 195.00 195.00 CENTER 180775 01/05/2017 018784 SKYTECH MEDIA SOLUTIONS MOBILE STUDIO EVENT CART:PEG 2,400.00 2,400.00 INC EQUIP Page:4 apChkLst Final Check List 01/05/2017 3:18:53PM CITY OF TEMECULA Page: 5 Bank : union UNION BANK (Continued) Check # Date Vendor 180776 01/05/2017 000537 SO CALIF EDISON Description Amount Paid Check Total DEC 2-32-903-8293: 41000 MAIN ST 11,700.87 DEC 2-29-933-3831 43230 BUSINESS PAF 1,516.93 DEC 2-31-912-7494: 28690 MERCEDES S' 1,449.58 DEC 2-29-224-0173:32364 OVERLAND TR 1,379.17 DEC 2-35-403-6337: 41375 MCCABE CT 985.97 DEC 2-02-351-4946: 41845 6TH ST 687.28 DEC 2-19-171-8568: 28300 MERCEDES 626.67 DEC 2-35-664-9053: 29119 MARGARITA R 497.34 DEC 2-18-937-3152 28314 MERCEDES 460.65 DEC 2-25-393-4681: 41951 MORAGA RD 408.59 DEC 2-34-624-4452 32131 S LOOP RD LC 275.97 DEC 2-31-536-3481: 41902 MAIN ST 234.53 DEC 2-31-536-3655: 41904 MAIN ST 177.69 NOV 2-28-904-7706:32329 OVERLAND TR 148.19 NOV 2-28-331-4847:32805 PAUBA RD LS3 100.33 DEC 2-33-357-5785 44747 REDHAWK PK\ 39.80 DEC 2-14-204-1615 30027 FRONT ST 33.83 DEC 2-36-641-3839:27498 ENTERPRISE C 30.94 DEC 2-35-164-3770: 43487 BUTTERFIELD 26.88 DEC 2-36-641-3912:27498 ENTERPRISE ( 26.76 DEC 2-35-164-3242: 44270 MEADOWS PK 26.24 DEC 2-34-333-3589: 41702 MAIN ST 25.44 DEC 2-35-164-3663: 42335 MEADOWS PK 25.36 DEC 2-35-164-3515: 32932 LEENA WAY 25.36 DEC 2-31-031-2616: 27991 DIAZ RD PED 24.93 DEC 2-31-282-0665: 27407 DIAZ RD PED 24.93 DEC 2-29-807-1226: 28077 DIAZ RD PED 24.68 DEC 2-29-807-1093 28079 DIAZ RD PED 24.56 DEC 2-29-657-2787: 41638 WINCHESTER 24.19 DEC 2-31-419-2873: 43000 HWY 395 24.06 DEC 2-21-981-4720:30153 TEM PKWY TPI 21.39 21,079.11 Page:5 apChkLst Final Check List 01/05/2017 3:18:53PM CITY OF TEMECULA Page: 6 Bank : union UNION BANK (Continued) Check # Date Vendor 180777 01/05/2017 001212 SO CALIF GAS COMPANY Description DEC 091-024-9300-5:30875 RANCHO VISTA DEC 129-535-4236-7:41000 MAIN ST NOV 125-244-2108-3:30600 PAUBA RD DEC 026-671-2909-8:42051 MAIN ST DEC 101-525-1560-6:27415 ENTERPRISE NOV 095-167-7907-2:30650 PAUBA RD DEC 129-582-9784-3:43230 BUS PARK DF DEC 021-725-0775-4:41845 6TH ST DEC 101-525-0950-0:28816 PUJOL ST DEC 196-025-0344-3:42081 MAIN ST DEC 181-383-8881-6:28314 MERCEDES 8 DEC 028-025-1468-3:41375 MCCABE CT DEC 117-188-6393-6:32131 S LOOP RD DEC 133-040-7373-0:43210 BUS PARK DF DEC 091-085-1632-0:41951 MORAGA RD 180778 01/05/2017 005786 SPRINT 11/20 - 12/19 BUS FUSION M2M:POLICE 180779 01/05/2017 002015 STAR WAY SYSTEMS AUDIO ENG & SRVCS: OT LIGHT CORPORATION PARADE 12/2 180780 01/05/2017 004570 STEPHEN G WHITE, MAI Appraisal srvcs:roripaugh cfd pan area 180781 01/05/2017 007698 SWANK MOTIONS PICTURES, Winterfest Chilled movie INC. 180782 01/05/2017 010276 TIME WARNER CABLE JAN HIGH SPEED INTERNET:41000 MAIN ST JAN HIGH SPEED INTERNET:LIBRARY Amount Paid Check Total 3,113.01 1,991.83 512.52 420.91 328.08 294.17 251.36 232.22 186.51 149.24 116.35 40.87 25.95 20.69 14.79 7,698.50 110.20 110.20 1,190.00 1,190.00 12,000.00 12,000.00 393.00 393.00 3,916.45 592.94 JAN HIGH SPEED INTERNET:40820 WINC 1.60 4,510.99 180783 01/05/2017 000278 TRONC, INC. NOV PUBLIC NTC ADS: CITY 1,838.81 1,838.81 CLERK/PLNG/PW 180784 01/05/2017 017579 U.S. HEALTHWORKS MEDICAL Pre employ drug screenings:HR 563.00 563.00 180785 01/05/2017 008977 VALLEY EVENTS, INC. RENTAL EQUIP:NYE EVENT 435.00 435.00 180786 01/05/2017 014486 VERIZON WIRELESS 11/16-12/15 BROADBAND 2,448.47 2,448.47 SVCS:CITYWIDE 180787 01/05/2017 003730 WEST COASTARBORISTS INC 12/1-15 TREE TRIMS:REMOVALS:PRKS 5,757.00 5,757.00 & MEDIA 180788 01/05/2017 000341 WILLDAN ASSOCIATES INC NOV TRAFFIC ENG SRVCS: PW 5,019.32 5,019.32 TRAFFIC Page apChkLst Final Check List 01/05/2017 3:18:53PM CITY OF TEMECULA Page: 7 Bank : union UNION BANK (Continued) Check # Date Vendor Description 180789 01/05/2017 018871 WONDER SCIENCE TCSD INSTRUCTOR EARNINGS Amount Paid Check Total 980.00 980.00 Grand total for UNION BANK: 260,833.97 Page:7 apChkLst 01/05/2017 3:18:53PM Final Check List CITY OF TEMECULA Page: 8 69 checks in this report. Grand Total All Checks. 260,833.97 Page:8 Item No. 4 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Kevin Hawkins, Director of Community Services DATE: January 24, 2017 SUBJECT: Approve a Cooperative Agreement Between City of Temecula and Nonprofit Senior Golden Years in Support of Various Senior Services Activities PREPARED BY: Yvette Martinez, Community Services Supervisor I RECOMMENDATION: That the City Council approve the Cooperative Agreement between the City of Temecula and nonprofit Senior Golden Years in support of various Senior Services activities. BACKGROUND: The City of Temecula incorporated in 1989 with a population of less than 30,000 residents and a senior population of less than 10%. The City has grown to over three times the size with a population of over 109,000, with a senior population of 25%. The City of Temecula recognizes the need to assist in providing services and amenities to enrich quality of life, provide information and education, and to support the emotional and physical needs of aging adults within our community. For the past 22 years, the Mary Phillips Senior Center (MPSC) has grown along with the community by providing hundreds of programs, activities, and services for aging adults and those with special needs. It is our goal to provide the commitment and leadership to identify their needs, access existing programs, develop tangible solutions and plan for the future. The facility has become a place to socialize and participate, earning a reputation as "The Place Where Friends Meet". The Senior Golden Years (SGY) is a non-profit organization dedicated to the improvement of the lives of Temecula Valley Seniors through social, educational, and nutritional activities. SGY has played a very integral part since the formation of the MPSC in 1989. The Partnership between the City of Temecula and Senior Golden Years exists to leverage resource opportunities; create, expand, and improve activities and services; promote senior support. The City of Temecula and Senior Golden Years have worked cooperatively to host various activities for residents of Temecula and surrounding cities. The City will sponsor the use of space at the Mary Phillips Senior Center in order for the non-profit to conduct their services. This partnership will continue through the following: Board Meetings: The City will sponsor the use of space at the Mary Phillip's Senior Center to conduct the non -profits monthly board meetings. The Board Meetings are closed to the general public and for members of the board to conduct business. Member Meetings: The City will sponsor the use of space at the Mary Phillips Senior Center to conduct the non -profits bi-monthly member meetings. The Member Meetings are open to members of the club or anyone interested in joining. Meetings serve on average 50 — 60 seniors. Bingo Activity: The City will sponsor the use of space at the Mary Phillips Senior Center to conduct a Bingo Activity. The Activity is open to the general public for seniors ages 55 and over. The non-profit is required to obtain a Charitable Organization Bingo License in order to perform this activity. This activity serves on average 50 — 75 seniors. Social Activities: The City will sponsor the use of space at the Mary Phillips Senior Center to hold various social events like Saturday Socials, and Craft Boutique. These activities will be open to the general public for seniors ages 55 and over. This activity serves on average 25-100 people depending on the event. Use of Storage: The City will grant access to utilize closet and cabinet space to store items and materials that are used for activities/events. The amount of space is outlined in the Cooperative Agreement. In order to fulfill the desired outcomes of the Human Services Division to serve seniors and active adults, the City seeks to formalize the cooperative partnership between the City of Temecula and Senior Golden Years, which is essential in continuing to provide these types of activities to the senior population. This entails the use of in-kind Community Services facility and staff support valued at $3,768 and $815 respectively, refreshments costs of $480, and in-kind promotional services valued at $8,300. The non-profit Senior Golden Years shall provide the following benefits and in-kind services for the citizens of Temecula which include City of Temecula logo/name on advertisements, press releases, and all other promotional materials, and coordinate various Senior Social Activities as described above. FISCAL IMPACT: Funds are budgeted in the FY 2016-17 budget. ATTACHMENTS: Cooperative Agreement COOPERATIVE AGREEMENT BETWEEN CITY OF TEMECULA AND SENIOR GOLDEN YEARS THIS AGREEMENT is made and effective as of this 24TH day of January, 2017, by and between the City of Temecula , a municipal corporation (hereinafter referred to as "City"), and Senior Golden Years, a California nonprofit corporation (hereinafter referred to as the "Nonprofit"). In consideration of the mutual covenants, conditions and undertakings set forth herein, the parties agree as follows: 1. RECITALS This Agreement is made with respect to the following facts and purposes which each of the parties acknowledge and agree are true and correct: a.) The Nonprofit shall operate their Board Meetings (hereinafter referred to as the "Event") on 2nd Wednesday of each month from 12:00 — 12:30 pm at the Mary Phillips Senior Center (room based on availability). i. The Board Meetings are closed to the general public for members of the board to conduct business. ii. City Staff will setup and breakdown meetings. iii. The Nonprofit is responsible for clean up. b.) The Nonprofit shall operate their Member Meetings on the 2nd & 4th Wednesday of each month from 12:45 — 2:00 pm at the Mary Phillips Senior Center (room based on availability). i. The Member Meetings are open to members of the Senior Golden Years. ii. The City will sponsor coffee and condiments. iii. City Staff will setup and breakdown meetings. iv. The Nonprofit is responsible for clean up. c.) The Nonprofit shall operate their Bingo Activity on the 2nd & 4th Wednesday of each month from 2:00 — 4:00 pm at the Mary Phillips Senior Center. i. This activity is open to the general public for seniors ages 55 and over. ii. The City will sponsor coffee and condiments. iii. City Staff will setup and breakdown event. iv. The Nonprofit is responsible for clean up. v. The Nonprofit may store their Bingo machine in the Multipurpose Room closet. vi. The Nonprofit is required to obtain a Charitable Organization Bingo License from the City of Temecula. d.) The Nonprofit shall operate their Saturday Socials on the 3rd Satruday of each month from 4:00 — 8:00 pm at the Mary Phillips Senior Center (based on availability). i. The activity is open to the general public for seniors ages 55 and over. ii. The City will sponsor coffee and condiments. iii. City Staff will setup and breakdown activity. iv. The Nonprofit is responsible for clean up. e.) The Nonprofit shall operate a Craft Boutique 1x annually at the availability of the Mary Phillips Senior Center. i. The event is open to the general public. ii. City Staff will setup and breakdown event. iii. Use of Storage will not be provided. f.) The Nonprofit shall have access to the following closets/cabinets for the use of storage at the Mary Phillips Senior Center. i. The City will provide the closet in the Multipurpose Room to store the bingo machine. ii. The City will allow the use of one storage cabinet in the Craft Room to store meeting items and craft items. iii. The City will provide one cabinet in the kitchen pantry to store refreshment items. g.) Alcohol will not be served at any of the above mentioned events/programs. h.) The City desires to be a Co -Sponsor of all the above mentioned activities/events, providing in-kind support including facilities, staff support, refreshments, storage use, and advertising as described in Exhibit B. 2. TERM This Agreement shall commence on January 24, 2017, and shall remain and continue in effect until tasks described herein are completed, but in no event later than June 30, 2018 unless sooner terminated pursuant to the provisions of this Agreement. 3. CONSIDERATION a. As a Co -Sponsor the City shall receive sponsor benefits as listed in Exhbit A. b. WRITTEN REPORT Within ninety (90) days after the conclusion of the Event, the Nonprofit shall prepare and submit to the Assistant City Manager a written report evaluating the Event, its attendance, media coverage, and description of the materials in which the City has listed as a Co -Sponsor. 4. PERMITS The Nonprofit shall file applications for a Charitable Organization Bingo License with the City no later than thirty (30) days prior to the first day of the Event. The City retains its governmental jurisdiction to determine whether to issue the permits and the nature and scope of Conditions of Approval. The Nonprofit shall comply with all conditions of approval for the Charitable Organization Bingo License, or any other City -issued permits. Failure to comply with the Conditions of Approval of such permits shall constitute a default of this Agreement and is grounds for termination of this Agreement. 5. MEETING ATTENDANCE The Nonprofit shall attend all City pre -event planning meetings and event recap meetings if warranted. 6. INDEMNIFICATION The Nonprofit shall indemnify, protect, defend and hold harmless the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its elected officials, officers, employees, volunteers, and representatives from any and all suits, claims, demands, losses, defense costs or expenses, actions, liability or damages of whatsoever kind and nature which the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, agents and employees 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 the Nonprofit's negligent or wrongful acts or omissions arising out of or in any way related to the performance or non-performance of this Agreement. 7. INSURANCE The Nonprofit shall secure and maintain from a State of California admitted insurance company, pay for and maintain in full force and effect for the duration of this Agreement an insurance policy of comprehensive general liability against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by January 24, 2017, its agents, representatives, or employees. a. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1) Insurance Services Office Commercial General Liability form No. CG 00 01 11 85 or 88. 2) Insurance Services Office Business Auto Coverage form CA 00 01 06 92 covering Automobile Liability, code 1 (any auto). If the Recipient owns no automobiles, a non -owned auto endorsement to the General Liability policy described above is acceptable. 3) Worker's Compensation insurance as required by the State of California and Employer's Liability Insurance. If the Recipient has no employees while performing under this Agreement, worker's compensation insurance is not required, but Consultant shall execute a declaration that it has no employees. b. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1) General Liability: One million ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2) Worker's Compensation insurance is required only if Consultant employs any employees. Consultant warrants and represents to the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agencythat it has no employees and that it will obtain the required Worker's Compensation Insurance upon the hiring of any employees. c. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions shall not exceed Twenty Five Thousand Dollars and No Cents ($25,000). d. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1) The City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers are to be covered as insured's, as respects: liability arising out of activities performed by or on behalf of the NonProfit; products and completed operations of the Recipient; premises owned, occupied or used by the Nonprofit; or automobiles owned, leased, hired or borrowed by the Nonprofit. The coverage shall contain no special limitations on the scope of protection afforded to the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 2) For any claims related to this project, the Nonprofit's insurance coverage shall be primary insurance as respects the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers. Any insurance or self-insured maintained by the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 4) The Nonprofit's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5) Each insurance policy required by this agreement shall be endorsed to state: should the policy be canceled before the expiration date the issuing insurer will endeavor to mail thirty (30) days prior written notice to the City. 6) If insurance coverage is canceled or, reduced in coverage or in limits the Nonprofit shall within two (2) business days of notice from insurer phone, fax, and/or notify the City via certified mail, return receipt requested of the changes to or cancellation of the policy. e. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of A -:VII or better, unless otherwise acceptable to the City. Self insurance shall not be considered to comply with these insurance requirements. f. Verification of Coverage. Nonproft shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Nonprofit's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. 8. GOVERNING LAW The City and the Nonprofit understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. 9. LEGAL RESPONSIBILITIES The Nonprofit shall keep itself informed of all local, State and Federal ordinances, 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 Nonprofit shall at all times observe and comply with all such ordinances, laws and regulations. The City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Nonprofit to comply with this section. 10. ASSIGNMENT The Nonprofit shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the City. 11. NOTICES Any notices which either party may desire to give to the other party under this Agreement 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 United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice: Mailing Address: To Recipient: City of Temecula Attn: City Manager 41000 Main Street Temecula, CA 92590 Senior Golden Years Attn: Caroline Hoelzle PO BOX 69 Wildomar, CA 92595 15. INDEPENDENT CONTRACTOR a. The Nonprofit shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of the Nonprofit shall at all times be under the Nonprofit's exclusive direction and control. Neither City nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Recipient or any of the Nonprofit's officers, employees, or agents except as set forth in this Agreement. The Nonprofit shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. The Nonprofit shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. No employee benefits shall be available to the Nonprofit in connection with the performance of this Agreement. Except for the fees paid to the Nonprofit as provided in the Agreement, City shall not pay salaries, wages, or other compensation to the Nonprofit for performing services hereunder for City. City shall not be liable for compensation or indemnification to the Nonprofit for injury or sickness arising out of performing services hereunder. 16. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 17. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of the Nonprofit warrants and represents that he or she has the authority to execute this Agreement on behalf of the Nonprofit and has the authority to bind the Nonprofit to the performance of its obligations hereunder. The City Manager is authorized to enter into an amendment on behalf of the City to make the following non -substantive modifications to the agreement: (a) name changes; (b) extension of time; (c) non -monetary changes in scope of work; (d) agreement termination. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. CITY OF TEMECULA By: Maryann Edwards, Mayor ATTEST: By: Randi Johl, City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney SENIOR GOLDEN YEARS (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: Caroline Hoelzle, President By: Ron Hoelzle , Treasurer NONPROFIT Senior Golden Years Caroline Hoelzle PO Box 69 Wildomar, CA 92595 (951) 244-6409 Sweetcc41@yahoo.com PM Initials: Date: (-- EXHIBIT "A" CITY OF TEMECULA SPONSORSHIP BENEFITS CO-SPONSOR Senior Golden Years shall provide the following benefits and services for the citizens of the City of Temecula: • City of Temecula logo/name on advertisements, press releases, and other promotional materials • Bingo Activity for City of Temecula and patrons of the senior community • Saturday Social events for City of Temecula and patrons of the senior community • Craft Boutique for City of Temecula and its attendees EXHIBIT "B" IN-KIND SERVICES ESTIMATED VALUE OF CITY SUPPORT SERVICES AND COSTS Based on the input from City departments we received estimated cost projections for the Board Meetings, Member Meetings, Bingo Activity, Saturday Socials, and Craft Boutique event. The following expenses can be anticipated for the event: Mary Phillips Senior Center Facility Rental: Community Services Staff Hours: Community Services Refreshments Costs: $ 3,768.00 $ 815.00 $ 480.00 TOTAL: $ 5,063.00 ESTIMATED VALUE OF PROMOTIONAL SERVICES PROVIDED BY THE CITY OF TEMECULA The estimated value for in-kind promotional assistance provided by The City of Temecula for the Senior Golden Years is as follows: Item Value Cable Channel Event slide appears approximately once per hour for 30 seconds City Website Event listing on the City of Temecula's event calendar Promotional Poster 42X66 poster located in the concourse at the Civic Center Guide to Leisure Activities Senior Golden Years information listed $ 5,100.00 $ 2,200.00 $ 1,000.00 TOTAL VALUE: $ 8,300.00 Item No. 5 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Kevin Hawkins, Director of Community Services DATE: January 24, 2017 SUBJECT: Approve a Cooperative Agreement Between City of Temecula and the Temecula Valley Genealogical Society in Support of Facility Use PREPARED BY: Erica Russo, Senior Management Analyst RECOMMENDATION: That the City Council approve the Cooperative Agreement with the Temecula Valley Genealogical Society for in-kind services in support of Facility Use. BACKGROUND: The City has had a long-standing verbal sponsorship of the Temecula Valley Genealogical Society (TVGS), which includes facility and staff support at multiple facilities throughout the year. Currently, TVGS holds four meetings a month at the Ronald H. Roberts Temecula Public Library, with a collective in-kind value of $2,080 annually: 1. Genealogy Class, 10 meetings/year 2. Computer Club, 10 meetings/year 3. Board Meeting, 10 meetings/year 4. DNA Class, 10 meetings/year In addition, TVGS uses the Conference Center for monthly meetings, which have a total in-kind value of $5,500 annually. FISCAL IMPACT: These costs are allocated in the TCSD Annual Operating Budget. ATTACHMENTS: Cooperative Agreement COOPERATIVE AGREEMENT BETWEEN CITY OF TEMECULA AND TEMECULA VALLEY GENEALOGICAL SOCIETY THIS AGREEMENT is made and effective as of this 24TH day of January, 2017, by and between the City of Temecula , a municipal corporation (hereinafter referred to as "City"), and Temecula Valley Genealogical Society, a California nonprofit corporation (hereinafter referred to as the "Nonprofit"). In consideration of the mutual covenants, conditions and undertakings set forth herein, the parties agree as follows: 1. RECITALS This Agreement is made with respect to the following facts and purposes which each of the parties acknowledge and agree are true and correct: a.) The Nonprofit shall hold meetings (hereinafter referred to as the "Event") four times each month at the Ronald H. Roberts Temecula Public Library (room based on availability) as follows, or on alternate dates pending facility availability as determined by Staff : • lst Friday • 2nd Friday • 3rd Friday 3 hours 3 hours 3 hours • 4th Wednesday 3 hours i. The Meetings are closed to the general public for members of the Nonprofit to conduct business. ii. City Staff will setup and breakdown meetings. iii. The Nonprofit is responsible for clean up. b.) The Nonprofit shall hold meetings (hereinafter referred to as the "Event") one time each month at the City of Temecula Conference Center (room based on availability). 01/09/2017 5:30 pm to 9:30 pm 03/13/2017 5:30 pm to 9:30 pm 05/15/2017 5:30 pm to 9:30 pm 07/10/2017 5:30 pm to 9:30 pm 09/11/2017 5:30 pm to 9:30 pm 11/13/2017 5:30 pm to 9:30 pm 02/13/2017 5:30 pm to 9:30 pm 04/10/2017 5:30 pm to 9:30 pm 06/21/2017 5:30 pm to 9:30 pm 08/14/2017 5:30 pm to 9:30 pm 10/09/2017 5:30 pm to 9:30 pm 12/11/2017 5:30 pm to 9:30 pm i. The Meetings are closed to the general public for members of the Nonprofit to conduct business. ii. City Staff will setup and breakdown meetings. iii. The Nonprofit is responsible for clean up. c.) Alcohol will not be served at any of the above mentioned events/programs. d.) The City desires to be a Co -Sponsor of all the above mentioned activities/events, providing in-kind support including facilities, staff support, refreshments, storage use, and advertising as described in Exhibit B. 2. TERM This Agreement shall commence on January 24, 2017, and shall remain and continue in effect until tasks described herein are completed, but in no event later than December 31, 2017 unless sooner terminated pursuant to the provisions of this Agreement. 3. CONSIDERATION a. As a Co -Sponsor the City shall receive sponsor benefits as listed in Exhibit A. 4. WRITTEN REPORT Within thirty (30) days after the conclusion of the year, the Nonprofit shall prepare and submit to the Assistant City Manager a written report evaluating the Event, its attendance, media coverage, and description of the materials in which the City has listed as a Co -Sponsor. 5. MEETING ATTENDANCE The Nonprofit shall attend all City pre -event planning meetings and event recap meetings if warranted. 6. INDEMNIFICATION The Nonprofit shall indemnify, protect, defend and hold harmless the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its elected officials, officers, employees, volunteers, and representatives from any and all suits, claims, demands, losses, defense costs or expenses, actions, liability or damages of whatsoever kind and nature which the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, agents and employees 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 the Nonprofit's negligent or wrongful acts or omissions arising out of or in any way related to the performance or non-performance of this Agreement. 7. INSURANCE The Nonprofit shall secure and maintain from a State of California admitted insurance company, pay for and maintain in full force and effect for the duration of this Agreement an insurance policy of comprehensive general liability against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by January 24, 2017, its agents, representatives, or employees. a. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1) Insurance Services Office Commercial General Liability form No. CG 00 01 11 85 or 88. 2) Worker's Compensation insurance as required by the State of California and Employer's Liability Insurance. If the Recipient has no employees while performing under this Agreement, worker's compensation insurance is not required, but Consultant shall execute a declaration that it has no employees. b. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1) General Liability: One million ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2) Worker's Compensation insurance is required only if Consultant employs any employees. Consultant warrants and represents to the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agencythat it has no employees and that it will obtain the required Worker's Compensation Insurance upon the hiring of any employees. c. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions shall not exceed Twenty Five Thousand Dollars and No Cents ($25,000). d. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1) The City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers are to be covered as insured's, as respects: liability arising out of activities performed by or on behalf of the NonProfit; products and completed operations of the Recipient; premises owned, occupied or used by the Nonprofit; or automobiles owned, leased, hired or borrowed by the Nonprofit. The coverage shall contain no special limitations on the scope of protection afforded to the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 2) For any claims related to this project, the Nonprofit's insurance coverage shall be primary insurance as respects the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers. Any insurance or self-insured maintained by the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 4) The Nonprofit's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5) Each insurance policy required by this agreement shall be endorsed to state: should the policy be canceled before the expiration date the issuing insurer will endeavor to mail thirty (30) days prior written notice to the City. 6) If insurance coverage is canceled or, reduced in coverage or in limits the Nonprofit shall within two (2) business days of notice from insurer phone, fax, and/or notify the City via certified mail, return receipt requested of the changes to or cancellation of the policy. e. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of A -:VII or better, unless otherwise acceptable to the City. Self insurance shall not be considered to comply with these insurance requirements. f. Verification of Coverage. Nonproft shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Nonprofit's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. 8. GOVERNING LAW The City and the Nonprofit understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. 9. LEGAL RESPONSIBILITIES The Nonprofit shall keep itself informed of all local, State and Federal ordinances, 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 Nonprofit shall at all times observe and comply with all such ordinances, laws and regulations. The City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Nonprofit to comply with this section. 10. ASSIGNMENT The Nonprofit shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the City. 11. NOTICES Any notices which either party may desire to give to the other party under this Agreement 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 United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice: Mailing Address: To Recipient: City of Temecula Attn: City Manager 41000 Main Street Temecula, CA 92590 Temecula Valley Genealogical Society Attn: Barbara Perez 27475 Ynez Road, #291 Temecula, CA 92591 15. INDEPENDENT CONTRACTOR a. The Nonprofit shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of the Nonprofit shall at all times be under the Nonprofit's exclusive direction and control. Neither City nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Recipient or any of the Nonprofit's officers, employees, or agents except as set forth in this Agreement. The Nonprofit shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. The Nonprofit shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. No employee benefits shall be available to the Nonprofit in connection with the performance of this Agreement. Except for the fees paid to the Nonprofit as provided in the Agreement, City shall not pay salaries, wages, or other compensation to the Nonprofit for performing services hereunder for City. City shall not be liable for compensation or indemnification to the Nonprofit for injury or sickness arising out of performing services hereunder. 16. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 17. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of the Nonprofit warrants and represents that he or she has the authority to execute this Agreement on behalf of the Nonprofit and has the authority to bind the Nonprofit to the performance of its obligations hereunder. The City Manager is authorized to enter into an amendment on behalf of the City to make the following non -substantive modifications to the agreement: (a) name changes; (b) extension of time; (c) non -monetary changes in scope of work; (d) agreement termination. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. CITY OF TEMECULA TEMECULA VALLEY GENEALOGICAL SOCIETY (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Maryann Edwards, Mayor Barbara Perez, President ATTEST: By: By: Randi Johl, City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney NONPROFIT Pamela Pressney, 1st Vice President Temecula Valley Genealogical Society Attn: Barbara Perez 27475 Ynez Road, #291 Temecula, CA 92591 Barbgma9(yahoo.com PM Initial : Date: EXHIBIT "A" CITY OF TEMECULA SPONSORSHIP BENEFITS CO-SPONSOR Temecula Valley Genealogical Society shall provide the following benefits and services for the citizens of the City of Temecula: • City of Temecula logo/name on advertisements, flyers, press releases, or other promotional material EXHIBIT "B" IN-KIND SERVICES ESTIMATED VALUE OF CITY SUPPORT SERVICES AND COSTS Based on the input from City departments we received estimated cost projections for the Nonprofit meetings. The following expenses can be anticipated for the event: Library Facility Rental Total Costs: Conference Center Facility Rental Total Costs: TOTAL VALUE: $ 2,080.00 $ 5,500.00 $ 7,580.00 Item No. 6 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick A. Thomas, Interim Public Works Director DATE: January 24, 2017 SUBJECT: Approve the Agreement for Consultant Services with Stantec Consulting Services Inc. for the Butterfield Stage Road — Phase 111, PW15-11 PREPARED BY: Amer Attar, Principal Engineer Avlin R. Odviar, Senior Engineer RECOMMENDATION: That the City Council: 1. Approve the Agreement for Consultant Services with Stantec Consulting Services Inc., in the amount of $50,000, for professional design and engineering services in support of the Butterfield Stage Road — Phase 111, PW15-11; 2. Authorize the City Manager to approve Extra Work Authorizations not to exceed the contingency amount of $5,000, which is 10% of the Agreement amount. BACKGROUND: On May 13, 2008, City Council directed staff to proceed with completing improvements conditioned upon the Roripaugh Ranch Development. The improvements consisted primarily of arterial roadways: (1) Murrieta Hot Springs Road from Pourroy Road to Butterfield Stage Road and (2) Butterfield Stage Road from Murrieta Hot Springs Road to Rancho California Road. In July of 2009 the City, acting as the Temecula Public Financing Authority, and the Developer of Roripaugh Ranch entered an Agreement allowing the City to take over construction of the aforementioned public improvements and establishing funding of the work through Community Facilities District No. 03-02 bond proceeds. The improvements have been segmented into three phases. Construction of Phase I, consisting Murrieta Hot Springs Road from Pourroy Road to Butterfield Stage Road and Butterfield Stage Road from Murrieta Hot Springs Road to Calle Chapos, was completed in 2012. Construction of Phase 11, consisting of Butterfield Stage Road from Calle Chapos to La Serena Way, was completed in 2014. Design of Phase 111, consisting of Butterfield Stage Road from La Serena Way to Rancho California Road, is nearing completion. Stantec Consulting Services, Inc. (Stantec) is the Engineer of Record for all segments of the Butterfield Stage Road projects. Additional engineering services are necessary to complete the construction plans, specifications, and estimate for Phase III. FISCAL IMPACT: This project is funded with Roripaugh Ranch Community Facility District No. 03-02 bond proceeds. Adequate funds are available in the project accounts to cover the amount of the Agreement $50,000, plus the contingency amount of $5,000. ATTACHMENTS: 1. Agreement 2. Project Description 3. Project Location AGREEMENT FOR CONSULTANT SERVICES BETWEEN CITY OF TEMECULA AND STANTEC CONSULTING SERVICES INC. BUTTERFIELD STAGE ROAD — PHASE III, PW15-11 (CFD 03-02) THIS AGREEMENT is made and effective as of January 24, 2017, between the City of Temecula, a municipal corporation (hereinafter referred to as "City"), and Stantec Consulting Services Inc., a Corporation (hereinafter referred to as "Consultant"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. TERM This Agreement shall commence on January 24, 2017, and shall remain and continue in effect until tasks described herein are completed, but in no event later than June 30, 2018, unless sooner terminated pursuant to the provisions of this Agreement. 2. SERVICES Consultant shall perform the services and tasks described and set forth in Exhibit A, attached hereto and incorporated herein as though set forth in full. Consultant shall complete the tasks according to the schedule of performance which is also set forth in Exhibit A. 3. PERFORMANCE Consultant shall at all time faithfully, competently and to the best of his or her ability, experience, and talent, perform all tasks described herein. Consultant shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Consultant hereunder in meeting its obligations under this Agreement. 4. PREVAILING WAGES Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this Consultant from the Director of the Department of Industrial Relations. Copies may be obtained from the California Department of Industrial Relations Internet website at http://www.dir.ca.gov. Consultant shall provide a copy of prevailing wage rates to any staff or sub -consultant hired, and shall pay the adopted prevailing wage rates as a minimum. Consultant shall comply with the provisions of Sections 1720, 1725.5, 1771.1(a), 1773.8, 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor Code. Pursuant to the provisions of 1775 of the Labor Code, Consultant shall forfeit to the City, as a penalty, the sum of $200.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Agreement, by him or by any sub -consultant under him, in violation of the provisions of the Agreement. This project, work, or service will be subject to compliance monitoring and enforcement by the Department of Industrial Relations (DIR) pursuant to Labor Code Section 1771.4. 5. REGISTRATION WITH THE DEPARTMENT OF INDUSTRIAL RELATIONS Registration with the Department of Industrial Relations (DIR) is mandatory as a condition for bidding, providing certain services, and working on a public works project as specified in Labor Code Section 1771.1(a). Contractor and any subcontractors must be registered with the Department of Industrial Relations to be qualified to bid, or provide a proposal and/or time and material quote or be listed in a bid, proposal or quote, subject to the requirements of Public Contract Code Section 4104; or engage in the performance of any contract that is subject to Labor Code Section 1720 et seq., unless currently registered and qualified to perform public work pursuant to Labor Code Section 1725.5. Contractor and subcontractors will be required to provide proof of registration with the DIR. For more information regarding registration with the Department of Industrial Relations, refer to http://www.dir.ca.gov/Public-Works/PublicWorks.html 6. PAYMENT a. The City agrees to pay Consultant monthly, in accordance with the payment rates and terms and the schedule of payment as set forth in Exhibit B, Payment Rates and Schedule, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Any terms in Exhibit B, other than the payment rates and schedule of payment, are null and void. This amount shall not exceed Fifty Thousand Dollars ($50,000) for the total term of this agreement unless additional payment is approved as provided in this Agreement. b. Consultant shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the City Manager . Consultant shall be compensated for any additional services in the amounts and in the manner as agreed to by City Manager and Consultant at the time City's written authorization is given to Consultant for the performance of said services. The City Manager may approve additional work up to ten percent (10%) of the amount of the Agreement as approved by City Council. Any additional work in excess of this amount shall be approved by the City Council. c. Consultant will submit invoices monthly for actual services performed. Invoices shall be submitted between the first and fifteenth business day of each month, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as to all non -disputed fees. If the City disputes any of Consultant's fees, it shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. For all reimbursements authorized by this Agreement, Consultant shall provide receipts on all reimbursable expenses in excess of fifty dollars ($50) in such form as approved by the Director of Finance. 7. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE a. The City may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon the Consultant at least ten (10) days prior written notice. Upon receipt of said notice, the Consultant shall immediately cease all work under this Agreement, unless the notice provides otherwise. If the City suspends or terminates a portion of this Agreement such suspension or termination shall not make void or invalidate the remainder of this Agreement. b. In the event this Agreement is terminated pursuant to this Section, the City shall pay to Consultant the actual value of the work performed up to the time of termination, provided that the work performed is in compliance with this Agreement. Upon termination of the Agreement pursuant to this Section, the Consultant will submit an invoice to the City, pursuant to Section entitled "PAYMENT" herein. 8. DEFAULT OF CONSULTANT a. The Consultant's failure to comply with the provisions of this Agreement shall constitute a default. In the event that Consultant is in default for cause under the terms of this Agreement, City shall have no obligation or duty to continue compensating Consultant for any work performed after the date of default and can terminate this Agreement immediately by written notice to the Consultant. If such failure by the Consultant to make progress in the performance of work hereunder arises out of causes beyond the Consultant's control, and without fault or negligence of the Consultant, it shall not be considered a default. b. If the City Manager or his delegate determines that the Consultant is in default in the performance of any of the terms or conditions of this Agreement, it shall serve the Consultant with written notice of the default. The Consultant shall have ten (10) days after service upon it of said notice in which to cure the default by rendering a satisfactory performance. In the event that the Consultant fails to cure its default within such period of time, the City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity or under this Agreement. 9. OWNERSHIP OF DOCUMENTS a. Consultant shall maintain complete and accurate records with respect to sales, costs, expenses, receipts and other such information required by City that relate to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free access to the representatives of City or its designees at reasonable times to such books and records, shall give City the right to examine and audit said books and records, shall permit City to make transcripts there from as necessary, and shall allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. b. Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, designs, drawings, maps, models, computer files containing data generated for the work, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this Agreement shall become the sole property of the City and may be used, reused or otherwise disposed of by the City without the permission of the Consultant. With respect to computer files containing data generated for the work, Consultant shall make available to the City, upon reasonable written request by the City, the necessary computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. c. With respect to the design of public improvements, the Consultant shall not be liable for any injuries or property damage resulting from the reuse of the design at a location other than that specified in Exhibit A, without the written consent of the Consultant. 10. INDEMNIFICATION, HOLD HARMLESS, AND DUTY TO DEFEND a. Indemnity for Design Professional Services. In the connection with its design professional services, Consultant shall hold harmless and indemnify City, and its elected officials, officers, employees, servants, designated volunteers, and those City agents serving as independent contractors in the role of City officials (collectively, "Indemnitees"), with respect to any and all claims, demands, damages, liabilities, losses, costs or expenses, including reimbursement of attorneys' fees and costs of defense (collectively, "Claims" hereinafter), including but not limited to Claims relating to death or injury to any person and injury to any property, which arise out of, pertain to, or relate in whole or in part to the negligence, recklessness, or willful misconduct of Consultant or any of its officers, employees, sub - consultants, or agents in the performance of its professional services under this Agreement. b. Other Indemnities. In connection with any and all claims, demands, damages, liabilities, losses, costs or expenses, including attorneys' fees and costs of defense (collectively, "Damages" hereinafter) not covered by Paragraph 9.a. above, Consultant shall defend, hold harmless and indemnify the Indemnitees with respect to any and all Damages, including but not limited to, Damages relating to death or injury to any person and injury to any property, which arise out of, pertain to, or relate to acts or omissions of Consultant or any of its officers, employees, subcontractors, or agents in the performance of this Agreement, except for such loss or damage arising from the sole negligence or willful misconduct of the City, as determined by final arbitration or court decision or by the agreement of the parties. Consultant shall defend Indemnitees in any action or actions filed in connection with any such Damages with counsel of City's choice, and shall pay all costs and expenses, including all attorneys' fees and experts' costs actually incurred in connection with such defense. Consultant's duty to defend pursuant to this Section 9.b. shall apply independent of any prior, concurrent or subsequent misconduct, negligent acts, errors or omissions of Indemnitees." 11. INSURANCE REQUIREMENTS Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. a. Minimum Scope of Insurance. Coverage shall be at least as broad as: i. Insurance Services Office Commercial General Liability form No. CG 00 01 11 85 or 88. ii. Insurance Services Office Business Auto Coverage form CA 00 01 06 92 covering Automobile Liability, code 1 (any auto). If the Consultant owns no automobiles, a non -owned auto endorsement to the General Liability policy described above is acceptable. iii. Worker's Compensation insurance as required by the State of California and Employer's Liability Insurance. If the Consultant has no employees while performing under this Agreement, worker's compensation insurance is not required, but Consultant shall execute a declaration that it has no employees. iv. Professional Liability Insurance shall be written on a policy form providing professional liability for the Consultant's profession. b. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1. General Liability: One million ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: One million ($1,000,000) per accident for bodily injury and property damage. 3. Worker's Compensation as required by the State of California; Employer's Liability: One million dollars ($1,000,000) per accident for bodily injury or disease. 4. Professional Liability Coverage: One million ($1,000,000) per claim and in aggregate. c. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions shall not exceed Twenty Five Thousand Dollars and No Cents ($25,000). d. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1) The City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers are to be covered as insured's, as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 2) For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers. Any insurance or self-insured maintained by the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City of Temecula, the Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 4) The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurers liability. 5) Each insurance policy required by this agreement shall be endorsed to state: should the policy be canceled before the expiration date the issuing insurer will endeavor to mail thirty (30) days' prior written notice to the City. 6) If insurance coverage is canceled or, reduced in coverage or in limits the Consultant shall within two (2) business days of notice from insurer phone, fax, and/or notify the City via certified mail, return receipt requested of the changes to or cancellation of the policy. e. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of A -:VII or better, unless otherwise acceptable to the City. Self insurance shall not be considered to comply with these insurance requirements. f. Verification of Coverage. Consultant shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Consultant's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. 12. INDEPENDENT CONTRACTOR a. Consultant is and shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Consultant shall at all times be under Consultant's exclusive direction and control. Neither City nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents except as set forth in this Agreement. Consultant shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. b. No employee benefits shall be available to Consultant in connection with the performance of this Agreement. Except for the fees paid to Consultant as provided in the Agreement, City shall not pay salaries, wages, or other compensation to Consultant for performing services hereunder for City. City shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing services hereunder. 13. LEGAL RESPONSIBILITIES The Consultant shall keep itself informed of all local, State and Federal ordinances, 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 Consultant shall at all times observe and comply with all such ordinances, laws and regulations. The City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Consultant to comply with this section. 14. RELEASE OF INFORMATION a. All information gained by Consultant in performance of this Agreement shall be considered confidential and shall not be released by Consultant without City's prior written authorization. Consultant, its officers, employees, agents or subcontractors, shall not without written authorization from the City Manager or unless requested by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement or relating to any project or property located within the City. Response to a subpoena or court order shall not be considered "voluntary" provided Consultant gives City notice of such court order or subpoena. b. Consultant shall promptly notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed there under or with respect to any project or property located within the City. City retains the right, but has no obligation, to represent Consultant and/or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, City's right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response. 15. NOTICES Any notices which either party may desire to give to the other party under this Agreement 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 United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice. Notice shall be effective upon delivery to the addresses specified below or on the third business day following deposit with the document delivery service or United States Mail as provided above. Mailing Address: To Consultant: 16. ASSIGNMENT City of Temecula Attn: City Manager 41000 Main Street Temecula, CA 92590 Stantec Consulting Services Inc. Attn: Carlos Pineda 46 Discovery Suite 250 Irvine, CA 92618-3133 The Consultant shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the City. Upon termination of this Agreement, Consultant's sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the City Council and the Consultant. 17. LICENSES At all times during the term of this Agreement, Consultant shall have in full force and effect, all licenses required of it by law for the performance of the services described in this Agreement. 18. GOVERNING LAW The City and Consultant understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. 19. PROHIBITED INTEREST No officer, or employee of the City of Temecula that has participated in the development of this agreement or its approval shall have any financial interest, direct or indirect, in this Agreement, the proceeds thereof, the Consultant, or Consultant's sub -contractors for this project, during his/her tenure or for one year thereafter. The Consultant hereby warrants and represents to the City that no officer or employee of the City of Temecula that has participated in the development of this agreement or its approval has any interest, whether contractual, non - contractual, financial or otherwise, in this transaction, the proceeds thereof, or in the business of the Consultant or Consultant's sub -contractors on this project. Consultant further agrees to notify the City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. 20. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 21. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of Consultant warrants and represents that he or she has the authority to execute this Agreement on behalf of the Consultant and has the authority to bind Consultant to the performance of its obligations hereunder. The City Manager is authorized to enter into an amendment on behalf of the City to make the following non -substantive modifications to the agreement: (a) name changes; (b) extension of time; (c) non -monetary changes in scope of work; (d) agreement termination. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. CITY OF TEMECULA STANTEC CONSULTING SERVICES INC. (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Maryann Edwards, Mayor ATTEST: By: By: RAND! JOHL, CITY CLERK APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney CONSULTANT Mohammad Heiat, Principal Carlos Pineda, Associate Stantec Consulting Services Inc. Attn: Carlos Pineda, PE 46 Discovery Suite 250 Irvine, CA 92618-3133 949-474-1401 ext. 205 Carlos.Pineda@stantec.com PM Initials: Date: EXHIBIT A TASKS TO BE PERFORMED The general elements (scope of work) of this service include: At the direction of the City, the Consultant will perform professional engineering and land surveying services in support of the Butterfield Stage Road — Phase III project. Services may include, but are not limited to: PROJECT MANAGEMENT • Schedule and coordinate all work. • Participate in meetings, teleconferences, etc. DESIGN • Professional engineering (civil, structural, electrical, hydraulic, traffic, wet/dry utilities). • Professional land surveying (field surveys, right of way requirements and mapping). • Preparation of technical reports. • Preparation of estimates of construction costs and scheduling. • Preparation of plans/exhibits, including hardcopy and/or digital, for utility coordination. • Preparation of construction plans and specifications. BIDDING • Answering/addressing questions regarding omissions, errors, and design intent. • Assist in preparation of addenda. Specific work tasks will be identified and scoped between the City and Consultant when needed. The work will be performed and paid for on a Time and Materials (T&M) basis, in accordance with the payment rates shown in Exhibit B. EXHIBIT B PAYMENT RATES AND SCHEDULE Stantec SCHEDULE OF BILLING RATES- 2017 Billing Level Hourly Rate Description Junior Levet position 3 $75 i Independently carries out assignments of limited scope using standard procedures, methods and 4 $83 techniques o Assists senior staff in carrying out more advanced procedures 5 $93 u Completed work is rev iewed for feasibility and soundness ofjudgrnenl ❑ Graduatefrom an appropriate post -secondary program or equivalent ❑ Generally, one to three years' experience Fully Qualified Professional Position 6 $101 o Carries out assignments requiring general familiarity within a broad field of the respectiv e profession la Makes decisions by using a combination of standard mefhodsandtechniques 7 $109 o Activ ely participates in planning to ensure the achievement of objectives R $117 ❑ Works independently to interpret information and resolyedifficulties 0 Graduatefrom an appropriate post -secondary program, with credentials or equivalent 0 Generally, three 10 six years' experience First Level Supervisor orfirstcornplete Level of Specialization 9 $125 o Prov ides applied professional knowledge and initiative in planning and coordinating work programs 10 $135 a Adapts established guidelines as necessary to address unusual issues 11 $144 ❑ Decisions accepted as technically accurate, howevermay on occasion be reviewed for soundnessofjudgment ❑ Graduatefrom an appropriate post -secondary program, with credentials or equivalent 0 Generally, fiv e to nine years' experience Highly Specialized Technical Professional or Supervisor of groups of professionals ❑ Prov ides multi -discipline knowledge to deliver innov ativ e solutions in related field of expertise 12 $154 ❑ Participates in short and long range planning to ensure the achievement of objectives 13 $165 u Makes responsible decisions on all matters, including policy recommendations, work methods, and financial controls associa ted with large expenditures 14 $175 o Rev iews and ev a luates tech nical work o Graduatefrom an appropriate post -secondary program, with credentials or equivalent o Generally, ten to fifteen years' experience with extensive, broad experience Senior Level Consultant or Management J Recognized as an authority in a specific field with qualifications of significant v alue 15 $184 ❑ Prov ides multi -discipline knowledge to deliverinnovativesolutions in related field of expertise ❑ Independently conceives programs and problems for inv estigation 1 b $212 o Participates in discussions to ensure the achievement of program and/or project objectives 17 $242 j Makes responsible decisions on expenditures, including large sums or implementation of major programs and/or projects ❑ Graduatefrom an appropriate post -secondary program, with credentials or equivalent ❑ Generally, more than twelveyears' experience with extensive experience Senior Level Management under review by Vice President or higher 18 $283 ❑ Recognized as an authority in a specific field with qualifications of significant v alue o Responsible for long range planning within a specific area of practice or region 19 $319 ❑ Makes decisions which are far reaching and limited only by objectives and policies of the 20 $354 organization o Plans/approves projects requiring significant human resources or capital investment 21 $390 o Graduatefrom an appropriate post -secondary program, with credentials or equivalent ❑ Generally, fifteen years' experience with extensive professional and management experience Crew Size Regular Rate Overtime Rate Survey Crews 1 -Person $180 $210 2 -Person $255 $355 3 -Person $325 $450 T-2 2017 W11695Iactive19010501rtaster\dee\RATE TAeLESA2017 Rate Tables\Table 2 2017 Rate w Crew Rates.doc 2019-20 $ 20,271 2017-18 $ 19,484 Capital Improvement Program Fiscal Years 2017-21 BUTTERFIELD STAGE ROAD EXTENSION Circulation Project Project Description: This project includes the complete design and construction of four lanes on Butterfield Stage Road (from Rancho California Road to Murrieta Hot Springs Road), four lanes on Murrieta Hot Springs Road (from Butterfield Stage Road to the City limits), and two lanes on Calle Chapos (from Butterfield Stage Road to Walcott Road), totaling approximately 3.2 miles of road. Benefit / Core Value: This project improves traffic circulation by providing a crucial north and south arterial road on the eastern side of the City. In addition, this project satisfies the City's Core Values of Transportation Mobility and Connectivity. Project Status: Phase I and Phase II of this project (Murrieta Hot Springs Road to La Serene) have been completed. Phase III (La Serena to Rancho California Road) is scheduled to be completed during Fiscal Year 2016-17. Department: Public Works - Account No. 210.165.723 PW09-02 Level: I Project Cost: Prior Years Actual Expenditures FYE 2016 Carryover Budget 2016-17 Adopted 2017-18 Appropriation Projected 2018-19 Projected 2019-20 Projected 2020-21 Projected and Future Years Total Project Cost Administration $ 1,963,522 $ 200,000 $ 13,000 $ 2,176,522 Acquisition $15,006,728 $ 2,051,322 $ 17,058,050 Construction $13,027,660 $ 9,871,740 $ 110,200 $ 23, 009, 600 Construction S 590,028 $ 590,028 Engineering $ 409,867 $ 29,132 $ 438,999 Design/Environmental $ 608,379 $ 280,525 $ 888,904 Utilities $ 86 $ 914 $ 1,000 Totals $31,016,242 $12,433,633 $ 123,200 $ - $ - $ - $ - $ 43,573,075 Source of Funds: Prior Years Actual Expenditures FYE 2016 Carryover Budget 2016-17 Adopted 2017-18 2018-19 2019-20 2020-21 Appropriation Projected Projected Projected Projected Total Project Cost CFD (Roripaugh Ranch) Reimbursement/Other r $29,555,616 $11,672,921 $ 41,228,537 (EMWD) $ 10,965 $ 10,965 Reimbursement/Other (RCWD) S 590,028 $ 590,028 Reimbursement/Other (Shea Homes) $ 3,124 $ 170,684 $ 173,808 Reimbursement/Other (SCE) $ 8,537 $ 8,537 Reimbursement/Other (County of Riverside) $ 123,200 $ 123,200 TUMF $ 1,438,000 $ 1,438,000 Total Funding: $31,016,242 $12,433,633 $ 123,200 $ - $ - $ - $ - $ 43,573,075 Future Operation & Maintenance Costs: 2016-17 $ 19,102 2018-19 $ 19,874 2020-21 $ 20,677 Note: Assumes that only minor right-of-way acquisitions would be necessary and that all major right-of-way dedications are voluntary. Fiscal Years 2017-21 Capital Improvement Program 37 BUTTERFIELD STAGE ROAD EXTENSION Circulation Project Location CAMINO CIELO CALLE CHAPOS SOUTH LOOP RD LA SERENA WY Aerial Data - March 2010 0 512.5 1,025 Feet 2,050 36 Item No. 7 Approvals City Attorney Finance Director City Manager Jk-- 6,. CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick A. Thomas, Interim Public Works Director DATE: January 24, 2017 SUBJECT: Approve the First Amendment to Utility Agreement with Eastern Municipal Water District for Interstate 15 / State Route 79 South Ultimate Interchange, PW 04-08 PREPARED BY: Amer Attar, Principal Engineer Avlin R. Odviar, Senior Engineer RECOMMENDATION: That the City Council approve the First Amendment to Utility Agreement with Eastern Municipal Water District to relocate utilities for the Interstate 15 / State Route 79 South Ultimate Interchange project (Project). BACKGROUND: On October 13, 2015, the City Council approved Utility Agreement No. 23317 with Eastern Municipal Water District (EMWD) which established the roles, responsibilities, and terms for relocation of sewer and water lines as necessary to accommodate the Project. The Agreement includes the relocation of approximately 1,300 linear feet of 18 -inch and 20 -inch diameter sewer force mains. On September 12, 2016, EMWD requested the opportunity to upsize the relocated lines to dual 24 -inch diameter sewer force mains. EMWD made its request with the understanding that all additional costs associated with the upsizing would be at EMWD's expense. The City has included Additive Bid No. 2 in the construction contract currently being bid for the Project. The additive bid includes all additional work necessitated by upsizing the force mains above and beyond the base bid of relocate and replace in kind. After the bid opening, EMWD will have the opportunity to review the cost of Additive Bid No. 2 submitted by the low bidder. EMWD may elect to move forward with the upsizing of the force mains or default to the replace in kind. The City will award the construction contract with or without the additive bid accordingly. The First Amendment to the Agreement formalizes the roles, responsibilities, and terms associated with the upsizing of the relocated lines. The Amendment was prepared by City staff and has been reviewed by EMWD and Caltrans staff. The estimated cost of upsizing is $270,000. If included in the awarded contract, EMWD will be responsible for all actual costs associated with upsizing. FISCAL IMPACT: There is no fiscal impact as a result of the approval of the First Amendment to the Utility Agreement No. 23317. Any additional costs, if incurred, will be reimbursed by EMWD in accordance with the terms of the Agreement, as amended. ATTACHMENTS: 1. First Amendment to Utility Agreement No. 23317 2. Project Description 3. Project Location Page 1 of 4 UTILITY AGREEMENT — FIRST AMENDMENT CITY Agreement No. DISTRICT 08 COUNTY Riverside ROUTE 115 / SR79 POST MILE RIV 1-15, 3.0/4.0 SR -79, 19.6/19.8 EA 43230 PROJECT ID 08-00000668 FEDERAL AID NUMBER STPHPLULN 5459(025) EMWD'S Work Order No. 12-868 FEDERAL PARTICIPATION On the project ® YES ❑ NO On the Utilities El YES ® NO UTILITY AGREEMENT NO. 23317 DATE FIRST AMENDMENT TO UTILITY AGREEMENT NO. 23317 RECITALS WHEREAS, the City of Temecula ("CITY") and Eastern Municipal Water District ("EMWD") entered into that certain Utility Agreement No. 23317, dated February 3, 2016 ("Utility Agreement"), which sets forth the terms and conditions pursuant to which EMWD owns, operates, and maintains an 18 -inch and 20 -inch force main sewer, along with a 2" domestic water pipeline and related appurtenances ("FACILITIES") requiring relocation to accommodate CITY's construction of improvements to the Interstate 15 / State Route 79S interchange ("PROJECT"); and WHEREAS, by correspondence dated September 12, 2016, EMWD requested an option to upsize the 18 -inch and 20 -inch force main sewers to be relocated, to 24 -inch diameter pipes in lieu of replacement of these FACILITIES in kind, as part of the PROJECT; and WHEREAS, CITY and EMWD agree that the increase in capacity of the relocated force main sewers from the existing 18 -inch and 20 -inch size to the requested 24 -inch size, and any additional work beyond replacement in kind of these FACILITIES, is a betterment for which costs EMWD shall be solely responsible; and WHEREAS, CITY and EMWD agree that the approved relocation plans, EMWD Work Order No. 12-868, do not need revision to accommodate the increase or betterment of the 18 -inch and 20 -inch force main sewers to 24 inches; and WHEREAS, the estimated cost of construction for the betterment requested by EMWD in connection with increasing the 18 -inch and 20 -inch force main sewers to 24 -inch diameter pipes is $270,000.00; and WHEREAS, EMWD understands that the lowest responsible bidder for construction of the PROJECT will be based on the Base Bid price submitted and that EMWD is solely responsible for the costs in connection with the increase or betterment requested by EMWD, which is comprised of upsizing the 18 -inch and 20 -inch force main sewers to 24 - inch diameter pipes and any additional work beyond replacement of these FACILITIES in kind. NOW, THEREFORE, the CITY and EMWD mutually agree to amend the Utility Agreement as follows: 1. The CITY and EMWD incorporate the above RECITALS into the Utility Agreement as if set forth in full therein. 2. The CITY and EMWD hereby amend Section I. WORK TO BE PERFORMED of the Utility Agreement by revising the first and third paragraphs of said Section I. WORK TO BE PERFORMED as follows: In accordance with Notice to Owner No. 23317 dated 01/19/2016, CITY shall relocate FACILITIES as shown on EMWD Work Order No. 12-868 dated 1/28/2016, which plans are included in CITY's Contract Plans for the PROJECT, EA 43230 and included as "EXHIBIT A" in this agreement which, by this reference, are made a part hereof. EMWD hereby UTILITY AGREEMENT — FIRST AMENDMENT (Cont.) Page 2 of 4 UTILITY AGREEMENT NO. 23317 acknowledges review of CITY's plans for work and agrees to the construction in the manner proposed except that EMWD requests a betterment of the FACILITIES to include dual 24 - inch force main sewers in lieu of the existing 18 -inch and 20 -inch force main sewers. There will be no change in the 2" domestic water pipeline and related appurtenances. EMWD shall have the right to inspect the work by CITY's contractor during construction. Upon completion of the work by CITY, EMWD agrees to accept ownership and maintenance of the constructed facilities, which include dual 24" force main sewers betterment in lieu of the of the existing 18 -inch and 20 -inch force main sewers and 2" water line with related appurtenances all located within a 20' non-exclusive easement and relinquishes to CITY ownership of the replaced FACILITIES and easement. No change is made to the second paragraph of Section I. WORK TO BE PERFORMED. 3. The CITY and EMWD hereby amend Section II. LIABILITY FOR WORK by adding a new third paragraph after the existing first two paragraphs that reads as follows: EMWD is solely responsible for the costs relating to the upsizing of the existing 18 -inch and 20 -inch force main sewers to dual 24 -inch diameter force main sewers requested by EMWD by correspondence dated September 12, 2016. The upsizing of the 18 -inch and 20 -inch force main sewers to dual 24 -inch force main sewers constitutes a betterment and increases the existing capacity of said force main sewers and, as such, said costs relating to the upsizing or betterment, are the sole responsibility of EMWD consistent with Section IV. PAYMENT FOR WORK. No changes are made to the first and second paragraphs of Section II. LIABILITY FOR WORK. 4. The CITY and EMWD hereby add a new Section VI. OBLIGATIONS RELATING TO BETTERMENT OF FORCE MAIN SEWERS REQUESTED BY EMWD after Section V. GENERAL CONDITIONS that reads as follows: VI. OBLIGATIONS RELATING TO PROPOSAL AND BIDS IN CONNECTION WITH BETTERMENT OF FORCE MAIN SEWERS REQUESTED BY EMWD CITY will provide to EMWD a copy of the proposal submitted by the lowest responsible bidder. The CITY agrees to provide said copy of the proposal to EMWD by transmitting a copy by electronic mail and by United States first-class mail to the attention of the General Manager of EMWD. EMWD will respond to the CITY, in writing, approving or disapproving the award of the additive bid for the betterment or increase of the existing 18 -inch and 20 -inch force main sewers to dual 24 -inch force main sewers, within 10 business days of the date the CITY transmits said bid to EMWD for review. IF EMWD approves said additive bid for the betterment or increase of the existing 18 -inch and 20 -inch force main sewers to dual 24 -inch force main sewers, the above revisions to Section I. WORK TO BE PERFORMED and SECTION II. LIABILITY FOR WORK will apply. IF EMWD disapproves said additive bid for the betterment or increase of the existing 18 -inch and 20 -inch force main sewers to dual 24 -inch force main sewers, the CITY and EMWD agree that provisions in Section I. WORK TO BE PERFORMED and SECTION II. LIABILITY FOR WORK of the Utility Agreement will apply and the above revisions will have no force and effect. If the CITY awards the additive bid for the betterment or increase of the existing 18 -inch and 20 -inch force main sewers to dual 24 -inch force main sewers after receiving EMWD's notice UTILITY AGREEMENT — FIRST AMENDMENT (Cont.) Page 3 of 4 UTILITY AGREEMENT NO. 23317 of approval, EMWD will reimburse the CITY the actual costs incurred by the CITY in connection with the additive bid and betterment work. 5. All other terms and conditions of the Utility Agreement remain unchanged. Signatures on Following Page UTILITY AGREEMENT — FIRST AMENDMENT (Cont.) Page 4 of 4 UTILITY AGREEMENT NO. 23317 SIGNATURE PAGE TO FIRST AMENDMENT TO UTILITY AGREEMENT NO. 23317 IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Utility Agreement No. 23317 on the dates below. Owner: CITY OF TEMECULA EASTERN MUNICIPAL WATER DISTRICT APPROVED APPROVED By: By: Maryann Edwards, Mayor Paul D. Jones II, PE General Manager Date: Date: APPROVED AS TO FORM: By: By: Peter M. Thorson, City Attorney Sheila Zelaya Board Secretary Date: ATTEST: By: Randi Johl, City Clerk 2019-20 $ 153,000 2017-18 Tho Heart of Sou: horn Cabforna Wale Country Capital Improvement Program Fiscal Years 2017-21 INTERSTATE 15 / STATE ROUTE 79 SOUTH ULTIMATE INTERCHANGE Circulation Project Project Description: This project includes right-of-way acquisition, design, and construction of a ramp system that will improve access to Interstatel5 from Temecula Parkway/State Route 79 South. The interchange will accommodate traffic generated by future development of the City's General Plan land use as well as regional traffic volume increases forecasted for the year 2037. This project is crucial, as the projected traffic volume increases currently exceed the capacity of the existing interchange improvements constructed by the Riverside County Transportation Department. Benefit / Core Value: This project will improve circulation, freeway access, and level of service at the Interstate 15 and Temecula Parkway / State Route 79 South intersection. In addition, this project satisfies the City's Core Value of Transportation Mobility and Connectivity. Project Status: The plans, specifications, and estimates package are currently being prepared for review by California Department of Transportation (Caltrans). Acquisition was completed during Fiscal Year 2013-14. Construction is scheduled to start during Fiscal Year 2016-17. Department: Public Works - Account No. 210.165.662 PW04-08 Level: I Project Cost: Prior Years Actual Expenditures FYE 2016 2016-17 Carryover Adopted 2017-18 Budget Appropriation Projected 2018-19 Projected 2019-20 Projected 2020-21 Projected and Future Total Project Years Cost Administration $ 735,019 $ 120,513 $ 216,000 $ 192,356 $ 1,263,888 Acquisition $13,032,381 $ 186,760 $13,219,141 Construction $ 104,088 $14,080,764 $ 13,859,603 $ 39,193 $28,044,455 Construction $ 7,158,741 $ 5,817,359 $12,976,100 Engineering $ 4,452,000 $ 1,750,000 $ 1,875,000 $ 3,625,000 Design $ 3,944,254 $ 148,261 $ 4,092,515 MSHCP r$ 431,480 $ 9,917,244 $ 153,163 $ 431,480 Totals $17,815,742 $16,717,778 $ 15,950,603 $ 192,356 $ - $ - $ - $50,676,479 Source of Funds: Prior Years Actual Expenditures FYE 2016 2016-17 Carryover Adopted 2017-18 Budget Appropriation Projected 2018-19 Projected 2019-20 Projected 2020-21 Total Project Projected Cost CFD (Crowne Hill) Reimbursement/ Other (Morgan Hill) $ 502,211 $ 1,190,582 $ 502,211 $ 1,190,582 SAFETEA-LU $ 1,600,000 $ 1,600,000 Senate Bill 621 $10,270,949 $ 3,959,037 $ 216,000 $ 39,193 $14,485,179 STP(RCTC)( $ 7,158,741 $ 5,817,359 $12,976,100 TUMF (RCTC/CETAP)121 $ 4,452,000 $ 4,452,000 TUMF (RCTC/Region)131 $ 1,400,000 $ 4,000,000 $ 5,400,000 TUMF (WRCOG)141 $ 9,917,244 $ 153,163 $10,070,407 Total Funding: $17,815,742 $16,717,778 $ 15,950,603 $ 192,356 $ - $ - $50,676,479 Future Operation & Maintenance Costs: 2016-17 2018-19 $ 150,000 (1) Surface Transportation Program(STP) per RCTC call for Projects as approwd by the Commission on January 8, 2014($12,976,100.) (2) TUMF (RCTC/Region) - Funding is pursuant to RCTC Agreement No. 06-72-506 ($4,452,000) (3) TUMF (RCTC/CETAP) - Funding is pursuant to RCTC Agreement No. 11-72-041-00 ($5,400,000;$1,400,000 ROW;$4,000,000 CON). (4)TUMF WRCOG 2014 Southwest Zone 5 -Year Transportation Improvement Program (TIP) adopted on January 6, 2014 ($10,157,154). 2020-21 $ 156,060 Fiscal Years 2017-21 Capital Improvement Program 49 INTERSTATE -15 / STATE ROUTE 79 SOUTH ULTIMATE INTERCHANGE Circulation Project Location Aerial Data - March 2012 Feet 0 262.5 525 1,050 48 Item No. 8 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick Thomas, Interim Public Works Director DATE: January 24, 2017 SUBJECT: Approve an Appropriation and the Agreement for Consultant Services with Michael Baker International, Inc for Temecula Park and Ride, PW06-09 PREPARED BY: Amer Attar, Principal Engineer Steve Charette, Associate Engineer RECOMMENDATION: That the City Council: 1. Approve an appropriation from the General Fund, in the amount of $330,000 for Temecula Park and Ride, PW06-09, for additional administration, design, environmental, and site maintenance costs; 2. Approve the Agreement for Consultant Services with Michael Baker International, Inc., in an amount not to exceed $57,416, for additional design services; 3. Authorize the City Manager to approve extra work authorizations not to exceed the contingency amount of $5,741.60, which is equal to 10% of the Agreement amount. BACKGROUND: On February 23, 2016, the City Council awarded a Construction Contract to Aghapy Group, Inc. (AGI), in the amount of $1,471,777, to construct the improvements for the Temecula Park and Ride, PW06-09 (Project). Construction began on March 24, 2016 and it was scheduled for completion in October 2016. Four Change Orders were approved, in the amount of $51,147.23, for a total revised Contract amount of $1,522,924.23. On September 26, 2016, the City issued a letter to AGI informing them that the City is terminating the Contract under Section 6-4 of the Specifications "Termination of Contract for Default" due to demonstrated incompetence and failure to perform. All work is currently suspended due to litigation with the Contractor. The Project construction is approximately 40% complete and at final graded stage with a balance of $979,835 available in the Construction Contract. During the Project's suspension period, administration and site maintenance costs continue to accrue. Administration costs include staff costs incurred thus far and anticipated costs for the Project until construction starts again. Site maintenance costs consist of ongoing erosion control measures and securing the site with perimeter fencing. Also, focused environmental studies are needed to address potential traffic, noise, and lighting impacts in response to concerns by the local homeowner's association. Additional administration, environmental, and site maintenance costs needed are estimated to be in the amount of $266,842.40. The plans and specifications of the Project require updating to reflect existing conditions. This is required to rebid the Project and complete the construction with a new contractor. A revised set of plans and specifications will be prepared by Michael Baker International (MBI). MBI has previously provided professional design services for this Project and, therefore, is best qualified to revise the plans and specifications for rebidding. Additional design costs needed are in the amount of $63,157.60 ($57,416.00 for plan and specifications revision, and $5,741.60 for contingency) as shown in Exhibit A and B of the attached Agreement for Consultant Services with MBI. Administration, redesign, environmental, and site maintenance costs are not recoverable from Congestion Mitigation and Air Quality (CMAQ) Program funds. CMAQ funds are programmed for the construction phase only. However, additional construction and construction engineering costs are eligible for CMAQ reimbursement. Staff will request from Riverside County Transportation Commission (RCTC) to program additional CMAQ funds, if deemed necessary by bid results. Staff is requesting the appropriation of the necessary funds from the General Fund for the additional administration, design, environmental, and site maintenance costs, in the amount of $330,000. FISCAL IMPACT: The Temecula Park and Ride is identified in the City's Capital Improvement Program (CIP) Budget for Fiscal Years 2017-21, and is funded with AB 2766 (State funds available for programs that reduce air pollution), federal CMAQ Program funds, and Development Impact Fees (DIF), Police. Staff is requesting an additional $330,000 be appropriated from the General Fund for costs incurred thus far and anticipated for the Project. ATTACHMENTS: 1. Agreement 2. Project Location 3. Project Description AGREEMENT FOR CONSULTANT SERVICES BETWEEN CITY OF TEMECULA AND MICHAEL BAKER INTERNATIONAL, INC. TEMECULA PARK AND RIDE, PW06-09 THIS AGREEMENT is made and effective as of January 24, 2017, between the City of Temecula, a municipal corporation (hereinafter referred to as "City"), and Michael Baker International, Inc., a Pennsylvania corporation (hereinafter referred to as "Consultant"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. TERM This Agreement shall commence on January 24, 2017, and shall remain and continue in effect until tasks described herein are completed, but in no event later than January 24, 2018, unless sooner terminated pursuant to the provisions of this Agreement. 2. SERVICES Consultant shall perform the services and tasks described and set forth in Exhibit A, attached hereto and incorporated herein as though set forth in full. Consultant shall complete the tasks according to the schedule of performance which is also set forth in Exhibit A. 3. PERFORMANCE Consultant shall at all times competently and to the best of his or her ability, experience, and talent, perform all tasks described herein. Consultant shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Consultant hereunder in meeting its obligations under this Agreement. 4. PREVAILING WAGES Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this Agreement from the Director of the Department of Industrial Relations. Copies may be obtained from the California Department of Industrial Relations Internet website at http://www.dir.ca.gov. Consultant shall provide a copy of prevailing wage rates to any staff or sub -consultant hired, and shall pay the adopted prevailing wage rates as a minimum. Consultant shall comply with the provisions of Sections 1720, 1725.5, 1771.1(a), 1773.8, 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor Code. Pursuant to the provisions of 1775 of the Labor Code, Consultant shall forfeit to the City, as a penalty, the sum of $200 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Agreement, by him or by any sub - consultant under him, in violation of the provisions of the Agreement. This project, work, or service will be subject to compliance monitoring and enforcement by the Department of Industrial Relations (DIR) pursuant to Labor Code Section 1771.4. 1 5. REGISTRATION WITH THE DEPARTMENT OF INDUSTRIAL RELATIONS Registration with the Department of Industrial Relations (DIR) is mandatory as a condition for bidding, providing certain services, and working on a public works project as specified in Labor Code Section 1771.1(a). Consultant and any sub -consultants must be registered with the Department of Industrial Relations to be qualified to bid, or provide a proposal and/or time and material quote or be listed in a bid, proposal or quote, subject to the requirements of Public Contract Code Section 4104; or engage in the performance of any contract that is subject to Labor Code Section 1720 et seq., unless currently registered and qualified to perform public work pursuant to Labor Code Section 1725.5. Consultant and sub - consultants will be required to provide proof of registration with the DIR. For more information regarding registration with the Department of Industrial Relations, refer to http://www.dir.ca.gov/Public-Works/PublicWorks.html 6. PAYMENT a. The City agrees to pay Consultant monthly, in accordance with the payment rates and terms and the schedule of payment as set forth in Exhibit B, Payment Rates and Schedule, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Any terms in Exhibit B, other than the payment rates and schedule of payment, are null and void. This amount shall not exceed Fifty - Seven Thousand Four Hundred and Sixteen Dollars ($57,416) unless additional payment is approved as provided in this Agreement. b. Consultant shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the City Manager . Consultant shall be compensated for any additional services in the amounts and in the manner as agreed to by City Manager and Consultant at the time City's written authorization is given to Consultant for the performance of said services. c. Consultant will submit invoices monthly for actual services performed. Invoices shall be submitted between the first and fifteenth business day of each month, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as to all non -disputed fees. If the City disputes any of Consultant's fees, it shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. For all reimbursements authorized by this Agreement, Consultant shall provide receipts on all reimbursable expenses in excess of Fifty Dollars ($50) in such form as approved by the Director of Finance. 7. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE a. The City may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon the Consultant at least ten (10) days prior written notice. Upon receipt of said notice, the Consultant shall immediately cease all work under this Agreement, unless the notice provides otherwise. If the City suspends or terminates a portion of this Agreement such suspension or termination shall not make void or invalidate the remainder of this Agreement. 2 b. In the event this Agreement is terminated pursuant to this Section, the City shall pay to Consultant the actual value of the work performed up to the time of termination, provided that the work performed is of value to the City. Upon termination of the Agreement pursuant to this Section, the Consultant will submit an invoice to the City, pursuant to Section entitled "PAYMENT" herein. 8. DEFAULT OF CONSULTANT a. The Consultant's failure to comply with the provisions of this Agreement shall constitute a default. In the event that Consultant is in default for cause under the terms of this Agreement, City shall have no obligation or duty to continue compensating Consultant for any work performed after the date of default and can terminate this Agreement immediately by written notice to the Consultant. If such failure by the Consultant to make progress in the performance of work hereunder arises out of causes beyond the Consultant's control, and without fault or negligence of the Consultant, it shall not be considered a default. b. If the City Manager or his delegate determines that the Consultant is in default in the performance of any of the terms or conditions of this Agreement, it shall serve the Consultant with written notice of the default. The Consultant shall have ten (10) days after service upon it of said notice in which to cure the default by rendering a satisfactory performance. In the event that the Consultant fails to cure its default within such period of time, the City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity or under this Agreement. 9. OWNERSHIP OF DOCUMENTS a. Consultant shall maintain complete and accurate records with respect to sales, costs, expenses, receipts and other such information required by City that relate to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free access to the representatives of City or its designees at reasonable times to such books and records, shall give City the right to examine and audit said books and records, shall permit City to make transcripts there from as necessary, and shall allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. b. Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, designs, drawings, maps, models, computer files containing data generated for the work, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this Agreement shall become the sole property of the City and may be used, reused or otherwise disposed of by the City without the permission of the Consultant. With respect to computer files containing data generated for the work, Consultant shall make available to the City, upon reasonable written request by the City, the necessary computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. 3 10. INDEMNIFICATION The Consultant agrees to defend, indemnify, protect and hold harmless the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees and volunteers from and against any and all claims, demands, losses, defense costs or expenses, including attorney fees and expert witness fees, or liability of any kind or nature which the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, agents, employees 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 Consultant's negligent or wrongful acts or omissions arising out of or in any way related to the performance or non-performance of this Agreement, excepting only liability arising out of the negligence of the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency. 11. INSURANCE REQUIREMENTS Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. a. Minimum Scope of Insurance. Coverage shall be at least as broad as: 1) Insurance Services Office Commercial General Liability form No. CG 00 01 11 85 or 88. 2) Insurance Services Office Business Auto Coverage form CA 00 01 06 92 covering Automobile Liability, code 1 (any auto). If the Consultant owns no automobiles, a non -owned auto endorsement to the General Liability policy described above is acceptable. 3) Worker's Compensation insurance as required by the State of California and Employer's Liability Insurance. If the Consultant has no employees while performing under this Agreement, worker's compensation insurance is not required, but Consultant shall execute a declaration that it has no employees. 4) Professional Liability Insurance shall be written on a policy form providing professional liability for the Consultant's profession. b. Minimum Limits of Insurance. Consultant shall maintain limits no less than: 1) General Liability: One Million Dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2) Automobile Liability: One Million Dollars ($1,000,000) per accident for bodily injury and property damage. 3) Worker's Compensation as required by the State of California; Employer's Liability: One Million Dollars ($1,000,000) per accident for bodily injury or disease. 4) Professional Liability Coverage: One Million Dollars ($1,000,000) per claim and in aggregate. 4 c. Deductibles and Self -Insured Retentions. Any deductibles or self-insured retentions shall not exceed Twenty Five Thousand Dollars and No Cents ($25,000). d. Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions: 1) The City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers are to be covered as insured's, as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by the Consultant. The coverage shall contain no special limitations on the scope of protection afforded to the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 2) For any claims related to this project, the Consultant's insurance coverage shall be primary insurance as respects the City of Temecula, the Temecula Community Services District, the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees and volunteers. Any insurance or self-insured maintained by the City of Temecula, Temecula Community Services District, and/or the Successor Agency to the Temecula Redevelopment Agency, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it. 3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City of Temecula, the Temecula Community Services District, and the Successor Agency to the Successor Agency to the Temecula Redevelopment Agency, their officers, officials, employees or volunteers. 4) The Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 5) Each insurance policy required by this agreement shall be endorsed to state in substantial conformance to the following: If the policy will be canceled before the expiration date the insurer will notify in writing to the City of such cancellation not less than thirty (30) days' prior to the cancellation effective date. 6) If insurance coverage is canceled or, reduced in coverage or in limits the Consultant shall within two (2) business days of notice from insurer phone, fax, and/or notify the City via certified mail, return receipt requested of the changes to or cancellation of the policy. e. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of A -:VII or better, unless otherwise acceptable to the City. Self insurance shall not be considered to comply with these insurance requirements. f. Verification of Coverage. Consultant shall furnish the City with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the City. All endorsements are to be received and approved by the City before work commences. As an alternative to the City's forms, the Consultant's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. 5 12. INDEPENDENT CONTRACTOR a. Consultant is and shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Consultant shall at all times be under Consultant's exclusive direction and control. Neither City nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents except as set forth in this Agreement. Consultant shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. b. No employee benefits shall be available to Consultant in connection with the performance of this Agreement. Except for the fees paid to Consultant as provided in the Agreement, City shall not pay salaries, wages, or other compensation to Consultant for performing services hereunder for City. City shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing services hereunder. 13. LEGAL RESPONSIBILITIES The Consultant shall keep itself informed of all local, State and Federal ordinances, 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 Consultant shall at all times observe and comply with all such ordinances, laws and regulations. The City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Consultant to comply with this section. 14. RELEASE OF INFORMATION a. All information gained by Consultant in performance of this Agreement shall be considered confidential and shall not be released by Consultant without City's prior written authorization. Consultant, its officers, employees, agents or subcontractors, shall not without written authorization from the City Manager or unless requested by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement or relating to any project or property located within the City. Response to a subpoena or court order shall not be considered "voluntary" provided Consultant gives City notice of such court order or subpoena. b. Consultant shall promptly notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed there under or with respect to any project or property located within the City. City retains the right, but has no obligation, to represent Consultant and/or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, City's right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response. 6 15. NOTICES Any notices which either party may desire to give to the other party under this Agreement 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 United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice. Notice shall be effective upon delivery to the addresses specified below or on the third business day following deposit with the document delivery service or United States Mail as provided above. Mailing Address: To Consultant: 16. ASSIGNMENT City of Temecula Attn: City Manager 41000 Main Street Temecula, CA 92590 Michael Baker International, Inc. Attn: Steven B. Burick, Vice President 14725 Alton Parkway Irvine, CA 92618 The Consultant shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the City. Upon termination of this Agreement, Consultant's sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the City Council and the Consultant. 17. LICENSES At all times during the term of this Agreement, Consultant shall have in full force and effect, all licenses required of it by law for the performance of the services described in this Agreement. 18. GOVERNING LAW The City and Consultant understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Temecula. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. 19. PROHIBITED INTEREST No officer, or employee of the City of Temecula that has participated in the development of this agreement or its approval shall have any financial interest, direct or indirect, in this Agreement, the proceeds thereof, the Consultant, or Consultant's sub -contractors for this project, during his/her tenure or for one year thereafter. The Consultant hereby warrants and represents to the City that no officer or employee of the City of Temecula that has participated in the development of this agreement or its approval has any interest, whether contractual, non - 7 contractual, financial or otherwise, in this transaction, the proceeds thereof, or in the business of the Consultant or Consultant's sub -contractors on this project. Consultant further agrees to notify the City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. 20. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 21. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of Consultant warrants and represents that he or she has the authority to execute this Agreement on behalf of the Consultant and has the authority to bind Consultant to the performance of its obligations hereunder. The City Manager is authorized to enter into an amendment on behalf of the City to make the following non -substantive modifications to the agreement: (a) name changes; (b) extension of time; (c) non -monetary changes in scope of work; (d) agreement termination. 22. MEANS AND METHODS Consultant shall not be responsible for construction means, methods, techniques, sequences, or procedures of construction contractors, or the safety precautions and programs incident thereto, and shall not be responsible for such construction contractor's failure to perform work in accordance with the contract documents. City expressly agrees that Consultant even when providing on-site project representation or reviewing construction as part of the Agreement, is not responsible for and does not guarantee, the performance by the City or any third -party contractor. 8 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. CITY OF TEMECULA MICHAEL BAKER INTERNATIONAL, INC. (Two Signatures of corporate officers required unless corporate documents authorize only one person to sign the agreement on behalf of the corporation.) By: By: Maryann Edwards, Mayor Michael A. Tylman, Assistant Secretary ATTEST: By: By: Randi Johl, City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney CONSULTANT Steven B. Burick, Vice President Michael Baker International, Inc. Attn: Steven B. Burick, Vice President 14725 Alton Parkway Irvine, CA 92618-2027 949.855.5733 BURICK@mbakerintl.com 9 PM Initial C_&. Date: i��' EXHIBIT A TASKS TO BE PERFORMED Michael Baker INTERNATIONAL January 10, 2017 Mr. Steve Charette, P.E City of Temecula 41000 Main Street Temecula, Ca 92590 We Make a Difference Subject: Proposal for Park and Ride Phase I & II — Plan Revisions and Construction Support Services Dear Mr. Charette: In response to your request for proposal, Michael Baker International (Consultant) is pleased to submit an estimate of cost to provide Engineering services required to facilitate the scope as follows on a "not to exceed" basis for the subject project: SCOPE OF WORK: TASK 1 BASE MAP PREPARATION Michael Baker shall utilize the Site Plan line work generated in Autocad format by the Client's previous engineer (by AAE Incorporated) to establish accurate CAD base maps, which shall be used in the preparation of the improvement drawings described within this contract. Scope includes calculation of all line work to assure correct geometry per the agencies' design guidelines. TASK 2 PLAN REVIEW, 3D SURFACE AND DESIGN CROSS SECTIONS Michael Baker shall provide review of the existing City approved improvement plans prepared by AAE Incorporated to verify design accuracy (e.g. elevation callouts vs. design contours), positive drainage, applicable standards, applicable construction notes and ADA compliance. Utilizing the recent field topographic survey by CALVADA Surveying, Inc. and proposed design elevations shown on plans, Michael Baker will prepare a 3D surface to generate street cross sections and verify cross fall and longitudinal slope. A 3D surface will be generated to aid in the development of design contours (at 1 -foot intervals) within the limits of proposed improvements for Vallejo Avenue and the Phase I and Phase II parking lots. After review of street cross sections and design contours, minor adjustments to proposed grades maybe necessary to improve proposed and/or existing conditions and incorporated into the final design. However extensive adjustments to the approved plans are not expected and not included in this task. If it is found that significant redesign is required it shall be performed on an hourly basis for an additional fee and compensation. Street cross sections will be developed for Vallejo Avenue for approximately 800 feet at 25 feet intervals. Note: Cross sections, 3D surface and Pedestrian Modifications (Task 7) will be compiled in an exhibit format and submitted to City for review and approval prior to initiating final engineering plan development. MBAKERINTL.COM 11 40810 County Center, Suite 2001 Temecula, CA 92591 Office: 951 676.8042 1 Fax: 951.676.7240 Mr. Steve Charette, P.E City of Temecula January 10, 2017 Page 2 TASK 3 VALLEJO AVE — HALF WIDTH STREET IMPROVEMENTS (17'133') Utilizing the approved City of Temecula Park & Ride Site Improvement Plan Phase I and Phase II (Temecula Parkway - PW -06-09) dated 4/28/2011 and prepared by AAE Incorporated, Consultant shall modify the approved design and provide new street designs and the appropriate details to construct half -width street improvements for Vallejo Avenue; the limits of street improvements shall be consistent with the approved plans and as described herein, but itis assumed that Consultant will hold and match the existing street centerline elevations and use as limits of street section's AC saw - cut, grind and overlay. Note that a 3D surface will be generated under a separate task, and that City shall provide minimum AC structural sections. For Vallejo Avenue, improvements will include a 17' paved road (centerline to curb face), 6 -inch AC dike, 4' DG sidewalk with 8' wide DG trail and 4' wide transition slope and 2' wide berm (3' high). One commercial driveway with two (2) entry driveway returns with ADA compliant ramps, these ramps will be concrete. The topographic field survey used under task 2 will also be used in the design development of proposed improvements. This scope assumes a plan view only design and part of the Final Grading, Paving and Drainage Plan consistent with previously approved plans, however a profile exhibit will be generated for City's review and reference. Also assumes City will provide any field and/or aerial topography in AutoCAD format. And that new design sheets will replace the previous approved plans unless directed otherwise by client. TASK 4 FINAL GRADING, PAVING AND DRAINAGE PLAN Michael Baker shall prepare a Final Grading, Paving and Drainage Plan for both phases I and II at a scale of 1" = 20' with approximately 1 Title and General notes sheet, 2 plan view sheets and 2 detail sheets. Plans will be developed utilizing the engineered base map prepared under this contract, as well as any modifications made to the original design; and to the extent possible Baker utilize the site design features and controls from the originally approved plans. This scope assumes that all project site design modifications will be performed under separate task within this contract and therefore excluded from this scope. However notes and title sheet will be revised as needed to be consistent with final plans. The final grading, paving and drainage plan will show limits of walls, fencing and identify the cut/fill areas, parking lot grading, street paving, finish surface grades, storm drain system, drainage structures and drainage courses within project limits. Plan Submittal shall be based on 90% and Bid Ready. Note: This task assumes that City will provide a copy of the project specific WQMP, drainage report and site specific geotechnical report and/or preliminary structural pavement sections, and any screen and/or sound walls for the project will be based on/designed by Proto II. City shall provide limits of screen and/or sound wall. This scope excludes structural calculations and designs of retaining structures, and excludes lighting and electrical design. TASK 5 HORIZONTAL CONTROL PLAN Michael Baker shall use the base map prepared under this contract and prepare a horizontal control plan with approximately 2 sheets at a scale of 1" = 20' and in accordance with City requirements. This plan will be for both phases I and II. Plan Submittal shall be based on 90% and Bid Ready. 12 Mr. Steve Charette, P.E City of Temecula January 10, 2017 Page 3 TASK 6 DEMOLITION PLAN Michael Baker shall prepare a Demolition plan, assuming a single sheet to cover both phase I and II at a scale of 1" = 40'. It is understood that Michael Baker shall utilize Dokken Engineering's field data obtained from their field visit and reconnaissance, as well as utilize site survey data developed by Calvada Surveying (City retained survey) and/or contractor as -built provided by City (if available). Demolition items will include defective onsite concrete curbs for parking islands and lighting conduits, and storm drain piping. Michael Baker will perform a site visit (under separate task) to supplement and/or confirm above ground and visible existing conditions. Locating or potholing any underground facilities and/or structures is excluded from this scope. If it is found that drainage or lighting/electrical underground conduits needs to be located, it shall be provided under separate agreement or by others and/or City to retain a utility locator specialist. Plan Submittal shall be based on 90% and Bid Ready. TASK 7 PEDESTRIAN RAMP MODIFICATION Consultant shall prepare two preliminary alternatives for the pedestrian ramp at the intersection of Temecula Parkway and La Paz Road. One alternative will include an 8% ramp and associated handrails and the second alternative will include a ramp at less than 5% (hand rails not required).The preliminary alternatives will be presented to the City for review and selection of the preferred alternative. Consultant will include the design of the preferred ramp in the precise grading plan. TASK 8 FINAL LANDSCAPE AND IRRIGATION PLAN REVISIONS Consultant shall revise/modify the previously approved planting plans prepared by others, and the landscape and irrigation plans prepared by Michael Baker, specifications and estimates to reflect changes to the precise grading plan associated with new access ramp and parkway planter to accommodate new walls, and comply with the latest water conservation and RCWD requirements. It is assumed the City will submit plans to RCWD for review and approval. Plan Submittal shall be based on 90% and Bid Ready. Note: This task assumes that any screen and/or sound walls for the project will be coordinated with but designed by Proto II. Also that City will provide the previously approved Landscape planting and irrigation drawings in AutoCAD format that were developed by others. This drawing will be used to modify the planting plans consistent with the revised plans under this proposal. TASK 9 COST ESTIMATE Michael Baker shall prepare an Opinion of Probable Construction Costs (Engineer's Estimate) at each level of Improvement Plan submittal (90% and Bid Ready). This opinion shall be developed in the form of a Contract Item List (Bid Sheet) using the standard forms provided by the City of Temecula. Development of this opinion shall be accomplished through the use of CADD or other mathematic means and listed in detail for the City of Temecula to use during bidding and construction administration. The level of contingencies shall start at 25% and be adjusted as necessary during the plan development phase. The goal for the final opinion is a contingency of 10%. Michael Baker unit prices for these items shall be developed through judicial use of City of Temecula, Riverside County, and/or Caltrans recent and historical data. At the Michael Bakers option, local materials suppliers and contractors may be used to identify unit prices. 13 Mr. Steve Charette, P.E City of Temecula January 10, 2017 Page 4 Note: This task assumes that City will provide Consultant a copy of the Bid sheet and estimates previously obtained for this project. TASK 10 PROJECT MANAGEMENT, COORDINATION AND MEETING ATTENDANCE Michael Baker shall attend regularly scheduled meetings with City to review the progress of the work included within this contract, schedule updates, site visits and to provide consulting services. A maximum of 20 hours are included within this Scope of Work. Additional meetings and consulting services will be performed, if required, on an hourly basis for an additional fee. TASK 11 FINAL BID PHASE SUPPORT Michael Baker may be required to respond to questions concerning the plans, specifications, and estimates prior to bid opening and prepare contract addendum, if needed. A maximum of 16 hours are included within this Scope of Work. Additional consulting services will be performed, if required, on an hourly basis for an additional fee. TASK 12 CONSTRUCTION ASSISTANCE Baker shall provide construction assistance/support as requested by client: • Provide Field Walks, Inspection and/or Observations • Attend construction coordination meetings as requested by client. • Review and respond to contractor submittals for alternative "or equal" materials. • Review and respond to project related RFIs. It is our understanding that the duration of the construction activity for this project will be approximately 3 months. Therefore a maximum of 20 hours are included within this scope of work. Additional Construction support services will be performed, if required, on an hourly basis for an additional fee. TASK 13 ADDITIONAL DESIGN SERVICES EXPENDED Michael Baker has completed additional design services that City requested to support Dokken Engineering and contractor during construction. Tasks included revising Vallejo Avenue profile and generated street cross sections, revised parking lot access by incorporating an ADA ramp along La Paz and adjusting parking stalls. TASK 14 REIMBURSABLEjsi Consultant has included an allowance (estimated) for reimbursable expenses such as printing, reproductions, messenger services, mileage and other project -specific out-of-pocket expenses necessary to achieve preparation and processing of the tasks under this proposal. 14 Mr. Steve Charette, P.E City of Temecula January 10, 2017 Page 5 ADDITIONAL SERVICES: Services which are not specifically identified herein as services to be performed by Consultant or its consultants are considered "Additional Services" for purposes of this Agreement. City may request that Consultant perform services which are Additional Services. However, Consultant is not obligated to perform such Additional Services unless an amendment to this Agreement has been fully executed setting forth the scope, schedule and fee for such Additional Services. In the event Consultant performs Additional Services before receipt of such executed amendment, City acknowledges its obligation to pay for such services at Consultant's standard rates, within 30 days of receipt of Consultant's invoice. ASSUMPTIONS: • Owner will provide access to the Site. • Consultant can rely on existing plans and documents made available by the City and other agencies and utility companies, without independent verification. • City will provide approved plans, reference drawings and aerial topography in AutoCAD format to be used in design and delta revisions under this proposal. Boundary will be based on CAD base drawings and approved plans • Traffic Control Plans for construction will be submitted by the Contractor. Traffic control plans can be provided upon the City's request for a separate scope and fee. • Sufficient right-of-way exists for the proposed improvements and no additional right-of-way will be required. EXCLUSIONS: Consulting services relating to any of the following tasks may be completed by Consultant if negotiated under a separate contract for an additional fee; but are presently specifically excluded from this agreement: • Right-of-way exhibits, temporary construction easements, acquisition, negotiation and/or processing. • Structural analysis; • Special or non-standard retaining structures; • Parking lot lighting and electrical design; • Traffic Control Plans; • Design for areas outside limit of work; • Field Surveying Services; • Final Survey Monuments; • Construction Staking; • Drainage report(s) 15 Mr. Steve Charette, P.E City of Temecula January 10, 2017 Page 6 • NOI/SWPPP; • WQMP; • Landscaping Plans, only as amended under this agreement; • Environmental documentation/processing; • Hazardous wastes; • Potholing; • QSP Services; • Construction Management; • Geotechnical Services; • Any other services not specifically set forth in the above Scope of Services CLIENT RESPONSIBILITIES: • City shall pay all governmental fees and costs. • City shall provide AutoCAD project files that were previously approved • City to provide any and all indemnification, abatement, disposal or other actions required by local, state or federal law regarding hazardous materials. • City to provide all City record drawings/plans for existing roads within location of new improvement under this proposal. 16 Mr. Steve Charette, P.E City of Temecula January 10, 2017 Page 7 COMPENSATION: Consultant shall complete the work outlined above in accordance with the fee schedule identified below and shall invoice Client on a monthly basis based on the percentage of completion. ITEM WORK TASK FEE Task 1 *Base Map Preparation $2,500 Task 2 *Plan Review, 3D Surface and Design Cross Sections $6,200 Task 3 *Vallejo Ave — Half Width Street Improvements (17/33') $1,600 Task 4 *Final Grading, Paving and Drainage Plan $14,000 Task 5 *Horizontal Control Plan $3,500 Task 6 *Demolition Plan $3,600 Task 7 *Pedestrian Ramp Modification $3,500 Task 8 *Final Landscape and Irrigation Plan Revisions $6,000 Task 9 *Cost Estimate $2,000 Task 10 *Project Management, Coordination and Meeting Attendance $4,000 Task 11 *Final Bid Phase Support $3,200 Task 12 *Construction Assistance $4,000 Task 13 Additional Design Services Expended $2,316 Task 14 *Reimbursable(s) $1,000 GRAND TOTAL: $57,416 * The budget amount shown is for authorization purposes only. Should the total of the monthly billings reach eighty percent (80%) of the budget amount, Client and Consultant will review the status of the work to determine the need for an increase in the budget amount, and whether additional budget authorization to complete the project is appropriate. Progress billings will be forwarded to the Client on a monthly basis. These billings will include the fees earned for the billing period plus all direct costs advanced by Consultant. We appreciate the opportunity to be of service to you, and hope that this proposal meets with your approval. If you have any questions or require additional information please do not hesitate to call. Sincerely, Franci o Martinez Jr. P.E. QSD Department M nager— Land Development Civil Engineering H \pdala\145516Wdmin\Proposal\1 In Progress\Additional ServicesWWR 6 as new proposal 2\FM_Temecula_Park-Ride prp002.doc 17 EXHIBIT B FEE SUMMARY MICHAEL BAKER INTERNATIONAL, INC. HOURLY RATE SCHEDULE Effective January 2016 through December 2016 OFFICE PERSONNEL $/ Hour Senior Principal $285.00 Principal 260.00 Project Director 245.00 Program Manager 235.00 Senior Project Manager 225.00 Project Manager 208.00 Structural Engineer 205.00 Technical Manager 195.00 Senior Engineer 178.00 Senior Planner 175.00 Electrical Engineer 170.00 Biologist 168.00 Landscape Architect 164.00 Senior GIS Analyst 156.00 Project Engineer 155.00 Project Planner 155.00 Environmental Specialist 152.00 Design Engineer/Senior Designer/Survey Analyst 150.00 GIS Analyst 135.00 Designer/Planner 130.00 Project Coordinator 125.00 Graphic Artist 110.00 Environmental Analyst/Staff Planner 112.00 Design Technician 112.00 Assistant Engineer/Planner 104.00 Permit Processor 93.00 Engineering Aid/Planning Aid 84.00 Office Support/ Clerical 70.00 SURVEY PERSONNEL 2 -Person Survey Crew $265.00 1 -Person Survey Crew 170.00 Licensed Surveyor 188.00 Field Supervisor 178.00 CONSTRUCTION MANAGEMENT PERSONNEL Principal Construction Manager $235.00 Construction Manager 215.00 Contract Manager 180.00 Resident Engineer 180.00 Construction Inspector (Prevailing Wage) 175.00 Construction Inspector (Non -Prevailing Wage) 145.00 Field Office Engineer 120.00 Construction Technician 97.00 Contract Support 80.00 Note: Blueprinting, reproduction, messenger service and other direct expenses will be charged as an additional cost plus 15%. A Sub -consultant Management Fee of fifteen -percent (15%) will be added to the direct cost of all sub -consultant services to provide for the cost of administration, sub -consultant consultation and insurance. 12 19 TEMECULA PARK AND RIDE Infrastructure / Other Projects Location Aerial Data - March 2010 0 150 300 Feet 600 116 2018-19 2016-17 Alba (1Tho Heart of Southorn Cak.fwnia Were Country Capital Improvement Program Fiscal Years 2016-20 TEMECULA PARK AND RIDE Infrastructure / Other Project Project Description: This project includes the acquisition of property, design, and construction of a Park and Ride facility in the vicinity of Temecula Parkway and La Paz Street. The Furniture, Fixtures and Equipment (FF&E) covers camera system infrastructure, access control, and other identified Information Technology needs. Benefit / Core Value: This project enables and encourages Temecula residents to carpool when commuting. In addition, this project satisfies the City's Core Value of A Sustainable City. Project Status: The design and environmental document are being updated to accommodate City requests and the use of the federal CMAQ funds. This project has been designated as a Transportation Control Measure (TCM) project pursuant to the Air Quality Management Plan/State Implementation Plan (AQMP/SIP) to meet air quality conformity. The 2012 Regional Transportation Plan (RTP) and the current 2011 Federal Transportation Improvement Program (FTIP) identifies the Temecula Park and Ride as a committed (programmed in the first two years of the FTIP) TCM project. Once a TCM is committed for implementation in the first two years of the FTIP, the committed TCM must be operational by the completion date in the prevailing FTIP or FTIP amendment. The Temecula Park and Ride must be completed by December 31, 2015 in order to fulfill these requirements. Department: Public Works - Account No. 210.165.747 Level: I Project Cost: Prior Years Actual Expenditures FYE 2015 Carryover Budget 2015-16 Adopted Appropriation 2016-17 Projected 2017-18 2018-19 2019-20 Total Project Projected Projected Projected Cost Administration $ 92,465 $ 186,415 $ 25,000 $ 303,880 Acquisition $ 187,530 $ 187,530 Construction $ 319,450 $ 1,578,000 $ 250,000 $ 1,828,000 Construction $ 1,300,750 $ 1,300,750 Engineering $ 64,000 $ 25,000 $ 89,000 Design/Environmental $ 138,683 $ 37,000 $ 300,000 $ - $ - $ - $ - $ 175,683 Fixtures/Furn/Equip $ 100,000 $ 100,000 MSHCP $ 80,000 $ 80,000 Totals $ 418,678 $ 2,045,415 $ 300,000 $ - $ - $ - $ - $ 2,764,093 Source of Funds: Prior Years Actual Expenditures FYE 2015 Carryover Budget 2015-16 Adopted Appropriation 2016-17 Projected 2017-18 2018-19 2019-20 Total Project Projected Projected Projected Cost AB 2766 $ 99,228 $ 644,665 $ 120,322 $ 864,215 General Fund Contributions $ 319,450 $ 179,678 $ 499,128 *CMAQ $ 1,300,750 $ 1,300,750 DIF (Police Facilities) $ 100,000 $ 100,000 Total Funding: $ 418,678 $ 2,045,415 $ 300,000 $ - $ - $ - $ - $ 2,764,093 Future Operation & Maintenance Costs: 2015-16 `Congestion Mitigation and Air Quality (CMAQ) Funds approved by the RCTC on January 8, 2014. 117 2017-18 2019-20 Item No. 9 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick Thomas, Interim Public Works Director DATE: January 24, 2017 SUBJECT: Summarily Vacate Restricted Access Along a Portion of Campanula Way at Parcel 1 of Parcel Map 36461 PREPARED BY: Mayra De La Torre, Senior Engineer Steve Charette, Associate Engineer RECOMMENDATION: That the City Council adopt a resolution entitled: RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA TO SUMMARILY VACATE RESTRICTED ACCESS ALONG A PORTION OF CAMPANULA WAY AT PARCEL 1 OF PARCEL MAP 36461 PURSUANT TO THE AUTHORITY PROVIDED BY CHAPTER 4, PART 3, DIVISION 9 OF THE STREETS AND HIGHWAY CODE BACKGROUND: In September 2016, the property owner of Parcel Map No. 36461 filed a Summary Vacation application with the City for the purpose of vacating existing restricted access rights on Campanula Way. Pursuant to Parcel Map No. 36461 recorded on May 7, 2013, the abutter's access rights to Campanula Way were restricted from Parcel 1 of Parcel Map No. 36461 excepting one 40 -foot wide access opening. The subject vacation will remove the restricted access along Campanula Way and thereby allow relocation of the existing access opening to a new location. The new location will accommodate a future onsite building configuration and traffic circulation for a proposed health care center. Final driveway locations shall be pursuant to City standards and approval by the City Engineer. Vacation of the existing restricted access on Campanula Way is permitted since Campanula Way is classified as a non -circulation roadway within the General Plan. The subject vacation will not affect current access rights to the existing Parcel 1 of Parcel Map 36461 abutting Campanula Way nor will any utilities will be affected by this vacation. Staff, therefore, recommends that the City Council adopt a Resolution approving the proposed summary vacation, pursuant to Chapter 4, Part 3, Division 9 of the Streets and Highway Code. FISCAL IMPACT: None ATTACHMENT: Resolution RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA TO SUMMARILY VACATE RESTRICTED ACCESS ALONG A PORTION OF CAMPANULA WAY AT PARCEL 1 OF PARCEL MAP 36461 PURSUANT TO THE AUTHORITY PROVIDED BY CHAPTER 4, PART 3, DIVISION 9 OF THE STREETS AND HIGHWAY CODE THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The City Council of the City of Temecula does hereby find, determine and declares as follows: A. The Owner's Statement of Parcel Map No. 36461 provides that the Owner of Parcel 1 will have no rights of access to Campanula Way, excepting one 40 -foot wide access opening. B. In September 2016, the Owner of Parcel Map No. 36461 (hereinafter "Owner") filed a Summary Vacation application with the City for the purpose of vacating existing restricted access rights on Campanula Way. Pursuant to Parcel Map No. 36461 recorded on May 7, 2013, the abutter's access rights to Campanula Way were restricted from Parcel 1 excepting one 40 -foot wide access opening. C. The Owner now desires to vacate the restricted access along Campanula Way as shown on Parcel Map No. 36461 to allow for relocation of the existing access opening to a new location that accommodates future onsite building configuration and traffic circulation. Final driveway locations shall be pursuant to City standards and approval by the City Engineer. D. The City Council desires to effectuate the intention of the Owner by summarily vacating the existing restricted access along a portion of the westerly side of Campanula Way fronting Parcel 1 of Parcel Map No. 36461 and as described on Exhibits "A" and "B", attached hereto. E. This vacation is made pursuant to Section 8330 to 8336 of the Streets and Highways Code. F. This vacation will not change current access rights to Parcels 1 of Parcel Map No. 36461 abutting Campanula Road. G. There are no public utility easements or facilities which will be affected by this vacation. Section 2. The restricted access along a portion of the westerly side of Campanula Way on Parcels 1 of Parcel Map 36461, as described on Exhibit "A" and "B", is hereby vacated and shall no longer constitute an easement or right of way or other interest in real property of the city of Temecula and shall revert to the Owner. Section 3. The City Clerk shall certify the adoption of this resolution and shall cause a certified copy of the Resolution to be recorded pursuant to Streets and Highway Code Section 8336. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 24th day of January, 2017. Maryann Edwards, Mayor ATTEST: Randi Johl, City Clerk [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 17- was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 24th day of January, 2017, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: Randi Johl, City Clerk EXHIBIT "A" LEGAL DESCRIPTION SUMMARY VACATION OF RESTRICTED ACCESS — CAMPANULA WAY The City of Temecula hereby grants all access rights to grantee, appurtenant to grantee's property, in and to Campanula Way over and across the courses described as follows: That certain strip of land situated in the City of Temecula, County of Riverside, State of California, being Parcel 1 of Parcel Map No. 36461, as shown on the map filed in Book 235, Pages 52 through 54, inclusive, of Parcel Maps in the Office of the County Recorder of said Riverside County, more particularly described as follows: BEGINNING at the northerly terminus of that certain course shown as "N32°34'25"W 39.72" on said map for a portion of the northeasterly line of said Parcel 1; Thence along said northeasterly line South 32°34'25" East 39.72 feet to the beginning of a tangent curve, concave northeasterly and having a radius of 1028.00 feet; Thence along said curve and continuing along said northeasterly line, southeasterly 538.48 feet through a central angle of 30°00'44" to the POINT OF TERMINATION. EXHIBIT "B" attached hereto and by this reference made a part hereof. This description was prepared by me or under my direction. oA3/2c,/ 7 Thomas E. Verloop, 'LS 5348 Date 1 of 1 H:Ipdata11433801Admin\Legals11433801g1004 access vacation.doc EXHIBIT "B" SUMMARY VACATION OF RESTRICTED ACCESS (1) 0 W W CL N - 0 J UNF- v - DE PORTdLA RD Or) (D z uj 41c U W U N 0 M J 0 P.O.B. 53233952 CITY OF TEMECULA PALOMA DEL SOL PARK INST. NO. 119999 O.R. REC. 3-22-1994 G 17 �O 2 C/L 40' ACCESS OPENING TO BE REMOVED PARCEL 1 P.M. NO. 36461 P.M.B. 235/52-54 PM 28384 PMB. 190/43-45 PARCEL 2 Michael Baker 40810 COUNTY CENTER DR., SUITE 200 TEMECULA, CA 92591 PHONE: (951) 676-8042 N TE R N AT I 0 N A L MBAKERINTL.COM O 170 LP PM 29431 PMB. 195/94-99 PARCEL 3 LEGEND P.O.C. - POINT OF COMMENCEMENT P.O.T. - POINT OF TERMINATION P.M.B. - PARCEL MAP BOOK - RESTRICTED ACCESS SHEET 1 OF 1 JANUARY 03, 2017 SCALE 1"=120' JOB NO. 143380 Item No. 10 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick Thomas, Interim Public Works Director DATE: January 24, 2017 SUBJECT: Accept the Improvements and File the Notice of Completion for the Main Street Bridge Over Murrieta Creek (Replacement), PW03-05 PREPARED BY: Amer Attar, Principal Engineer RECOMMENDATION: That the City Council: 1. Accept the Improvements for the Main Street Bridge Over Murrieta Creek (Replacement), PW03-05, as complete; 2. Direct the City Clerk to File and Record the Notice of Completion. BACKGROUND: On January 8, 2013, the City Council awarded a construction Contract to Granite Construction Company, in the amount of $4,770,079, and authorized the City Manager to approve change orders not to exceed a 10% contingency of $477,007.90. Granite Construction Company has completed the improvements in accordance with the plans and specifications and to the satisfaction of the Director of Public Works. All improvements were warranted under the maintenance bond until May 8, 2015, which was one year from the date the City received beneficial use of the facility. The retention for this project was released previously pursuant to Public Contract Code Section 7107. As reported by the City Attorney at the open session of the December 13, 2016 City Council meeting, in Closed Session, the City Council approved a settlement with Granite Construction Company in the amount of $395,000 to be reimbursed by the California Department of Transportation (Caltrans), the administrator of the federal HPB funds. Furthermore, the City Council authorized the City Manager to execute the change order associated with the settlement and the agreement that implements this settlement. The Main Street Bridge Over Murrieta Creek (Replacement) Project was identified in the City's Capital Improvement Program, Fiscal Years 2014-18, and was funded with Capital Projects Reserves, Development Impact Fees (DIF), Streets, and Federal Highway Bridge Program (HBP) funds. The original construction contract amount was $4,770,079. The executed change orders for unforseen condition and added work requested by the City, including the settlement amount and contract items over -run totalled $1,299,656.97. This brings the total construction cost to $6,069,735.97 FISCAL IMPACT: There is no fiscal impact as a result of the acceptance of the project and filing the Notice of Completion. ATTACHMENT: Notice of Completion RECORDING REQUESTED BY AND RETURN TO: CITY CLERK CITY OF TEMECULA 41000 Main Street Temecula, CA 92590 EXEMPT FROM RECORDER'S FEES Pursuant to Government Code Sections 6103 and 27383 NOTICE OF COMPLETION NOTICE IS HEREBY GIVEN THAT: 1. The City of Temecula is the owner of the property hereinafter described. 2. The full address of the City of Temecula is 41000 Main Street, Temecula, California 92590. 3. The Nature of Interest is a Contract which was awarded by the City of Temecula to Granite Construction Company, 440 S. Melrose Drive, Suite 200, California 92081 to perform the following work of improvement: MAIN STREET BRIDGE OVER MURRIETA CREEK (REPLACEMENT) PROJECT NO. PW03-05 4. Said work was completed by said company according to plans and specifications and to the satisfaction of the Director of Public Works of the City of Temecula and that said work was accepted by the City Council of the City of Temecula at a regular meeting thereof held on January 24, 2017. 5. The property on which said work of improvement was completed is in the City of Temecula, County of Riverside, State of California, and is described as follows: MAIN STREET BRIDGE OVER MURRIETA CREEK (REPLACEMENT) PROJECT NO. PW03-05 6. The location of said property is: Main Street, Over Murrieta Creek between Old Town Front Street and Pujol Street, Temecula, California. Dated at Temecula, California, this 24th day of January, 2017. City of Temecula Randi Johl, City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, City Clerk of the City of Temecula, California, do hereby certify under penalty of perjury, that the foregoing NOTICE OF COMPLETION is true and correct, and that said NOTICE OF COMPLETION was duly and regularly ordered to be recorded in the Office of the County Recorder of Riverside by said City Council. Dated at Temecula, California, this 24th day of January, 2017. City of Temecula Randi Johl, City Clerk Item No. 11 TO: FROM: DATE: SUBJECT: Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT City Manager/City Council Patrick Thomas, Interim Public Works Director January 24, 2017 Accept the Improvements and File the Notice of Completion for the Old Town Temecula Community Theater Remediation, PW12-04 PREPARED BY: RECOMMENDATION: Amer Attar, Principal Engineer Bill McAteer, Construction Manager That the City Council: 1. Accept the Improvements for the Old Town Temecula Community Theater Remediation, PW12-04, as complete; 2. Direct the City Clerk to File and Record the Notice of Completion. BACKGROUND: On December 9, 2014, the City Council awarded a construction contract to California Averland Construction, Inc., in the amount of $2,349,000, and authorized the City Manager to approve change orders not to exceed the contingency amount of $469,800, which is equal to 20% of the contract amount. California Averland Construction, Inc. has completed the work in accordance with the plans and specifications and to the satisfaction of the Director of Public Works. All improvements were warranted under the Maintenance Bond until September 1, 2016, which was one year from the date the City received beneficial use of the facility. The retention for this project was released previously pursuant to Public Contract Code Section 7107. Old Town Temecula Community Theater Rehabilitation was identified in the City's Capital Improvement Program, Fiscal Years 2015-19, and was funded with Capital Project Reserves (litigation settlement funds) and Development Impact Fees (DIF), Police Facilities. The original construction contract amount was $2,349,000. The City executed numerous change orders for unforeseen conditions and added work requested by the City that totaled $348,791.58. These changes resulted in a total construction cost of $2,697,791.58. FISCAL IMPACT: There is no fiscal impact as a result of the acceptance of the project and filing the Notice of Completion. ATTACHMENTS: 1. Notice of Completion 2. Contractor's Affidavit and Final Release RECORDING REQUESTED BY AND RETURN TO: CITY CLERK CITY OF TEMECULA 41000 Main Street Temecula, CA 92590 EXEMPT FROM RECORDER'S FEES Pursuant to Government Code Sections 6103 and 27383 NOTICE OF COMPLETION NOTICE IS HEREBY GIVEN THAT: 1. The City of Temecula is the owner of the property hereinafter described. 2. The full address of the City of Temecula is 41000 Main Street, Temecula, California 92590. 3. The Nature of Interest is a Contract which was awarded by the City of Temecula to California Averland Construction, Inc., to perform the following work of improvement: Old Town Temecula Theater Remediation Project No. PW12-04 Said work was completed by said company according to plans and specifications and to the satisfaction of the Director of Public Works of the City of Temecula and that said work was accepted by the City Council of the City of Temecula at a regular meeting thereof held on January 24, 2017. 5. The property on which said work of improvement was completed is in the City of Temecula, County of Riverside, State of California, and is described as follows: Old Town Temecula Theater Remediation Project No. PW12-04 The location of said property is: 42501, Main Street, Temecula, California. Dated at Temecula, California, this 24th day of January 2017 City of Temecula Randi Johl, City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, City Clerk of the City of Temecula, California, do hereby certify under penalty of perjury, that the foregoing NOTICE OF COMPLETION is true and correct, and that said NOTICE OF COMPLETION was duly and regularly ordered to be recorded in the Office of the County Recorder of Riverside by said City Council. Dated at Temecula, California, this 24th day of January 2017. City of Temecula Randi Johl, City Clerk CITY OF TEMECULA, DEPARTMENT OF PUBLIC WORKS CONTRACTOR'S AFFIDAVIT AND FINAL RELEASE OLD TOWN TEMECULA COMMUNITY THEATER REMEDIATION PROJECT NO. PW12-04 This is to certify that it ,lFcvi-ti a pvE g o C Q01 �2Uc-k bO ,' (hereinafter the "Contractor") declares to the City of Temecula, under oath, that he/she/it has paid in full for all materials, supplies, labor, services, tools, equipment, and all other bills contracted for by the Contractor or by any of the Contractor's agents, employees or subcontractors used or in contribution to the execution of its contract with the City of Temecula, with regard to the building, erection, construction, or repair of that certain work of improvement known as OLD TOWN COMMUNITY THEATER REMEDIATION, PROJECT NO. PW12-04, situated in the City of Temecula, State of California, more particularly described as follows: 42 QS I M+ tv S (kJ cA 9 2S 9i U ADDRESS OR DESCRIBE LOCATION OWORK The Contractor declares that it knows of no unpaid debts or claims arising out of said Contract which would constitute grounds for any third party to claim a Stop Notice against of any unpaid sums owing to the Contractor. Further, in connection with the final payment of the Contract, the Contractor hereby disputes the following amounts: Description Dollar Amount to Dispute Pursuant to Public Contract Code §7100, the Contractor does hereby fully release and acquit the City of Temecula and all agents and employees of the City, and each of them, from any and all claims, debts, demands, or cause of action which exist or might exist in favor of the Contractor by reason of payment by the City of Temecula of any contract amount which the Contractor has not disputed above. Dated: 6 / 1`4 tZ 01( RELEASE G CA ° ?F c M i fteiretZ Print Name and itle R-1 Item No. 12 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick A. Thomas, Interim Public Works Director DATE: January 24, 2017 SUBJECT: Approve Plans and Specifications, and Authorize the Solicitation of Construction Bids for Pavement Rehabilitation Program — Margarita Road (Rancho California Road to Temecula Parkway), PW12-11 PREPARED BY: Amer Attar, Principal Engineer Bill McAteer, Construction Manager RECOMMENDATION: That the City Council: 1. Approve the Plans and Specifications, and authorize the Department of Public Works to solicit construction bids for the Pavement Rehabilitation Program - Margarita Road (Rancho California Road to Temecula Parkway), PW12-11; 2. Make a finding that this project is exempt from CEQA per Section 15301, Class 1(c) of the CEQA Guidelines. BACKGROUND: As part of the Capital Improvement Program and Budget for Fiscal Year 2017-21, the City Council approved appropriations to support a Citywide pavement rehabilitation program that would implement the recommended maintenance activities identified in the previously completed Pavement Management System (PMS). The PMS prioritized the areas in need of repairs and identified the recommended method for these repairs. Using the PMS, staff selected several locations throughout the City based on its ranking on the PMS report, economy of scale, and the available budget. Margarita Road, between Rancho California Road and Temecula Parkway, was selected for rehabilitation at this time. Plans and specifications are complete and the project is ready to be advertised for construction bids. The contract documents are available for review in the office of the Director of Public Works. The Engineer's Construction Estimate is $3,400,000. FISCAL IMPACT: The Pavement Rehabilitation Program - Citywide is identified in the City's Capital Improvement Program (CIP) budget for Fiscal Years 2017-21, and is funded with Measure A and General Fund Contributions. Adequate funds are available in the project accounts to construct the project. ATTACHMENTS: 1. Project Description 2. Project Location tJ;(6141:Mkr1 Capital Improvement Program Fiscal Years 2017-21 PAVEMENT REHABILITATION PROGRAM - CITYWIDE Circulation Project Street Location Old Town Front Street - PW 12-14 (Temecula Parkway to First Street) Overland Drive - PW 12-15 (Commerce Center Drive to Jefferson Avenue) Temecula Parkway - PW 12-13 (Bedford Court to Pechanga Parkway Margarita Road - PW12-11 (Rancho California Road to Temecula Parkway) Anticipated Year of Construction/Estimated Project Cost 2015-16 $790,000 2016-17 $450,000 2016-17 $555,000 2016-17 $4,000,000 $5,005,000 Funding Source General Fund Contributions Measure A General Fund Contributions Measure A General Fund Contributions Measure A General Fund Contributions Measure A To Be Determined To Be Determined 2017-18 $1,000,000 2018-19 2019-20 -201 0 - General Fund Contributions Measure A General Fund Contributions Measure A Fiscal Years 2017-21 Capital Improvement Program 68 Capital improvement Program Fiscal Years 2017-21 PAVEMENT REHABILITATION PROGRAM - CITYWIDE Circulation Project Project Description: This project includes the environmental processing, design, construction of pavement rehabilitation, and reconstruction of major streets as recommended in the Pavement Management System. Benefit / Core Value: This project improves pavement conditions so that the transportation needs of the public, business industry, and government can be met. In addition, this project satisfies the City's Core Value of Transportation Mobility and Connectivity. Project Status: A priority list of rehabilitation projects has been developed. Installations are completed on an ongoing basis. Department: Public Works - Account No. 210.165.655 Level: I Project Cost: Prior Years FYE 2016 2016-17 Actual Carryover Adopted 2017-18 Expenditures Budget Appropriation Projected 2018-19 Projected 2019-20 Projected 2020.21 Projected and Future To1at Project Administration $ 1,838,095 $ 105,863 $ 160,000 $ 160.000 $ 160,000 $ 160000 $ 160,000 $ 2.743.955 Construction Construction $ 12,312,143 $3,654,849 $ 1,256,304 $ 831,219 $ 913,092 $ 998,973 $1,029,038 $ 20,995,618 Engineering $ 150,882 $ 253.877 $ 150,000 $ 150,000 $ 150,000 $ 150.000 $ 150,000 $ 1.154,759 Design $ 628,925 $ 243,263 $ 230,000 51,141,219 $1,223,092 $1.308,973 $1,339,038 $ 1.102,168 Totals $ 14,930,045 $4,257,852 $ 1,796,304 $1.141.219' $1,223,092 $1,305,9733 $1,339.038 $ 25.996,523 Source of Funds: Prior Years FYE 2016 2016-17 Actual Carryover Adopted 2017.18 Expenditures Budget ApproprlatIon Protected 2018-19 Prolecte+ 2019-20 2020-21 Total Project Prole General Fund Contributions $ 4,622,318 $1,050„000 S 5.672,318 Measure A $ 10,307,727 $3,207,852 $ 1,796,304 $1,141.219 $1,223.092 $1.308,973 $1,339,038 S 20,324,205 Total Funding: $ 14.930.045 54,257.852 $ 1,796,304 51,141,219 $1,223,092 $1.308,973 $1,339,038 5 25,996.523 Future Operation & Maintenance Costs: 2016-17 2017-18 2018.19 2019-20 2020-21 NOTE: General Fund Contributions include 1.5 million for Pavement Management Program Approved at Midyear on 2124/2015. Fiscal Years 2017-21 Capital Improvement Program 69 PW 12-11 Pavement Rehabilitation Program - Margarita Road (Rancho California Rd. to Temecula Pky.) 0 625 1,250 2,500 Feet 1 Inch = 1,250 feet Item No. 13 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA AGENDA REPORT TO: City Manager/City Council FROM: Patrick A. Thomas, Interim Public Works Director DATE: January 24, 2017 SUBJECT: Approve Plans and Specifications, and Authorize the Solicitation of Construction Bids for Butterfield Stage Road at La Serena Way — Traffic Signal Installation, PW 15-11 TS PREPARED BY: Amer Attar, Principal Engineer Avlin R. Odviar, Senior Engineer RECOMMENDATION: That the City Council approve the Plans and Specifications, and authorize the Department of Public Works to solicit Construction Bids for the Butterfield Stage Road at La Serena — Traffic Signal Installation, PW15-11TS (Project). BACKGROUND: On May 13, 2008, City Council directed staff to proceed with completing improvements conditioned upon the Roripaugh Ranch Development. The improvements consisted primarily of arterial roadways: (1) Murrieta Hot Springs Road from Pourroy Road to Butterfield Stage Road and (2) Butterfield Stage Road from Murrieta Hot Springs Road to Rancho California Road. In July of 2009 the City, acting as the Temecula Public Financing Authority, and the Developer of Roripaugh Ranch entered an Agreement allowing the City to take over construction of the aforementioned public improvements and establishing funding of the work through Community Facilities District No. 03-02 bond proceeds. The improvements have been segmented into three phases. Construction of Phase I, consisting Murrieta Hot Springs Road from Pourroy Road to Butterfield Stage Road and Butterfield Stage Road from Murrieta Hot Springs Road to Calle Chapos, was completed in 2012. Construction of Phase 11, consisting of Butterfield Stage Road from Calle Chapos to La Serena Way, was completed in 2014. Design of Phase 111, consisting of Butterfield Stage Road from La Serena Way to Rancho California Road, is nearing completion. The intersection of Butterfield Stage Road at La Serena Way is located at the border of Phases 11 and 111. Installation of traffic signals is readily achievable without necessitating reconstruction of improvements during Phase 111. Installation of the traffic signal will provide safety improvements with independent utility. The plans and specifications for the traffic signal installation at the intersection of Butterfield Stage Road at La Serena Way are complete and the project is ready to be advertised for construction bids. The contract documents are available for review in the office of the Interim Director of Public Works. The estimated construction cost for this project is $315,000 and the number of allowable working days is 45. FISCAL IMPACT: This project is funded with Roripaugh Ranch Community Facility District No. 03-02 bond proceeds. Adequate funds are available in the project accounts. ATTACHMENTS: 1. Project Description 2. Project Location 2019-20 $ 20,271 2017-18 $ 19,484 Capital Improvement Program Fiscal Years 2017-21 BUTTERFIELD STAGE ROAD EXTENSION Circulation Project Project Description: This project includes the complete design and construction of four lanes on Butterfield Stage Road (from Rancho California Road to Murrieta Hot Springs Road), four lanes on Murrieta Hot Springs Road (from Butterfield Stage Road to the City limits), and two lanes on Calle Chapos (from Butterfield Stage Road to Walcott Road), totaling approximately 3.2 miles of road. Benefit / Core Value: This project improves traffic circulation by providing a crucial north and south arterial road on the eastern side of the City. In addition, this project satisfies the City's Core Values of Transportation Mobility and Connectivity. Project Status: Phase I and Phase II of this project (Murrieta Hot Springs Road to La Serene) have been completed. Phase III (La Serena to Rancho California Road) is scheduled to be completed during Fiscal Year 2016-17. Department: Public Works - Account No. 210.165.723 PW09-02 Level: I Project Cost: Prior Years Actual Expenditures FYE 2016 Carryover Budget 2016-17 Adopted 2017-18 Appropriation Projected 2018-19 Projected 2019-20 Projected 2020-21 Projected and Future Years Total Project Cost Administration $ 1,963,522 $ 200,000 $ 13,000 $ 2,176,522 Acquisition $15,006,728 $ 2,051,322 $ 17,058,050 Construction $13,027,660 $ 9,871,740 $ 110,200 $ 23, 009, 600 Construction S 590,028 $ 590,028 Engineering $ 409,867 $ 29,132 $ 438,999 Design/Environmental $ 608,379 $ 280,525 $ 888,904 Utilities $ 86 $ 914 $ 1,000 Totals $31,016,242 $12,433,633 $ 123,200 $ - $ - $ - $ - $ 43,573,075 Source of Funds: Prior Years Actual Expenditures FYE 2016 Carryover Budget 2016-17 Adopted 2017-18 2018-19 2019-20 2020-21 Appropriation Projected Projected Projected Projected Total Project Cost CFD (Roripaugh Ranch) Reimbursement/Other r $29,555,616 $11,672,921 $ 41,228,537 (EMWD) $ 10,965 $ 10,965 Reimbursement/Other (RCWD) S 590,028 $ 590,028 Reimbursement/Other (Shea Homes) $ 3,124 $ 170,684 $ 173,808 Reimbursement/Other (SCE) $ 8,537 $ 8,537 Reimbursement/Other (County of Riverside) $ 123,200 $ 123,200 TUMF $ 1,438,000 $ 1,438,000 Total Funding: $31,016,242 $12,433,633 $ 123,200 $ - $ - $ - $ - $ 43,573,075 Future Operation & Maintenance Costs: 2016-17 $ 19,102 2018-19 $ 19,874 2020-21 $ 20,677 Note: Assumes that only minor right-of-way acquisitions would be necessary and that all major right-of-way dedications are voluntary. Fiscal Years 2017-21 Capital Improvement Program 37 BUTTERFIELD STAGE ROAD EXTENSION Circulation Project Location CAMINO CIELO CALLE CHAPOS SOUTH LOOP RD LA SERENA WY Aerial Data - March 2010 0 512.5 1,025 Feet 2,050 36 TEMECULA COMMUNITY SERVICES DISTRICT CONSENT Item No. 14 ACTION MINUTES January 10, 2017 City Council Chambers, 41000 Main Street, Temecula, California TEMECULA COMMUNITY SERVICES DISTRICT MEETING The Temecula Community Services District meeting convened at 7:36 PM CALL TO ORDER: President Jeff Comerchero ROLL CALL: DIRECTORS: Edwards, Naggar, Rahn, Stewart, Comerchero CSD PUBLIC COMMENTS (None) CSD CONSENT CALENDAR 10 Approve the Action Minutes of December 13, 2016 - Approved Staff Recommendation (5-0) Director Edwards made the motion; it was seconded by Director Rahn; and electronic vote reflected approval by Directors Edwards, Naggar, Rahn, Stewart and Comerchero. RECOMMENDATION: 10.1 Approve the action minutes and of December 13, 2016; 10.2 Approve the Joint Meeting of the City Council/Temecula Community Services District action minutes of December 13, 2016. CSD DIRECTOR OF COMMUNITY SERVICES REPORT CSD GENERAL MANAGER REPORT CSD BOARD OF DIRECTORS REPORTS CSD ADJOURNMENT At 7:40 PM, the Community Services District meeting was formally adjourned to Tuesday, January 24, 2017, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. Jeff Comerchero, President ATTEST: Randi Johl, Secretary [SEAL] CSD Action Minutes 011017 1 SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY CONSENT Item No. 15 Approvals City Attorney Finance Director City Manager Mr - THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY AGENDA REPORT TO: Executive Director/Board of Directors FROM: Luke Watson, Director of Community Development DATE: January 24, 2017 SUBJECT: Approve Recognized Obligation Payment Schedule for the Period of July 1, 2017 through June 30, 2018 (ROPS 17-18) PREPARED BY: Lynn Kelly -Lehner, Principal Management Analyst RECOMMENDATION: That the Board of Directors adopt a resolution entitled: RESOLUTION NO. SARDA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2017 THROUGH JUNE 30, 2018 PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH BACKGROUND: Pursuant to Health and Safety Code Section 34177(1)(2)(B), successor agencies are required to prepare, in advance, a Recognized Obligation Payment Schedule (ROPS) that is forward looking for twelve months, covering the period of July 1, 2017 through June 30, 2018. The ROPS lists all of the Successor Agency's financial obligations. The Successor Agency is required to submit this ROPS to the State Department of Finance and the County Auditor Controller no later than February 1, 2017. Preparation of a Recognized Obligation Payment Schedule is in furtherance of allowing the Successor Agency to pay enforceable obligations of the former Redevelopment Agency. Recent legislation (SB 107) directed cities to prepare only one ROPS per year, where previously cities prepared two ROPS per budget cycle. FISCAL IMPACT: Adoption of the proposed resolution will enable the Successor Agency to fulfill its enforceable obligations. In accordance with Health and Safety Code Section 34173(e), the liability of the Successor Agency, acting pursuant to the powers granted under Part 1.85, shall be limited to the extent of, and payable solely from, the total sum of property tax revenues it receives pursuant to Part 1.85 and the value of assets transferred to it as a successor agency for a dissolved redevelopment agency. The debts, assets, liabilities, and obligations of the Successor Agency shall be solely the debts, assets, liabilities, and obligations of the Successor Agency and not of the City. ATTACHMENTS: 1. Resolution 2. Exhibit A — Recognized Obligations Payment Schedule for the period of July 1, 2017 through June 30, 2018 (ROPS 17-18) RESOLUTION NO. SARDA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY APPROVING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2017 THROUGH JUNE 30, 2018 PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE TEMECULA REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Recitals. The Board of Directors of the Successor Agency to the Temecula Redevelopment Agency does hereby find, determine and declare that: A. The Redevelopment Agency of the City of Temecula was a redevelopment agency in the City of Temecula, duly created pursuant to the Community Redevelopment Law, Part 1, commencing with Section 33000, of Division 24 of the California Health and Safety Code (hereafter the "Temecula Redevelopment Agency"). On June 12, 1988, the Board of Supervisors of the County of Riverside adopted Ordinance No. 658 adopting and approving the "Redevelopment Plan for Riverside County Redevelopment Project No. 1988-1." On December 1, 1989, the City of Temecula was incorporated. The boundaries of the Project Area described in the Plan are entirely within the boundaries of the City of Temecula. On April 9, 1991, the City Council of the City of Temecula adopted Ordinances Nos. 91-08, 91-11, 91-14, and 91- 15 establishing the Redevelopment Agency of the City of Temecula and transferring jurisdiction over the Plan from the County to the City. Pursuant to Ordinance Nos. 91- 11 and 91-15, the City of Temecula and the Redevelopment Agency of the City of Temecula assumed jurisdiction over the Plan as of July 1, 1991. The Plan has been amended by Ordinance Nos. 94-33, 06-11 and 07-20 adopted by the City Council. The Agency duly adopted its Implementation Plan for 2010-2014 on December 8, 2009 in accordance with Health and Safety Code Section 33490. B. The City Council of the City of Temecula adopted Resolution No. 12-02 January 10, 2012, pursuant to Health and Safety Code Section 34173 and applicable law electing for the City to serve as the Successor Agency for the Temecula Redevelopment Agency upon the dissolution of the Redevelopment Agency of the City of Temecula. The City Council of the City of Temecula, Acting as the Governing Body for the Successor Agency to the Temecula Redevelopment Agency, adopted Resolution No. 12-01 on February 28, 2012 declaring the Successor Agency to the Temecula Redevelopment Agency duly constituted pursuant to law and establishing rules and regulations for the operation of the Successor Agency to the Temecula Redevelopment Agency ("Successor Agency"). C. Pursuant to Health and Safety Code Section 34175(b) and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al. (53 Ca1.4th 231(2011)), on February 1, 2012, all assets, properties, contracts, leases, books and records, buildings, and equipment of the former Temecula Redevelopment Agency transferred to the control of the Successor Agency by operation of law. D. Health and Safety Code Section 34177(1), as modified by the California Supreme Court, provides that by March 3, 2015, the Successor Agency must prepare a Recognized Obligation Payment Schedule for the enforceable obligations of the former Redevelopment Agency, in accordance with the requirements of paragraph (1). The draft schedule must be reviewed and certified, as to its accuracy, by an external auditor designated at the county auditor -controller's direction pursuant to Health and Safety Code Section 34182. The certified Recognized Obligation Payment Schedule must be submitted to and approved by the Oversight Board. Finally, after approval by the Oversight Board, a copy of the approved Recognized Obligation Payment Schedule must be submitted to the County Auditor -Controller, the State Controller and the State Department of Finance ("DOF"), and be posted on the Successor Agency's web site. E. Accordingly, the Board desires to adopt this Resolution approving the Recognized Obligation Payment Schedule for the period of July 1, 2017 through June 30, 2018 in accordance with Part 1.85. Section 2. This Resolution is adopted pursuant to Health and Safety Code Section 34177. Section 3. The Board hereby approves the Recognized Obligation Payment Schedule for the period of July 1, 2017 through June 30, 2018 substantially in the form attached as Exhibit A to this Resolution and incorporated herein by reference (the "ROPS"). The Executive Director of the Successor Agency, in consultation with the Successor Agency's legal counsel, may modify the ROPS as the Executive Director or the Successor Agency's legal counsel deems necessary or advisable. Section 4. The Board hereby designates the Finance Director as the official to whom the DOF may make requests for review in connection with the ROPS and who shall provide the DOF with the telephone number and e-mail contact information for the purpose of communicating with the DOF. Section 5. Staff is hereby authorized and directed to post a copy of the Oversight Board -approved ROPS on the Successor Agency's Internet Website (being a page on the Internet website of the City of Temecula). Section 6. The officers and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution, including submitting the Recognized Obligation Payment Schedule to the oversight board for approval and requesting additional review by the DOF and an opportunity to meet and confer on any disputed items, and any such actions previously taken by such officers are hereby ratified and confirmed. Section 7. The Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Successor Agency to the Temecula Redevelopment Agency this 24th day of January, 2017. Maryann Edwards, Chair ATTEST: Randi Johl, Secretary [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, Secretary of the Successor Agency to the Temecula Redevelopment Agency, do hereby certify that the foregoing Resolution No. SARDA 17- was duly and regularly adopted by the Board of Directors of the Successor Agency to the Temecula Redevelopment Agency at a meeting thereof held on the 24th day of January, 2017, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Randi Johl, Secretary EXHIBIT A Recognized Obligations Payment Schedule (ROPS) for the period July 1, 2017 through June 30, 2018 (ROPS 17-18) Successor Agency: County: Recognized Obligation Payment Schedule (ROPS 17-18) - Summary Filed for the July 1, 2017 through June 30, 2018 Period Temecula Riverside 17-18A Total Current Period Requested Funding for Enforceable Obligations (ROPS Detail) (July - December) 17-18B Total (January - June) ROPS 17-18 Total A Enforceable Obligations Funded as Follows (B+C+D): $ 1,219,731 $ - $ 1,219.731 B Bond Proceeds - - C Reserve Balance 1,219,731 1,219.731 D Other Funds - E Redevelopment Property Tax Trust Fund (RPTTF) (F+G): $ 3,907,793 $ 3,951,357 $ 7,859,1.50 F RPTTF 3,782,793 3,826,357 7,609,150 G Administrative RPTTF 125,000 125,000 250,000 H Current Period Enforceable Obligations (A+E): $ 5,127,524 $ 3,951.357 $ 9.078,881 Certification of Oversight Board Chairman: Pursuant to Section 34177 (o) of the Health and Safety code, I hereby certify that the above is a true and accurate Recognized Obligation Payment Schedule for the above named successor agency. Name /s/ Title Signature Date A Temecula 5lecognized Obligation Payma2 Schedule (0 OPS 17.18)- BOPS 0.ta11 July 1, 2017 through Jute 30, 2018 (R.10610PJnollb in Whole Dollars) B C D E F G X 1 J K L M N O P O R 6 T U V 28 Prop. 64.0.81 Obinallmr 02502542 Type Con0394044.11enl Eaw25en Dm Carr.112inomen5 781146.05536.E Pane 71x52 7.16611. 11,AF4 56. 74.1 Ou0len3ln5 091010beeeor Rem 12002 17.1817-111A Teal 17-18A (July - Dscem .r) T. 17.155 (Jantsry • June) 17-188 Teal Fund Sources Fund Sources F �Nn P Bebrwp � Doer Funds RPTTF � rr4n807TF Bond Proceeds Reborn Bans Dant FUMe apn5 min8PTIF 02 I Tn.0,Ad tine 4242002 0002010 LS 280kITrvNw.r 750.1., lees 91158844486an no 1-1860 1 150,10 0.166 18 W3 N $ 50761 05 i 18440 1 i 1017,731 - 2 3,028703 13100 t 120030 5 5127.524 S 18000 1 - i • $ • 3 3529357 $ 126000 i 2851354 2(.8807 .Few CPA 00020084021.89020s 512//002 9/122021 0221 006005.9429 PO615.1674005543454350 W.1-1960 630000 N 5 19000 120000 1 120002 1 - 3 Abbott 03•0 073)20520314.094307 2112,2002 .12/2021 266.80.98./ Pokohunoons Fur054240n521l Lrnarovess 54. 1-1900 750,000 0 1 - 1 1 - 4 8B RAF Paer.n0Saan6w.171 50100/0407 5110/2011 //102416 Lew., H8 88,2 Fund o w 4 21., FUM tar 14 m 253 SEPAFa no. 1.1908 5250.954 N S 5 - 5 - 5 Temecula Garden L.P Loan 00,10014104m18cbo4 .111938 7112027 Tern.. G.. L.P. Linn 81011814114 Xpuen9 No. 1.1901 3255 09 N S 303,000 305,000 5 305,000 i - 82002 end 2802 TAB FY 912113 Debt Sent • eW B031/1srued On or Before 12/11/10 0242002 '7282032 I800enk w Tnaae for Bonds luxes. FON Redw.pmmt 24,174.2 N5. 1.1888 35.510,887 N 5 3,010,473 1.219.711 500731 5 1784,452 1,294111 1 1.2]4611 3 978119. 72008 TAB Belle A FY 2012/13 Debt Seance164468121. Bonds 1118 On or Beal 0 198008 77302035 20NwF.s US BwkaaTwee* br 04,56.208 B 1' R2m'+ioPe+P1 No 1908 25,514.271 N 5 1,0/5,338 388,518 1 388,519 95,09 8200E TAB 641448 FY 2012113 Dein liaanes Bvd4 Weird On or Bebn 1.12008 7202030 US Gunk =TnWs.r 098842.8 153140!0 _ 190140 Ise. to FUM Retle.pmsnt No.1-1905 4,359,420 N 3 188,018 135,114 0 175,114 63.504 3 6399 8:007 TAB FY 2012/13 Wbt Sal. 2072.10 Benda laaued On dr Bebn 193190 101172007 7202037 UBe0n4 w TluameF 958814./0 187+'ew Bonds lessee to Fund Redevelopment 024053 00,1-1985 24,023,438 N 5 5,065,433 719,532 5 719,92 385,901 1 365;801 0 2010 14.19 TAB Series A 6 B FY 001/13 Debt Genies lee)09819 Benda Ise. On 5r Betoe 21242010 7/312040 UB Beat min.* RP Son.485 Bonds !eche. Fund 0140118 Has .e No, 1.1285 25,737.330 N 5 1,243,218 776,218 5 775,215 467,041 s 057.011 112011 it HoB TAB P'ieal Year Ho./ Promenade 12/130b1R54322*/2) Parkins Gael DPA BondeNosed After 12,31/10 0PA2,01864.3.9 (72 11111 9!9201 7012041 7237015 US Bank Tnemab 10400042 Fun. CM D.e Ia. 2 Full 144201. 20unns for Par. Lampe No. 1.1960 20. 1.1960 96007,95 20000 N N 5 1,308,358 1 - 777,079 1 777,878 i - 531879 s men 1 2049enryA15118 don 00.1 Coe. 7/1/2012 6102015 WS Payees ,5424 2270 A1enoy 6.5 Comanubon/Agency 4do, No, 1-1888 250.000 N 1 250,002 125,300 5 125,000 123,000 6 125100 218618ha1 Inerencey NNP 5eartue0 team0e w BMn.4JnI11 3112/1988 1.21114/1/ 067 N 105347 1804.12..4411.13781.111b 1Meem0FV W N5.1-1800 73,92 N _ - 11.IIIIIMIP 1 10000 8 10.200 30TIM.edDO..e aeon loud Ono ease 921110 124110112 1211808 72ffi71136 72N81e US Sank w 8.esb Bmaeielunr V3 amt w TuwP4 .6.1140 BS 8391258 Fhes0.2.26811.1 4443x/ SwF 1®>a ®,e.2 No.t-198 18. 1.16138 404751 100.000 11 N ' 16000 214214+70505116.. Seal* anal Ere. 49211117 -24'Un2nded 0219.5275 eel0ed Aller 12/3110 3/12011 7212033 Trustee /07565145 BondsF,md8J.s4apn,e l� No. 1.1035 10,001 N 0 10006 251n7414e0 0001536. 1,114saional Sena. 3/92011 0/302918 8002018 6n81e3w6e12220e24 4153.01. 58:14 Planning 4 caa.n Jeflenon 027103r 30.050 Pen E1R 100.412 Garrido 5240&Plan Ne. 1.1952 14a1-1820 114,070 13.09 N N 5 114,070 0 16.820 5 8 - 114,070 53529 5 121.070 t 13630 03 2T Un1aWrd 26/1806. 40120e20 0010..18 PrNw6om949,46n 0P54065101na380422 3222611 2/122002 2/12/2021 7282031 05514 58 UB Bank08Trustee for 05r2.,4.n 1164,08181164,0818 Tea .6nene07 Bondele 538 Fund Rem.prrent A1erbas No. 1-1980 No.1.301 255.`598 144,254 N N 1 2 59 $ 114,254 5 - $ - 25536 144,254 1 25.531 s 141264 9 Un.nded Obropeons IJn6.41.9 4s 4124/2002 20 211.8163 Obi.. urn.. Uabbdea 12/12006 7002038 UB Bort w TruNw@r 11199811.8 Bonds!53x10!5 Fund Redevefoprnent No, 1.1988 - N 1 0 • PeXw.wl Sava 10114 00 L.. 12] 312011 11/302016 Enalno r6087dllnce 4453146.1 Jefferson Conpor See. P. EIR No. 81988 - N 1 1 31 N 1 - - s • [ A 1 B C D E F G H I 1 Temecula Recognized Obligation Payment Schedule (ROPS 17-18) - Report of Cash Balances (Report Amounts in Whole Dollars) 2 Pursuant to Health and Safety Code section 34177 (I), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation. Far t ps on how to complete the Report of Cash Balances Form, see Cash Balance Tips Sheet. 3 A B C D E F G H I 4 Cash Balance Information by ROPS Period Fund Sources Comments 5 Bond Proceeds Reserve Balance Other RPTTF Bonds issued on or before 12/31/10 Bonds issued on or after 01/01/11 Prior ROPS period balances and DDR RPTTF !balances retained Prior ROPS RPTTF distributed as reserve for future period(s) Rent, grants, interest, etc. Non -Admin and Admin ROPS 15-16B Actuals (01/01/16 - 06/30116) 1 Beginning Available Cash Balance (Actual 01/01/16) 7,987,054 8;581,604 (489,446) 2 1 Revenue/Income (Actual 06/30/16) RPTTF amounts should tie to the ROPS 15-16B distribution from the County Auditor -Controller during January 2016 168 3.561 _ 161,398 3,071.869 10 3 Expenditures for ROPS 15-16B Enforceable Obligations (Actual 06/30/16) 2 651.026 4 Retention of Available Cash Balance (Actual 06/30/16) RPTTF amount retained should only include the amounts distributed as reserve for future period(s) 1.219.731 12 ROPS 15-16B RPTTF Balances Remaining No entry required 13 6 Ending Actual Available Cash Balance CtoG=(1+2-3-4),H=(1+2-3-4-5) E 7,987.222 $ 8,585.185 $ - $ - $ 161.398 $ (1.288.334) TEMECULA PUBLIC FINANCING AUTHORITY CONSENT Item No. 16 ACTION MINUTES January 10, 2017 City Council Chambers, 41000 Main Street, Temecula, California TEMECULA PUBLIC FINANCING AUTHORITY MEETING The Temecula Public Financing Authority Meeting convened at 7:41 PM CALL TO ORDER: Chairperson Maryann Edwards ROLL CALL: DIRECTORS: Comerchero, Naggar, Rahn, Stewart, Edwards TPFA PUBLIC COMMENTS (None) TPFA BUSINESS 12 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds — Random Selection of Board Member to Achieve a Quorum of Four for Consideration of Approval of Issuance of the 2017 Bonds - The General Counsel presented a report to the Board of Directors outlining the conflicts of interest of Board Members Comerchero and Naggar relating to the approval of the issuance of Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds ("2017 Bonds") due to the ownership of Europa Vineyard Estates being otherwise related business entities to them, describing the legal need for achieving a quorum of four Board members for the approval of the issuance of the 2017 Bonds, and the procedures to be used by the Secretary pursuant to Section 17805 of the Fair Political Practices Commission Regulations for the random selection of one of these Board Members to participate in the approval of the issuance of the 2017 Bonds. Utilizing the procedures of Section 18705, the Secretary randomly selected Board Member Jeff Comerchero and announced that this Board Member will be entitled to participate in all actions of the Authority Board of Directors actions related to the 2017 Bonds or Butterfield Stage Road Phase 3 when four affirmative votes are required in order to Authority Board Actions related thereto. RECOMMENDATION: 12.1 The Secretary of Board shall randomly select either Board Member Comerchero or Board Member Naggar in order to achieve a four -member quorum of the Temecula Public Financing Authority ("Authority") Board of Directors required consider the approval of the issuance of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds ("2017 Bonds") and for all matters relating to approval of the Butterfield Stage Road Phase 3 public improvement project by the Authority Board of Directors that may require a four-fifths vote of the Board. TPFA Action Minutes 011017 1 TPFA EXECUTIVE DIRECTOR REPORT TPFA BOARD OF DIRECTORS REPORTS TPFA ADJOURNMENT At 7:48 PM, the Temecula Public Financing Authority meeting was formally adjourned to Tuesday, January 24, 2017, at 5:30 PM, for a Closed Session, with regular session commencing at 7:00 PM, City Council Chambers, 41000 Main Street, Temecula, California. Maryann Edwards, Chair ATTEST: Randi Johl, Secretary [SEAL] TPFA Action Minutes 011017 2 JOINT CITY COUNCIL/ TEMECULA PUBLIC FINANCING AUTHORITY PUBLIC HEARING Item No. 17 Approvals City Attorney Finance Director City Manager CITY OF TEMECULA/TEMECULA PUBLIC FINANCING AUTHORITY AGENDA REPORT TO: City Council/Board of Directors FROM: Aaron Adams, City Manager/Executive Director DATE: January 24, 2017 SUBJECT: Approve Issuance of Special Tax Bonds for the Temecula Public Financing Authority Community Facilities Districts No. 03-02 (Roripaugh Ranch) and No. 16-01 (Roripaugh Ranch Phase 2) RECOMMENDATION: 1. That the City Council hold a public hearing in accordance with Section 6586.5(a)(2) of the California Government Code with respect to the financing of public improvements by means of the issuance of community facilities district special tax bonds by the Temecula Public Financing Authority for its Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2), and adopt by a majority vote the resolution entitled: RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA MAKING FINDINGS WITH RESPECT TO AND APPROVING THE ISSUANCE OF BONDS BY THE TEMECULA PUBLIC FINANCING AUTHORITY 2. That the Temecula Public Financing Authority adopt by a 4/5ths vote the resolution entitled: RESOLUTION NO. TPFA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF SPECIAL TAX BONDS FOR COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2), AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS 3. That the Temecula Public Financing Authority adopt by a majority vote the resolution entitled: RESOLUTION NO. TPFA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF SPECIAL TAX REFUNDING BONDS RELATED TO THE TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH), APPROVING AND DIRECTING THE EXECUTION OF A FISCAL AGENT AGREEMENT AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS BACKGROUND: A. CFD No. 16-01 (Roripaugh Ranch Phase 2) The two current owners of the property in Phase 2 of the Roripaugh Ranch development, consisting of Roripaugh Valley Restoration, LLC and Wingsweep Corporation (collectively referred to below as the "Property Owners"), have requested that the Temecula Public Finance Authority (the "Authority") form a new community facilities district (the "new CFD") and issue special tax bonds of the Authority for the new CFD to provide funds to: (i) Prepay in full, special taxes authorized to be levied for the Temecula Public Finance Authority Community Facilities District No. 03-02 (Roripaugh Ranch) ("CFD No. 03-02") on the property to be included in the new CFD and thereby repay the portion of the outstanding special tax bonds issued by the Authority for CFD No. 03-02 in April of 2006 payable from such special taxes, (ii) Assist in paying the costs of various public improvements necessitated by development to occur in Phase 2 of Roripaugh Ranch, and (iii) Finance costs of issuing the special tax bonds and of providing a reserve fund for the bonds. The Authority will also be empowered to levy special taxes on property in the new CFD to pay the costs of certain municipal services to be provided by the City to the property. The City and the former Redevelopment Agency of the City of Temecula created the Authority in 2001 to provide an independent governmental entity that could consider the formation of community facilities districts for property in the City and act as the issuer of any related community facilities district bonds. Following the dissolution of the former Redevelopment Agency, the Temecula Community Services District and the Temecula Housing Authority were substituted for the former Redevelopment Agency as the parties with the City under the agreement that created the Authority. The new CFD will only include land owned by the Property Owners that submitted petitions requesting formation of the CFD. The Property Owners have agreed to pay all City and Authority costs related to the proposed new CFD formation and bond issue, subject to reimbursement from bond proceeds when and if bonds are issued for the new CFD, and have previously entered into a deposit/reimbursement agreement with the City and the Authority with respect thereto. The bonds, if issued by the Authority for the new CFD, would be payable solely from special taxes levied on land in the area of the new CFD and collected by the Authority. On March 22, 2016, The Authority adopted two resolutions related to the formation of the new CFD. On April 26, 2016, The Authority conducted a public hearing regarding the new CFD, the Property Owners voted to approve the new CFD and the first reading of the ordinance levying special taxes on property in the new CFD occurred. On May 10, 2016, the City Council had the second reading of special tax ordinance and adopted the ordinance, and the ordinance went into effect on June 10, 2016. B. CFD 03-02 (Roripaugh Ranch) In order to implement the prepayment of the special taxes being levied by CFD 03-02 on property in the new CFD, it is necessary to refund the outstanding bonds issued in 2006 for CFD 03-02. The refunding will be accomplished (i) with the special tax prepayment made with proceeds of the special tax bonds issued for the new CFD, and (ii) the issuance of refunding bonds by the Authority for CFD 03-02 to refund the portion of the outstanding 2006 bonds not otherwise paid off with proceeds of the new CFD special tax bonds. The refunding of the 2006 bonds will result in lower annual special taxes for the homeowners in the Panhandle area of Roripaugh Ranch, who will remain subject to CFD 03-02 special tax levies to repay the refunding bonds being issued for CFD 03-02. Unspent 2006 bond proceeds in an improvement fund and a reserve fund will be made available to pay costs of infrastructure improvements for Roripaugh Ranch. SPECIFIC RECOMMENDED ACTIONS: TONIGHT'S SPECIFIC ACTIONS: It is recommended that the Authority adopt the two resolutions authorizing the issuance of the respective CFD No. 16-01 Special Tax Bonds and the CFD No. 03-02 Special Tax Refunding Bonds and approving related documents. These documents include the following: Fiscal Agent Agreements - These are contracts between the Authority and US Bank National Association serving as Fiscal Agent for the respective CFD No. 16-01 Special Tax Bonds and CFD No. 03-02 Special Tax Refunding Bonds and specify the terms of the respective bonds, the accounts to be established by the Fiscal Agent for the respective Bonds, the bond redemption provisions and the certain covenants of the Authority with respect to the bonds. Bond Purchase Agreements — These are contracts between Stifel, Nicolaus & Company ("Stifel") acting as underwriter and the Authority whereby the Authority agrees to sell the bonds to Stifel and Stifel agree to buy the respective CFD No. 16-01 Special Tax Bonds and CFD No. 03-02 Special Tax Refunding Bonds from the Authority and sell them to the public. Preliminary Official Statements — These are disclosure documents that will be used by Stifel to inform investors about the upcoming bond issues and provide all material information for the potential investors to make a decision whether or not to buy the respective CFD No. 16- 01 Special Tax Bonds and CFD No. 03-02 Special Tax Refunding Bonds. The anticipated principal amounts of the two bond issues are shown on the cover pages of the Preliminary Official Statements. Continuing Disclosure Agreements— These agreements specify the Authority's obligation to provide annual disclosure to the municipal bond market related to the respective CFD No. 16-01 Special Tax Bonds and CFD No. 03-02 Special Tax Refunding Bonds by preparing and filing annual disclosure reports and notices of certain material events, if they occur. Escrow Agreement — This agreement between the Authority and US Bank National Association serving as Escrow Agent and specifies the requirements to defease and redeem the outstanding 2006 bonds issued for CFD 03-02. Acquisition Agreement — This agreement between the Authority and Roripaugh Valley Restoration, LLC specifies how unspent 2006 bond proceeds and some of the proceeds of the bonds being issued for the new CFD can be used to pay costs of certain public facilities necessary for the development of the remaining undeveloped land within Roripaugh Ranch. A complete description of facilities eligible to be financed is included on Exhibit A to the Agreement. Adoption by the Authority of the two Resolutions approving the documents listed above and the prior actions related to the CFDs will enable the following items to happen: Separate the Pan portion (totally undeveloped) from the Pan -Handle (almost fully developed) of Roripaugh Ranch into the separate new CFD, Lower CFD 03-02 special taxes for homeowners in the Pan -Handle portion of Roripaugh Ranch starting in FY 2017-18 (estimated to be approximately $800 per year lower for an average household), Generate proceeds to build facilities required to develop the Pan area (estimated to be approximately $7.4M), Allow for a future services special tax to be levied on property in the Pan area POTENTIAL CONFLICTS OF INTEREST OF COUNCIL/BOARD MEMBERS COMERCHERO AND NAGGAR Europa Vineyard Estates is located on approximately 290 acres southesterly of Butterfield Stage Road and La Serena Way in unincorporated Riverside County. Its westerly boarder is adjacent to Butterfield Stage Road south of La Serena Way on the border of the City of Temecula. Europa Vineyard Estates had been owned by Temecula Vineyard Estates, LLC. Europa Vineyard Estates is now owned by an entity related to Temecula Vineyard Estates, LLC, Sirah Vineyard Development Corporation. Council/Board Member Comerchero is the President of Sirah Vineyard Development Corporation. Neither Council/Board Member Comerchero nor Council/Board Member Naggar has any direct investments or ownership interests in the Europa Vineyard Estates Project, Temecula Vineyard Estates, LLC or Sirah Vineyard Development Corporation. The managing member of Temecula Vineyard Estates, LLC, has been Mr. Daniel Stephenson. Council/Board Member Comerchero and Council/Board Member Naggar, however, each have ownership interests and are members of other limited liability companies that are developing property outside of the City of Temecula and in which Mr. Stephenson is also the managing member. The Europa Vineyard Estates Project, Temecula Vineyard Estates, LLC, and Sirah Development Corporation are, therefore, "otherwise related business entities" for Council/Board Member Comerchero and Council/Board Member Naggar within the meaning of § 18700.2 of the FPPC Regulations. The proposed actions needed for approval of the 2017 Bonds for CFD 03-02 and CFD 16-01 will have no material financial effect on the Europa Vineyard Estates Project, or the owners of that Project. Approval of the issuance of these 2017 Bonds will not increase or decrease or otherwise change the Roripaugh Ranch Developers' obligation to construct the Phase 3 Improvements to Butterfield Stage Road from what has been continuously required since approval of the Development Agreement and Specific Plan in December 2002. Additionally, the funding for the Phase 3 Improvements for Butterfield Stage Road adjacent to Europa Vineyard Estates has been in place since the issuance of the 2006 Bonds in April of 2006. The owners of Europa Vineyard Estates Project will, however, need to widen and improve Butterfield Stage Road adjacent to the westerly boundary of Europa Vineyard Estates if Butterfield Stage Road is not otherwise widened by the time certificates of occupancy are to be issued for 80% of the Tots in Europa Vineyard Estates. Council/Board Member Comerchero and Council/Board Member Naggar have not participated in the preliminary actions relating to the 2017 Bonds for CFD 03-02 and CFD 16-01 due to these conflict issues. The approval of the Authority Resolution authorizing the Issuance of Special Tax Bonds For Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) will require an affirmative vote of four-fifths of the members of the Authority Board of Directors as required by Government Code Section 53345.8 (c) because the value of the property in CFD 16-01 that will be subject to the special tax to pay debt service on the 2017 Bonds for CFD 16-01 is not at least three times the expected principal amount of the 2017 Bonds to be sold. In order to achieve a quorum of four Members of the Authority Board of Directors, Section 18705 of the Fair Political Practices Commission Regulations specifically authorizes the random selection either Board Member Comerchero or Board Member Naggar to achieve the required quorum. On January 10, 2017 at a regular public meeting of the Authority Board of Directors, Board Member Comerchero was randomly selected to achieve a quorum of four Board Members for the consideration of the Resolution authorizing the issuance of the 2017 Bonds for CFD 16-01 in accordance with the requirements of Section 18705. Board Member Comerchero is, therefore, legally authorized to participate in the consideration and approval of the Resolution of the Authority Board of Directors authorizing the issuance of the 2017 Bonds for CFD 16-01. Council/Board Member Naggar will not participate in any of the actions of the City Council and Authority Board of Directors with respect to the actions proposed to authorize issuance of the 2017 Bonds for CFD 03-02 and CFD 16-01. Board Member Comerchero may participate in the Authority Board of Directors' consideration and approval of the Resolution to authorize issuance of the 2017 CFD 16-01 Bonds because that Resolution requires a 415th vote. Council/Board Member Comerchero will not participate in any of the actions of the City Council required for issuance of the 2017 Bonds for CFD 03-02 and 16-01 and will not participate in any of the actions of the Authority Board of Directors with respect to the actions proposed to authorize issuance of the 2017 Bonds for CFD 03-02. FISCAL IMPACT: The two Property Owners in the Pan area of Roripaugh Ranch have agreed to pay all out of pocket expenses incurred relative to the proposed formation of the new CFD and the issuance of bonds for the new CFD. Costs of issuance of the proposed bond issues will be paid from the proceeds of the bonds to be issued by the Authority for the new CFD and for CFD 03-02. All annual costs of administering the new CFD and the bonds issued for the new CFD will be paid from special taxes levied on the properties in the new CFD, and annual costs of administering CFD 03-02 and the refunding bonds issued for CFD 03-02 will be paid from special taxes levied on land in CFD 03-02. The bonds will not be obligations of the City, or general obligations of the Authority, but will be limited obligations of the Authority for the respective CFD, payable solely from special taxes levied on land in the respective CFD. CONCLUSION AND NEXT STEPS: It is anticipated that the bond sales will occur in early February, with closings in mid-February, and the 2006 CFD 03-02 bonds will be redeemed on March 1, 2017. ATTACHMENTS: 1. Resolutions (3) 2. Fiscal Agent Agreement (2) 3. Bond Purchase Contract (2) 4. Preliminary Official Statement (2) 5. Continuing Disclosure Agreement (2) 6. Escrow Agreement 7. Acquisition Agreement RESOLUTION NO. 17- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA MAKING FINDINGS WITH RESPECT TO AND APPROVING THE ISSUANCE OF BONDS BY THE TEMECULA PUBLIC FINANCING AUTHORITY THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The City of Temecula (the "City"), the Temecula Community Services District and the Temecula Housing Authority are parties to a Joint Exercise of Powers Agreement which established the Temecula Public Financing Authority (the "Authority") for the purpose, among others, of issuing bonds to finance public capital improvements. Section 2. The Board of Directors of the Authority has formed the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (the "CFD"), and the Authority intends to issue bonds of the Authority for the CFD (the "Bonds") to finance various public improvements within the City of Temecula (the "Improvements"). Section 3. The City Council has on this date held a duly noticed public hearing with respect to the financing of the Improvements with the proceeds of the Bonds, as required by Section 6586.5(a) of the California Government Code. Section 4. The City Council hereby finds that significant public benefits will arise from the financing of the Improvements with the proceeds of the Bonds, in accordance with Section 6586 of the California Government Code. Section 5. The City Council hereby approves the financing of the Improvements with the proceeds of the Bonds, and the issuance of the Bonds by the Authority for the CFD. Section 6. This Resolution shall take effect upon adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 24th day of January, 2017. Maryann Edwards, Mayor ATTEST: Randi Johl, City Clerk [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 17- was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 24th day of January, 2017, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: Randi Johl, City Clerk RESOLUTION NO. TPFA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF SPECIAL TAX BONDS FOR COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2), AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. This Board of Directors has conducted proceedings under and pursuant to the Mello -Roos Community Facilities Act of 1982 (the "Law"), to form the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (the "District"), to authorize the levy of special taxes upon the land within the District, and to issue bonds secured by the special taxes the proceeds of which are to be used to finance certain public improvements (the "Facilities") and the prepayment of certain special taxes, all as described in the Resolutions entitled "A Resolution of the Board of Directors of the Temecula Public Financing Authority of Formation of Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2), Authorizing the Levy of a Special Tax Within the District, Preliminarily Establishing an Appropriations Limit for the District and Submitting Levy of the Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors of the District" (the "Resolution of Formation") and "A Resolution of the Board of Directors of the Temecula Public Financing Authority Determining the Necessity to Incur Bonded Indebtedness Within Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) and Submitting Proposition to the Qualified Electors of the District," which Resolutions were adopted by this Board of Directors on April 26, 2016. Section 2. Pursuant to the Resolutions described in Section 1, an election was held within the District on April 26, 2016 and the then two qualified electors of the District approved the propositions of the incurrence of the bonded debt, the establishment of the appropriations limit and the levy of the special tax by more than two-thirds of the votes cast at said special election. Section 3. There have been submitted to this Board of Directors for its approval a Fiscal Agent Agreement (the "Fiscal Agent Agreement") providing for the issuance of the Bonds (as defined in Section 5 below) and the use of the proceeds of the Bonds to finance the Facilities and to prepay certain special taxes, as well as a Preliminary Official Statement (the "Preliminary Official Statement") describing the Bonds, a bond purchase agreement to be used in connection with the sale of the Bonds (the "Purchase Contract") and a Continuing Disclosure Agreement relating to the Bonds (the "Continuing Disclosure Agreement"), and this Board of Directors, with the aid of City of Temecula staff, has reviewed said documents and found them to be in proper order. Section 4. 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 and the levy of said special taxes as contemplated by 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 Law. Section 5. Pursuant to the Law, this Resolution and the Fiscal Agent Agreement, special tax bonds of the Temecula Public Financing Authority (the "Authority") for the District in an aggregate principal amount not to exceed $46,000,000 are hereby authorized to be issued, such bonds to be designated the "Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds" (the "Bonds"). The Bonds shall be executed in the form set forth in and otherwise as provided in the Fiscal Agent Agreement. The Board of Directors hereby finds and determines that (a) the issuance of the Bonds should proceed for public policy reasons, including that the issuance of the Bonds at this time is expected to result in lower interest rates on the Bonds than if they were issued at a later time, and the issuance of the Bonds will allow for infrastructure development to continue in the District on a coordinated basis, to the benefit of the future residents of homes to be built in the District, (b) the Bonds, when issued, will be in compliance with the applicable requirements of the Authority's local goals and policies for community facilities districts adopted by the Board of Directors on April 24, 2001, except for the requirement that there be at least a three to one property value to public lien ratio, which requirement is hereby waived so that the Bonds may be issued for the public policy reasons stated in the preceding clause (a), and (c) the District and the Bonds are consistent with the requirements set forth in Section VIII E. of the City of Temecula's Budget and Fiscal Policies as contained in the City's Fiscal Year 2016-17 Annual Operating Budget. The Board of Directors further finds that the sale of the Bonds at negotiated sale as contemplated by the Purchase Contract will result in a lower overall cost. Section 6. The Fiscal Agent Agreement with respect to the Bonds, in the form presented to this Board of Directors at this meeting, is hereby approved. The Executive Director, the Assistant Executive Director and the Treasurer (each, a "Designated Officer"), each acting alone, are hereby authorized to execute and deliver the Fiscal Agent Agreement in said form, with such additions thereto or changes therein as are approved by the Designated Officer executing the Fiscal Agent Agreement upon consultation with the Authority's General Counsel and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Fiscal Agent Agreement by a Designated Officer. The Secretary is hereby authorized to countersign the Fiscal Agent Agreement. The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms of the Bonds shall be as provided in the Fiscal Agent Agreement as finally executed. Section 7. The Purchase Contract between the Authority and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), in the form presented to the Board of Directors at this meeting, is hereby approved. The Designated Officers, each acting alone, are hereby authorized to accept the offer of the Underwriter to purchase the Bonds contained in the Purchase Contract; provided that the aggregate principal amount of the Bonds sold thereby is not in excess of $46,000,000, the true interest cost of the Bonds is not in excess of 7.25% and the Underwriter's discount is not in excess of 2.00% of the aggregate principal amount of the Bonds. The Designated Officers, each acting alone, are hereby authorized to execute and deliver the Purchase Contract in said form (if the requirements of the preceding sentence are satisfied), with such additions thereto or changes therein as are recommended or approved by the Designated Officer executing the Purchase Contract upon consultation with the Authority's General Counsel and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Purchase Contract by a Designated Officer. The Secretary does not need to countersign the Purchase Contract. Section 8. The Preliminary Official Statement, in the form presented to the Board of Directors at this meeting, is hereby approved. The Designated Officers are hereby authorized, for and in the name and on behalf of the Authority, to make changes to the Preliminary Official Statement prior to its dissemination to prospective investors, and to bring the Preliminary Official Statement into the form of a final official statement (the "Official Statement") including such additions thereto or changes therein as are recommended or approved by any such officer upon consultation with Authority's General Counsel and Disclosure Counsel. The Executive Director is hereby authorized and directed to execute and deliver the Official Statement. The Underwriter is hereby authorized to distribute copies of the Preliminary Official Statement to persons who may be interested in the purchase of the Bonds and is directed to deliver copies of the Official Statement to all actual purchasers of the Bonds. The Designated Officers, each acting alone, are hereby authorized to execute a certificate or certificates to the effect that the Official Statement and the Preliminary Official Statement were deemed "final" as of their respective dates for purposes of Rule 15c2-12 of the Securities Exchange Act of 1934, and each Designated Officer is authorized to so deem such statements final. Section 9. The Continuing Disclosure Agreement related to the Bonds, in the form appended as Appendix E to the Preliminary Official Statement, is hereby approved. The Designated Officers, each acting alone, are hereby authorized, for and in the name of and on behalf of the Authority, to execute and deliver the Continuing Disclosure Agreement in said form, with such additions thereto or changes therein as are deemed necessary, desirable or appropriate by the Designated Officer executing the Continuing Disclosure Agreement upon consultation with the Authority's General Counsel and Disclosure Counsel, the approval of such changes to be conclusively evidenced by the execution and delivery by a Designated Officer of the Continuing Disclosure Agreement. The Secretary does not need to countersign the Continuing Disclosure Agreement. Section 10. The Authority hereby covenants, for the benefit of the Bondowners, to commence and diligently pursue to completion any foreclosure action regarding delinquent installments of any amount levied as a special tax for the payment of interest or principal of the Bonds, said foreclosure action to be commenced and pursued as more completely set forth in the Fiscal Agent Agreement. Section 11. The Bonds, when executed, shall be delivered to the Fiscal Agent for authentication. The Fiscal Agent (as defined in the Fiscal Agent Agreement) 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 Underwriter in accordance with written instructions executed on behalf of the Authority by a Designated Officer, which instructions each Designated Officer acting alone is hereby authorized, 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 Underwriter upon payment of the purchase price therefor. Section 12. The law firm of Quint & Thimmig LLP is hereby designated as Bond Counsel and Disclosure Counsel to the Authority for the Bonds. The Executive Director is hereby authorized to execute an agreement with said firm for its services in connection with the Bonds in a form acceptable to the Authority's General Counsel, provided that the compensation payable to said firm is payable solely from the proceeds, and wholly contingent upon the issuance, of the Bonds. Section 13. All actions heretofore taken by the officers and agents of the Authority with respect to the establishment of the District and the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the proper officers of the Authority (including the Designated Officers and the Secretary) are hereby authorized and directed to do any and all things 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 in accordance with this Resolution, and any certificate, agreement, and other document described in the documents herein approved. 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 14. This Resolution shall take effect upon its adoption. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Temecula Public Financing Authority this 24th day of January, 2017. Maryann Edwards, Chair ATTEST: Randi Johl, Secretary [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, Secretary of the Temecula Public Financing Authority, do hereby certify that the foregoing Resolution No. TPFA 17- was duly and regularly adopted by the Board of Directors of the Temecula Public Financing Authority at a meeting thereof held on the 24th day of January, 2017, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Randi Johl, Secretary RESOLUTION NO. TPFA 17- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF SPECIAL TAX REFUNDING BONDS RELATED TO THE TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH), APPROVING AND DIRECTING THE EXECUTION OF A FISCAL AGENT AGREEMENT AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS THE BOARD OF DIRECTORS OF THE TEMECULA PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The Board of Directors has conducted proceedings under and pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act"), to form the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District"), to authorize the levy of special taxes on the real property within the District, and to issue bonds secured by the special taxes the proceeds of which were to be used to finance certain public improvements, all as described in Resolution No. TPFA 05-01 adopted by the Board of Directors on January 11, 2005. Section 2. On April 27, 2006, the Temecula Public Financing Authority (the "Authority"), for and on behalf of the District, issued $51,250,000 principal amount of Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds (the "Prior Bonds"), with the Prior Bonds having been issued under a Fiscal Agent Agreement, dated as of March 1, 2006 (as amended by a Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of May 1, 2008, the "Prior Fiscal Agent Agreement") to finance facilities authorized to be funded by the District. Section 3. Due to favorable interest rates in the financial markets, the Board of Directors has determined that it is in the best interests of the Authority and the persons owning real property in the District that the Prior Bonds be refunded. Section 4. There have been submitted to the Board of Directors for its approval a Fiscal Agent Agreement (the "Fiscal Agent Agreement") providing for the issuance of special tax refunding bonds of the Authority for the District (the "Bonds") and the use of the proceeds of the Bonds to refund a portion of the Prior Bonds, as well as a Preliminary Official Statement (the "Preliminary Official Statement") describing the Bonds, a bond purchase agreement to be used in connection with the sale of the Bonds (the "Purchase Contract"), a Continuing Disclosure Agreement relating to the Bonds (the "Continuing Disclosure Agreement"), and an Escrow Agreement (the "Escrow Agreement") relating to the redemption of the Prior Bonds, and the Board of Directors, with the aid of City of Temecula staff, has reviewed said documents and found them to be in proper order. Section 5. 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 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. Section 6. Pursuant to the Act, Article 11, commencing with Section 53580, of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Refunding Law"), this Resolution and the Fiscal Agent Agreement, special tax bonds of the Authority for the District (described in Section 4 and elsewhere in this Resolution as the "Bonds"), in an aggregate principal amount not to exceed $10,500,000, are hereby authorized to be issued, with the Bonds to be designated the "Temecula Public Financing Authority Community Facilities District No. 03- 02 (Roripaugh Ranch) 2017 Special Tax Refunding Bonds." The Bonds shall be executed in the form set forth in and otherwise as provided in the Fiscal Agent Agreement. In furtherance of the issuance of the Bonds, the Board of Directors hereby makes the following findings and determinations: (a) it is prudent in the management of the fiscal affairs of the Authority, the Board of Directors and the District to issue the Bonds for the purpose of refunding a portion of the outstanding Prior Bonds; (b) the total net interest cost to maturity on the Bonds plus the principal amount of the Bonds will not exceed the total net interest cost to maturity of the portion of the Prior Bonds to be refunded with proceeds of the Bonds plus the principal amount of the portion of the Prior Bonds to be refunded with proceeds of the Bonds (by reason of the requirement for sale of the Bonds in clause (d) of Section 8 below); (c) the Bonds satisfy the requirements of Section 53345.8(a) of the Act in that the assessed value of the real property in the District that will be subject to the levy of special taxes to pay debt service on the Bonds is more than three times the principal amount of the Bonds, based upon the assessed value of the real property in the District as determined by reference to the Riverside County Assessor's records; and (d) the Bonds, when issued pursuant to the Fiscal Agent Agreement, will be in accordance with the Local Goals and Policies for Community Facilities Districts adopted by the Board of Directors on April 24, 2001. For purposes of Section 53363.2 of the Act: (i) it is expected that the purchase of the Bonds will occur on or after February 23, 2017; (ii) the date, denomination, maturity dates, places of payment and form of the Bonds shall be as set forth in the Fiscal Agent Agreement; (iii) the minimum rate of interest to be paid on the Bonds shall be one-half of one percent (0.5%) with the actual rate or rates to be set forth in the Fiscal Agent Agreement as executed; (iv) the place of payment for the Prior Bonds shall be as set forth in the Prior Fiscal Agent Agreement; and (v) the designated costs of issuing the Bonds shall be as described in Section 53363.8(a) of the Act, and as otherwise described in the Fiscal Agent Agreement hereafter approved, in the Official Statement for the Bonds and the closing certificates for the Bonds, including Bond Counsel and Disclosure Counsel fees and expenses, Underwriter's discount, municipal advisor fees and expenses, rating agency fees, costs of bond insurance and a debt service reserve surety bond, fees of a verification agent, printing costs for the Official Statement, initial fiscal agent fees, and costs of City staff and the City Attorney incurred in connection with the sale and issuance of the Bonds. Section 7. The Fiscal Agent Agreement with respect to the Bonds, in the form presented to the Board of Directors at this meeting, is hereby approved. The Executive Director, the Assistant Executive Director and the Treasurer (each a "Designated Officer"), each acting alone, are hereby authorized to execute and deliver the Fiscal Agent Agreement in said form, with such additions thereto or changes therein as are approved by the Designated Officer executing the Fiscal Agent Agreement upon consultation with the Authority's General Counsel and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Fiscal Agent Agreement by a Designated Officer. The Secretary is hereby authorized and directed to countersign the Fiscal Agent Agreement. The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms of the Bonds shall be as provided in the Fiscal Agent Agreement as finally executed. Section 8. The Purchase Contract between the Authority and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), in the form presented to the Board of Directors at this meeting, is hereby approved. The Designated Officers, each acting alone, are hereby authorized to accept the offer of the Underwriter to purchase the Bonds contained in the Purchase Contract; provided that (a) the aggregate principal amount of the Bonds sold thereby is not in excess of $10,500,000, (b) the true interest cost of the Bonds is not in excess of 5.00%, (c) the Underwriter's discount is not in excess of 1.50% of the aggregate principal amount of the Bonds, and (d) the requirements of clause (b) of the second paragraph of Section 6 above are satisfied. The Designated Officers, each acting alone, are hereby authorized to execute and deliver the Purchase Contract in said form (if the requirements of the preceding sentence are satisfied), with such additions thereto or changes therein as are recommended or approved by the Designated Officer executing such document upon consultation with the Authority's General Counsel and Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the execution and delivery of the Purchase Contract by a Designated Officer. The Secretary does not need to countersign the Purchase Contract. Section 9. The Preliminary Official Statement, in the form presented to the Board of Directors at this meeting, is hereby approved. The Designated Officers are hereby authorized, for and in the name and on behalf of the Authority, to make changes to the Preliminary Official Statement prior to its dissemination to prospective investors, and to bring the Preliminary Official Statement into the form of a final official statement (the "Official Statement") including such additions thereto or changes therein as are recommended or approved by any such officer upon consultation with the Authority's General Counsel and Disclosure Counsel. The Executive Director is hereby authorized and directed to execute and deliver the Official Statement. The Underwriter is hereby authorized to distribute copies of the Preliminary Official Statement to persons who may be interested in the purchase of the Bonds and is directed to deliver copies of the Official Statement to all actual purchasers of the Bonds. The Designated Officers, each acting alone, are hereby authorized to execute a certificate or certificates to the effect that the Official Statement and the Preliminary Official Statement were deemed "final" as of their respective dates for purposes of Rule 15c2-12 of the Securities Exchange Act of 1934, and each Designated Officer is authorized to so deem such statements final. Section 10. The Continuing Disclosure Agreement related to the Bonds, in the form appended as Appendix E to the Preliminary Official Statement, is hereby approved. The Designated Officers, each acting alone, are hereby authorized, for and in the name of and on behalf of the Authority, to execute and deliver the Continuing Disclosure Agreement in said form, with such additions thereto or changes therein as are deemed necessary, desirable or appropriate by the Designated Officer executing the Continuing Disclosure Agreement upon consultation with the Authority's General Counsel and Disclosure Counsel, the approval of such changes to be conclusively evidenced by the execution and delivery by a Designated Officer of the Continuing Disclosure Agreement. Section 11. The Board of Directors hereby approves the refunding of a portion of the Prior Bonds with the proceeds of the Bonds, in accordance with the provisions of the Prior Fiscal Agent Agreement and the Escrow Agreement between the Authority and U.S. Bank National Association, as Escrow Bank. The Board of Directors hereby approves the Escrow Agreement in the form presented to the Board of Directors at this meeting. The Designated Officers, each acting alone, are hereby authorized, for and in the name of and on behalf of the Authority, to execute and deliver the Escrow Agreement in said form, with such additions thereto or changes therein as are deemed necessary, desirable or appropriate by the Designated Officer executing the Escrow Agreement upon consultation with the Authority's General Counsel and Bond Counsel, the approval of such changes to be conclusively evidenced by the execution and delivery by a Designated Officer of the Escrow Agreement. The Secretary is hereby authorized and directed to countersign the Escrow Agreement. Section 12. The Authority hereby covenants, for the benefit of the Bondowners, to commence and diligently pursue to completion any foreclosure action regarding delinquent installments of any amount levied as a special tax for the payment of interest or principal of the Bonds, said foreclosure action to be commenced and pursued as more completely set forth in the Fiscal Agent Agreement. Section 13. The Bonds, when executed, shall be delivered to the Fiscal Agent (as defined in the Fiscal Agent Agreement) 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 Underwriter in accordance with written instructions executed on behalf of the Authority by a Designated Officer, which instructions each Designated Officer, acting alone, is hereby authorized, 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 Underwriter upon payment of the purchase price therefor. Section 14. The Designated Officers, each acting alone, are hereby authorized to provide to U.S. Bank National Association, in its capacity as fiscal agent for the Prior Bonds, direction to provide a notice of redemption of the Prior Bonds conditioned upon the issuance of the Bonds and of a series of special tax bonds by the Authority for its Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2), with said redemption to occur on March 1, 2017, said conditional notice of redemption to be in a form provided by Bond Counsel. Section 15. The law firm of Quint & Thimmig LLP is hereby designated as Bond Counsel and Disclosure Counsel to the Authority for the Bonds. The Executive Director is hereby authorized to execute an agreement with said firm for its services in connection with the Bonds, provided that the compensation payable to said firm is payable solely from the proceeds, and wholly contingent upon the issuance, of the Bonds. Section 16. All actions heretofore taken by the officers and agents of the Authority with respect to the sale and issuance of the Bonds and the refunding of the Prior Bonds are hereby approved, confirmed and ratified, and the proper officers of the Authority (including the Designated Officers and the Secretary) are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents (including but not limited to those related to bond insurance and a reserve fund surety bond for the Bonds) 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 refunding of the Prior Bonds in accordance with this Resolution, and any certificate, agreement, and other document described in the documents herein approved. Section 17. This Resolution shall take effect upon its adoption. PASSED, APPROVED, AND ADOPTED by the Board of Directors of the Temecula Public Financing Authority this 24th day of January, 2017. Maryann Edwards, Chair ATTEST: Randi Johl, Secretary [SEAL] STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, Secretary of the Temecula Public Financing Authority, do hereby certify that the foregoing Resolution No. TPFA 17- was duly and regularly adopted by the Board of Directors of the Temecula Public Financing Authority at a meeting thereof held on the 24th day of January, 2017, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSTAIN: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Randi Johl, Secretary Quint & Thimmig LLP 4/7/16 5/6/16 6/15/16 6/28/16 12/26/16 1/6/17 FISCAL AGENT AGREEMENT by and between the TEMECULA PUBLIC FINANCING AUTHORITY and U. S. BANK NATIONAL ASSOCIATION, as Fiscal Agent dated as of February 1, 2017 relating to: $ Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds 20009.13:J13843 TABLE OF CONTENTS ARTICLE 1 STATUTORY AUTHORITY AND DEFINITIONS Section 1.01. Authority for this Agreement 3 Section 1.02. Agreement for Benefit of Owners of the Bonds 3 Section 1.03. Definitions 3 ARTICLE 11 THE BONDS Section 2.01. Principal Amount; Designation 13 Section 2.02. Terms of the 2017 Bonds 13 Section 2.03. Redemption 15 Section 2.04. Form of Bonds 18 Section 2.05. Execution of Bonds 18 Section 2.06. Transfer of Bonds 19 Section 2.07. Exchange of Bonds 20 Section 2.08. Bond Register 20 Section 2.09. Temporary Bonds 20 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen 20 Section 2.11. Limited Obligation 21 Section 2.12. No Acceleration 21 Section 2.13. Book -Entry System 21 Section 2.12. Issuance of Parity Bonds 22 ARTICLE III ISSUANCE OF 2017 BONDS Section 3.01. Issuance and Delivery of 2017 Bonds 25 Section 3.02. Pledge of Special Tax Revenues 25 Section 3.03. Validity of Bonds 25 ARTICLE IV FUNDS AND ACCOUNTS Section 4.01. Application of Proceeds of Sale of 2017 Bonds and Other Moneys 26 Section 4.02. Improvement Fund 26 Section 4.03. Costs of Issuance Fund 27 Section 4.04. Reserve Fund 27 Section 4.05. Bond Fund 29 Section 4.06. Special Tax Fund 30 Section 4.07. Administrative Expense Fund 31 ARTICLE V OTHER COVENANTS OF THE AUTHORITY Section 5.01. Punctual Payment 33 Section 5.02. Limited Obligation 33 Section 5.03. Extension of Time for Payment 33 Section 5.04. Against Encumbrances 33 Section 5.05. Books and Records 33 Section 5.06. Protection of Security and Rights of Owners 33 Section 5.07. Compliance with Act 33 Section 5.08. Collection of Special Tax Revenues 33 Section 5.09. Covenant to Foreclose 34 Section 5.10. Further Assurances 35 Section 5.11. Private Activity Bond Limitations 35 Section 5.12. Federal Guarantee Prohibition 35 Section 5.13. Rebate Requirement 35 Section 5.14. No Arbitrage 36 Section 5.15. Yield of the 2017 Bonds 36 Section 5.16. Maintenance of Tax -Exemption 36 Section 5.17. Continuing Disclosure to Owners 36 Section 5.18. Reduction of Special Taxes 36 Section 5.19. Limits on Special Tax Waivers and Bond Tenders 37 Section 5.20. No Additional Bonds 37 -1- Section 5.21. Authority Bid at Foreclosure Sale 37 ARTICLE VI INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE AUTHORITY Section 6.01. Deposit and Investment of Moneys in Funds 38 Section 6.02. Limited Obligation 39 Section 6.03. Liability of Authority 39 Section 6.04. Employment of Agents by Authority 40 ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent 41 Section 7.02. Liability of Fiscal Agent 42 Section 7.03. Information 43 Section 7.04. Notice to Fiscal Agent 43 Section 7.05. Compensation, Indemnification 43 ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.01. Amendments Permitted 45 Section 8.02. Owners' Meetings 46 Section 8.03. Procedure for Amendment with Written Consent of Owners 46 Section 8.04. Disqualified Bonds 46 Section 8.05. Effect of Supplemental Agreement 47 Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments 47 Section 8.07. Amendatory Endorsement of Bonds 47 ARTICLE IX MISCELLANEOUS Section 9.01. Benefits of Agreement Limited to Parties 48 Section 9.02. Successor is Deemed Included in All References to Predecessor 48 Section 9.03. Discharge of Agreement 48 Section 9.04. Execution of Documents and Proof of Ownership by Owners 49 Section 9.05. Waiver of Personal Liability 49 Section 9.06. Notices to and Demands on Authority and Fiscal Agent 49 Section 9.07. State Reporting Requirements 50 Section 9.08. Partial Invalidity 51 Section 9.09. Unclaimed Moneys 51 Section 9.10. Applicable Law 51 Section 9.11. Conflict with Act 52 Section 9.12. Conclusive Evidence of Regularity 52 Section 9.13. Payment on Business Day 52 Section 9.14. Counterparts 52 EXHIBIT A — FORM OF 2017 BOND FISCAL AGENT AGREEMENT Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds THIS FISCAL AGENT AGREEMENT (the "Agreement"), dated as of February 1, 2017, is by and between the Temecula Public Financing Authority, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California (the "Authority") for and on behalf of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (the "District"), and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, as fiscal agent (the "Fiscal Agent"). RECITALS: WHEREAS, the Board of Directors of the Authority has formed the District under the provisions of the Mello -Roos Community Facilities Act of 1982, as amended (Section 53311, et seq. of the California Government Code) (the "Act") and Resolution No. TPFA 16- of the Board of Directors of the Authority adopted on April 26, 2016 (the "Resolution of Formation"); WHEREAS, the Board of Directors of the Authority, as the legislative body for the District, is authorized under the Act to levy special taxes to pay for the costs of 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 January 24, 2017 the Board of Directors of the Authority adopted its Resolution No. TPFA 17- (the "Resolution"), which resolution authorized the issuance and sale of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds (the "2017 Bonds") in an aggregate principal amount of not to exceed $ , and authorized the execution of this Agreement; 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 to be levied in the District and the owners of the 2017 Bonds that the Authority enter into this Agreement to provide for the issuance of the 2017 Bonds, the disbursement of proceeds of the 2017 Bonds, the disposition of the special taxes securing the 2017 Bonds and the administration and payment of the 2017 Bonds; and WHEREAS, the Authority has determined that all things necessary to cause the 2017 Bonds, when executed by the Authority for and on behalf of 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 and on behalf of the District in accordance with their terms, and all things necessary to cause the creation, authorization, execution and delivery of this Agreement and the creation, authorization, execution and issuance of the 2017 Bonds, subject to the terms hereof, have in all respects been duly authorized. -1- AGREEMENT: 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: -2- ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS 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 Owners of the Bonds. 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 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 Agreement. Any action by any Owner to enforce the provisions of this Agreement shall be for the equal benefit and protection of all Owners of the Bonds. 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 if 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 Expenses" means costs directly related to the administration of the District consisting of the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the Treasurer or designee thereof or both) and the costs of collecting the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxes to the Fiscal Agent; fees and costs of the Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under this Agreement; the costs of the Authority, the City or any designee of either the Authority or the City of complying with the disclosure provisions of the Act, the Continuing Disclosure Agreement and this Agreement, including those related to public inquiries regarding the Special Tax and disclosures to Bondowners and the Original Purchaser; the costs of the Authority, the City or any designee of either the Authority or the City related to an appeal of the Special Tax; any amounts required to be rebated to the federal government in order for the Authority to comply with Section 5.13; an allocable share of the salaries of the City staff directly related to the foregoing and a proportionate amount of City general administrative overhead related thereto. Administrative Expenses shall also include amounts advanced by the Authority or the City for any administrative purpose of the District, including costs related to prepayments of Special Taxes, recordings related to such prepayments and satisfaction of Special Taxes, amounts advanced to ensure compliance with Section 5.13, administrative costs related to the administration of any joint community facilities agreement regarding the District, and the costs of commencing and pursuing foreclosure of delinquent Special Taxes. Administrative Expenses shall include any such expenses incurred in prior years but not yet paid. -3- "Administrative Expense Fund" means the fund by that name established by Section 4.07(A) hereof. "Agreement" 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 (including by reason of the provisions of Section 2.03(A)(ii) providing for mandatory sinking payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking payment due in such Bond Year pursuant to Section 2.03(A)(ii)). "Auditor" means the auditor/controller of the County, or such other official at the County who is responsible for preparing property tax bills. "Authority" means the Temecula Public Financing Authority and any successor thereto. "Authority Attorney" means any attorney or firm of attorneys employed by the Authority or the City in the capacity of general counsel to the Authority. "Authorized Denominations" means with respect to the 2017 Bonds (i) prior to the 2017 Bond Transfer Restriction Release Date, $100,000 and integral multiples of $5,000 in excess of $100,000, provided however that one 2017 Bond may be in a denomination less than $100,000 as a result of any partial redemption of 2017 Bonds prior to the 2017 Bond Transfer Restriction Release Date pursuant to Section 2.03 hereof, and (ii) on and after the 2017 Bond Transfer Restriction Release Date, $5,000 and integral multiples thereof. "Authorized Officer" means the Chairperson, Executive Director, Treasurer or Secretary of the Authority, or any other officer or employee of the Authority or the City 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. "Beneficial Owner" has the meaning given to such term in Section 2.13 hereof. "Bond Counsel" means (i) Quint & Thimmig LLP, or (ii) any other 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 4.05(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 2nd in each year and ending on September 1st in the following year, except that the first Bond Year shall begin on the Closing Date and end on September 1, 2017. "Bonds" means the 2017 Bonds, and, if the context requires, any Parity Bonds, at any time Outstanding under this Agreement or any Supplemental Agreement. -4- "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 principal corporate trust office are authorized or obligated by law or executive order to be closed. "CDIAC" means the California Debt and Investment Advisory Commission of the office of the State Treasurer of the State of California or any successor agency or bureau thereto. "City" means the City of Temecula, California. "Closing Date" means February _, 2017, being the date upon which there is a physical delivery of the 2017 Bonds in exchange for the amount representing the purchase price of the 2017 Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the 2017 Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the 2017 Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Continuing Disclosure Agreement" means that certain Continuing Disclosure Agreement pertaining to the 2017 Bonds, dated as of February 1, 2017, between the Authority and Albert A. Webb Associates as dissemination agent, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the Authority or the City and related to the authorization, sale and issuance of the 2017 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 City or the Authority in connection with the issuance of the 2017 Bonds, special tax consultant fees and expenses, Bond (underwriter's) discount, legal fees and charges, including bond counsel and disclosure counsel, municipal advisor's fees, appraisal and market consultant fees, charges for execution, transportation and safekeeping of the 2017 Bonds, and other costs, charges and fees in connection with the foregoing. hereof. "Costs of Issuance Fund" means the fund by that name established by Section 4.03(A) "County" means the County of Riverside, California. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Debt Service" means the scheduled amount of interest and amortization of principal (including principal payable by reason of Section 2.03(A)(ii)) on the Bonds and the scheduled amount of interest and amortization of principal payable on any Parity 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. -5- "Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.13. "District" means the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2), formed by the Authority under the Act and the Resolution of Formation. "District Value" means the market value, as of the date of the appraisal described below and/or the date of the most recent County real property tax roll, as applicable, of all parcels of real property in the District subject to the levy of the Special Taxes and not delinquent in the payment of any Special Taxes then due and owing, including with respect to such nondelinquent parcels the value of the then existing improvements and any facilities to be constructed or acquired with any amounts then on deposit in the Improvement Fund and with the proceeds of any proposed series of Parity Bonds, as determined with respect to any parcel or group of parcels by reference to (i) an appraisal performed within six (6) months of the date of issuance of any proposed Parity Bonds by an MAI appraiser (the "Appraiser") selected by the Authority, or (ii) in the alternative, the assessed value of all such nondelinquent parcels and improvements thereon as shown on the then current County real property tax roll available to the Treasurer. It is expressly acknowledged that, in determining the District Value, the Authority may rely on an appraisal to determine the value of some or all of the parcels in the District and/or the most recent County real property tax roll as to the value of some or all of the parcels in the District. Neither the Authority nor the Treasurer shall be liable to the Owners, the Original Purchaser or any other person or entity in respect of any appraisal provided for purposes of this definition or by reason of any exercise of discretion made by any Appraiser pursuant to this definition. "Escrow Agreement" means the Escrow Agreement, dated as of February 1, 2017, by and between the Authority and the Escrow Bank. "Escrow Bank" means U.S. Bank National Association, in its capacity as escrow bank under the Escrow Agreement. "Escrow Release Test" means, with respect to the release of funds from an escrow fund of the character described in the last sentence of Section 2.14(D), that the provisions of the first sentence of Section 2.14(D) are satisfied, taking into account in respect of the principal amount of the Parity Bonds, the amount then to be released from such escrow fund. "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 if at all times during which the investment is held its yield is reasonably -6- expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. "Federal Securities" means any of the following which are non -callable 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: (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. "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. "Fitch" means Fitch, Inc. and any successor 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. "Improvement Fund" means the fund by that name created by and held by the Fiscal Agent pursuant to Section 4.02(A) hereof. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the Authority, the City or the Treasurer, and who, or each of whom: (i) is judged by the person or entity that approved them 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 City or the Authority as an officer or employee of the City or the Authority, but who may be regularly retained to make reports to the City or the Authority. "Information Services" means the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board (at http://emma.msrb.org); 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. -7- "Interest Payment Dates" means March 1 and September 1 of each year, commencing September 1, 2017. "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Moody's" means Moody's Investors Service, and any successor thereto. "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 Stifel, Nicolaus & Company, Incorporated, the first purchaser of the 2017 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 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 is the registered owner of any particular Outstanding Bond. "Parity Bonds" means bonds issued by the Authority for the District and secured on a parity with any then Outstanding Bonds pursuant to Section 2.14 hereof. "Participating Underwriter" shall have the meaning ascribed thereto in the Continuing Disclosure Agreement. "Permitted Investments" means any of the following, but only to the extent that the same are acquired at Fair Market Value: (a) Federal Securities. (b) Registered state warrants or treasury notes or bonds of the State of California (the "State"), including bonds payable solely out of the revenues from a revenue- producing property owned, controlled, or operated by the State or by a department, board, agency, or authority of the State, which are rated in one of the two highest short- term or Tong -term rating categories by either Moody's or S&P, and which have a maximum term to maturity not to exceed three years. (c) Unsecured certificates of deposit, time deposits and bankers' acceptance of any bank the short-term obligations of which are rated on the date of purchase "A-1+" or better by S&P and "P-1" by Moody's and or certificates of deposit (including those of the Fiscal Agent, its parent and its affiliates) secured at all times by collateral that may be used by a national bank for purposes of satisfying its obligations to collateralize pursuant to federal law which are issued by commercial banks, savings and loan associations or -8- mutual savings bank whose short-term obligations are rated on the date of purchase A-1 or better by S&P, Moody's and Fitch. (d) Commercial paper which at the time of purchase is of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided by either Moody's or S&P, which commercial paper is limited to issuing corporations that are organized and operating within the United States of America and that have total assets in excess of five hundred million dollars ($500,000,000) and that have an "A" or higher rating for the issuer's debentures, other than commercial paper, by either Moody's or S&P, provided that purchases of eligible commercial paper may not exceed 180 days' maturity nor represent more than 10 percent of the outstanding commercial paper of an issuing corporation. Purchases of commercial paper may not exceed 20 percent of the total amount invested pursuant to this definition of Permitted Investments. (e) A repurchase agreement with a state or nationally charted bank or trust company or a national banking association or government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York, provided that all of the following conditions are satisfied: (1) the agreement is secured by any one or more of the securities described in subdivision (a) of this definition of Permitted Investments, (2) the underlying securities are required by the repurchase agreement to be held by a bank, trust company, or primary dealer having a combined capital and surplus of at least one hundred million dollars ($100,000,000) and which is independent of the issuer of the repurchase agreement, and (3) the underlying securities are maintained at a market value, as determined on a marked -to -market basis calculated at least weekly, of not less than 103 percent of the amount so invested. (f) An investment agreement or guaranteed investment contract with, or guaranteed by, a financial institution the long-term unsecured obligations of which are rated Aa2 and "AA" or better, respectively, by Moody's and S&P at the time of initial investment. The investment agreement shall be subject to a downgrade provision with at least the following requirements: (1) the agreement shall provide that within five business days after the financial institution's long-term unsecured credit rating has been withdrawn, suspended, other than because of general withdrawal or suspension by Moody's or S&P from the practice of rating that debt, or reduced below "AA-" by S&P or below "Aa3" by Moody's (these events are called "rating downgrades") the financial institution shall give notice to the Authority and, within the five-day period, and for as long as the rating downgrade is in effect, shall deliver in the name of the Authority or the Fiscal Agent to the Authority or the Fiscal Agent Federal Securities allowed as investments under subdivision (a) of this definition of Permitted Investments with aggregate current market value equal to at least 105 percent of the principal amount of the investment agreement invested with the financial institution at that time, and shall deliver additional allowed federal securities as needed to maintain an aggregate current market value equal to at least 105 percent of the principal amount of the investment agreement within three days after each evaluation date, which shall be at least weekly, and (2) the agreement shall provide that, if the financial institution's long-term unsecured credit rating is reduced below "A3" by Moody's or below "A-" by S&P, the Fiscal Agent or the Authority may, upon not more than five business days' written notice to the financial institution, withdraw the investment agreement, with accrued but unpaid interest thereon to the date, and terminate the agreement. (g) The Local Agency Investment Fund of the State of California. -9- (h) Investments in a money market fund (including any funds of the Fiscal Agent or its affiliates and including any funds for which the Fiscal Agent or its affiliates provides investment advisory or other management services) rated in the highest rating category (without regard to plus (+) or minus (-) designations) by Moody's or S&P. (i) Any other lawful investment for City funds. "Principal Office" means the corporate trust office of the Fiscal Agent set forth in Section 9.06, except for the purpose of maintenance of the registration books and presentation of Bonds for payment, transfer or exchange, such term shall mean 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. "Project" means the facilities eligible to be funded by the District, as more particularly described in the Resolution of Formation. "Qualified Institutional Buyer" means a "qualified institutional buyer" within the meaning of Rule 144A promulgated under the Securities Act of 1933, as amended. "Rate and Method of Apportionment of Special Taxes" means the rate and method of apportionment of special taxes for the District, as approved pursuant to the Resolution of Formation, and as it may be modified from time to time in accordance with the Act. "Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such day is a Business Day. "Refunding Bonds" means bonds issued by the Authority for the District the net proceeds of which are used to refund all or a portion of the then Outstanding Bonds; provided that the debt service on the Refunding Bonds in any Bond Year is not in excess of the debt service on the Bonds being refunded and the final maturity of the Refunding Bonds is not later than the final maturity of the Bonds being refunded. "Reserve Fund" means the fund by that name established pursuant to Section 4.04(A) hereof. "Reserve Requirement" means, as of any date of calculation, an amount equal to the least of (i) the then Maximum Annual Debt Service, (ii) one hundred twenty-five percent (125%) of the then average Annual Debt Service, or (iii) ten percent (10%) of the then Outstanding principal amount of the Bonds. The Reserve Requirement as of the Closing Date is $ "Resolution" means Resolution No. TPFA 17- , adopted by the Board of Directors of the Authority on January 24, 2017. "Resolution of Formation" means Resolution No. TPFA 16- , adopted by the Board of Directors of the Authority on April 26, 2016. "S&P" means S&P Global Ratings, and any successor thereto. -10- "Securities Depositories" means The Depository Trust Company, 55 Water Street, New York, New York 10041-0099, Fax (212) 855-7232; 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. "Special Tax A" shall have the meaning given such term in the Rate and Method of Apportionment of Special Taxes. "Special Tax B" shall have the meaning given such term in the Rate and Method of Apportionment of Special Taxes. "Special Tax Fund" means the fund by that name established by Section 4.06(A) hereof. "Special Tax Prepayments" means the proceeds of any prepayments of Special Tax A received by the Authority, as calculated pursuant to the Rate and Method of Apportionment of the Special Taxes, less any administrative fees or penalties collected as part of any such prepayment. "Special Tax Prepayments Account" means the account by that name established within the Bond Fund by Section 4.05(A) hereof. "Special Tax Revenues" means the proceeds of the Special Taxes received by the Authority, including any scheduled payments and any prepayments thereof, interest 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 and interest thereon. "Special Tax Revenues" does not include any penalties collected in connection with delinquent Special Taxes, which amounts may be deposited to the Administrative Expense Fund or otherwise disposed of as determined by the Treasurer consistent with any applicable provisions of the Act. "Special Taxes" means the Special Tax A levied within the District pursuant to the Act, the Ordinance, the Rate and Method of Apportionment of Special Taxes and this Agreement. "Supplemental 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. "Tax Consultant" means any independent financial or tax consultant retained by the Authority or the City for the purpose of computing the Special Taxes. "Treasurer" means the Treasurer of the Authority or such other officer or employee of the Authority performing the functions of the chief financial officer of the Authority. "2017 Bonds" means the Bonds so designated and authorized to be issued under Section 2.01 hereof. "2017 Bond Transfer Restriction Release Date" means the date which is five (5) Business Days after the date the Authority posts on the Municipal Securities Rulemaking Board's EMMA website a continuing disclosure notice pursuant to the Continuing Disclosure Agreement to the effect that (a) seventy-five percent (75%) of the Special Tax levied in the then -11- current Fiscal Year was levied on assessor parcels that are owned by individual owners; (b) no property owner owns Taxable Property (as defined in the Rate and Method of Apportionment of Special Taxes) responsible more than fifteen percent (15%) of the Special Tax levy for such Fiscal Year; and (c) the assessed value of Taxable Property in the District is at least four times the principal amount of the Bonds then outstanding. -12- ARTICLE II THE BONDS Section 2.01. Principal Amount; Designation. 2017 Bonds in the aggregate principal amount of Million Thousand Dollars ($ ) are authorized to be issued by the Authority for and on behalf of 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 2017 Bonds are hereby designated as the "Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds." Section 2.02. Terms of the 2017 Bonds. (A) Form; Denominations. The 2017 Bonds shall be issued in fully registered form without coupons in Authorized Denominations. (B) Date of 2017 Bonds. The 2017 Bonds shall be dated the Closing Date. (C) CUSIP Identification Numbers. "CUSIP" identification numbers shall be imprinted on the 2017 Bonds, but such numbers shall not constitute a part of the contract evidenced by the 2017 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 2017 Bonds. In addition, failure on the part of the Authority or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the Authority's contract with such Owners and shall not impair the effectiveness of any such notice. (D) Maturities, Interest Rates. The 2017 Bonds shall mature and become payable on September 1 in each of the years, and shall bear interest at the rates per annum as follows: -13- Maturity Date (September 1) Principal Amount Interest Rate (E) Interest. The 2017 Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360 -day year composed of twelve 30 -day months. Each 2017 Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such date of authentication, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a 2017 Bond, interest is in default thereon, such 2017 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. (F) Method of Payment. Interest on the 2017 Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on the Interest Payment Dates by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the Bond Register maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer (i) to the Depository (so long as the Bonds are in book -entry form pursuant to Section 2.13), or (ii) to an account within the United States made on such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds received before the applicable Record Date, which instructions shall continue in effect until revoked in writing, or until such Bonds are transferred to a new Owner. The principal of the 2017 Bonds and any premium on the 2017 Bonds are payable by check in lawful money of the United States of America upon surrender of the 2017 Bonds at the Principal Office of the Fiscal Agent. All 2017 Bonds paid by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled 2017 Bonds and issue a certificate of destruction thereof to the Authority upon the Authority's request. -14- Section 2.03. Redemption. (A) Redemption Dates. (i) Optional Redemption. The 2017 Bonds maturing on or after September 1, 2028 are subject to optional redemption prior to their stated maturity on any Interest Payment Date occurring on or after September 1, 2027, as a whole, or in part in an amount equal to $5,000 or any integral multiple thereof and among maturities so as to maintain substantially level debt service on the Bonds, and by lot within a maturity, at a redemption price equal to the principal amount of the 2017 Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. (ii) Mandatory Sinking Payment Redemption. The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date 1September 1) Sinking Payments -15- The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The amounts in the foregoing tables shall be reduced to the extent practicable so as to maintain level debt service on the 2017 Bonds, as a result of any prior partial redemption of the 2017 Bonds pursuant to Section 2.03(A)(i) above or Section 2.03(A)(iii) below, as specified in writing by the Treasurer to the Fiscal Agent. (iii) Redemption From Special Tax Prepayments. Special Tax Prepayments and any corresponding transfers from the Reserve Fund pursuant to Section 4.05(B)(ii) and Section 4.04(F), respectively, shall be used to redeem 2017 Bonds in whole, or in part in an amount equal to $5,000 or any integral multiple thereof, on the next Interest Payment Date for which notice of redemption can timely be given under Section 2.03(D), by lot within a maturity and allocated among maturities of the 2017 Bonds so as to maintain substantially level debt service on the Bonds, at a redemption price (expressed as a percentage of the principal amount of the 2017 Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption: -16- Redemption Dates Redemption Prices any Interest Payment Date from September 1, 103% 2017 to and including March 1, September 1, and March 1, 102 September 1, and March 1, 101 September 1, and any Interest Payment 100 Date thereafter (B) Notice to Fiscal Agent. The Authority shall give the Fiscal Agent written notice of its intention to redeem 2017 Bonds pursuant to subsection (A)(i) or (A)(iii) not Tess than forty-five (45) days prior to the applicable redemption date, or such lesser number of days as the Fiscal Agent shall allow. (C) Purchase of Bonds in Lieu of Redemption. In lieu of redemption under Section 2.03(A), moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2017 Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase prior to the selection of 2017 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 2017 Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase and any premium which would otherwise be due if such 2017 Bonds were to be redeemed in accordance with this Agreement. (D) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, or by such other means as is acceptable to the recipient thereof, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories, to one or more Information Services (or by such other means as permitted by such services), and to the respective registered Owners of any 2017 Bonds designated for redemption, at their addresses appearing on the Bond Register; 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 2017 Bonds. Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding 2017 Bonds are to be called for redemption, shall designate the CUSIP numbers and, if applicable, Bond numbers of the 2017 Bonds to be redeemed by giving the individual CUSIP number and, if applicable, Bond number of each 2017 Bond to be redeemed or if Bond numbers have been assigned by the Fiscal Agent to the 2017 Bonds shall state that all 2017 Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the 2017 Bonds of one or more maturities have been called for redemption, shall state as to any 2017 Bond called in part the principal amount thereof to be redeemed, and shall require that such 2017 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 2017 Bonds will not accrue from and after the redemption date. Notwithstanding the foregoing, in the case of any redemption of the 2017 Bonds under Section 2.03(A)(i) above, the notice of redemption may state that the redemption is conditioned upon receipt by the Fiscal Agent of sufficient moneys to redeem the 2017 Bonds on the -17- anticipated redemption date, and that the redemption shall not occur if by no later than the scheduled redemption date sufficient moneys to redeem the 2017 Bonds have not been deposited with the Fiscal Agent. In the event that the Fiscal Agent does not receive sufficient funds by the scheduled redemption date to so redeem the 2017 Bonds to be redeemed, the Fiscal Agent shall send written notice to the owners of the 2017 Bonds, to the Securities Depositories and to one or more of the Information Services to the effect that the redemption did not occur as anticipated, and the 2017 Bonds for which notice of redemption was given shall remain Outstanding for all purposes of this Agreement. Upon the payment of the redemption price of 2017 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, the 2017 Bonds being redeemed with the proceeds of such check or other transfer. Whenever provision is made in this Agreement for the redemption of less than all of the 2017 Bonds (other than a redemption pursuant to Section 2.03(A)(ii)), the Fiscal Agent shall select the 2017 Bonds to be redeemed, from all 2017 Bonds or such given portion thereof not previously called for redemption, among maturities as directed in writing by the Treasurer (who shall specify 2017 Bonds to be redeemed so as to maintain substantially level debt service on the Bonds), and by lot within a maturity in any manner which the Fiscal Agent deems appropriate. Upon surrender of 2017 Bonds redeemed in part only, the Authority shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the Authority, a new 2017 Bond or 2017 Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the 2017 Bond or 2017 Bonds. (E) Effect of Redemption. 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 2017 Bonds so called for redemption shall have been deposited in the Bond Fund, such 2017 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. (F) Redemption of Parity Bonds. Redemption provisions, if any, pertaining to any Parity Bonds shall be set forth in the Supplemental Agreement providing for such Parity Bonds. Section 2.04. Form of Bonds. The 2017 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 manual or facsimile signatures of its Chairperson and Secretary. 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 if 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. -18- Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, executed 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. (A) General. Any Bond may, in accordance with its terms, be transferred, upon the Bond Register 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 acceptable to 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 of authorized denomination(s). 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, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. (B) Additional Transfer Restrictions Prior to 2017 Bond Transfer Restriction Release Date. Prior to the 2017 Bond Transfer Restriction Release Date, no transfer, sale or other disposition of any 2017 Bond, or any beneficial interest therein, may be made except to an entity that the transferor reasonably believes is a Qualified Institutional Buyer that is purchasing such 2017 Bond for its own account for investment purposes and not with a view to distributing such 2017 Bond. Each transferee of a 2017 Bond, or any beneficial interest therein, transferred prior to the 2017 Bond Transfer Restriction Release Date, by its purchase thereof, shall be deemed to have represented that such transferee is a Qualified Institutional Buyer that is purchasing such 2017 Bond for its own account for investment purposes and not with a view to distributing such 2017 Bond. Each 2017 Bond delivered prior to the 2017 Bond Transfer Restriction Release Date shall bear a legend describing or referencing the foregoing restriction on transferability. Each entity that is or that becomes a Beneficial Owner of a 2017 Bond prior to the 2017 Bond Transfer Restriction Release Date shall be deemed by the acceptance or acquisition of such beneficial ownership interest to have agreed to be bound by the provisions of this subsection 2.06(B). The transferor of a 2017 Bond transferred prior to the 2017 Bond Transfer Restriction Release Date agrees to provide notice to any proposed assignee of a beneficial ownership interest in the purchased 2017 Bond of the restriction on transfer described herein. Any Owner or Beneficial Owner effecting a transfer, sale or other disposition of a 2017 Bond, or beneficial interest therein, prior to the 2017 Bond Transfer Restriction Release Date shall, and does hereby agree to, indemnify the Authority and the Fiscal Agent against any liability that may result if such transfer, sale or other disposition is not made in accordance with this Section 2.06(B). -19- From and after the 2017 Bond Transfer Restriction Release Date, the restrictions on transfer of the 2017 Bonds described in this Section 2.06(B) shall not apply; and, from and after such date, 2017 Bonds may be transferred to any person in accordance with, and upon compliance with the requirements of, the provisions of Section 2.06(A) hereof. 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 series and 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. 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, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. 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 -20- by it and destroyed by the Fiscal Agent who shall deliver a certificate of destruction thereof to the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to the Fiscal Agent 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. All obligations of the Authority under this Agreement and the Bonds shall be special obligations of the Authority, payable solely from the Special Tax Revenues and the funds pledged therefore hereunder. Neither the faith and credit nor the taxing power of the Authority (except with respect to the levy of Special Taxes in the District, to the limited extent set forth herein) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds. The City has no obligations whatsoever under this Agreement or otherwise with respect to 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 redemption of Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of this Agreement under Section 9.03 hereof. Section 2.13. Book -Entry System. DTC shall act as the initial Depository for the 2017 Bonds. One 2017 Bond for each maturity of the 2017 Bonds shall be initially executed, authenticated, and 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 2017 Bonds shall be registered in the Bond Register 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 Fiscal Agent are hereby authorized to take any and all actions as may be necessary and not inconsistent with this Agreement 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 Bond Register in the name of Cede & Co., as nominee of DTC, neither the Authority nor the Fiscal Agent 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 Fiscal Agent 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 -21- 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 as set forth above, the Fiscal Agent 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 Fiscal Agent shall pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown on the Bond Register, 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 amounts so paid. No person other than an Owner, as shown on the Bond Register, shall receive a physical Bond. Upon delivery by DTC to the Fiscal Agent 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 2.06 hereof, references to "Cede & Co." in this Section 2.13 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 Fiscal Agent 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 Fiscal Agent. 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 if the Authority determines that it is in the best interest of the Beneficial Owners of the 2017 Bonds that they be able to obtain certificated 2017 Bonds, the 2017 Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names the Owners shall designate at that time, in accordance with Section 2.06. To the extent that the Beneficial Owners are designated as the transferee by the Owners, in accordance with Section 2.06, the 2017 Bonds will be delivered to such Beneficial Owners as soon as practicable. Section 2.14. Issuance of Parity Bonds. The Authority may issue one or more series of Parity Bonds, in addition to the 2017 Bonds authorized under Section 2.01 hereof, by means of a Supplemental Agreement and without the consent of any Bondowners, upon compliance with the provisions of this Section 2.14. Only bonds that comply with the requirements of this Section 2.14 shall be Parity Bonds, and such Parity Bonds shall constitute Bonds hereunder and shall be secured by a lien on the Special Tax Revenues and funds pledged for the payment -22- of the Bonds hereunder on a parity with all other Bonds Outstanding hereunder. The Authority may issue Parity Bonds subject to the following specific conditions precedent: (A) Current Compliance. The Authority shall be in compliance in all material respects on the date of issuance of the Parity Bonds with all covenants set forth in this Agreement and all Supplemental Agreements, and the principal amount of the Parity Bonds shall not cause the Authority to exceed the maximum authorized indebtedness of the District under the provisions of the Act. (B) Payment Dates. The Supplemental Agreement providing for the issuance of such Parity Bonds shall provide that interest thereon shall be payable on March 1 and September 1, and principal thereof shall be payable on September 1 in any year in which principal is payable (provided that there shall be no requirement that any Parity Bonds pay interest on a current basis). (C) Funds and Accounts; Reserve Fund Deposit. The Supplemental Agreement providing for the issuance of such Parity Bonds may provide for the establishment of separate funds and accounts, and shall provide for a deposit to the Reserve Fund (or to a separate account created for such purpose) in an amount necessary so that the amount on deposit in the Reserve Fund (together with the amount in any such separate account), following the issuance of such Parity Bonds, is at least equal to the Reserve Requirement. (D) Value -to -Lien Ratio. The District Value shall be at least three times the sum of: (i) the aggregate principal amount of all Bonds then Outstanding, plus (ii) the aggregate principal amount of the series of Parity Bonds proposed to be issued, plus (iii) the aggregate principal amount of any fixed assessment liens on the parcels in the District subject to the levy of Special Taxes, plus (iv) a portion of the aggregate principal amount of any and all other community facilities district bonds then outstanding and payable at least partially from special taxes to be levied on parcels of land within the District (the "Other District Bonds") equal to the aggregate principal amount of the Other District Bonds multiplied by a fraction, the numerator of which is the amount of special taxes levied for the Other District Bonds on parcels of land within the District, and the denominator of which is the total amount of special taxes levied for the Other District Bonds on all parcels of land against which the special taxes are levied to pay the Other District Bonds (such fraction to be determined based upon the maximum special taxes which could be levied in the year in which maximum annual debt service on the Other District Bonds occurs), based upon information from the most recent available Fiscal Year. For purposes of this Section 2.14(D), there shall be excluded from the principal amount of any Parity Bonds the portion thereof (if any) representing amounts on deposit in an escrow fund established by the Authority with the Fiscal Agent that can only be (i) released from such escrow fund to the Improvement Fund if the Escrow Release Test is satisfied in respect of the portion to be so moved to the Improvement Fund, or (ii) used to redeem Bonds on the next available redemption date if the Escrow Release Test is not satisfied with respect to any funds in such escrow fund within no more than three (3) years from the date of deposit of funds into the escrow fund. (E) The Special Tax Coverage. The Authority shall obtain a certificate of a Tax Consultant to the effect that the amount of the maximum Special Taxes that may be levied in each Fiscal Year during the term of the Bonds and the proposed Parity Bonds on Taxable Property (as defined in the Rate and Method of Apportionment of Special -23- Taxes) not then delinquent in the payment of Special Taxes theretofore levied on such property, based upon the status of the land in the District as of the date of issuance of the Parity Bonds, less an amount sufficient to pay annual Administrative Expenses (as determined by the Treasurer), shall be at least one hundred ten percent (110°/x) of the total Annual Debt Service for each such Fiscal Year on the Bonds and the proposed Parity Bonds. (F) Escrow Release. There are no funds in any escrow fund described in the last sentence of subsection (D) above. (G) Officer's Certificate. The Authority shall deliver to the Fiscal Agent an Officer's Certificate certifying that the conditions precedent to the issuance of such Parity Bonds set forth in subsections (A), (B), (C), (D), (E) and (F) of this Section 2.14 have been satisfied. In delivering such Officer's Certificate, the Authorized Officer that executes the same may conclusively rely upon such certificates of the Fiscal Agent, the Tax Consultant and others selected with due care, without the need for independent inquiry or certification. Notwithstanding the foregoing, the Authority may issue Refunding Bonds as Parity Bonds without the need to satisfy the requirements of subsections (D), (E) and (F) above, and without limitation on the number of series of such Refunding Bonds; and, in connection therewith, the Officer's Certificate in clause (G) above need not make reference to said subsections (D), (E) and (F). Nothing in this Section 2.14 shall prohibit the Authority from issuing bonds or otherwise incurring debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof under Section 3.02 of this Agreement. -24- ARTICLE III ISSUANCE OF 2017 BONDS Section 3.01. Issuance and Delivery of 2017 Bonds. At any time after the execution of this Agreement, the Authority may issue the 2017 Bonds for the District in the aggregate principal amount set forth in Section 2.01 and deliver the 2017 Bonds to the Original Purchaser. The Authorized Officers of the Authority are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the 2017 Bonds in accordance with the provisions of the Act, the Resolution and this Agreement, to complete the prepayment of the special taxes authorized to be levied for the Authority's Community Facilities District No. 03-02 (Roripaugh Ranch) on property in the District, to authorize the payment of Costs of Issuance from the proceeds of the 2017 Bonds, to authorize withdrawals from the Improvement Fund, and to do and cause to be done any and all acts and things necessary or convenient for delivery of the 2017 Bonds to the Original Purchaser. Section 3.02. Pledge of Special Tax Revenues. The Bonds shall be secured by a first pledge of all of the Special Tax Revenues (other than the Special Tax Revenues to be deposited to the Administrative Expense Fund pursuant to clause (i) of the second paragraph of Section 4.06(A)) and all moneys deposited in the Bond Fund (including 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 Improvement Fund, the Costs of Issuance Fund, and the Special Tax Revenues to be deposited to the Administrative Expense Fund pursuant to clause (i) of the second paragraph of Section 4.06(A), are not pledged to the repayment of the Bonds. The Project is not in any way pledged to pay the Debt Service on the Bonds. Any proceeds of condemnation or destruction of any portion of the Project are not pledged to pay the Debt Service on the Bonds and are free and clear of any lien or obligation imposed hereunder. Section 3.03. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the performance by any person of such persons obligation(s) with respect to the Project. -25- ARTICLE IV FUNDS AND ACCOUNTS Section 4.01. Application of Proceeds of Sale of 2017 Bonds and Other Moneys. The proceeds of the purchase of the 2017 Bonds by the Original Purchaser (being $ ) shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date as follows: (A) deposit $ in the Costs of Issuance Fund; (B) deposit $ in the Reserve Fund (being an amount equal to the initial Reserve Requirement); (C) deposit $ to a temporary account on the records of the Fiscal Agent hereby created for such purpose, for immediate transfer to the Treasurer, for deposit by the Treasurer in the Administrative Expense Fund; (D) deposit $ in the Improvement Fund; and (E) transfer $ to the Escrow Bank for deposit in the Refunding Fund established under the Escrow Agreement, said amount representing a prepayment in whole of special taxes authorized to be levied by the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) on property in the District. The Fiscal Agent may establish a temporary fund or account in its records to facilitate any of the deposits or transfers referred to in this Section 4.01. Section 4.02. Improvement Fund (A) Establishment of Improvement Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Improvement Fund (the "Improvement Fund"). Deposits shall be made to the Improvement Fund as required by Section 4.01(D) and clause (iv) of the second paragraph of Section 4.06(A). Moneys in the Improvement Fund shall be held by the Fiscal Agent for the benefit of the Authority, and shall be disbursed for the payment or reimbursement of costs of the Project. (B) Procedure for Disbursement. Disbursements from the Improvement Fund shall be made by the Fiscal Agent upon receipt of an Officer's Certificate, which shall: (a) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made (which shall be for a Project cost), that the disbursement is a proper expenditure from the Improvement Fund, and the person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. In making disbursements from the Improvement Fund, the Fiscal Agent shall use amounts deposited thereto pursuant to Section 4.01(D) and any proceeds of any Parity Bonds deposited thereto, and any investment earnings on such amounts, before using any amounts deposited to the Improvement Fund pursuant to clause (iv) of the second paragraph of Section 4.06(A) and any investment earnings thereon. -26- Each such Officer's Certificate or other certificate submitted to the Fiscal Agent as described in this Section 4.02(B) shall be sufficient evidence to the Fiscal Agent of the facts stated therein, and the Fiscal Agent shall have no duty to confirm the accuracy of such facts. (C) Investment. Moneys in the Improvement Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits from the investment and deposit of amounts in the Improvement Fund shall be retained in the Improvement Fund, to be used for the purposes of the Improvement Fund. (D) Closing of Improvement Fund. Upon receipt by the Fiscal Agent of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid, or that any such costs are not required to be paid from the Improvement Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund to be used to pay Debt Service on the Bonds on the next Interest Payment Date, and when no amounts remain on deposit in the Improvement Fund, the Improvement Fund shall be closed. Section 4.03. 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 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Costs of Issuance Fund (the "Costs of Issuance Fund"), to the credit of which a deposit shall be made as required by Section 4.01(A). Moneys in the Costs of Issuance Fund shall be held 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 on the Closing Date, or otherwise in an Officer's Certificate delivered to the Fiscal Agent after the Closing Date. The Fiscal Agent shall pay all Costs of Issuance after 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 pursuant to an Officer's Certificate requesting payment of Costs of Issuance. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 90 days from the date of delivery of the 2017 Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Treasurer for deposit by the Treasurer in the Administrative Expense Fund. (C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used for the purposes of such fund. Section 4.04. Reserve Fund. (A) Establishment of Fund. There is hereby established as a separate fund to be held by the Fiscal Agent the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Reserve Fund (the "Reserve Fund"), to the credit of which a deposit shall be made as required by Section 4.01(B) equal to the Reserve Requirement as of -27- the Closing Date for the 2017 Bonds, and deposits shall be made as provided in clause (ii) of the second paragraph of Section 4.06(A) and clause (ii) of Section 4.06(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 lien 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 redeeming Bonds from the Bond Fund. (C) Transfer Due to Deficiency in Bond Fund. Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall provide written notice thereof to the Treasurer, specifying the amount withdrawn. (D) Transfer of Excess of Reserve Requirement. Whenever, on the Business Day prior to any September 1 occurring on or after September 1, 2017, 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 the Bond Fund to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with Section 4.05. (E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund equals or 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 upon the written direction of the Treasurer 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 2.03 and 4.05, 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 under the Act. Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to this Section 4.04(E) until after (i) the calculation of any amounts due to the federal government pursuant to Section 5.13 following payment of the Bonds and withdrawal of any such amount from the Reserve Fund 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 Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and Bonds are to be redeemed with the proceeds of such prepayment pursuant to Section 2.03(A)(iii) and 4.05(B)(ii), funds in the Reserve Fund in the amount of any applicable "Reserve Fund Credit," as such term is defined in and otherwise determined in accordance with Section H of the Rate and Method of Apportionment of Special Taxes, shall be 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)(iii). The Treasurer shall deliver to the Fiscal Agent an Officer's Certificate specifying any amount to be so transferred, and the Fiscal Agent may rely on any such Officer's Certificate. -28- (G) Transfer to Pay Rebate. Amounts in the Reserve Fund shall be withdrawn, at the written request of an Authorized Officer, for purposes of paying any rebate liability under Section 5.13. (H) Investment. Moneys in the Reserve 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 Reserve Fund to be used for the purposes of such fund, including any of the purposes specified in this Section 4.04. Section 4.05. Bond Fund. (A) Establishment of Bond Fund and Special Tax Prepayments Account. There is hereby established as a separate fund to be held by the Fiscal Agent, the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Bond Fund (the "Bond Fund"), to the credit of which deposits shall be made as required by Section 4.02(D), Section 4.04, clause (ii) of the second paragraph of Section 4.06(A) and Section 4.06(B), and any other amounts required to be deposited therein by this Agreement or the Act. There is also hereby created in the Bond Fund a separate account held by the Fiscal Agent, the Special Tax Prepayments Account, to the credit of which deposits shall be made as provided in clause (iii) of the second paragraph of Section 4.06(A). Moneys in the Bond Fund and the accounts therein shall be held 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. Notwithstanding the foregoing, amounts in the Bond Fund may be used for the purposes set forth in Section 2.03(C). (B) Disbursements. (i) Bond Fund Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Bond Fund and pay to the Owners of the Bonds the principal, 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 Section 2.03(A)(ii), or a redemption of the Bonds required by Section 2.03(A)(i) or (iii), such payments to be made in the priority listed in the second succeeding paragraph. Notwithstanding the foregoing, (a) amounts in the Bond Fund as a result of a transfer pursuant to Section 4.02(D) 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; and (b) amounts in the Bond Fund as a result of a transfer pursuant to clause (ii) of the second paragraph of Section 4.06(A) shall be immediately disbursed by the Fiscal Agent to pay past due amounts owing on the Bonds. In the event that amounts in the Bond Fund are insufficient for the purposes 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 4.05(B)(i), the Fiscal Agent shall apply the available funds first to the payment of -29- 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. Each such payment shall be made ratably to the Owners of the Bonds based on the then Outstanding principal amount of the Bonds, if there are insufficient funds to make the corresponding payment for all of the then Outstanding Bonds. Any sinking payment not made as scheduled shall be added to the sinking payment to be made on the next sinking payment date. (ii) Special Tax Prepayments Account Disbursements. Moneys in the Special Tax Prepayments Account shall be transferred by the Fiscal Agent to the Bond Fund on the next date for which notice of redemption of Bonds can timely be given under Section 2.03(A)(iii), and notice to the Fiscal Agent can timely be given under Section 2.03(B), and shall be used (together with any amounts transferred pursuant to Section 4.04(F)) to redeem Bonds on the redemption date selected in accordance with Section 2.03. (C) Investment. Moneys in the Bond Fund and the Special Tax Prepayments Account shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from the investment and deposit 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 purposes of such fund and account. Section 4.06. Special Tax Fund. (A) Establishment of Special Tax Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Special Tax Fund (the "Special Tax Fund"). The Authority shall transfer or cause to be transferred to the Fiscal Agent, as soon as practicable following receipt, all Special Tax Revenues received by the Authority, which amounts shall be deposited by the Fiscal Agent to the Special Tax Fund. In addition, the Fiscal Agent shall deposit in the Special Tax Fund amounts to be transferred thereto pursuant to Section 4.07(B) hereof. Notwithstanding the foregoing, (i) the first Special Tax Revenues collected by the Authority in any Fiscal Year, in an amount equal to the portion of such Fiscal Year's Special Tax levy for Administrative Expenses (but not to exceed, in any Fiscal Year, $50,000.00), shall be deposited by the Treasurer in the Administrative Expense Fund; (ii) any Special Tax Revenues constituting the collection of delinquencies in payment of Special Taxes shall be separately identified by the Treasurer and shall be deposited by the Fiscal Agent first, in the Bond Fund to the extent needed to pay any past due debt service on the Bonds; second, to the Reserve Fund to the extent needed to increase the amount then on deposit in the Reserve Fund up to the then Reserve Requirement; third, to the Administrative Expense Fund to the extent that amounts in such fund were used to pay costs related to the collection of such delinquencies; and fourth, to the Special Tax Fund for use as described in Section 4.06(B) below; (iii) any proceeds of Special Tax Prepayments shall be transferred by the Treasurer to the Fiscal Agent for deposit by the Fiscal Agent (as specified in writing by -30- the Treasurer to the Fiscal Agent) directly in the Special Tax Prepayments Account established pursuant to Section 4.05(A); and (iv) any Special Tax Revenues constituting the portion, if any, of the Special Tax A Requirement (as defined in the Rate and Method of Apportionment), that is to pay directly for the acquisition or construction of any portion of the Project shall be separately identified by the Authority and shall be deposited by the Fiscal Agent in the Improvement Fund so long as the Improvement Fund has not theretofore been closed pursuant to Section 4.02(D), and if the Improvement Fund has been closed, then such amount shall be retained by the Authority to be used to pay Project costs. Moneys in the Special Tax Fund shall be held by the Fiscal Agent for the benefit of the Authority and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds and the Authority. (B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Special Tax Fund and transfer the following amounts in the following order of priority (i) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any expected transfers from the Improvement Fund, the Reserve Fund and the Special Tax Prepayments Account to the Bond Fund pursuant to Sections 4.02(D), 4.04(D), (E), and (F), and 4.05(B)(ii), such that the amount in the Bond Fund equals the principal (including any sinking payment), premium, if any, and interest due on the Bonds on such Interest Payment Date, and (ii) 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 is equal to the Reserve Requirement. In addition to the foregoing, if in any Fiscal Year there are sufficient funds in the Special Tax Fund to make the foregoing transfers to the Bond Fund and the Reserve Fund in respect of the Interest Payment Dates occurring in the Bond Year that commences in such Fiscal Year, the Treasurer may transfer any amount in the Special Tax Fund in excess of the amount needed to make such transfers to the Bond Fund and the Reserve Fund (i) to the Administrative Expense Fund, from time to time, if monies are needed to pay Administrative Expenses in excess of the amount then on deposit in the Administrative Expense Fund; (ii) to such other fund or account established to pay debt service on or administrative expenses with respect to any bonds or other debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof under Section 3.02 of this Agreement; or (iii) to such other fund or account established by the Authority to be used for any lawful purpose under the Act and otherwise in accordance with the provisions of the Rate and Method of Apportionment of Special Taxes. (C) Investment. Moneys in the Special Tax Fund shall be invested and deposited 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 4.07. Administrative Expense Fund. (A) Establishment of Administrative Expense Fund. There is hereby established as a separate fund to be held by the Treasurer, the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Administrative Expense Fund (the "Administrative Expense Fund"), to the credit of which deposits shall be made as required by Sections 4.01(C) and 4.03(B), and clause (i) of the second paragraph of Section 4.06(A). -31- Moneys in the Administrative Expense Fund shall be held 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 withdrawn, that such amount is to be used to pay an Administrative Expense or Costs of Issuance, and the nature of such Administrative Expense or Costs of Issuance. Amounts transferred from the Costs of Issuance Fund to the Administrative Expense Fund pursuant to Section 4.03(B) shall be separately identified at all times, and shall be expended for purposes of the Administrative Expense Fund prior to the use of amounts transferred to the Administrative Expense Fund from the Special Tax Fund pursuant to Section 4.06(B). Annually, on the last day of each Fiscal Year, the Treasurer shall withdraw any amounts then remaining in the Administrative Expense Fund in excess of $30,000.00 that have not otherwise been allocated to pay Administrative Expenses incurred but not yet paid, and which are not otherwise encumbered, and transfer such amounts to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Fund. (C) Investment. Moneys in the Administrative Expense Fund shall be invested and deposited 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 thereof. -32- ARTICLE V OTHER COVENANTS OF THE AUTHORITY 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 (including the Special Tax Prepayments Account therein), the Reserve Fund and, until disbursed as provided herein, the Special Tax Fund. 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 all of the Bonds then Outstanding and of all claims for interest which shall not have 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 lien 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 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 all 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 Act. The Authority will comply with all applicable provisions of the Act and law in administering the District. Section 5.08. 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 limitation, the enforcement of delinquent Special Taxes. -33- On or within five (5) Business Days of each June 1, the Fiscal Agent shall provide the Treasurer with a notice stating the amount then on deposit in the Bond Fund and the Reserve Fund, and informing the Authority that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for the debt service to become due on the Bonds in the calendar year that commences in the Fiscal Year for which the levy is to be made, and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance therein equals the Reserve Requirement. The receipt of or failure to receive such notice by the Treasurer shall in no way affect the obligations of the Treasurer under the following two 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. The Treasurer shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance by each July 15 that the Bonds are outstanding, or otherwise such that the computation of the levy is complete 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 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 Treasurer shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any outstanding Bonds of the District becoming due and payable during the ensuing year, 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 (including amounts necessary to discharge any obligation under Section 5.13) during such year, taking into account the balances in such funds and in the Special Tax Fund. The Special Taxes so levied shall not exceed the maximum amounts as provided in the Rate and Method of Apportionment of Special Taxes. The Special Taxes, when levied, shall be payable and be collected in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property; provided that, pursuant to and in accordance with the Ordinance, the Special Taxes may be collected by means of direct billing of the property owners within the District, in which event the Special Taxes shall become delinquent if not paid when due pursuant to said billing. Section 5.09. Covenant to Foreclose. 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 as hereinafter provided, and thereafter diligently prosecute to judgment (unless such delinquency is theretofore brought current), an action in the superior court to foreclose the lien of any Special Tax or installment thereof not paid when due as provided in the following paragraph. The Treasurer shall notify the Authority Attorney of any such delinquency of which the Treasurer is aware, and the Authority Attorney shall commence, or cause to be commenced, such proceedings. On or about June 15 of each Fiscal Year, the Treasurer shall compare the amount of Special Taxes theretofore levied in the District to the amount of Special Tax Revenues theretofore received by the Authority, and: -34- (A) Individual Delinquencies. If, as of any June 15, the Treasurer determines that any single parcel subject to the Special Tax in the District is delinquent in the payment of Special Taxes in the aggregate amount of $7,500.00 or more, then the Treasurer shall promptly send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner, and (if the delinquency remains uncured) foreclosure proceedings shall be commenced by the Authority within 90 days after the notice of delinquency has been sent. (B) Aggregate Delinquencies. If the Treasurer determines that, as of any June 15, the total amount of delinquent Special Tax for the then current Fiscal Year for the entire District (including the total of delinquencies under subsection (A) above), exceeds 5% of the total Special Tax due and payable for the then current Fiscal Year, the Treasurer shall promptly notify or cause to be notified property owners who are then delinquent in the payment of Special Taxes (and demand immediate payment of the delinquency), and the Authority shall commence foreclosure proceedings within 90 days after the notices of delinquency have been sent. Notwithstanding the foregoing, the Treasurer may defer any mailing of notices of delinquency or foreclosure action if (i) the amount in the Reserve Fund is at least equal to the Reserve Requirement, and (ii) the amounts then on deposit in the Special Tax Fund and the Bond Fund are sufficient to pay the scheduled debt service due on the Bonds on the succeeding September 1 and March 1 without the need for any draw on the Reserve Fund. The Treasurer and the Authority Attorney, as applicable, are hereby authorized to employ counsel to conduct any such foreclosure proceedings. The fees and expenses of any such counsel (including a charge for Authority staff time) in conducting foreclosure proceedings shall be an Administrative Expense hereunder. Section 5.10. 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 5.11. Private Activity Bond Limitations. The Authority shall assure that the proceeds of the 2017 Bonds are not so used as to cause the 2017 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. Section 5.12. 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 the 2017 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 5.13. Rebate Requirement. 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, if any, to the federal government, to the extent that such section is applicable to the 2017 Bonds. If necessary, the Authority may use amounts in the Reserve Fund, amounts on deposit in the Administrative Expense Fund, and any other funds available to the District, including -35- amounts advanced by the Authority or the City, in its respective sole discretion, to be repaid by the District as soon as practicable from amounts described in the preceding clauses, to satisfy its obligations under this Section 5.13. The Treasurer shall take note of any investment of monies hereunder in excess of the yield on the 2017 Bonds, and shall take such actions as are necessary to ensure compliance with this Section 5.13, such as increasing the portion of the Special Tax levy for Administration Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under this Section 5.13. In order to provide for the administration of this Section 5.13, 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 6.02, 6.03 and 6.04, 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. Any fees or expenses incurred by the Authority or the City under or pursuant to this Section 5.13 shall be Administrative Expenses. The Fiscal Agent may rely conclusively upon the Authority's determinations, calculations and certifications required by this Section. The Fiscal Agent shall have no responsibility to independently make any calculation or determination or to review the Authority's calculations hereunder. Section 5.14. 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 2017 Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the 2017 Bonds would have caused the 2017 Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Section 5.15. Yield of the 2017 Bonds. In determining the yield of the 2017 Bonds to comply with Section 5.13 and 5.14 hereof, the Authority will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the Authority, as of the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or 2017 Bonds redeemed. Section 5.16. Maintenance of Tax -Exemption. The Authority shall take all actions necessary to assure the exclusion of interest on the 2017 Bonds from the gross income of the Owners of the 2017 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 2017 Bonds. Section 5.17. Continuing Disclosure to Owners. In addition to its obligations under Section 9.07, 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 Agreement, failure of the Authority to comply with the Continuing Disclosure Agreement shall not be considered a default hereunder; however, any Participating Underwriter or any holder or Beneficial Owner (as defined in Section 2.13) of the Bonds may take such actions as may be necessary and appropriate to compel performance by the Authority of its obligations thereunder, including seeking mandate or specific performance by court order. Section 5.18. Reduction of Special Taxes. The Authority covenants and agrees to not consent or conduct proceedings with respect to a reduction in the maximum Special Taxes that -36- may be levied in the District below an amount, for any Fiscal Year, equal to 110% of the aggregate of the Debt Service due on the Bonds in such Fiscal Year, plus a reasonable estimate of Administrative Expenses for such Fiscal Year. It is hereby acknowledged that Bondowners are purchasing the Bonds in reliance on the foregoing covenant, and that said covenant is necessary to assure the full and timely payment of the Bonds. Section 5.19. Limits on Special Tax Waivers and Bond Tenders. The Authority covenants not to exercise its rights under the Act to waive delinquency and redemption penalties related to the Special Taxes or to declare Special Tax penalties amnesty program if to do so would materially and adversely affect the interests of the owners of the Bonds and further covenants not to permit the tender of Bonds in payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the Authority having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds remaining Outstanding following such tender. Section 5.20. No Additional Bonds. Except as expressly permitted by Section 2.14 hereof, the Authority shall not issue any additional bonds secured by (A) a pledge of Special Taxes on a parity with or senior to the pledge thereof under Section 3.02 hereof; or (B) any amounts in any funds or accounts established hereunder. Section 5.21. Authority Bid at Foreclosure Sale. The Authority will not bid at a foreclosure sale of property in respect of delinquent Special Taxes unless it expressly agrees to take the property subject to the lien for Special Taxes imposed by the District and that the Special Taxes levied on the property are payable while the Authority owns the property. -37- ARTICLE VI INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE AUTHORITY 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. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest, to the extent reasonably practicable, any such moneys in Permitted Investments described in clause (h) of the definition thereof in Section 1.03; provided, however, that any such investment shall be made by the Fiscal Agent only if, prior to the date on which such investment is to be made, the Fiscal Agent shall have received an Officer's Certificate specifying a specific money market fund into which the funds shall be invested and, if no such Officer's Certificate is so received, the Fiscal Agent shall hold such moneys uninvested. The Treasurer shall make note of any investment of funds hereunder in excess of the yield on the Bonds, so that appropriate actions can be taken to assure compliance with Section 5.13. 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 Permitted Investment, which in any event by its terms matures 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 and its affiliates or the Treasurer may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. Neither the Fiscal Agent nor the Treasurer shall incur any liability for losses arising from any investments made pursuant to this Section. The Fiscal Agent shall not be required to determine the legality of any investments. Except as otherwise provided in the next sentence, 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 Fiscal Agent shall have no duty in connection with the determination of Fair Market Value other than to follow the investment direction of an Authorized Officer in any written direction of any Authorized Officer. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under the applicable provisions of the Code and (unless valuation is undertaken at least annually) investments in the subaccounts within the Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Code). The Fiscal Agent shall not be liable for verification of the application of such sections 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 -38- 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 or the Treasurer, as applicable, shall sell at Fair Market Value, 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 fund or account to which such investment security is credited and neither the Fiscal Agent nor the Treasurer shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith. The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent will furnish the Authority periodic cash transaction statements which include detail for all investment transactions made by the Fiscal Agent hereunder. Section 6.02. 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 Special Tax Prepayments Account therein) and the Reserve Fund created hereunder. Section 6.03. 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. 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 and the Treasurer 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 -39- 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 or the Treasurer 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, an Independent Financial Consultant or a Tax Consultant, and such certificate shall be full warrant to the Authority and the Treasurer 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 or the Treasurer may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 6.04. 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. -40- ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent. U.S. Bank National Association 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 Fiscal Agent shall give the Treasurer written notice of any such succession hereunder. The Authority may at any time 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, corporation 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, corporation 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 upon acceptance of appointment by the successor Fiscal Agent. Upon such acceptance, the successor Fiscal Agent shall be vested with all rights and powers of its predecessor hereunder without any further act. 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 Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. If, by reason of the judgment of any court, or reasonable agency, the Fiscal Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent hereunder shall be assumed by and vest in the Treasurer of the Authority in trust for the benefit of the Owners. The Authority covenants for the direct benefit of the Owners that its Treasurer in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the -41- Fiscal Agent hereunder, in trust for the benefit of the Owners of the Bonds. In such event, the Treasurer may designate a successor Fiscal Agent qualified to 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. 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, 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 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. 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 if it were not the Fiscal Agent. The Fiscal Agent shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, and its liability shall be limited to the proper accounting for such funds as it shall actually receive. -42- The Fiscal Agent may consult with counsel, who may be 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. In order to perform its duties and obligations hereunder, the Fiscal Agent may employ such persons or entities as it deems necessary or advisable. The Fiscal Agent 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. 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 (including the Special Tax Prepayments Account therein), the Reserve Fund, the Special Tax Fund, the Improvement Fund and the Costs of Issuance Fund. Such books of record and accounts shall 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 upon reasonable prior notice. 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, consent, order, certificate, report, warrant, bond or other paper or document believed in good faith by it to be genuine and to have been signed or presented by the proper party or proper parties. 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 satisfactorily 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 an Officer's Certificate, 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. 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 -43- 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 costs, expenses, claims or liabilities whatsoever, including without limitation fees and expenses of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the Authority under this Section shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement, but any monetary obligation of the Authority arising under this Section shall be limited solely to amounts on deposit in the Administrative Expense Fund. -44- ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT 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 Owners of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), or (iii) 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, correcting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the Authority or the Fiscal Agent 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; (D) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from gross federal income taxation of interest on the Bonds; and (E) in connection with the issuance of Parity Bonds under and pursuant to Section 2.14. The Fiscal Agent may in its discretion, but shall not be obligated to, enter into any such Supplemental Agreement authorized by this Section which materially adversely affects the Fiscal Agent's own rights, duties or immunities under this Fiscal Agent Agreement or otherwise with respect to the Bonds or any agreements related thereto. -45- 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 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; provided, however, that the Fiscal Agent shall not be deemed to have knowledge that any Bond is owned or held by the Authority unless the Authority is the registered Owner or the Fiscal Agent has received written notice that any other registered Owner is an Owner for the account of the Authority. -46- 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 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. -47- ARTICLE IX MISCELLANEOUS 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. 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, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in Sections 4.04 and 4.05 is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or (C) by irrevocably depositing with the Fiscal Agent 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 4.04 and 4.05, 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 if 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 obligation 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, 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 taken if -48- 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, Councilmember, officer, official, agent or employee of the Authority, the City or the District 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 Boardmember, Councilmember, officer, official, 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: Temecula Public Financing Authority c/o City of Temecula 41000 Main Street Temecula, CA 92590 Attn: Director of Finance 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 -49- deposited postage prepaid in a post office letter box addressed (until another address is filed by the Fiscal Agent with the Authority) as follows (provided that any such notice shall not be effective until actually received by the Fiscal Agent): U.S. Bank National Association 633 W. Fifth Street, 24th Floor Los Angeles, CA 90071 Attention: Corporate Trust Services Reference: Temecula CFD 16-01 (Roripaugh Ranch Phase 2) Section 9.07. State Reporting Requirements. The following requirements shall apply to the Bonds, in addition to those requirements under Section 5.17: (A) Annual Reporting. Not later than October 30 of each calendar year, beginning with the October 30 first succeeding the Closing Date, and in each calendar year thereafter until the October 30 following the final maturity of the Bonds, the Treasurer shall cause the following information to be supplied to CDIAC: (i) the name of the Authority; (ii) the full name of the District; (iii) the name, title, and series of the Bond issue; (iv) any credit rating for the Bonds and the name of the rating agency; (v) the Closing Date of the Bond issue and the original principal amount of the Bond issue; (vi) the amount of the Reserve Requirement; (vii) the principal amount of Bonds outstanding; (viii) the balance in the Reserve Fund; (ix) that there is no capitalized interest account for the Bonds; (x) the number of parcels in the District that are delinquent with respect to Special Tax payments, the amount that each parcel is delinquent, the total amount of Special Taxes due on the delinquent parcels, the length of time that each has been delinquent, when foreclosure was commenced for each delinquent parcel, the total number of foreclosure parcels for each date specified, and the total amount of tax due on the foreclosure parcels for each date specified; (xi) the balance, if any, in the Improvement Fund; (xii) the assessed value of all parcels subject to the Special Tax to repay the Bonds as shown on the most recent equalized roll, the date of assessed value reported, and the source of the information; (xiii) the total amount of Special Taxes due, the total amount of unpaid Special Taxes, and whether or not the Special Taxes are paid under any County Teeter Plan (Chapter 6.6 (commencing with Section 54773) of the California Government Code); (xiv) the reason and the date, if applicable, that the Bonds were retired; and (xv) contact information for the party providing the foregoing information. The annual reporting shall be made using such form or forms as may be prescribed by CDIAC. (B) Other Reporting. If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bonds, or if funds are withdrawn from the Reserve Fund to pay principal and interest on the Bonds, the Fiscal Agent shall notify the Treasurer of such failure or withdrawal in writing. The Treasurer shall notify CDIAC and the Original Purchaser of such failure or withdrawal within 10 days of such failure or withdrawal, and the Authority shall provide notice under the Continuing Disclosure Agreement of such event as required thereunder. (C) Special Tax Reporting. The Treasurer shall file a report with the Authority no later than January 1, 2018, and at least once a year thereafter, which annual report shall contain: (i) the amount of Special Taxes collected and expended with respect to the District, (ii) the amount of Bond proceeds collected and expended with respect to the District, and (iii) the status of the Project. It is acknowledged that the Special Tax Fund -50- and the Special Tax Prepayments Account are the accounts into which Special Taxes collected on the District will be deposited for purposes of Section 50075.1(c) of the California Government Code, and the funds and accounts listed in Section 4.01 are the funds and accounts into which Bond proceeds will be deposited for purposes of Section 53410(c) of the California Government Code, and the annual report described in the preceding sentence is intended to satisfy the requirements of Sections 50075.1(d), 50075.3 and 53411 of the California Government Code. (D) Amendment. The reporting requirements of this Section 9.07 shall be amended from time to time, without action by the Authority or the Fiscal Agent (i) with respect to subparagraphs (A) and (B) above, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act, and (ii) with respect to subparagraph (C) above, to reflect any amendments to Section 50075.1, 50075.3, 53410 or 53411 of the California Government Code. Notwithstanding the foregoing, any such amendment shall not, in itself, affect the Authority's obligations under the Continuing Disclosure Agreement. The Authority shall notify the Fiscal Agent in writing of any such amendments which affect the reporting obligations of the Fiscal Agent under this Agreement. (E) No Liability. None of the Authority and its officers, agents and employees, the Treasurer or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 9.07. The Treasurer shall provide copies of any of such reports to any Bondowner upon the written request of a Bondowner and payment by the person requesting the information of the cost of the Authority to produce such information and pay any postage or other delivery cost to provide the same, as determined by the Treasurer. The term "Bondowner" for purposes of this Section 9.07 shall include any Beneficial Owner (as defined in Section 2.13) of the Bonds. Section 9.08. 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 9.09. 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 pledge or lien under this Agreement, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Authority for the payment of the principal of, and interest and any premium on, such Bonds. Any right of any Owner to look to the Authority for such payment shall survive only so long as required under applicable law. Section 9.10. 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. -51- Section 9.11. 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. Section 9.12. 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 9.13. 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 from and after such date. Section 9.14. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. -52- IN WITNESS WHEREOF, the Authority caused this Fiscal Agent Agreement to be executed all as of February 1, 2017. Attest: By: Randi Johl, Secretary TEMECULA PUBLIC FINANCING AUTHORITY, for and on behalf of TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) By: Aaron Adams, Executive Director U. S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By: Authorized Officer [Signature page to Fiscal Agent Agreement — CFD 16-01 (Roripaugh Ranch Phase 2)] 20009.13:J13843 S-1 EXHIBIT A FORM OF 2017 BOND PRIOR TO THE "2017 BOND TRANSFER RESTRICTION RELEASE DATE," AS DEFINED IN THE FISCAL AGENT AGREEMENT REFERRED TO BELOW, THIS BOND IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.06(B) OF THE FISCAL AGENT AGREEMENT. PRIOR TO THE 2017 BOND TRANSFER RESTRICTION RELEASE DATE, NO TRANSFER, SALE OR OTHER DISPOSITION OF THIS BOND, OR ANY BENEFICIAL INTEREST HEREIN, MAY BE MADE EXCEPT TO A PERSON THAT THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT IS PURCHASING THIS BOND FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTING THIS BOND. EACH ENTITY THAT IS OR THAT BECOMES AN OWNER OR A BENEFICIAL OWNER OF THIS BOND PRIOR TO THE 2017 BOND TRANSFER RESTRICTION RELEASE DATE IS DEEMED BY THE ACCEPTANCE OR ACQUISITION OF THIS BOND OR SUCH BENEFICIAL OWNERSHIP INTEREST TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF SAID SECTION 2.06(B). ANY OWNER OR BENEFICIAL OWNER OF THIS BOND EFFECTING A TRANSFER, SALE OR OTHER DISPOSITION OF THIS BOND, OR BENEFICIAL INTEREST HEREIN, PRIOR TO THE 2017 BOND TRANSFER RESTRICTION RELEASE DATE AGREES BY ACCEPTANCE OF THIS BOND TO INDEMNIFY THE TEMECULA PUBLIC FINANCING AUTHORITY AND THE FISCAL AGENT AGAINST ANY LIABILITY THAT MAY RESULT IF SUCH TRANSFER, SALE OR OTHER DISPOSITION IS NOT MADE IN ACCORDANCE WITH SECTION 2.06(B) OF THE FISCAL AGENT AGREEMENT. UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE No. $ TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) 2017 SPECIAL TAX BOND INTEREST RATE MATURITY DATE September 1, REGISTERED OWNER: BOND DATE February _, 2017 CUSIP 87972Y PRINCIPAL AMOUNT: DOLLARS The Temecula Public Financing Authority (the "Authority") for and on behalf of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (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 A-1 hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above, or from the most recent interest payment date to which interest has been or duly provided for, semiannually on March 1 and September 1, commencing September 1, 2017, 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 Office (as defined in the Agreement referred to below) of U.S. Bank National Association (the "Fiscal Agent"). 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 (i) if the Bonds are in book - entry -only form, or (ii) otherwise 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 the depository for the Bonds or to an account in the United States designated by such registered owner in such written request, respectively. This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $ approved by a resolution of the Board of Directors of the Authority adopted on January 24, 2017 (the "Resolution"), and being issued pursuant to the provisions of Section 53311 et seq. of the California Government Code (the "Act"), for the purpose of financing certain public facilities within and in the vicinity of the District (the "Project") and to prepay certain special taxes so as to eliminate a lien on property in the District, and is one of the first series of such bonds designated "Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) 2017 Special Tax Bonds" (the "Bonds"). The creation of the Bonds and the terms and conditions thereof are provided for in the Fiscal Agent Agreement, dated as of February 1, 2017, 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. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the Authority from time to time secured by a lien on funds held under the Agreement on a parity with the lien securing the Bonds. The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with, the laws of the State of California. Pursuant to the 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 Act to be collected within the District (the "Special Tax") and certain funds held under 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 from such date of authentication, or (ii) it is authenticated prior to an interest payment date and after the close of business on the Record Date preceding such interest payment date, in which event it shall bear interest from such interest payment date, or (iii) it is authenticated prior to the Record Date preceding the first interest payment date, in which event it shall bear interest from the Bond Date set forth above; provided, however, that if 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. A-2 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 Authority, as may be permitted by law. The Bonds do not constitute obligations of the Authority for which the Authority is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. The City of Temecula has no liability or obligations whatsoever with respect to the District, the Bonds or the Agreement. The Bonds maturing on or after September 1, 2028 are subject to redemption prior to their stated maturity on any interest payment date occurring on or after September 1, 2027, as a whole or in part in an amount equal to $5,000 or any integral multiple thereof and among maturities as provided in the Agreement, and by lot within a maturity, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The Bonds maturing on September 1, , 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 Date 1September 1) Sinking Payments A-3 The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The Bonds are also subject to redemption from the proceeds of Special Tax Prepayments and any corresponding transfers from the Reserve Fund pursuant to the Agreement, on any Interest Payment Date, in whole, or in part in any amount equal to $5,000 or any integral multiple thereof and among maturities as specified in the Agreement, and by lot within a maturity, at a redemption price (expressed as a percentage at the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption: Redemption Dates Redemption Prices any Interest Payment Date from March 1, 2017 103% to and including March 1, 2024 September 1, 2024 and March 1, 2025 102 September 1, 2025 and March 1, 2026 101 September 1,2026 and any Interest Payment 100 A-4 Date thereafter 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. Notices of optional redemption may be conditioned upon receipt by the Fiscal Agent of sufficient moneys to redeem the Bonds on the anticipated redemption date, and if the Fiscal Agent does not receive sufficient funds by the scheduled redemption date the redemption shall not occur and the Bonds for which notice of redemption was given shall remain outstanding for all purposes of the Agreement. This Bond shall be registered in the name of the owner hereof, as to both principal and interest. 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 manual signature upon the certificate of authentication endorsed hereon. No transfer, sale or other disposition of this Bond may be made except in accordance with the restrictions on transfer set forth in Section 2.06(B) of the Fiscal Agent Agreement. Also, 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, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding interest payment date. Exchanges may only be made for Bonds in authorized denominations, as provided in the Agreement. The Agreement and the rights and obligations of the Authority thereunder may be modified or amended as set forth therein. The Agreement contains provisions permitting the Authority to make provision for the payment of the interest on, and the principal and premium, if any, of the Bonds so that such Bonds shall no longer be deemed to be outstanding under the terms of the Agreement. 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 signed by the Fiscal Agent. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE A-5 BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. 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. A-6 IN WITNESS WHEREOF, Temecula Public Financing Authority has caused this Bond to be dated the Bond Date set forth above, to be signed by the facsimile signature of its Chairperson and countersigned by the facsimile signature of its Secretary. TEMECULA PUBLIC FINANCING AUTHORITY By: Michael S. Naggar, Chairperson ATTEST: By: Randi Johl, Secretary FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the Resolution and in the Agreement which has been authenticated on , 2017. A-7 U.S. Bank National Association, as Fiscal Agent By: Authorized Signatory ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within -registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney, to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises. Dated: Signature Guaranteed: Signature: Note: Signature(s) must be guaranteed by an eligible guarantor. A-8 Note: The signature(s) on this Assignment must 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. Quint & Thimmig LLP 4/6/16 5/6/16 6/15/16 6/28/16 12/22/16 1/6/17 FISCAL AGENT AGREEMENT by and between the TEMECULA PUBLIC FINANCING AUTHORITY and U. S. BANK NATIONAL ASSOCIATION, as Fiscal Agent dated as of February 1, 2017 relating to: $ Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2017 Special Tax Refunding Bonds 20009.14:J13847 TABLE OF CONTENTS ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 1.01. Authority for this Agreement 3 Section 1.02. Agreement for Benefit of Owners of the Bonds 3 Section 1.03. Definitions 3 ARTICLE II THE BONDS Section 2.01. Principal Amount; Designation 12 Section 2.02. Terms of the 2017 Bonds 12 Section 2.03. Redemption 14 Section 2.04. Form of Bonds 16 Section 2.05. Execution of Bonds 16 Section 2.06. Transfer of Bonds 16 Section 2.07. Exchange of Bonds 17 Section 2.08. Bond Register 17 Section 2.09. Temporary Bonds 17 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen 18 Section 2.11. Limited Obligation 18 Section 2.12. No Acceleration 18 Section 2.13. Book -Entry System 18 Section 2.14. Issuance of Parity Bonds 20 ARTICLE III ISSUANCE OF 2017 BONDS Section 3.01. Issuance and Delivery of 2017 Bonds 21 Section 3.02. Pledge of Special Tax Revenues 21 Section 3.03. Validity of Bonds 21 ARTICLE IV FUNDS AND ACCOUNTS Section 4.01. Application of Proceeds of Sale of 2017 Bonds and Other Moneys 22 Section 4.02. Improvement Fund 22 Section 4.03. Costs of Issuance Fund 23 Section 4.04. Reserve Fund 24 Section 4.05. Bond Fund 25 Section 4.06. Special Tax Fund 26 Section 4.07. Administrative Expense Fund 28 ARTICLE V OTHER COVENANTS OF THE AUTHORITY Section 5.01. Punctual Payment 29 Section 5.02. Limited Obligation 29 Section 5.03. Extension of Time for Payment 29 Section 5.04. Against Encumbrances 29 Section 5.05. Books and Records 29 Section 5.06. Protection of Security and Rights of Owners 29 Section 5.07. Compliance with Act 29 Section 5.08. Collection of Special Tax Revenues 29 Section 5.09. Covenant to Foreclose 30 Section 5.10. Further Assurances 31 Section 5.11. Private Activity Bond Limitations 31 Section 5.12. Federal Guarantee Prohibition 31 Section 5.13. Rebate Requirement 31 Section 5.14. No Arbitrage 32 Section 5.15. Yield of the 2017 Bonds 32 Section 5.16. Maintenance of Tax -Exemption 32 -i- Section 5.17. Continuing Disclosure to Owners 32 Section 5.18. Reduction of Special Taxes 32 Section 5.19. Limits on Special Tax Waivers and Bond Tenders 33 Section 5.20. No Additional Bonds 33 Section 5.21. Authority Bid at Foreclosure Sale 33 ARTICLE VI INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE AUTHORITY Section 6.01. Deposit and Investment of Moneys in Funds 34 Section 6.02. Limited Obligation 35 Section 6.03. Liability of Authority 35 Section 6.04. Employment of Agents by Authority 36 ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent 37 Section 7.02. Liability of Fiscal Agent 38 Section 7.03. Information 39 Section 7.04. Notice to Fiscal Agent 39 Section 7.05. Compensation, Indemnification 39 ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.01. Amendments Permitted 41 Section 8.02. Owners' Meetings 42 Section 8.03. Procedure for Amendment with Written Consent of Owners 42 Section 8.04. Disqualified Bonds 42 Section 8.05. Effect of Supplemental Agreement 43 Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments 43 Section 8.07. Amendatory Endorsement of Bonds 43 ARTICLE IX MISCELLANEOUS Section 9.01. Benefits of Agreement Limited to Parties 44 Section 9.02. Successor is Deemed Included in All References to Predecessor 44 Section 9.03. Discharge of Agreement 44 Section 9.04. Execution of Documents and Proof of Ownership by Owners 45 Section 9.05. Waiver of Personal Liability 45 Section 9.06. Notices to and Demands on Authority and Fiscal Agent 45 Section 9.07. State Reporting Requirements 46 Section 9.08. Partial Invalidity 47 Section 9.09. Unclaimed Moneys 47 Section 9.10. Applicable Law 47 Section 9.11. Conflict with Act 48 Section 9.12. Conclusive Evidence of Regularity 48 Section 9.13. Payment on Business Day 48 Section 9.14. Counterparts 48 EXHIBIT A — FORM OF 2017 BOND FISCAL AGENT AGREEMENT Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2017 Special Tax Refunding Bonds THIS FISCAL AGENT AGREEMENT (the "Agreement"), dated as of February 1, 2017, is by and between the Temecula Public Financing Authority, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California (the "Authority") for and on behalf of the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District"), and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, as fiscal agent (the "Fiscal Agent"). RECITALS: WHEREAS, the Board of Directors of the Authority has formed the District under the provisions of the Mello -Roos Community Facilities Act of 1982, as amended (Section 53311, et seq. of the California Government Code) (the "Act") and Resolution No. TPFA 05-01 of the Board of Directors of the Authority adopted on January 11, 2005 (the "Resolution of Formation"); WHEREAS, the Board of Directors of the Authority, as the legislative body for the District, is authorized under the Act to levy special taxes to pay for the costs of the District and to authorize the issuance of bonds, including bonds to refund any bonds issued by the Authority for the District, secured by said special taxes under the Act; WHEREAS, under the provisions of the Act, on April 27, 2006 the Authority, for and on behalf of the District, issued $51,250,000 initial principal amount of its Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds (the "2006 Bonds") to finance various public improvements authorized to be funded by the District; WHEREAS, due to favorable interest rates in the financial markets, the Board of Directors of the Authority has determined to refund the 2006 Bonds in full; WHEREAS, under the provisions of the Act and Article 11, commencing with Section 53580, of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Refunding Law"), on January 24, 2017, the Board of Directors of the Authority adopted its Resolution No. TPFA- (the "Resolution"), which resolution, among other matters, authorized the issuance of the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2017 Special Tax Refunding Bonds (the "2017 Bonds") to provide moneys to defease and currently refund a portion of the outstanding 2006 Bonds and provided that said issuance would be in accordance with this Agreement, and authorized the execution hereof; -1- 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 to be levied in the District and the owners of the 2017 Bonds that the Authority enter into this Agreement to provide for the issuance of the 2017 Bonds, the disbursement of proceeds of the 2017 Bonds, the disposition of the special taxes securing the 2017 Bonds and the administration and payment of the 2017 Bonds; and WHEREAS, the Authority has determined that all things necessary to cause the 2017 Bonds, when executed by the Authority for and on behalf of the District and issued as in the Act, the Refunding Law, the Resolution and this Agreement provided, to be legal, valid and binding and special obligations of the Authority for and on behalf of the District in accordance with their terms, and all things necessary to cause the creation, authorization, execution and delivery of this Agreement and the creation, authorization, execution and issuance of the 2017 Bonds, subject to the terms hereof, have in all respects been duly authorized. AGREEMENT: 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: -2- ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the Act, the Refunding Law and the Resolution. Section 1.02. Agreement for Benefit of Owners of the Bonds. 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 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 Agreement. Any action by any Owner to enforce the provisions of this Agreement shall be for the equal benefit and protection of all Owners of the Bonds. 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 if 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 Expenses" means costs directly related to the administration of the District consisting of the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the Treasurer or designee thereof or both) and the costs of collecting the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxes to the Fiscal Agent; fees and costs of the Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under this Agreement; the costs of the Authority, the City or any designee of either the Authority or the City of complying with the disclosure provisions of the Act, the Continuing Disclosure Agreement and this Agreement, including those related to public inquiries regarding the Special Tax and disclosures to Bondowners and the Original Purchaser; the costs of the Authority, the City or any designee of either the Authority or the City related to an appeal of the Special Tax; any amounts required to be rebated to the federal government in order for the Authority to comply with Section 5.13; any fees or expenses of the Escrow Bank and any costs incurred by the Authority or the City (including fees and expenses of the Escrow Bank) under or in connection with the Escrow Agreement; an allocable share of the salaries of the City staff directly related to the foregoing and a proportionate amount of City general administrative overhead related thereto. Administrative Expenses shall also include amounts advanced by the Authority or the City for any administrative purpose of the District, including costs related to prepayments of Special Taxes, recordings related to such prepayments and satisfaction of Special Taxes, amounts advanced to ensure compliance with Section 5.13, administrative costs related to the administration of any joint community facilities agreement regarding the District, and the costs of commencing and pursuing foreclosure of -3- delinquent Special Taxes. Administrative Expenses shall include any such expenses incurred in prior years but not yet paid. "Administrative Expense Fund" means the fund by that name established by Section 4.07(A) hereof. "Agreement" 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 (including by reason of the provisions of Section 2.03(A)(ii) providing for mandatory sinking payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking payment due in such Bond Year pursuant to Section 2.03(A)(ii)). "Auditor" means the auditor/controller of the County, or such other official at the County who is responsible for preparing property tax bills. "Authority" means the Temecula Public Financing Authority and any successor thereto. "Authority Attorney" means any attorney or firm of attorneys employed by the Authority or the City in the capacity of general counsel to the Authority. "Authorized Officer" means the Chairperson, Executive Director, Treasurer or Secretary of the Authority, or any other officer or employee of the Authority or the City 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 (i) Quint & Thimmig LLP, or (ii) any other 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 4.05(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 2nd in each year and ending on September 1st in the following year, except that the first Bond Year shall begin on the Closing Date and end on September 1, 2017. "Bonds" means the 2017 Bonds, and, if the context requires, any Parity 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 principal corporate trust office are authorized or obligated by law or executive order to be closed. -4- "CDIAC" means the California Debt and Investment Advisory Commission of the office of the State Treasurer of the State of California or any successor agency or bureau thereto. "City" means the City of Temecula, California. "Closing Date" means February _, 2017, being the date upon which there is a physical delivery of the 2017 Bonds in exchange for the amount representing the purchase price of the 2017 Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the 2017 Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the 2017 Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Continuing Disclosure Agreement" means that certain Continuing Disclosure Agreement pertaining to the 2017 Bonds, executed as of the Closing Date by the Authority and Albert A. Webb Associates, as dissemination agent, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the Authority or the City and related to the authorization, sale and issuance of the 2017 Bonds and the refunding and defeasance of the 2006 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 City or the Authority in connection with the issuance of the 2017 Bonds and the refunding and defeasance of the 2006 Bonds, Escrow Bank fees and expenses, special tax consultant fees and expenses, Bond (underwriter's) discount, legal fees and charges, including bond counsel and disclosure counsel, municipal advisor's fees, rating agency fees, costs of bond insurance and any reserve fund surety bond, verification agent fees, charges for execution, transportation and safekeeping of the 2017 Bonds, and other costs, charges and fees in connection with the foregoing. hereof. "Costs of Issuance Fund" means the fund by that name established by Section 4.03(A) "County" means the County of Riverside, California. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Debt Service" means the scheduled amount of interest and amortization of principal (including principal payable by reason of Section 2.03(A)(ii)) on the Bonds and the scheduled amount of interest and amortization of principal payable on any Parity 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. "Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.13. -5- "District" means the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch), formed by the Authority under the Act and the Resolution of Formation. "Escrow Agreement" means the Escrow Agreement, dated as of February 1, 2017, by and between the Authority and the Escrow Bank. "Escrow Bank" means U.S. Bank National Association, in its capacity as escrow bank under the Escrow Agreement. "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 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 any of the following which are non -callable 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: (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. "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. -6- "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 4.02(A) hereof. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the Authority, the City or the Treasurer, and who, or each of whom: (i) is judged by the person or entity that approved them 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 City or the Authority as an officer or employee of the City or the Authority, but who may be regularly retained to make reports to the City or the Authority. "Information Services" means the Electronic Municipal Market Access System (referred to as "EMMA"), a facility of the Municipal Securities Rulemaking Board (at http://emma.msrb.org); 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 September 1, 2017. "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Moody's" means Moody's Investors Service, and any successor thereto. "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 Stifel, Nicolaus & Company, Incorporated, the first purchaser of the 2017 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 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 is the registered owner of any particular Outstanding Bond. "Parity Bonds" means bonds issued by the Authority for the District and secured on a parity with any then Outstanding Bonds pursuant to Section 2.14 hereof. -7- "Participating Underwriter" shall have the meaning ascribed thereto in the Continuing Disclosure Agreement. "Permitted Investments" means any of the following, but only to the extent that the same are acquired at Fair Market Value: (a) Federal Securities. (b) Registered state warrants or treasury notes or bonds of the State of California (the "State"), including bonds payable solely out of the revenues from a revenue- producing property owned, controlled, or operated by the State or by a department, board, agency, or authority of the State, which are rated in one of the two highest short- term or long-term rating categories by either Moody's or S&P, and which have a maximum term to maturity not to exceed three years. (c) Unsecured certificates of deposit, time deposits and bankers' acceptance of any bank the short-term obligations of which are rated on the date of purchase "A-1+" or better by S&P and "P-1" by Moody's and or certificates of deposit (including those of the Fiscal Agent, its parent and its affiliates) secured at all times by collateral that may be used by a national bank for purposes of satisfying its obligations to collateralize pursuant to federal law which are issued by commercial banks, savings and loan associations or mutual savings bank whose short-term obligations are rated on the date of purchase A-1 or better by S&P and Moody's.(d) Commercial paper which at the time of purchase is of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided by either Moody's or S&P, which commercial paper is limited to issuing corporations that are organized and operating within the United States of America and that have total assets in excess of five hundred million dollars ($500,000,000) and that have an "A" or higher rating for the issuer's debentures, other than commercial paper, by either Moody's or S&P, provided that purchases of eligible commercial paper may not exceed 180 days' maturity nor represent more than 10 percent of the outstanding commercial paper of an issuing corporation. Purchases of commercial paper may not exceed 20 percent of the total amount invested pursuant to this definition of Permitted Investments. (e) A repurchase agreement with a state or nationally charted bank or trust company or a national banking association or government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York, provided that all of the following conditions are satisfied: (1) the agreement is secured by any one or more of the securities described in subdivision (a) of this definition of Permitted Investments, (2) the underlying securities are required by the repurchase agreement to be held by a bank, trust company, or primary dealer having a combined capital and surplus of at least one hundred million dollars ($100,000,000) and which is independent of the issuer of the repurchase agreement, and (3) the underlying securities are maintained at a market value, as determined on a marked -to -market basis calculated at least weekly, of not less than 103 percent of the amount so invested. (f) An investment agreement or guaranteed investment contract with, or guaranteed by, a financial institution the long-term unsecured obligations of which are rated Aa2 and "AA" or better, respectively, by Moody's and S&P at the time of initial investment. The investment agreement shall be subject to a downgrade provision with -8- at least the following requirements: (1) the agreement shall provide that within five business days after the financial institution's long-term unsecured credit rating has been withdrawn, suspended, other than because of general withdrawal or suspension by Moody's or S&P from the practice of rating that debt, or reduced below "AA-" by S&P or below "Aa3" by Moody's (these events are called "rating downgrades") the financial institution shall give notice to the Authority and, within the five-day period, and for as long as the rating downgrade is in effect, shall deliver in the name of the Authority or the Fiscal Agent to the Authority or the Fiscal Agent Federal Securities allowed as investments under subdivision (a) of this definition of Permitted Investments with aggregate current market value equal to at least 105 percent of the principal amount of the investment agreement invested with the financial institution at that time, and shall deliver additional allowed federal securities as needed to maintain an aggregate current market value equal to at least 105 percent of the principal amount of the investment agreement within three days after each evaluation date, which shall be at least weekly, and (2) the agreement shall provide that, if the financial institution's long-term unsecured credit rating is reduced below "A3" by Moody's or below "A-" by S&P, the Fiscal Agent or the Authority may, upon not more than five business days' written notice to the financial institution, withdraw the investment agreement, with accrued but unpaid interest thereon to the date, and terminate the agreement. (g) The Local Agency Investment Fund of the State of California. (h) Investments in a money market fund (including any funds of the Fiscal Agent or its affiliates and including any funds for which the Fiscal Agent or its affiliates provides investment advisory or other management services) rated in the highest rating category (without regard to plus (+) or minus (-) designations) by Moody's or S&P. (i) Any other lawful investment for City funds. "Principal Office" means the corporate trust office of the Fiscal Agent set forth in Section 9.06, except for the purpose of maintenance of the registration books and presentation of Bonds for payment, transfer or exchange, such term shall mean 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. "Project" means the facilities eligible to be funded by the District, as more particularly described in the Resolution of Formation. "Rate and Method of Apportionment of Special Taxes" means the rate and method of apportionment of special taxes for the District, as approved pursuant to the Resolution of Formation, and as it may be modified from time to time in accordance with the Act. "Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such day is a Business Day. "Refunding Bonds" means bonds issued by the Authority for the District the net proceeds of which are used to refund all or a portion of the then Outstanding Bonds; provided that the debt service on the Refunding Bonds in any Bond Year is not in excess of the debt service on the Bonds being refunded and the final maturity of the Refunding Bonds is not later than the final maturity of the Bonds being refunded. -9- "Refunding Law" means Article 11, commencing with Section 53580, of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code. "Reserve Fund" means the fund by that name established pursuant to Section 4.04(A) hereof. "Reserve Requirement" means, as of any date of calculation, an amount equal to the least of (i) the then Maximum Annual Debt Service, (ii) one hundred twenty-five percent (125%) of the then average Annual Debt Service, or (iii) ten percent (10%) of the initial principal amount of the Bonds. The Reserve Requirement as of the Closing Date is $ "Resolution" means Resolution No. TPFA 17-, adopted by the Board of Directors of the Authority on January 24, 2017. "Resolution of Formation" means Resolution No. TPFA 05-01, adopted by the Board of Directors of the Authority on January 11, 2005. "S&P" means S&P Global Ratings, and any successor thereto. "Securities Depositories" means The Depository Trust Company, 55 Water Street, New York, New York 10041-0099, Fax (212) 855-7232; 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. "Special Tax Fund" means the fund by that name established by Section 4.06(A) hereof. "Special Tax Prepayments" means the proceeds of any prepayments of the Special Tax received by the Authority, as calculated pursuant to the Rate and Method of Apportionment of the Special Taxes, less any administrative fees or penalties collected as part of any such prepayment. "Special Tax Prepayments Account" means the account by that name established within the Bond Fund by Section 4.05(A) hereof. "Special Tax Revenues" means the proceeds of the Special Taxes received by the Authority, including any scheduled payments and any prepayments thereof, interest 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 and interest thereon. "Special Tax Revenues" does not include any penalties collected in connection with delinquent Special Taxes, which amounts may be deposited to the Administrative Expense Fund or otherwise disposed of as determined by the Treasurer consistent with any applicable provisions of the Act. "Special Taxes" means the special tax levied within the District pursuant to the Act, the Ordinance, the Rate and Method of Apportionment of Special Taxes and this Agreement. "Supplemental 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. -10- "Tax Consultant" means any independent financial or tax consultant retained by the Authority or the City for the purpose of computing the Special Taxes. "Treasurer" means the Treasurer of the Authority or such other officer or employee of the Authority performing the functions of the chief financial officer of the Authority. "2006 Bonds" means the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds. "2017 Bonds" means the Bonds so designated and authorized to be issued under Section 2.01 hereof. -11- ARTICLE II THE BONDS Section 2.01. Principal Amount; Designation. 2017 Bonds in the aggregate principal amount of Million Thousand Dollars ($ ) are authorized to be issued by the Authority for and on behalf of the District under and subject to the terms of the Resolution and this Agreement, the Act, the Refunding Law and other applicable laws of the State of California. The 2017 Bonds are hereby designated as the "Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2017 Special Tax Refunding Bonds." Section 2.02. Terms of the 2017 Bonds. (A) Form; Denominations. The 2017 Bonds shall be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple in excess thereof. (B) Date of 2017 Bonds. The 2017 Bonds shall be dated the Closing Date. (C) CUSIP Identification Numbers. "CUSIP" identification numbers shall be imprinted on the 2017 Bonds, but such numbers shall not constitute a part of the contract evidenced by the 2017 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 2017 Bonds. In addition, failure on the part of the Authority or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the Authority's contract with such Owners and shall not impair the effectiveness of any such notice. (D) Maturities, Interest Rates. The 2017 Bonds shall mature and become payable on September 1 in each of the years, and shall bear interest at the rates per annum as follows: -12- Maturity Date (September 1) Principal Amount Interest Rate (E) Interest. The 2017 Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360 -day year composed of twelve 30 -day months. Each 2017 Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such date of authentication, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a 2017 Bond, interest is in default thereon, such 2017 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. (F) Method of Payment. Interest on the 2017 Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on the Interest Payment Dates by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the Bond Register maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer (i) to the Depository (so long as the Bonds are in book -entry form pursuant to Section 2.13), or (ii) to an account within the United States made on such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds received before the applicable Record Date, which instructions shall continue in effect until revoked in writing, or until such Bonds are transferred to a new Owner. The principal of the 2017 Bonds and any premium on the 2017 Bonds are payable by check in lawful money of the United States of America upon surrender of the 2017 Bonds at the Principal Office of the Fiscal Agent. All 2017 Bonds paid by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled 2017 Bonds and issue a certificate of destruction thereof to the Authority upon the Authority's request. -13- Section 2.03. Redemption. (A) Redemption Dates. (i) Optional Redemption. The 2017 Bonds maturing on or after September 1, 2028 are subject to optional redemption prior to their stated maturity on any Interest Payment Date occurring on or after September 1, 2027, as a whole, or in part in an amount equal to $5,000 or any integral multiple thereof and among maturities so as to maintain substantially level debt service on the Bonds, and by lot within a maturity, at a redemption price equal to the principal amount of the 2017 Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. (ii) Mandatory Sinking Payment Redemption. The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The amounts in the foregoing table shall be reduced to the extent practicable so as to maintain level debt service on the 2017 Bonds, as a result of any prior partial redemption of the 2017 Bonds pursuant to Section 2.03(A)(i) above or Section 2.03(A)(iii) below, as specified in writing by the Treasurer to the Fiscal Agent. (iii) Redemption From Special Tax Prepayments. Special Tax Prepayments and any corresponding transfers from the Reserve Fund pursuant to Section 4.05(B)(ii) and Section 4.04(F), respectively, shall be used to redeem 2017 Bonds on the next Interest Payment Date for which notice of redemption can timely be given under Section 2.03(D), in whole, or in part in an amount equal to $5,000 or any integral multiple thereof allocated among maturities of the 2017 Bonds so as to maintain substantially level debt service on the Bonds, and by lot within a maturity, at a redemption price (expressed as a percentage of the principal amount of the 2017 Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption: Redemption Dates Redemption Prices any Interest Payment Date from September 1, 103% 2017 to and including March 1, September 1, and March 1, 102 September 1, and March 1, 101 September 1, and any Interest Payment 100 Date thereafter -14- (B) Notice to Fiscal Agent. The Authority shall give the Fiscal Agent written notice of its intention to redeem 2017 Bonds pursuant to subsection (A)(i) or (A)(iii) not less than forty-five (45) days prior to the applicable redemption date, or such lesser number of days as the Fiscal Agent shall allow. (C) Purchase of Bonds in Lieu of Redemption. In lieu of redemption under Section 2.03(A), moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2017 Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase prior to the selection of 2017 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 2017 Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase and any premium which would otherwise be due if such 2017 Bonds were to be redeemed in accordance with this Agreement. (D) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, or by such other means as is acceptable to the recipient thereof, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories, to one or more Information Services, and to the respective registered Owners of any 2017 Bonds designated for redemption, at their addresses appearing on the Bond Register; 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 2017 Bonds. Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding 2017 Bonds are to be called for redemption, shall designate the CUSIP numbers and, if applicable, Bond numbers of the 2017 Bonds to be redeemed by giving the individual CUSIP number and, if applicable, Bond number of each 2017 Bond to be redeemed or if Bond numbers have been assigned by the Fiscal Agent to the 2017 Bonds shall state that all 2017 Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the 2017 Bonds of one or more maturities have been called for redemption, shall state as to any 2017 Bond called in part the principal amount thereof to be redeemed, and shall require that such 2017 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 2017 Bonds will not accrue from and after the redemption date. Notwithstanding the foregoing, in the case of any redemption of the 2017 Bonds under Section 2.03(A)(i) above, the notice of redemption may state that the redemption is conditioned upon receipt by the Fiscal Agent of sufficient moneys to redeem the 2017 Bonds on the anticipated redemption date, and that the redemption shall not occur if by no later than the scheduled redemption date sufficient moneys to redeem the 2017 Bonds have not been deposited with the Fiscal Agent. In the event that the Fiscal Agent does not receive sufficient funds by the scheduled redemption date to so redeem the 2017 Bonds to be redeemed, the Fiscal Agent shall send written notice to the owners of the 2017 Bonds, to the Securities Depositories and to one or more of the Information Services to the effect that the redemption did not occur as anticipated, and the 2017 Bonds for which notice of redemption was given shall remain Outstanding for all purposes of this Agreement. Upon the payment of the redemption price of 2017 Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the -15- CUSIP number identifying, by issue and maturity, the 2017 Bonds being redeemed with the proceeds of such check or other transfer. Whenever provision is made in this Agreement for the redemption of less than all of the 2017 Bonds (other than a redemption pursuant to Section 2.03(A)(ii)), the Fiscal Agent shall select the 2017 Bonds to be redeemed, from all 2017 Bonds or such given portion thereof not previously called for redemption, among maturities as directed in writing by the Treasurer (who shall specify 2017 Bonds to be redeemed so as to maintain substantially level debt service on the Bonds), and by lot within a maturity in any manner which the Fiscal Agent deems appropriate. Upon surrender of 2017 Bonds redeemed in part only, the Authority shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the Authority, a new 2017 Bond or 2017 Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the 2017 Bond or 2017 Bonds. (E) Effect of Redemption. 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 2017 Bonds so called for redemption shall have been deposited in the Bond Fund, such 2017 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. (F) Redemption of Parity Bonds. Redemption provisions, if any, pertaining to any Parity Bonds shall be set forth in the Supplemental Agreement providing for such Parity Bonds. Section 2.04. Form of Bonds. The 2017 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 manual or facsimile signatures of its Chairperson and Secretary. 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 if 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 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 Bond Register 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 -16- delivery of a duly written instrument of transfer in a form acceptable to 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 of authorized denomination(s). 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, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. 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 series and 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. 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, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. 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 -17- 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 who shall deliver a certificate of destruction thereof to the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to the Fiscal Agent 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. All obligations of the Authority under this Agreement and the Bonds shall be special obligations of the Authority, payable solely from the Special Tax Revenues and the funds pledged therefore hereunder. Neither the faith and credit nor the taxing power of the Authority (except with respect to the levy of Special Taxes in the District, to the limited extent set forth herein) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds. The City has no obligations whatsoever under this Agreement or otherwise with respect to 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 redemption of Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of this Agreement under Section 9.03 hereof. Section 2.13. Book -Entry System. DTC shall act as the initial Depository for the 2017 Bonds. One 2017 Bond for each maturity of the 2017 Bonds shall be initially executed, authenticated, and 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 2017 Bonds shall be registered in the Bond Register 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 Fiscal Agent are hereby authorized to take any and all actions as may be necessary and not inconsistent with this Agreement to qualify the Bonds for the Depository's book -entry system, including the execution of the Depository's required representation letter. -18- With respect to Bonds registered in the Bond Register in the name of Cede & Co., as nominee of DTC, neither the Authority nor the Fiscal Agent 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 Fiscal Agent 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 as set forth above, the Fiscal Agent 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 Fiscal Agent shall pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown on the Bond Register, 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 amounts so paid. No person other than an Owner, as shown on the Bond Register, shall receive a physical Bond. Upon delivery by DTC to the Fiscal Agent 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 2.06 hereof, references to "Cede & Co." in this Section 2.13 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 Fiscal Agent 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 Fiscal Agent. 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 if the Authority determines that it is in the best interest of the Beneficial Owners of the 2017 Bonds that they be able to obtain certificated 2017 Bonds, the 2017 Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names the Owners shall designate at that time, in accordance with Section 2.06. -19- To the extent that the Beneficial Owners are designated as the transferee by the Owners, in accordance with Section 2.06, the 2017 Bonds will be delivered to such Beneficial Owners as soon as practicable. Section 2.14. Issuance of Parity Bonds. The Authority may issue one or more series of Parity Bonds, in addition to the 2017 Bonds authorized under Section 2.01 hereof, by means of a Supplemental Agreement and without the consent of any Bondowners, upon compliance with the provisions of this Section 2.14. Only Refunding Bonds that comply with the requirements of this Section 2.14 shall be Parity Bonds, and such Parity Bonds shall constitute Bonds hereunder and shall be secured by a lien on the Special Tax Revenues and funds pledged for the payment of the Bonds hereunder on a parity with all other Bonds Outstanding hereunder. The Authority may issue Refunding Bonds that are Parity Bonds subject to the following specific conditions precedent: (A) Current Compliance. The Authority shall be in compliance in all material respects on the date of issuance of the Parity Bonds with all covenants set forth in this Agreement and all Supplemental Agreements, and the principal amount of the Parity Bonds shall not cause the Authority to exceed the maximum authorized indebtedness of the District under the provisions of the Act. (B) Payment Dates. The Supplemental Agreement providing for the issuance of such Parity Bonds shall provide that interest thereon shall be payable on March 1 and September 1, and principal thereof shall be payable on September 1 in any year in which principal is payable (provided that there shall be no requirement that any Parity Bonds pay interest on a current basis). (C) Funds and Accounts; Reserve Fund Deposit. The Supplemental Agreement providing for the issuance of such Parity Bonds may provide for the establishment of separate funds and accounts, and shall provide for a deposit to the Reserve Fund (or to a separate account created for such purpose) in an amount necessary so that the amount on deposit in the Reserve Fund (together with the amount in any such separate account), following the issuance of such Parity Bonds, is at least equal to the Reserve Requirement. (D) Refunding Bonds. The Parity Bonds shall be Refunding Bonds. (E) Officer's Certificate. The Authority shall deliver to the Fiscal Agent an Officer's Certificate certifying that the conditions precedent to the issuance of such Parity Bonds set forth in subsections (A), (B), (C) and (D) of this Section 2.14 have been satisfied. In delivering such Officer's Certificate, the Authorized Officer that executes the same may conclusively rely upon such certificates of the Fiscal Agent, the Tax Consultant and others selected with due care, without the need for independent inquiry or certification. Nothing in this Section 2.14 shall prohibit the Authority from issuing bonds or otherwise incurring debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof under Section 3.02 of this Agreement. -20- ARTICLE III ISSUANCE OF 2017 BONDS Section 3.01. Issuance and Delivery of 2017 Bonds. At any time after the execution of this Agreement, the Authority may issue the 2017 Bonds for the District in the aggregate principal amount set forth in Section 2.01 and deliver the 2017 Bonds to the Original Purchaser. The Authorized Officers of the Authority are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the 2017 Bonds in accordance with the provisions of the Act, the Refunding Law, the Resolution and this Agreement, to redeem the 2006 Bonds with proceeds of the 2017 Bonds, to authorize the payment of Costs of Issuance from the proceeds of the 2017 Bonds, to authorize withdrawals from the Improvement Fund, and to do and cause to be done any and all acts and things necessary or convenient for delivery of the 2017 Bonds to the Original Purchaser and the redemption of the 2006 Bonds pursuant to the Escrow Agreement. Section 3.02. Pledge of Special Tax Revenues. The Bonds shall be secured by a first pledge of all of the Special Tax Revenues (other than the Special Tax Revenues to be deposited to the Administrative Expense Fund pursuant to clause (i) of the second paragraph of Section 4.06(A)) and all moneys deposited in the Bond Fund (including 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 Improvement Fund, the Costs of Issuance Fund, and the Special Tax Revenues to be deposited to the Administrative Expense Fund pursuant to clause (i) of the second paragraph of Section 4.06(A), are not pledged to the repayment of the Bonds. The Project is not in any way pledged to pay the Debt Service on the Bonds. Any proceeds of condemnation or destruction of any portion of the Project are not pledged to pay the Debt Service on the Bonds and are free and clear of any lien or obligation imposed hereunder. Section 3.03. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the performance by any person of such persons obligation(s) with respect to the Project. -21- ARTICLE IV FUNDS AND ACCOUNTS Section 4.01. Application of Proceeds of Sale of 2017 Bonds and Other Moneys. (A) The proceeds of the purchase of the 2017 Bonds by the Original Purchaser (being $ ) shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date as follows: (i) deposit in the Costs of Issuance Fund an amount equal to $ (ii) deposit in the Reserve Fund an amount equal to $ (being an amount equal to the initial Reserve Requirement); and (iii) transfer to the Escrow Bank for deposit by the Escrow Bank in the Refunding Fund established under the Escrow Agreement an amount equal to $ (B) In addition to the foregoing, on the Closing Date the Authority shall transfer or cause to be transferred certain moneys held with respect to the 2006 Bonds as follows: (i) transfer from the administrative expense fund held with respect to the 2006 Bonds to the Treasurer for deposit by the Treasurer in the Administrative Expense Fund, the amount on deposit in such administrative expense fund; (ii) transfer from the special tax fund held with respect to the 2006 Bonds (a) to the Escrow Bank for deposit by the Escrow Bank in the Refunding Fund established under the Escrow Agreement $ ; and (b) to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Fund, the remaining $ on deposit in such special tax fund; (iii) transfer from the reserve fund held with respect to the 2006 Bonds to the Fiscal Agent for deposit in the Improvement Fund, the amount on deposit in such reserve fund; (iv) transfer from the bond fund held with respect to the 2006 Bonds to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Fund, any amounts on deposit in such bond fund; and (v) transfer from the accounts within the improvement fund held with respect to the 2006 Bonds to the Fiscal Agent for deposit by the Fiscal Agent to the Improvement Fund, all amounts in such accounts. (C) The Fiscal Agent may establish a temporary fund or account in its records to facilitate any of the deposits or transfers referred to in this Section 4.01. Section 4.02. Improvement Fund (A) Establishment of Improvement Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2017 Improvement Fund (the "Improvement -22- Fund"). A deposit shall be made to the Improvement Fund as required by Sections 4.01(B)(iii) and 4.01(B)(v). Moneys in the Improvement Fund shall be held by the Fiscal Agent for the benefit of the Authority, and shall be disbursed for the payment or reimbursement of costs of the Project. (B) Procedure for Disbursement. Disbursements from the Improvement Fund shall be made by the Fiscal Agent upon receipt of an Officer's Certificate, which shall: (a) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made (which shall be for a Project cost), that the disbursement is a proper expenditure from the Improvement Fund, and the person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. Each such Officer's Certificate or other certificate submitted to the Fiscal Agent as described in this Section 4.02(B) shall be sufficient evidence to the Fiscal Agent of the facts stated therein, and the Fiscal Agent shall have no duty to confirm the accuracy of such facts. (C) Investment. Moneys in the Improvement Fund shall be invested and deposited in accordance with Section 6.01; provided, however, that amounts in the Improvement Fund may only be invested in (i) Federal Securities of the character described in clauses (i) and (ii)(b) and (d) of the definition "Federal Securities" in Section 1.03, and (ii) Permitted Investments of the character described in clauses (b), (d), (e), (g), (h) and (i) of the definition "Permitted Investments" in Section 1.03, but only so long as any such investment is not secured by any federal guarantee, such as a letter of credit or other guarantee of the Federal Home Loan Bank or other federal agency, except that guarantees related to the following obligations are permitted: FNMA and Freddie Mac obligations, Federal Housing Administration (FHA) guarantees, REFCORP obligations and Government National Mortgage Association (GNMA) obligations. Interest earnings and profits from the investment and deposit of amounts in the Improvement Fund shall be retained in the Improvement Fund, to be used for the purposes of the Improvement Fund. (D) Closing of Improvement Fund. Upon receipt by the Fiscal Agent of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid, or that any such costs are not required to be paid from the Improvement Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund to be used to pay Debt Service on the Bonds on the next Interest Payment Date, and when no amounts remain on deposit in the Improvement Fund, the Improvement Fund shall be closed. Section 4.03. 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 Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2017 Costs of Issuance Fund (the "Costs of Issuance Fund"), to the credit of which a deposit shall be made as required by Section 4.01(A)(i). Moneys in the Costs of Issuance Fund shall be held 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 -23- be paid to the designated payees, signed by the Treasurer and delivered to the Fiscal Agent on the Closing Date, or otherwise in an Officer's Certificate delivered to the Fiscal Agent after the Closing Date. The Fiscal Agent shall pay all Costs of Issuance after 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 pursuant to an Officer's Certificate requesting payment of Costs of Issuance. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 90 days from the date of delivery of the 2017 Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Treasurer for deposit by the Treasurer in the Administrative Expense Fund. (C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used for the purposes of such fund. Section 4.04. Reserve Fund. (A) Establishment of Fund. There is hereby established as a separate fund to be held by the Fiscal Agent the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) Reserve Fund (the "Reserve Fund"), to the credit of which a deposit shall be made as required by Section 4.01(A)(ii) equal to the Reserve Requirement as of the Closing Date for the 2017 Bonds, and deposits shall be made as provided in clause (ii) of the second paragraph of Section 4.06(A) and clause (ii) of Section 4.06(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 lien 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 redeeming Bonds from the Bond Fund. (C) Transfer Due to Deficiency in Bond Fund. Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall provide written notice thereof to the Treasurer, specifying the amount withdrawn. (D) Transfer of Excess of Reserve Requirement. Whenever, on the Business Day prior to any September 1 occurring on or after September 1, 2017, 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 the Bond Fund to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with Section 4.05. (E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund equals or 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 upon the written direction of the Treasurer transfer the amount in the Reserve Fund to the Bond Fund to be applied, on the next succeeding Interest -24- Payment Date to the payment and redemption, in accordance with Section 2.03 and 4.05, 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 under the Act. Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to this Section 4.04(E) until after (i) the calculation of any amounts due to the federal government pursuant to Section 5.13 following payment of the Bonds and withdrawal of any such amount from the Reserve Fund 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 Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and Bonds are to be redeemed with the proceeds of such prepayment pursuant to Section 2.03(A)(iii) and 4.05(B)(ii), funds in the Reserve Fund in the amount of any applicable "Reserve Fund Credit," as such term is defined in and otherwise determined in accordance with Section H of the Rate and Method of Apportionment of Special Taxes, shall be 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)(iii). The Treasurer shall deliver to the Fiscal Agent an Officer's Certificate specifying any amount to be so transferred, and the Fiscal Agent may rely on any such Officer's Certificate. (G) Transfer to Pay Rebate. Amounts in the Reserve Fund shall be withdrawn, at the written request of an Authorized Officer, for purposes of paying any rebate liability under Section 5.13. (H) Investment. Moneys in the Reserve 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 Reserve Fund to be used for the purposes of such fund, including any of the purposes specified in this Section 4.04. Section 4.05. Bond Fund. (A) Establishment of Bond Fund and Special Tax Prepayments Account. There is hereby established as a separate fund to be held by the Fiscal Agent, the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) Bond Fund (the "Bond Fund"), to the credit of which deposits shall be made as required by Section 4.02(D), Section 4.04, clause (ii) of the second paragraph of Section 4.06(A) and Section 4.06(B), and any other amounts required to be deposited therein by this Agreement or the Act. There is also hereby created in the Bond Fund a separate account held by the Fiscal Agent, the Special Tax Prepayments Account, to the credit of which deposits shall be made as provided in clause (iii) of the second paragraph of Section 4.06(A). Moneys in the Bond Fund and the accounts therein shall be held 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. Notwithstanding the foregoing, amounts in the Bond Fund may be used for the purposes set forth in Section 2.03(C). -25- (B) Disbursements. (i) Bond Fund Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Bond Fund and pay to the Owners of the Bonds the principal, 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 Section 2.03(A)(ii), or a redemption of the Bonds required by Section 2.03(A)(i) or (iii), such payments to be made in the priority listed in the second succeeding paragraph. Notwithstanding the foregoing, (a) amounts in the Bond Fund as a result of a transfer pursuant to Section 4.02(D) 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; and (b) amounts in the Bond Fund as a result of a transfer pursuant to clause (ii) of the second paragraph of Section 4.06(A) shall be immediately disbursed by the Fiscal Agent to pay past due amounts owing on the Bonds. In the event that amounts in the Bond Fund are insufficient for the purposes 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 4.05(B)(i), the Fiscal Agent shall apply the available 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. Each such payment shall be made ratably to the Owners of the Bonds based on the then Outstanding principal amount of the Bonds, if there are insufficient funds to make the corresponding payment for all of the then Outstanding Bonds. Any sinking payment not made as scheduled shall be added to the sinking payment to be made on the next sinking payment date. (ii) Special Tax Prepayments Account Disbursements. Moneys in the Special Tax Prepayments Account shall be transferred by the Fiscal Agent to the Bond Fund on the next date for which notice of redemption of Bonds can timely be given under Section 2.03(A)(iii), and notice to the Fiscal Agent can timely be given under Section 2.03(B), and shall be used (together with any amounts transferred pursuant to Section 4.04(F)) to redeem Bonds on the redemption date selected in accordance with Section 2.03. (C) Investment. Moneys in the Bond Fund and the Special Tax Prepayments Account shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from the investment and deposit 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 purposes of such fund and account. Section 4.06. Special Tax Fund. (A) Establishment of Special Tax Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) Special Tax Fund (the "Special Tax Fund"). The Authority shall transfer or cause to be transferred to the Fiscal Agent, as soon as practicable following receipt, all Special Tax Revenues received by the Authority and any amounts required by Section 4.01(B)(ii)(b) and Section 4.01(B)(iv) to be deposited to the Special Tax Fund, all -26- which amounts shall be deposited by the Fiscal Agent to the Special Tax Fund. In addition, the Fiscal Agent shall deposit in the Special Tax Fund amounts to be transferred thereto pursuant to Section 4.07(B) hereof. Notwithstanding the foregoing, (i) the first Special Tax Revenues collected by the Authority in any Fiscal Year, in an amount equal to the portion of such Fiscal Year's Special Tax levy for Administrative Expenses (but not to exceed, in any Fiscal Year, $35,000.00), shall be deposited by the Treasurer in the Administrative Expense Fund; (ii) any Special Tax Revenues constituting the collection of delinquencies in payment of Special Taxes shall be separately identified by the Treasurer and shall be deposited by the Fiscal Agent first, in the Bond Fund to the extent needed to pay any past due debt service on the Bonds; second, to the Reserve Fund to the extent needed to increase the amount then on deposit in the Reserve Fund up to the then Reserve Requirement; third, to the Administrative Expense Fund to the extent that amounts in such fund were used to pay costs related to the collection of such delinquencies; and fourth, to the Special Tax Fund for use as described in Section 4.06(B) below; and (iii) any proceeds of Special Tax Prepayments shall be transferred by the Treasurer to the Fiscal Agent for deposit by the Fiscal Agent (as specified in writing by the Treasurer to the Fiscal Agent) directly in the Special Tax Prepayments Account established pursuant to Section 4.05(A). Moneys in the Special Tax Fund shall be held by the Fiscal Agent for the benefit of the Authority and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds and the Authority. (B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Special Tax Fund and transfer the following amounts in the following order of priority (i) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any expected transfers from the Improvement Fund, the Reserve Fund and the Special Tax Prepayments Account to the Bond Fund pursuant to Sections 4.02(D), 4.04(D), (E), and (F), and 4.05(B)(ii), such that the amount in the Bond Fund equals the principal (including any sinking payment), premium, if any, and interest due on the Bonds on such Interest Payment Date, and (ii) 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 is equal to the Reserve Requirement. In addition to the foregoing, if in any Fiscal Year there are sufficient funds in the Special Tax Fund to make the foregoing transfers to the Bond Fund and the Reserve Fund in respect of the Interest Payment Dates occurring in the Bond Year that commences in such Fiscal Year, the Treasurer may transfer any amount in the Special Tax Fund in excess of the amount needed to make such transfers to the Bond Fund and the Reserve Fund (i) to the Administrative Expense Fund, from time to time, if monies are needed to pay Administrative Expenses in excess of the amount then on deposit in the Administrative Expense Fund; (ii) to such other fund or account established to pay debt service on or administrative expenses with respect to any bonds or other debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof under Section 3.02 of this Agreement; or (iii) to such other fund or account established by the -27- Authority to be used for any lawful purpose under the Act and otherwise in accordance with the provisions of the Rate and Method of Apportionment of Special Taxes. (C) Investment. Moneys in the Special Tax Fund shall be invested and deposited 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 4.07. Administrative Expense Fund. (A) Establishment of Administrative Expense Fund. There is hereby established as a separate fund to be held by the Treasurer, the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2016 Administrative Expense Fund (the "Administrative Expense Fund"), to the credit of which deposits shall be made as required by Sections 4.01(B)(i) and 4.03(B), and clause (i) of the second paragraph of Section 4.06(A). 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 withdrawn, that such amount is to be used to pay an Administrative Expense or Costs of Issuance, and the nature of such Administrative Expense or Costs of Issuance. Amounts transferred from the Costs of Issuance Fund to the Administrative Expense Fund pursuant to Section 4.03(B) shall be separately identified at all times, and shall be expended for purposes of the Administrative Expense Fund prior to the use of amounts transferred to the Administrative Expense Fund from the Special Tax Fund pursuant to Section 4.06(B). Annually, on the last day of each Fiscal Year, the Treasurer shall withdraw any amounts then remaining in the Administrative Expense Fund in excess of $20,000.00 that have not otherwise been allocated to pay Administrative Expenses incurred but not yet paid, and which are not otherwise encumbered, and transfer such amounts to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Fund. (C) Investment. Moneys in the Administrative Expense Fund shall be invested and deposited 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 thereof. -28- ARTICLE V OTHER COVENANTS OF THE AUTHORITY 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 (including the Special Tax Prepayments Account therein), the Reserve Fund and, until disbursed as provided herein, the Special Tax Fund. 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 all of the Bonds then Outstanding and of all claims for interest which shall not have 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 lien 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 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 all 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 Act. The Authority will comply with all applicable provisions of the Act and law in administering the District. Section 5.08. 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 limitation, the enforcement of delinquent Special Taxes. -29- On or within five (5) Business Days of each June 1, the Fiscal Agent shall provide the Treasurer with a notice stating the amount then on deposit in the Bond Fund and the Reserve Fund, and informing the Authority that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for the debt service to become due on the Bonds in the calendar year that commences in the Fiscal Year for which the levy is to be made, and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance therein equals the Reserve Requirement. The receipt of or failure to receive such notice by the Treasurer shall in no way affect the obligations of the Treasurer under the following two 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. The Treasurer shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance by each July 15 that the Bonds are outstanding, or otherwise such that the computation of the levy is complete 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 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 Treasurer shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any outstanding Bonds of the District becoming due and payable during the ensuing year, 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 (including amounts necessary to discharge any obligation under Section 5.13) during such year, taking into account the balances in such funds and in the Special Tax Fund. The Special Taxes so levied shall not exceed the maximum amounts as provided in the Rate and Method of Apportionment of Special Taxes. The Special Taxes, when levied, shall be payable and be collected in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property; provided that, pursuant to and in accordance with the Ordinance, the Special Taxes may be collected by means of direct billing of the property owners within the District, in which event the Special Taxes shall become delinquent if not paid when due pursuant to said billing. Section 5.09. Covenant to Foreclose. 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 as hereinafter provided, and thereafter diligently prosecute to judgment (unless such delinquency is theretofore brought current), an action in the superior court to foreclose the lien of any Special Tax or installment thereof not paid when due as provided in the following paragraph. The Treasurer shall notify the Authority Attorney of any such delinquency of which the Treasurer is aware, and the Authority Attorney shall commence, or cause to be commenced, such proceedings. On or about June 15 of each Fiscal Year, the Treasurer shall compare the amount of Special Taxes theretofore levied in the District to the amount of Special Tax Revenues theretofore received by the Authority, and: -30- (A) Individual Delinquencies. If, as of any June 15, the Treasurer determines that any single parcel subject to the Special Tax in the District is delinquent in the payment of Special Taxes in the aggregate amount of $7,500.00 or more, then the Treasurer shall promptly send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner, and (if the delinquency remains uncured) foreclosure proceedings shall be commenced by the Authority within 90 days after the notice of delinquency has been sent. (B) Aggregate Delinquencies. If the Treasurer determines that, as of any June 15, the total amount of delinquent Special Tax for the then current Fiscal Year for the entire District (including the total of delinquencies under subsection (A) above), exceeds 5% of the total Special Tax due and payable for the then current Fiscal Year, the Treasurer shall promptly notify or cause to be notified property owners who are then delinquent in the payment of Special Taxes (and demand immediate payment of the delinquency), and the Authority shall commence foreclosure proceedings within 90 days after the notices of delinquency have been sent. Notwithstanding the foregoing, the Treasurer may defer any mailing of notices of delinquency or foreclosure action if (i) the amount in the Reserve Fund is at least equal to the Reserve Requirement, and (ii) the amounts then on deposit in the Special Tax Fund and the Bond Fund are sufficient to pay the scheduled debt service due on the Bonds on the succeeding September 1 and March 1 without the need for any draw on the Reserve Fund. The Treasurer and the Authority Attorney, as applicable, are hereby authorized to employ counsel to conduct any such foreclosure proceedings. The fees and expenses of any such counsel (including a charge for Authority staff time) in conducting foreclosure proceedings shall be an Administrative Expense hereunder. Section 5.10. 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 5.11. Private Activity Bond Limitations. The Authority shall assure that the proceeds of the 2006 Bonds and of the 2017 Bonds are not so used as to cause the 2017 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. Section 5.12. 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 the 2017 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 5.13. Rebate Requirement. 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, if any, to the federal government, to the extent that such section is applicable to the 2017 Bonds. If necessary, the Authority may use amounts in the Reserve Fund, amounts on deposit in the Administrative Expense Fund, and any other funds available to the District, including -31- amounts advanced by the Authority or the City, in its respective sole discretion, to be repaid by the District as soon as practicable from amounts described in the preceding clauses, to satisfy its obligations under this Section 5.13. The Treasurer shall take note of any investment of monies hereunder in excess of the yield on the 2017 Bonds, and shall take such actions as are necessary to ensure compliance with this Section 5.13, such as increasing the portion of the Special Tax levy for Administration Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under this Section 5.13. In order to provide for the administration of this Section 5.13, 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 6.02, 6.03 and 6.04, 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. Any fees or expenses incurred by the Authority or the City under or pursuant to this Section 5.13 shall be Administrative Expenses. The Fiscal Agent may rely conclusively upon the Authority's determinations, calculations and certifications required by this Section. The Fiscal Agent shall have no responsibility to independently make any calculation or determination or to review the Authority's calculations hereunder. Section 5.14. 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 2017 Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the 2017 Bonds would have caused the 2017 Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Section 5.15. Yield of the 2017 Bonds. In determining the yield of the 2017 Bonds to comply with Section 5.13 and 5.14 hereof, the Authority will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the Authority, as of the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or 2017 Bonds redeemed. Section 5.16. Maintenance of Tax -Exemption. The Authority shall take all actions necessary to assure the exclusion of interest on the 2017 Bonds from the gross income of the Owners of the 2017 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 2017 Bonds. Section 5.17. Continuing Disclosure to Owners. In addition to its obligations under Section 9.07, 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 Agreement, failure of the Authority to comply with the Continuing Disclosure Agreement shall not be considered a default hereunder; however, any Participating Underwriter or any holder or Beneficial Owner (as defined in Section 2.13) of the Bonds may take such actions as may be necessary and appropriate to compel performance by the Authority of its obligations thereunder, including seeking mandate or specific performance by court order. Section 5.18. Reduction of Special Taxes. The Authority covenants and agrees to not consent or conduct proceedings with respect to a reduction in the maximum Special Taxes that -32- may be levied in the District below an amount, for any Fiscal Year, equal to 110% of the aggregate of the Debt Service due on the Bonds in such Fiscal Year, plus a reasonable estimate of Administrative Expenses for such Fiscal Year. It is hereby acknowledged that Bondowners are purchasing the Bonds in reliance on the foregoing covenant, and that said covenant is necessary to assure the full and timely payment of the Bonds. Section 5.19. Limits on Special Tax Waivers and Bond Tenders. The Authority covenants not to exercise its rights under the Act to waive delinquency and redemption penalties related to the Special Taxes or to declare Special Tax penalties amnesty program if to do so would materially and adversely affect the interests of the owners of the Bonds and further covenants not to permit the tender of Bonds in payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the Authority having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds remaining Outstanding following such tender. Section 5.20. No Additional Bonds. Except as expressly permitted by Section 2.14 hereof, the Authority shall not issue any additional bonds secured by (A) a pledge of Special Taxes on a parity with or senior to the pledge thereof under Section 3.02 hereof; or (B) any amounts in any funds or accounts established hereunder. Section 5.21. Authority Bid at Foreclosure Sale. The Authority will not bid at a foreclosure sale of property in respect of delinquent Special Taxes unless it expressly agrees to take the property subject to the lien for Special Taxes imposed by the District and that the Special Taxes levied on the property are payable while the Authority owns the property. -33- ARTICLE VI INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE AUTHORITY 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; provided that investments of amounts in the Improvement Fund shall be restricted as provided in Section 4.02(C). In the absence of any such Officer's Certificate, the Fiscal Agent shall invest, to the extent reasonably practicable, any such moneys in Permitted Investments described in clause (h) of the definition thereof in Section 1.03; provided, however, that any such investment shall be made by the Fiscal Agent only if, prior to the date on which such investment is to be made, the Fiscal Agent shall have received an Officer's Certificate specifying a specific money market fund into which the funds shall be invested and, if no such Officer's Certificate is so received, the Fiscal Agent shall hold such moneys uninvested. The Treasurer shall make note of any investment of funds hereunder in excess of the yield on the Bonds, so that appropriate actions can be taken to assure compliance with Section 5.13. 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 Permitted Investment, which in any event by its terms matures 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 and its affiliates or the Treasurer may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. Neither the Fiscal Agent nor the Treasurer shall incur any liability for losses arising from any investments made pursuant to this Section. The Fiscal Agent shall not be required to determine the legality of any investments. Except as otherwise provided in the next sentence, 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 Fiscal Agent shall have no duty in connection with the determination of Fair Market Value other than to follow the investment direction of an Authorized Officer in any written direction of any Authorized Officer. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under the applicable provisions of the Code and (unless valuation is undertaken at least annually) investments in the subaccounts within the Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Code). The Fiscal Agent shall not be liable for verification of the application of such sections of the Code. -34- 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 or the Treasurer, as applicable, shall sell at Fair Market Value, 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 fund or account to which such investment security is credited and neither the Fiscal Agent nor the Treasurer shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith. The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent will furnish the Authority periodic cash transaction statements which include detail for all investment transactions made by the Fiscal Agent hereunder. Section 6.02. 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 Special Tax Prepayments Account therein) and the Reserve Fund created hereunder. Section 6.03. 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. 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. -35- The Authority and the Treasurer 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 or the Treasurer 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, an Independent Financial Consultant or a Tax Consultant, and such certificate shall be full warrant to the Authority and the Treasurer 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 or the Treasurer may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 6.04. 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. -36- ARTICLE VII THE FISCAL AGENT Section 7.01. Appointment of Fiscal Agent. U.S. Bank National Association 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 Fiscal Agent shall give the Treasurer written notice of any such succession hereunder. The Authority may at any time 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, corporation 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, corporation 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 upon acceptance of appointment by the successor Fiscal Agent. Upon such acceptance, the successor Fiscal Agent shall be vested with all rights and powers of its predecessor hereunder without any further act. 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 Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. If, by reason of the judgment of any court, or reasonable agency, the Fiscal Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent hereunder shall be assumed by and vest in the Treasurer of the Authority in trust for the benefit of the Owners. The Authority covenants for the direct benefit of the Owners that its Treasurer in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the -37- Fiscal Agent hereunder, in trust for the benefit of the Owners of the Bonds. In such event, the Treasurer may designate a successor Fiscal Agent qualified to 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. 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, 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 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. 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 if it were not the Fiscal Agent. The Fiscal Agent shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, and its liability shall be limited to the proper accounting for such funds as it shall actually receive. -38- The Fiscal Agent may consult with counsel, who may be 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. In order to perform its duties and obligations hereunder, the Fiscal Agent may employ such persons or entities as it deems necessary or advisable. The Fiscal Agent 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. 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 (including the Special Tax Prepayments Account therein), the Reserve Fund, the Special Tax Fund, the Improvement Fund and the Costs of Issuance Fund. Such books of record and accounts shall 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 upon reasonable prior notice. 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, consent, order, certificate, report, warrant, bond or other paper or document believed in good faith by it to be genuine and to have been signed or presented by the proper party or proper parties. 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 satisfactorily 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 an Officer's Certificate, 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. 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 -39- 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 costs, expenses, claims or liabilities whatsoever, including without limitation fees and expenses of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the Authority under this Section shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement, but any monetary obligation of the Authority arising under this Section shall be limited solely to amounts on deposit in the Administrative Expense Fund. -40- ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT 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 Owners of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), or (iii) 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, correcting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the Authority or the Fiscal Agent 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; (D) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from gross federal income taxation of interest on the Bonds; and (E) in connection with the issuance of Parity Bonds under and pursuant to Section 2.14. The Fiscal Agent may in its discretion, but shall not be obligated to, enter into any such Supplemental Agreement authorized by this Section which materially adversely affects the Fiscal Agent's own rights, duties or immunities under this Fiscal Agent Agreement or otherwise with respect to the Bonds or any agreements related thereto. -41- 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 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; provided, however, that the Fiscal Agent shall not be deemed to have knowledge that any Bond is owned or held by the Authority unless the Authority is the registered Owner or the Fiscal Agent has received written notice that any other registered Owner is an Owner for the account of the Authority. -42- 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 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. -43- ARTICLE IX MISCELLANEOUS 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. 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, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in Sections 4.04 and 4.05 is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or (C) by irrevocably depositing with the Fiscal Agent 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 4.04 and 4.05, 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 if 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 obligation 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, 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 taken if -44- 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, Councilmember, officer, official, agent or employee of the Authority, the City or the District 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 Boardmember, Councilmember, officer, official, 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: Temecula Public Financing Authority c/o City of Temecula 41000 Main Street Temecula, CA 92590 Attn: Director of Finance 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 -45- deposited postage prepaid in a post office letter box addressed (until another address is filed by the Fiscal Agent with the Authority) as follows (provided that any such notice shall not be effective until actually received by the Fiscal Agent): U.S. Bank National Association 633 W. Fifth Street, 24th Floor Los Angeles, CA 90071 Attention: Corporate Trust Services Reference: Temecula CFD 03-02 (Roripaugh Ranch) Section 9.07. State Reporting Requirements. The following requirements shall apply to the Bonds, in addition to those requirements under Section 5.17: (A) Annual Reporting. Not later than October 30 of each calendar year, beginning with the October 30 first succeeding the Closing Date, and in each calendar year thereafter until the October 30 following the final maturity of the Bonds, the Treasurer shall cause the following information to be supplied to CDIAC: (i) the name of the Authority; (ii) the full name of the District; (iii) the name, title, and series of the Bond issue; (iv) any credit rating for the Bonds and the name of the rating agency; (v) the Closing Date of the Bond issue and the original principal amount of the Bond issue; (vi) the amount of the Reserve Requirement; (vii) the principal amount of Bonds outstanding; (viii) the balance in the Reserve Fund; (ix) that there is no capitalized interest account for the Bonds; (x) the number of parcels in the District that are delinquent with respect to Special Tax payments, the amount that each parcel is delinquent, the total amount of Special Taxes due on the delinquent parcels, the length of time that each has been delinquent, when foreclosure was commenced for each delinquent parcel, the total number of foreclosure parcels for each date specified, and the total amount of tax due on the foreclosure parcels for each date specified; (xi) the balance, if any, in the Improvement Fund; (xii) the assessed value of all parcels subject to the Special Tax to repay the Bonds as shown on the most recent equalized roll, the date of assessed value reported, and the source of the information; (xiii) the total amount of Special Taxes due, the total amount of unpaid Special Taxes, and whether or not the Special Taxes are paid under any County Teeter Plan (Chapter 6.6 (commencing with Section 54773) of the California Government Code); (xiv) the reason and the date, if applicable, that the Bonds were retired; and (xv) contact information for the party providing the foregoing information. The annual reporting shall be made using such form or forms as may be prescribed by CDIAC. (B) Other Reporting. If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bonds, or if funds are withdrawn from the Reserve Fund to pay principal and interest on the Bonds, the Fiscal Agent shall notify the Treasurer of such failure or withdrawal in writing. The Treasurer shall notify CDIAC and the Original Purchaser of such failure or withdrawal within 10 days of such failure or withdrawal, and the Authority shall provide notice under the Continuing Disclosure Agreement of such event as required thereunder. (C) Special Tax Reporting. The Treasurer shall file a report with the Authority no later than January 1, 2018, and at least once a year thereafter, which annual report shall contain: (i) the amount of Special Taxes collected and expended with respect to the District, (ii) the amount of Bond proceeds collected and expended with respect to the District, and (iii) the status of the Project. It is acknowledged that the Special Tax Fund -46- and the Special Tax Prepayments Account are the accounts into which Special Taxes collected on the District will be deposited for purposes of Section 50075.1(c) of the California Government Code, and the funds and accounts listed in Section 4.01 are the funds and accounts into which Bond proceeds will be deposited for purposes of Section 53410(c) of the California Government Code, and the annual report described in the preceding sentence is intended to satisfy the requirements of Sections 50075.1(d), 50075.3 and 53411 of the California Government Code. (D) Amendment. The reporting requirements of this Section 9.07 shall be amended from time to time, without action by the Authority or the Fiscal Agent (i) with respect to subparagraphs (A) and (B) above, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act, and (ii) with respect to subparagraph (C) above, to reflect any amendments to Section 50075.1, 50075.3, 53410 or 53411 of the California Government Code. Notwithstanding the foregoing, any such amendment shall not, in itself, affect the Authority's obligations under the Continuing Disclosure Agreement. The Authority shall notify the Fiscal Agent in writing of any such amendments which affect the reporting obligations of the Fiscal Agent under this Agreement. (E) No Liability. None of the Authority and its officers, agents and employees, the Treasurer or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 9.07. The Treasurer shall provide copies of any of such reports to any Bondowner upon the written request of a Bondowner and payment by the person requesting the information of the cost of the Authority to produce such information and pay any postage or other delivery cost to provide the same, as determined by the Treasurer. The term "Bondowner" for purposes of this Section 9.07 shall include any Beneficial Owner (as defined in Section 2.13) of the Bonds. Section 9.08. 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 9.09. 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 pledge or lien under this Agreement, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Authority for the payment of the principal of, and interest and any premium on, such Bonds. Any right of any Owner to look to the Authority for such payment shall survive only so long as required under applicable law. Section 9.10. 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. -47- Section 9.11. 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. Section 9.12. 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 9.13. 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 from and after such date. Section 9.14. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. -48- IN WITNESS WHEREOF, the Authority caused this Fiscal Agent Agreement to be executed all as of February 1, 2017. Attest: By: Randi Johl, Secretary TEMECULA PUBLIC FINANCING AUTHORITY, for and on behalf of TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03- 02 (RORIPAUGH RANCH) By: Aaron Adams, Executive Director U. S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By: Authorized Officer [Signature page to Fiscal Agent Agreement — CFD 03-02 (Roripaugh Ranch)] 20009.14:J13847 S-1 No. EXHIBIT A FORM OF 2017 BOND UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2017 SPECIAL TAX REFUNDING BOND $ INTEREST RATE MATURITY DATE BOND DATE CUSIP September 1, February _, 2017 87972Y REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The Temecula Public Financing Authority (the "Authority") for and on behalf of the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) (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 set forth above, or from the most recent interest payment date to which interest has been or duly provided for, semiannually on March 1 and September 1, commencing September 1, 2017, 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 Office (as defined in the Agreement referred to below) of U.S. Bank National Association (the "Fiscal Agent"). 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 (i) if the Bonds are in book - entry -only form, or (ii) otherwise 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 the depository for the Bonds or to an account in the United States designated by such registered owner in such written request, respectively. This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $ approved by a resolution of the Board of Directors of the Authority adopted on A-1 January 24, 2017 (the "Resolution"), and being issued pursuant to the provisions of Section 53311 et seq. of the California Government Code (the "Act") and Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, for the purpose of refunding a portion of the outstanding Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds, and is one of the series of bonds designated "Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2017 Special Tax Refunding Bonds" (the "Bonds"). The creation of the Bonds and the terms and conditions thereof are provided for in the Fiscal Agent Agreement, dated as of February 1, 2017, 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. Pursuant to and as more particularly provided in the Resolution and in the Agreement, additional bonds may be issued by the Authority from time to time secured by a lien on funds held under the Agreement on a parity with the lien securing the Bonds. The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with, the laws of the State of California. Pursuant to the 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 Act to be collected within the District (the "Special Tax") and certain funds held under 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 from such date of authentication, or (ii) it is authenticated prior to an interest payment date and after the close of business on the Record Date preceding such interest payment date, in which event it shall bear interest from such interest payment date, or (iii) it is authenticated prior to the Record Date preceding the first interest payment date, in which event it shall bear interest from the Bond Date set forth above; provided, however, that if 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 Authority, as may be permitted by law. The Bonds do not constitute obligations of the Authority for which the Authority is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. The City of Temecula has no liability or obligations whatsoever with respect to the District, the Bonds or the Agreement. The Bonds maturing on or after September 1, 2028 are subject to redemption prior to their stated maturity on any interest payment date occurring on or after September 1, 2027, as a whole or in part in an amount equal to $5,000 or any integral multiple thereof among maturities as provided in the Agreement, and by lot within a maturity, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Bonds maturing on September 1, , 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: A-2 Redemption Date (September 1) Sinking Payments The Bonds are also subject to redemption from the proceeds of Special Tax Prepayments and any corresponding transfers from the Reserve Fund pursuant to the Agreement, on any Interest Payment Date, in whole, or in part in any amount equal to $5,000 or any integral multiple thereof among maturities as specified in the Agreement and by lot within a maturity, at a redemption price (expressed as a percentage at the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption: Redemption Dates Redemption Prices any Interest Payment Date from September 1, 103% 2017 to and including March 1, September 1, and March 1, 102 September 1, and March 1, 101 September 1, and any Interest Payment 100 Date thereafter 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. Notices of optional redemption may be conditioned upon receipt by the Fiscal Agent of sufficient moneys to redeem the Bonds on the anticipated redemption date, and if the Fiscal Agent does not receive sufficient funds by the scheduled redemption date the redemption shall not occur and the Bonds for which notice of redemption was given shall remain outstanding for all purposes of the Agreement. This Bond shall be registered in the name of the owner hereof, as to both principal and interest. 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 manual 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, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding interest payment date. Exchanges may only be made for Bonds in authorized denominations, as provided in the Agreement. A-3 The Agreement and the rights and obligations of the Authority thereunder may be modified or amended as set forth therein. The Agreement contains provisions permitting the Authority to make provision for the payment of the interest on, and the principal and premium, if any, of the Bonds so that such Bonds shall no longer be deemed to be outstanding under the terms of the Agreement. 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 signed by the Fiscal Agent. Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. 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, Temecula Public Financing Authority has caused this Bond to be dated the Bond Date set forth above, to be signed by the facsimile signature of its Chairperson and countersigned by the facsimile signature of its Secretary. ATTEST: By: Randi Johl Secretary A-4 TEMECULA PUBLIC FINANCING AUTHORITY By: Michael S. Naggar, Chairperson FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the Resolution and in the Agreement which has been authenticated on A-5 U.S. Bank National Association, as Fiscal Agent By: Authorized Signatory ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within -registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney, to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises. Dated: Signature Guaranteed: Signature: Note: Signature(s) must be guaranteed by an eligible guarantor. A-6 Note: The signature(s) on this Assignment must 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. SYCR DRAFT OF 1/3/17 TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) 2017 SPECIAL TAX BONDS BOND PURCHASE AGREEMENT February _, 2017 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Temecula, California Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (the "Purchase Agreement") with the Temecula Public Financing Authority (the "Authority"), acting on behalf of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (the "District"), which, upon acceptance, will be binding upon the Authority and upon the Underwriter. This offer is made subject to its acceptance by the Authority as evidenced by its execution and delivery to the Underwriter prior to 5:00 p.m. PST on the date hereof and, if not accepted prior thereto, will be subject to withdrawal by the Underwriter upon written notice delivered to the Authority at any time prior to the acceptance hereof by the Authority. The Authority acknowledges and agrees that: (i) the purchase and sale of the Bonds (as such term is defined below) pursuant to this Purchase Agreement is an arm's-length commercial transaction between the Authority and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as a "municipal advisor" (as defined in Section 15B of the Securities Exchange Act of 1934, as amended) to either the Authority or the District; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Authority on other matters); (iv) the Underwriter has financial interests that may differ from, and be adverse to, those of the Authority and the District; and (v) the Authority has consulted its own legal, financial and other advisors to the extent it has deemed appropriate with respect to this transaction. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the Authority, and the Authority agrees to sell to the Underwriter, all (but not less than all) of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Special Tax Refunding Bonds, Series 2017 (the "Bonds") in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be dated the Closing Date (as such term is defined below), shall bear interest from said date (payable semiannually on March 1 and September 1 in each year, commencing September 1, 2017) at the rates per annum, shall mature on September 1 in each of the years and in the amounts, and shall be subject to redemption, all as set forth in Exhibit A hereto. The purchase price for the Bonds shall be the amount specified as such in Exhibit A hereto. (b) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable as provided in, the Fiscal Agent Agreement by and between the Authority and U.S. Bank National Association, as Fiscal Agent (the "Fiscal Agent"), dated as of February 1, 2017 (the "Fiscal Agent Agreement"), approved by Resolution No. TPFA 17-_ adopted by the Board of Directors of the Authority, (the "Board of Directors"), as the legislative body of the Authority and the District, on January 24, 2017 (the "Resolution of Issuance"). The Bonds and interest thereon will be payable from Special Tax Revenues (as that term is defined in the Fiscal Agent Agreement) derived from a special tax which is referred to in the Fiscal Agent Agreement as "Special Tax A" (the "Special Tax") and which is to be levied and collected on the taxable land within the District in accordance with Resolution No. TPFA 16-04 adopted by the Board of Directors on April 26, 2016 (the "Resolution of Formation") and Ordinance No. TPFA 16-01 (the "Ordinance"). Proceeds of the sale of the Bonds will be used in accordance with the Fiscal Agent Agreement and the Mello -Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California) (the "Act"), to: (i) prepay certain special taxes applicable to property within the District (the "CFD No. 03-02 Special Taxes"), (ii) pay the costs of the acquisition and construction of certain public facilities necessary for the development of the District (the "Facilities"), (iii) fund a reserve fund for the Bonds, (iv) pay certain administrative expenses of the Authority and (v) pay the costs of issuing the Bonds. The Resolution of Formation, the Resolution of Issuance, Resolution Nos. TPFA 16-05 through TPFA 16-07 and the Ordinance are collectively referred to herein as the "District Resolutions." (c) At or prior to the execution of this Bond Purchase Agreement, except to the extent waived by the Underwriter, the District shall have caused to be delivered to the Underwriter a certificate of each of Roripaugh Valley Restoration, LLC and Wingsweep Corporation (each, an "Owner" and, collectively, the "Owners") on its behalf its chief financial officer or, if it does not have a chief financial officer, by the person holding the position with responsibilities most similar to those of a chief financial officer, or by such other officer as may have been approved in writing by the Underwriter, in the form attached hereto as Exhibit B, with only such changes thereto as shall have been accepted by the Underwriter. (d) Subsequent to its receipt of the Authority's 15c2-12 Certificate, in substantially the form attached hereto as Exhibit C, deeming the Preliminary Official Statement for the Bonds, dated , 2017 (the "Preliminary Official Statement"), final for purposes of Rule 15c2-12 ("Rule 15c2-12") of the Securities and Exchange Commission (the "SEC"), the Underwriter has distributed copies of the Preliminary Official Statement. The Authority hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute in printed and/or electronic format the final Official Statement dated the date hereof (including all information previously permitted to have been omitted from the Preliminary Official Statement by Rule 15c2-12, and any supplements and amendments thereto as have been approved by the Authority as evidenced by the execution and delivery of such document by an officer of the Authority) (the "Official Statement"), the Fiscal Agent Agreement, the Continuing Disclosure Agreement of the Authority (the "Authority Disclosure Agreement"), the Joint Community Facilities Agreement by and between the City of Temecula and the Authority (the "JCFA"), the Acquisition Agreement, dated as of February 1, 2017, by and between Roripaugh Valley Restoration, 2 LLC and the Authority (the "Acquisition Agreement"), this Purchase Agreement, and all information contained therein, and all other documents, certificates and written statements furnished by the Authority to the Underwriter in connection with the transactions contemplated by this Purchase Agreement, in connection with the offer and sale of the Bonds by the Underwriter. The Underwriter hereby agrees to deliver a copy of the Official Statement to the Municipal Securities Rulemaking Board (the "MSRB") through the Electronic Municipal Marketplace Access website of the MSRB on or before the Closing Date and otherwise to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12. (e) Except as otherwise disclosed in writing and agreed to by the Authority, the Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth in Exhibit A hereto; provided, however, that the Underwriter reserves the right to: (i) change such prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, (ii) sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the aforesaid initial offering prices and (iii) over -allot or effect transactions which stabilize or maintain the market price of the Bonds at levels above those that might otherwise prevail in the open market and discontinue such stabilizing, if commenced, at any time without prior notice. A "bona fide public offering" shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. (f) At 8:00 a.m., Pacific Standard Time, on February _, 2017, or at other time or date as shall be agreed upon by the Underwriter and the Authority (such time and date being herein referred to as the "Closing Date"), the Authority will deliver (i) to The Depository Trust Company ("DTC") or to the Fiscal Agent, acting as DTC's agent, the Bonds in definitive form (all Bonds being in book - entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the Authority and authenticated by the Fiscal Agent, as provided in the Fiscal Agent Agreement, and (ii) to the Underwriter, at the offices of Bond Counsel (as such term is defined below), or at such other place as shall be mutually agreed upon by the Authority and the Underwriter, the other documents mentioned in Section 3(d) below; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being herein referred to as the "Closing"). 2. Representations, Warranties and Agreements of the Authority. The Authority represents, warrants and covenants to and agrees with the Underwriter that: (a) The Authority is duly organized and validly existing as a joint exercise of powers authority under the laws of the State of California and has duly authorized the formation of the District pursuant to the Resolution of Formation and the Act. The Board of Directors, as the legislative body of the Authority and the District, has duly adopted the District Resolutions, and has caused to be recorded a Notice of Special Tax Lien in the real property records of the County of Riverside as Document No. 2016-0180604 (the "Notice of Special Tax Lien"). (The District Resolutions and the Notice of Special Tax Lien are collectively referred to herein as the "Formation Documents"). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended, modified or supplemented. The District is duly organized and validly existing as a community facilities district under the laws of the State of California (the "State"). The Authority has, and at the Closing Date will have, as the case may be, full legal right, power and authority (i) to execute, deliver and perform its obligations under this Purchase 3 Agreement, the Fiscal Agent Agreement, the Authority Disclosure Agreement, the JCFA and the Acquisition Agreement (collectively, the "Authority Documents") and to carry out all transactions contemplated by each of the Authority Documents and the Official Statement; and (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Resolution of Issuance and the Fiscal Agent Agreement and as provided herein. (b) The Authority has complied, and will at the Closing Date be in compliance, in all material respects, with the Formation Documents and the Authority Documents, and any immaterial non-compliance by the Authority will not impair the ability of the Authority to carry out, give effect to or consummate the transactions on its part contemplated by the foregoing. From and after the date of issuance of the Bonds, the Authority will continue to comply with the covenants of the Authority contained in the Authority Documents. (c) The Board of Directors has duly and validly: (i) adopted the District Resolutions, (ii) called, held and conducted in accordance with all requirements of the Act an election within the District to approve the levy of the Special Tax within the District and to authorize bonded indebtedness of the District, (iii) authorized and approved the issuance of the Bonds and due performance by the Authority of its obligations set forth in the Authority Documents, (iv) authorized the preparation, delivery and distribution of the Preliminary Official Statement and the Official Statement, and (v) authorized and approved the performance by the Authority of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by, each of the Authority Documents (including, without limitation, the levy of the Special Tax), the Bonds and the Official Statement; and, at the Closing Date, the Formation Documents will be in full force and effect and the Authority Documents and the Bonds will constitute the valid, legal and binding obligations of the Authority and (assuming due authorization, execution and delivery by other parties thereto, where necessary) will be enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles if equitable remedies are sought and to the limitations on legal remedies against public agencies in the State. (d) To the best of the Authority's knowledge, neither the Authority nor the District is in breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order to which the Authority or the District is subject, or under any loan agreement, note, resolution, fiscal agent agreement, contract, agreement or other instrument to which the Authority or District is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the Authority or the District of their respective obligations under the Bonds, the Formation Documents or the Authority Documents, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order to which the Authority or the District is subject, or a material breach of or default under any loan agreement, note, resolution, indenture, fiscal agent agreement, trust agreement, contract, agreement or other instrument to which the Authority or the District is a party or is otherwise subject or bound. (e) Except for compliance with blue sky or other states securities law filings, as to which the Authority makes no representations, all approvals, consents, authorizations, elections and orders 4 of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Authority of its obligations hereunder, or under the Formation Documents or the Authority Documents, have been obtained and are in full force and effect. (f) The Special Tax constituting the source of funds for the payment of the Bonds has been duly and lawfully authorized and may be levied under the Act, the State Constitution and the applicable laws of the State; and such Special Tax constitutes a valid and legally binding continuing lien on the properties on which it will be levied (except to the extent that any of such property prepays its Special Tax obligation); except as described in the Official Statement, the Authority is unaware of any outstanding special assessment liens or special tax liens applicable to any property within the District other than the Special Tax authorized to be levied by the Authority on behalf of the District; and the Authority has no present intention of conducting further proceedings leading to the levying of any additional special assessments or special taxes against any such property. (g) The Authority will not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without prior written notification of the Underwriter. Until the date which is twenty-five (25) days after the "end of the underwriting period" (as hereinafter defined), if any event shall occur of which the Authority is aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the Authority shall forthwith notify the Underwriter of such event and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter's reasonable opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time; and the Authority shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. If any such amendment or supplement of the Official Statement shall occur after the Closing Date, the Authority also shall furnish, or cause to be furnished, such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of such amendment or supplement to the Official Statement. As used herein, the term "end of the underwriting period" means the later of such time as (i) the Authority delivers the Bonds to the Underwriter, or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public; and unless the Underwriter gives notice to the contrary, the "end of the underwriting period" shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the Authority at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the "end of the underwriting period." (h) The Fiscal Agent Agreement creates a valid pledge of the Special Taxes and the moneys in the Bond Fund, the Reserve Fund and, until disbursed as provided in the Fiscal Agent Agreement, the Special Tax Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon to maturity or to the date of redemption if redeemed prior to maturity, and premium, if any, the Authority will faithfully perform and abide by all of its obligations under the Fiscal Agent Agreement. 5 (i) Except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body with respect to which the Authority has been served with process or has received pleadings or equivalent documents is pending or, to the best knowledge of the Authority, is threatened (i) which would materially adversely affect the ability of the Authority to perform its obligations under the Bonds, the Formation Documents or the Authority Documents, or (ii) which seeks to restrain or to enjoin (A) the development of any of the land within the District in the manner described in the Preliminary Official Statement and the Official Statement, (B) the issuance, sale or delivery of the Bonds, (C) the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or (D) the collection or application of the Special Tax pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or which in any way contests or affects the validity or enforceability of the Bonds, the Formation Documents, the Authority Documents, or any action contemplated by any of said documents, or (iii) which in any way contests the completeness or accuracy of the Official Statement or the powers or authority of the Authority with respect to the Bonds, the Formation Documents, the Authority Documents, or any action of the Authority or the District contemplated by any of said documents; nor is there any action pending with respect to which the Authority has been served with process or has received pleadings or equivalent documents or, to the best knowledge of the Authority, threatened against the Authority or the District which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation. (j) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the 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 Underwriter may designate; provided, however, the Authority shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing. (k) Any certificate signed by any official of the Authority authorized by the Board of Directors of the Authority to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein. (1) The Authority will apply the proceeds of the Bonds in accordance with the Fiscal Agent Agreement and as described in the Official Statement. (m) The information contained in the Preliminary Official Statement (except the information under the caption ["THE DISTRICT — Property Ownership and Development,"] any information supplied by the Underwriter, any information regarding DTC or its book -entry system, and CUSIP numbers, as to which no view is expressed) was as of the date thereof, and the information contained in the Official Statement (except the information under the caption ["THE DISTRICT — Property Ownership and Development,"] any information supplied by the Underwriter, any information regarding DTC or its book -entry system, and CUSIP numbers, as to which no view is expressed) is as of its date and will be on the Closing Date, true and correct in all material respects; and such information does not and shall 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. (n) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the Authority as of its date, except for the omission of such information as is 6 permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The Authority hereby covenants and agrees that, within seven (7) business days from the date hereof, or, if sooner, upon reasonable written notice from the Underwriter, within sufficient time to accompany any confirmation requesting payment for Bonds from any customer of the Underwriter the Authority shall cause a final printed form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the Authority so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-15, G-32 and G-36 of the MSRB. (o) Except as disclosed in the Official Statement, the Authority is not, and has not been within the last five (5) years, in material breach of any reporting obligation that it has undertaken under Rule 15c2-12. To the best knowledge of the Authority neither the City of Temecula (the "City") nor any public agency for which the City Council of the City serves as the legislative body is, or has been within the last five (5) years, in material breach of any reporting obligation that it has undertaken under Rule 15c2-12. (p) Prior to the end of the underwriting period, the Authority shall not amend, terminate, or rescind, and will not agree to any amendment, termination, or rescission of the Formation Documents, the Authority Documents or this Purchase Agreement without the prior written consent of the Underwriter (which consent shall not be unreasonably delayed or withheld). (q) The Authority shall not voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to the Authority as set forth in this Purchase Agreement. (r) The Authority shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from personal income taxation of the State or the exclusion from gross income for federal income tax purposes of the interest on the Bonds. 3. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the Authority contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the Authority made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Authority of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions: (a) At the Closing Date, the Formation Documents and the Authority 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 there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as, in the opinion of Quint & Thimmig LLP ("Bond Counsel") shall be necessary and appropriate. (b) The information contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 2(g) hereof, be true and correct in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 2(g) hereof, 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 light of the circumstances under which they were made, not misleading. 7 (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement or the ability of the Underwriter to enforce contracts for the sale of Bonds shall not have been materially adversely affected, in the reasonable judgment of the Underwriter (as evidenced by a written notice to the Authority terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following: (1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; (2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the SEC, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect; (3) any amendment to the federal or California Constitution or action by any federal or State court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Authority or the District, their respective properties, incomes, or securities (or interest thereon), the validity or enforceability of the Special Tax or the ability of the Authority to provide for the prepayment of the CFD No. 03-02 Special Taxes and/or to finance the acquisition and construction of the Facilities as contemplated by the Formation Documents, the Authority Documents or the Official Statement; (4) any event occurring, or information becoming known, which, in the reasonable judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading misleading and (x) the Authority refuses to permit the Official Statement to be supplemented to supply such statement or information or (y) the effect of any such supplement would be to materially 8 adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; (5) a declaration of war or an escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States; (6) the declaration of a general banking moratorium by federal, State of New York or State of California authorities, or the general suspension of trading on any national securities exchange or the fixing and maintaining in force of minimum or maximum prices for trading or maximum ranges for prices for securities on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; (7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (8) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; (9) there shall have been any material adverse change in the financial affairs of the Authority or the District; (10) there shall be filed or threatened any litigation described in Section 2(i); (11) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or (12) a stop order, release, regulation, or no -action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of federal securities laws at the Closing Date. (d) On the Closing Date, the Underwriter shall have received originals or true and correct copies of the following documents, in either printed or electronic format in each case satisfactory in form and substance to the Underwriter: (1) The Formation Documents and the Authority Documents, together with a certificate dated as of the Closing Date of the Secretary of the Authority to the effect that each such 9 document is a true, correct and complete copy of the one duly approved or adopted by the Board of Directors; (2) The Preliminary Official Statement and the Official Statement; (3) An unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the Authority, in the form attached to the Official Statement as [Appendix E], and a letter from Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that such approving opinion may be relied upon by the Underwriter to the same extent as if such opinion was addressed to it; (4) A supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that (i) the JCFA, the Acquisition Agreement, the Authority Disclosure Agreement and this Purchase Agreement have been duly authorized, executed and delivered by the Authority, and, assuming such agreements constitute valid and binding obligations of the respective other parties thereto, they constitute the legally valid and binding agreements of the Authority enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor's rights or remedies and by general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the 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; (iii) the information contained in the Official Statement on the cover and under the captions ["INTRODUCTION," "PLAN OF FINANCE," "THE 2017 BONDS (excluding the subheading "Debt Service Schedule")," "SECURITY FOR THE 2017 BONDS," "LEGAL MATTERS — Tax Exemption," and Appendices C and E] thereof is accurate, insofar as such information purports to summarize or replicate certain provisions of the Act, the Bonds and the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State personal income taxes of interest on the Bonds present a fair and accurate summary of such provisions; and (iv) the Special Taxes have been duly and validly authorized in accordance with the provisions of the Act; (5) An opinion, dated the Closing Date and addressed to the Authority and the Underwriter of Quint & Thimmig LLP, in its capacity as the Authority's disclosure counsel ("Disclosure Counsel"), to the effect that, without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, but on the basis of their participation in conferences with representatives of the Authority and the District, Richards, Watson & Gershon, A Professional Corporation, as counsel to the Authority, Bond Counsel, Fieldman Rolapp & Associates, as financial advisor to the Authority, the Special Tax Consultant (as such term is defined below), the Underwriter, the Owners, the Appraiser (as such term is defined below), Empire Economics (as such term is defined below), the Special Tax Consultant (as such term is defined below) and others, and their examination of certain documents, no facts have come to their attention which would lead them to believe that the Official Statement as of its date or as of the Closing Date contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial, statistical, economic, engineering, or demographic data or forecasts, numbers, charts, tables, graphs, maps, estimates, projections, assumptions or expressions of opinion, or any information about feasibility, valuation, appraisals, market absorption, real estate, archaeological, or environmental matters, the Appendices to the Official Statement or any 10 information about debt service requirements, book -entry, The Depository Trust Company, or tax exemption contained in the Official Statement); (6) An opinion, dated the Closing Date and addressed to the Underwriter, of Stradling Yocca Carlson & Rauth, a Professional Corporation ("Underwriter's Counsel"), in form and substance acceptable to the Underwriter; (7) A certificate or certificates, dated the Closing Date and signed by an authorized officer of the Authority, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying that (i) the representations and warranties of the Authority contained in Section 2 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Official Statement; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters discussed therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect; and (iii) the Authority has complied, in all material respects, with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Authority Documents and the Official Statement at or prior to the Closing Date; (8) An opinion, dated the Closing Date and addressed to the Underwriter, of legal counsel to the Authority, to the effect that (i) to the best of his or her knowledge and except as disclosed in the Official Statement, there is no litigation, action, suit, proceeding or investigation at law or in equity as to which the Authority is or would be a party, before or by any court, governmental agency or body, pending and notice of which has been served on and received by the Authority or, to the best of his or her knowledge, threatened against the Authority, challenging the creation, organization or existence of the Authority or the District, or the validity of the Financing Documents or contesting the authority of the Authority to enter into or perform its obligations under any of such documents, or with respect to which an unfavorable decision, ruling or finding would materially adversely affect the ability of the Authority to perform its obligations under the Bonds, the Formation Documents or the Authority Documents, or which seeks to restrain or enjoin the development of the land within the District as described in the Official Statement or the issuance, sale and delivery of the Bonds or which challenges the exclusion from gross income for federal income tax purposes or State of California personal income taxes of interest on the Bonds, or the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax to pay the principal of and interest on the Bonds, or which in any way contests or affects the validity or enforceability of the Bonds, the Formation Documents or the Authority Documents or the accuracy of the Official Statement, or any action of the Authority contemplated by any of said documents; (ii) the Authority is duly organized and validly existing as a joint exercise of powers authority under the laws of the State of California and the District is duly organized and validly existing as a community facilities district under the laws of the State of California, (iii) the Board of Directors has duly and validly adopted the Formation Documents and Authority Documents at meetings of the Board of Directors which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Formation Documents and Authority Documents are now in full force and effect and have not been amended; and (iv) to the best of such counsel's knowledge, the authorization, execution and delivery of the Authority Documents and compliance with the provisions thereof by the Authority of its obligations thereunder, will not conflict with, or constitute a breach or default 11 under, in any material respect, any law, administrative regulation, court decree, resolution, ordinance or other agreement to which the Authority or District is subject or by which it is bound; (9) A certificate of each Owner, executed on its behalf by its chief financial officer or, if it does not have a chief financial officer, by the person holding the position with responsibilities most similar to those of a chief financial officer, or by such other officer as may have been approved in writing by the Underwriter, and dated the Closing Date, to the effect that the certifications, representations and warranties set forth in the certificate of such Owner delivered pursuant to Section 1(c) hereof are true and correct in all material respects as of the Closing Date, except that all references in such certificate to the Preliminary Official Statement shall be deemed to be references to the Official Statement; (10) A letter from counsel to each Owner, dated the Closing Date and addressed to the Underwriter and the District, substantially in the form attached hereto as Exhibit D; (11) One or more certificates dated the Closing Date from Albert A. Webb Associates (the "Special Tax Consultant") addressed to the Authority and the Underwriter to the effect that (i) the Special Tax, if collected in the maximum amounts permitted from the properties in the District whose Special Tax will not have been prepaid in full at or before the Closing Date, and without regard to the portion thereof levied to pay Administrative Expenses, will generate in each Fiscal Year at least 110% of the debt service payable with respect to the Bonds in the calendar year that begins in such Fiscal Year; (ii) all information appearing in the Official Statement for which the Special Tax Consultant is identified as being the source is true and correct as of the date of the Official Statement and as of the Closing Date; and (iii) the statements concerning the Special Tax and the statistical and financial data set forth in the tables and discussion in the Official Statement which were derived from information supplied by the Special Tax Consultant for use in the Official Statement are true, correct and complete in all material respects and do 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 light of the circumstances under which they were made, not misleading and no events or occurrences have been ascertained by the Special Tax Consultant or have come to its attention that would substantially change such information set forth in the Official Statement; (12) A letter from Stephen G, White, MAI (the "Appraiser"), dated the Closing Date and addressed to the Underwriter and the Authority to the effect that it has prepared the appraisal report with respect to the property located within the District dated December 15, 2016, (the "Appraisal Report"), and that: (a) the Appraisal Report was included in the Preliminary Official Statement and the Official Statement with his permission, (b) neither the Appraisal Report nor the information in the Official Statement referring to it contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (c) no events or occurrences have been ascertained by the Appraiser or have come to the Appraiser's attention that would materially change the opinion set forth in the Appraisal Report; (13) A letter from Empire Economics, Inc. ("Empire") dated the Closing Date and addressed to the Underwriter and the Authority to the effect that it has prepared the report entitled "Market Absorption Study for the City of Temecula CFD No. 16-01 Roripaugh Ranch Pan Area", dated December 2, 2016 (the "Market Absorption Study") and that (a) the Market Absorption Study was included in the Preliminary Official Statement and the Official Statement with 12 its permission, (b) neither the summary of the Market Absorption Study nor the information regarding the Market Absorption Study described in the Preliminary Official Statement and the Official Statement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (c) no events or occurrences have been ascertained by it or have come to its attention that would materially change any of the conclusions reported in the Market Absorption Study; (14) A certificate of the Authority dated the Closing Date, in a form acceptable to Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (15) A certificate of the Fiscal Agent and an opinion of counsel to the Fiscal Agent, each dated the Closing Date and addressed to the Authority and the Underwriter, in form satisfactory to Bond Counsel and Underwriter's Counsel, to the effect that the Fiscal Agent has authorized the execution and delivery of the Fiscal Agent Agreement and that the Fiscal Agent Agreement is a valid and binding obligation of the Fiscal Agent enforceable in accordance with its terms; (16) Written confirmation from the Authority's financial advisor (or an affiliate thereof) and/or dissemination agent in a form acceptable to the Underwriter that the Authority has timely filed materially complete disclosure reports in conformance with the Authority's continuing disclosure undertakings pursuant to Rule 15c2-12 in each of the last five fiscal years; (17) Evidence that the federal tax information Form 8038-G has been prepared for filing; and (18) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the Authority's representations and warranties contained herein, and of the representations and warranties of each of the Owners as set forth in the certificates delivered to them pursuant to Section 1(c) hereof, and the due performance or satisfaction by the Authority at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the Authority in connection with the transactions contemplated hereby and by the Official Statement. If the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the Authority shall be under any further obligation hereunder, except that the respective obligations of the Authority and the Underwriter set forth in Section 5 hereof shall continue in full force and effect. 13 4. Conditions of the Authority's Obligations. The Authority's obligations hereunder are subject to the Underwriter's performance of its obligations hereunder, and are also subject to the following conditions: (a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the Authority executing the certificate referred to in Section 3(d)(7) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Formation Documents, the Authority Documents or the existence or powers of the Authority; and (b) As of the Closing Date, the Authority shall receive the approving opinion of Bond Counsel referred to in Section 3(d)(3) hereof, dated as of the Closing Date. 5. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein: (a) The Underwriter shall be under no obligation to pay, and the Authority shall pay or cause to be paid (out of any legally available funds of the Authority or the District), all expenses incident to the performance of the Authority's obligations hereunder, including, but not limited to, the cost of printing and delivering the Bonds to DTC, the cost of preparation, printing, distribution and delivery of the Preliminary Official Statement, and the Official Statement (including any amendment thereof or supplement thereto), the reasonable cost of confirming that the Authority has timely filed materially complete disclosure reports in conformance with the Authority's continuing disclosure undertakings pursuant to Rule 15c2-12 in each of the last five fiscal years; and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter (excluding the fees and disbursements of the Underwriter's Counsel); and the fees and disbursements of the Fiscal Agent for the Bonds and Bond Counsel, Disclosure Counsel and any accountants, engineers or any other experts or consultants the Authority has retained in connection with the Bonds; and (b) The Authority shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of obtaining CUSIP numbers, the cost of preparation of any "blue sky" or legal investment memoranda and this Purchase Agreement; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses. 6. Notices. Any notice or other communication to be given to the Authority under this Purchase Agreement may be given by delivering the same in writing to the Authority at 41000 Main Street, Temecula, California 92590, Attention: Director of Finance; and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, CA 94104, Attention: Sara Oberlies Brown, Managing Director. 7. Parties in Interest. This Purchase Agreement is made solely for the benefit of the Authority and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. The term "successor" shall not include any owner of a Bond merely by virtue of such ownership. 14 8. Survival of Representations and Warranties. The representations and warranties of the Authority set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the Authority and regardless of delivery of and payment for the Bonds. 9. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Authority and shall be valid and enforceable as of the time of such acceptance. 10. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the Authority. 11. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California applicable to contracts made and performed in California. 12. Counterparts. This Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Managing Director ACCEPTED at a.m./p.m. PST: TEMECULA PUBLIC FINANCING AUTHORITY FOR AND ON BEHALF OF THE TEMECULA PUBLIC FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) By: Treasurer 15 EXHIBIT A MATURITY SCHEDULE TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) SPECIAL TAX REFUNDING BONDS, SERIES 2017 Maturity Date Principal (September 1) Amount Interest Rate Yield Price The purchase price of the Bonds shall be $ , which is the principal amount thereof ($ ) plus net original issue premium of $ and less Underwriter's discount of $ The Bonds shall be subject to redemption in accordance with the following: Optional Redemption. The Bonds are subject to optional redemption prior to their stated maturity on any Interest Payment Date occurring on or after March 1, 20_, as a whole, or in part in an amount equal to $5,000 or any integral multiple thereof and among maturities so as to maintain substantially level debt service on the Bonds, and by lot within a maturity, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed) as set forth below together with accrued interest thereon to the date fixed for redemption: [TO COME] Mandatory Sinking Payment Redemption. The Bonds maturing on September 1, , 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 A-1 to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking payments as follows: Redemption Date (September 1) Sinking Payments (maturity) The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments (maturity) The amounts in the foregoing tables shall be reduced to the extent practicable so as to maintain level debt service on the Bonds as a result of any prior partial redemption of the Bonds pursuant to an optional redemption or mandatory redemption from prepaid Special Taxes, as specified in writing by the Treasurer to the Fiscal Agent. Redemption from Special Tax Prepayments. Special Tax Prepayments and any corresponding transfers from the Reserve Fund shall be used to redeem the Bonds on the next Interest Payment Date for which notice of redemption can timely be given, by lot and allocated among maturities of the Bonds so as to maintain substantially level debt service on the Bonds, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption: [TO COME] A-2 EXHIBIT B TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) SPECIAL TAX REFUNDING BONDS, SERIES 2017 CERTIFICATE OF [NAME OF OWNER] In connection with the issuance and sale of the above -captioned bonds (the "Bonds"), and pursuant to the Bond Purchase Agreement (the "Bond Purchase Agreement") to be executed by and between the Temecula Public Financing Authority (the "Authority"), acting on behalf of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (the "District"), and Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), [Name of Owner] ("Owner") hereby certifies, represents, warrants and covenants that: 1. While the Bonds or any refunding obligations related thereto are outstanding, Owner will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the District, to challenge the adoption of the ordinance levying Special Taxes within the District, to invalidate the District or any of the Bonds or any refunding obligations, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent Owner in any way from bringing any other action, suit, proceeding, inquiry, or investigation at law or in equity relating to the following: (i) that the Special Tax has not been levied in accordance with the methodologies contained in the rate and method of apportionment of special tax (the "Rate and Method of Apportionment") pursuant to which the Special Taxes are levied, (ii) the application or use of the Special Taxes levied and collected, or (iii) the enforcement of the obligations of the Authority under any agreement between and between [Owner's Name] and the Authority or to which Owner is a party or of which it is a beneficiary. 2. All information submitted by Owner directly to, (i) the Underwriter, its counsel (Stradling Yocca Carlson & Rauth, a Professional Corporation), the District's disclosure counsel (Quint & Thimmig LLP), Albert A Webb Associates, the District or the Authority in connection with the preparation of the Preliminary Official Statement, dated , 2017 (the "Preliminary Official Statement"), (ii) Stephen G. White, MAI, in connection with the preparation of the appraisal report appearing in the Preliminary Official Statement including any updates thereto made prior to the date hereof, and (iii) Empire Economics, Inc. in connection with the preparation of the Market Absorption Study summarized in the Preliminary Official Statement, was, to the Actual Knowledge of the Undersigned, when given, true and correct in all material respects and, except for any such information that was modified or supplemented by subsequent information submitted by or on behalf of Owner or the information that is otherwise contained in the Preliminary Official Statement, no material change has occurred with respect to such information as of the date hereof. 3. As of the date hereof and subject to the cautionary statement concerning forward-looking statements on page _ of the Preliminary Official Statement, the information in the Preliminary Official Statement under the captions ["PROPERTY OWNERSHIP AND B-1 DEVELOPMENT" and "CONTINUING DISCLOSURE"], solely as such information pertains to Owner, its Affiliates (as defined herein), the property owned by Owner and/or its Affiliates in the District (the "Property"), Owner's plans for the development of the Property and Owner's contractual arrangements with respect thereto and the Owner's compliance with its undertakings to provide continuing disclosure pursuant to the SEC's Rule 15c2-12 is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 4. Except as disclosed in the Preliminary Official Statement, Owner has never been adjudicated as bankrupt or discharged from any or all of its debts or obligations or granted an extension of time to pay its debts or a reorganization or readjustment of its debts. Except as disclosed in the Preliminary Official Statement, Owner does not have any proceedings pending (with service of process to Owner having been accomplished) or, to the Actual Knowledge of the Undersigned, overtly threatened in which Owner may be adjudicated as bankrupt, become the debtor in a bankruptcy proceeding, be discharged from any or all of its debts or obligations, be granted an extension of time to pay its debts or obligations, or be granted a reorganization or readjustment of its debts or obligations. 5. Except as disclosed in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending, or to the Actual Knowledge of the Undersigned, overtly threatened (a) in any way seeking to restrain or enjoin the development of the Property, or (b) in any way seeking to invalidate or set aside any approval or permit relating to the development of the Property. 6. Except as disclosed in the Preliminary Official Statement, no other public debt secured by a tax or assessment on the Property is in the process of being authorized and no assessment districts or community facilities districts have been or are in the process of being formed which include any portion of the Property. 7. Except as disclosed in the Preliminary Official Statement, there are no events of monetary default or events which with the passage of time would constitute a monetary default under any loan or similar credit arrangement to which Owner is a party the result of which could have a material adverse effect on the development of the Property or Owner's ability to pay Special Taxes prior to delinquency. 8. Except as disclosed in the Preliminary Official Statement, with respect to property owned by Owner or its Affiliates (as defined below) located within the boundaries of a development project, to the Actual Knowledge of the Undersigned (as defined below), within the last five years, neither Owner nor any of its Affiliates has (i) intentionally failed to pay when due any property taxes, special taxes, or assessments levied or assessed against such property, (ii) had any such property become either tax deeded to any governmental agency or the subject of judicial foreclosure proceedings for failure to pay such property taxes, special taxes, or assessments levied or assessed against such property, or (iii) failed to cure such delinquencies within forty-five days of becoming aware of such delinquencies. 9. As used in this Certificate, the term "Actual Knowledge of the Undersigned" means the knowledge that the undersigned currently has as of the date of this Certificate or has obtained through (i) interviews with such officers and responsible employees of the Owner and its Affiliates B-2 (or its members or agents) as the undersigned has reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Certificate including, if the undersigned is not the chief financial officer of Owner (or, if Owner does not have a chief financial officer, the person who performs the functions usually associated with such officer) the chief financial officer or such person, and (ii) reviews of documents that were reasonably necessary for the undersigned to obtain knowledge of the matters set forth in this Certificate. 10. As used in this Certificate, the term "Affiliate" of Owner means any person directly (or indirectly through one or more intermediaries) that exercises managerial control over Owner or that is under managerial control of Owner, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including without limitation information relevant to the proposed development of the Property, or to Owner's ability to pay the special taxes levied on the Property prior to delinquency). 11. Until the date which is twenty-five days after the "end of the underwriting period" (as defined in Section 2(g) of the Bond Purchase Agreement), if any event shall occur of which Owner becomes aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement under the caption referenced in Section 3 hereof regarding Owner, its Affiliates, the Property, or the development of the Property, in light of the circumstances existing at such time, not misleading in any material respect, Owner shall forthwith give written notice thereof to the Authority and the Underwriter and shall reasonably cooperate with them in furnishing any information available to Owner for any supplement to the Official Statement necessary so that the statements in the Official Statement under the caption referenced in Section 3 hereof, as so supplemented, will not be misleading in any material respect in light of the circumstances existing at such time. 12. All capitalized terms not otherwise defined herein shall have the meaning set forth in the Bond Purchase Agreement. 13. [FOR RORIPAUGH VALLEY RESTORATION, LLC] The Acquisition Agreement, dated as of February 1, 2017, by and between the Owner and the Authority and the Owner's Continuing Disclosure Agreement each constitutes a valid, legal and binding obligation of the Owner and (assuming due authorization, execution and delivery by the respective other party) is enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles if equitable remedies are sought. Dated: , 2017 [NAME OF OWNER] By: Name: : Title: : B-3 EXHIBIT C TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) SPECIAL TAX REFUNDING BONDS, SERIES 2017 RULE 15c2-12 CERTIFICATE The undersigned hereby certifies and represents that he or she is the Executive Director of the Temecula Public Financing Authority, and, as such, is duly authorized to execute and deliver this certificate and further hereby certifies that: (1) this certificate is being delivered in connection with the sale and issuance of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Special Tax Refunding Bonds, Series 2017 (the "Bonds") in order to enable the underwriter of the Bonds to comply with Rule 15c2-12 promulgated under the Securities and Exchange Act of 1934, as amended (the "Rule"); (2) in connection with the sale and issuance of the Bonds, there has been prepared a Preliminary Official Statement dated , 2017 setting forth information concerning the Bonds and the Authority (the "Preliminary Official Statement"); and (3) except for the Permitted Omissions, the Preliminary Official Statement is deemed final within the meaning of the Rule. As used herein, the term "Permitted Omissions" refers to the offering price(s), interest rates(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all as set forth in the Rule. IN WITNESS WHEREOF, I have hereunto set my hand as of , 2017. Preliminary, subject to change. TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) By: Its: Executive Director C-1 EXHIBIT D NEGATIVE ASSURANCE LETTER FOR [NAME OF OWNER] , 2017 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Temecula, California Stifel, Nicolaus & Company, Incorporated San Francisco, California Re: Temecula Public Financing Authority Community Facilities District No. 16-01(Roripaugh Ranch Phase 2) Special Tax Refunding Bonds, Series 2017 Ladies and Gentlemen: We have acted as [special] counsel to [Name of Owner] (the "Owner"), in connection with the Owner's plans for the development of certain property (the "Property") located within the boundaries of Temecula Public Financing Authority Community Facilities District No. 16- 01(Roripaugh Ranch Phase 2) (the "Community Facilities District") and in connection with the issuance by the Temecula Public Financing Authority (the "Authority") of the above -captioned bonds (the "Bonds") on behalf of the Community Facilities District. The Bonds are described in that certain Official Statement, dated , 2017 (the "Official Statement"). The Bonds are being sold to Stifel, Nicolaus & Company, Incorporated, as underwriter (the "Underwriter"), pursuant to that certain Bond Purchase Agreement, dated , 2017 (the "Bond Purchase Agreement"), by and between the Authority and the Underwriter. This letter is provided for the benefit of the Authority and the Underwriter pursuant to Section 3(d)(10) of the Bond Purchase Agreement. [We advise you that we are not general counsel to the Owner and do not represent the Owner on a continuing basis. Rather, we represent the Owner as requested from time to time on specific matters.] The primary purpose of our professional engagement was not to establish or confirm factual matters or quantitative information. 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 [special] counsel to the Owner, we reviewed the Official Statement and we met in person or telephonically with representatives of the Owner, the Underwriter and its counsel, Quint & Thimmig LLP, as Bond Counsel and Disclosure Counsel, and others, during which conferences the contents of the Official Statement and related matters were discussed. We also reviewed certain written statements of D-1 officers and other representatives of the Owner and others as to the existence and consequence of certain factual and other matters. Based on our participation, review, and reliance as described above, we advise you that no information came to the attention of the lawyers in our firm rendering legal services in connection with such representation that caused us to believe that, as of the date of the Official Statement and as of the date hereof, the information in the Official Statement under the captions ["PROPERTY OWNERSHIP AND DEVELOPMENT"], solely as such information pertains to Owner, its Affiliates, the property owned by Owner and/or its Affiliates in the Community Facilities District (the "Property"), Owner's development of the Property and Owner's contractual arrangements with respect thereto contained or contain any untrue statement of a material fact or omitted or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no belief is expressed as to (a) any financial statements and other financial, statistical, economic, or engineering data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions, or expressions of opinion, or (b) any information about valuation, appraisals, market absorption, archaeological, or environmental matters). For purposes of this paragraph, "attention" refers to the conscious awareness of each of the lawyers in our firm who actively participated in rendering legal services in connection with such representation and "believe" refers to the actual, subjective, good faith belief of each of those lawyers. We further advise you that, except as disclosed in the Official Statement, no litigation is pending against the Owner (with service of process to the Owner having been accomplished) or, to our actual knowledge, overtly threatened against the Owner which would materially and adversely affect (a) the ability of the Owner to complete the planned development, and sale of the Property described in the Official Statement, or (b) the ability of the Owner to pay special taxes or ad valorem property taxes prior to delinquency on the Property. We express no opinion or belief as to the applicability or effect on the subject transaction of the securities laws of the State of California or of the United States of America, including but not limited to the Securities Act of 1933, as amended. No attorney-client relationship has existed or exists between our firm and the Authority or the Underwriter in connection with the Bonds or by virtue of this letter. This letter is delivered as of the date hereof and is furnished solely for your benefit in connection with the subject transaction, and may not be relied upon for any other purpose or furnished to, used, circulated, quoted, or referred to by any other person without our prior written consent. This letter is not intended to, and may not, be relied upon by any owners of the Bonds. Our engagement with respect to this matter has terminated as of the date hereof, and we do not undertake to advise you of any matters that may come to our attention subsequent to the date hereof that may affect the statements set forth herein. This letter is limited to the matters expressly set forth herein, and no belief or assurance is implied or may be inferred beyond the matters expressly stated herein. [FOR RORIPAUGH VALLEY RESTORATION, LLC] The Acquisition Agreement, dated as of February 1, 2017, by and between the Owner and the Authority and the Owner's Continuing Disclosure Agreement each constitutes a valid, legal and binding obligation of the Owner and (assuming due authorization, execution and delivery by the respective other party) is enforceable in D-2 accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles if equitable remedies are sought. Respectfully submitted, [NAME OF LAWYER OR LAW FIRM] D-3 SYCR DRAFT OF 1/3/17 TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2017 SPECIAL TAX REFUNDING BONDS BOND PURCHASE AGREEMENT February _, 2017 Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) Temecula, California Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (the "Purchase Agreement") with the Temecula Public Financing Authority (the "Authority"), acting on behalf of the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District"), which, upon acceptance, will be binding upon the Authority and upon the Underwriter. This offer is made subject to its acceptance by the Authority as evidenced by its execution and delivery to the Underwriter prior to 5:00 p.m. PST on the date hereof and, if not accepted prior thereto, will be subject to withdrawal by the Underwriter upon written notice delivered to the Authority at any time prior to the acceptance hereof by the Authority. The Authority acknowledges and agrees that: (i) the purchase and sale of the Bonds (as such term is defined below) pursuant to this Purchase Agreement is an arm's-length commercial transaction between the Authority and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as a "municipal advisor" (as defined in Section 15B of the Securities Exchange Act of 1934, as amended) to either the Authority or the District; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Authority on other matters); (iv) the Underwriter has financial interests that may differ from, and be adverse to, those of the Authority and the District; and (v) the Authority has consulted its own legal, financial and other advisors to the extent it has deemed appropriate with respect to this transaction. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the Authority, and the Authority agrees to sell to the Underwriter, all (but not less than all) of the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) Special Tax Refunding Bonds, Series 2017 (the "Bonds") in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be dated the Closing Date (as such term is defined below), shall bear interest from said date (payable semiannually on March 1 and September 1 in each year, commencing September 1, 2017) at the rates per annum, shall mature on September 1 in each of the years and in the amounts, and shall be subject to redemption, all as set forth in Exhibit A hereto. The purchase price for the Bonds shall be the amount specified as such in Exhibit A hereto. (b) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable as provided in, the Fiscal Agent Agreement by and between the Authority and U.S. Bank National Association, as Fiscal Agent (the "Fiscal Agent"), dated as of February 1, 2017 (the "Fiscal Agent Agreement"), approved by Resolution No. TPFA 17-_ adopted by the Board of Directors of the Authority, (the "Board of Directors"), as the legislative body of the Authority and the District, on January 24, 2017 (the "Resolution of Issuance"). The Bonds and interest thereon will be payable from Special Tax Revenues (as that term is defined in the Fiscal Agent Agreement) derived from a special tax (the "Special Tax") levied and collected on the taxable land within the District in accordance with Resolution No. TPFA 05-01 adopted by the Board of Directors on January 11, 2005 (the "Resolution of Formation") and Ordinance No. TPFA 05-01, (the "Ordinance"). Proceeds of the sale of the Bonds will be used in accordance with the Fiscal Agent Agreement, the Escrow Agreement, dated as of February 1, 2017 (the "Escrow Agreement"), by and between the Authority and U.S. Bank National Association, as Escrow Bank (the "Escrow Bank"), Article 11 (commencing with Section 53580, of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Refunding Law"), and the Mello -Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California) (the "Act"), along with certain other available funds, to: (i) refund the Authority's outstanding Temecula Public Financing Authority Communities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds (the "2006 Bonds"), (ii) fund a reserve fund for the Bonds, and (iii) pay the costs of issuing the Bonds. The Resolution of Formation, the Resolution of Issuance and the Ordinance are collectively referred to herein as the "District Resolutions." (c) Subsequent to its receipt of the Authority's 15c2-12 Certificate, in substantially the form attached hereto as Exhibit B, deeming the Preliminary Official Statement for the Bonds, dated January , 2017 (the "Preliminary Official Statement"), final for purposes of Rule 15c2-12 ("Rule 15c2-12") of the Securities and Exchange Commission (the "SEC"), the Underwriter has distributed copies of the Preliminary Official Statement. The Authority hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute in printed and/or electronic format the final Official Statement dated the date hereof (including all information previously permitted to have been omitted from the Preliminary Official Statement by Rule 15c2-12, and any supplements and amendments thereto as have been approved by the Authority as evidenced by the execution and delivery of such document by an officer of the Authority) (the "Official Statement"), the Fiscal Agent Agreement, the Escrow Agreement, the Continuing Disclosure Agreement of the Authority (the "Disclosure Agreement"), this Purchase Agreement, and all information contained therein, and all other documents, certificates and written statements furnished by the Authority to the Underwriter in connection with the transactions contemplated by this Purchase Agreement, in connection with the offer and sale of the Bonds by the Underwriter. The Underwriter hereby agrees to deliver a copy of the Official Statement to the Municipal Securities Rulemaking Board (the "MSRB") through the Electronic Municipal Marketplace Access website of the MSRB on or before the Closing Date and otherwise to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12. 2 (d) Except as otherwise disclosed in writing and agreed to by the Authority, the Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth in Exhibit A hereto; provided, however, that the Underwriter reserves the right to: (i) change such prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, (ii) sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the aforesaid initial offering prices and (iii) over -allot or effect transactions which stabilize or maintain the market price of the Bonds at levels above those that might otherwise prevail in the open market and discontinue such stabilizing, if commenced, at any time without prior notice. A "bona fide public offering" shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. (e) At 8:00 a.m., Pacific Standard Time, on February , 2017, or at other time or date as shall be agreed upon by the Underwriter and the Authority (such time and date being herein referred to as the "Closing Date"), the Authority will deliver (i) to The Depository Trust Company ("DTC") or to U.S. Bank National Association, acting as DTC's agent, the Bonds in definitive form (all Bonds being in book -entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the Authority and authenticated by the Fiscal Agent, as provided in the Fiscal Agent Agreement, and (ii) to the Underwriter, at the offices of Bond Counsel (as such term is defined below), or at such other place as shall be mutually agreed upon by the Authority and the Underwriter, the other documents mentioned in Section 3(d) below; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being herein referred to as the "Closing"). 2. Representations, Warranties and Agreements of the Authority. The Authority represents, warrants and covenants to and agrees with the Underwriter that: (a) The Authority is duly organized and validly existing as a joint exercise of powers authority under the laws of the State of California and has duly authorized the formation of the District pursuant to the Resolution of Formation and the Act. The Board of Directors, as the legislative body of the Authority and the District, has duly adopted the District Resolutions, and has caused to be recorded a Notice of Special Tax Lien in the real property records of the County of Riverside as Document No. 2005-0039138 and a First Amendment to Notice of Special Tax Lien as Document No. 2006-0174544 (collectively, the "Notice of Special Tax Lien"). (The District Resolutions and Notice of Special Tax Lien are collectively referred to herein as the "Formation Documents"). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended, modified or supplemented except to the extent that the Rate and Method of Apportionment of Special Tax approved thereby has been clarified by the Authority's Resolution No. TPFA 17- . The District is duly organized and validly existing as a community facilities district under the laws of the State of California (the "State"). The Authority has, and at the Closing Date will have, as the case may be, full legal right, power and authority (i) to execute, deliver and perform its obligations under this Purchase Agreement, the Fiscal Agent Agreement, the Escrow Agreement and the Disclosure Agreement (collectively, the "Authority Documents)" and to carry out all transactions contemplated by each of the Authority Documents and the Official Statement; and (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Resolution of Issuance and the Fiscal Agent Agreement and as provided herein. 3 (b) The Authority has complied, and will at the Closing Date be in compliance, in all material respects, with the Formation Documents and the Authority Documents, and any immaterial non-compliance by the Authority will not impair the ability of the Authority to carry out, give effect to or consummate the transactions on its part contemplated by the foregoing. From and after the date of issuance of the Bonds, the Authority will continue to comply with the covenants of the Authority contained in the Authority Documents. (c) The Board of Directors has duly and validly: (i) adopted the District Resolutions, (ii) called, held and conducted in accordance with all requirements of the Act an election within the District to approve the levy of the Special Tax within the District and to authorize bonded indebtedness of the District, (iii) authorized and approved the issuance of the Bonds and due performance by the Authority of its obligations set forth in the Authority Documents, (iv) authorized the preparation, delivery and distribution of the Preliminary Official Statement and the Official Statement, and (v) authorized and approved the performance by the Authority of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by, each of the Authority Documents (including, without limitation, the levy of the Special Tax), the Bonds and the Official Statement; and, at the Closing Date, the Formation Documents will be in full force and effect and the Authority Documents and the Bonds will constitute the valid, legal and binding obligations of the Authority and (assuming due authorization, execution and delivery by other parties thereto, where necessary) will be enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles if equitable remedies are sought and to the limitations on legal remedies against public agencies in the State. (d) To the best of the Authority's knowledge, neither the Authority nor the District is in breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order to which the Authority or the District is subject, or under any loan agreement, note, resolution, fiscal agent agreement, contract, agreement or other instrument to which the Authority or District is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the Authority or the District of their respective obligations under the Bonds, the Formation Documents or the Authority Documents, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order to which the Authority or the District is subject, or a material breach of or default under any loan agreement, note, resolution, indenture, fiscal agent agreement, trust agreement, contract, agreement or other instrument to which the Authority or the District is a party or is otherwise subject or bound. (e) Except for compliance with blue sky or other states securities law filings, as to which the Authority makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Authority of its obligations hereunder, or under the Formation Documents or the Authority Documents, have been obtained and are in full force and effect. 4 (f) The Special Tax constituting the source of funds for the payment of the Bonds has been duly and lawfully authorized and may be levied under the Act, the State Constitution and the applicable laws of the State; and such Special Tax constitutes a valid and legally binding continuing lien on the properties on which it has been levied (except to the extent that any of such property has, or at or prior to the Closing Date, will have, prepaid its Special Tax obligation); except as described in the Official Statement, the Authority is unaware of any outstanding special assessment liens or special tax liens applicable to any property within the District other than the Special Tax authorized to be levied by the Authority on behalf of the District; and the Authority has no present intention of conducting further proceedings leading to the levying of any additional special assessments or special taxes against any such property. (g) The Authority will not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without prior written notification to the Underwriter. Until the date which is twenty-five (25) days after the "end of the underwriting period" (as hereinafter defined), if any event shall occur of which the Authority is aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the Authority shall forthwith notify the Underwriter of such event and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter's reasonable opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time; and the Authority shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. If any such amendment or supplement of the Official Statement shall occur after the Closing Date, the Authority also shall furnish, or cause to be furnished, such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of such amendment or supplement to the Official Statement. As used herein, the term "end of the underwriting period" means the later of such time as (i) the Authority delivers the Bonds to the Underwriter, or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public; and unless the Underwriter gives notice to the contrary, the "end of the underwriting period" shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the Authority at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the "end of the underwriting period." (h) The Fiscal Agent Agreement creates a valid pledge of the Special Taxes and the moneys in the Bond Fund, the Reserve Fund and, until disbursed as provided in the Fiscal Agent Agreement, the Special Tax Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon to maturity or to the date of redemption if redeemed prior to maturity, and premium, if any, the Authority will faithfully perform and abide by all of its obligations under the Fiscal Agent Agreement. (i) Except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body with respect to which the Authority has been served with process or has received pleadings or equivalent documents is pending or, to the best knowledge of the Authority, is threatened (i) which 5 would materially adversely affect the ability of the Authority to perform its obligations under the Bonds, the Formation Documents or the Authority Documents, or (ii) which seeks to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement and the Escrow Agreement, or the collection or application of the Special Tax pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contests or affects the validity or enforceability of the Bonds, the Formation Documents, the Authority Documents, or any action contemplated by any of said documents, or (iii) which in any way contests the completeness or accuracy of the Official Statement or the powers or authority of the Authority with respect to the Bonds, the Formation Documents, the Authority Documents, or any action of the Authority or the District contemplated by any of said documents; nor is there any action pending with respect to which the Authority has been served with process or has received pleadings or equivalent documents or, to the best knowledge of the Authority, threatened against the Authority or the District which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation. (j) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the 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 Underwriter may designate; provided, however, the Authority shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing. (k) Any certificate signed by any official of the Authority authorized by the Board of Directors of the Authority to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein. (1) The Authority will apply the proceeds of the Bonds in accordance with the Fiscal Agent Agreement and as described in the Official Statement. (m) The information contained in the Preliminary Official Statement (other than any information supplied by the Underwriter, any information regarding DTC or its book -entry system, and CUSIP numbers, as to which no view is expressed) was as of the date thereof, and the information contained in the Official Statement (other than any information supplied by the Underwriter, any information regarding DTC or its book -entry system, and CUSIP numbers, as to which no view is expressed) is as of its date and will be on the Closing Date, true and correct in all material respects; and such information does not and shall 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. (n) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the Authority as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The Authority hereby covenants and agrees that, within seven (7) business days from the date hereof, or, if sooner, upon reasonable written notice from the Underwriter, within sufficient time to accompany any confirmation requesting payment for Bonds from any customer of the Underwriter the Authority shall cause a final printed form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the Authority so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-15, G-32 and G-36 of the MSRB. 6 (o) Except as disclosed in the Official Statement, the Authority is not, and has not been within the last five (5) years, in material breach of any reporting obligation that it has undertaken under Rule 15c2-12. To the best knowledge of the Authority neither the City of Temecula (the "City") nor any public agency for which the City Council of the City serves as the legislative body is, or has been within the last five (5) years, in material breach of any reporting obligation that it has undertaken under Rule 15c2-12. (p) Prior to the end of the underwriting period, the Authority shall not amend, terminate, or rescind, and will not agree to any amendment, termination, or rescission of the Formation Documents, the Authority Documents or this Purchase Agreement without the prior written consent of the Underwriter (which consent shall not be unreasonably delayed or withheld). (q) The Authority shall not voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to the Authority as set forth in this Purchase Agreement. (r) The Authority shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from personal income taxation of the State or the exclusion from gross income for federal income tax purposes of the interest on the Bonds. 3. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the Authority contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the Authority made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Authority of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions: (a) At the Closing Date, the Formation Documents and the Authority 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 there shall have been taken in connection therewith, with the issuance of the Bonds and the refunding of the 2006 Bonds and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as, in the opinion of Quint & Thimmig LLP ("Bond Counsel") shall be necessary and appropriate. (b) The information contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 2(g) hereof, be true and correct in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 2(g) hereof, 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 light of the circumstances under which they were made, not misleading. (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement or the ability of the Underwriter to enforce contracts for the sale of Bonds shall not have been materially adversely affected, in the reasonable judgment of the Underwriter (as evidenced by a written notice to the Authority terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following: 7 (1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; (2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the SEC, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect; (3) any amendment to the federal or California Constitution or action by any federal or State court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Authority or the District, their respective properties, incomes, or securities (or interest thereon), the validity or enforceability of the Special Tax or the ability of the Authority to refund the 2006 Bonds as contemplated by the Formation Documents, the Authority Documents or the Official Statement; (4) any event occurring, or information becoming known, which, in the reasonable judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading misleading and (x) the Authority refuses to permit the Official Statement to be supplemented to supply such statement or information or (y) the effect of any such supplement would be to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; (5) a declaration of war or an escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States; 8 (6) the declaration of a general banking moratorium by federal, State of New York or State of California authorities, or the general suspension of trading on any national securities exchange or the fixing and maintaining in force of minimum or maximum prices for trading or maximum ranges for prices for securities on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; (7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (8) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; (9) there shall have been any material adverse change in the financial affairs of the Authority or the District; (10) there shall be filed or threatened any litigation described in Section 2(i); (11) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or (12) a stop order, release, regulation, or no -action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of federal securities laws at the Closing Date. (d) On the Closing Date, the Underwriter shall have received originals or true and correct copies of the following documents, in either printed or electronic format in each case satisfactory in form and substance to the Underwriter: (1) The Formation Documents and the Authority Documents, together with a certificate dated as of the Closing Date of the Secretary of the Authority to the effect that each such document is a true, correct and complete copy of the one duly approved or adopted by the Board of Directors; (2) The Preliminary Official Statement and the Official Statement; (3) An unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the Authority, in the form attached to the Official Statement as Appendix D, and a letter from Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that 9 such approving opinion may be relied upon by the Underwriter to the same extent as if such opinion was addressed to it; (4) A supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that (i) the Escrow Agreement, the Authority Disclosure Agreement and this Purchase Agreement have been duly authorized, executed and delivered by the Authority, and, assuming such agreements constitute valid and binding obligations of the respective other parties thereto, they constitute the legally valid and binding agreements of the Authority enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor's rights or remedies and by general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the 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; (iii) the information contained in the Official Statement on the cover and under the captions "INTRODUCTION," "PLAN OF REFUNDING," "THE 2017 BONDS (excluding the subheading "Scheduled Debt Service")," "SECURITY FOR THE 2017 BONDS," "TAX MATTERS" and Appendices C and D thereof is accurate, insofar as such information purports to summarize or replicate certain provisions of the Act, the Bonds, the Escrow Agreement and the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State personal income taxes of interest on the Bonds present a fair and accurate summary of such provisions; and (iv) the Special Taxes have been duly and validly authorized in accordance with the provisions of the Act; (5) An opinion, dated the Closing Date and addressed to the Authority and the Underwriter of Quint & Thimmig LLP, in its capacity as the Authority's disclosure counsel ("Disclosure Counsel"), to the effect that, without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, but on the basis of their participation in conferences with representatives of the Authority and the District, Richards, Watson & Gershon, A Professional Corporation, as counsel to the Authority, Bond Counsel, Fieldman Rolapp & Associates, as financial advisor to the Authority, the Special Tax Consultant (as such term is defined below), the Underwriter and others, and their examination of certain documents, no facts have come to their attention which would lead them to believe that the Official Statement as of its date or as of the Closing Date contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial, statistical, economic, engineering, or demographic data or forecasts, numbers, charts, tables, graphs, maps, estimates, projections, assumptions or expressions of opinion, or any information about feasibility, valuation, appraisals, market absorption, real estate, archaeological, or environmental matters, the Appendices to the Official Statement or any information about debt service requirements, book - entry, The Depository Trust Company, or tax exemption contained in the Official Statement); (6) Evidence satisfactory to the Underwriter that Bond Counsel or an independent certified public accountant has confirmed that the cash and/or Federal Securities to be deposited with the Escrow Bank, as provided for in the Escrow Agreement, will be fully sufficient, together with the interest to accrue thereon and the moneys then on deposit in the fund and accounts provided for in the fiscal agent agreement under which the 2006 Bonds were issued (the "2006 Fiscal Agent Agreement"), to pay and discharge the indebtedness on the 2006 Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; 10 (7) A defeasance opinion of Bond Counsel, dated the Closing Date and addressed to the Underwriter and the Fiscal Agent, to the effect that, upon the deposit with the Escrow Bank as provided for in the Escrow Agreement, the 2006 Bonds will no longer be considered outstanding within the meaning of the 2006 Fiscal Agent Agreement and will not have any lien on, or be payable from, the "special tax revenues" as such term is defined in the 2006 Fiscal Agent Agreement; (8) An opinion, dated the Closing Date and addressed to the Underwriter, of Stradling Yocca Carlson & Rauth, a Professional Corporation ("Underwriter's Counsel"), in form and substance acceptable to the Underwriter; (9) A certificate or certificates, dated the Closing Date and signed by an authorized officer of the Authority, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying that (i) the representations and warranties of the Authority contained in Section 2 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Official Statement; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters discussed therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect; and (iii) the Authority has complied, in all material respects, with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Authority Documents and the Official Statement at or prior to the Closing Date; (10) An opinion, dated the Closing Date and addressed to the Underwriter, of legal counsel to the Authority, to the effect that (i) to the best of his or her knowledge and except as disclosed in the Official Statement, there is no litigation, action, suit, proceeding or investigation at law or in equity as to which the Authority is or would be a party, before or by any court, governmental agency or body, pending and notice of which has been served on and received by the Authority or, to the best of his or her knowledge, threatened against the Authority, challenging the creation, organization or existence of the Authority or the District, or the validity of the Financing Documents or contesting the authority of the Authority to enter into or perform its obligations under any of such documents, or with respect to which an unfavorable decision, ruling or finding would materially adversely affect the ability of the Authority to perform its obligations under the Bonds, the Formation Documents or the Authority Documents, or which seeks to restrain or enjoin the issuance, sale and delivery of the Bonds or which challenges the exclusion from gross income for federal income tax purposes or State of California personal income taxes of interest on the Bonds, or the application of the proceeds thereof in accordance with the Fiscal Agent Agreement and the Escrow Agreement, or the collection or application of the Special Tax to pay the principal of and interest on the Bonds, or which in any way contests or affects the validity or enforceability of the Bonds, the Formation Documents or the Authority Documents or the accuracy of the Official Statement, or any action of the Authority contemplated by any of said documents; (ii) the Authority is duly organized and validly existing as a joint exercise of powers authority under the laws of the State of California and the District is duly organized and validly existing as a community facilities district under the laws of the State of California, (iii) the Board of Directors has duly and validly adopted the Formation Documents and Authority Documents at meetings of the Board of Directors which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Formation Documents and Authority Documents are now in full force and effect and have not been amended; and (iv) to the best of such counsel's knowledge, 11 the authorization, execution and delivery of the Authority Documents and compliance with the provisions thereof by the Authority of its obligations thereunder, will not conflict with, or constitute a breach or default under, in any material respect, any law, administrative regulation, court decree, resolution, ordinance or other agreement to which the Authority or District is subject or by which it is bound; (11) One or more certificates dated the Closing Date from Albert A. Webb Associates (the "Special Tax Consultant") addressed to the Authority and the Underwriter to the effect that (i) the Special Tax, if collected in the maximum amounts permitted from the properties in the District whose Special Tax will not have been prepaid in full at or before the Closing Date, and without regard to the portion thereof levied to pay Administrative Expenses, will generate in each Fiscal Year at least 110% of the debt service payable with respect to the Bonds in the calendar year that begins in such Fiscal Year; (ii) all information appearing in the Official Statement for which the Special Tax Consultant is identified as being the source is true and correct as of the date of the Official Statement and as of the Closing Date; and (iii) the statements concerning the Special Tax and the statistical and financial data set forth in the tables and discussion in the Official Statement which were derived from information supplied by the Special Tax Consultant for use in the Official Statement are true, correct and complete in all material respects and do 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 light of the circumstances under which they were made, not misleading and no events or occurrences have been ascertained by the Special Tax Consultant or have come to its attention that would substantially change such information set forth in the Official Statement; (12) A certificate of the Authority dated the Closing Date, in a form acceptable to Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (13) A certificate of U.S. Bank National Association and an opinion of counsel to U.S. Bank National Association, each dated the Closing Date and addressed to the Authority and the Underwriter, in form satisfactory to Bond Counsel and Underwriter's Counsel, to the effect that U.S. Bank National Association has authorized the execution and delivery of the Fiscal Agent Agreement and the Escrow Agreement and that the Fiscal Agent Agreement and the Escrow Agreement are valid and binding obligations of U.S. Bank National Association enforceable in accordance with their terms; (14) A certificate from each of KB Home Coastal, Inc. and CalAtlantic Group, Inc., dated the Closing Date and reasonably satisfactory in form and substance to Disclosure Counsel and the Underwriter, certifying that certain specified information contained in the Official Statement under the captions "THE DISTRICT Location and General Description of the District" and "— Major Land Owners," is true and correct in all material respects. (15) Evidence satisfactory to the Underwriter that a rating has been assigned to the Bonds as described in the Official Statement and that such rating has not been revoked or revised; (16) Written confirmation from the Authority's financial advisor (or an affiliate thereof) and/or dissemination agent in a form acceptable to the Underwriter that the Authority has timely filed materially complete disclosure reports in conformance with the Authority's continuing disclosure undertakings pursuant to Rule 15c2-12 in each of the last five fiscal years; 12 (17) Evidence that the federal tax information Form 8038-G has been prepared for filing; (18) A verification report, dated the Closing Date, from Grant Thornton LLP, consistent with the description thereof contained in the Official Statement; (19) Evidence that notice of the defeasance of the 2006 Bonds and termination of disclosure obligations relating to the 2006 Bonds has been prepared for filing with the EMMA system of the MSRB; and (20) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the Authority's representations and warranties contained herein and the due performance or satisfaction by the Authority at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the Authority in connection with the transactions contemplated hereby and by the Official Statement. If the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the Authority shall be under any further obligation hereunder, except that the respective obligations of the Authority and the Underwriter set forth in Section 5 hereof shall continue in full force and effect. 4. Conditions of the Authority's Obligations. The Authority's obligations hereunder are subject to the Underwriter's performance of its obligations hereunder, and are also subject to the following conditions: (a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the Authority executing the certificate referred to in Section 3(d)(9) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Formation Documents, the Authority Documents or the existence or powers of the Authority; and (b) As of the Closing Date, the Authority shall receive the approving opinion of Bond Counsel referred to in Section 3(d)(3) hereof, dated as of the Closing Date. 5. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein: (a) The Underwriter shall be under no obligation to pay, and the Authority shall pay or cause to be paid (out of any legally available funds of the Authority or the District), all expenses incident to the performance of the Authority's obligations hereunder, including, but not limited to, the cost of printing and delivering the Bonds to DTC, the cost of preparation, printing, distribution and delivery of the Preliminary Official Statement, and the Official Statement (including any amendment thereof or supplement thereto), the reasonable cost of confirming that the Authority has timely filed materially complete disclosure reports in conformance with the Authority's continuing 13 disclosure undertakings pursuant to Rule 15c2-12 in each of the last five fiscal years; and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter (excluding the fees and disbursements of the Underwriter's Counsel); and the fees and disbursements of the Fiscal Agent for the Bonds and Bond Counsel, Disclosure Counsel and any accountants, engineers or any other experts or consultants the Authority has retained in connection with the Bonds; and (b) The Authority shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of obtaining CUSIP numbers, the cost of preparation of any "blue sky" or legal investment memoranda and this Purchase Agreement; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses. 6. Notices. Any notice or other communication to be given to the Authority under this Purchase Agreement may be given by delivering the same in writing to the Authority at 41000 Main Street, Temecula, California 92590, Attention: Director of Finance; and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, CA 94104, Attention: Sara Oberlies Brown, Managing Director. 7. Parties in Interest. This Purchase Agreement is made solely for the benefit of the Authority and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. The term "successor" shall not include any owner of a Bond merely by virtue of such ownership. 8. Survival of Representations and Warranties. The representations and warranties of the Authority set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the Authority and regardless of delivery of and payment for the Bonds. 9. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Authority and shall be valid and enforceable as of the time of such acceptance. 10. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the Authority. 11. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California applicable to contracts made and performed in California. 14 12. Counterparts. This Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Managing Director ACCEPTED at a.m./p.m. PST: TEMECULA PUBLIC FINANCING AUTHORITY FOR AND ON BEHALF OF THE TEMECULA PUBLIC FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) By: Treasurer 15 EXHIBIT A MATURITY SCHEDULE TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) SPECIAL TAX REFUNDING BONDS, SERIES 2017 Maturity Date Principal (September 1) Amount Interest Rate Yield Price The purchase price of the Bonds shall be $ , which is the principal amount thereof ($ ) plus net original issue premium of $ and less Underwriter's discount of $ The Bonds shall be subject to redemption in accordance with the following: Optional Redemption. The Bonds are subject to optional redemption prior to their stated maturity on any Interest Payment Date occurring on or after September 1, 20 , as a whole, or in part among maturities so as to maintain substantially level debt service on the Bonds and by lot within a maturity, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest thereon to the date fixed for redemption: [TO COME] A-1 Mandatory Sinking Payment Redemption. The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments (maturity) The Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments (maturity) The amounts in the foregoing tables shall be reduced to the extent practicable so as to maintain level debt service on the Bonds as a result of any prior partial redemption of the Bonds pursuant to an optional redemption or mandatory redemption from prepaid Special Taxes, as specified in writing by the Treasurer to the Fiscal Agent. Redemption from Special Tax Prepayments. Special Tax Prepayments and any corresponding transfers from the Reserve Fund shall be used to redeem the Bonds on the next Interest Payment Date for which notice of redemption can timely be given, by lot and allocated among maturities of the Bonds so as to maintain substantially level debt service on the Bonds, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption: [TO COME] A-2 EXHIBIT B TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) SPECIAL TAX REFUNDING BONDS, SERIES 2017 RULE 15c2-12 CERTIFICATE The undersigned hereby certifies and represents that he or she is the Executive Director of the Temecula Public Financing Authority, and, as such, is duly authorized to execute and deliver this certificate and further hereby certifies that: (1) this certificate is being delivered in connection with the sale and issuance of the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) Special Tax Refunding Bonds, Series 2017 (the "Bonds") in order to enable the underwriter of the Bonds to comply with Rule 15c2-12 promulgated under the Securities and Exchange Act of 1934, as amended (the "Rule"); (2) in connection with the sale and issuance of the Bonds, there has been prepared a Preliminary Official Statement dated , 2017 setting forth information concerning the Bonds and the Authority (the "Preliminary Official Statement"); and (3) except for the Permitted Omissions, the Preliminary Official Statement is deemed final within the meaning of the Rule. As used herein, the term "Permitted Omissions" refers to the offering price(s), interest rates(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all as set forth in the Rule. IN WITNESS WHEREOF, I have hereunto set my hand as of , 2017. Preliminary, subject to change. TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) By: Its: Executive Director B-1 L_ O -c n� -o a) u) C `O U O O >, CO CD ID a o a) o O N O O o >, O o U coo N 0 u,`o a)— aa) O N c o E � cnc a) a, te• a) . m - v, c w o L a) E a) a) To E 7.5 o0" c L., m o cuc a) Eo U d ocn0 L U " 4) a) To L N vim) O cn 2°)o c coo a) a) V) 'U • Eo _c U N " c.0 m E o c O - U O N O • o `O `- c c m c c a)�o t... O -0 -0 N c m .c • .> a) c >, c E -o c6 C1).E Cu• -,a - ca) ToE� U O U 0 u) w a) N a) .— N O a. y U) a) T Ho :.as PRELIMINARY OFFICIAL STATEMENT DATED AS OF JANUARY 2017 NEW ISSUE - BOOK ENTRY ONLY NOT RATED In the opinion of Quint & Thimmig LLP, Larkspur, California, Bond Counsel, subject however, to certain qualifications described in this Official Statement, under existing law, interest on the 2017 Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the further opinion of Bond Counsel, interest on the 2017 Bonds is exempt from personal income taxation imposed by the State of California. See "TAX MATTERS." $44,550,000* TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) 2017 SPECIAL TAX BONDS Dated: Date of Issuance Due: September 1, as shown on inside cover The Temecula Public Financing Authority (the "Authority"), for and on behalf of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (the "District"), is issuing the above -captioned bonds (the "2017 Bonds") to (i) prepay a special tax obligation with respect to property in the District, (ii) provide funds to finance public improvements authorized to be funded by the District, (iii) fund a reserve fund for the 2017 Bonds, (iv) pay a portion of the interest due on the 2017 Bonds on September 1, 2017, (v) provide funds for the administration of the District, and (vi) pay costs of issuing the 2017 Bonds. See "PLAN OF FINANCING." The 2017 Bonds are being issued pursuant to a Fiscal Agent Agreement, dated as of February 1, 2017 (the "Fiscal Agent Agreement"), by and between the Authority, for and on behalf of the District, and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent"). The 2017 Bonds are payable from the proceeds of an annual Special Tax (as defined in the Fiscal Agent Agreement) to be levied on property located within the District (see "THE DISTRICT") and from certain funds pledged under the Fiscal Agent Agreement. The Special Tax is being levied according to a rate and method of apportionment of Special Taxes approved by the qualified electors of the District. See "SECURITY FOR THE 2017 BONDS—Special Taxes" and Appendix B - "Rate and Method." Interest on the 2017 Bonds is payable on March 1 and September 1 of each year, commencing on September 1, 2017. The 2017 Bonds will be issued in book -entry form only and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the 2017 Bonds. Individual purchases of the 2017 Bonds will be made in book -entry form only. Purchasers of the 2017 Bonds will not receive physical certificates representing their ownership interests in the 2017 Bonds purchased. The 2017 Bonds will be issued in the principal amount of $100,000 and any integral multiple thereof. Principal of and interest on the 2017 Bonds are payable directly to DTC by the Fiscal Agent. Upon receipt of payments of principal and interest, DTC will in turn distribute such payments to the beneficial owners of the 2017 Bonds. See "THE 2017 BONDS" and Appendix G - "DTC and the Book -Entry Only System." The 2017 Bonds are subject to optional redemption, mandatory sinking payment redemption and redemption from Special Tax Prepayments prior to their respective maturities. See "THE 2017 BONDS—Redemption." The Authority may issue additional bonded indebtedness that is secured by a lien on the Special Tax Revenues (as defined in the Fiscal Agent Agreement) and by funds pledged under the Fiscal Agent Agreement for the payment of the 2017 Bonds on a parity with the 2017 Bonds. See "SECURITY FOR THE 2017 BONDS—Issuance of Additional Bonds." THIS OFFICIAL STATEMENT IS FURNISHED SOLELY FOR THE PURPOSE OF CONSIDERATION OF AN INVESTMENT IN THE 2017 BONDS BY QUALIFIED INSTITUTIONAL BUYERS WITH THE EXPERIENCE AND FINANCIAL EXPERTISE TO UNDERSTAND AND EVALUATE THE HIGH DEGREE OF RISK INHERENT IN THE INVESTMENT. PURCHASE OF THE 2017 BONDS WILL CONSTITUTE AN INVESTMENT SUBJECT TO A HIGH DEGREE OF RISK, INCLUDING THE RISK OF NONPAYMENT OF PRINCIPAL AND INTEREST AND THE LOSS OF ALL OR PART OF THE INVESTMENT. THE DEBT SERVICE ON THE 2017 BONDS IS PAYABLE FROM SPECIAL TAX LEVIES ON PROPERTY IN THE DISTRICT WITH AN APPRAISED VALUE ONLY APPROXIMATELY FIVE PERCENT* IN EXCESS OF THE INITIAL PRINCIPAL AMOUNT OF THE 2017 BONDS. THERE CAN BE NO ASSURANCE THAT THE PROPERTY OWNERS IN THE DISTRICT WILL PAY THE SPECIAL TAXES LEVIED ON SUCH PROPERTY WHEN DUE. SEE "SECURITY FOR THE 2017 BONDS" and "SPECIAL RISK FACTORS" herein. NONE OF THE FAITH AND CREDIT OF THE DISTRICT, THE AUTHORITY OR THE STATE OF CALIFORNIA OR OF ANY OF ITS POLITICAL SUBDIVISIONS IS PLEDGED TO THE PAYMENT OF THE 2017 BONDS. EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE 2017 BONDS. THE 2017 BONDS ARE NEITHER GENERAL NOR SPECIAL OBLIGATIONS OF THE AUTHORITY, NOR GENERAL OBLIGATIONS OF THE DISTRICT, BUT ARE LIMITED OBLIGATIONS OF THE AUTHORITY FOR THE DISTRICT, PAYABLE SOLELY FROM CERTAIN AMOUNTS PLEDGED THEREFOR UNDER THE FISCAL AGENT AGREEMENT, AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT. This cover page contains certain information for quick reference only. Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision with respect to the 2017 Bonds. The 2017 Bonds are offered when, as and if issued, subject to approval as to their legality by Quint & Thimmig LLP, Larkspur, California, Bond Counsel, and certain other conditions. Certain legal matters with respect to the 2017 Bonds will be passed upon for the Authority by Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, in its capacity as general counsel to the Authority, and by Quint & Thimmig LLP, Larkspur, California, acting as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California. It is anticipated that the 2017 Bonds in definitive form will be available for delivery to DTC on or about February ., 2017. The date of this Official Statement is February , 2017. * Preliminary, subject to change. STIFEL $44,550,000* TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) 2017 SPECIAL TAX BONDS MATURITY SCHEDULE $ % Term Bonds due September 1 $ % Term Bonds due September 1 $ % Term Bonds due September 1 $ % Term Bonds due September 1 $ % Term Bonds due September 1 $ % Term Bonds due September 1 , ; Yield %; Price %; CUSIP 87972 , ; Yield %a; Price %; CUSIP 87972 , ; Yield %; Price %; CUSIP 87972 , ; Yield %O; Price %; CUSIP 87972 , ; Yield %; Price %; CUSIP 87972 , ; Yield %; Price %; CUSIP 87972 * Preliminary, subject to change. t Copyright American Bankers Association. CUSIP data is provided by Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. Neither the Authority nor the Underwriter assumes any responsibility for the accuracy of the CUSIP data. GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT The information contained in this Official Statement has been obtained from sources that are believed to be reliable. No representation, warranty or guarantee, however, is made by the Underwriter as to the accuracy or completeness of any information in this Official Statement, including, without limitation, the information contained in the Appendices, and nothing contained in this Official Statement should be relied upon as a promise or representation by the Underwriter. Neither the Authority nor the Underwriter has authorized any dealer, broker, salesperson or other person to give any information or make any representations with respect to the offer or sale of the 2017 Bonds other than as contained in this Official Statement. If given or made, any such information or representations must not be relied upon as having been authorized by the Authority or the Underwriter. The information and expressions of opinion in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the 2017 Bonds shall under any circumstances create any implication that there has been no change in the affairs of any party described in this Official Statement, or in the status of any property described in this Official Statement, subsequent to the date as of which such information is presented. This Official Statement and the information contained in this Official Statement are subject to amendment without notice. The 2017 Bonds may not be sold, and no offer to buy the 2017 Bonds may be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the 2017 Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. When used in this Official Statement, in any continuing disclosure by the Authority, in any press release, or in any oral statement made with the approval of an authorized officer of the Authority or any other entity described or referenced in this Official Statement, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "forecast," "expect," "intend" and similar expressions identify "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized, and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. All summaries of the documents referred to in this Official Statement are qualified by the provisions of the respective documents summarized and do not purport to be complete statements of any or all of such provisions. The Underwriter has provided the following sentence for inclusion in this Official Statement: "The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or the completeness of such information." In connection with the offering of the 2017 Bonds, the Underwriter may overallot or effect transactions that stabilize or maintain the market prices of the 2017 Bonds at levels above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The 2017 Bonds have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon an exemption from the registration requirements contained in the Securities Act. The 2017 Bonds have not been registered or qualified under the securities laws of any state. The City of Temecula maintains an Internet website, but the information on the website is not incorporated in this Official Statement. -i- TEMECULA PUBLIC FINANCING AUTHORITY Board of Directors Maryann Edwards, Chairperson Michael S. Naggar, Member Jeff Comerchero, Member Matt Rahn, Member James Stewart, Member Authority/City of Temecula Officials Aaron Adams, Executive Director and City Manager Greg Butler, Assistant City Manager Jennifer Hennessy, Authority Treasurer and City Director of Finance Patrick Thomas, Interim Director of Public Works and Interim City Engineer Randi Johl, Authority Secretary and City Clerk PROFESSIONAL SERVICES Authority General Counsel and City Attorney Richards, Watson & Gershon, A Professional Corporation Los Angeles, California Municipal Advisor Fieldman, Rolapp & Associates Irvine, California Bond Counsel and Disclosure Counsel Quint & Thimmig LLP Larkspur, California Special Tax Consultant and Dissemination Agent Albert A. Webb Associates Riverside, California Appraiser Stephen G. White, MAI Fullerton, California Market Absorption Consultant Empire Economics, Inc. Capistrano Beach, California Fiscal Agent U.S. Bank National Association Los Angeles, California TABLE OF CONTENTS INTRODUCTION 1 General 1 Authority for Issuance 1 The 2017 Bonds 2 Security for the 2017 Bonds 2 Reserve Fund 3 The Authority 4 The District 4 Land Valuation 5 Limited Obligation 6 Issuance of Parity Bonds 6 Bondowners' Risks 6 Continuing Disclosure 6 Other Information 7 PLAN OF FINANCING 7 Overview 7 Estimated Sources and Uses of Funds 9 THE 2017 BONDS 9 Authority for Issuance 9 General Provisions 10 Redemption 10 Transfer or Exchange of 2017 Bonds 14 Discontinuance of DTC Services 16 Scheduled Debt Service 17 SECURITY FOR THE 2017 BONDS 17 General 17 Limited Obligation 18 Special Taxes 18 Special Tax Fund 19 Summary of Rate and Method 20 Reserve Fund 24 Covenant for Superior Court Foreclosure 25 No Teeter Plan 26 Investment of Moneys 26 Issuance of Additional Bonds 27 THE DISTRICT 29 Location and General Description of the District 29 History of the District 31 The Improvements 32 The Roripaugh Ranch Development 35 The Current Landowners 40 Land Use Distribution 42 Property Values 42 APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F APPENDIX G APPENDIX H APPENDIX I APPENDIX J APPENDIX K Value -to -District Lien Ratios 43 Direct and Overlapping Governmental Obligations45 THE AUTHORITY 47 SPECIAL RISK FACTORS 47 No General Obligation of the City or the District 47 Property Value 47 Concentration of Ownership 48 Failure to Complete Development 49 Failure to Achieve Market Absorption Projections 49 Government Approvals 49 Payment of the Special Tax is not a Personal Obligation 49 FDIC/Federal Government Interests in Properties49 Exempt Properties 52 Parity Taxes and Special Assessments 52 Insufficiency of Special Taxes 52 Tax Delinquencies 53 Bankruptcy Delays 54 Proceeds of Foreclosure Sales 54 Natural Disasters 55 Hazardous Substances 55 Disclosure to Future Purchasers 55 No Acceleration Provision 56 Taxability Risk 56 Enforceability of Remedies 56 No Secondary Market 57 Proposition 218 57 Ballot Initiatives 58 IRS Audit of Tax -Exempt Bond Issues 58 TAX MATTERS 58 LEGAL MATTERS 61 NO RATING 61 NO LITIGATION 61 MUNICIPAL ADVISOR 62 UNDERWRITING 62 CONTINUING DISCLOSURE 62 The Authority 62 The Primary Landowner 63 Remedies for Failures to Comply 63 MISCELLANEOUS 64 GENERAL INFORMATION ABOUT THE CITY OF TEMECULA RATE AND METHOD SUMMARY OF THE FISCAL AGENT AGREEMENT FORM OF OPINION OF BOND COUNSEL FORM OF CONTINUING DISCLOSURE AGREEMENT OF THE AUTHORITY FORM OF CONTINUING DISCLOSURE AGREEMENT OF THE PRIMARY LANDOWNER DTC AND THE BOOK -ENTRY ONLY SYSTEM BUILDING PERMIT THRESHOLDS APPRAISAL REPORT MARKET ABSORPTION STUDY BOUNDARY MAP OF THE DISTRICT NOTICE TO PURCHASERS The Temecula Public Financing Authority and the Underwriter intend that the 2017 Bonds are to be offered and sold only to persons reasonably believed to qualify as Qualified Institutional Buyers that are purchasing the 2017 Bonds for their own account for investment purposes and not with a view to distributing the 2017 Bonds. Purchasers Must Be Qualified Institutional Buyers. As defined in the Fiscal Agent Agreement for the 2017 Bonds described in this Official Statement, "Qualified Institutional Buyer" means a "qualified institutional buyer" within the meaning of Rule 144A promulgated under the Securities Act of 1933, as amended. Agreement of Each Purchaser. Each purchaser of any of the 2017 Bonds, by its acceptance of a 2017 Bond or of any interest therein, acknowledges and agrees with the Authority and the Underwriter that: 1. The Purchaser (a) is a Qualified Institutional Buyer and (b) is acquiring the 2017 Bonds for its own account or for the account of an Qualified Institutional Buyer; 2. The Purchaser has sufficient knowledge and experience in financial and business matters with respect to the evaluation of the risk and merits of the investment represented by the 2017 Bonds and is able to bear the economic risks of such investment; 3. The Purchaser agrees to and shall indemnify, hold harmless and defend the Authority and its officers, members, directors, officials and employees, and each of them, against all loss, costs, damages, expenses, suits, judgments, actions and liabilities of whatever nature (including, without limitation, attorneys' fees, litigation and court costs, amounts paid in settlement, and amounts paid to discharge judgments) directly or indirectly resulting from or arising out of or related to its transfer of the 2017 Bonds in violation of the transfer restrictions set forth in the Fiscal Agent Agreement described below; and 4. The Purchaser understands that the 2017 Bonds are limited obligations of the Authority secured only by a pledge of Special Tax Revenues and amounts in certain funds and accounts established under, and all to the extent and as provided in, the Fiscal Agent Agreement. Resale Restrictions and Limits on Transferability. Prior to the 2017 Bond Transfer Restriction Release Date (defined below), no transfer, sale or other disposition of any 2017 Bond, or any beneficial interest therein, may be made except to transferees that the transferor reasonably believes is a Qualified Institutional Buyer that is purchasing for its own account for investment purposes and not with a view to distributing the Series 2017 Bond. Each transferee of a 2017 Bond, or any beneficial interest therein, by its purchase thereof, will be deemed to have represented that such transferee is a Qualified Institutional Buyer that is purchasing such 2017 Bond for its own account for investment purposes and not with a view to distributing the 2017 Bond. Each entity which is or which becomes a Beneficial Owner of a 2017 Bond prior to the 2017 Bond Transfer Restriction Release Date will be deemed by the acceptance or acquisition of such beneficial ownership interest to have agreed to be bound by the aforementioned transfer restriction provisions of the Fiscal Agent Agreement. The transferor of a 2017 Bond transferred prior to the 2017 Bond Transfer Restriction Release Date will be deemed to have agreed to provide notice to any proposed assignee of a beneficial ownership interest in the purchased 2017 Bond of the restrictions on transfer described herein. Any Owner or Beneficial Owner effecting a transfer, sale or other disposition of a 2017 Bond, or beneficial interest therein, will be deemed to have agreed to indemnify the Authority and the Fiscal Agent against any liability that may result if such transfer, sale or other disposition is not made in accordance with the Fiscal Agent Agreement. The restrictions on transfer of the 2017 Bonds described above will no longer be applicable to transfers of the 2017 Bonds or any beneficial interest therein following the date (the "2017 Bond Transfer Restriction Release Date") which is five business days after the date the Authority posts on the Municipal Securities Rulemaking Board's EMMA website a continuing disclosure notice pursuant to the Continuing Disclosure Agreement for the 2017 Bonds to the effect that (a) at least twenty-five percent (25%) of the Special Tax levied on property in the Community Facilities District in the then current Fiscal Year was levied on assessor parcels that are Developed Property; and (c) the then value of Property in the Community Facilities District, excluding the value of any Undeveloped Property that is then delinquent in the payment of any Special Taxes previously levied, is at least three times the principal amount of the Bonds then outstanding. The terms "Developed Property" and "Undeveloped Property" are as defined in the Rate and Method of Apportionment of Special Taxes for the District. See "THE 2017 BONDS— Transfer or Exchange of 2017 Bonds - Transfers Prior to 2017 Bond Transfer Restriction Release Date" in this Official Statement. The 2017 Bonds will bear a legend describing the restrictions on transferability prior to the 2017 Bond Transfer Restriction Release Date mentioned above, and as required by the Fiscal Agent Agreement. -iv- CITY OF TEMECULA (Riverside County, California) Regional Location Map OFFICIAL STATEMENT $44,550,000* TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) 2017 SPECIAL TAX REFUNDING BONDS INTRODUCTION This introduction is not a summary of this Official Statement and is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement by those interested in purchasing the 2017 Bonds. The sale and delivery of 2017 Bonds to potential investors is made only by means of the entire Official Statement. Certain capitalized terms used in this Official Statement and not defined herein have the meanings set forth in Appendix C — "Summary of the Fiscal Agent Agreement—Definitions" or in Appendix B — "Rate and Method." General The purpose of this Official Statement, which includes the cover page, the inside cover page, the table of contents and the attached appendices (the "Official Statement"), is to provide certain information concerning the issuance of the above -captioned bonds (the "2017 Bonds"). The 2017 Bonds are being issued by the Temecula Public Financing Authority (the "Authority"), for and on behalf of the Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) (the "District"), to (i) prepay a special tax obligation with respect to property in the District, (ii) provide funds to finance public improvements authorized to be funded by the District, (iii) fund a reserve fund for the 2017 Bonds, (iv) pay a portion of the interest on the 2017 Bonds due on September 1, 2017, (v) provide funds for the administration of the District, and (vi) pay costs of issuing the 2017 Bonds. See "PLAN OF FINANCING." The public improvements being financed include various public infrastructure improvements (the "Improvements") necessitated by development occurring in the Roripaugh Ranch area of the City of Temecula, California (the "City"). When used in this Official Statement, the term "Bonds" means the 2017 Bonds, and any Parity Bonds that may be issued by the Authority for the District in the future. See "SECURITY FOR THE 2017 BONDS— Issuance of Additional Bonds." Authority for Issuance General. The District was formed on April 26, 2016 under the authority of the Mello - Roos Community Facilities Act of 1982, as amended, commencing at Section 53311, et seq., of the California Government Code (the "Act"), which was enacted by the California Legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. The Act authorizes local governmental entities to establish community facilities districts as legally constituted governmental entities within defined boundaries, with the legislative body of the local applicable governmental entity acting on behalf of the district. Subject to approval by at least a two-thirds vote of the votes cast by the qualified electors within a district and compliance with the provisions of the Act, the legislative * Preliminary, subject to change. -1- body may issue bonds for the community facilities district established by it and may levy and collect a special tax within such district to repay such bonds. Bond Authority. The 2017 Bonds are authorized to be issued pursuant to the Act, Resolution No. 17-01 adopted on January 24, 2017 by the Board of Directors of the Authority (the "Board of Directors") acting as the legislative body of the District, and the Fiscal Agent Agreement dated as of February 1, 2017 (the "Fiscal Agent Agreement"), between the Authority, for and on behalf of the District, and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent"). For more detailed information about the formation of the District and the authority for issuance of the 2017 Bonds, see "THE DISTRICT—History of the District." The 2017 Bonds General. The 2017 Bonds will be issued only as fully registered bonds, in Authorized Denominations (initially $100,000 and integral multiples of $5,000 in excess thereof), and will bear interest at the rates per annum and will mature on the dates and in the principal amounts set forth on the inside cover page of this Official Statement. The 2017 Bonds will be dated the date of their issuance and interest on the 2017 Bonds, will be payable on March 1 and September 1 of each year (individually an "Interest Payment Date"), commencing September 1, 2017. See "THE 2017 BONDS." The 2017 Bonds will be issued in book -entry form only and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the 2017 Bonds. See "THE 2017 BONDS—General Provisions." Redemption Prior to Maturity. The 2017 Bonds are subject to optional redemption, mandatory sinking payment redemption and mandatory redemption from Special Tax prepayments prior to their respective maturities. See "THE 2017 BONDS—Redemption." Restrictions on Transfer of 2017 Bonds. As described on page -iv- entitled "Notice to Purchasers," until the 2017 Bond Transfer Restriction Release Date, the 2017 Bonds and any beneficial interests therein may only be transferred in denominations of $100,000 and integral multiples of $5,000 in excess thereof, and only to a transferee that the transferor reasonably believes is a Qualified Institutional Buyer that is purchasing for its own account for investment purposes and not with a view to distributing the 2017 Bond. The Fiscal Agent Agreement provides that each transferee of a 2017 Bond, or any beneficial interest therein, by its purchase thereof, will be deemed to have represented that such transferee is a Qualified Institutional Buyer that is purchasing such 2017 Bond for its own account for investment purposes and not with a view to distributing the 2017 Bond. For a more complete description of the 2017 Bond transfer restrictions, and the definitions of the terms "2017 Bond Transfer Restrictions Release Date" and "Qualified Institutional Buyer", see page -iv- entitled "Notice to Purchasers," and "THE 2017 BONDS—General Provisions," and "—Transfer or Exchange of 2017 Bonds." Security for the 2017 Bonds Pledge Under the Fiscal Agent Agreement. Pursuant to the Fiscal Agent Agreement, the 2017 Bonds are secured by a first pledge of all of the Special Tax Revenues (other than, in each Fiscal Year, up to the first $50,000 of Special Tax Revenues that may be deposited into the Administrative Expense Fund) and all moneys deposited in the Bond Fund, the Reserve Fund and, until disbursed in accordance with the Fiscal Agent Agreement, in the Special Tax Fund. "Special Tax Revenues," as defined in the Fiscal Agent Agreement, means the proceeds of the Special Taxes (as defined under the subheading "Special Taxes; Rate and Method" below) -2- 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 does not include interest and penalties, if any, collected with the Special Taxes that are in excess of the rate of interest payable on the Bonds. The Special Tax Revenues and all moneys deposited into said funds (except as otherwise provided in the Fiscal Agent Agreement) are dedicated to the payment of the principal of, and interest and any premium on, the 2017 Bonds in accordance with the Fiscal Agent Agreement until all of the 2017 Bonds have been paid or defeased. See "SECURITY FOR THE 2017 BONDS—Special Taxes" and Appendix B - "Rate and Method." Amounts in the Administrative Expense Fund, the Improvement Fund and the Costs of Issuance Fund, each of which is established under the Fiscal Agent Agreement, are neither pledged to nor available for the repayment of the 2017 Bonds. Special Taxes; Rate and Method. The Special Taxes to be used to pay debt service on the 2017 Bonds will be levied in accordance with the Rate and Method of Apportionment of Special Tax, as described under the heading "SECURITY FOR THE 2017 BONDS—Summary of Rate and Method" (the "Rate and Method"). The term "Special Taxes", when used in this Official Statement, means the Special Tax A levied on the Taxable Property within the District pursuant to the Rate and Method and the Fiscal Agent Agreement to fund the "Special Tax A Requirement," which includes amounts needed to pay the debt service on the 2017 Bonds. The Rate and Method also allows for the levy of a Special Tax B to pay for certain municipal services authorized to be funded by the District, but the Special Tax B is not in any way pledged, and will not be used, to pay debt service on the 2017 Bonds. See "SECURITY FOR THE 2017 BONDS—Special Taxes," and "—Summary of Rate and Method." Limitations. Amounts in the Administrative Expense Fund, the Improvement Fund and the Costs of Issuance Fund, each of which is established under the Fiscal Agent Agreement, are not pledged to the repayment of the 2017 Bonds. A portion of the Special Taxes collected annually and to be deposited on a priority basis to the Administrative Expense Fund (see clause (i) of the second paragraph under "SECURITY FOR THE 2017 BONDS—Special Tax Fund") is not pledged to the repayment of the 2017 Bonds. The Improvements are not pledged as collateral for the 2017 Bonds. The Special Tax B and the proceeds of condemnation or destruction of any of the Improvements are not pledged to pay the debt service on the 2017 Bonds. In the event that the Special Taxes are not paid when due, the only sources of funds available to repay the 2017 Bonds are amounts held by the Fiscal Agent under the Fiscal Agent Agreement in the Bond Fund and the Reserve Fund, amounts held by the Authority under the Fiscal Agent Agreement in the Special Tax Fund, and the proceeds, if any, from foreclosure sales of parcels with delinquent Special Taxes. See "SECURITY FOR THE 2017 BONDS - General." Reserve Fund The Fiscal Agent Agreement establishes a Reserve Fund to be held by the Fiscal Agent as a reserve for the payment of principal of and interest on the 2017 Bonds. The Reserve Fund is required to be funded in an amount equal to the lesser of (i) Maximum Annual Debt Service, (ii) 125% of average Annual Debt Service, or (iii) 10% of the initial principal amount of the Bonds (the "Reserve Requirement"). The Reserve Fund will be available to pay debt service on the 2017 Bonds and any Parity Bonds (as defined below), in the event that there is a shortfall in the amount in the Bond Fund to pay such debt service. The Reserve Requirement as of the date of -3- issuance of the 2017 Bonds will be $3,151,400*. See "SECURITY FOR THE 2017 BONDS— Reserve Fund." The Authority The Authority was formed on April 10, 2001, pursuant to a Joint Exercise of Powers Agreement (the "JPA Agreement") between the City and the former Redevelopment Agency of the City of Temecula (the "Agency"), in accordance with Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California. The JPA Agreement was amended in May of 2016, to provide for the withdrawal of the Successor Agency to the Agency as a member of the Authority, and to add the Temecula Community Services District and the Temecula Housing Authority as members of the Authority. See "THE AUTHORITY." The District The District was formed by the Board of Directors pursuant to proceedings conducted under the Act on April 26, 2016 and an election held on that date wherein the two owners of the property in the District voted in favor of the formation of the District, the levy of the Special Tax A and the Special Tax B on the property in the District and the issuance of up to $60,000,000 principal amount of special tax bonds payable from the Special Tax A. See "THE DISTRICT— History of the District." The proceeds of the Special Tax B, which will not be available to pay the debt service on the 2017 Bonds, will be used to pay costs of services eligible to be funded by the District, which include a panoply of municipal services ranging from public safety services, to maintenance of landscaping in public areas, maintenance of sidewalks and roadways, signage, storm drains, and street lighting and traffic signals, all related to the property in the District. The District is located in the far northern portion of the City, and includes approximately 645 gross acres of undeveloped property in an area of the City known as "Roripaugh Ranch." Roripaugh Ranch is a master planned community that at build out is expected to include approximately 1,735 single family detached homes, a neighborhood retail center, recreation centers, parks, schools, a fire station and open space areas. Roripaugh Ranch is shaped approximately like the State of Oklahoma. The Roripaugh Ranch development is located in the Authority's Community Facilities District No. 03-02 (Roripaugh Ranch) ("CFD 03- 02"), for which the Authority issued $51,250,000 of special tax bonds in 2006 to finance various infrastructure improvements necessitated by development occurring in Roripaugh Ranch. See "THE DISTRICT—The Roripaugh Ranch Development." The District includes the property in the "Pan Area" of Roripaugh Ranch. Roripaugh Ranch also includes a "Panhandle Area" which includes 509 Riverside County Assessor's parcels on approximately 160 acres, which area is substantially built -out with single family homes and which is not in the District. See "THE DISTRICT—Location and General Description of the District" and "—The Roripaugh Ranch Development." The Special Taxes heretofore levied by the Authority for CFD 03-02 on the Pan Area are being prepaid in full on the date of issuance of the 2017 Bonds with a portion of the proceeds of the 2017 Bonds, so that the Pan Area (and, hence, the property in the District) will no longer be subject to special tax levies for CFD 03-02. See "PLAN OF FINANCING—Overview – Prepayment of CFD 03-02 Special Taxes." Proceeds of the 2017 Bonds will also be deposited in an Improvement Fund established under the Fiscal Agent Agreement to be used to finance costs of the Improvements, some of which must be completed in order for building permits to be * Preliminary, subject to change. -4- issued by the City for parcels in the District. See "PLAN OF FINANCING—Overview – Funding for Improvements" and "THE DISTRICT—The Improvements." The land in the District is planned to include a total of 1,226 separate County Assessor's parcels to be developed with single family residences in fifteen different planning areas, plus a 10.7 net acre commercial site. While the property in the District was mass graded 9 to 10 years ago, it is currently largely undeveloped, with significant backbone infrastructure needed for the development of the parcels in the District yet to be constructed. The land in twelve of the planning areas is currently owned by Roripaugh Valley Restoration, LLC (the "Primary Landowner"), and the land in the other three planning areas as well as the site for commercial development is currently owned by Wingsweep Corporation. While the City and the Primary Landowner have been conducting activities to design, permit and construct necessary infrastructure improvements, the land owned by the Primary Landowner may be sold to another entity, and no assurance can be given that infrastructure development, including construction of the Improvements needed for the issuance of building permits for the property in the District, will continue as expected and as assumed in the Appraisal Report and the Absorption Study referred to under the heading "INTRODUCTION—Land Valuation" below. See "THE DISTRICT—Location and General Description of the District," "—The Roripaugh Ranch Development," and "—The Current Landowners." Land Valuation Stephen G. White, MAI (the "Appraiser") has prepared an Appraisal Report dated December 15, 2016 (the "Appraisal Report") with a valuation date of December 1, 2016, estimating the market value of the parcels within the District that are subject to the Special Tax securing the 2017 Bonds. In providing the Appraisal Report, the Appraiser relied on and utilized the Market Absorption Study (the "Absorption Study") dated December 2, 2016, by Empire Economics. The Appraiser concluded in the Appraisal Report that the market value of the property in the District as of December 1, 2016 was $46,735,000, subject to the extraordinary assumptions, among other assumptions, in the Appraisal Report. The extraordinary assumptions include that 2017 Bond proceeds and other funds totaling $22,000,000 will be available to fund the Improvements required to support the residential and commercial development of the property in the District as planned and that the current or future property owners will complete the approval/permit process for the Nicolaus Road construction project as necessary to allow adequate building permits to be issued in a timely manner as specified in the Development Agreement (described under the heading "THE DISTRICT—The Roripaugh Ranch Development"), so as to support the absorption projections in the Absorption Study. See also "SPECIAL RISK FACTORS—Failure to Achieve Market Absorption Projections." The appraised value of the land in the District, as reflected in the Appraisal Report, is approximately 1.05* times the $44,550,000* initial principal amount of the 2017 Bonds. The Appraisal Report and the Absorption Study, the complete texts of which are set forth in Appendices I and J, respectively, to this Official Statement are subject to various assumptions and limiting conditions, and should be read in their entirety by prospective purchasers of the 2017 Bonds. See "SPECIAL RISK FACTORS—Property Value." The value of individual parcels of the Taxable Property varies significantly, and no assurance can be given that should Special Taxes levied on one or more of the parcels become delinquent, and should the delinquent parcels be offered for sale at a judicial foreclosure sale, that any bid would be received for the property or, if a bid is received, that such bid would be sufficient to pay such parcel's delinquent Special Taxes. See "THE DISTRICT—Value-to-District * Preliminary, subject to change. -5- Lien Ratio - Value to District Lien Ratio Distribution," "SPECIAL RISK FACTORS—Property Value" and "SPECIAL RISK FACTORS—Insufficiency of Special Taxes." Limited Obligation Although the unpaid Special Taxes constitute liens on parcels within the District on which they are levied, they do not constitute a personal indebtedness of the property owners. There is no assurance that the current two owners of the property in the District or subsequent owners of the property will be financially able to pay the Special Taxes levied on their property in the District, or that they will pay the Special Taxes even though financially able to do so. NONE OF THE FAITH AND CREDIT OF THE DISTRICT, THE AUTHORITY OR THE STATE OF CALIFORNIA OR OF ANY OF ITS POLITICAL SUBDIVISIONS IS PLEDGED TO THE PAYMENT OF THE 2017 BONDS. EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE 2017 BONDS. THE 2017 BONDS ARE NEITHER GENERAL NOR SPECIAL OBLIGATIONS OF THE AUTHORITY, NOR GENERAL OBLIGATIONS OF THE DISTRICT, BUT ARE LIMITED OBLIGATIONS OF THE AUTHORITY FOR THE DISTRICT PAYABLE SOLELY FROM CERTAIN AMOUNTS PLEDGED THEREFOR UNDER THE FISCAL AGENT AGREEMENT, AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT. Issuance of Additional Bonds The Authority may issue additional bonded indebtedness for the District that is secured by a lien on the Special Tax Revenues and on the funds pledged under the Fiscal Agent Agreement for the payment of the 2017 Bonds on a parity with the 2017 Bonds ("Parity Bonds"). See "SECURITY FOR THE 2017 BONDS—Issuance of Additional Bonds." Bondowners' Risks Certain events could affect the ability of the Authority to pay the principal of and interest on the 2017 Bonds when due. Except for the Special Taxes, no other taxes are pledged to the payment of the 2017 Bonds. See "SPECIAL RISK FACTORS" for a discussion of certain factors that should be considered in evaluating an investment in the 2017 Bonds. The purchase of the 2017 Bonds involves significant risk, and until the 2017 Bond Transfer Release Date the 2017 Bonds and any beneficial interests therein may only be transferred in denominations of $100,000 and integral multiples of $5,000 in excess thereof, and only to a transferee that the transferor reasonably believes is a Qualified Institutional Buyer that is purchasing for its own account for investment purposes and not with a view to distributing the 2017 Bond. See "INTRODUCTION—The 2017 Bonds - Restrictions on Transfer of 2017 Bonds." Continuing Disclosure For purposes of complying with Rule 15c2 -12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended (the "Rule"), the Authority and the Primary Landowner have agreed to provide, or cause to be provided, to the Municipal Securities Rulemaking Board (the "MSRB") certain annual financial information and other information. The Authority and the Primary Landowner each have further agreed to provide notice of certain enumerated events, and the Primary Landowner has agreed to provide mid -year reports with certain limited information. The Primary Landowner's annual, mid -year and enumerated event reporting obligations will terminate if and when the Primary Landowner and any affiliate thereof, or successor thereto, owns parcels in the District that are subject to less than twenty percent (20%) of the annual Special Tax levy. These covenants have been made in order to assist the -6- Underwriter in complying with the Rule. See "CONTINUING DISCLOSURE," and Appendices E and F for a description of the specific nature of the annual reports and notices of significant events, as well as the terms of the Continuing Disclosure Agreements of the Authority and the Primary Landowner, respectively, pursuant to which such reports and notices are to be made. Other Information This Official Statement speaks only as of its date, and the information contained in this Official Statement is subject to change without notice. Except where otherwise indicated, all information contained in this Official Statement has been provided by the Authority on behalf of the District. Copies of the Fiscal Agent Agreement and certain other documents referenced in this Official Statement are available for inspection at the office of, and (upon written request and payment to the Authority of a charge for copying, mailing and handling) are available for delivery from, the Director of Finance, City of Temecula, 41000 Main Street, Temecula, California 92590. PLAN OF FINANCING Overview General. The primary purposes of the 2017 Bonds are to fund the prepayment in full of the special taxes levied by the Authority for CFD 03-02 on property in the District, so that the property is no longer subject to special tax levies for CFD 03-02 (see "INTRODUCTION—The District"), and to provide funds to pay costs of Improvements authorized to be funded by the District. Proceeds of the 2017 Bonds will also be used to fund a Reserve Fund for the 2017 Bonds, to pay a portion of the interest due on the 2017 Bonds on September 1, 2017, to pay costs of issuance of the 2017 Bonds, and to pay costs of administration of the District until Special Taxes are collected from properties in the District. As an additional source of funds to pay the interest due on the 2017 Bonds on September 1, 2017, a portion of the special taxes collected for CFD 03-02 attributable to the parcels in the District will be deposited on the date of issuance of the 2017 Bonds to the Capitalized Interest Account held by the Fiscal Agent under the Fiscal Agent Agreement. Such amount, together with the portion of the 2017 Bonds to be deposited to the Capitalized Interest Account, will be equal to the interest due on the 2017 Bonds on September 1, 2017. Prepayment of CFD 03-02 Special Taxes. Proceeds of the 2017 Bonds being used to prepay CFD 03-02 special taxes authorized to be levied on property in the District, along with the proceeds of refunding bonds being issued by the Authority for CFD 03-02 (the "CFD 03-02 Refunding Bonds") concurrently with the issuance of the 2017 Bonds, will be deposited to a refunding fund established under an Escrow Agreement, dated as of February 1, 2017, between the Authority and U.S. Bank, National Association, as escrow bank. Amounts in the refunding fund will be used to redeem in full on March 1, 2017 the bonds issued in 2006 by the Authority for CFD 03-02 (the "CFD 03-02 2006 Bonds"). Funds in the refunding fund are not available to be used for payments on the 2017 Bonds. Following the prepayment of CFD 03-02 special taxes to occur on the date of issuance of the 2017 Bonds, the property in the District will no longer be subject to any lien or other obligation with respect to CFD 03-02, and the CFD 03-02 Refunding Bonds will be payable solely from property in the Panhandle Area of Roripaugh Ranch. Funding for Improvements. The Authority, for and on behalf of the District, has entered into an Acquisition Agreement with the Primary Landowner, dated as of February 1, 2016 (the -7- "Acquisition Agreement"), pursuant to which the Authority has agreed to use amounts in an improvement fund for CFD 03-02 (estimated to total approximately $14,977,000*), as well as proceeds of the 2017 Bonds and of any new -money Parity Bonds (collectively, the "Improvement Funds"), to pay the costs of specified public infrastructure improvements (referred to in this Official Statement as the "Improvements") the construction of which is necessitated by development occurring in the District. While the Acquisition Agreement provides for the Primary Landowner or its successor to construct most of the Improvements, under a Development Agreement between the Primary Landowner and the City governing the development of the property in Roripaugh Ranch, the owners of the land in the District are obligated to complete the Improvements in order to develop the land they own in the District (see "THE DISTRICT—The Roripaugh Ranch Development"). In addition to the Improvements subject to the Acquisition Agreement, some of the Improvements are being constructed by the City and are to be paid for from the Improvement Funds. See "THE DISTRICT – The Improvements." Some of the Improvements have been completed; however additional Improvements need to be completed in order to obtain building permits from the City in respect of the property in the District. See "THE DISTRICT—The Improvements" and Appendix H— "Building Permit Thresholds." The costs of Improvements completed to date have been paid for with proceeds of the CFD 03-02 2006 Bonds or with funds advanced by the owners of land in Roripaugh Ranch. See "THE DISTRICT—The Roripaugh Ranch Development." In accordance with the Acquisition Agreement, proceeds of the Improvement Funds will be used to make payments to the Primary Landowner or its successor under the Acquisition Agreement for costs of those Improvements constructed by the Primary Landowner or its successor. See "PLAN OF FINANCING – Sources and Uses of Funds." The Fiscal Agent Agreement allows for the issuance of Parity Bonds secured on a parity with the 2017 Bonds (see "SECURITY FOR THE 2017 BONDS—Issuance of Additional Bonds," and it is expected that the Authority will issue Parity Bonds for the District in one or more series to fund costs of the Improvements in excess of the Improvement Funds. Parity Bonds are expected to be issued as development of the Taxable Property (as defined in the Rate and Method) in the District occurs, and the aggregate principal amount of any Parity Bonds (other than Parity Bonds that are Refunding Bonds, to which no principal limit applies), plus the initial principal amount of the 2017 Bonds cannot exceed the bonded indebtedness limit of $60,000,000 for the District. Any costs of Improvements in excess of the Improvement Funds and any net proceeds of Parity Bonds are the responsibility of the Primary Landowner or its successor under the Development Agreement. See "THE DISTRICT—The Improvements." The Improvement Funds are not available to make payments on the 2017 Bonds. * Preliminary, subject to change. -8- Estimated Sources and Uses of Funds The sources and uses of funds in connection with the 2017 Bonds are expected to be as follows: Principal amount of 2017 Bonds Less: Underwriter's Discount Plus: Transfer of Funds on Handau Total Sources $ Prepayment of CFD 03-02 Special Taxes(1) $ Deposit to Reserve Fund(2) Deposit to Costs of Issuance Fund( ) Deposit to Improvement Fundc4) Deposit to the Capitalized Interest Account(5) Deposit to Administrative Expense Fund(6) Total Uses $ (1) "PLAN OF FINANCING—Overview - General." (2) See "PLAN OF FINANCING—Overview." (3) Equal to the initial Reserve Requirement. See "SECURITY FOR THE 2017 BONDS—Reserve Fund." (4) Costs of issuance include, without limitation, Fiscal Agent fees and expenses; Municipal Advisor fees and expenses; the fees and expenses of Bond Counsel, Disclosure Counsel, and the City Attorney; printing costs and other costs related to the issuance of the 2017 Bonds. (5) To be used, along with certain funds held in an improvement fund under a fiscal agent agreement for the CFD 03-02 Refunding Bonds, to pay costs of the Improvements. See "PLAN OF FINANCING—Overview - Funds for Improvements" and "THE DISTRICT—The Improvements." (6) To be used to pay interest on the 2017 Bonds due on September 1, 2017. To be funded in part with proceeds of the 2017 Bonds and in part from a transfer of special taxes previously collected. See "PLAN OF FINANCING—Overview - General." (7) To be used to pay costs of administering the District prior to the receipt of Special Tax Revenues. THE 2017 BONDS Authority for Issuance Pursuant to the Act, on April 26, 2016, the Board of Directors adopted Resolution No. TPFA 16-04 establishing the District ("Resolution of Formation"). Also on April 26, 2016, the Board of Directors adopted Resolution No. TPFA 16-06 calling an election to authorize the issuance of bonds and the levying of a special tax within the District. On April 26, 2016, the election was held and the then two owners of property in the District, constituting the qualified electors of the District, cast votes in the election in favor of the issuance of up to $60,000,000 of bonded indebtedness to finance the Improvements, and approved the Rate and Method, a copy of which is attached to this Official Statement as Appendix B. See "THE DISTRICT—History of the District." The 2017 Bonds are authorized to be issued pursuant to the Act, Resolution No. TPFA 17-01 adopted on January 24, 2017, by the Board of Directors, acting as the legislative body of the District, and the Fiscal Agent Agreement. See "THE DISTRICT—History of the District" for information in respect of the adoption by the Board of Directors of such Resolution. The Special Taxes to be used to pay debt service on the 2017 Bonds are being levied in accordance with the Rate and Method. -9- General Provisions The 2017 Bonds will be issued only as fully registered bonds, in Authorized Denominations, and will bear interest at the rates per annum and will mature on the dates set forth on the inside cover page of this Official Statement. The Fiscal Agent Agreement defines "Authorized Denominations" as (i) prior to the 2017 Bond Transfer Restriction Release Date (see "THE 2017 BONDS—Transfer or Exchange of 2017 Bonds"), $100,000 and integral multiples of $5,000 in excess of $100,000, provided however that one 2017 Bond may be in a denomination less than $100,000 as a result of any partial redemption of 2017 Bonds prior to the 2017 Bond Transfer Restriction Release Date, and (ii) on and after the 2017 Bond Transfer Restriction Release Date, $5,000 and integral multiples thereof. See page iv entitled "Notice to Purchasers," and "THE 2017 BONDS—Transfer or Exchange of 2017 Bonds." The 2017 Bonds will be dated the date of their issuance and interest will be payable on each Interest Payment Date, commencing September 1, 2017. Each 2017 Bond will bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated on an Interest Payment Date, in which event it will bear interest from such date of authentication, or (b) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it will bear interest from such Interest Payment Date, or (c) it is authenticated on or before August 15, 2017, in which event it will bear interest from the date of issuance of the 2017 Bonds; provided, however, that if, as of the date of authentication of any 2017 Bond interest thereon is in default, such 2017 Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. "Record Date" is defined in the Fiscal Agent Agreement as the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such fifteenth (15th) day is a Business Day. The 2017 Bonds will be payable both as to principal and interest, and as to any premium upon the redemption thereof, in lawful money of the United States of America. The principal of the 2017 Bonds and any premium due upon the redemption thereof will be payable upon presentation and surrender at the principal corporate trust office of the Fiscal Agent. Interest on each 2017 Bond will be computed using a year of 360 days comprised of twelve 30 -day months. The 2017 Bonds will be issued in book -entry form only and, when delivered, will be registered in the name of Cede & Co., as nominee of DTC, which will act as securities depository for the 2017 Bonds. Individual purchases of the 2017 Bonds will be made in Authorized Denominations in book -entry form only. Purchasers of the 2017 Bonds will not receive physical certificates representing their ownership interests in the 2017 Bonds purchased. Principal and interest payments represented by the 2017 Bonds are payable directly to DTC by the Fiscal Agent. Upon receipt of payments of principal and interest, DTC will in turn distribute such payments to the beneficial owners of the 2017 Bonds. See Appendix F - "DTC and the Book -Entry Only System." So long as the 2017 Bonds are registered in the name of Cede & Co., as nominee of DTC, references in this Official Statement to the owners shall mean Cede & Co., and shall not mean the purchasers or Beneficial Owners of the 2017 Bonds. Redemption Optional Redemption.* The 2017 Bonds maturing on or after September 1, 2028 are subject to optional redemption prior to their stated maturities on any Interest Payment Date occurring on or after September 1, 2027, as a whole or in part in an amount equal to $5,000 or Preliminary, subject to change. -10- any integral multiple thereof, upon payment from any source of funds available for that purpose, at a redemption price equal to the principal amount of the 2017 Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. Mandatory Sinking Payment Redemption. The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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: -11- Redemption Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The 2017 Bonds maturing on September 1, , 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 Date (September 1) Sinking Payments The amounts in the foregoing tables will be reduced as a result of any prior partial redemption of the 2017 Bonds pursuant to the optional redemption or redemption from special tax prepayments provisions of the Fiscal Agent Agreement, as specified in writing by the Authority's Treasurer to the Fiscal Agent. -12- Mandatory Redemption From Special Tax Prepayments.* The 2017 Bonds are subject to mandatory redemption prior to their stated maturity on any Interest Payment Date, from the proceeds of Special Tax Prepayments and corresponding transfers of funds from the Reserve Fund (as described below under "SECURITY FOR THE 2017 BONDS—Reserve Fund"), as a whole or in part in an amount equal to $5,000 or any integral multiple thereof, at a redemption price (expressed as a percentage of the principal amount of the 2017 Bonds to be redeemed), as set forth below, together with accrued interest thereon to the date fixed for redemption: Redemption Dates Redemption Prices any Interest Payment Date from September 1, 2017 to and including March 1, 103% September 1, and March 1, 102 September 1, and March 1, 101 September 1, and any Interest Payment 100 Date thereafter No assurance can be given that prepayments of Special Taxes levied on the Taxable Property will not occur in the future, which would result in a redemption to 2017 Bonds prior to their maturity. See "SECURITY FOR THE 2017 BONDS—Summary of Rate and Method — Prepayment in Full," and "—Prepayment in Part." Purchase of 2017 Bonds In Lieu of Redemption. In lieu of redemption as described above, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2017 Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase prior to the selection of 2017 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 2017 Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase and any premium which would otherwise be due if such 2017 Bonds were redeemed in accordance with the Fiscal Agent Agreement. Selection of 2017 Bonds for Redemption. Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the 2017 Bonds (other than pursuant to the mandatory sinking payment redemption provisions of the Fiscal Agent Agreement), the Fiscal Agent will select the 2017 Bonds to be redeemed from among the maturities of the 2017 Bonds or such given portion thereof not previously redeemed as directed by the Treasurer (who shall specify 2017 Bonds to be redeemed so as to maintain substantially level debt service on the Bonds) and within a maturity by lot in any manner which the Fiscal Agent deems appropriate. Notice of Redemption. The Fiscal Agent will cause notice of any redemption to be mailed by first class mail, postage prepaid, or by such other means as is acceptable to the recipient thereof, at least 30 days but not more than 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 2017 Bonds designated for redemption, at their addresses appearing on the Bond registration books maintained by the Fiscal Agent; but such mailing is not a condition precedent to redemption and failure to mail or to receive any such notice, or any defect therein, will not affect the validity of the proceedings for the redemption of such 2017 Bonds. The redemption notice will state the redemption date and the redemption price and, if less than all of the then Outstanding 2017 Bonds are to be called for redemption, will designate the CUSIP numbers and, if applicable, Bond numbers of the 2017 Bonds to be redeemed by giving the individual CUSIP number and, if applicable, Bond number of each Bond to be * Preliminary, subject to change. -13- redeemed or if Bond numbers have been assigned by the Fiscal Agent to the 2017 Bonds will state that all 2017 Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the 2017 Bonds of one or more maturities have been called for redemption, will state as to any Bond called in part the principal amount thereof to be redeemed, and will require that such 2017 Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and will state that further interest on such 2017 Bonds will not accrue from and after the redemption date. Notwithstanding the foregoing, in the case of any redemption of the 2017 Bonds pursuant to the redemption provisions described above under "- Optional Redemption" the notice of redemption may state that the redemption is conditioned upon receipt by the Fiscal Agent of sufficient moneys to redeem the 2017 Bonds on the anticipated redemption date, and that the redemption will not occur if by no later than the scheduled redemption date sufficient moneys to redeem the 2017 Bonds have not been deposited with the Fiscal Agent. In the event that the Fiscal Agent does not receive sufficient funds by the scheduled redemption date to so redeem the 2017 Bonds to be redeemed, the Fiscal Agent will send written notice to the owners of the 2017 Bonds, to the Securities Depositories and to one or more of the Information Services to the effect that the redemption did not occur as anticipated, and the 2017 Bonds for which notice of redemption was given will remain Outstanding for all purposes of the Fiscal Agent Agreement. Effect of Redemption. 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 2017 Bonds so called for redemption have been deposited in the Bond Fund, such 2017 Bonds so called will cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice. Tender of 2017 Bonds in Payment of Special Taxes. The Authority has covenanted in the Fiscal Agent Agreement not to permit the tender of 2017 Bonds in payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the Authority having insufficient Special Tax Revenues to pay the principal of and interest on the 2017 Bonds that will remain Outstanding following such tender. Transfer or Exchange of 2017 Bonds General. So long as the 2017 Bonds are registered in the name of Cede & Co., as nominee of DTC, transfers and exchanges of 2017 Bonds shall be made in accordance with DTC procedures. See Appendix G - "DTC and the Book -Entry Only System." If the book -entry only system for the 2017 Bonds is ever discontinued, 2017 Bonds may, in accordance with its terms, be transferred or exchanged in Authorized Denominations by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such 2017 Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form acceptable to the Fiscal Agent. Whenever any 2017 Bond or 2017 Bonds are surrendered for transfer or exchange, the Authority will execute and the Fiscal Agent will authenticate and deliver a new 2017 Bond or 2017 Bonds, for a like aggregate principal amount of 2017 Bonds of authorized denominations and of the same maturity. The Fiscal Agent will collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfers or exchanges of 2017 Bonds will be required to be made (i) within the 15 days prior to the date designated by the Fiscal Agent as the date for selecting 2017 Bonds for -14- redemption, (ii) with respect to any 2017 Bond after such 2017 Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. Transfers Prior to 2017 Bond Transfer Restriction Release Date. The Fiscal Agent Agreement provides that, prior to the 2017 Bond Transfer Restriction Release Date, no transfer, sale or other disposition of any 2017 Bond, or any beneficial interest therein, may be made except to a transferee that the transferor reasonably believes is a Qualified Institutional Buyer that is purchasing such 2017 Bond for its own account for investment purposes and not with a view to distributing such 2017 Bond. Each transferee of a 2017 Bond, or any beneficial interest therein, transferred prior to the 2017 Bond Transfer Restriction Release Date, by its purchase thereof, will be deemed to have represented that such transferee is a Qualified Institutional Buyer that is purchasing such 2017 Bond for its own account for investment purposes and not with a view to distributing such 2017 Bond. Each 2017 Bond delivered prior to the 2017 Bond Transfer Restriction Release Date will bear a legend describing or referencing the foregoing restriction on transferability. Each entity that is or that becomes a Beneficial Owner of a 2017 Bond prior to the 2017 Bond Transfer Restriction Release Date is deemed by the acceptance or acquisition of such beneficial ownership interest to have agreed to be bound by the above-described provisions of the Fiscal Agent Agreement. The transferor of a 2017 Bond transferred prior to the 2017 Bond Transfer Restriction Release Date agrees to provide notice to any proposed assignee of a beneficial ownership interest in the purchased 2017 Bond of the restriction on transfer described above. The Fiscal Agent Agreement provides that any Owner or Beneficial Owner effecting a transfer, sale or other disposition of a 2017 Bond, or beneficial interest therein, prior to the 2017 Bond Transfer Restriction Release Date shall, and does agree to, indemnify the Authority and the Fiscal Agent against any liability that may result if such transfer, sale or other disposition is not made in accordance with the requirements of the Fiscal Agent Agreement. The term "2017 Bond Transfer Restriction Release Date" is defined in the Fiscal Agent Agreement as the date which is five (5) Business Days after the date the Authority posts on the Municipal Securities Rulemaking Board's EMMA website a continuing disclosure notice pursuant to the Continuing Disclosure Agreement to the effect that (a) at least twenty-five percent (25%) of the Special Tax levied in the then current Fiscal Year was levied on assessor parcels that are classified as Developed Property under the Rate and Method; and (b) the then value of Undeveloped Property (as defined in the Rate and Method) in the District, excluding the value of any Undeveloped Property that is then delinquent in the payment of any Special Taxes previously levied, is at least three times the portion of the principal amount of the Bonds then outstanding allocable to such property. For purposes of the preceding clause (b), the value of the applicable parcels of Undeveloped Property shall be determined either by reference to the assessed value of the property on the most recent County real property tax roll or by reference to an appraisal performed within six (6) months of the release date by an MAI appraiser selected by the Authority. The term "Qualified Institutional Buyer" is defined in the Fiscal Agent Agreement as a "qualified institutional buyer" within the meaning of Rule 144A promulgated under the Securities Act of 1933, as amended. From and after the 2017 Bond Transfer Restriction Release Date, the restrictions on transfer of the 2017 Bonds described above will no longer apply; and, from and after such date, 2017 Bonds may be transferred to any person in accordance with, and upon compliance with the requirements of, the provisions of the Fiscal Agent Agreement described under the subheading "General" above. Also, following the 2017 Bonds Transfer Restriction Release Date, the 2017 Bonds may be transferred or exchanged in denominations of $5,000 or integral multiples thereof. -15- Discontinuance of DTC Services DTC may determine to discontinue providing its services with respect to the 2017 Bonds by giving written notice to the Fiscal Agent during any time that the 2017 Bonds are Outstanding, and discharging its responsibilities with respect to the 2017 Bonds under applicable law. The Authority may terminate the services of DTC with respect to the 2017 Bonds if it determines that DTC is unable to discharge its responsibilities with respect to the 2017 Bonds or that continuation of the system of book -entry transfers through DTC is not in the best interest of the Beneficial Owners. The Authority will mail any such notice of termination to the Fiscal Agent. Upon the termination of the services of DTC as provided in the previous paragraph, and if no substitute Depository willing to undertake the functions can be found which is willing and able to undertake such functions upon reasonable or customary terms, or if the Authority determines that it is in the best interest of the Beneficial Owners of the 2017 Bonds that they obtain certificated Bonds, the 2017 Bonds will no longer be restricted to being registered in the Registration Books of the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names the Owners designate at that time, in accordance with the Fiscal Agent Agreement. To the extent that the Beneficial Owners are designated as the transferees by the Owners, the 2017 Bonds will be delivered to such Beneficial Owners as soon as practicable in accordance with the Fiscal Agent Agreement. -16- Scheduled Debt Service The following table shows the annual scheduled debt service on the 2017 Bonds, assuming no optional redemption of the 2017 Bonds and no redemption of the 2017 Bonds from Special Tax Prepayments: Bond Year ending Annual Debt September 1 Principal Interest Service 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 Totals General SECURITY FOR THE 2017 BONDS Pursuant to the Fiscal Agent Agreement, the 2017 Bonds are secured by a first pledge of all of the Special Tax Revenues (other than, each Fiscal Year, a maximum of $50,000 of Special Tax Revenues that may be deposited to the Administrative Expense Fund on a priority basis), and all moneys deposited in the Bond Fund (including the Special Tax Prepayments Account therein), the Reserve Fund and, until disbursed in accordance with the Fiscal Agent Agreement, the Special Tax Fund. Special Tax Revenues do not include penalties, if any, collected in respect of delinquent Special Taxes. The Special Tax Revenues and all moneys deposited into said funds (except as otherwise provided in the Fiscal Agent Agreement) are dedicated to the payment of -17- the principal of, and interest and any premium on, the 2017 Bonds in accordance with the Fiscal Agent Agreement until all of the 2017 Bonds have been paid or defeased. Amounts in the Administrative Expense Fund, the Improvement Fund, the Costs of Issuance Fund and the Refunding Fund, and up to $50,000 of the first Special Tax Revenues collected in any Fiscal Year that may be deposited to the Administrative Expense Fund on a priority basis, are not pledged to the repayment of the 2017 Bonds. The Improvements are not pledged as collateral for the 2017 Bonds. The proceeds of condemnation or destruction of any of the Improvements are not pledged to pay the Debt Service on the 2017 Bonds. Limited Obligation The 2017 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 (including the Special Tax Prepayments Account therein), the Reserve Fund and the Special Tax Fund created pursuant to the Fiscal Agent Agreement. In the event that the Special Taxes are not paid when due, the only sources of funds available to repay the 2017 Bonds are amounts held by the Fiscal Agent under the Fiscal Agent Agreement in the Bond Fund, the Reserve Fund and the Special Tax Fund, and the proceeds, if any, from foreclosure sales of parcels with delinquent Special Tax levies. Special Taxes In accordance with the provisions of the Act, the Rate and Method was approved in 2016 by the two owners of the property in the District. The Rate and Method is set forth in its entirety in Appendix B. The Rate and Method provides for the levy of a "Special Tax A" in order to fund the annual "Special Tax A Requirement," which includes amounts needed to pay the debt service on the Bonds, to pay costs of administering the Bonds and the District, to replenish any draws on the Reserve Fund and to pay directly for costs of the Improvements; and the levy of a "Special Tax B" in order to fund the annual "Special Tax B Requirement," which includes amounts needed to pay costs of services authorized to be funded by the District, and to pay related administrative expenses. See "INTRODUCTION—The District" and "SECURITY FOR THE 2017 BONDS - Summary of Rate and Method." The Special Tax B to be levied on Taxable Property in the District to satisfy the annual Special Tax B Requirement is not pledged, and will not be used, to pay debt service on the 2017 Bonds; and the term "Special Taxes" when used in this Official Statement includes only the Special Tax A levied to satisfy the annual Special Tax A Requirement. Under the Fiscal Agent Agreement, the Authority is obligated to fix and levy the amount of Special Taxes within the District required for the timely payment of principal of and interest on the outstanding 2017 Bonds becoming due and payable, including any necessary replenishment of the Reserve Fund and an amount estimated to be sufficient to pay the Administrative Expenses, taking into account any prepayments of Special Taxes previously received by the Authority. The Special Taxes levied on any parcel of Taxable Property may not in any event exceed the maximum amount as provided in the Rate and Method and the Act. The Special Taxes are payable and are to be collected in the same manner, at the same time and in the same installment as County ad valorem taxes on property levied on the secured tax roll are payable, and pursuant to the Act 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 County secured tax roll. Notwithstanding the foregoing, the Special Taxes may be collected in certain circumstances by means of direct billing of the owners of Taxable Property. -18- Although the Special Taxes will constitute a lien on taxed parcels within the District, they do not constitute a personal indebtedness of the owners of the property within the District. Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of the Special Tax on a parcel of Taxable Property, the Authority may order the institution of a superior court action to foreclose the lien on the parcel of Taxable Property within specified time limits. In such an action, the real property subject to the unpaid amount of the Special Tax lien may be sold at judicial foreclosure sale. The Act provides that the Special Taxes are secured by a continuing lien that is subject to the same lien priority in the case of delinquency as ad valorem property taxes. See "SECURITY FOR THE 2017 BONDS—Summary of Rate and Method," and "—Covenant for Superior Court Foreclosure" and "SPECIAL RISK FACTORS— Parity Taxes and Special Assessments." The property located within the District is subject to other liens for taxes and assessments, and other such liens could come into existence in the future. See "SPECIAL RISK FACTORS—Parity Taxes and Special Assessments." There is no assurance that any owner of a parcel subject to the Special Tax levy will be financially able to pay the annual Special Taxes or that it will pay such taxes even if financially able to do so. See "SPECIAL RISK FACTORS." While no assurance can be given that the owners of the Taxable Property in the District will pay the Special Taxes levied by the Authority on such property, it should be noted that both of the current owners of the Taxable Property have consistently paid the special taxes levied for CFD 03-02 on their property. As discussed under "PLAN OF FINANCING— Overview – Prepayment of CFD 03-02 Special Taxes," proceeds of the 2017 Bonds will be used to prepay the remaining CFD 03-02 special tax obligation of the property in the District, so no future levies of special taxes for CFD 03-02 will be made on the property in the District. The first levy of the Special Tax A and the Special Tax B for the District will be for fiscal year 2017- 18, with one-half of such Special Tax levy delinquent if not paid by December 10, 2017 and one- half delinquent if not paid by April 10, 2018. Special Tax Fund Deposit of Special Tax Revenues. The Fiscal Agent Agreement establishes a Special Tax Fund to be held by the Fiscal Agent. Under the Fiscal Agent Agreement, the Authority is obligated to transfer or cause to be transferred to the Fiscal Agent, for deposit by the Fiscal Agent in the Special Tax Fund, as soon as practicable following receipt, all Special Tax Revenues received by the Authority. Notwithstanding the foregoing, (i) the first Special Tax Revenues collected by the Authority in any Fiscal Year, in an amount equal to the portion of such Fiscal Year's Special Tax levy for Administrative Expenses (but not to exceed, in any Fiscal Year, $50,000) will be deposited by the Treasurer in the Administrative Expense Fund; (ii) any Special Tax Revenues constituting the collection of delinquencies in payment of Special Taxes will be separately identified by the Treasurer and will be disposed of by the Fiscal Agent first, by transfer to the Bond Fund to pay any past due debt service on the Bonds; second, by transfer to the Reserve Fund to the extent needed to increase the amount then on deposit in the Reserve Fund to the then Reserve Requirement; third, by transfer to the Administrative Expense Fund to the extent that amounts in such fund were used to pay costs related to the collection of such delinquencies; and fourth, to be held in the Special Tax Fund and used for its purposes; -19- (iii) any proceeds of Special Tax Prepayments will be remitted by the Treasurer to the Fiscal Agent for deposit by the Fiscal Agent in the Special Tax Prepayments Account and used to redeem Bonds; and (iv) any Special Tax Revenues constituting the portion, if any, of the Special Tax A Requirement that is to pay directly for the acquisition or construction of any portion of the Improvements shall be separately identified by the Authority and shall be deposited by the Fiscal Agent in the Improvement Fund established under the Fiscal Agent Agreement so long as the Improvement Fund has not theretofore been closed, and if the Improvement Fund has been closed, then such amount shall be retained by the Authority to be used to pay Improvement costs. Moneys in the Special Tax Fund will be held by the Fiscal Agent for the benefit of the Authority and the Owners of the Bonds, will be disbursed as provided below and, pending any disbursement, will be subject to a lien in favor of the Owners of the Bonds and the Authority. Disbursements. On each Interest Payment Date, the Fiscal Agent will withdraw from the Special Tax Fund and transfer the following amounts in the following order of priority: (i) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund and any expected transfers under the Fiscal Agent Agreement from the Improvement Fund, the Reserve Fund and the Special Tax Prepayments Account to the Bond Fund, such that the amount in the Bond Fund equals the principal (including any sinking payment), premium, if any, and interest due on the Bonds on such Interest Payment Date; and (ii) 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 is equal to the Reserve Requirement. In addition to the foregoing, if in any Fiscal Year there are sufficient funds in the Special Tax Fund to make the foregoing transfers to the Bond Fund and the Reserve Fund in respect of the Interest Payment Dates occurring in the Bond Year that commences in such Fiscal Year, the Treasurer may transfer any amount in the Special Tax Fund in excess of the amount needed to make such transfers to the Bond Fund and the Reserve Fund (i) to the Administrative Expense Fund, from time to time, if monies are needed to pay Administrative Expenses in excess of the amount then on deposit in the Administrative Expense Fund; (ii) to such other fund or account established to pay debt service on or administrative expenses with respect to any bonds or other debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof under the Fiscal Agent Agreement; or (iii) to such other fund or account established by the Authority to be used for any lawful purpose under the Act and otherwise in accordance with the provisions of the Rate and Method. Summary of Rate and Method Special Tax Formula - Calculation of Annual Special Taxes. The Rate and Method is used to allocate the amount of the Special Tax A and the Special Tax B that is needed to be collected each fiscal year among the Taxable Properties within the District, based upon the development status of the Taxable Property and its size, subject to a maximum tax rate that may be levied against each class of Taxable Property, and depending upon the "Zone" in which the property is located. The Rate and Method is set forth in full in Appendix B, and the following is -20- a summary of the Rate and Method. Capitalized terms used, but not otherwise defined, in this section have the meanings given to them in the Rate and Method. The Special Tax A will first be levied on property in the District in Fiscal Year 2017-18. The Rate and Method provides that the Annual Special Tax A may be levied only so long as any Bonds are outstanding, provided that levies may continue if there are any delinquent Special Taxes in order to collect those delinquent amounts but not in any event later than Fiscal Year 2061-62. The Annual Special Tax B may only be levied on Developed Property, as described below, and may be levied in perpetuity on Developed Property. Special Tax Requirements. Annually, at the time of levying the Special Tax, the Authority, with the assistance of a special tax administrator (currently Albert A. Webb Associates), determines the amount of money to be collected from Taxable Property in the District (the "Special Tax A Requirement"), which will be the amount required in any Fiscal Year to pay the following: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses (apportioned between Special Tax A and Special Tax B), (iii) any amount required to establish or replenish any reserve funds established in association with the Bonds, and (iv) the collection or accumulation of funds for the acquisition or construction of Improvements or payment of fees authorized by the District by the levy on Developed Property of the Assigned Annual Special Tax A provided that the inclusion of such amount does not cause an increase in the levy of Special Tax A on Approved Property or Undeveloped Property as set forth in Step Two and Three described under the subheading "Method of Apportionment" below, less (v) any amount available to pay debt service or other periodic costs on the Bonds pursuant to the Fiscal Agent Agreement. The Authority, with the assistance of the special tax administrator, will also determine the amount of money to be collected from Taxable Property in the District (the "Special Tax B Requirement"), which will be the amount required in any Fiscal Year to pay for the municipal services the District is authorized to fund, as well as a share of the costs of administration of the District. See "INTRODUCTION—The District." Classification of Property. The Rate and Method provides that for each Fiscal Year, all Assessor's Parcels of Taxable Property within the District be classified as either Taxable Property or Exempt Property. Taxable Property is further classified as Developed Property, Approved Property, Undeveloped Property, or Provisional Exempt Property. In addition, each Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property and Provisional Exempt Property is classified as being within Zone 1, Zone 2, Zone 3 or Zone 4 of the District, as such "Zones" are identified on the boundary map of the District, a copy of which is included in Appendix K. If an Assessor's Parcel of Developed Property, Approved Property, Undeveloped Property or Provisional Exempt Property is located within more than one Zone, it is deemed to be entirely within the Zone in which the largest portion of its Acreage is located. In addition, each Assessor's Parcel of Developed Property is further classified as Residential Property, Multifamily Residential Property or Non -Residential Property. Assessor's Parcels of Residential Property are further categorized based on the Building Square Footage of each such Assessor's Parcel. Under the Rate and Method, "Developed Property" includes all Assessor's Parcels of Taxable Property for which a Final Map was recorded as of the January 1 preceding the Fiscal Year for which the Special Tax levy is being made and a building permit for new construction was issued as of the April 1 preceding the Fiscal Year for which the Special Tax A and Special Tax B are being levied. "Undeveloped Property" includes all Taxable Property not classified as Developed Property, Approved Property or Provisional Exempt Property. "Approved Property" includes all Assessor's Parcels of Taxable Property other than Provisional Exempt Property: (i) that are included in a Final Map that was recorded prior to the January 1st -21- immediately preceding the Fiscal Year for which the Special Tax A is being levied, and (ii) that have not been issued a building permit on or before the April 1st immediately preceding the Fiscal Year for which the Special Tax A is being levied. "Provisional Exempt Property" includes all Assessor's Parcels of Taxable Property subject to Special Tax A that would otherwise be classified as Exempt Property pursuant to the provisions of the Rate and Method, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property within the applicable Zone below the required minimum Acreage for that Zone set forth in the Exempt Property section (Section M) of the Rate and Method. Maximum Special Taxes. The Maximum Special Tax A for each Assessor's Parcel that is Residential Property, Multifamily Residential Property or Non -Residential Property in any Fiscal Year is the greater of (i) the Assigned Annual Special Tax A, or (ii) the Backup Annual Special Tax A. The Maximum Special Tax A for each Assessor's Parcel of Approved Property, Undeveloped Property or Provisional Exempt Property is the Assigned Annual Special Tax A. The Assigned Annual Special Tax A rates for the four Zones of the District and for the various categories of Taxable Property are set forth in Section D of the Rate and Method in Appendix B, and range from $2,110 annually per dwelling unit to $5,455 annually per dwelling unit depending upon the size of the home, and from $7,783 annually per acre for Multifamily Residential Property to $32,894 annually per acre depending upon the Zone in which such property is located. The Maximum Special Tax B for Fiscal Year 2016-17 for each Assessor's Parcel of Residential Property is $432 per Unit, and for each Assessor's Parcel of Multifamily Residential Property and of Non -Residential Property is $2,766 per Acre. The Maximum Special Tax A is not subject to annual increases; however the Maximum Special Tax B is subject to annual increases, commencing July 1, 2017, by an amount equal to increases in the Consumer Price Index or two percent (2%), whichever is greater, of the amount in effect for the previous Fiscal Year. Method of Apportionment. The Rate and Method provides that for each Fiscal Year, the Board of Directors of the Authority will levy the Annual Special Tax A on all Taxable Property to fund the Special Tax A Requirement as follows: First: The Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Developed Property, up to 100% of the applicable Assigned Annual Special Tax A rates in Tables 1, 2, 3 and 4 of Section D of the Rate and Method (which Section sets forth the Assigned Annual Special Tax rates for the four Zones within the District) to satisfy the Special Tax A Requirement; Second: If additional moneys are needed to satisfy the Special Tax A Requirement after the first step, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the applicable Assigned Annual Special Tax A to satisfy the Special Tax A Requirement; Third: If additional moneys are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Assigned Annual Special Tax A for Undeveloped Property applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement; Fourth: If additional moneys are needed to satisfy the Special Tax A Requirement after the first three steps have been completed, the Annual Special Tax A on each Assessor's Parcel of Developed Property for which the Maximum Special Tax A is the Backup Annual Special Tax A (the Backup Annual Special Tax A is computed pursuant to Section E of the Rate and Method) shall be increased Proportionately from the -22- Assigned Annual Special Tax A up to 100% of the Backup Annual Special Tax A as needed to satisfy the Special Tax A Requirement; and Fifth: If additional moneys are needed to satisfy the Special Tax A Requirement after the first four steps have been completed, the Annual Special Tax A shall be levied Proportionately on each Assessor's Parcel of Provisional Exempt Property up to 100% of the Assigned Annual Special Tax A applicable to each such Assessor's Parcel as needed to satisfy the Special Tax A Requirement. The Rate and Method provides that for each Fiscal Year, commencing with Fiscal Year 2016-17, the Authority shall levy the Special Tax B at up to 100% of the applicable Maximum Special Tax B Proportionately on each Assessor's Parcel of Developed Property until the amount of Special Tax B equals the Special Tax B Requirement. Notwithstanding the above, the Act effectively provides that under no circumstances will the Special Tax A and the Special Tax B levied against any Assessor's Parcel used as a private residence be increased as a consequence of delinquency or default by the owner of any other Assessor's Parcel or Assessor's Parcels within the District by more than ten percent (10%) per Fiscal Year. Prepayment in Full. The Maximum Special A Tax obligation applicable to an Assessor's Parcel of Developed Property, Approved Property or Undeveloped Property for which a Building Permit has been issued, or Approved or Undeveloped Property for which a Building Permit has not been issued, and Assessor's Parcels of Provisional Exempt Property that are not Exempt Property may be fully prepaid and the obligation of the Assessor's Parcel to pay the Special Tax A permanently satisfied as described in Section G of the Rate and Method, provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to the Assessor's Parcel. The Prepayment Amount for Special Tax A for an applicable Assessor's Parcel is calculated based on Bond Redemption Amounts, the Future Facilities Amounts and other costs, all as specified in Section G of the Rate and Method. Any such prepayment will result in a redemption of Bonds prior to maturity. See "THE 2017 BONDS—Redemption – Mandatory Redemption From Special Tax Prepayments." In addition, the Act authorizes a public agency which acquires property subject to the Special Tax A to prepay the Special Tax A so long as the Authority determines the prepayment arrangement will fully protect the interests of the owners of the Bonds. The Special Tax B is not subject to prepayment. Prepayment in Part. The Maximum Special A Tax on an Assessor's Parcel of Developed Property, Approved Property or Undeveloped Property may be partially prepaid. The amount of any such partial prepayment will be calculated pursuant to Section H of the Rate and Method. The Maximum Special Tax B is not subject to partial prepayment. -23- Projected Fiscal Year 2017-18 Special Tax A Levy. Table 1 below sets forth the Property Owners by Planning Areas of the property in the District and their respective portion of projected Special Tax A levy for Fiscal Year 2017-18. The Table also shows the aggregate Maximum Special Tax A that may be levied under the Rate and Method based on the parcels in each Planning Area, and the projected Fiscal Year 2017-18 Special Tax A levy as a percentage of the Fiscal Year 2017-18 Maximum Special Tax A. Table 1 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Planning Areas and Projected Fiscal Year 2017-18 Special Tax Levy for Taxable Property by Planning Area Projected FY % of Total 2017-18 Expected FY 2017-18 Projected FY Special Tax as Current No. of Projected 2017-18 Maximum Percentage of Planning No. of Unitsat Special Special Special Maximum Property Owner Area Parcels Buildout Acreage Tax A(1) Tax A(2) Tax A(3) Tax(2) Roripaugh Valley Restoration 14 1 77 13.59 $ 166,525 5.21% $ 311,768 53.41% Roripaugh Valley Restoration 15 1 104 14.09 172,651 5.40 323,239 53.41 Roripaugh Valley Restoration 16 1 121 26.42 323,737 10.12 606,101 53.41 Roripaugh Valley Restoration 17 1 147 41.08 503,372 15.74 942,416 53.41 Roripaugh Valley Restoration 18 1 121 30.58 374,711 11.72 701,536 53.41 Roripaugh Valley Restoration 19 1 26 29.98 124,631 3.90 233,334 53.41 Roripaugh Valley Restoration 20 1 29 33.71 140,137 4.38 262,365 53.41 Roripaugh Valley Restoration 21 1 24 23.61 98,150 3.07 183,757 53.41 Roripaugh Valley Restoration 22 1 126 20.99 257,200 8.04 481,532 53.41 Roripaugh Valley Restoration 23 1 51 10.02 122,780 3.84 229,869 53.41 Roripaugh Valley Restoration 24 1 71 12.28 150,473 4.71 281,715 53.41 Roripaugh Valley Restoration 31 1 164 25.19 308,665 9.65 577,884 53.41 Wingsweep Corporation 10 1 14 8.12 39,559 1.24 74,063 53.41 Wingsweep Corporation 11 1 1 15.19 74,003 2.31 138,548 53.41 Wingsweep Corporation 12 1 136 16.01 281,290 8.80 526,633 53.41 Wingsweep Corporation 33A 2 12 10.26 49,985 1.56 93,581 53.41 Wingsweep Corporation 33B 1 3 2.08 10,133 0.32 18,972 53.41 18 1,227 333.20 $3,198,000 100.00% $5,987,312 53.41% (1) Fiscal Year 2017-18 Projected Special Tax A is based upon preliminary 2017 Bond sizing provided by the Underwriter. Amount includes debt service for the 2017 Bonds and $50,000 in District administrative costs. Preliminary, subject to change. (2) Preliminary, subject to change. (3) See "SECURITY FOR THE 2017 BONDS -Summary of Rate and Method -Maximum Special Taxes.". Source: Albert A. Webb Associates. Reserve Fund The Fiscal Agent Agreement establishes a debt service reserve fund (the "Reserve Fund") as a separate fund to 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. Moneys in the Reserve Fund are subject to a lien in favor of the Owners of the Bonds. The Reserve Fund is required by the Fiscal Agent Agreement to be maintained in an amount equal to the Reserve Requirement, which is defined in the Fiscal Agent Agreement, as of any date of calculation, as an amount equal to the least of (i) the then Maximum Annual Debt Service, (ii) 125% of the then average Annual Debt Service, or (iii) 10% of the initial principal amount of the Bonds issued under the Fiscal Agent Agreement. The Reserve Requirement as of the date of issuance of the 2017 Bonds will be $3,151,400*. Except as otherwise provided in the Fiscal Agent Agreement (with respect to the use of moneys in the Reserve Fund in connection with prepayments of Special Taxes, for the payment * Preliminary, subject to change. -24- of any rebate liability due to the federal government, and the use of moneys in excess of the Reserve Requirement to pay debt service on the Bonds), all amounts deposited in the Reserve Fund will 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. See Appendix C - "Summary of Fiscal Agent Agreement - Reserve Fund." Whenever the balance in the Reserve Fund equals or exceeds the amount required to redeem or pay all of the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent will transfer the amount in the Reserve Fund to the Bond Fund to be used for the payment and redemption of all of the Outstanding Bonds. In the event that the amount 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 will be retained by the Authority, free of any encumbrance by the Fiscal Agent Agreement, to be used for any lawful purpose under the Act. Notwithstanding the foregoing, no amounts will be transferred from the Reserve Fund until after (i) amounts in the Reserve Fund are withdrawn for purposes of making a rebate payment to the federal government in accordance with the Fiscal Agent Agreement, and (ii) payment of any fees and expenses due to the Fiscal Agent. See Appendix C - "Summary of Fiscal Agent Agreement - Reserve Fund." Covenant for Superior Court Foreclosure Foreclosure Under the Act. Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of the Special Tax on the taxed parcel, the Authority may order the institution of a superior court action to foreclose the lien on the taxed parcel within specified time limits. In such an action, the real property subject to the unpaid amount of the Special Tax lien may be sold at judicial foreclosure sale. Authority Foreclosure Covenant. The Authority has covenanted for the benefit of the Bondowners that the Treasurer will determine on or about June 15 of each year whether or not all Special Taxes theretofore levied in the District have been received by the Authority and, consequently, whether any deficiencies in payment of Special Taxes exist. The Fiscal Agent Agreement provides that, following such determination: (A) if, as of any June 15, the Treasurer determines that any single parcel subject to the Special Tax in the District is delinquent in the payment of Special Taxes in the aggregate amount of $7,500 or more, the Treasurer will send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner, and if the delinquency remains uncured foreclosure proceedings will be commenced by the Authority against the delinquent parcel within 90 days of the sending of such notice; and (B) if the Treasurer determines that, as of any June 15, the total amount of delinquent Special Tax for the then current Fiscal Year for the entire District (including the total of delinquencies under subsection (A) above), exceeds 5% of the total Special Tax due and payable for the then current Fiscal Year, the Treasurer shall promptly notify or cause to be notified property owners who are then delinquent in the payment of Special Taxes (and demand immediate payment of the delinquency), and the Authority shall commence foreclosure proceedings within 90 days after the notices of delinquency have been sent. Notwithstanding the foregoing, the Treasurer may defer any mailing of notices of delinquency or foreclosure action if (i) the amount in the Reserve Fund is at least equal to the Reserve Requirement, and (ii) the amounts then on deposit in the Special Tax Fund and the Bond Fund are sufficient to pay the scheduled debt service due on the Bonds on the succeeding September 1 and March 1 without the need for any draw on the Reserve Fund. See Appendix C - "Summary of the Fiscal Agent Agreement." -25- No assurance can be given as to the time necessary to complete any foreclosure sale or that any foreclosure sale will be successful. The Authority is not required to be a bidder at any foreclosure sale and does not intend to be such a bidder. Sufficiency of Foreclosure Sale Proceeds; Foreclosure Limitations and Delays. No assurances can be given that the real property subject to a judicial foreclosure sale will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment. Subject to the maximum rates, the Rate and Method is designed to generate from all non-exempt property within the District the current year's debt service, administrative expenses, and replenishment of the Reserve Fund to the Reserve Requirement, including an amount reflecting the prior year's delinquencies. However, if foreclosure proceedings are necessary, and the Reserve Fund has been depleted, there could be a delay in payments to owners of the 2017 Bonds pending prosecution of the foreclosure proceedings and receipt by the Authority of the proceeds of the foreclosure sale. See "SPECIAL RISK FACTORS— Bankruptcy Delays" and "—Proceeds of Foreclosure Sales." No assurance can be given that a foreclosure action in respect of delinquent Special Taxes will result in the collection of the Special Taxes, especially given the current appraised values of the parcels of Taxable Property in the District. See "SPECIAL RISK FACTORS—Property Values." Section 53356.6 of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of judgment in the foreclosure action, plus post- judgment interest and authorized costs, unless the consent of the owners of 75% of the outstanding Bonds is obtained. However, under Section 53356.6 of the Act, the Authority, as judgment creditor, is entitled to purchase any property sold at foreclosure using a "credit bid," where the Authority could submit a bid crediting all or part of the amount required to satisfy the judgment for the delinquent amount of the Special Tax. If the Authority becomes the purchaser under a credit bid, the Authority must pay the amount of its credit bid into the redemption fund established for the 2017 Bonds, but this payment may be made up to 24 months after the date of the foreclosure sale. Neither the Act nor the Fiscal Agent Agreement requires the Authority to purchase or otherwise acquire any lot or parcel of property foreclosed upon if there is no other purchaser at such sale, and the Authority has no intent to be such a purchaser. No Teeter Plan Collection of the Special Taxes is not subject to the "Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds," as provided for in Section 4701 et seq. of the California Revenue and Taxation Code (known as the "Teeter Plan"). Accordingly, collections of Special Taxes will reflect actual delinquencies, if any. Investment of Moneys Except as otherwise provided in the Fiscal Agent Agreement, all moneys in any of the funds or accounts established pursuant to the Fiscal Agent Agreement will be invested by the Fiscal Agent solely in Permitted Investments, as directed by the Authority. See Appendix C – "Summary of the Fiscal Agent Agreement" for a definition of "Permitted Investments" and for additional provisions regarding the investment of funds held under the Fiscal Agent Agreement. -26- Issuance of Additional Bonds Parity Bonds. The Fiscal Agent Agreement authorizes the Authority to issue one or more series of "Parity Bonds" secured and payable on a parity under the Fiscal Agent Agreement with the 2017 Bonds. Subject to meeting the conditions summarized below, the Parity Bonds will be secured by a lien on the Special Tax Revenues and funds pledged for the payment of the Bonds under the Fiscal Agreement on a parity with all other Bonds Outstanding under the Fiscal Agreement (the Fiscal Agreement defines "Bonds" as the 2017 Bonds and any future Parity Bonds). The Authority may issue the Parity Bonds subject to the following specific conditions precedent, as set forth in the Fiscal Agent Agreement: (A) Current Compliance. The Authority must be in compliance in all material respects on the date of issuance of the Parity Bonds with all covenants set forth in the Fiscal Agent Agreement and all Supplemental Agreements, and the principal amount of the Parity Bonds must not cause the Authority to exceed the maximum authorized indebtedness of the District under the provisions of the Act. (B) Payment Dates. The interest on the Parity Bonds must be payable on March 1 and September 1, and principal of the Parity Bonds must be payable on September 1 in any year in which principal is payable (provided that there is no requirement that any Parity Bonds pay interest on a current basis). (C) Funds and Accounts; Reserve Fund Deposit. The Supplemental Agreement providing for the issuance of such Parity Bonds may provide for the establishment of separate funds and accounts, and shall provide for a deposit to the Reserve Fund (or to a separate account created for such purpose) in an amount necessary so that the amount on deposit in the Reserve Fund (together with the amount in any such separate account), following the issuance of such Parity Bonds, is at least equal to the Reserve Requirement. (D) Value -to -Lien Ratio. The District Value shall be at least three times the sum of: (i) the principal amount of all Bonds then Outstanding allocable to such property (based on the percentage of the then fiscal year overall Special Tax levy on such property), plus (ii) the aggregate principal amount of the series of Parity Bonds proposed to be issued allocable to such property, plus (iii) the aggregate principal amount of any fixed assessment liens on such parcels, plus (iv) a portion of the aggregate principal amount of any and all other community facilities district bonds then outstanding and payable at least partially from special taxes to be levied on parcels of land within the District (the "Other District Bonds") equal to the aggregate principal amount of the Other District Bonds multiplied by a fraction, the numerator of which is the amount of special taxes levied for the Other District Bonds on such parcels, and the denominator of which is the total amount of special taxes levied for the Other District Bonds on all parcels of land against which the special taxes are levied to pay the Other District Bonds (such fraction to be determined based upon the maximum special taxes which could be levied in the year in which maximum annual debt service on the Other District Bonds occurs), based upon information from the most recent available Fiscal Year. For purposes of this paragraph (D), there shall be excluded from the principal amount of any Parity Bonds the portion thereof (if any) representing amounts on deposit in an escrow fund established by the Authority with the Fiscal Agent that can only be (i) released from such escrow fund to the Improvement Fund if the Release Test is satisfied in respect of the portion to be so moved to the Improvement Fund, or (ii) used to redeem Bonds on the next available redemption date if the Release Test is not satisfied with -27- respect to any funds in such escrow fund within no more than three (3) years from the date of deposit of funds into the escrow fund. The term "District Value" in the Fiscal Agent Agreement is defined as the market value, as of the date of the appraisal described below and / or the date of the most recent County real property tax roll, as applicable, of all parcels of Undeveloped Property in the District subject to the levy of the Special Taxes and not delinquent in the payment of any Special Taxes then due and owing, including with respect to such nondelinquent parcels the value of the then existing improvements and any facilities to be constructed or acquired with any amounts then on deposit in the Improvement Fund and with the proceeds of any proposed series of Parity Bonds, as determined with respect to any parcel or group of parcels of Undeveloped Property by reference to (i) an appraisal performed within six (6) months of the date of issuance of any proposed Parity Bonds by an MAI appraiser selected by the Authority, or (ii) in the alternative, the assessed value of all such nondelinquent parcels and improvements thereon as shown on the then current County real property tax roll available to the Treasurer. It is expressly acknowledged that, in determining the District Value, the Authority may rely on an appraisal to determine the value of some or all of the parcels in the District and / or the most recent County real property tax roll as to the value of some or all of the parcels in the District. Neither the Authority nor the Treasurer shall be liable to the Owners, the Original Purchaser or any other person or entity in respect of any appraisal provided for purposes of this definition or by reason of any exercise of discretion made by any appraiser pursuant to this definition. (E) The Special Tax Coverage. The Authority shall obtain a certificate of a Tax Consultant to the effect that the amount of the maximum Special Tax A that may be levied in each Fiscal Year during the term of the Bonds and the proposed Parity Bonds on Taxable Property (as defined in the Rate and Method of Apportionment of Special Taxes) not then delinquent in the payment of Special Taxes theretofore levied on such property, based upon the status of the land in the District as of the date of issuance of the Parity Bonds, less an amount sufficient to pay annual Administrative Expenses (as determined by the Treasurer), shall be at least one hundred ten percent (110%) of the total Annual Debt Service for each such Fiscal Year on the Bonds and the proposed Parity Bonds. (F) Escrow Release. There are no funds in any escrow fund described in the last sentence of the first paragraph under (D) above. (G) Officer's Certificate. The Authority shall deliver to the Fiscal Agent an Officer's Certificate certifying that the conditions precedent to the issuance of such Parity Bonds set forth in paragraphs (A), (B), (C), (D), (E) and (F) above have been satisfied. In delivering such Officer's Certificate, the Authorized Officer that executes the same may conclusively rely upon such certificates of the Fiscal Agent, the Tax Consultant and others selected with due care, without the need for independent inquiry or certification. The maximum principal amount of "new money" Parity Bonds that may be issued is limited to $15,450,000*. Notwithstanding the foregoing, the Authority may issue Refunding Bonds as Parity Bonds without the need to satisfy the requirements of the foregoing paragraphs (D), (E) and (F) above, and without limitation on the number of series of such Refunding Bonds; and, in connection therewith, the Officer's Certificate referred to in paragraph (G) above need not make * Preliminary, subject to change. -28- reference to the foregoing paragraphs (D), (E) and (F). The term "Refunding Bonds" is defined in the Fiscal Agent Agreement as bonds issued by the Authority for the District the net proceeds of which are used to refund all or a portion of the then Outstanding Bonds; provided that the debt service on the Refunding Bonds in any Bond Year is not in excess of the debt service on the Bonds being refunded and the final maturity of the Refunding Bonds is not later than the final maturity of the Bonds being refunded. Subordinate Bonds. Nothing in the provisions described above will prohibit the Authority from issuing bonds or otherwise incurring debt secured by a pledge of Special Tax Revenues subordinate to the pledge of the Special Tax Revenues under the Fiscal Agent Agreement. THE DISTRICT Location and General Description of the District The District is located in the northern portion of the City, and includes approximately 645 gross acres of land located in the Pan Area of the Roripaugh Ranch development. The City of Murrieta is about one mile to the west, and unincorporated area of Riverside County is located to the north, east and southeast. The French Valley airport is located about a mile northwest of the District, and the Lake Skinner Recreation Area is located within two miles to the northeast. In the area to the north is a relatively new approximately 800 acre master planned community known as Rancho Bella Vista, planned for just over 1,800 dwelling units. Roripaugh Ranch is a master -planned community expected to include up to 1,735 single family detached homes, a neighborhood retail center, two private recreation centers, parks, an elementary school and a middle school, a fire station and 263 acres of open space. See "THE DISTRICT—The Roripaugh Ranch Development." Roripaugh Ranch is shaped approximately like the State of Oklahoma. As discussed under the heading "THE DISTRICT—History of the District," when CFD 03-02 was formed in 2006, it included all of the property then in Roripaugh Ranch, which included the Pan Area of the development (which is primarily undeveloped), but the Special Taxes levied on the Pan Area are being fully prepaid on the date of issuance of the 2017 Bonds, so that the property in the Pan Area will not be subject to future levies of special taxes for CFD 03-02. See "PLAN OF FINANCING—Overview - Prepayment of CFD 03-02 Special Taxes." The portion of the Roripaugh Ranch located in the Panhandle Area is fully entitled for development, but the Pan Area requires the completion of additional infrastructure improvements before homes can be constructed in that portion of Roripaugh Ranch. See "THE DISTRICT—The Improvements" and "—The Roripaugh Ranch Development." The following page contains an aerial photo which shows the location of the District. See "THE DISTRICT—The Roripaugh Ranch Development" for a map showing the several Planning Areas of the land within the District. -29- Man created 07 Tin 2016 G: \ 201 S \ 15-0312\ (:TS \ CF1)16-01.mx3 TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 16-01 (RORIPAUGH RANCH PHASE 2) The Heart o1 Southern Calitorrda WireCokmiry 0 4,000 8,000 -30- 1 I Feet LOCATION MAP CFD 16-01 ALBERT A. WEBB ASSOCIATES History of the District The land in the District is located within the boundaries of CFD 03-02, which was formed under the provisions of the Act by the Board of Directors of the Authority, acting as the legislative body of CFD 03-02, on January 11, 2005, in order to finance public infrastructure improvements necessitated by the Roripaugh Ranch development. On April 27, 2006, the Authority issued, for CFD 03-02, $51,250,000 initial principal amount of the CFD 03-02 2006 Bonds. In connection with the issuance of the CFD 03-02 2006 Bonds, the Authority, for and on behalf of the District, entered into on Acquisition Agreement, dated as of March 1, 2006 (the "Ashby Acquisition Agreement") with Ashby USA, LLC ("Ashby"), the then owner of the majority of the property in CFD 03-02, pursuant to which Ashby was to construct the improvements authorized to be funded by CFD 03-02. Shortly after the issuance of the CFD 03-02 2006 Bonds, Ashby encountered financial difficulties. Between June 1, 2006 and May 10, 2011, the Authority posted 41 separate event notices on the Municipal Securities Rulemaking Board's EMMA website setting forth information regarding the status of various matters related to CFD 03-02. During that time period all of Ashby's interests in the property in CFD 03-02 it had not yet sold were transferred to various parties, some of which were subject to bank foreclosures and, ultimately, acquisition by the Federal Deposit Insurance Corporation following bank failures. See "THE DISTRICT— The Roripaugh Ranch Development - History of Roripaugh Ranch." The parcels in the Panhandle portion of Roripaugh Ranch which is also included in CFD 03-02, a total of 509 separate Riverside County Assessor's parcels, were subsequently developed by Standard Pacific Corp. (now CalAtlantic), KB Home Costal and Roripaugh Temecula 113. 480 of those parcels now have completed single family homes, 416 of which have been sold to homeowners. All but 29 of the remaining parcels have completed homes for sale or homes under construction. The land in the District, constituting the Pan portion of Roripaugh Ranch, is currently owned by Roripaugh Valley Restoration, LLC (referred to in this Official Statement as the "Primary Landowner") as a consequence of receivership by the Federal Deposit Insurance Corporation, and by Wingsweep Corporation, and remains undeveloped. See "THE DISTRICT—The Current Landowners" and "—The Roripaugh Ranch Development - History of Roripaugh Ranch." In order to raise additional funds to finance the Improvements needed for the development of the Pan area, the two landowners petitioned the Authority in March of 2016 to form the District. Following the adoption by the Board of Directors of the Authority of resolutions of intention for the District on March 22, 2016, the Authority held a public hearing regarding the formation of, and the issuance of bonds for, the District on April 26, 2016. Following the public hearing, also on April 26, 2016, the Board of Directors of the Authority adopted Resolution No. TPFA 16-04 forming the District, Resolution No. TPFA 16-05 determining the necessity to issue up to $60,000,000 of special tax bonds for the District, and Resolution No. 16-06 calling a special election regarding the formation of the District and the issuance of the special tax bonds for the District. The election was held on April 26, 2016 at which the Primary Landowner and Wingsweep Corporation voted in favor of the formation of the District, the levy of Special Tax A and Special Tax B on property in the District, and the issuance by the Authority of special tax bonds for the District. On May 4, 2016, a Notice of Special Tax Lien was recorded in the Riverside County Recorder's Office against the property in the District, and on May 10, 2016 the -31- Board of Directors of the Authority adopted Ordinance No. TPFA 16-01 levying Special Tax A and Special Tax B on the property in the District. Two of the Boardmembers of the Authority have interests in business entities related to the owners of certain land adjacent to the District. This land is dependent in part on the widening of Butterfield Stage Road (one of the Improvements) for the last twenty percent (20%) of the lots in such other development to obtain building permits. This interest has resulted in the appearance of a potential conflict of interest of such Boardmembers in voting for the Authority Approving Resolution referenced below. In light of the need for a 4/5th vote of the Board of Directors to adopt the Authority Approving Resolution, as described in the next paragraph, the Board of Directors at its regular public meeting of January 10, 2017 followed procedures authorized under Section 18705 of the California Fair Political Practices Commission of the Regulations to randomly select one of the two Boardmembers to achieve a quorum of four Boardmembers and be eligible to vote on the adoption of the Authority Approving Resolution despite the possible conflict of interest. The Authority Secretary randomly selected one of the two Boardmembers by means of a drawing of the name of one of the two Boardmembers from a clear bowl during the January 10th Board of Directors meeting, as authorized by said Section 18705. On January 24, 2017, the City Council held a public hearing regarding the issuance by the Authority of the 2017 Bonds. Following the public hearing, the City Council adopted Resolution No. 17-07 pursuant to which it found that significant public benefits will arise from the use of the proceeds of the 2017 Bonds to finance costs of the Improvements and it approved the issuance of the 2017 Bonds by the Authority. Also on January 24, 2017, the Authority adopted Resolution No. TPFA 17-01 authorizing the issuance of the 2017 Bonds and approving related documents (the "Authority Approving Resolution"). The Act required that the Authority Resolution be approved by a 4/5ths vote of the Board of Directors of the Authority because the value of the Taxable Property in the District estimated in the Appraisal Report is not at least three times the initial principal amount of the 2017 Bonds. The Authority Approving Resolution was approved by the required 4 / 5ths vote, and the Board of Directors found in the Authority Approving Resolution that the issuance of the 2017 Bonds should proceed for public policy reasons, including that the issuance of the 2017 Bonds as currently contemplated is expected to result in lower interest rates on the 2017 Bonds than if they were issued at a later time, and the issuance of the 2017 Bonds will allow for infrastructure development to continue in the District on a coordinated basis, to the benefit of the future residents of homes to be built in the District. See, however, "SPECIAL RISK FACTORS— Property Value." A portion of the proceeds of the 2017 Bonds will be used to prepay, on the closing date for the 2017 Bonds, the special taxes authorized to be levied by the Authority for CFD 03-02 on the land in the District. See "PLAN OF FINANCING—Overview – Prepayment of CFD 03-02 Special Taxes." As a consequence of the prepayment, the property in the District will no longer be subject to any future special tax levies for CFD 03-02. However, the land in the District is subject to certain overlapping indebtedness and governmental levies. See "THE DISTRICT – Direct and Overlapping Government Obligations." The Improvements As previously mentioned under the heading "PLAN OF FINANCING – Overview – Funding for Improvements," the Authority has entered into the Acquisition Agreement with the Primary Landowner pursuant to which the Authority has agreed to use amounts in an -32- improvement fund for CFD 03-02 (estimated to be approximately $14,977,000*) as well as proceeds of the 2017 Bonds and proceeds of any future Parity Bonds to finance costs of Improvements to be constructed by the Primary Landowner or its successor, although certain of the Improvements are being constructed by the City and will be paid for with such funds. The Acquisition Agreement supersedes and replaces an Amended and Restated Acquisition Agreement mentioned under the heading "THE DISTRICT—The Roripaugh Ranch Development - History of Roripaugh Ranch." The City and the Authority are parties to joint community facilities agreements for both the District and CFD 03-02, and the Authority is a party to Joint Community Facilities Agreements with the County of Riverside (two such agreements, one related to street improvements and one related to flood control improvements), the Temecula Community Services District and the Eastern Municipal Water District for CFD 03-02, such that the Authority can expend the available funds for Improvements that will ultimately be owned by those entities. Some of the Improvements have been completed, and others must be completed in order to obtain building permits from the City for parcels in the District. See Exhibit H - "Building Permit Thresholds." See also "THE DISTRICT—Property Values" and "SPECIAL RISK FACTORS—Property Values." Listed below are the Improvements that proceeds of the 2017 Bonds, and amounts in the improvement fund for CFD 03-02, are authorized to fund and the status of their completion as of December 27, 2016. 1. Construction of Murrieta Hot Springs Road from the westerly boundary of Tract 29661 to Butterfield Stage Road. The construction of Murrieta Hot Springs Road (funded by CFD 03-02 funds) commenced in November of 2011 and was completed in September of 2012. 2. Construction of portions of Butterfield Stage Road. The construction of Butterfield Stage Road was sequenced in three phases. • Phase I included the segment of Butterfield Stage Road between Murrieta Hot Springs Road and Calle Chapos; construction commenced in November of 2011 and was completed in September of 2012. • Phase II included the segment of Butterfield Stage Road between Calle Chapos and approximately 700' south of La Serena Road; construction commenced in January of 2013 and was completed in July of 2014. • Phase III includes the segment of Butterfield Stage Road between 700' south of La Serena Road and Rancho California Road in addition to the intersection/transition improvements and traffic signal modifications at Rancho California Road. Construction of Phase III is anticipated to commence in January of 2018 and be completed by January of 2019. 3. Construction of portions of Nicolas Road. The construction of the portion of Nicolas Road in the District (between Butterfield Stage Road and the Metropolitan Water District right-of-way) is anticipated to commence in April 2018 and be completed by January of 2019. The construction of the portion of Nicolas Road outside of the District (west of the Metropolitan Water District * Preliminary, subject to change. -33- right-of-way) is anticipated to commence in the first quarter of 2019 and be completed by the third quarter of 2020. 4. Construction of the Nicolas Road sewer pipeline from Liefer Road to Joseph Road. The Nicolas Road sewer pipeline from Liefer Road to Joseph Road was completed as part of Butterfield Stage Road Phase I construction. 5. Installation of Nicolas Road and North General Kearny Road intersection signalization. The Nicolas Road and North General Kearney Road intersection signalization work commenced in September of 2003 and the traffic signal was activated in May of 2004. 6. Nicolas Road and Winchester Road intersection widening and signal modification improvements. The Nicolas Road and Winchester Road Intersection widening and signal modification work is anticipated to commence in October of 2017 and be completed by January of 2019. 7. Construction of Calle Chapos from Butterfield Stage Road to Walcott Lane. The construction of Calle Chapos was completed as part of Butterfield Stage Road Phase I construction. 8. Construction of portions of the Long Valley Channel. The construction of the Long Valley Channel is anticipated to commence in April of 2018 and be completed by April of 2019. 9. Construction of portions of the Santa Gertrudis Creek. The construction of the Santa Gertrudis Creek is anticipated to commence in October of 2017 and be completed by January of 2019. 10. Construction of a sports park. The sports park is to be constructed at the Southeast corner of the intersection of North Loop Road and Butterfield Stage Road. The construction of the Sports Park is anticipated to commence in April of 2019 and be completed by July of 2020. 11. Roripaugh Ranch Fire Station site grading. The fire station site grading commenced in January of 2005 and was completed in April of 2005. 12. Construction of a North Loop Road. The construction of the North Loop Road is anticipated to commence in April of 2018 and be completed by January of 2020. 13. Construction of a South Loop Road. The construction of the South Loop Road is anticipated to commence in April of 2018 and be completed by January of 2020. 14. Construction of Roripaugh Valley Road Grading and Street Improvements. Construction of this roadway from Murrieta Hot Springs Road to Butterfield Stage Road (A Street) commenced in 2005, but was not then pursued to completion. Construction is anticipated to recommence in October of 2017 and be completed by January of 2018. 15. Construction of Fiesta Ranch Road (B Street). The construction of Fiesta Ranch Road (B Street) commenced in 2005, but was not then pursued to completion. Construction is anticipated to recommence in October of 2017 and be completed by January of 2018. -34- 16. Construction of Fire Station and Fire Truck Purchase. The construction of the fire station and the acquisition of fire apparatus commenced in April of 2005 and was completed in February of 2006. 17. Construction of Neighborhood Park. The construction of a neighborhood park at the SW corner of the intersection of Murrieta Hot Springs Road and Roripaugh Valley Road (A Street) commenced in 2006, but was not then pursued to completion. Construction recommenced in April of 2016 and is anticipated to be completed by April of 2017. 18. Construction of SR -79 Improvements. The construction of the SR -79 improvements commenced in March of 2010 and was completed in December of 2011. The Improvements identified above as #2 (Phase III of Butterfield Stage Road), #3, #6 and #9 are expected to be financed with proceeds of the 2017 Bonds deposited to the Improvement Fund and funds in the improvement fund for CFD 03-02. See "PLAN OF FINANCING—Overview-Funding for Improvements". It is expected that the City will construct the Improvements identified above as #2 (Phase III of Butterfield Stage Road) and certain other public improvements not listed above, and that the Primary Landowner or its successor under the Acquisition Agreement will construct the remaining Improvements not yet completed. The issuance of building permits for property in the District is contingent upon the completion of certain of the Improvements (see Exhibit H – "Building Permit Thresholds"). No assurance can be given the construction of the Improvements not yet completed will commence, continue or be completed as currently anticipated. However, the Primary Landowner and the City continue to conduct activities related to the permitting and construction of the Improvements. See "THE DISTRICT—The Roripaugh Ranch Development – Current Status." The Roripaugh Ranch Development General. The District includes approximately 645 gross acres of undeveloped property in an area of the City known as "Roripaugh Ranch." Roripaugh Ranch is a master planned community that at buildout is expected to include approximately 1,743 single family detached homes, a neighborhood retail center, parks, schools, a fire station, and open space areas. The District includes the property in the Pan Area of the Roripaugh Ranch development, which development also includes a Panhandle Area. The Panhandle Area includes 509 Riverside County Assessor's parcels on approximately 160 acres, which area is substantially built -out with single family homes, and which property is not in the District. See "INTRODUCTION— The District." History of Roripaugh Ranch. In November of 2002, the City adopted the Roripaugh Ranch Specific Plan (the "Specific Plan"). The Specific Plan provides for a mixed-use development of residential, commercial, and public facilities within the framework of a comprehensive master -planned community. In connection with the Specific Plan, the City certified an Environmental Impact Report (the "EIR") for the property encompassed by the Specific Plan. In December of 2002, Ashby USA, LLC, the original expected master developer of Roripaugh Ranch, entered into a Preannexation and Development Agreement (the "Development Agreement") with the City regarding the development of Roripaugh Ranch. The Development Agreement allows for the proposed improvement of the Roripaugh Ranch development site in a manner consistent with the Specific Plan. Under applicable provisions of -35- the California Government Code, the Development Agreement granted Ashby USA, LLC and its successors under the Development Agreement a vested right to develop the property consistent with the provisions of the Development Agreement. Subsequent to the execution of the Development Agreement, Ashby USA, LLC undertook activities to obtain various approvals needed from public agencies other than the City for the development of Roripaugh Ranch, as well as to satisfy certain required mitigation measures incident to the proposed development. These activities included transferring certain land to the City for wildlife mitigation, habitat area grading and planting and the payment of funds for habitat land management, the obtaining of a necessary permit from the U.S. Army Corps of Engineers related to creek and flood wash improvements and maintenance, a permit from the California Department of Fish and Game related to marsh habitat, as well as approval of a Storm Water Pollution Prevention Plan by the California Regional Water Quality Control Board related to the proposed construction activity. During the period between 2003 and 2006, the City and Ashby USA, LLC entered into three operating memorandum with respect to provisions of the Development Agreement and a first amendment to the Development Agreement, as well as a Deferral Agreement related to the proposed development, with the Deferral Agreement allowing for Ashby USA, LLC to record a final map for the Panhandle Area prior to the fulfillment of various requirements of the Development Agreement. Grading and the sales of land in the Panhandle Area to various merchant builders took place during this period, as well as the start of construction of homes in the Panhandle Area. In 2004, the Authority commenced proceedings for the formation of CFD 03-02 which includes all of the area within Roripaugh Ranch, including both the Panhandle Area and the Pan Area. In connection with the formation of CFD 03-02, the Authority entered into several joint community facilities agreements related to some of the Improvements, including such agreements with the City, the Temecula Community Services District, the County of Riverside (two such agreements, one related to street improvements and one related to flood control improvements), and the Eastern Municipal Water District. Those agreements generally provide that the respective public agency counterparties to the agreements will accept public improvements funded by CFD 03-02 upon their completion in accordance with plans and specifications approved by the applicable public agency. On April 27, 2006, the Authority issued $51,250,000 principal amount of the CFD 03-02 2006 Bonds and entered into an acquisition agreement with Ashby USA, LLC whereby proceeds of the CFD 03-02 2006 Bonds would be used to finance various public infrastructure improvements upon their completion by Ashby USA, LLC. Shortly after the issuance of the CFD 03-02 2006 Bonds, Ashby USA, LLC encountered financial difficulties. While it continued to sell property in Roripaugh Ranch, Ashby USA, LLC eventually defaulted on a construction loan made to it by Ohio Savings Bank, as described below. The Authority and Ashby USA, LLC entered into a fourth Operating Memorandum in 2007. During the period from June 1, 2006 through May 10, 2011, the Authority filed forty-one informational releases regarding Roripaugh Ranch and the CFD 03-02 2006 Bonds with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access ("EMMA") repository website, which are included with the Official Statement for the CFD 03-02 2006 Bonds and various annual and semiannual reports filed for the Authority and Ashby USA, LLC and its successors. The EMMA website and can be accessed at the following web address: emma.msrb.org, using CUSIP Number 879724 CN4. The Authority and Ashby USA, LLC subsequently entered into an Amended and Restated Acquisition Agreement, dated as of July 21, 2009, with respect to the use of the then remaining undistributed CFD 03-02 2006 Bond proceeds, allowing for the City to construct and complete some of the infrastructure improvements with CFD 03-02 2006 Bond proceeds that were previously to be constructed by Ashby USA, LLC. -36- In connection with its development activities in Roripaugh Ranch, in 2006 Ashby USA, LLC obtained a loan from Ohio Savings Bank, which was subsequently named AmTrust Bank. In December of 2009, the federal Office of Thrift Supervision closed AmTrust Bank and appointed the Federal Deposit Insurance Corporation (the "FDIC") as receiver for the failed institution. In July of 2010, the FDIC, in its capacity as receiver for AmTrust Bank, formed AMT CADC Venture, LLC ("AMT CADC"), and assigned the Ashby USA, LLC loan to AMT CADC, which subsequently declared the loan to be in default and sought to foreclose on Ashby USA, LLC's then remaining interest in the Roripaugh Ranch development, including the majority of the property in the Pan Area (a portion of which had previously been sold to Wingsweep Corporation in 2008). In May of 2011, AMT CADC, Ashby USA, LLC and certain other parties entered into a Deed -in -Lieu Settlement Agreement whereby Ashby USA, LLC's remaining interests in the Roripaugh Ranch property and related land use entitlements and agreements (including the Development Agreement and the Amended and Restated Acquisition Agreement) were conveyed to the Primary Landowner, and the City subsequently consented to the assignment. Current Status. The map on the following page contains a map showing the land use plan for Roripaugh Ranch, with the Planning Areas identified as 1A, 2, 3, 4A, 4B, 5, 6, 7A, 7B, 7C, 8, and 9A being in the Panhandle Area that is not within the District. While the land use plan remains essentially the same as originally contemplated in 2003, the Development Agreement and the Specific Plan have been amended several times, most recently in the Spring of 2016, and in connection therewith an Addendum No. 2 to the EIR was approved by the City's Planning Commission on February 17, 2016 and subsequently by the City on March 8, 2016. The City Council adopted an Ordinance on March 22, 2016 approving a third amendment to the Development Agreement which modified the schedule and building permit thresholds for the commencement and completion of various public improvements related to the development of the Planning Areas in the Pan Area, which constitutes the property in the District. Those thresholds pertain to improvements needed before building permits may be issued by the City for the various Planning Areas and are described in more detail in Appendix H — "Building Permit Thresholds." -37- 1NY r • !P0 Laail.aai Fri ---1144 - -- aim l ya5ima--m,s J 41a y i 4a_ IWIIM Z •"3a Ilk am .ter.—� S .tea. ram • aLH. YF. 1a WIM I 114:1 r Vie= ] 9► sem _ate—aat-tet a—r aa. F.3—nal -���l®1 maw- . R — - • e._s •df�rYs*---=• .a t e..ss aaca a.aa# r. ea. WRAW • r=ice WW• aa��{ At this time, water and sewer and electric and gas utilities are available to the land in the Pan Area from the Eastern Municipal Water District (with some of the parcels in the District to be served by the Rancho California Water District) and the Southern California Edison Company and Southern California Gas Company, respectively, and are expected to be installed in the roadways in the Pan Area as a part of the land development process. There are two recorded "A" tract maps for the Planning Areas within the Pan Area, and while tentative tract maps have been prepared for most of the Planning Areas, only one that was previously filed with the City remains in effect. Further development will require the filing of additional tentative and final tract maps, as well as design approval by the City of homes and commercial structures to be built, and a development plan for the commercial site in the Pan Area. As indicated in Exhibit H, and as described under the heading "THE DISTRICT – The Improvements," the City has completed certain priority roadway improvements necessary for the development of the Pan Area, including improvements to Butterfield Stage Road and Murrieta Hot Springs Road. In connection with the issuance of the 2017 Bonds, the Authority and the Primary Landowner are entering into an Acquisition Agreement, as described under the heading "PLAN OF FINANCING—Overview - Funding for Improvements" related to the use of certain funds held in an improvement fund for CFD 03-02 and a portion of the proceeds of the 2007 Bonds to be deposited to an Improvement Fund established under the Fiscal Agent Agreement, pursuant to which such funds will be used to finance costs of the Improvements, most of which are to be constructed by the Primary Landowner or its successor and some of which are to be constructed by the City. The owners of the land in the Pan Area, currently the Primary Landowner and Wingsweep Corporation, are obligated to fund the construction of the public improvements required by the Development Agreement as amended that are not financed with such CFD 03-02 and 2017 Bond Proceeds. See "THE DISTRICT—The Current Landowners." -38- The Primary Landowner reports that it has engaged various consultants in connection with overall site engineering, submittal of updated tentative tract maps and other planning tasks, updated infrastructure design, updated grading plans, and other site development activities. The Primary Landowner has advised that it is engaged in peer review of proposed flood control and drainage improvements, as well as activities related to the landscape architecture and master maintenance plan, plans for a sports park, the master plan for community trails, the homeowners' association recreation center, open space and revegetation plans, and certain roadway intersection landscaping. The Primary Landowner has further advised that it has engaged a biological consultant to assist with the construction of mitigation measures, has done engineering and plans for a necessary roadway intersection, as well as storm water design and street construction. The Primary Landowner has stated that work is being finished on certain flood control and creek channel improvements as well as certain offsite improvements. The Primary Landowner has advised that it plans to continue its efforts in respect of the development of the land in the District; however it is expected that the Primary Landowner will dispose of its interest in the property in the District in the near future, and it is unknown what entity will ultimately acquire such interest and such entities financial and managerial abilities to continue to construct the necessary public infrastructure improvements needed for vertical construction, as well as the eventual construction of homes on the subject property. See "THE DISTRICT—The Current Landowners – The Primary Landowner." Wingsweep Corporation has advised that the parcels that it owns in the District have been rough graded, with the land in one of the Planning Areas owned by it rough graded to near blue -topped condition and the commercial site it owns rough graded to near superpad condition. Wingsweep Corporation has also advised that it may request that the Development Agreement be amended to allow an "IT Village" to be constructed on the commercial site in lieu of neighborhood -serving commercial uses, but no such proposed amendment has yet been submitted to the City. The Absorption Study, the complete text of which is included in Appendix J, depends upon an assumption that various infrastructure requirements of the Development Agreement are completed in a timely fashion, including, most significantly, the approval of plans and permitting for Nicolas Road improvements (see page 52 of the Absorption Study in Appendix J). If construction of necessary improvements can be undertaken and completed, model home construction in the District and sales are expected to occur in mid to late 2019. The Appraisal Report explicitly assumes the timely construction of Nicolas Road as described in the Absorption Study. The current construction schedule for Nicolas Road is as follows: obtain necessary permits by the third quarter of 2018, commence construction in the first quarter of 2019, and complete construction in the third quarter of 2020. No assurance can be given as to the commencement or completion of any of the Improvements not yet under construction. The Primary Landowner and Wingsweep Corporation have entered into a Joint Development Agreement (Roripaugh Ranch Specific Plan) (the "Joint Development Agreement") whereby the Primary Landowner and its successors will be responsible for ninety percent (90%) of the costs of the construction of the improvements required by the Development Agreement for development of the Pan Area, and Wingsweep Corporation will be responsible for ten percent (10%) of such costs. The Joint Development Agreement identifies the costs of the Improvements expected to be funded under the Acquisition Agreement, as well as an estimated $20,250,000 of costs of the Improvements not expected to be funded under that agreement (but which may be funded from proceeds of future Parity Bonds, when and if any such Parity Bonds are issued as described under the heading "SECURITY FOR THE 2017 BONDS – Issuance of Additional Bonds"). The Joint Development Agreement further identifies the costs of public improvements required by the Development Agreement but not eligible for funding under the Acquisition Agreement totaling $25,388,500. No assurance can be given that -39- the Primary Landowner or its successor or Wingsweep Corporation will have the funds necessary to pay their respective share of the costs to complete the required improvements. See "THE DISTRICT—The Current Landowners." Both the Primary Landowner and Wingsweep Corporation have expended significant funds in respect of their acquisition and development activities for the property in the District, and they both continue to advance funds for development activities. Both landowners have effectively self -financed their activities to date. See "THE DISTRICT—The Current Landowners." The Current Landowners General. All of the property within the District is currently owned by Roripaugh Valley Restoration, LLC (referred to in this Official Statement as the "Primary Landowner"), and by Wingsweep Corporation. The Primary Landowner owns approximately 290.54 acres of land in twelve of the Planning Areas in the District on which currently planned 1,061 separate single family homes are expected to be constructed each on their own lot, and Wingsweep Corporation owns approximately 42.66 acres of land in three of the Planning Areas in the District on which up to 166 separate single family homes are expected to be constructed each on their own lot, and an approximately 12.34 acre site (10.7 net acres) for commercial development. See "THE DISTRICT—Land Use Distribution." As described below, the Primary Landowner has advised that it may sell its interests in the property it owns in the District later this year, but Wingsweep Corporation has advised that it currently has no plans to sell the property it owns in the District. The Primary Landowner. The Primary Landowner is a California limited liability company whose sole asset is its interests in the property it owns in the District and in related agreements. The sole member of the Primary Landowner is AMT CADC Venture, LLC, a Delaware limited liability company (referred to in this Official Statement as "AMT CADC"). AMT CADC is owned sixty percent (60%) by the Federal Deposit Insurance Corporation (referred to in this Official Statement as the "FDIC"), and forty percent (40%) by PMO Loan Acquisition Venture, LLC, a Delaware limited liability company ("PMO"). The ownership of PMO is comprised of (i) various funds managed by Oaktree Capital Management, (ii) an entity of Gibraltar Capital & Asset Management (a Toll Brothers subsidiary), and (iii) another entity comprised of stakeholders with a small ownership percentage. PMO is the manager of the AMT CADC entity. AMT CADC owns a portfolio of assets that was purchased by the FDIC in April of 2010. The assets that the FDIC contributed to AMT CADC included a total of 279 assets with a nominal value of approximately $1,703,000,000, which included its interests in the loan by AmTrust Bank to Ashby USA, LLC that was secured by property Ashby USA, LLC owned in the District. See "THE DISTRICT—The Roripaugh Ranch Development – History of Roripaugh Ranch." Sabal Financial Group, L.P. is the servicer and asset manager of the portfolio of assets owned by AMT CADC, and pursuant to a written action by AMT CADC on April 25, 2011, Ken Kraemer, an employee of Sabal Financial Group, L.P., was designated to serve as the operating manager of the Primary Landowner. Sabal Financial Group, L.P. is an international diversified financial services firm specializing in real estate, banking and lending, and reports that it has acquired nearly $8.2 billion in assets on behalf of its clients and investors. Sabal Financial Group, L.P. maintains a website at sabalfin.com, but the Authority has no responsibility for the information on such website and the information thereon is not incorporated into this Official Statement. -40- AMT CADC was formed in order to manage and orderly dispose of the assets contributed by the FDIC to it over an expected six to seven year period. To that end, the assets of the Primary Landowner, consisting of its interests in Roripaugh Ranch, were offered for sale in the summer of 2016. No acceptable offers to purchase such assets were submitted. Those assets not liquidated within the six to seven year period may be sold at the direction of the FDIC. The Primary Landowner finances its ongoing activities from advances made from time to time by AMT CADC, which AMT CADC derives from activities related to its assets (sales and dispositions of assets, ongoing payment with respect to other assets, etc.). To date, the Primary Landowner has paid all of the special taxes levied by the Authority for CFD 03-02 on its property, and it has expressed its willingness to pay the Special Taxes to be levied thereon for the repayment of the 2017 Bonds. As described under PLAN OF FINANCING—Overview – Prepayment of CFD 03-02 Special Taxes, no further levies of special taxes will be made for CFD 03-02 on the property in the District. In light of the possible disposition by the Primary Landowner of its interests in the property it owns in the District, and in related agreements including the Development Agreement, the Joint Development Agreement and the Acquisition Agreement, it is unknown at this time what entity may ultimately develop the property currently owned by the Primary Landowner in the District and such entity's ability to finance the needed public infrastructure improvements required to be constructed in order to obtain building permits for such property. The Primary Landowner has entered into a Continuing Disclosure Agreement (see "CONTINUING DISCLOSURE") whereby it is obligated to provide semiannual reports and notices of certain events, including sales by it of its property in the District. See Appendix F – "Form of Continuing Disclosure Agreement of the Primary Landowner." Wingsweep Corporation. Wingsweep Corporation is a California corporation wholly owned by UNICOM Global, Inc., a real estate holding company. UNICOM Global, Inc. is privately held, and is part of an affiliated group that consists of more than 40 corporate entities worldwide, and works in collaboration with its shareholders mergers and acquisition business, financial services business and information technology business. UNICOM Global, Inc. maintains a website at uniglobal.com, with a link to eden.com with regard to its real estate holdings, but the Authority has no responsibility for the information on such websites and the information thereon is not incorporated into this Official Statement. Wingsweep Corporation self funds its activities, and has advised that it expects to eventually sell some or all of the property it owns in the District to a nationally -recognized residential builder and / or commercial builder prior to the commencement of vertical construction on the property (expected in early 2019), or may also partner with such an entity to complete the development of the property. Wingsweep Corporation has advised that it may apply to the City to amend the Development Agreement to allow for the development of all or a portion of the parcel in the District that it owns that is to be developed with neighborhood commercial uses as, instead, an information technology village. However, no such application has been made to date and no assurance can be given that the City would approve any such change in use of the parcel. Wingsweep Corporation is under no obligation to maintain its ownership of property in the District, and could sell or dispose of all or any portion of the property at any time without any requirement for notice to or the consent of the owners of the 2017 Bonds. -41- Land Use Distribution All of the property in the District is currently owned by the Primary Landowner and Wingsweep Corporation. The following table shows the distribution of ownership of the land in the District among the 19 Planning Areas within the District, the expected number of homes (units) for each Planning Area, the values of the parcels in each Planning Area as derived from the Appraisal Report, the allocation of the principal of the 2017 Bonds to each Planning Area, estimated Special Tax levy for fiscal year 2017-18 for the parcel in each Planning Area, as well as the Maximum Special Tax A that could be levied on parcels in each land use class under the Rate and Method and the projected Fiscal Year 2017-18 Special Tax levy as a percentage of the Maximum Special Tax A. Table 2 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Appraised Values and Projected Fiscal Year 2017-18 Special Tax A Levy by Planning Area Projected FY 2017- FY 2017-18 Expected Estimated 18 % of Special Tax as No. of 2017 Value- Maximum Projected Projected Percentage of Planning No. of Units at Appraised Special Tax to -Lien Special Special Special Maximum Property Owner Area Parcels Buildout Acreage Value(1) Bonds((2) Ratio(4) Tax Tax((3) Tax(4) Tax(4) Roripaugh Valley Restoration 14 1 77 13.59 $2,350,952 $ 2,319,784 1.01:1 $ 311,768 $ 166,525 5.21% 53.41% Roripaugh Valley Restoration 15 1 104 14.09 2,747,057 2,405,133 1.14:1 323,239 172,651 5.40 53.41 Roripaugh Valley Restoration 16 1 121 26.42 4,301,671 4,509,838 0.95:1 606,101 323,737 10.12 53.41 Roripaugh Valley Restoration 17 1 147 41.08 5,285,328 7,012,269 0.75:1 942,416 503,372 15.74 53.41 Roripaugh Valley Restoration 18 1 121 30.58 4,350,508 5,219,941 0.83:1 701,536 374,711 11.72 53.41 Roripaugh Valley Restoration 19 1 26 29.98 1,556,214 1,736,179 0.90:1 233,334 124,631 3.90 53.41 Roripaugh Valley Restoration 20 1 29 33.71 1,735,778 1,952,188 0.89:1 262,365 140,137 4.38 53.41 Roripaugh Valley Restoration 21 1 24 23.61 1,436,506 1,367,284 1.05:1 183,757 98,150 3.07 53.41 Roripaugh Valley Restoration 22 1 126 20.99 3,847,012 3,582,949 1.07:1 481,532 257,200 8.04 53.41 Roripaugh Valley Restoration 23 1 51 10.02 1,557,124 1,710,393 0.91:1 229,869 122,780 3.84 53.41 Roripaugh Valley Restoration 24 1 71 12.28 2,334,953 2,096,170 1.11:1 281,715 150,473 4.71 53.41 Roripaugh Valley Restoration 31 1 164 25.19 4,331,897 4,299,880 1.01:1 577,884 308,665 9.65 53.41 Wingsweep Corporation 10 1 14 8.12 1,238,264 551,080 2.25:1 74,063 39,559 1.24 53.41 Wingsweep Corporation 11 1 1 15.19 2,700,993 1,030,899 2.62:1 138,548 74,003 2.31 53.41 Wingsweep Corporation 12 1 136 16.01 5,597,858 3,918,536 1.43:1 526,633 281,290 8.80 53.41 Wingsweep Corporation 33A 2 12 10.26 1,090,308 696,315 1.57:1 93,581 49,985 1.56 53.41 Wingsweep Corporation 33B 1 3 2.08 272,577 141,163 1.93:1 18,972 10,133 0.32 53.41 18 1,227 333.20 $46,735,000 $44,550,000 1.05:1 $5,987,312 $3,198,000 100.00% 53.41% (1) Appraised Value per Planning Area is not provided in the Appraisal. The Appraised Value for each Planning Area has been allocated based upon each Planning Area's Blue -Topped Condition Value (as described in the Appraisal) in relation to the total Blue -Topped Condition Value. Date of value is December 1, 2016. (2) 2017 Bond Allocation based on Fiscal Year 2017-18 Projected Special Tax Levy. Preliminary, subject to change. (3) Projected Fiscal Year 2017-18 Special Tax Requirement based upon preliminary 2017 Bond sizing provided by the Underwriter. Amount includes scheduled debt service for the 2017 Special Tax Bonds and $50,000 in District administrative costs. Preliminary, subject to change. (4) Preliminary, subject to change. Source: Albert A. Webb Associates. Property Values The value of the property in the District is an important factor in determining the investment quality of the 2017 Bonds. If a property owner defaults in the payment of the Special Tax, the Authority's primary 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. A variety of economic, political, and natural occurrences incapable of being accurately predicted can affect property values. See "SPECIAL RISK FACTORS - Property Value." -42- The Authority has commissioned the Appraisal Report for the property in the District. The Appraisal Report estimates the market value of the property as of December 1, 2016, based upon a hypothetical condition, and the assumptions and limiting conditions, described in the Appraisal Report. The Appraiser relied on the Absorption Study (a copy of which is included in Appendix J to this Official Statement) in determining the value of the property in the District. The Appraisal Report is included in Appendix I to this Official Statement. Both the Appraisal Report and the Absorption Study should be read in their entirety for an explanation of the methodology and the assumptions underlying and the conditions limiting the valuation conclusions contained in the Appraisal Report. Neither the Authority nor the Underwriter makes any representation as to the accuracy or completeness of the Appraisal Report or the Absorption Study. The Appraiser concluded in the Appraisal Report that the market value of the property in the District as of December 1, 2016 was $46,735,000, subject to the extraordinary assumptions, among other assumptions, in the Appraisal Report. The extraordinary assumptions include that 2017 Bond proceeds and other funds totaling $22,000,000 will be available to fund the Improvements required to support the residential and commercial development of the property in the District as planned and that the current or future property owners will complete the approval/permit process for the Nicolas Road construction project as necessary to allow adequate building permits to be issued in a timely manner as specified in the Development Agreement (described under the heading "THE DISTRICT—The Roripaugh Ranch Development – History of Roripaugh Ranch"), so as to support the absorption projections in the Absorption Study. The appraised value of the land in the District, as reflected in the Appraisal Report, is approximately 1.05* times the $44,550,000* initial principal amount of the 2017 Bonds. The Appraisal Report does not take into account possible future liens or indebtedness which may be imposed by the City or by other public entities. As described under the heading "SECURITY FOR THE 2017 BONDS – Issuance of Additional Bonds," if certain requirements for the issuance of Parity Bonds are met (which include a Value -to -Lien Ratio requirement), the Authority anticipates issuing Parity Bonds to finance some of the costs of the Improvements not funded with proceeds of the 2017 Bonds. See "SECURITY FOR THE 2017 BONDS – Issuance of Additional Bonds," and "THE DISTRICT – The Improvements." The Authority has not covenanted, and in many instances does not have the legal ability, to restrict other entities from imposing indebtedness, which may be secured by a lien on the Taxable Property in the District which is on a parity with the Special Tax. See "THE DISTRICT – Direct and Overlapping Governmental Obligations" and "SPECIAL RISK FACTORS – Parity Taxes and Special Assessments." A number of economic, political, and natural occurrences may adversely affect the value of the property as expressed in the Appraisal Report. See "SPECIAL RISK FACTORS." Appraised Value -to -District Lien Ratios General Information Regarding Value -to -District Lien Ratios. The value -to -lien ratio on bonds secured by special taxes will generally vary over the life of those bonds as a result of changes in the value of the property that is security for the special taxes and the principal amount of the bonds. In comparing the appraised value of the real property within the District and the principal amount of the 2017 Bonds, it should be noted that an individual parcel may only be foreclosed upon to pay delinquent installments of the Special Taxes attributable to that parcel. The principal amount of the 2017 Bonds is not allocated among the parcels within the District * Preliminary, subject to change. -43- based on their appraised values; rather, the total Special Taxes will be allocated among the parcels within the District according to the Rate and Method. Economic and other factors beyond the property owners' control, such as economic recession, deflation of land values, financial difficulty or bankruptcy by one or more property owners, or the complete or partial destruction of Taxable Property caused by, among other possibilities, earthquake, flood, fire or other natural disaster, could cause a reduction in the assessed value within the District. See "SPECIAL RISK FACTORS -Property Value" and "Bankruptcy Delays." Appraised Value -to -District Lien Ratio Distribution. The table below shows the projected fiscal year 2017-18 Special Tax levy, the aggregate appraised value derived from the Appraisal Report, the allocation of the principal amount of the 2017 Bonds, and the estimated debt to appraised value ratios for the parcels in the District. See "THE DISTRICT -Major Land Owners" for more information regarding the status of ownership of Parcels in the District. Table 3 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Estimated Value to Lien by Planning Area and Property Owner Expected Value -to - No. of 2017 Bond Planning No. of Units at Appraised Allocation of Principal Property Owner Area Parcels Buildout Acreage Value(1) 2017 Bonds(2) Ratio(3) Roripaugh Valley Restoration 14 1 77 13.59 $ 2,350,952 $ 2,319,784 1.01:1 Roripaugh Valley Restoration 15 1 104 14.09 2,747,057 2,405,133 1.14:1 Roripaugh Valley Restoration 16 1 121 26.42 4,301,671 4,509,838 0.95:1 Roripaugh Valley Restoration 17 1 147 41.08 5,285,328 7,012,269 0.75:1 Roripaugh Valley Restoration 18 1 121 30.58 4,350,508 5,219,941 0.83:1 Roripaugh Valley Restoration 19 1 26 29.98 1,556,214 1,736,179 0.90:1 Roripaugh Valley Restoration 20 1 29 33.71 1,735,778 1,952,188 0.89:1 Roripaugh Valley Restoration 21 1 24 23.61 1,436,506 1,367,284 1.05:1 Roripaugh Valley Restoration 22 1 126 20.99 3,847,012 3,582,949 1.07:1 Roripaugh Valley Restoration 23 1 51 10.02 1,557,124 1,710,393 0.91:1 Roripaugh Valley Restoration 24 1 71 12.28 2,334,953 2,096,170 1.11:1 Roripaugh Valley Restoration 31 1 164 25.19 4,331,897 4,299,880 1.01:1 Wingsweep Corporation 10 1 14 8.12 1,238,264 551,080 2.25:1 Wingsweep Corporation 11 1 1 15.19 2,700,993 1,030,899 2.62:1 Wingsweep Corporation 12 1 136 16.01 5,597,858 3,918,536 1.43:1 Wingsweep Corporation 33A 2 12 10.26 1,090,308 696,315 1.57:1 Wingsweep Corporation 33B 1 3 2.08 272,577 141,163 1.93:1 18 1,227 333.20 $46,735,000 $44,550,000 1.05:1 (1) Appraised Value per Planning Area is not provided in the Appraisal. The Appraised Value for each Planning Area has been allocated based upon each Planning Area's Blue -Topped Condition Value (as described in the Appraisal) in relation to the total Blue -Topped Condition Value. Date of value is December 1, 2016. (2) Allocation of 2017 Bonds based on Fiscal Year 2017-18 Projected Special Tax Levy. Preliminary, subject to change. (3) Preliminary, subject to change. Source: Albert A. Webb Associates. -44- The following table sets forth the distribution of appraised value -to -District 2017 Bond lien ratios among the 18 parcels of land in the District based on the projected fiscal year 2017-18 Special Tax levy and the initial principal amount of the 2017 Bonds. Table 4 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Distribution of Value -to -District Lien Ratios Fiscal Year 2017-18 Percent of Projected Total Total FY 2017-18 Projected Estimated Aggregate No. of % of Total Appraised Special Tax FY 2017-18 2017 Special Value -to - Appraised Value to Lien(1) Parcels Acreage Acreage Value(2) Levy Levy Tax Bonds(5) Lien(5) Less than 1.00:1(3) 6 171.79 51.56% $18,786,623 $1,589,367 49.70% $22,140,808 0.85:1 Between 1.00:1 and 1.99:1 10 138.10 41.45 24,009,121 1,495,071 46.75 20,827,214 1.15:1 Greater than 1.99:1(4) 2 23.31 7.00 3,939,257 113,562 3.55 1,581,978 2.49:1 Total 18 333.20 100.00% $46,735,000 $3,198,000 100.00% $44,550,000 1.05:1 (1) Value -to -Lien Ratios based upon estimated Refunding Par amount and Appraised Value. (2) Appraised Value per parcel is not provided in the Appraisal. The Appraised Value for each parcel had been allocated based upon each parcel's Blue -Topped Condition Value (as described in the Appraisal) in relation to the total Blue -Topped Condition Value. Date of value is December 1, 2016. (3) Lowest estimated Value -to -Lien is 0.75:1. Preliminary, subject to change. (4) Highest estimated Value -to -Lien is 2.62:1. Preliminary, subject to change. (5) Preliminary, subject to change. Source: Albert A. Webb Associates. Direct and Overlapping Governmental Obligations Taxes, Charges and Assessments. The base ad valorem secured property tax rate on property in the District is 1.00% (including ad valorem tax overrides). Property in the District is also subject, or will be subject, to certain annual charges and assessments (which are billed to property owners on a semi-annual basis). See "THE DISTRICT—Sample Tax Bill" below for a list of public agencies that currently levy annual charges and assessments on property in the District. Overlapping Public Debt. The District is located within the boundaries of certain local agencies, other than the Authority, that provide public services and assess property taxes, assessments, special taxes and other charges on the property in the District. Some of these local agencies have outstanding debt. The current and estimated direct and overlapping obligations affecting the property in the District are shown in the following table. The table was prepared by the Special Tax Consultant and is included for general information purposes only. The Authority has not reviewed this report for completeness or accuracy and makes no representation in connection therewith. -45- Table 5 Temecula Public Financing Authority Community Facilities District No. 16-01 (Roripaugh Ranch Phase 2) Direct and Overlapping Bonded Debt I. APPRAISED VALUE Appraised Value(1) $46,735,000 II. LAND SECURED BOND INDEBTEDNESS Outstanding Direct and Overlapping Bonded Debt TEMECULA CFD 16-01 RORIPAUGH RANCH PHASE 2 Total Parcels Amount Type Levied Issued Outstanding % Applicable Applicable CFD 18 $44,550,000 $44,550,000(2) 100.000% $44,550,000 TOTAL OUTSTANDING LAND SECURED BONDED DEBT $44,550,000 Total Parcels Amount Authorized and Unissued Direct and Overlapping Bonded Debt Type Levied Authorized Unissued % Applicable Applicable TEMECULA CFD 16-01 RORIPAUGH RANCH PHASE 2 CFD 18 $60,000,000 $15,450,000(3) 100.000% $15,450,000 TOTAL UNISSUED LAND SECURED INDEBTEDNESS $15,450,000 TOTAL OUTSTANDING AND UNISSUED LAND SECURED $60,000,000 INDEBTEDNESS(4) III. GENERAL OBLIGATION BOND INDEBTEDNESS Total Parcels Amount Outstanding Direct and Overlapping Bonded Debt Type Levied Issued Outstanding % Applicable Applicable Temecula Valley Unified School B & I (0.03164%) GO 18 $137,412,035 $82,432,035 0.078592% $64,785 MT San Jacinto Comm (0.0132%) GO 18 $70,000,000 $63,950,000 0.020188% $12,910 Metropolitan Water East (0.00350%) GO 18 $850,000,000 $92,865,000 0.000611% $567 Rancho Water Rancho Division (0.30000%)(5) REV 2 $168,743,865 $119,025,286 0.024219% $28,827 TOTAL OUTSTANDING GENERAL OBLIGATION $107,089 BONDED DEBT Total Parcels Amount Authorized and Unissued Direct and Overlapping Indebtedness Type Levied Authorized Unissued % Applicable Applicable Temecula Valley Unified School B & I (0.03164%) GO 18 $230,000,000 $92,587,965 0.078592% $72,767 MT San Jacinto Comm (0.0132%) GO 18 $295,000,000 $225,000,000 0.020188% $45,423 Metropolitan Water East (0.00350%) GO 18 $850,000,000 $0 0.000611% $0 Rancho Water Rancho Division (0.30000%)(5) REV 2 $168,743,865 $0 0.024219% $0 TOTAL UNISSUED GENERAL OBLIGATION INDEBTEDNESS $118,190 TOTAL OUTSTANDING AND UNISSUED GENERAL $225,279 OBLIGATION INDEBTEDNESS(4) TOTAL OF ALL OUTSTANDING DIRECT AND OVERLAPPING BONDED DEBT TOTAL OF ALL OUTSTANDING AND UNISSUED DIRECT AND OVERLAPPING INDEBTEDNESS IV. RATIOS TO APPRAISED VALUATION Outstanding Land Secured Bonded Debt Outstanding Direct and Overlapping Bonded Debt 1.05:1 1.05:1 $44,657,089 $60,225,279 (1) Reflects appraised value from the Appraisal Report with a date of value of December 1, 2016. (2) Amount outstanding is equal to the initial principal amount of the 2017 Bonds. Preliminary, subject to change. (3) Additional Parity Bonds may be issued with respect to the remaining $15,450,000 in Bond authorization. Preliminary, subject to change. (4) Additional bonded debt or available bond authorization may exist but is not shown because a tax was not levied for Fiscal Year 2016-17. (5) Rancho Water Rancho Division is assessed at 0.30000% of Land Assessed Value only. Source: Albert A. Webb Associates -46- THE AUTHORITY The Temecula Public Financing Authority was established pursuant to a Joint Exercise of Powers Agreement, dated April 10, 2001 (the "JPA Agreement"), by and between the City and the Agency. The JPA was entered into pursuant to the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California. The Authority was formed for the primary purpose of assisting in the financing and refinancing of public capital improvements in the City. As of May 1, 2016, the JPA Agreement was amended to provide for the withdrawal of the Successor Agency to the Agency as a member of the Authority, and to add the Temecula Community Services District and the Temecula Housing Authority as members of the Authority. The Authority is administered by a five -member Board of Directors, which currently consists of the members of the City Council of the City. The Authority has no independent staff. The Executive Director of the Authority is the City Manager of the City, and the Treasurer of the Authority is the City's Chief Financial Officer. The Executive Director administers the day-to- day affairs of the Authority, and the Treasurer has custody of all money of the Authority from whatever source. SPECIAL RISK FACTORS The following is a description of certain risk factors affecting the District, the property owners in the District, the parcels subject to the levy of Special Taxes and the payment of and security for the 2017 Bonds. The following discussion of risks is not meant to be a complete list of the risks associated with the purchase of the 2017 Bonds and does not necessarily reflect the relative importance of the various risks. Potential investors are advised to consider the following factors along with all other information in this Official Statement in evaluating the investment quality of the 2017 Bonds. There can be no assurance that other risk factors will not become material in the future. No General Obligation of the Authority or the District The Authority's obligations under the 2017 Bonds and under the Fiscal Agent Agreement 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 amounts in the Special Tax Fund, the Bond Fund and the Reserve Fund. The 2017 Bonds are neither general or special obligations of the Authority nor general obligations of the District, but are limited obligations of the Authority for the District payable solely from the revenues and funds pledged therefor and under the Fiscal Agent Agreement. None of the faith and credit of the District, the Authority or the State of California or of any of their respective political subdivisions is pledged to the payment of the 2017 Bonds. Property Value The value of land within the District is a critical factor in determining the investment quality of the 2017 Bonds. If a landowner defaults in the payment of the Special Tax, the only legal remedy is the institution of a superior court action to foreclose on the delinquent Taxable Property in an attempt to obtain funds with which to pay the Special Tax. The value of the taxable parcels in the District could be adversely affected by economic factors beyond the Authority's control, including, without limitation, (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District, the supply of or demand for competitive properties in such area, and the market -47- value of residential property in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies; and (iii) natural disasters (including, without limitation, wildfire, earthquakes and floods), which may result in uninsured losses. See "SPECIAL TAX FACTORS—Natural Disasters." No assurances can be given that the real property subject to a judicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be sufficient to pay the delinquent Special Tax installment. Although the Act authorizes the Authority to cause such an action to be commenced and diligently pursued to completion, the Act does not specify any obligation of the Authority with regard to purchasing or otherwise acquiring any lot or parcel of property sold at the foreclosure sale in any such action if there is no other purchaser at such sale. The Authority is not obligated and does not expect to be a bidder at any such foreclosure sale. See "SPECIAL TAX FACTORS—Proceeds of Foreclosure Sale." The current appraised value of the property in the District is approximately five percent (5%)* more than the initial principal of the 2017 Bonds. See "THE DISTRICT— Appraised Property Values." Provisions of the Act required that the Board of Directors of the Authority make findings in the Authority Approving Resolution and to adopt the Authority Approving Resolution by a 4/5th vote of the Board of Directors because the value of the Taxable Property in the District as estimated in the Appraisal Report is not at least three times the initial principal amount of the 2017 Bonds. See "THE DISTRICT—History of the District." The District currently includes one parcel in each Planning Area, each of which is expected to be subdivided into multiple parcels on which homes will be constructed and, with respect to one Planning Area, on which commercial development will occur. The current values of the parcels, and their interpreted appraised values, vary significantly (see "THE DISTRICT— Appraised Value -to -District Lien Ratios"), with some of the values being less than their respective allocation of 2017 Bond principal. Moreover, as a consequence of the expected subdivision of the land, the values of individual parcels in the District may vary even more in the future. If an owner of a parcel defaults in the payment of Special Taxes levied in the District, the Authority may commence foreclosure proceedings to collect the delinquent Special Taxes, but any such action may not be successful if the value of the delinquent parcel is less than its allocable share of the 2017 Bond debt. See "SPECIAL RISK FACTORS—Payment of the Special Tax is not a Personal Obligation," "—Tax Delinquencies," and "—Proceeds of Foreclosure Sales." Concentration of Ownership The Primary Landowner and Wingsweep Corporation currently own all of the land in the District. See "THE DISTRICT—The Current Landowners," and "—Land Use Distribution." Moreover, if is expected that the Primary Landowner will dispose of its interests in the land in the District later this year. See "THE DISTRICT—The Current Landowners – The Primary Landowners." The lack of diversity in the obligation to pay the Special Tax represents a significant risk to the owners of the 2017 Bonds in that the two landowners ability to pay the Special Tax will be dependent on the success of the development of the land in the District. Failure of any owner of a significant portion of the land in the District to pay the annual Special Tax when due could result in a default in payments of the principal of, and interest on, the 2017 Bonds. See "SPECIAL RISK FACTORS—Insufficiency of Special Tax Revenues" below. It should be noted, however, that neither the Primary Landowner nor Wingsweep Corporation failed to remit special taxes levied by the Authority for CFD 03-02 on property they own in the District. * Preliminary, subject to change. -48- Failure to Complete Development The development of the property in the District includes the construction of public infrastructure, public facilities and other site work. While construction of some of the needed public infrastructure has been completed, the remainder of the infrastructure is expected to be completed over a multiple year period. Any event that significantly impacts the ability to complete the development of the property in the District on a timely basis (such as strikes or other work stoppages, loan defaults, adverse weather conditions, catastrophic events such as earthquakes or other natural events, or other similar events) could cause the value of the land within the District to be less than that estimated by the Appraiser and could affect the willingness and ability of the landowners in the District to pay the Special Taxes when due. See "THE DISTRICT—The Roripaugh Ranch Development" for information regarding the status of development in the District. Failure to Achieve Market Absorption Projections The Appraisal Report took into consideration the Absorption Study, which assumes construction and absorption schedule for the homes and commercial development for the property in the District to be constructed and sold. See Appendix J — "Market Absorption Study." There can be no assurance that such level of dwelling unit and commercial property absorption can be obtained. Failure to achieve the estimated absorption projections could adversely affect the Appraiser's estimated value of the property in the District, could impair the economic viability of the proposed development and could reduce the ability or desire of the property owners to pay the annual Special Taxes. In that event, there could be a default in the payment of principal of, and interest on, the 2017 Bonds. Prospective purchasers of the 2017 Bonds should not assume that the absorption of dwelling units will occur as estimated and should review the Absorption Study in its entirety in order to make an informed decision whether to purchase the 2017 Bonds. Government Approvals Development within the District is contingent upon the completion, and acceptance by various public agencies, of infrastructure improvements, as well as the issuance by the City of building and other ministerial permits for homes and commercial structures to be constructed in the District. The failure to commence and complete the required infrastructure improvements and to obtain any such permits in a timely manner could adversely affect land development within the District. Payment of the Special Tax is not a Personal Obligation The owners of the parcels in the District are not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation that is secured only by a lien against the parcels on which it is levied. If the value of the taxable parcels is not sufficient to secure fully the payment of the Special Tax, the Authority has no recourse against the property owners. FDIC/Federal Government Interests in Properties General. The ability of the District to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the "FDIC"), the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest. -49- Federal courts have held that, based on the supremacy clause of the United States Constitution, in the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest. The supremacy clause of the United States Constitution reads as follows: "This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding." This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within the District but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments. Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government's mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association ("FNMA") is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States. FDIC. In the event that any financial institution making any loan which is secured by real property within the District is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC, then the ability of the District to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited. The FDIC's policy statement regarding the payment of state and local real property taxes (the "Policy Statement") provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property's value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC's interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC -owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent. The Policy Statement states that the FDIC generally will not pay non -ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of -50- tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Act and a rate and method of apportionment which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC's federal immunity. The Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from special taxes levied pursuant to the Act. The Authority is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within the District in which the FDIC has or obtains an ownership interest, although prohibiting the lien of the Special Taxes to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the Reserve Fund and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the 2017 Bonds. FDIC Ownership Interest Relative to the Primary Landowner. As described under the heading "THE DISTRICT—The Current Landowners – The Primary Landowner," the Primary Landowner is a limited liability company the sole member of which is AMT CADC Venture, LLC, a Delaware limited liability company in which the FDIC has a sixty percent ownership interest. However, the FDIC does not directly own any of the property in the District, and it is only a partial owner of the sole member of the Primary Landowner. The Policy Statement, in addition to the matters described above, states that: "It generally applies to the [Federal Deposit Insurance] Corporation when it is liquidating assets of an insured depository institution in its corporate or receivership capacities. It applies to any tax, penalty, interest, or other related charge imposed or sought to be imposed on property to whose ownership the FDIC succeeds in such capacities." The Policy Statement is replete with language suggesting that it only applies to property that is owned by the FDIC. None of the language in the Policy Statement suggests that it applies to properties in which the FDIC may have a financial interest but does not own the property directly, such as the property in the District owned by the Primary Landowner. Moreover, the Primary Landowner has paid the special taxes levied by the Authority for CFD 03-02 on the property in the District owned by it ever since it was conveyed to the Primary Landowner in May of 2011. The Primary Landowner submitted a petition to the Authority requesting the issuance of the 2017 Bonds, one of the primary purposes of which is the prepayment of CFD 03-02 special tax levies on the property in the District. Also, as discussed under the heading "THE DISTRICT—The Current Landowners – The Primary Landowner," it is expected that the Primary Landowner will attempt to dispose of all of its interests in the property it owns in the District and related agreements later this year. Notwithstanding the foregoing, the Authority cannot provide any assurance that the FDIC, or a court of competent jurisdiction, may in the future interpret the Policy Statement to apply to property in which the FDIC has a financial interest but not a direct ownership interest. The FDIC is obligated to maximize recoveries from the disposition of financial institutions and their assets, and the property owned by the Primary Landowner was acquired in connection with the FDIC's takeover of AmTrust Bank. However, given the activities of the Primary Landowner to date with respect to the property it owns in the District, including the consistent payment of special taxes levied for CFD 03-02 since May of 2011 and its petition to request formation of the District to prepay such special taxes, it is not expected that the FDIC will take the position that the Policy Statement applies to such property. -51- Exempt Properties Certain properties are exempt from the Special Tax in accordance with the Rate and Method. In addition, the Act provides that properties or entities of the state, federal or local government are exempt from the Special Tax; provided, however, that property within the District acquired by a public entity through a negotiated transaction, or by gift or devise, that is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax. It is possible that property acquired by a public entity following a tax sale or foreclosure based upon failure to pay taxes could become exempt from the Special Tax. In addition, the 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, for outstanding Bonds only, is to be treated as if it were a special assessment. The constitutionality and operation of these provisions of the Act have not been tested. In particular, insofar as the Act requires payment of the Special Tax by a federal entity acquiring property within the District, it may be unconstitutional (see "SPECIAL RISK FACTORS—FDIC /Federal Government Interests in Properties"). If for any reason property within the District becomes exempt from taxation by reason of ownership by a nontaxable entity such as the federal government or another public agency, subject to the limitation of the Maximum Rate, the Special Tax will be reallocated to the remaining taxable properties within the District. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the timely payment of the Special Tax. Moreover, if a substantial portion of land within the District becomes exempt from the Special Tax because of public ownership, or otherwise, the maximum rate that could be levied upon the remaining acreage might not be sufficient to pay principal of and interest on the Series Prior Bonds when due and a default would occur with respect to the payment of such principal and interest. Parity Taxes and Special Assessments The Special Taxes and any penalties thereon will constitute liens against the taxable parcels in the District until they are paid. Such lien is on a parity with all special taxes and special assessments levied by other agencies and is coequal to and independent of the lien for general property taxes regardless of when they are imposed upon the taxable parcel. The Special Tax B, not pledged to the payment of the 2017 Bonds, is collected with, and secured by the same lien that secures the payment of, the Special Tax A. The Special Taxes have priority over all existing and future private liens imposed on the property. The Authority, however, has no control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the taxable parcels within the District subject to the levy of Special Taxes. In addition, the landowners within the District may, without the consent or knowledge of the District, petition other public agencies to issue public indebtedness secured by special taxes or assessments, and any such special taxes or assessments may have a lien on such property on a parity with the Special Taxes. The imposition of additional indebtedness could reduce the willingness and the ability of the property owners within the District to pay the Special Taxes when due. See "THE DISTRICT—Direct and Overlapping Governmental Obligations." Insufficiency of Special Taxes In order to pay debt service on the 2017 Bonds, it is necessary that the Special Taxes levied against taxable parcels within the District be paid in a timely manner. The Authority has established the Reserve Fund in an amount equal to the Reserve Requirement to pay debt service on the 2017 Bonds and any Parity Bonds to the extent Special Taxes are not paid on time -52- and other funds are not available. See "SECURITY FOR THE 2017 BONDS—Reserve Fund" and Appendix C – "Summary of the Fiscal Agent Agreement—Reserve Fund." Under the Fiscal Agent Agreement, the Authority has covenanted to maintain in the Reserve Fund an amount equal to the Reserve Requirement; subject, however, to the limitations that (i) the Authority may not levy the Special Tax in any fiscal year at a rate in excess of the Maximum Special Tax rates permitted under the Rate and Method and (ii) per the Act, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within the District. See "SECURITY FOR THE 2017 BONDS—Summary of Rate and Method Special Tax Formula – Calculation of Annual Special Tax." Consequently, if a delinquency occurs, the Authority may be unable to replenish the Reserve Fund to the Reserve Requirement due to the limitation of the Maximum Special Tax rates. If such defaults were to continue in successive years, the Reserve Fund could be depleted and a default on the 2017 Bonds would occur if proceeds of a foreclosure sale did not yield a sufficient amount to pay the delinquent Special Taxes. The Authority has made certain covenants regarding the institution of foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the 2017 Bonds. See "SECURITY FOR THE 2017 BONDS—Covenant for Superior Court Foreclosure." If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of delinquent Special Taxes to protect its security interest. Tax Delinquencies Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the 2017 Bonds are derived, are being billed to the taxable parcels within the District on the regular property tax bills sent to owners of the parcels. Such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. Special Tax installment payments cannot be made separately from property tax payments. Therefore, the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and Special Tax installment payments in the future. See "SECURITY FOR THE 2017 BONDS— Reserve Fund" and "-Covenant for Superior Court Foreclosure" for a discussion of the provisions which apply, and procedures which the District is obligated to follow under the Fiscal Agent Agreement, in the event of delinquency in the payment of Special Tax installments. See also "THE DISTRICT—Special Tax Delinquencies" for historical Special Tax delinquency history. Also, as noted under "SECURITY FOR THE 2017 BONDS—Summary of Rate and Method," the Act provides that under no circumstances will the Special Taxes levied against any Parcel used as a private residence be increased as a consequence of delinquency or default by the owner of any other Parcel or Parcels within the District by more than ten percent (10%) per Fiscal Year. In addition, the Rate and Method provides that under no circumstances will the Acreage Special Tax be levied against Parcels of Developed Residential Property if the Special Taxes which may be levied pursuant to the first and second steps described under the subheading "Method of Apportionment" in the section entitled "SECURITY FOR THE 2017 BONDS—Summary of Rate and Method," are equal to or greater than the sum of estimated Administrative Expenses and one hundred ten percent (110%) of the then maximum annual debt service for outstanding Bonds. -53- While no assurance can be given that the owners of the Taxable Property in the District will pay the Special Taxes levied by the Authority on such property, it should be noted that both of the current owners of the Taxable Property have consistently paid the special taxes levied on their property for CFD 03-02. As discussed under "PLAN OF FINANCING— Overview – Prepayment of CFD 03-02 Special Taxes, proceeds of the 2017 Bonds will be used to prepay the remaining CFD 03-02 special tax obligation of the property in the District, so no future levies of special taxes for CFD 03-02 will be made on the property in the District. Bankruptcy Delays The payment of the Special Tax and the ability of the Authority to commence a superior court action to foreclose the lien of a delinquent unpaid Special Tax, as dis