HomeMy WebLinkAboutMINUTES - 12112012 - SD.3 (2)RECOMMENDATION(S):
ADOPT Resolution No. 2012/515 authorizing the issuance of Community Facilities District No. 2001-1 (Norris
Canyon) 2013 Special Tax Refunding Bonds (“Bonds”), and approving related documents and actions, including:
1) a) authorizing the issuance of 2013 Special Tax Refunding Bonds in an amount not to exceed $6,500,000;
b) finding and determining that it is prudent to issue the Bonds for the purpose of refunding the 2001 Special Tax
Bonds (“Prior Bonds”), that the total net interest cost on the Bonds will not exceed the Prior Bonds, that the assessed
value of the land in the District is more than three times the principal amount of the Bonds, that the issuance will
result in lower annual special taxes levied, and that the negotiated sale of the Bonds to Stifel, Nicolaus & Company,
Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus (“Underwriter”) will result in lower overall costs;
c) approving the form of Fiscal Agent Agreement between Contra Costa County and the Bank of New York Mellon
Trust Company, N.A., including the authorization of the Chair of the Board of Supervisors, the Vice-Chair of the
Board of Supervisors, the County Administrator, the Director of the Department of Conservation
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 12/11/2012 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Candace Andersen, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Karen Mitchoff, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Kristen Lackey,
4-7888
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: December 11, 2012
David Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
SD. 3
To:Board of Supervisors
From:Catherine Kutsuris, Conservation & Development
Date:December 11, 2012
Contra
Costa
County
Subject:Issuance of Community Facilities District No. 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds
RECOMMENDATION(S): (CONT'D)
and Development, and the Community Development Bond Program Manager (collectively, the “Designated
Officers”), to execute the Fiscal Agent Agreement;
d) For purposes of Section 53363.2 of the Mello-Roos Community Facilities Act of 1982, as amended, it is
expected that the Bonds will be sold after December 12, 2012 with a minimum rate of interest of 0.25%, the
specifics of the Bonds, payment of the Prior Bonds, and costs of issuance will be as set forth in the Fiscal Agent
Agreement, Official Statement, and closing certificates;
e) approving the form of Escrow Agreement between Contra Costa County and the Bank of New York Mellon
Trust Company, N.A., including the refunding of the Prior Bonds with the proceeds of the Bonds, and authorizing
the Designated Officers to execute the Escrow Agreement;
2) directing the Fiscal Agent to authenticate the Bonds and deliver the Bonds to the Underwriter;
3) approving the form of Bond Purchase Agreement between Contra Costa County and Underwriter including the
sale of the Bonds to the Underwriter provided that the true interest cost of the Bonds does not exceed 5.0% and
the Underwriter’s Discount does not exceed 1.0% of the principal amount of the Bonds, and authorizing the
Designated Officers to execute the Bond Purchase Agreement;
4) a) approving the form of Preliminary Official Statement and authorizing the Designated Officers to deem the
Preliminary Official Statement as final;
b) authorizing the Underwriter to distribute the Preliminary Official Statement;
c) authorizing the Designated Officers to assist Disclosure Counsel in causing the Preliminary Official Statement
to be brought into the form of Final Official Statement, and execute the Final Official Statement;
d) approving the distribution of the Final Official Statement;
5) approving the form of Continuing Disclosure Certificate and authorizing the Designated Officers to execute the
Continuing Disclosure Certificate;
6) covenanting to pursue foreclosure action regarding delinquent special tax levies as set forth in the Fiscal Agent
Agreement; and
7) approving, confirming and ratifying actions taken with respect to the sale and issuance of the bonds, and
authorizing and directing Designated Officers to take actions necessary to issue the Bonds and refund the Prior
Bonds as contemplated by the documents approved by this Resolution.
FISCAL IMPACT:
At the closing for the Bonds, the County will be reimbursed for costs incurred in the issuance process. The Bonds
will be payable from and secured solely by special taxes levied on land within Community Facilities District No.
2001-1 (Norris Canyon). (100% Community Facilities District Special Tax Bonds)
BACKGROUND:
In June 2001, Contra Costa County (the “County”) issued $7.22 million of Community Facilities District No.
2001-1 2001 Special Tax Bonds ("2001 Bonds") to finance infrastructure and road improvements along Norris
Canyon Road in association with the Norris Canyon Estates, a 300 acre, 361 unit residential development built by
Toll Brothers. The debt service on the 2001 Bonds is paid from special property taxes levied on the parcels within
the District. Of the 2001 Bonds, $5,720,000 principal amount remains outstanding with maturities through
September 1, 2031. The average interest rate on the outstanding bonds is 6.034%.
The current municipal bond market has seen significant decreases in interest rates, and there is an opportunity to
refinance the 2001 Bonds. The proposed refinancing results in an average interest rate of 4.62% with an estimated
net present value savings of approximately $592,000 (10.354%). At this savings level, the annual Special Tax per
parcel would decrease by $241. These financing estimates are based on the refunding bonds being sold without a
rating. The financing team is seeking a rating from Standard & Poor's, which would decrease interest rates and
increase the savings levels even further. If approved by the Board, the 2013 Special Tax Refunding Bonds would
be sold during mid-December or early January, financial conditions permitting.
The Board's Debt Affordability Advisory Committee considered the proposed financing at its November 30, 2012
meeting, and found that it complies with the County's adopted Financing Policies for Community Facilities
Districts. The Committee recommends approval of Resolution No. 2012/___ authorizing the issuance of 2013
Special Tax Refunding Bonds in an amount not to exceed $6,500,000, and approving related documents and
actions.
Attachments
A - Fiscal Agent Agreement
B - Escrow Agreement
C - Bond Purchase Agreement
D - Preliminary Official Statement
E - Continuing Disclosure Certificate
CONSEQUENCE OF NEGATIVE ACTION:
Negative action would prevent the County from issuing 2013 Special Tax Refunding Bonds in order to reduce the
special tax levy on land within Community Facilities District No. 2001-1 (Norris Canyon).
CHILDREN'S IMPACT STATEMENT:
No impact.
ATTACHMENTS
Resolution No. 2012/515
Att A Norris Canyon Fiscal Agent Agr
Att B Norris Canyon Escrow Agr
Att C Norris Canyon Bond Purchase Agr
Att D Norris Canyon POS
Att E Norris Canyon Continuing Disclosure Certificate
Quint & Thimmig LLP 11/9/12
11/21/12
MARKED TO SHOW CHANGES.
03007.27:J11946
ESCROW AGREEMENT
by and between the
COUNTY OF CONTRA COSTA, CALIFORNIA
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Escrow Bank
dated as of January 1, 2013
relating to:
County of Contra Costa
Community Facilities District No. 2001-1
(Norris Canyon)
2001 Special Tax Bonds
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TABLE OF CONTENTS
Section 1. Establishment of Refunding Fund........................................................................................................................1
Section 2. Deposit into Refunding Fund; Investment of Amounts.............................................................................2
Section 3. Instructions as to Application of Refunding Fund.........................................................................................2
Section 4. Application of Proceeds from Prior Bond Funds............................................................................................2
Section 5. Application of Certain Terms of Prior Fiscal Agent Agreement...........................................................3
Section 6. Proceedings for Redemption of Prior Bonds.....................................................................................................3
Section 7. Compensation to Escrow Bank.................................................................................................................................3
Section 8. Liabilities and Obligations of Escrow Bank ......................................................................................................3
Section 9. Resignation of Escrow Bank......................................................................................................................................5
Section 10. Amendment......................................................................................................................................................................5
Section 11. Unclaimed Moneys........................................................................................................................................................5
Section 12. Execution in Counterparts..........................................................................................................................................5
Section 13. Applicable Law................................................................................................................................................................5
EXHIBIT A: SCHEDULE OF PAYMENTS ON PRIOR BONDS
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ESCROW AGREEMENT
This ESCROW AGREEMENT (this “Agreement”), dated as of January 1, 2013, is by
and between the COUNTY OF CONTRA COSTA, CALIFORNIA, a political subdivision of the
State of California (the “County”), for and on behalf of the COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1 (NORRIS CANYON) (the “District”), and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking
association organized and existing under the laws of the United States of America, acting as
successor Fiscal Agent for the Prior Bonds hereinafter referred to and acting as escrow bank
hereunder (the “Escrow Bank”).
RECITALS:
WHEREAS, the Board of Supervisors of the County has conducted proceedings under
and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, to form the
District, to authorize the levy of special taxes upon the land within the District, and to issue
bonds secured by said special taxes to finance certain facilities; and
WHEREAS, pursuant to a Fiscal Agent Agreement, dated as of June 1, 2001 (the “Prior
Fiscal Agent Agreement”), between the County and The Bank of New York Mellon Trust
Company, N.A. (successor to BNY Western Trust Company), as fiscal agent (the “Fiscal
Agent”), the County has issued its County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) 2001 Special Tax Bonds (the “Prior Bonds”); and
WHEREAS, the County has determined to issue, for and on behalf of the District,
pursuant to a Fiscal Agent Agreement, dated as of January 1, 2013 (the “2013 Agreement”),
between the County and The Bank of New York Mellon Trust Company, N.A., as fiscal agent,
special tax refunding bonds in the aggregate principal amount of $__________ (the
“Refunding Bonds”) at this time for the purposes of providing funds to currently refund and
defease the Prior Bonds; and
WHEREAS, the County and the Escrow Bank wish to enter into this Agreement for the
purpose of providing the terms and conditions relating to the deposit and application of
moneys to provide for the payment and redemption of the Prior Bonds in full, pursuant to and
in accordance with the provisions of Section 9.03(B) of the Prior Fiscal Agent Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the above premises and of the mutual
promises and covenants herein contained and for other valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
Section 1. Establishment of Refunding Fund . There is hereby created an escrow fund
(the “Refunding Fund”) to be held in trust by the Escrow Bank as an irrevocable escrow
securing the payment of the Prior Bonds, as hereinafter set forth. The Escrow Bank shall
administer the Refunding Fund as provided in this Agreement. All cash in the Refunding Fund
are hereby irrevocably pledged as a special fund for the payment of the principal of and
interest and premium, if any, on the Prior Bonds in accordance with the provisions of this
Agreement and the Prior Fiscal Agent Agreement. If at any time the Escrow Bank shall receive
actual knowledge that the cash in the Refunding Fund will not be sufficient to make any
payment required by Section 3 hereof, the Escrow Bank shall notify the County of such fact
and the County shall immediately cure such deficiency from any source of funds legally
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available to the District. The Escrow Bank shall have no obligation whatsoever to use its own
funds to cure any such deficiency.
Section 2. Deposit into Refunding Fund; No Investment of Amounts . Concurrent with
delivery of the Refunding Bonds, the County shall cause to be transferred to the Escrow Bank
for deposit into the Refunding Fund the amount of $__________ in immediately available
funds, which shall be derived from (a) proceeds of sale of the Refunding Bonds in the amount
of $__________, (b) the moneys on deposit in the reserve fund established under the Prior
Fiscal Agent Agreement (the “Reserve Fund”) in the amount of $__________, and (c) the
moneys held in the special tax fund established under the Prior Fiscal Agent Agreement (the
“Special Tax Fund”) in the amount of $__________. The Escrow Bank, in its capacity as
Fiscal Agent for the Prior Bonds, is hereby directed by the County to make a transfer of funds
from the Reserve Fund under the Prior Fiscal Agent Agreement to the Refunding Fund as
described in clause (b) of the preceding sentence. The County shall direct the Auditor (as
defined in the Prior Fiscal Agent Agreement) to make the transfer of funds from the Special
Tax Fund under the Prior Fiscal Agent Agreement to the Refunding Fund as described in
clause (c) of the second preceding sentence.
The moneys deposited into the Refunding Fund pursuant to the preceding paragraph
shall be held by the Escrow Bank in cash, uninvested. The funds deposited with and held by
the Escrow Bank in the Refunding Fund shall be used by the Escrow Bank solely for the uses
and purposes set forth herein. The Escrow Bank shall have no lien upon or right of set off
against the funds at any time on deposit in the Refunding Fund.
Section 3. Instructions as to Application of Refunding Fund . The total amount held in
the Refunding Fund hereunder shall be applied by the Escrow Bank for the sole purpose of
paying the principal of and interest, and premium, on the Prior Bonds in accordance with
Section 2.03(A)(ii) of the Prior Fiscal Agent Agreement and the schedule set forth in Exhibit A
hereto. Following payment in full of the principal of and interest, and premium, on the Prior
Bonds, all amounts on deposit in the Refunding Fund shall be transferred by the Escrow Bank
on March 2, 2013 to Auditor (as defined in the 2013 Agreement), for deposit by the Auditor in
the Special Tax Fund established pursuant to Section 4.05 of the 2013 Agreement.
The Escrow Bank, in its capacity as Fiscal Agent under the Prior Fiscal Agent
Agreement, is hereby directed to apply the amounts in the Refunding Fund to the payment
and redemption of the Prior Bonds pursuant to the preceding paragraph.
Section 4. Application of Proceeds from Prior Bond Funds. Upon receipt by the Escrow
Bank from the Fiscal Agent for the Prior Bonds and the County, as applicable, of certain
amounts on deposit in the funds and accounts established under the Prior Fiscal Agent
Agreement as of the date of delivery of the Refunding Bonds, such amount received shall be
applied by the Escrow Bank as follows:
(a) of amounts on deposit in the Reserve Fund established under the Prior
Fiscal Agent Agreement, $__________ transferred by the Fiscal Agent for the Prior
Bonds to the Escrow Bank shall be deposited by the Escrow Bank in the Refunding
Fund; and
(b) of amounts on deposit in the Special Tax Fund established under the
Prior Fiscal Agent Agreement ($__________) shall be deposited in the Refunding Fund.
After making the foregoing deposits and transfers, any other amounts remaining on
deposit in or accruing to any funds and accounts established under the Prior Fiscal Agent
Agreement shall be disposed of as provided in the 2012 Agreement.
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Section 5. Application of Certain Terms of Prior Fiscal Agent Agreement . All of the
terms of the Prior Fiscal Agent Agreement relating to the making of payments of the principal
of and interest on the Prior Bonds are incorporated in this Agreement as if set forth in full
herein.
Section 6. Proceedings for Redemption of Prior Bonds . The County hereby irrevocably
elects to redeem all of the outstanding Prior Bonds in full on March 1, 2013 pursuant to the
provisions of Section 2.03(A)(ii) of the Prior Fiscal Agent Agreement. The Escrow Bank is
hereby directed to provide notice of redemption (on behalf of and at the direction and expense
of the County) required under Section 2.03(D)(i) of the Prior Fiscal Agent Agreement as
necessary to comply with Section 9.03(B) of the Prior Fiscal Agent Agreement and to so
redeem the Prior Bonds on March 1, 2013.
Section 7. Compensation to Escrow Bank. The County shall pay the Escrow Bank,
promptly upon written request, full compensation for its duties under this Agreement,
including out-of-pocket costs such as publication costs, redemption expenses, legal fees
(including fees of outside counsel and the allocated costs of internal attorneys) and other costs
and expenses relating hereto. Under no circumstances shall amounts deposited in or credited
to the Refunding Fund be deemed to be available for said purposes. The obligation of the
County under this Section 7 to pay compensation already earned by the Escrow Bank and to
pay costs and expenses already incurred shall survive termination of this Agreement and shall
survive the resignation or removal of the Escrow Bank.
Section 8. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no
obligation to make any payment or disbursement of any type or incur any financial liability in
the performance of its duties under this Agreement unless the County shall have deposited
sufficient funds therefor with the Escrow Bank. The Escrow Bank may rely and shall be fully
protected in acting upon the written instructions of the County or its agents relating to any
matter or action as Escrow Bank under this Agreement.
The County covenants to indemnify, defend and hold harmless the Escrow Bank and its
officers, employees, directors and agents, solely from funds of the District, against any loss,
liability or expense, including legal fees (including the fees of outside counsel and internal
attorneys), incurred in connection with the performance of any of the duties of Escrow Bank
hereunder, except the Escrow Bank shall not be indemnified against any loss, liability or
expense resulting from its negligence or willful misconduct. The indemnity provided in this
Section 8 shall survive the termination of this Agreement and shall survive the resignation or
removal of the Escrow Bank.
The Escrow Bank shall have such duties as are expressly set forth herein and no implied
duties shall be read into this Agreement against the Escrow Bank. The Escrow Bank shall not
be liable for any act or omission of the County under this Agreement or the Prior Fiscal Agent
Agreement.
The Escrow Bank shall not be liable for the accuracy of any calculations provided as to
the sufficiency of moneys deposited with it to pay the principal of and interest and premium
on the Prior Bonds.
Any bank, federal savings association, national association or trust company into
which the Escrow Bank may be merged or with which it may be consolidated shall become the
Escrow Bank without any action of the County.
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The Escrow Bank shall have no liability or obligation to the holders of the Prior Bonds or
the Refunding Bonds with respect to the payment of debt service by the County or with respect
to the observance or performance by the County of the other conditions, covenants and terms
contained in the Prior Fiscal Agent Agreement or the 2013 Fiscal Agent Agreement
(collectively, the “Bond Agreements”), or with respect to the investment of any moneys in any
fund or account established, held or maintained by the County pursuant to the Bond
Agreements.
The Escrow Bank may conclusively rely, as to the trust of the statements and
correctness of the opinions expressed therein, on any certificate or opinion furnished to it in
accordance with this Agreement or the Prior Fiscal Agent Agreement. The Escrow Bank may
consult with counsel, whose opinion shall be full and complete authorization and protection to
the Escrow Bank if it acts in accordance with such opinion.
The Escrow Bank shall not be liable for any error of judgment made in good faith by an
authorized officer.
Nothing herein should be interpreted to require the Escrow Bank to expend, advance or
risk its own funds or otherwise incur financial liability in the performance of any of its duties
or the exercise of any of its rights hereunder, if it believes that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured.
Any corporation or association succeeding to all or substantially all of the corporate
trust business of the Escrow Bank shall be the successor of the Escrow Bank hereunder,
without the execution or filing of any paper or any further act on the part of the any of the
parties hereto.
The Escrow Bank shall not have any liability hereunder except to the extent of its own
negligence or willful misconduct. In no event shall the Escrow Bank be liable for any special
indirect or consequential damages.
The Escrow Bank shall not be responsible for any of the recitals or representations
contained herein.
The Escrow Bank may execute any of the trusts or powers under this Agreement or
perform any duties under this Agreement either directly or by or through agents, attorneys,
custodians or nominees, and shall not be responsible for any willful misconduct or negligence
on the part of any agent, attorney, custodian or nominee so appointed with due care.
The Escrow Bank agrees to accept and act upon instructions or directions pursuant to
this Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured
electronic methods; provided, however, that, the Escrow Bank shall have received an
incumbency certificate listing persons designated to give such instructions or directions and
containing specimen signatures of such designated persons, which such incumbency certificate
shall be amended and replaced whenever a person is to be added or deleted from the listing. If
the County elects to give the Escrow Bank e-mail or facsimile instructions (or instructions by a
similar electronic method) and the Escrow Bank in its discretion elects to act upon such
instructions, the Escrow Bank’s reasonable understanding of such instructions shall be deemed
controlling. The Escrow Bank shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Escrow Bank’s reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent with a subsequent
written instruction. The County agrees to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Escrow Bank, including
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without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the
risk of interception and misuse by third parties.
Section 9. Resignation of Escrow Bank. The Escrow Bank may at any time resign by
giving written notice to the County, which notice shall indicate the date on which the
resignation is to be effective (the “resignation date”). The County shall promptly appoint a
successor Escrow Bank by the resignation date. Resignation of the Escrow Bank will be
effective only upon acceptance of appointment by a successor Escrow Bank. If the County
does not appoint a successor Escrow Bank by the resignation date, the Escrow Bank may, at
the expense of the County, petition any court of competent jurisdiction for the appointment of
a successor Escrow Bank, which court may thereupon, after such notice, if any, as it may deem
proper and prescribe and as may be required by law, appoint a successor Escrow Bank.
Section 10. Amendment . This Agreement may be amended or modified by the parties
hereto, but only if there shall have been filed with the County and the Escrow Bank (a) a
written opinion of Bond Counsel stating that such amendment will not materially adversely
affect the interests of the owners of the Prior Bonds, and that such amendment will not cause
interest on the Prior Bonds or the Refunding Bonds to become includable in the gross income of
the owners thereof for federal income tax purposes, and (b) a certification of Bond Counsel or
an independent certified public accountant that the funds on deposit in the Refunding Fund
will be in an amount at all times at least sufficient to make the payments specified in Section 3
hereof.
Section 11. Unclaimed Moneys . Anything contained herein to the contrary
notwithstanding, any moneys held by the Escrow Bank in trust for the payment and discharge
of the principal of, and the interest and any premium on, the Prior Bonds which remains
unclaimed for two (2) years after the date when the payment of such principal, interest and
premium have become payable, if such moneys were held by the Escrow Bank at such date,
shall be repaid by the Escrow Bank to the County as its absolute property free from any trust,
and the Escrow Bank shall thereupon be released and discharged with respect thereto and the
owners of such Prior Bonds shall look only to the County for the payment of the principal of,
and interest and any premium on, such Prior Bonds. Any right of any Prior Bondowner to look
to the County for such payment shall survive only so long as required under applicable law.
Section 12. Execution in Counterparts . This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument.
Section 13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts made and
performed in California.
S-1
IN WITNESS WHEREOF, the County and the Escrow Bank have each caused this
Agreement to be executed by their duly authorized officers all as of the date first above
written.
COUNTY OF CONTRA COSTA,
CALIFORNIA, for and on behalf of the
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT
NO. 2001-1 (NORRIS CANYON)
By
Catherine O. Kutsuris,
Director, Department of
Conservation and Development
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Escrow Bank
By
Vice President
03007.27:J11946
Exhibit A
EXHIBIT A
SCHEDULE OF PAYMENTS ON PRIOR BONDS
Payment
Date Interest
Called
Principal Premium Total Due
March 1, 2013 $ $ $ $
29079-220 JH:CKL 11-16-12
11-21-12v2
11-26-12
BOND PURCHASE AGREEMENT
$_______
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
_______, 2013
County of Contra Costa, California
30 Muir Road
Martinez, CA 94553
Attention: Director, Department of Conservation and Development
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated dba Stone & Youngberg, a Division of Stifel
Nicolaus (the “Underwriter”) offers to enter into this Bond Purchase Agreement (this “Purchase
Contract”) with the County of Contra Costa, California (the “Issuer”), for and on behalf of the
County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) (the
“District”), which, upon your acceptance of this offer, will be binding upon the Issuer and the
Underwriter. Capitalized terms used in this Purchase Contract and not otherwise defined herein
have the meanings given to such terms in the Fiscal Agent Agreement described below.
This offer is made subject to the acceptance by the Issuer of this Purchase Contract on
or before 5:00 p.m. on the date set forth above.
1. Upon the terms and conditions and in reliance upon the respective
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the Issuer, and the Issuer hereby agrees to sell to the Underwriter, all (but not less than all)
of the above-captioned bonds (the “Bonds”) at a purchase price (the “Purchase Price”) of
$_______ (equal to the par amount of the Bonds ($_______.00) plus a net original issue
premium/less a net original issue discount of $_____, less an Underwriter’s discount of
$________).
The Bonds will be issued by the Issuer for and on behalf of the District under the
authority of the Mello-Roos Community Facilities Act of 1982 (constituting Section 53311 et seq.
of the California Government Code) (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”) and Resolution No. _______ adopted on ______, 2012 (the “Bond Resolution”) by the
Board of Supervisors of the Issuer (the “Board of Supervisors”) acting as the legislative body
of the District. The special taxes that will provide a source of payment for the Bonds (the
“Special Taxes”) are being levied pursuant to (i) Resolution No. 2001/244, adopted by the
Board of Supervisors of the Issuer on June 5, 2001 (the “Resolution of Formation”), which
established the District and authorized the levy of a special tax within the District, (ii) a two-
2
thirds vote of the qualified electors at an election held in the District on June 5, 2001, and (iii)
Ordinance No. 2001/11 enacted by the Board of Supervisors of the Issuer on June 19, 2001
(the “Ordinance”), pursuant to which the Special Taxes were levied in the District. Together, the
Bond Resolution, the Resolution of Formation and the Ordinance are referred to as the
“Resolutions and the Ordinance” in this Purchase Contract.
The Bonds will be issued pursuant to the terms of a Fiscal Agent Agreement (the “Fiscal
Agent Agreement”), dated as of January 1, 2013, between the Issuer, for and on behalf of the
District, and The Bank of New York Mellon Trust Company, N.A., San Francisco, California, as
fiscal agent (the “Fiscal Agent”). The proceeds of the sale of the Bonds will be applied in
accordance with the Fiscal Agent Agreement to (i) refund in full the County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon) 2001 Special Tax Bonds (the “Prior
Bonds”); (ii) fund a debt service reserve fund for the Bonds; and (iii) pay costs of issuing the
Bonds.
The refunding of the Prior Bonds will be accomplished as described in an Escrow
Agreement, dated as of January 1, 2013 (the “Escrow Agreement”), by and between the
Issuer, for and on behalf of the District, and The Bank of New York Mellon Trust Company, N.A.,
as escrow bank (the “Escrow Bank”).
2. The Bonds will mature on the dates and in the principal amounts, and will bear
interest at the rates, as set forth in Exhibit B hereto. The Bonds will be subject to redemption as
set forth in Exhibit B. The Underwriter agrees to make a bona fide public offering of all of the
Bonds at the offering prices set forth on Exhibit B hereto.
3. The Issuer agrees to deliver to the Underwriter as many copies of the Official
Statement dated the date hereof relating to the Bonds (as supplemented and amended from
time to time, the “Final Official Statement”) as the Underwriter shall reasonably request as
necessary to comply with paragraph (b)(4) of Rule 15c2-12 under the Securities Exchange Act
of 1934, as amended (the “Rule”). The Issuer agrees to deliver such Final Official Statements
within seven (7) business days after the execution hereof, or such earlier date identified by the
Underwriter to be necessary to allow the Underwriter to meet its obligations under the Rule and
Rule G-32 of the Municipal Securities Rulemaking Board (“MSRB”). The Underwriter agrees to
file the Final Official Statement with the MSRB on or as soon as practicable after the Closing
Date (defined below). The Underwriter agrees to deliver a copy of the Final Official Statement
to each of its customers purchasing Bonds no later than the settlement date of the transaction.
The Issuer has authorized and approved the Preliminary Official Statement dated _____,
2012 relating to the Bonds (the “Preliminary Official Statement”) and the Final Official
Statement and consents to their distribution and use by the Underwriter in connection with the
offer and sale of the Bonds. The Issuer deems such Preliminary Official Statement final as of its
date for purposes of the Rule, except for information allowed by the Rule to be omitted, and has
executed a certificate to that effect in the form of Exhibit C.
In connection with issuance of the Bonds, and in order to assist the Underwriter in
complying with the Rule, the Issuer will execute a Continuing Disclosure Certificate dated the
date of issuance of the Bonds (the “Continuing Disclosure Certificate”). The form of the
Continuing Disclosure Certificate is attached as Appendix E to the Final Official Statement.
Digital Assurance Certification, L.L.C. will initially act as dissemination agent under the
Continuing Disclosure Certificate.
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4. The Issuer represents and warrants to the Underwriter that:
(a) The District is a community facilities district duly organized and validly
existing under the laws of the State of California (the “State”), including the Act. The
Issuer is duly organized and validly existing under the laws of the State, with the power
to act as the legislative body of the District, and has the full legal right, power and
authority, among other things, (i) upon satisfaction of the conditions in this Purchase
Contract and the Fiscal Agent Agreement, to issue the Bonds for the District for the
purpose specified in Section 1 hereof, (ii) to secure the Bonds in the manner
contemplated in the Fiscal Agent Agreement and (iii) to levy the Special Taxes according
to the rate and method of apportionment of special taxes for the District (the “Rate and
Method”).
(b) The Board of Supervisors has the full legal right, power and authority to
adopt the Resolutions and the Ordinance, and the Issuer has the full legal right, power
and authority for and on behalf of the District (i) to enter into this Purchase Contract, the
Fiscal Agent Agreement, the Escrow Agreement and the Continuing Disclosure
Certificate (such documents are collectively referred to herein as the “Issuer
Documents”), (ii) to issue, sell and deliver the Bonds to the Underwriter as provided
herein, and (iii) to carry out and consummate all other transactions on its part
contemplated by each of the Issuer Documents and the Resolutions and the Ordinance,
and the Issuer and the Board of Supervisors have complied with all provisions of
applicable law, including the Act and the Refunding Law, in all matters relating to such
transactions.
(c) The Issuer has duly authorized (i) the execution and delivery by the
Issuer for and on behalf of the District of the Bonds and the execution, delivery and due
performance by the Issuer of its obligations under the Issuer Documents, (ii) the
distribution and use of the Preliminary Official Statement and execution, delivery and
distribution of the Final Official Statement, and (iii) the taking of any and all such action
as may be required on the part of the Issuer to carry out, give effect to and consummate
the transactions on its part contemplated by such instruments. All consents or approvals
necessary to be obtained by the Issuer in connection with the foregoing have been
received, and the consents or approvals so received are still in full force and effect.
(d) The Resolutions and the Ordinance have been duly adopted by the Board
of Supervisors and are in full force and effect; and the Issuer Documents, when
executed and delivered by the Issuer and the other party thereto, will constitute legal,
valid and binding obligations of the Issuer for and on behalf of the District enforceable
against the Issuer in accordance with its terms, except as enforceability thereof may be
limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally.
(e) When delivered to the Underwriter, the Bonds will have been duly
authorized by the Board of Supervisors and duly executed, issued and delivered by the
Issuer and will constitute legal, valid and binding obligations of the Issuer for and on
behalf of the District enforceable against the Issuer in accordance with their respective
terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other
laws affecting creditors’ rights generally, and will be entitled to the benefit and security of
the Fiscal Agent Agreement.
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(f) The information relating to the Issuer and the District contained in the
Preliminary Official Statement is, and as of the Closing Date such information in the
Final Official Statement will be, true and correct in all material respects, and neither the
Preliminary Official Statement nor the Final Official Statement will as of the Closing Date
contain any untrue or misleading statement of a material fact relating to the Issuer or the
District or omit to state any material fact relating to the Issuer or the District necessary to
make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(g) If, at any time prior to the date twenty-five (25) days following the later of
the Closing (as described in Section 6 below) or the date the Underwriter no longer
retains, directly or as a member of an underwriting syndicate, an unsold balance of the
Bonds for sale to the public, which date shall be provided to the Issuer by written notice
of the Underwriter (the "End of the Underwriting Period"), any event of which the
Issuer has knowledge shall occur which might or would cause the Final Official
Statement to contain an untrue statement of a material fact or to omit to state any
material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, the Issuer
will promptly notify the Underwriter in writing of the circumstances and details of such
event. If, as a result of such event or any other event, it is necessary, in the opinion of
the Underwriter, the Issuer or their respective counsel, to amend or supplement the Final
Official Statement in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Issuer will forthwith
cooperate with the Underwriter in the prompt preparation and furnishing to the
Underwriter of a reasonable number of copies of an amendment of or a supplement to
the Final Official Statement, in form and substance reasonably satisfactory to the
Underwriter, which will so amend or supplement the Final Official Statement so that, as
amended or supplemented, it will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(h) None of the adoption of the Resolutions and the Ordinance, the execution
and delivery of the Issuer Documents or the Final Official Statement, the consummation
of the transactions on the part of the Issuer contemplated herein or therein and the
compliance by the Issuer with the provisions hereof or thereof will conflict with, or
constitute on the part of the Issuer, a material violation of, or a material breach of or
default under, (i) any indenture, mortgage, commitment, note or other agreement or
instrument to which the Issuer is a party or by which it is bound, (ii) any provision of the
State Constitution, or (iii) any existing law, rule, regulation, ordinance, judgment, order or
decree to which the Issuer (or the members of the Board of Supervisors or any of its
officers in their respective capacities as such) is subject, that would have a material
adverse affect on the ability of the Issuer to perform its obligations under the Issuer
Documents.
(i) The Issuer has never been in default at any time, as to principal of or
interest on any obligation which it has issued, including those which it has issued as a
conduit for another entity, which default may have an adverse effect on the ability of the
Issuer to consummate the transactions on its part under the Issuer Documents, except
as specifically disclosed in the Final Official Statement; and other than the Fiscal Agent
Agreement, the Issuer has not entered into any contract or arrangement of any kind
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which might give rise to any lien or encumbrance on the Special Taxes following
issuance of the Bonds.
(j) Except as is specifically disclosed in the Final Official Statement, there is
no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending with respect to which the Issuer or the District has
been served with process or known by the official of the Issuer executing this Purchase
Contract to be threatened, which in any way questions the powers of the Board of
Supervisors or the Issuer referred to in paragraph (b) above, or the validity of any
proceeding taken by the Board of Supervisors in connection with the issuance of the
Bonds, or wherein an unfavorable decision, ruling or finding could materially adversely
affect the transactions on the part of the Issuer contemplated by this Purchase Contract,
or of any other Issuer Document, or which, in any way, could adversely affect the validity
or enforceability of the Resolutions, the Ordinance, the Fiscal Agent Agreement, the
Escrow Agreement, the Bonds or this Purchase Contract or, to the knowledge of the
official of the Issuer executing this Purchase Contract, which in any way questions the
exclusion from gross income of the recipients thereof of the interest on the Bonds for
federal income tax purposes or in any other way questions the status of the Bonds under
State tax laws or regulations.
(k) Any certificate signed by an official of the Issuer authorized to execute
such certificate and delivered to the Underwriter in connection with the transactions
contemplated by the Issuer Documents shall be deemed a representation and warranty
by the Issuer to the Underwriter as to the truth of the statements therein contained.
(l) The Issuer has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The Bonds will be paid from Special Tax Revenues (as defined in the
Fiscal Agent Agreement) received by the Issuer and moneys held in certain funds and
accounts established under the Fiscal Agent Agreement and pledged thereunder to the
payment of the Bonds.
(n) The Special Taxes may lawfully be levied in accordance with the Rate
and Method, and the Ordinance, and, when levied, will be secured by a lien on the
property on which they are levied.
(o) The Fiscal Agent Agreement creates a valid pledge of and first lien upon
the Special Tax Revenues deposited thereunder, and the moneys in certain funds and
accounts established pursuant to the Fiscal Agent Agreement, 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.
(p) Except as disclosed in the Preliminary Official Statement and the Final
Official Statement, the Issuer has not failed in any material respect to comply with any
undertaking of the Issuer under the Rule in the previous five years.
(q) The Issuer acknowledges and agrees that: (i) the purchase and sale of
the Bonds pursuant to this Purchase Contract is an arm’s length, commercial transaction
between the Issuer and the Underwriter, (ii) in connection with such transaction, the
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Underwriter is acting solely as a principal and is not acting as a municipal advisor,
financial advisor or fiduciary to the Issuer; (iii) the Underwriter has not assumed any
advisory or fiduciary responsibility to the Issuer with respect to the transaction
contemplated hereby and the discussions, undertakings and proceedings leading thereto
(irrespective of whether the Underwriter has provided other services or is currently
providing other services to the Issuer on other matters) or any other obligation to the
Issuer except the obligations expressly set forth in this Purchase Contract and (iv) the
Issuer has consulted its own legal, accounting, tax, financial and other advisors, as
applicable, to the extent it has deemed appropriate in connection with the transaction
contemplated herein.
5. The Issuer covenants with the Underwriter that the Issuer will cooperate with the
Underwriter (at the cost and written directions of the Underwriter), in qualifying the Bonds for
offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as
the Underwriter may reasonably request; provided, however, that the Issuer shall not be
required to consent to suit or to service of process, or to qualify to do business, in any
jurisdiction. The Issuer consents to the use by the Underwriter of the Issuer Documents, the
Preliminary Official Statement and the Final Official Statement in the course of its compliance
with the securities or Blue Sky laws of the various jurisdictions related to the offering and sale of
the Bonds.
6. At 9:00 a.m. on _____, 2013 (the “Closing Date”) or at such other time and/or
date as shall have been mutually agreed upon by the Issuer and the Underwriter, the Issuer will
deliver or cause to be delivered to the Underwriter the Bonds in definitive form duly executed
and authenticated by the Fiscal Agent together with the other documents mentioned in Section
8 hereof; and the Underwriter will accept such delivery and pay the Purchase Price of the Bonds
by delivering to the Fiscal Agent for the account of the Issuer a check payable in federal funds
or making a wire transfer in federal funds payable to the order of the Fiscal Agent.
The activities relating to the final execution and delivery of the Bonds and the Fiscal
Agent Agreement and the payment therefor and the delivery of the certificates, opinions and
other instruments as described in Section 8 of this Purchase Contract shall occur at the offices
of Quint & Thimmig LLP, San Francisco, California (“Bond Counsel”). The payment for the
Bonds and simultaneous delivery of the Bonds to the Underwriter is herein referred to as the
“Closing.” The Bonds will be delivered as fully registered, book-entry only Bonds initially in
denominations equal to the principal amount of each maturity thereof. The Bonds will be
registered in the name of Cede & Co., as nominee of The Depository Trust Company, and will
be made available for checking by the Underwriter at such place as the Underwriter and the
Fiscal Agent shall agree not less than 24 hours prior to the Closing.
7. The Underwriter shall have the right to cancel its obligations to purchase the
Bonds if between the date hereof and the date of Closing:
(a) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it, or shall have
passed or recommended favorably, legislation introduced previous to the date hereof,
which legislation, if enacted in its form as introduced or as amended, would have the
purpose or effect of imposing federal income taxation upon revenues or other income of
the general character to be derived by the Issuer or by any similar body under the Fiscal
Agent Agreement or upon interest received on obligations of the general character of the
Bonds, or of causing interest on obligations of the general character of the Bonds, to be
7
includable in gross income for purposes of federal income taxation, and such legislation,
in the Underwriter’s opinion, materially adversely affects the market price of the Bonds;
or
(b) a tentative decision with respect to legislation shall be reached by a
committee of the House of Representatives or the Senate of the Congress of the United
States, or legislation shall be favorably reported or re-reported by such a committee or
be introduced, by amendment or otherwise, in or be passed by the House of
Representatives or the Senate, or recommended to the Congress of the United States
for passage by the President of the United States, or be enacted or a decision by a
federal court of the United States or the United States Tax Court shall have been
rendered, or a ruling, release, order, circular, regulation or official statement by or on
behalf of the United States Treasury Department, the Internal Revenue Service or other
governmental agency shall have been made or proposed to be made having the
purpose or effect, or any other action or event shall have occurred which has the
purpose or effect, directly or indirectly, of adversely affecting the federal income tax
consequences of owning the Bonds, including causing interest on the Bonds to be
included in gross income for purposes of federal income taxation, or imposing federal
income taxation upon revenues or other income of the general character to be derived
by the Issuer under the Fiscal Agent Agreement or upon interest received on obligations
of the general character of the Bonds, or the Bonds and also including adversely
affecting the tax-exempt status of the Issuer under the Code, which, in the opinion of the
Underwriter, materially adversely affects the market price of or market for the Bonds; or
(c) legislation shall have been enacted, or actively considered for enactment
with an effective date prior to the Closing, or a decision by a court of the United States
shall have been rendered, the effect of which is that the Bonds, including any underlying
obligations, or the Fiscal Agent Agreement, as the case may be, is not exempt from the
registration, qualification or other requirements of the Securities Act of 1933, as
amended and as then in effect, the Securities Exchange Act of 1934, as amended and
as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect;
or
(d) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the
subject matter shall have been issued or made or any other event occurs, the effect of
which is that the issuance, offering or sale of the Bonds, including any underlying
obligations, or the execution and delivery of the Fiscal Agent Agreement as
contemplated hereby or by the Final Official Statement, is or would be in violation of any
provision of the federal securities laws, including the Securities Act of 1933, as amended
and as then in effect, the Securities Exchange Act of 1934, as amended and as then in
effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or
(e) any event shall have occurred or any information shall have become
known to the Underwriter which causes the Underwriter to reasonably believe that the
Final Official Statement includes an untrue statement of a material fact, or omits to state
any material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and the Issuer fails to amend or
supplement such Final Official Statement to cure such omission or misstatement
pursuant to Section 4(g); or
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(f) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the
financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the
Bonds; or
(g) there shall be in force a general suspension of trading on the New York
Stock Exchange, the effect of which on the financial markets of the United States is such
as, in the reasonable judgment of the Underwriter, would materially adversely affect the
market for or market price of the Bonds; or
(h) a general banking moratorium shall have been declared by federal, New
York or State authorities; or
(i) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the Issuer or the District; or
(j) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by
any national securities exchange which adversely affects the Underwriter’s ability to sell
the Bonds; or
(k) the New York Stock Exchange or other national securities exchange, or
any governmental authority, shall impose, as to the Bonds or obligations of the general
character of the Bonds, any material restrictions not now in force, or increase materially
those now in force, with respect to the extension of credit by, or the charge to the net
capital requirements of, the Underwriter; or
(l) an amendment to the federal or State constitution shall be enacted or
action taken by any federal or State court, legislative body, regulatory body or other
authority materially adversely affecting the tax status of the Issuer, its property, income
or securities (or interest thereon), the validity or enforceability of the Special Tax or the
ability of the Issuer to issue the Bonds and levy the Special Tax as contemplated by the
Fiscal Agent Agreement, the Rate and Method and the Final Official Statement; or
(m) any rating on the Bonds shall have been downgraded or withdrawn by a
national rating service, which, in the Underwriter’s reasonable opinion, materially
adversely affects the marketability of the Bonds or the sale, at the contemplated offering
prices, by the Underwriter of the Bonds.
8. The obligation of the Underwriter to purchase the Bonds shall be subject (a) to
the performance by the Issuer of its obligations to be performed by it hereunder at and prior to
the Closing, (b) to the accuracy as of the date hereof and as of the time of the Closing of the
representations and warranties of the Issuer herein, and (c) to the following conditions, including
the delivery by the Issuer of such documents as are enumerated herein in form and substance
satisfactory to the Underwriter:
(a) At the time of Closing, (i) the Final Official Statement, this Purchase
Contract, the Continuing Disclosure Certificate, the Escrow Agreement and the Fiscal
Agent Agreement shall be in full force and effect and shall not have been amended,
modified or supplemented except as may have been agreed to by the Underwriter, and
9
(ii) the Issuer shall have duly adopted and there shall be in full force and effect such
resolutions and ordinances (including, but not limited to, the Resolutions and the
Ordinance) as, in the opinion of Bond Counsel, shall be necessary in connection with the
transactions contemplated hereby.
(b) Receipt of the Bonds, executed by the Issuer and authenticated by the
Fiscal Agent, at or prior to the Closing. The terms of the Bonds, when delivered, shall in
all instances be as described in Final Official Statement.
(c) At or prior to the Closing, the Underwriter shall receive the following
documents in such number of counterparts as shall be mutually agreeable to the
Underwriter and the Issuer:
(i) A final approving opinion of Bond Counsel dated the date of
Closing in the form attached to the Final Official Statement as Appendix B
(ii) A letter or letters of Bond Counsel addressed to the Underwriter,
which includes a statement to the effect that Bond Counsel’s final approving
opinion may be relied upon by the Underwriter to the same extent as if such
opinion were addressed to the Underwriter, and further provides:
(A) the statements contained in the Official Statement on the
cover page and under the captions “INTRODUCTION,” “THE 2013
BONDS” (other than information relating to DTC and its book-entry only
system, as to which no opinion need be expressed), “SECURITY AND
SOURCES OF PAYMENT FOR THE 2013 BONDS,” and “TAX
MATTERS,” and in Appendices A and B thereto, are accurate insofar as
such statements expressly summarize certain provisions of the Bonds,
the Fiscal Agent Agreement and Bond Counsel’s opinion concerning
certain federal tax matters relating to the Bonds;
(B) this Purchase Contract and the Escrow Agreement
constitute legal, valid and binding obligations of the Issuer enforceable
against the Issuer in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws affecting
enforcement of creditors’ rights in general and to the application of
equitable principles if equitable remedies are sought; and
(C) 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 pursuant to the Trust Indenture
Act of 1939, as amended.
(iii) A letter of Lofton & Jennings, A Professional Law Corporation
(“Disclosure Counsel”), addressed to the Issuer and the Underwriter, to the
effect that:
(A) during the course of serving as Disclosure Counsel in
connection with the issuance of the Bonds and without having undertaken
to determine independently or assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the
10
Final Official Statement, no information came to the attention of the
attorneys in such firm rendering legal services in connection with the
issuance of the Bonds that would lead them to believe that the Final
Official Statement (excluding therefrom the financial statements, any
financial or statistical data, or forecasts, charts, numbers, estimates,
projections, assumptions or expressions of opinion included in the Official
Statement, information regarding DTC, and the appendices to the Official
Statement, as to which no opinion need be expressed), as of the date
thereof or the Closing Date, contains any untrue statement of a material
fact or omits to state a 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;
(B) the Bonds are exempt from registration pursuant to the
Securities Act of 1933, as amended; and
(C) the Continuing Disclosure Certificate constitutes a legal,
valid and binding obligation of the Issuer enforceable against the Issuer in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws affecting enforcement of
creditors’ rights in general and to the application of equitable principles if
equitable remedies are sought.
(iv) The Final Official Statement executed on behalf of the Issuer by a
duly authorized officer of the Issuer.
(v) Certified copies of the Resolutions and the Ordinance.
(vi) Evidence of recordation in the real property records of the County
of Contra Costa of the Notice of Special Tax Lien in the form required by the Act.
(vii) A certificate, in form and substance as set forth in Exhibit A
hereto, of the Issuer, dated as of the Closing Date.
(viii) Evidence that Federal Form 8038 has been executed by the
Issuer and will be filed with the Internal Revenue Service.
(ix) Executed copies of the Fiscal Agent Agreement, the Escrow
Agreement and the Continuing Disclosure Certificate.
(x) An arbitrage certificate in form satisfactory to Bond Counsel.
(xi) An opinion, dated the Closing Date and addressed to the
Underwriter, of the County Counsel, to the effect that:
(A) the Issuer is duly organized and validly existing as a municipal
corporation under and by virtue of the Constitution and laws of the State,
with full legal right, power and authority to adopt the Resolutions and the
Ordinance;
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(B) the Resolutions and the Ordinance were each duly adopted at a
meeting of the Board of Supervisors, acting as legislative body of the
District which was called and held pursuant to law and with all public
notice required by law and at which a quorum was present and acting
throughout, and the Resolutions and the Ordinance are in full force and
effect and have not been amended or repealed, except as set forth
therein;
(C) 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 with respect to which the Issuer has been served with process or
to the knowledge of the County Counsel, is threatened, in any way
affecting the existence of the Issuer or the titles of the Issuer’s officials to
their respective offices, or seeking to restrain or to enjoin the issuance,
sale or delivery of the Bonds or the application of the proceeds thereof in
accordance with the Fiscal Agent Agreement, or the collection or
application of the Special Taxes to pay the principal of and interest on the
Bonds, or in any way contesting or affecting the validity or enforceability
of the Bonds, the Issuer Documents or any action of the Issuer
contemplated by any of said documents, or in any way contesting the
completeness or accuracy of the Final Official Statement or the powers of
the Issuer or its authority with respect to the Bonds, the Issuer
Documents or any action on the part of the Issuer contemplated by any of
said documents, wherein an unfavorable decision, ruling, or finding could
materially adversely affect the validity or enforceability of the Bonds or the
Issuer Documents;
(D) the execution and delivery of the Bonds and the Issuer
Documents, and compliance with the provisions of each, will not conflict
with or constitute a breach of or default under any loan agreement, note,
ordinance, resolution, indenture, contract, agreement or other instrument
of which the Issuer is a party or is otherwise subject or bound, a
consequence of which could be to materially and adversely affect the
ability of the Issuer to perform its obligations under the Bonds or the
Issuer Documents;
(E) all approvals, consents, authorization, elections and orders of or
filings or registrations with any 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 ability of the Issuer, to perform its obligations under the Bonds or the
Issuer Documents, have been obtained or made, as the case may be,
and are in full force and effect; and
(F) based upon the information made available to the County Counsel
in the course of his participation in the transaction and without having
undertaken to determine independently or assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Final Official Statement, nothing has come to the attention of the County
Counsel which has led the County Counsel to believe that the Final
Official Statement (excluding therefrom the financial and statistical data
12
included in the Final Official Statement, as to which no opinion need be
expressed) contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading in any material respect;
(xii) In connection with printing and distribution of the Preliminary
Official Statement, an executed certificate of the Issuer in the form attached
hereto as Exhibit C.
(xiii) A certificate in form and substance as set forth in Exhibit D hereto
of the Fiscal Agent/Escrow Bank and an opinion of its counsel in form and
substance satisfactory to the Underwriter.
(xiv) A certificate in form and substance as set forth in Exhibit E hereto,
of Goodwin Consulting Group (“Special Tax Consultant”), dated as of the
Closing Date.
(xv) A defeasance opinion of Bond Counsel with respect to the Prior
Bonds.
(xvi) The report of an independent certified public accountant that
satisfies the requirements of Section 9.03 of the Fiscal Agent Agreement, dated
as of June 1, 2001, relating to the Prior Bonds.
(xvii) Evidence satisfactory to the Underwriter and Underwriter’s
Counsel that (A) the disclosure in the Official Statement regarding the
compliance by the County and certain related entities identified by the County
and the Underwriter in the previous five years with their continuing disclosure
undertakings is true and accurate and (B) the County has established reasonable
procedures to ensure compliance with its continuing disclosure undertakings,
including the Continuing Disclosure Certificate, in the future.
(xviii) A rating letter evidencing the rating disclosed in the Official
Statement.
(xix) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter or Bond Counsel may
reasonably request to evidence compliance by the Issuer with legal
requirements, the truth and accuracy, as of the time of Closing, of the respective
representations of the Issuer herein contained and the due performance or
satisfaction by the Issuer at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied.
If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter
contained in this Purchase Contract, or if the obligations of the Underwriter to purchase and
accept delivery of the Bonds shall be terminated for any reason permitted by this Purchase
Contract, this Purchase Contract shall terminate and neither the Underwriter nor the Issuer shall
be under further obligation hereunder; except that the respective obligations to pay expenses,
as provided in Section 11 hereof shall continue in full force and effect.
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9. The obligations of the Issuer to issue and deliver the Bonds on the Closing Date
shall be subject, at the option of the Issuer, to the performance by the Underwriter of its
obligations to be performed hereunder at or prior to the Closing Date, and to the delivery by
Bond Counsel of the opinion described in Section 8(c)(i) and by Disclosure Counsel of the letter
described in Section 8(iii).
10. All representations, warranties and agreements of the Issuer hereunder shall
remain operative and in full force and effect, regardless of any investigations made by or on
behalf of the Underwriter, and shall survive the Closing.
11. The Issuer shall pay or cause to be paid from any lawfully available funds of the
District all expenses incident to the performance of its obligations under this Purchase Contract,
including, but not limited to, delivery of the Bonds, costs of printing the Bonds, the Preliminary
Official Statement and the Final Official Statement, any amendment or supplement to the
Preliminary Official Statement or Final Official Statement and this Purchase Contract, fees and
disbursements of Bond Counsel and Disclosure Counsel, the financial advisor and other
consultants engaged by the Issuer, including the fees and expenses of the Special Tax
Consultant, the California Debt Investment and Advisory Commission fee, fees of the Fiscal
Agent and the Escrow Bank, and fees and disbursements in connection with the qualification of
the Bonds for sale under the securities or “Blue Sky” laws of the various jurisdictions and the
preparation of “Blue Sky” memoranda.
The Underwriter shall pay all advertising expenses in connection with the public offering
of the Bonds, and all other expenses incurred by it in connection with its public offering and
distribution of the Bonds, including fees and expenses of its counsel, if any.
12. Any notice or other communication to be given to the Issuer under this Purchase
Contract may be given by delivering the same in writing at its address set forth above, and any
notice or other communication to be given to the Underwriter under this Purchase Contract may
be given by delivering the same in writing to the following: Stifel, Nicolaus & Company,
Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus, One Ferry Building, San
Francisco, CA 94111, Attention: Eileen Gallagher, Managing Director.
13. This Purchase Contract is made solely for the benefit of the Issuer and the
Underwriter (including the successors or assigns of the Underwriter) and no other person,
including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue
hereof.
14. This Purchase Contract shall be governed by and construed in accordance with
the laws of the State applicable to contracts made and performed in the State.
14
15. This Purchase Contract shall become effective upon acceptance hereof by the
Issuer.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED DBA STONE &
YOUNGBERG, A DIVISION OF
STIFEL NICOLAUS
By:
Authorized Representative
Accepted and agreed to as of
the date first above written:
COUNTY OF CONTRA COSTA,
CALIFORNIA, for and on behalf of
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
Catherine Kutsuris
Director, Department of Conservation and
Development
A-1
EXHIBIT A
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
ISSUER CLOSING CERTIFICATE
I, the undersigned, hereby certify that I am the _________ of the County of Contra
Costa, California, the Board of Supervisors of which is the legislative body for County of Contra
Costa Community Facilities District No. 2001-1 (Norris Canyon) (the “Community Facilities
District”), a community facilities district duly organized and existing under the laws of the State
of California (the “State”) and that as such, I am authorized to execute this Certificate on behalf
of the Issuer in connection with the issuance of the above-referenced 2013 Special Tax
Refunding Bonds (the “Bonds”).
I hereby further certify on behalf of the Issuer that:
(A) no litigation is pending with respect to which the Issuer has been served
with process or, to my best knowledge after reasonable inquiry, threatened (1) to restrain
or enjoin the issuance of any of the Bonds or the collection of Special Taxes pledged
under the Fiscal Agent Agreement; (2) in any way contesting or affecting the authority for
the issuance of the Bonds or the validity or enforceability of the Bonds, the Fiscal Agent
Agreement, the Escrow Agreement, the Continuing Disclosure Certificate or the
Purchase Contract; or (3) in any way contesting the existence or powers of the Issuer;
(B) the representations and warranties made by the Issuer in the Issuer
Documents are true and correct in all material respects on the Closing Date, with the
same effect as if made on the Closing Date;
(C) no event has occurred since the date of the Final Official Statement that,
as of the Closing Date, would cause any statement or information contained in the Final
Official Statement to be incorrect or incomplete in any material respect or would cause
the information in the Final Official Statement to contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make such statements
therein, in the light of the circumstances under which they were made, not misleading;
and
(D) as of the date hereof, the Fiscal Agent Agreement is in full force and
effect in accordance with its terms and has not been amended, modified or
supplemented except in such case as may have been agreed to by the Underwriter; and
(E) the Issuer has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under the Issuer Documents prior to
issuance of the Bonds.
Capitalized terms used in this Certificate and not defined herein shall have the same
meaning set forth in the Bond Purchase Agreement dated ______, 2013, between the Issuer,
A-2
for and on behalf of the Community Facilities District, and Stifel, Nicolaus & Company,
Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
hereinbelow set forth.
Dated: [Closing Date]
COUNTY OF CONTRA COSTA, CALIFORNIA, for
and on behalf of the COUNTY OF CONTRA
COSTA COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
[to come]
B-1
EXHIBIT B
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
Serial Bonds
Maturity
Date
Principal
Amount
Interest
Rate
Yield
Price
Term Bond
Redemption Provisions
[to come]
C-1
EXHIBIT C
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
RULE 15C2-12 CERTIFICATE
The undersigned hereby certifies and represents that she is the duly elected and acting
Community Development Bond Program Manager of the County of Contra Costa, California (the
“Issuer”), the Board of Supervisors of which is the legislative body of the County of Contra
Costa Community Facilities District No. 2001-1 (Norris Canyon) (the “District”), and is duly
authorized to execute and deliver this Certificate and further hereby certifies on behalf of the
Issuer as follows:
(1) This Certificate is delivered in connection with the offering and sale of the
above-referenced bonds (the “Bonds”) in order to enable the underwriter of the Bonds to
comply with Securities and Exchange Commission Rule 15c2-12 under the Securities
Exchange Act of 1934, as amended (the “Rule”).
(2) In connection with the offering and sale of the Bonds, there has been
prepared a Preliminary Official Statement, setting forth information concerning the
Bonds, the Issuer and the District (the “Preliminary Official Statement”).
(3) As used herein, “Permitted Omissions” shall mean the offering price(s),
interest rate(s), selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings and other terms of the Bonds depending on such
matters, all with respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of the Rule.
IN WITNESS WHEREOF, I have hereunto set my hand as of _____, 2012.
COUNTY OF CONTRA COSTA,
CALIFORNIA, for and on behalf of the
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
Community Development Bond Program
Manager
D-1
EXHIBIT D
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF FISCAL AGENT/ESCROW BANK
The undersigned hereby states and certifies that the undersigned is an authorized officer
of The Bank of New York Mellon Trust Company, N.A., (the “Bank”), which is acting (A) as fiscal
agent (the “Fiscal Agent”) under that certain Fiscal Agent Agreement, dated as of January 1,
2013 (the “Fiscal Agent Agreement”), by and between the County of Contra Costa, California
(the “Issuer”), for and on behalf of the County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) (the “District”) and the Fiscal Agent, relating to the captioned bonds
(the “Bonds”), and (B) as escrow bank (the “Escrow Bank”) under the Escrow Agreement,
dated as of January 1, 2013 (the “Escrow Agreement”), between the Issuer, for and on behalf
of the District, and the Escrow Bank, and as such, is familiar with the following facts and is
authorized and qualified to certify the following facts on behalf of the Bank:
(1) The Bank is duly organized and existing as a national banking association
under the laws of the United States of America, having the full power and authority to
enter into and perform its duties under the Fiscal Agent Agreement and the Escrow
Agreement.
(2) The Fiscal Agent Agreement and the Escrow Agreement have been duly
authorized, executed and delivered by the Bank, and are legal, valid and binding
agreements of the Bank enforceable upon the Bank in accordance with their respective
terms.
(3) The Bonds have been authenticated by a duly authorized representative of
the Bank in accordance with the Fiscal Agent Agreement.
(4) To the best knowledge of the Bank, after due inquiry, there is no action, suit,
proceeding or investigation, at law or in equity, before or by any court or governmental
agency, public board or body pending against the Bank or threatened against the Bank
which in the reasonable judgment of the Bank would affect the existence of the Bank or
in any way contesting or affecting the validity or enforceability of the Fiscal Agent
Agreement or the Escrow Agreement or contesting the powers of the Bank or its
authority to enter into and perform its obligations under the Fiscal Agent Agreement and
the Escrow Agreement.
Dated: [closing date] THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
By
Authorized Officer
E-1
EXHIBIT E
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF SPECIAL TAX CONSULTANT
Goodwin Consulting Group, Inc. (the “Special Tax Consultant”) has been retained as
Special Tax administrator for the County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) (the “District”) and has reviewed the Rate and Method of
Apportionment of Special Tax for the District (the “Rate and Method”), a copy of which is set
forth in Appendix C to the Official Statement, dated ______, 2013 (the “Official Statement”)
relating to the above-captioned bonds (the “Bonds”).
Based upon such review, the Special Tax Consultant hereby certifies that the Special
Tax, if collected in the maximum amounts permitted pursuant to the Rate and Method on the
date hereof, would generate the debt service coverage shown in Table _____ of the Official
Statement, provided that the annual debt service figures on the attached debt service schedule,
which were relied upon by Special Tax Consultant, are substantially true and correct.
Although the Special Tax, if collected in the maximum amounts pursuant to the Rate and
Method, would generate the debt service coverage shown in Table _____ of the Official
Statement, no representation is made herein as to actual amounts that will be collected in future
years.
All information with respect to the Rate and Method in the Official Statement and all
other information sourced to the Special Tax Consultant is true and correct as of the date of the
Official Statement and as of the date hereof, and a true and correct copy of the Rate and
Method is attached to the Official Statement as Appendix B.
Dated: ____, 2013
Goodwin Consulting Group, Inc.
By:
Susan Goodwin
Formatted: Left: 1", Right: 1",
Suppress Endnotes
12036\pos-3
L&J DRAFT #3
11/27/12
PRELIMINARY OFFICIAL STATEMENT DATED ________________, 2013
NEW ISSUE–BOOK-ENTRY ONLY S&P: _____
(See “RATINGS”)
In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject
however, to certain qualifications described in this Official Statement, under existing law, interest on the
2013 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 2013 Bonds is exempt
from personal income taxation imposed by the State of California. See “Tax Matters”
$5,885,000*
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
Dated: Date of Delivery Due: September 1, as shown below
The County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) 2013
Special Tax Refunding Bonds (the “2013 Bonds”) are being issued to provide funds to: (i) refund and
defease all of the $5,720,000 outstanding principal amount of County of Contra Costa Community
Facilities District No 2001-1 (Norris Canyon) 2001 Special Tax Bonds; (ii) fund a reserve fund as
security for the 2013 Bonds; and (iii) pay certain costs associated with the issuance of the 2013 Bonds.
See “PLAN OF REFUNDING” and “ESTIMATED SOURCES AND USES OF FUNDS.” The 2013 Bonds
are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended
(constituting Section 53311 et seq. of the California Government Code) (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”) and a Fiscal Agent Agreement (the “Fiscal Agent
Agreement”), dated as of January 1, 2013, by and between the County of Contra Costa (the “County”) for
and on behalf of the County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon)
(the “District”) and The Bank of New York Mellon Trust Company, N.A., San Francisco, California, as
Fiscal Agent.
The 2013 Bonds are limited obligations of the County payable solely from a special tax (the
“Special Tax”) levied by the County on certain real property within the District and are secured by a
pledge of all Special Tax Revenues (defined herein) and certain moneys deposited in certain funds
established under the Fiscal Agent Agreement. The Special Tax is levied according to the rate and
method of apportionment of the Special Tax and does not constitute a personal indebtedness of the
respective property owners. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–
Special Tax Authorization,” “–Special Tax Formula” and APPENDIX A–“RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX.”
The 2013 Bonds will be issued as fully registered bonds, without coupons, in the denomination of
$5,000 or any integral multiple thereof, in book-entry form, initially registered in the name of Cede &
Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchases of
beneficial interests in the 2013 Bonds will not receive physical certificates representing their interest in
the 2013 Bonds. For so long as the 2013 Bonds are registered in the name of Cede & Co., the Fiscal
12036\pos-3
Agent will make all payments of principal and interest on the 2013 Bonds to DTC, which, in turn, is
obligated to remit such principal and interest to DTC Participants (defined herein) for subsequent
disbursement to the Beneficial Owners (defined herein) of the 2013 Bonds. See APPENDIX F–“DTC
AND THE BOOK-ENTRY ONLY SYSTEM.” Interest on the 2013 Bonds will be payable on March 1 and
September 1 of each year (each an “Interest Payment Date”), commencing September 1, 2013. See “THE
2013 BONDS–Description of the 2013 Bonds.”
The 2013 Bonds are subject to optional redemption prior to their stated maturities. The 2013
Bonds are subject to mandatory redemption prior to their stated maturities, as a whole or in part, on any
Interest Payment Date, at a redemption price equal to 103% of the 2013 Bonds to be redeemed from
prepayments of the Special Tax. See “THE 2013 BONDS–Redemption Provisions.”
The Series 2013 Bonds are limited obligations of the County on behalf of the District payable
solely from the Special Tax (including any prepayments thereof and proceeds collected from the sale of
property pursuant to foreclosure provisions as set forth in the Fiscal Agent Agreement for delinquency
in payment of the Special Tax) and certain funds established pursuant to the Fiscal Agent Agreement
and held by the Fiscal Agent, as more fully described herein. Neither the faith and credit nor any
general taxing power of the County or the State of California or any political subdivision thereof is
pledged to the payment of the 2013 Bonds. Except for the Special Tax, no other taxes are pledged to
the payment of the 2013 Bonds.
MATURITY SCHEDULE
(See inside cover page)
This cover page contains certain information for quick reference only. It is not a complete
summary of the terms of this bond issue. Investors must read the entire Official Statement to obtain
information essential to the making of an informed investment decision with respect to the 2013 Bonds.
See “CERTAIN RISK FACTORS” for a discussion of certain risk factors that should be considered, in
addition to the other matters discussed herein, in considering the investment quality of the 2013 Bonds.
The 2013 Bonds are offered when, as and if issued by the County for the District and accepted by
the Underwriter, subject to the approval as to their legality by Quint & Thimmig, LLP, San Francisco,
California, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for
the County and the District by County Counsel, and Lofton & Jennings, San Francisco, California,
Disclosure Counsel, and for the Underwriter by Jones Hall, A Professional Law Corporation, San
Francisco, California, Underwriter’s Counsel. It is anticipated that the 2013 Bonds will be available for
delivery in book-entry only form through the facilities of DTC in New York, New York on or about
__________, 2013.
Stone & Youngberg, a Division of Stifel Nicolaus
Dated: __________________, 2013
_______________
* Preliminary, subject to change.
12036\pos-3
$5,885,000*
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
MATURITY SCHEDULE
Maturity Date Principal Interest
(September 1) Amount Rate Yield CUSIP No.†
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
_______________
† Copyright 2013, American Bankers Association. CUSIP data herein is provided by Standard and Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in
any way as a substitute for the CUSIP Service. CUSIP numbers are provided for reference only. Neither the County nor
the Underwriter is responsible for the accuracy, the selection or uses of the CUSIP numbers, and no representation is made
as to their correctness on the applicable 2013 Bonds or as included herein. The CUSIP numbers of specific maturities are
subject to change following the issuance of the 2013 Bonds as a result of various actions, including, but not limited to, a
refunding in whole or in part or as the result of the procurement of a secondary market portfolio insurance or other similar
enhancement by investors that is applicable to all or a portion of certain maturities of the 2013 Bonds.
12036\pos-3
i
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No dealer, broker, salesperson or other person has been authorized by the County or the District to give any
information or to make any representation with respect to the 2013 Bonds other than those contained herein and, if given
or made, such other information or representation must not be relied upon as having been authorized by any of the
foregoing. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy nor shall there
be any sale of the 2013 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer,
solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers of the 2013 Bonds. Statements
contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so
described herein, are intended solely as such and are not to be construed as a representation of facts.
The information set forth herein has been obtained from the County and the District and from other sources and
is believed to be reliable but is not guaranteed as to accuracy or completeness. The information and expressions of
opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County
or the District since the date hereof. This Official Statement is submitted in connection with the sale of the 2013 Bonds
referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in
writing by the County. All summaries of the documents and laws are made subject to the provisions thereof and do not
purport to be complete statements of any or all such provisions. All capitalized terms used herein, unless noted otherwise,
shall have the meanings prescribed in the Fiscal Agent Agreement. This Official Statement, including any supplement or
amendment hereto, is intended to be deposited with the Electronic Municipal Market Access site maintained by the
Municipal Securities Rulemaking Board.
Any statement made in this Official Statement involving any forecast or matter of estimates or opinion, whether
or not expressly stated, is intended solely as such and not as a representation of fact. Certain statements included or
incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the
United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act
of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended (the “Securities Act”).
Such forward-looking statements are generally identified by use of the words “plan,” “project,” “expect,” “estimate,”
“budget” or other similar words. Such forward-looking statements refer to the achievement of certain results or other
expectations or performance which involve known and unknown risks, uncertainties and other factors. These risks,
uncertainties and other factors may cause actual results, performance or achievements to be materially different from any
projected results, performance or achievements described or implied by such forward looking statements. Neither the
County nor the District plans to issue updates or revisions to such forward-looking statements if or when the expectations,
events, conditions or circumstances on which such statements are based, occur, or if actual results, performance or
achievements are materially different from any results, performance or achievements described or implied by such
forward-looking statements.
The 2013 Bonds have not been registered with the Securities and Exchange Commission by reason of the
provisions of Section 3(a)(2) of the Securities Act of 1933, as amended. The registration or qualification of the 2013
Bonds in accordance with applicable provisions of Securities Laws of the states in which these Bonds have been registered
or qualified, and the exemption from registration or qualification in other states, shall not be regarded as a recommendation
thereof. Neither these states nor any of their agencies have passed upon the merits of the securities or the accuracy or
completeness of this Official Statement. Any representation to the contrary may be a criminal offense.
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, their 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 completeness of such information.
In connection with the offering of the 2013 Bonds, the Underwriter may overallot or effect transactions which
stabilize or maintain the market price of the 2013 Bonds offered hereby at a level above that which might otherwise prevail
in the open market. Such stabilization, if commenced, may be discontinued at any time. The Underwriter may offer and
sell the 2013 Bonds to certain dealers, institutional investors and others at prices lower than the public offering prices
stated on the inside cover page hereof and said public offering prices may be changed from time to time by the
Underwriter.
The County maintains a website. Unless specifically indicated otherwise, the information presented on that
website is not incorporated by reference as part of this Official Statement and should not be relied upon in making
investment decisions with respect to the 2013 Bonds.
12036\pos-3
ii
COUNTY OF CONTRA COSTA
Board of Supervisors
Mary N. Piepho
(District 3)
Chair
John M. Gioia Candace Andersen
(District 1) (District 2)
Vice Chair
Karen Mitchoff Federal D. Glover
(District 4) (District 5)
County Staff
David J. Twa
Clerk of the Board and County Administrator
Catherine Kutsuris
Director, Department of Conservation and Development
Robert R. Campbell Russell V. Watts
Auditor-Controller Treasurer-Tax Collector
Sharon L. Anderson Stephen L. Weir
County Counsel County Clerk-Recorder
SPECIAL SERVICES
Quint & Thimmig LLP
San Francisco, California
Bond Counsel
Goodwin Consulting Group, Inc.
Sacramento, California
Special Tax Consultant
Lofton & Jennings
San Francisco, California
Disclosure Counsel
The Bank of New York Mellon Trust Company, N.A.
San Francisco, California
Fiscal Agent
Fieldman, Rolapp & Associates
Irvine, California
Financial Advisor
12036\pos-3
iii
TABLE OF CONTENTS
Page Page
INTRODUCTION ..................................................... 1
General; Authority for Issuance ............................. 1
Purpose .................................................................. 2
The County ............................................................ 2
The District ............................................................ 2
Security and Sources of Payment for the
2013 Bonds ................................................... 2
Risks to Bondowners ............................................. 3
Continuing Disclosure ........................................... 3
Tax Matters ............................................................ 3
Additional Information .......................................... 4
PLAN OF REFUNDING .......................................... 4
ESTIMATED SOURCES AND USES OF FUNDS . 6
DEBT SERVICE SCHEDULE ................................. 7
Debt Service Schedule ........................................... 7
THE 2013 BONDS .................................................... 8
Authority for Issuance ........................................... 8
Description ............................................................. 8
Redemption Provisions .......................................... 8
Purchase of Bonds in Lieu of Redemption ............ 9
Redemption Procedures ......................................... 9
SECURITY AND SOURCES OF PAYMENT FOR
THE 2013 BONDS ......................................... 10
General ................................................................. 10
Special Tax Authorization ................................... 10
Special Tax is not a Personal Obligation ............. 12
Special Tax Formula ............................................ 12
Reserve Fund ....................................................... 13
Deposit of Special Tax; Flow of Funds ............... 14
The Teeter Plan .................................................... 14
Covenant to Foreclose ......................................... 15
Limited Obligation ............................................... 16
Limited Issuance of Parity Bonds Only
for Refunding .............................................. 16
THE DISTRICT ...................................................... 17
General; Location and Description ...................... 17
Status of Development ......................................... 17
Projected Debt Service Coverage ........................ 19
Property Values in the District ............................. 20
Secured Property Tax Levies, Collections
and Delinquencies ....................................... 22
Residential Mortgage Foreclosure
Activity ........................................................ 22
Public Utilities ..................................................... 22
Direct and Overlapping Debt ............................... 23
CERTAIN RISK FACTORS ................................... 24
Insufficiency of Special Tax Revenues ................ 24
Bankruptcy and Foreclosure Delays .................... 25
Hazardous Materials ............................................ 27
Geologic, Topographic and Climatic
Conditions ................................................... 27
Federal Government Interests in Property ........... 28
Non-Cash Payments of the Special Tax ............... 29
Payment of the Special Tax is not a
Personal Obligation of the Owners ............. 29
Limitations on Remedies ..................................... 30
Loss of Tax Exemption ........................................ 30
Proceedings to Reduce or Terminate the
Special Tax .................................................. 30
Secondary Markets and Prices ............................. 31
No Acceleration Provision ................................... 31
THE COUNTY ........................................................ 31
CONTINUING DISCLOSURE .............................. 32
ABSENCE OF MATERIAL LITIGATION ........... 32
TAX MATTERS ..................................................... 32
CERTAIN LEGAL MATTERS .............................. 35
FINANCIAL ADVISOR ......................................... 35
RATING .................................................................. 35
UNDERWRITING .................................................. 35
MISCELLANEOUS ................................................ 36
MAPS AND TABLES
Page
Table 1 – Prior Bonds .................................................................................................................................................... 5
Table 2 – Debt Service Schedule ................................................................................................................................... 7
Table 3 – Maximum Special Tax by Land Use Classification ................................................................................... 18
Table 4 – Projected Debt Service Coverage ................................................................................................................ 19
Table 5 – Historical Assessed Value of Taxable Property ......................................................................................... 20
Table 6 – Assessed Value of Residential Property-to-Special Tax Lien Categories .................................................. 21
Table 7 – Historical Special Tax Delinquency ............................................................................................................ 22
Table 8 – Direct and Overlapping Debt Report ........................................................................................................... 23
Table 9 – Typical Property Tax Bill ............................................................................................................................ 24
12036\pos-3
iv
APPENDICES
Page
APPENDIX A SUMMARY OF THE FISCAL AGENT AGREEMENT ............................................................ A-1
APPENDIX B PROPOSED FORM OF OPINION OF BOND COUNSEL......................................................... B-1
APPENDIX C RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ....................................... C-1
APPENDIX D GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION ....................... D-1
APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE ....................................................... E-1
APPENDIX F DTC AND THE BOOK ENTRY SYSTEM ................................................................................. F-1
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v
[INSERT AREA MAP HERE]
12036\pos-3
$5,885,000*
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
INTRODUCTION
This introduction contains only a brief summary of certain of the terms of the 2013 Bonds being
offered, and a full review should be made of the entire Official Statement including the cover page, the
table of contents and the appendices for a more complete description of the terms of the 2013 Bonds. All
statements contained in this introduction are qualified in their entirety by reference to the entire Official
Statement. All capitalized terms used in this Official Statement and not otherwise defined herein have the
meanings given to such terms as set forth in the Fiscal Agent Agreement (defined below). See
APPENDIX A–“SUMMARY OF THE FISCAL AGENT AGREEMENT–DEFINITIONS.”
General; Authority for Issuance
The purpose of this Official Statement, including the cover page, the inside cover page and the
appendices, is to furnish information in connection with the sale and delivery by the County of Contra
Costa (the “County”) of $5,885,000* principal amount of County of Contra Costa Community Facilities
District No 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds (the “2013 Bonds”).
The 2013 Bonds are issued pursuant to the provisions of the Mello-Roos Community Facilities
Act of 1982, as amended (being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the
State of California, constituting Section 53311 et seq. of the California Government Code) (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”), and pursuant to a Fiscal Agent Agreement, dated as
of January 1, 2013 (the “Fiscal Agent Agreement”), by and between the County, for and on behalf of the
County of Contra Costa Community Facilities District No 2001-1 (Norris Canyon) (the “District”), and
The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”).
Under the Act, the Board of Supervisors of the County (the “Board of Supervisors”), as the
legislative body of the District, is authorized to issue bonds and levy and collect a special tax within the
District to repay such indebtedness.
The 2013 Bonds are secured solely by a pledge of the annual special tax (the “Special Tax”)
levied by the County (including any prepayment thereof and proceeds from foreclosure sales pursuant to
the Fiscal Agent Agreement) on Taxable Property within the District pursuant to the Act and the funds
and accounts established pursuant to the Fiscal Agent Agreement. See “SECURITY AND SOURCES OF
PAYMENT FOR THE 2013 BONDS.” The Special Tax is levied in accordance with the Rate and Method
of Apportionment of Special Tax (the “Special Tax Formula”) in an amount sufficient to pay the principal
and interest on the 2013 Bonds, pay the administrative expenses of the District and to make any
replenishments to the Reserve Fund consistent with the Special Tax Formula. The Special Tax is
included on the regular property tax bill sent to the record owners of properties within the District. The
County covenants for the benefit of the owners of the 2013 Bonds, under certain circumstances described
herein, to commence foreclosure actions against property with delinquent Special Tax and to diligently
pursue such actions to completion. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013
BONDS–Special Tax Authorization” and “–Covenant for Foreclosure.”
_____________
* Preliminary, subject to change.
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Purpose
The 2013 Bonds are being issued to provide funds to: (i) refund and defease all of the outstanding
$5,720,000 principal amount of County of Contra Costa Community Facilities District No 2001-1 (Norris
Canyon) 2001 Special Tax Bonds (the “Prior Bonds”); (ii) fund a reserve fund as security for the 2013
Bonds; and (iii) pay certain costs associated with the issuance of the 2013 Bonds. See “PLAN OF
REFUNDING” and “ESTIMATED SOURCES AND USES OF FUNDS.”
The County
The County is located northeast of the San Francisco Bay and is the ninth most populous County
in the State of California. As of January 1, 2012, the population within the County was 1,065,117. For
economic and demographic information with respect to the County, see APPENDIX A–“GENERAL
COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION.”
The District
The District, created in 2001, is located in an unincorporated portion of the County near the
western edge of the City of San Ramon. For the location of the District, see the map on page v. The
District is comprised of approximately 1,189 gross acres, of which approximately 800 acres is open space.
For Fiscal Year 2012-13, the Special Tax was levied on 271 parcels of Residential Property (as defined
herein) of the total 361 parcels within the District. The development within the District, known as “Norris
Canyon Estates,” is a gated community, featuring large, single-family homes on one-third to one-half acre
sites, walking trails, tennis and basketball courts, playground and community centers. The aggregate
Fiscal Year 2012-13 assessed value of the 271 parcels of Residential Property subject to the Fiscal Year
2012-13 Special Tax levy is $373,218,307, which is more than 62* times the principal amount of the
2013 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–Special Tax
Formula” and “THE DISTRICT–Value of the District” and “–Direct and Overlapping Debt.”
Security and Sources of Payment for the 2013 Bonds
Payments of interest on and principal of the 2013 Bonds will be made solely from the proceeds of
the Special Tax received by the County, including any scheduled payments thereof, interest and proceeds
of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Tax to the
amount of said interest, but shall not include any interest in excess of the interest due on the 2013 Bonds
or any penalties collected in connection with any such foreclosure (the “Special Tax Revenues”). The
Special Tax is authorized to be levied annually by the Board of Supervisors, acting as the legislative body
of the District, on all Taxable Property in the District under and pursuant to the Act and the election held
in the District on June 5, 2001. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–
Special Tax Authorization.”
The Series 2013 Bonds are limited obligations of the County on behalf of the District payable
solely from the Special Tax (including any prepayments thereof and proceeds collected from the sale of
property pursuant to foreclosure provisions as set forth in the Fiscal Agent Agreement for delinquency
in payment of the Special Tax) and certain funds established pursuant to the Fiscal Agent Agreement
and held by the Fiscal Agent, as more fully described herein. Neither the faith and credit nor any
general taxing power of the County or the State of California or any political subdivision thereof is
pledged to the payment of the 2013 Bonds. Except for the Special Tax, no other taxes are pledged to
the payment of the 2013 Bonds.
_______________
* Preliminary, subject to change.
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If the Special Tax is not paid when due, the only other source of funds to repay the 2013 Bonds
will be the amounts held by the Fiscal Agent in certain of the funds established under the Fiscal Agent
Agreement, including amounts held in the Reserve Fund and the proceeds, if any, from foreclosure sales
of land with delinquent Special Tax. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013
BONDS–Covenant to Foreclose.”
Reserve Fund. A reserve fund for the 2013 Bonds (the “Reserve Fund”) is established under the
Fiscal Agent Agreement. The Reserve Fund is required to be maintained in the amount of the Reserve
Requirement (defined herein).
Upon the issuance and delivery of the 2013 Bonds, proceeds of the 2013 Bonds in the amount of
$___,000 will be deposited into the Reserve Fund, which amount is equal to the Reserve Requirement.
See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–Reserve Fund.”
Risks to Bondowners
Certain events could affect the ability of the County to pay debt service on the 2013 Bonds when
due and an investment in the 2013 Bonds involves risks that should be considered in addition to other
matters described herein in evaluating the investment quality of the 2013 Bonds. See “CERTAIN RISK
FACTORS” for a discussion of certain factors that should be considered, in addition to other matters set
forth herein, in evaluating an investment in the 2013 Bonds
Continuing Disclosure
The County has covenanted for the benefit of the beneficial owners of the 2013 Bonds to provide
certain financial information and operating data relating to the County and the District by no later than
eight months after the end of each Fiscal Year (which fiscal year currently ends June 30), commencing
with the report due for the Fiscal Year ended June 30, 2013 (each, an “Annual Report”), and to provide
notices of the occurrence of certain specified events. The Annual Report and notices of specified events
will be filed with the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic
Municipal Market Access site. The specific nature of the information to be contained in the Annual
Report or the notices of specified events is set forth in APPENDIX E–“FORM OF CONTINUING
DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in
complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
In order to provide certain continuing disclosure with respect to the 2013 Bonds in accordance
with the Rule 15c2-12, the County entered into a Continuing Disclosure Certificate for the benefit of the
Owners of the 2013 Bonds and has appointed Digital Assurance Certification, L.L.C. (“DAC”) as
Dissemination Agent. The form of Continuing Disclosure Certificate is set forth in APPENDIX E–“FORM
OF CONTINUING DISCLOSURE CERTIFICATE.”
See “CONTINUING DISCLOSURE” for a summary of the County’s compliance in the previous
five years with its continuing disclosure undertakings.
Tax Matters
In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject
however, to certain qualifications described in this Official Statement, under existing law, interest on the
2013 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 2013 Bonds is exempt from personal
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income taxation imposed by the State of California. See “TAX MATTERS” and APPENDIX B–
“PROPOSED FORM OF OPINION OF BOND COUNSEL.”
Additional Information
This Official Statement contains brief descriptions of, among other things, the 2013 Bonds, the
security for the 2013 Bonds, the District, and the Fiscal Agent Agreement and certain other documents.
Such descriptions do not purport to be comprehensive or definitive. All references herein to the Fiscal
Agent Agreement are qualified in their entirety by reference to such documents, copies of which are
available for inspection at the office of Fiscal Agent, The Bank of New York Mellon Trust Company,
N.A., 100 Pine Street, Suite 3100, San Francisco, California 94111; Attention: Corporate Trust
Department.
PLAN OF REFUNDING
A portion of the proceeds from the sale of the 2013 Bonds will be used by the County together
with other available moneys, to establish an irrevocable escrow (the “Refunding Fund”) to redeem all of
the County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) 2001 Special Tax
Refunding Bonds in the outstanding principal amount of $5,720,000 (the “Prior Bonds”) on
March 1, 2013 at a redemption price equal to 101% of the principal amount of the 2013 Bonds, plus
accrued interest to the redemption date.
The Prior Bonds were issued by the County to finance the design and construction of various off-
site public improvements within the District, including street, water and utility facilities, construction of
landscaping and irrigation facilities, and acquisition of all necessary real property interests in real
property and to pay fees required by public agencies for sewer, water, schools, parks, traffic mitigation
and other related fees, charges and expenses (collectively, the “Facilities”). All of the Facilities have
been completed and installed. See “THE DISTRICT.”
(Remainder of this Page Intentionally Left Blank)
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The Prior Bonds consist of the following:
Table 1
$5,720,000
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Maturity Date
(September 1)
Amount
Interest
Rate
CUSIP†
2013 $175,000 5.400% 212288BQ6
2014 185,000 5.500 212288BR4
2015 195,000 5.600 212288BS2
2016 210,000 5.650 212288BT0
2017 220,000 5.750 212288BU7
2018 230,000 5.850 212288BV5
2019 240,000 5.900 212288BW3
2026 2,190,000 6.000 212288BX1
2031 2,205,000 6.100 212288BY9
_______________
† Copyright 2013, American Bankers Association. CUSIP data herein is provided by Standard and Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in
any way as a substitute for the CUSIP Service. CUSIP numbers are provided for reference only. Neither the County nor
the Underwriter take any responsibility for the accuracy of such numbers.
Upon the sale of the 2013 Bonds, the County will apply a portion of the proceeds therefrom,
together with certain other available moneys, to establish the Refunding Fund pursuant to the Escrow
Agreement, dated January 1, 2013 (the “Escrow Agreement”) by and between the County and The Bank
of New York Mellon Trust Company, N.A., as escrow bank (the “Escrow Bank”). Amounts deposited in
the Refunding Fund will be held in cash, uninvested, in an amount sufficient to pay the principal of,
interest on and redemption premium of, the Prior Bonds on March 1, 2013.
(Remainder of this Page Intentionally Left Blank)
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ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds are summarized as follows:
Sources of Funds
Par Amount of 2013 Bonds ........................
Transfer of Prior Bonds Funds ...................
Less: Net Original Issue Discount .............
TOTAL SOURCES .................................
Uses of Funds
Deposit to the Refunding Fund(1) ...............
Deposit to Reserve Fund ............................
Deposit to Costs of Issuance Fund(2) ..........
Underwriters’ Discount ..............................
TOTAL USES ........................................
______________
(1) See “PLAN OF REFUNDING.”
(2) Includes the fees and expenses of Bond Counsel and Disclosure Counsel, fees and expenses of the Fiscal Agent, the
Financial Advisor and the Special Tax Consultant, printing costs, rating agency fees and other costs related to the issuance
of the 2013 Bonds.
(Remainder of this Page Intentionally Left Blank)
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DEBT SERVICE SCHEDULE
Debt Service Schedule
The table below sets forth the scheduled annual debt service payments on the 2013 Bonds,
assuming no optional redemption, or redemption from prepayments of the Special Tax.
Table 2
Debt Service Schedule
Year Ending
September 1
Principal
Interest
Total
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
TOTAL
(Remainder of this Page Intentionally Left Blank)
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THE 2013 BONDS
Authority for Issuance
Pursuant to the Act, the Board of Supervisors established the District on June 5, 2001, and an
election of the sole property owner was held authorizing the issuance of bonded indebtedness, in an
amount not to exceed $7,220,000, and approving the Special Tax Formula. For a description of the
Special Tax Formula and the amount of the Special Tax that can be collected from the Taxable Property
within the District, see “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS,” “THE
DISTRICT” and APPENDIX A–“RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Description
The 2013 Bonds will be dated as of the date of initial delivery, issued only in fully registered
form, without coupons, in the denomination of $5,000 or any integral multiple thereof. The 2013 Bonds
will mature in the principal amounts, and will bear interest at the respective rates shown on the inside
cover page of this Official Statement. Interest on the 2013 Bonds will be payable on each March 1 and
September 1, commencing September 1, 2013 (each an “Interest Payment Date”). Interest on the 2013
Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months.
The 2013 Bonds will be dated the date issued in fully registered form, without coupons, and,
registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New
York (“DTC”). DTC will act as securities depository for the 2013 Bonds. Ownership interests in the
2013 Bonds may be purchased in book-entry form only. Purchasers will not receive certificates
representing their interests in the 2013 Bonds purchased.
Interest on the 2013 Bonds will be payable on each Interest Payment Date to the person whose
name appears on the registration books maintained by the Fiscal Agent as the Owner thereof as of the
15th day of the month next preceding the month of the applicable Interest Payment Date, whether or not
such 15th day is a Business Day (the “Record Date”) immediately preceding each such Interest Payment
Date, such interest to be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, on
each Interest Payment Date to the Owner at the address of such Owner as it appears on the registration
books maintained by the Fiscal Agent as of the preceding Record Date. Principal of and premium (if any)
on any 2013 Bond will be paid by check upon presentation and surrender thereof, at maturity or the prior
redemption thereof, at the Principal Office of the Fiscal Agent.
So long as the 2013 Bonds are registered in the name of the Cede & Co., all payments of
principal of, and interest on, the 2013 Bonds will be paid by the Fiscal Agent to DTC, which is obligated
in turn to remit such principal and interest to its DTC Participants for subsequent disbursement to the
beneficial owners of the 2013 Bonds. See APPENDIX F–“DTC AND THE BOOK-ENTRY ONLY
SYSTEM.”
Redemption Provisions
Optional Redemption. The 2013 Bonds maturing on or after September 1, 20 __, are subject to
optional redemption prior to their stated maturities on any Interest Payment Date occurring on or after
September 1, 20 __, as a whole or in part, upon payment from any source of funds available for that
purpose, at a redemption price equal to the principal amount of the 2013 Bonds to be redeemed together
with accrued interest thereon to the date fixed for redemption, without premium.
Mandatory Redemption From Special Tax Prepayments The 2013 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 pursuant to the
Fiscal Agent Agreement, as a whole or in part, on any Interest Payment Date, at a redemption price
12036\pos-3
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(expressed as a percentage of the principal amount of the 2013 Bonds to be redeemed), together with
accrued interest thereon to the date fixed for redemption, as set forth below:
Redemption Dates Redemption Prices
March 1, 2013 to and including March 1, 20__ ____%
September 1, 20__ and March 1, 20__ ____
September 1, 20__ and March 1, 20__ ____
September 1, 20__ and thereafter ____
Purchase of Bonds in Lieu of Redemption
In lieu of redemption of the 2013 Bonds pursuant to the Fiscal Agent Agreement, moneys in the
Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2013 Bonds,
upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase prior to the
selection of 2013 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
2013 Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the
date of purchase.
Redemption Procedures
Selection of Bonds for Redemption. Whenever provision is made in the Fiscal Agent Agreement
for the redemption of less than all of the 2013 Bonds or any given portion thereof, the Fiscal Agent is
required to select the 2013 Bonds to be redeemed, from all 2013 Bonds or such given portion thereof not
previously called for redemption among maturities so as to maintain substantially level debt service on
the 2013 Bonds, and within a maturity by lot in any manner which the Fiscal Agent in its sole discretion
deemed appropriate and fair.
For purposes of such selection, all 2013 Bonds are deemed to be comprised of separate $5,000
portions and such portions shall be treated as separate Bonds which will be separately redeemed.
Notice of Redemption. The Fiscal Agent will cause notice of any redemption to be mailed by
first class mail, postage prepaid, 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 (or by such other
means as permitted by such services), and to the respective registered Owners of any 2013 Bonds
designated for redemption, at their addresses appearing on the 2013 Bond registration books in the
Principal Office of the Fiscal Agent; but is mailing shall not a condition precedent to such 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 2013 Bonds.
Such notice is required to state the redemption date and the redemption price and, if less than all
of the then Outstanding 2013 Bonds are to be called for redemption, designate the CUSIP numbers and
Bond numbers of the 2013 Bonds to be redeemed by giving the individual CUSIP number and Bond
number of each 2013 Bond to be redeemed or state that all 2013 Bonds between two stated Bond
numbers, both inclusive, are to be redeemed or that all of the 2013 Bonds of one or more maturities have
been called for redemption, state as to any 2013 Bond called in part the principal amount thereof to be
redeemed, and require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for
redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue
from and after the redemption date.
So long as the 2013 Bonds are registered in the name of the Cede & Co., all notices with respect
to such 2013 Bonds will be made and given to DTC. See APPENDIX F–“DTC AND THE BOOK-ENTRY
ONLY SYSTEM.”
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Conditional Notice of Redemption. In the case of any redemption of the 2013 Bonds, the notice
of redemption may state that the redemption is conditioned upon receipt by the Fiscal Agent of sufficient
moneys to redeem the 2013 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 2013 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 2013 Bonds to be redeemed, the Fiscal Agent is required to send written notice to
the owners of the 2013 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 2013 Bonds for which
notice of redemption was given will remain Outstanding for all purposes of the Fiscal Agent Agreement.
Partial Redemption of 2013 Bonds. In the event only a portion of any 2013 Bond is called for
redemption, then upon surrender of such 2013 Bond, the County is required to execute and the Fiscal
Agent is required to authenticate and deliver to the registered Owner, at the expense of the County, a new
2013 Bond or 2013 Bonds, in authorized denominations, equal in aggregate principal amount to the
unredeemed portion of the 2013 Bond or 2013 Bonds surrendered.
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 2013 Bonds so called for redemption
have been deposited in the 2013 Bond Fund, such 2013 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.
All 2013 Bonds redeemed and purchased by the Fiscal Agent pursuant to the Fiscal Agent
Agreement will be canceled by the Fiscal Agent.
SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS
General
The 2013 Bonds constitute limited obligations of the District payable as to both principal and
interest and redemption premium, if any, from the Special Tax levied by the County on Taxable Property
within the District, including proceeds from the sale of property collected as result of foreclosure of the
lien of the Special Tax, net of the cost to the County of administering the District, and certain funds and
accounts held under the Fiscal Agent Agreement.
The Series 2013 Bonds are limited obligations of the County on behalf of the District payable
solely from the Special Tax (including any prepayments thereof and proceeds collected from the sale of
property pursuant to foreclosure provisions as set forth in the Fiscal Agent Agreement for delinquency
in payment of the Special Tax) and certain funds established pursuant to the Fiscal Agent Agreement
and held by the Fiscal Agent, as more fully described herein. Neither the faith and credit nor any
general taxing power of the County or the State of California or any political subdivision thereof is
pledged to the payment of the 2013 Bonds. Except for the Special Tax, no other taxes are pledged to
the payment of the 2013 Bonds.
Special Tax Authorization
Pursuant to the Act, on June 5, 2001, the Board of Supervisors adopted a resolution establishing
the District and calling a special election to authorize the issuance of bonds and the levy of the Special
Tax. On June 5, 2011, at an election held pursuant to the Act, Toll Land XXII Limited Partners, an
affiliate of Toll Brothers, Inc. (the “Developer”) as the sole property owner within the District authorized
the issuance of bonded indebtedness in an amount not to exceed $7,220,000 and approved the Special Tax
12036\pos-3
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Formula to pay the principal of, and interest on, and redemption premium, if any, the authorized bonded
indebtedness. The District issued the Prior Bonds pursuant to this authorization. Pursuant to Government
Code Section 53362.7, the 2013 Bonds do not reduce the principal amount of Bonds that may be issued
pursuant to the authorization. The Special Tax is levied according to the Special Tax Formula which is
set forth in full in APPENDIX C. The Board of Supervisors, as the legislative body of the District, is
required to establish tax rates, and levy and apportion the Special Tax against property within the District
on an annual basis.
Covenant to Levy. Pursuant to the Fiscal Agent Agreement, so long as any Bonds are
outstanding, the County is required annually to levy the Special Tax on behalf of the District, subject to
the maximum tax rates approved by the landowner voters, against all Taxable Property in the District and
to make provision for the collection of the Special Tax in amounts that, together with other moneys
available to the District, will be sufficient to pay the principal of and interest on the Bonds when due, to
pay the annual expenses of administering the District, to cure delinquencies in the payment of debt
service on the Bonds that have occurred or are expected to occur in the current fiscal year, and to
replenish the Reserve Fund to an amount equal to the Reserve Requirement.
In the opinion of Bond Counsel, the Special Tax is excepted from the tax rate limitation of
California Constitution Article XIII A pursuant to Section 4 thereof as a “special tax” authorized by two-
thirds vote of the qualified electors as set forth in the Act. Consequently, the County, on behalf of the
District, has the power and is obligated to cause the levy and collection of the Special Tax in an amount
determined according to the Special Tax Formula.
The Act prohibits the Board of Supervisors, as the legislative body of the District, from adopting
a resolution to initiate proceedings to reduce the rate of the Special Tax or terminate the levy of the
Special Tax unless the Board of Supervisors, as the legislative body of the District, determines that the
reduction or termination of the Special Tax “would not interfere with the timely retirement” of
outstanding Bonds secured by the Special Tax.
Manner of Collection. The Special Tax will be collected in the manner and at the same time as
ad valorem property taxes are collected by the County and, except as described below under the
“–Covenant to Foreclose,” will be subject to the same penalties and the same procedures, sale and lien
priority in the case of delinquency as is provided for ad valorem property taxes. Taxes are levied by the
County for each fiscal year on taxable real property that is situated in the County as of the preceding
January 1. For collection purposes, property is classified either as “secured” or “unsecured” and is listed
accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll
containing State-assessed public utilities property and real property having a tax lien that is sufficient, in
the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed and
collected on the “unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of
each fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and
a 10% penalty attaches to any delinquent payment. Property on the secured roll with respect to which
taxes are delinquent become tax defaulted on June 30 of the fiscal year; such property may thereafter be
redeemed by payment of a penalty of 1.5% per month to the date of redemption, together with the
defaulted taxes, the delinquency penalty, costs, and a redemption fee. If taxes are unpaid for a period of
five years or more, the property is subject to auction sale by the County.
Property taxes on the unsecured roll are due as of the lien date and become delinquent, if unpaid,
on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at
5:00 p.m. on October 31, an additional penalty of 1.5% attaches to them on the first day of each month
until paid. The County has four ways of collecting delinquent unsecured property taxes: (i) bringing a
civil action against the taxpayer; (ii) filing a certificate in the office of the County Clerk specifying certain
facts in order to obtain a lien on certain property of the taxpayer; (iii) filing a certificate of delinquency
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for record in the County Clerk and County Recorder’s office in order to obtain a lien on certain property
of the taxpayer; and (iv) seizing and selling personal property, improvements, or possessory interests
belonging or assessed to the assessee.
Special Tax is not a Personal Obligation
Although the Special Tax constitutes a lien on Taxable Property, it does not constitute a personal
indebtedness of the owners of such property. There is no assurance that the owners will be financially
able to pay the Special Tax or that they will pay such tax even if financially able to do so. The risk of the
property owners not paying the Special Tax is more fully described in “CERTAIN RISK FACTORS–
Collection of the Special Tax.”
Special Tax Formula
The Special Tax Formula is used to allocate the amount of Special Tax that is needed to be
collected each Fiscal Year from all non-exempt parcels within the District (the “Taxable Property”), based
upon the land use class of the property (i.e. Residential Property, Undeveloped Property, or Other
Property), subject to a maximum tax rate (the “Maximum Special Tax”) that may be levied against each
land use class. Currently, there is no property within the District classified as “Other.”
The County collects the Special Tax on all Taxable Property at a level sufficient to pay the debt
service and related administrative costs for the 2013 Bonds and any Parity Bonds for refunding in
accordance with the Special Tax Formula. The Special Tax Formula is set forth in full in APPENDIX C–
“RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” A summary of the Special Tax
Formula is set forth below.
The Special Tax is first levied proportionately on each Parcel of Residential Property up
to the Maximum Special Tax in an amount equal to $2,100 per Taxable Parcel as needed to
satisfy the Special Tax Requirement. “Residential Property” includes any parcels for which a
building permit was issued prior to June 1 of the preceding Fiscal Year.
If the amount levied on Residential Property is less than the Special Tax Requirement
then the Special Tax is levied proportionately on each Parcel of Undeveloped Property up to the
Maximum Special Tax rate equal to $3,360 per acres, as needed to satisfy the Special Tax
Requirement.
If additional revenue is needed, the Special Tax is then levied proportionately on each
parcel of Homeowners’ Association Property and Public Property which originally had Planned
Units, up to the Maximum Special Tax for Undeveloped Property in an amount up to $3,360 per
acre for such Fiscal Year determined pursuant to the Special Tax Formula.
Pursuant to Section 53340 of the Act, the Special Tax Formula exempts public property
(i.e. property owned by or irrevocably offered for dedication to the federal government, the State or local
governments or public agencies), except that the Special Tax on property not otherwise exempt that is
acquired by a public entity shall be required to be permanently satisfied pursuant to Sections 53317.3 and
53317.5 of the Act. Parcels for which the owner has prepaid and satisfied the Special Tax are also
exempt from further Special Tax.
The Act provides that the Special Tax levied against any parcel used for private residential
purposes may not be increased as a consequence of delinquency or default by the owners of any other
parcels by more than 10% above the amount that would have been levied had there been no such
delinquencies or defaults.
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Reserve Fund
The 2013 Bonds are secured by a Reserve Fund in an amount equal to the “Reserve
Requirement,” which is held by the Fiscal Agent for the benefit of the Owners of the 2013 Bonds as a
reserve for the payment of the principal of, and interest and any premium on the 2013 Bonds. The
“Reserve Requirement” means, as of any date of calculation, an amount equal to 50% of the lesser of
(i) Maximum Annual Debt Service, (ii) 125% of average Annual Debt Service on the 2013 Bonds, or
(iii) 10% of the initial principal amount of the 2013 Bonds.
Upon the issuance and delivery of the 2013 Bonds, proceeds in the amount of $_______, which is
equal to the Reserve Requirement, will be deposited into the Reserve Fund.
Use of Reserve Fund. Except as otherwise provided in the Fiscal Agent Agreement, all amounts
on deposit in the Reserve Fund will be used solely and withdrawn by the Fiscal Agent 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 2013 Bonds or
in accordance with the Fiscal Agent Agreement for the purpose of redeeming 2013 Bonds from the Bond
Fund.
If amounts on deposit in the Special Tax Fund together with any other amounts transferred to
replenish the Reserve Fund are inadequate to restore the Reserve Fund to the Reserve Requirement, then
the County is required to include the amount necessary to fully restore the Reserve Fund to the Reserve
Requirement in the next annual Special Tax levy to the extent of the maximum permitted Special Tax
rates.
Transfer of Excess of Reserve Requirement. Whenever, on the Business Day before any Interest
Payment Date, or on any other date at the request of an Authorized Officer, the amount in the Reserve
Fund exceeds the then Reserve Requirement, the Fiscal Agent is required to provide written notice to the
Auditor of the amount of the excess and 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 2013 Bonds on the next Interest Payment
Date in accordance with the Fiscal Agent Agreement.
Transfer When Balance Exceeds Outstanding 2013 Bonds. Whenever the balance in the
Reserve Fund exceeds the amount required to redeem or pay the Outstanding 2013 Bonds, including
interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the
Fiscal Agent is required to transfer the amount in the Reserve Fund to the Bond Fund to be applied, on the
next succeeding Interest Payment Date to the payment of all of the Outstanding 2013 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 2013 Bonds, the balance in the Reserve Fund is required to be
transferred to the County 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 until after (i) the calculation, pursuant to the Fiscal Agent Agreement, of any amounts due
to the federal government following payment of the 2013 Bonds and withdrawal of any such amount for
purposes of making such payment to the federal government, and (ii) payment of any fees and expenses
due to the Fiscal Agent.
Transfer Upon Special Tax Prepayment. Whenever the Special Tax is prepaid and 2013 Bonds
are to be redeemed with the proceeds of such prepayment pursuant to the Fiscal Agent Agreement, a
proportionate amount in the Reserve Fund (determined by the Auditor on the basis of the principal of
2013 Bonds to be redeemed and the then original principal of the 2013 Bonds) is required to 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 2013 Bonds pursuant to the Fiscal Agent Agreement.
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Deposit of Special Tax; Flow of Funds
Pursuant to the Fiscal Agent Agreement, a separate fund, the “Community Facilities District No.
2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds, Special Tax Fund” (the “Special Tax
Fund”), is established and held by the Auditor for the benefit of the County and the Owners of the 2013
Bonds. The Special Tax Fund is subject to a lien in favor of the Owners of the Bonds and the County.
The County is required to transfer or cause to be transferred to the Auditor, as soon as practicable
following receipt, all Special Tax Revenues received by the County and any amounts required by Fiscal
Agent Agreement to be deposited to the Special Tax Fund. In addition, the Auditor is required to deposit
in the Special Tax Fund amounts to be transferred thereto from the Administrative Expense Fund.
Pursuant to the Fiscal Agent Agreement, the Auditor is required to withdraw and transfer from
the Special Tax Fund from time to time, but no later than the Business day before each Interest Payment
Date, the following amounts to the Fiscal Agent in the following order of priority:
First: for deposit by the Fiscal Agent in the Bond Fund an amount, taking into account any
amounts then on deposit in the Bond Fund and any expected transfers from the Reserve Fund and the
Special Tax Fund to the Bond Fund pursuant to the Fiscal Agent Agreement, such that the amount in the
Bond Fund equals the principal, premium, if any, and interest due on the 2013 Bonds on the next Interest
Payment Date
Second: for deposit by the Fiscal Agent in 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; provided that no such transfers shall exceed the amount then available to be
transferred from the Special Tax Fund.
The Teeter Plan
In 1949, the California Legislature enacted an alternative method for the distribution of secured
ad valorem property taxes to local agencies. This method, known as the Teeter Plan, is set forth in
Sections 4701-4717 of Revenue and Taxation Code of the State of California. Generally, the Teeter Plan
provides for a tax distribution procedure by which secured roll taxes are distributed to taxing agencies
within the County included in the Teeter Plan on the basis of the tax levy, rather than on the basis of
actual tax collections. The constitutionality of the Teeter Plan was upheld in Corrie v. County of Contra
Costa, 110 Cal. App. 2d 210 (1952). The Teeter Plan was named after Desmond Teeter, the then
Auditor-Controller of the County who originated this method of tax distribution. The County was the
first Teeter Plan county in the State.
Pursuant to the Teeter Plan, the County apportions to the local agencies 100% of the amount of
the taxes which are levied regardless of the amount collected from property owners. The County retains
all penalties and interest which are collected with delinquent taxes. So long as the Special Tax levied on
Taxable Property within the District is subject to the Teeter Plan, the District will receive 100% of the
Special Tax which is levied in each Fiscal Year.
If any tax or assessment which was distributed to a Teeter Plan participant is subsequently
changed by correction, cancellation or refund, a pro rata adjustment for the amount of the change is made
on the records of the treasurer of the County and the County Auditor. Such an adjustment would be an
offset to future distributions of tax revenues to the District.
The County’s Teeter Plan remains in effect in perpetuity unless the Board of Supervisors orders
its discontinuance or unless, prior to the commencement of a fiscal year, a petition for discontinuance is
received and joined in by resolutions of the governing bodies of not less than two-thirds of the
participating districts in the County. The County may, however, opt to discontinue the Teeter Plan with
respect to any levying agency in the County if the Board of Supervisors, by action taken not later than
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July 15 of a fiscal year, elects to discontinue the procedure with respect to such levying agency and the
rate of secured tax delinquencies in that agency in any year exceeds 3% of the total of all taxes and
assessments levied on the secured roll by that agency. No assurance can be given that the County will
continue to include special taxes levied within community facilities districts in the Teeter Plan, and the
County could decide to discontinue the inclusion of such special taxes in the Teeter Plan at any time, or to
discontinue the Teeter Plan in its entirety.
Covenant to Foreclose
General. The Fiscal Agent Agreement provides that the Special Tax is to be collected in the
same manner as ordinary ad valorem property taxes are collected and, except as provided in the special
covenant for foreclosure described below and in the Act, are subject to the same penalties and the same
procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes.
Pursuant to Section 53356.1 of the Act, if any payment of the Special Tax for a parcel of Taxable
Property is delinquent, the County may order the institution of a court action to foreclose the lien on the
Taxable Property within specified time limits. In such an action, the real property subject to the unpaid
amount may be sold at judicial foreclosure sale. The ability of the County to foreclose the lien of any
delinquent unpaid Special Tax may be limited in certain instances and may require prior consent of the
property owner if the property is owned by or in receivership of the Federal Deposit Insurance
Corporation (the “FDIC”). See “CERTAIN RISK FACTORS–Bankruptcy and Foreclosure Delays.”
The County covenants in the Fiscal Agent Agreement for the benefit of the Owners of the 2013
Bonds that it will order, and cause to be commenced and thereafter diligently prosecute to judgment
(unless such delinquency is brought current), an action in the superior court to foreclose the lien of any
Special Tax or installment thereof not paid when due. The County is required to notify County Counsel
of any such delinquency of which it is aware, and County Counsel is required to commence, or cause to
be commenced, such proceedings.
Pursuant to the Fiscal Agent Agreement, the Auditor is required to review its public records in
connection with the collection of the Special Tax not later than July 1 of each year to determine the
amount of the Special Tax collected in the Fiscal Year ending the preceding June 30, and:
Individual Delinquencies. If the Auditor determines that any single parcel subject to the
Special Tax in the District is delinquent in the payment of the Special Tax in the aggregate
amount of (i) $7,500 or more if all of the property within the District is on the Teeter Plan; or (ii)
$3,000 or more if any property within the District is not on the Teeter Plan, then the Auditor is
required to send or cause to be sent a notice of delinquency (and a demand for immediate
payment thereof) to the property owner within 45 days of such determination, and (if the
delinquency remains uncured) foreclosure proceedings shall be commenced by the County within
120 days of such determination and will be diligently pursued by the County to completion.
Notwithstanding the foregoing, the Auditor may defer any such action if the amount then in the
Reserve Fund is at least equal to the Reserve Requirement.
Aggregate Delinquencies. If the Auditor determines that the total amount of delinquent
Special Tax for the prior Fiscal Year for the entire District, (including the total of individual
delinquencies described above), exceeds 5% of the total Special Tax due and payable for the prior
Fiscal Year, the Auditor is required to notify or cause to be notified property owners who are then
delinquent in the payment of the Special Tax (and demand immediate payment of the
delinquency) within 45 days of such determination, and the County is required to commence
foreclosure proceedings within 120 days of such determination against each parcel of land in the
District with a Special Tax delinquency of (i) $7,500 or more if all of the property within the
District is on the Teeter Plan; or (ii) $3,000 or more if any property within the District is not on
the Teeter Plan, and the County is required to diligently pursue such proceedings to completion.
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Subject to the Maximum Special Tax Rate, the Special Tax Formula is designed to generate from
all Taxable 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 equal to the prior
year’s delinquencies. However, if foreclosure actions are necessary, and the Reserve Fund has been
depleted, there could be a delay in payments to Bondowners pending prosecution of the foreclosure
proceedings and receipt by the County of the proceeds of the foreclosure sale. See “CERTAIN RISK
FACTORS–Bankruptcy.”
Priority of Lien. The Act specifies that the Special Tax will have the same lien priority as
ad valorem property taxes in the case of delinquency but does not further specify the priority relationship,
if any, between the Special Tax and other special taxes and ad valorem taxes on a taxed parcel. See “THE
DISTRICT–General” and “–Direct and Overlapping Debt,” and “CERTAIN RISK FACTORS–Parity Taxes
and Special Assessments.”
If foreclosure proceedings were ever instituted, any holder of a mortgage or deed of trust on the
affected property could, but would not be required to, advance the amount of the delinquent Special Tax
payment to protect its security interest.
Sufficiency of Foreclosure Sale Proceeds. 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. The Act does not require the County to purchase or
otherwise acquire any lot or parcel of property sold if there is no other purchaser at such sale. 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 2013 Bonds is obtained.
Limited Obligation
Neither the full faith and credit nor the general taxing power of the County, the State, or any
political subdivision thereof, other than the District, is pledged to the payment of the 2013 Bonds. The
2013 Bonds are not general obligations of the County but are limited obligations of the County on
behalf of the District payable solely from the proceeds of the Special Tax (and other sources
described in the Fiscal Agent Agreement). The 2013 Bonds are secured by a pledge of and lien upon
the Special Tax and from amounts on deposit in the Interest Account, the Principal Account, and the
Reserve Fund. Amounts on deposit in the Costs of Issuance Fund and the Rebate Account are not
pledged to the payment of the 2013 Bonds. Moneys held in any of the accounts or special funds under
the Fiscal Agent Agreement are required to be invested at the written direction of the District only in
Permitted Investments, as defined in the Fiscal Agent Agreement.
Limited Issuance of Parity Bonds Only for Refunding
Under the Fiscal Agent Agreement, the County may at any time issue one or more series of
Bonds only for the purpose of refunding all or a portion of the 2013 Bonds or any Parity Bonds then
Outstanding, without the consent of Bondowners, payable from the Special Tax and other amounts
deposited in the Special Tax Fund (other than in the Administrative Expenses Account therein) and
secured by a lien and charge upon such amounts equal to the lien and charge securing the 2013 Bonds and
any other Parity Bonds.
Nothing in the Fiscal Agent Agreement prohibits the County from issuing bonds or otherwise
incurring debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof securing
the 2013 Bonds under the Fiscal Agent Agreement.
See also APPENDIX C–“SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT
AGREEMENT–ISSUANCE OF PARITY BONDS.”
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THE DISTRICT
General; Location and Description
The District, a gated, single-family community of approximately 1,189 acres known as “Norris
Canyon Estates,” is located in an unincorporated portion of the County, near the western edge of the City
of San Ramon. Norris Canyon Estates features homes on one-third to one-half acre sites, walking trails,
tennis and basketball courts, playgrounds, community centers and approximately 800 acres of open space.
The general area surrounding the District is one of predominantly single-family detached homes
bounded on the north by Crow Canyon Road, on the east by Interstate 680, on the south by Montevideo
Drive and on the west by a low range of hills which separates the County from Alameda County to the
west. While there is some attached housing along Bollinger Canyon Road, the vast majority of the homes
in this area consist of single-family homes built during the late 1960’s and 1970’s. The property in the
District is separated from the single-family neighborhoods by the Bishop Ranch Regional Open Space, an
undeveloped park land of approximately 380 acres.
Freeway access to the District is provided at the intersection of I-680 and Crow Canyon Road and
Bollinger Canyon Road. The Crow Canyon Road/I-680 intersection is heavily improved with retail and
some office use. There is a neighborhood shopping center on the west side of I-680, south of Crow
Canyon Road, and a regional shopping complex on the east side of I-680 surrounding Crow Canyon
Road. Retail uses are located at the intersection of I-680 and Bollinger Canyon Road, and larger, regional
shopping centers are available at the Stoneridge Mall, approximately eight miles south of the District in
Pleasanton (located in Alameda County), and approximately eight miles north of the District in Walnut
Creek (located in the County).
Approximately two miles to the northeast of the District, on the east side of Interstate 680 within
the City of San Ramon, is the Bishop Ranch Business Park, a major regional employment center. Two of
the county’s largest employers, Chevron and Pacific Bell, have large facilities within the Bishop Ranch
Business Park.
Status of Development
The District has been developed as a gated community comprised of 361 parcels planned for the
construction of single-family homes. Production homes were planned for 289 lots with a minimum size
of 12,000 square feet and custom homes were planned for the remaining significantly larger 72 lots, some
of which are in excess of one acre. To date, 271 homes have been constructed, of which 255 have been
sold to individual owners. The Developer and another entity, Norris Canyon Associates, continue to
build and market homes on the remaining parcels intended for development.
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Table 3 below summarizes the assessed property values, the Maximum Special Tax Revenue and
the actual Special Tax levy for Fiscal Year 2012-13.
Table 3
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Maximum Special Tax by Land Use Classification
(As of the Fiscal Year 2012-13 Special Tax Levy)
Total Actual Percentage
Assessed Maximum Levy of Actual
Land Use Classification Parcels Value Levy Fiscal Levy
Residential Property
Individually Owned(1) 255 $327,385,983 $529,200 $495,825 92.99%
Developer Owned(2)
Norris Associates LLC 8 3,583,808 16,800 15,740 2.95
Toll Land Entities(3) 8 7,219,032 16,800 15,740 2.95
SUBTOTAL RESIDENTIAL PROPERTY 271 $341,967,443 $569,100 $533,209 100.00
Undeveloped Property(4)
Norris Associates LLC 34 14,122,398 92,254 0 0.00
Toll Land Entities(3) 48 17,128,466 92,254 0 0.00
SUBTOTAL UNDEVELOPED PROPERTY 82 31,250,864 186,850 0 0.00
TOTAL TAXABLE PROPERTY(4) 353 $373,218,307 $755,950
$533,209 100.00%
Parcels Not Subject to Tax
Prepaid Parcels 8 11,124,982 0 0 0.00
TOTAL PARCELS IN THE DISTRICT 361 $384,343,289(3)$755,950 $533,209 100.00%
_______________
(1) Includes three parcels owned by financial institutions.
(2) Includes 11 parcels with no improvement value as of the Fiscal Year 2012-13 tax roll, but for which building permits were
issued as of June 1, 2012.
(3) The County tax rolls list three entities Toll Land XXII LP, Toll Land XXIII Ltd Partnership and Toll Land XXII LP that
appear to be the same or related entities as the original developer, Toll Land XII Limited Partnership, the general partner of
which was a wholly-owned subsidiary of Toll Holdings and in turn, Toll Brothers, Inc.
(4) Includes two parcels with completed model homes. As of November 6, 2012, seven additional building permits have been
issued. These parcels will be taxed as Residential Property in Fiscal Year 2013-14.
Sources: Goodwin Consulting Group, Inc.
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Projected Debt Service Coverage
Table 4 shows projected annual scheduled debt service on the 2013 Bonds, without regard to any
optional redemption and the estimated annual coverage from Maximum Special Tax Revenue based on
the development status in the District as of Fiscal Year 2012-13.
Table 4
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Projected Debt Service Coverage
Coverage from
Maximum Maximum
Special Special
Coverage Tax Revenue Tax Revenue
from from from
2013 Bonds Maximum Maximum
Total Special Special Residential Residential
Fiscal Year(1) Debt Service(2) Tax Revenue(3) Tax Revenue Property(4) Property
2012-13 $436,598 $755,950 173% $529,200 121%
2013-14 435,825 755,950 173 529,200 121
2014-15 439,075 755,950 172 529,200 121
2015-16 437,025 755,950 173 529,200 121
2016-17 437,425 755,950 173 529,200 121
2017-18 437,425 755,950 173 529,200 121
2018-19 437,025 755,950 173 529,200 121
2019-20 436,225 755,950 173 529,200 121
2020-21 435,025 755,950 174 529,200 122
2021-22 438,425 755,950 172 529,200 121
2022-23 436,225 755,950 173 529,200 121
2023-24 435,736 755,950 173 529,200 121
2024-25 439,361 755,950 172 529,200 120
2025-26 437,461 755,950 173 529,200 121
2026-27 434,756 755,950 174 529,200 122
2027-28 436,688 755,950 173 529,200 121
2028-29 437,625 755,950 173 529,200 121
2029-30 438,000 755,950 173 529,200 121
2030-31 436,800 755,950 173 529,200 121
_______________
(1) Represents Debt Service payable for the Bond Year which ends September 1, following the Fiscal Year.
(2) Preliminary, subject to change. Assumes an “A” rating by Standard & Poor’s, a division of the McGraw-Hill Companies,
Inc. and market conditions as of November 16, 2012 plus 25 basis points.
(3) Reflects the Maximum Special Tax as of Fiscal Year 2012-13, assuming no further development or prepayments of the
Special Tax.
(4) Reflects the Maximum Special Tax on individually owned Residential Property, including three parcels owned by financial
institutions, as of Fiscal Year 2012-13, assuming no further development or prepayments of the Special Tax
Sources: Stifel, Nicolaus & Company, Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus for the projected debt
service on the 2013 Bonds and Goodwin Consulting Group, Inc. for the Maximum Special Tax revenue.
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Property Values in the District
The assessed value of Taxable Property in the District for Fiscal Year 2012-13 is $373,218,307.
This value is not necessarily representative of the actual market value of the property in the District,
however, since Article XIII A of the California Constitution limits any increase in assessed value to no
more than 2% per year unless property is sold or transferred. As a consequence, assessed values are
typically less than actual market values unless the property has recently changed ownership. This value
does not account for any reassessments based on changes in ownership or improvements to property
occurring after January 1, 2012
Table 5 summarizes the assessed value for Taxable Property within the District by land use
classification for Fiscal Years 2008-09 through 2012-13.
Table 5
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Historical Assessed Value of Taxable Property
Fiscal Years 2008-09 through 2012-13
Total
Fiscal Year Land Value Improved Value Assessed Value
2007-08 $226,957,875 $202,115,066 $429,072,941
2008-09 238,896,950 231,783,192 470,680,142
2009-10 214,707,495 207,398,292 422,105,787
2010-11 172,268,002 169,296,253 341,564,255
2011-12 180,142,061 198,281,855 378,423,916
2012-13 178,526,561 197,989,023 376,515,584
_______________
Source: Goodwin Consulting Group, Inc.
(Remainder of this Page Intentionally Left Blank)
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Following the issuance of the 2013 Bonds the average assessed value of Residential Property is
more than 58* times the principal amount of the 2013 Bonds. See also “–Direct and Overlapping Debt.”
A summary of the assessed value of Residential Property-to-Special Tax lien categories,
including the 2013 Bonds and excluding parcels that were not subject to the Fiscal Year 2012-13 Special
Tax levy, is set forth in Table 6.
Table 6
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Assessed Value of Residential Property(1)-to-Special Tax Lien Categories
As of the Fiscal Year 2012-13 Special Tax Levy
Fiscal Year
Total 2012-13
Value- Land Improved Assessed Actual Percentage Share
to-Lien Parcels(1) Value Value Value Levy of Levy of Debt(2)
50:1 and Greater 243 $134,012,496 $185,820,170 $319,832,666 $478,117 89.67% $5,276,956
20:1 ≤ X < 50:1 22 10,586,900 9,364,553 19,951,453 43,286 8.12 477,749
10:1 ≤ X < 20:1 6 2,183,324 0 2,183,324 11,805 2.21 130,295
Less than 10:1 0 0 0 0 0 0.00 0
TOTAL 271 $146,782,720 $195,184,723 $341,967,443 $553,209 100.00% $5,885,000
Aggregate Assessed Value of Residential Property-to-Special Tax Lien Coverage: 58*:1x
_______________
(1) Excludes 82 parcels classified as Taxable Property but not subject to the Fiscal Year 2012-13 levy.
(2) The amount of outstanding bonds excludes the principal payment due on September 1, 2013, and are allocated based on the
actual Fiscal Year 2012-13 Special Tax levy.
* Preliminary, subject to change.
Source: Goodwin Consulting Group, Inc.
_______________
* Preliminary subject to change.
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Secured Property Tax Levies, Collections and Delinquencies
Historically, delinquencies for each property tax installment period are higher immediately
following the respective installment payment due date. Late payments received after the respective due
date reduce the outstanding delinquencies for each installment period, to a level of approximately 1%
after 18 months.
Table 7 summarizes of payment history for taxes levied in the District for the past eight Fiscal
Years.
Table 7
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Historical Special Tax Delinquency
As of Fiscal Year End As of November 20, 2012†
Total Number of Number of
Fiscal Special Amount % Parcels Parcels Amount
Year Tax Levy Delinquent Delinquent Delinquent Delinquent Delinquent
2004-05 $536,230 $10,500 1.96% 8 0 $0
2005-06 542,605 2,100 0.39 2 0 0
2006-07 546,460 28,350 5.19 19 0 0
2007-08 537,639 45,150 8.40 28 0 0
2008-09 570,730 49,504 8.67 29 0 0
2009-10 447,601 20,107 4.49 15 0 0
2010-11 514,111 18,930 3.68 13 1 996
2011-12 504,193 25,017 4.96 17 3 4,811
_______________
† Property taxes are due in two installments and become delinquent on December 10 with respect to the installment due on
November 1, and on April 10 with respect to the installment due on February 1. Delinquency information with respect to
the November 1 installment is not yet available.
Source: Goodwin Consulting Group, Inc.
Residential Mortgage Foreclosure Activity
Residential mortgage loan defaults and foreclosures between 2005 and 2010 increased
significantly in connection with the collapse of the sub-prime sector of the residential mortgage market
and broader economic pressures. In California, the greatest impacts to date are in regions of the Central
Valley and the Inland Empire (both areas that are outside of the County), although the County has been
impacted as well, particularly in the eastern portions of the County where the largest number of new
mortgages were originated as growth in residential development occurred.
Such foreclosure activity has not significantly affected the District. Based on information
provided by MDA DataQuick Information, an independent data collection service, for calendar-years
2008 through 2011, mortgage holders had sent a total of 23 notices of default with respect to properties
located within the District, and 16 trustee deeds had been recorded (indicating that the property has been
lost to foreclosure) during that period. In 2009, the number of trustee deeds recorded within the District
peaked at nine.
Public Utilities
The East Bay Municipal Water District supplies water to the District. The Contra Costa County
Sanitary District, supplies sanitary sewer service, Pacific Gas and Electric Company supplies electricity
and natural gas services, and Pacific Bell supplies telephone services to the District.
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Direct and Overlapping Debt
Numerous overlapping local agencies provide public services to properties in the District; many
of these local agencies have outstanding debt. The direct and overlapping debt (the “Debt Report”) of the
District as of December 1, 2012, is shown in Table 8, was prepared by California Municipal Statistics,
Inc. The Debt Report is included for general information purposes only. The County has not reviewed
this report for completeness or accuracy and makes no representation in connection therewith.
The Debt Report generally includes long term obligations sold in the public credit markets by
public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long
term obligations other than the 2013 Bonds are not payable from the Special Tax. In many cases, long
term obligations issued by a public agency are payable only from the general fund or other revenues of
such public agency. Table 9 summarizes a typical tax bill for Taxable Property within the District in
accordance with the Special Tax Formula for Fiscal Year 2012-13.
Table 8
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Direct and Overlapping Debt Report
[Ordered]
____________
Source: California Municipal Statistics, Inc.
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To provide an indication of the tax burden on individual homeowners in the District a typical
Fiscal Year 2012-13 tax bill for a parcel of Taxable Property with an assessed value closet to the median
assessed value for Residential Property is summarized below.
Table 9
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Typical Property Tax Bill for Fiscal Year 2012-13
Description Amount
1% Base property tax $13,015
General Obligation overrides 1,153
Norris Canyon Special Tax 1,968
Other special assessments 1,619
TOTAL TAX BILL $17,755
Total Fiscal Year 2012-13 value $1,301,500
Effective total tax rate 1.36%
___________
Source: Contra Costa County Assessor Website.
CERTAIN RISK FACTORS
Investment in the 2013 Bonds involves risks which may not be appropriate for certain investors.
The following is a discussion of certain risk factors which should be considered, in addition to other
matters set forth herein, in evaluating the investment quality of the 2013 Bonds which are not rated by
any municipal bond rating agency. This discussion does not purport to be comprehensive or definite, and
the risk factors are not listed in any particular order of importance. The occurrence of one or more of the
events discussed herein could adversely affect the ability or willingness of property owners in the District
to pay their Special Tax when due. Such failure to pay the Special Tax could result in the inability of the
District to make full and punctual payments of debt service on the 2013 Bonds. In addition, the
occurrence of one or more of the events discussed herein could adversely affect the value of the Taxable
Property in the District.
Insufficiency of Special Tax Revenues
In order to pay debt service on the 2013 Bonds, it is necessary that the Special Tax levied against
land within the District be paid in a timely manner. Should the Special Tax not be paid on time, the
County has established the Reserve Fund to pay debt service on the 2013 Bonds to the extent other funds
are not available therefor. Although the County may levy the Special Tax in an amount sufficient to
replenish the Reserve Fund, the levy would be subject to the maximum amounts set forth in the Special
Tax Formula. See the section of this Official Statement entitled “SECURITY AND SOURCES OF
PAYMENT FOR THE 2013 BONDS–Special Tax Authorization.”
The Act provides that, if any property within the District not otherwise exempt from the Special
Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax
will continue to be levied on and enforceable against the public entity that acquired the property. The
Bondowners will be dependent on the ability and/or willingness of the public entity to pay the Special
Tax levied on such property when due. 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 is to be treated as if it were a special assessment and be paid
from the eminent domain award. The constitutionality and operation of these provisions of the Act have
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not been tested. If for any reason property subject to the Special Tax becomes exempt from taxation by
reason of ownership by a non-taxable entity such as the federal government, or another public agency,
subject to the limitation of the maximum authorized rate of levy, the Special Tax will be reallocated to the
remaining taxable properties within the District, but in no case more than the maximum authorized
Special Tax for such properties. If a substantial portion of land within the District became exempt from
the Special Tax because of public ownership or otherwise, the maximum Special Tax which could be
levied upon the remaining acreage might not be sufficient to pay principal of and interest on the 2013
Bonds when due and a default may occur with respect to the payment of such principal and interest.
The County covenants to institute foreclosure proceedings to sell any Taxable Property with any
delinquent unpaid Special Tax in order to obtain funds to pay debt service on the 2013 Bonds. 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 Tax to protect its security interest. See
“SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–Covenant to Foreclose” for
provisions which apply in the event foreclosure is required and which the County is required to follow in
the event of delinquency in the payment of the Special Tax. In the event such superior court foreclosure
or foreclosures are necessary, there could be a delay in payments to Bondowners pending prosecution of
the foreclosure sale, if the County removes the District from the Reserve Fund and Teeter Plan were
depleted.
No assurances can be given that the real property subject to foreclosure and sale at a judicial
foreclosure sale will be sold, or, if sold, that the proceeds of such sale will be sufficient to pay any
delinquent Special Tax. Although the Act authorizes and the Fiscal Agent Agreement obligates the
County to cause such an action to be commenced and diligently pursued to completion, the Act does not
obligate the County to purchase or otherwise acquire any lot or parcel of property sold at the execution
sale pursuant to the judgment in any such action if there is no other purchaser at such sale.
Bankruptcy and Foreclosure Delays
The payment of the Special Tax and the ability of the County to foreclose the lien of a delinquent
unpaid Special Tax, as discussed in the section herein entitled “SECURITY AND SOURCES OF
PAYMENT FOR THE 2013 BONDS–Covenant to Foreclose,” may be limited by bankruptcy, insolvency,
or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial
foreclosure. In addition, the prosecution of a foreclosure could be delayed due to crowded local court
calendars or legal delaying tactics.
The various legal opinions to be delivered concurrently with the delivery of the 2013 Bonds
(including Bond Counsel’s approving legal opinion) will be qualified as to the enforceability of the
various legal instruments by bankruptcy, reorganization, insolvency or other similar laws affecting the
rights of creditors generally.
Regardless of the priority of the Special Tax securing the 2013 Bonds over non-governmental
liens on a parcel, the exercise by the County of the foreclosure and sale remedy may be forestalled or
delayed by bankruptcy, reorganization, insolvency, or other similar proceedings of the owner of, or
anyone else who claims an interest in, a parcel. The federal bankruptcy laws provide for an automatic
stay of foreclosure and sale proceedings, thereby delaying such proceedings perhaps for an extended
period. Delay in exercise of remedies or the institution of bankruptcy proceedings may cause Special Tax
collections to be insufficient to pay debt service on the 2013 Bonds.
Further, should remedies be exercised under the bankruptcy law against a parcel, payment of the
Special Tax may be subordinated to other claims in the bankruptcy proceedings. Thus, certain claims
may have priority over a claim for unpaid any Special Tax, even though, in the absence of the bankruptcy
proceedings, no such priority would exist.
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On July 30, 1992 the United States Court of Appeals for the Ninth Circuit issued an opinion in a
bankruptcy case entitled In re Glasply Marine Industries holding that ad valorem property taxes levied by
a county in the State of Washington after the date that the property owner filed a petition for bankruptcy
would not be entitled to priority over the claims of a secured creditor with a prior lien on the property.
Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid
taxes imposed subsequent to the filing of the bankruptcy petition were declared to be “administrative
expenses” of the bankruptcy estate, payable after the claims of all secured creditors. As a result, the
secured creditor was able to foreclose on the subject property and retain all the proceeds from the sale
thereof except the amount of the pre-petition taxes. Pursuant to this holding, post-petition taxes would be
paid only as administrative expenses and only if a bankruptcy estate has sufficient assets to do so. In
certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the
property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would be subject
only to current ad valorem taxes (i.e., not those accruing during the bankruptcy proceeding).
Glasply was controlling precedent on bankruptcy courts in the State of California for several
years subsequent to the date of the Ninth Circuit’s holding. Pursuant to state law, the lien date for general
ad valorem property taxes levied in the State of California is the January 1 preceding the Fiscal Year for
which the taxes are levied. Under the Glasply holding, a bankruptcy petition filing would have prevented
the lien for general ad valorem property taxes levied in Fiscal Years subsequent to the filing of a
bankruptcy petition from attaching and becoming a lien so long as the property was a part of the estate in
bankruptcy. However, the Glasply holding was for the most part subsequently rendered inoperative with
respect to the composition of a lien for and the collection of ad valorem taxes by amendments to the
federal Bankruptcy Code (Title 11 U.S.C.) which were part of the Bankruptcy Reform Act of 1994 (the
“Bankruptcy Reform Act”) passed by Congress during the later part of 1994. The Bankruptcy Reform
Act added a provision to the automatic stay section of the Bankruptcy Code which, pursuant to Section
362(b)(18) thereof, excepts from the Bankruptcy Code’s automatic stay provisions, “the creation of a
statutory lien for an ad valorem property tax imposed by . . . a political subdivision of a state, if such tax
comes due after the filing of the petition” by a debtor in bankruptcy court. The effect of this provision is
to continue the secured interest of ad valorem taxes on real property (i.e., post-petition taxes) in effect
during the period following the filing of a bankruptcy petition, including during the period bankruptcy
proceedings are pending.
Without further clarification by the courts or Congress, the original rationale of the Glasply
holding could, however, still result in the treatment of post-petition special taxes (and assessments) as
“administrative expenses,” rather than as tax liens secured by real property, at least during the pendency
of bankruptcy proceedings. First, special taxes have a different lien date than the lien date for general
ad valorem taxes in the State of California noted above. The lien of a Mello-Roos special tax attaches
upon recordation of the notice of the special tax lien as provided for in Section 53328.3 of the Mello-
Roos Act, as opposed to the January 1 lien date for general ad valorem taxes. Thus, in deciding whether
the original Glasply ruling is applicable to a bankruptcy proceeding involving special taxes rather than
general ad valorem property taxes, a court might consider the differences in the statutory provisions for
creation of the applicable tax lien (general ad valorem or special tax) in determining whether there is a
basis for post-petition special taxes to be entitled to a lien on the property during pending bankruptcy
proceedings. If a court were to apply Glasply to eliminate the priority of the special tax lien as a secured
claim against property with respect to post petition levy of the Special Tax made against property owners
within the District who file for bankruptcy, collections of the Special Tax from such property owners
could be reduced as the result of being treated as “administrative expenses” of the bankruptcy estate.
Second, and most importantly, is the fact that the original holding in Glasply and the mitigation of that
holding by the Bankruptcy Reform Act of 1994 both appear to be applicable only to general ad valorem
taxes, and, therefore, the exemption from the automatic stay in Section 362(b)(18) discussed above may
not be applicable to special taxes or assessments since they were not expressly mentioned or provided for
in this section, nor defined to be included within the term “ad valorem taxes.”
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Any prohibition of the enforcement of the Special Tax lien, or any such non-payment or delay
would increase the likelihood of a delay or default in payment of the principal of and interest on the 2013
Bonds.
Hazardous Materials
While government taxes, assessments and charges are a common claim against the value of a
taxed parcel, other less common claims may be relevant. One of the most serious in terms of the potential
reduction in the value that may be realized to pay the Special Tax is a claim with regard to a hazardous
substance. In general, the owners and operators of a Taxable Property may be required by law to remedy
conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal
Comprehensive Environmental Response, Compensation and Liability Act of 1989, sometimes referred to
as “CERCLA” or “Superfund Act,” is a well known one of these laws, but California laws with regard to
hazardous substances are also stringent and somewhat similar. Under many of these laws, the owner (or
operator) is obligated to remediate hazardous substances on, under or about the property whether or not
the owner (or operator) has anything to do with creating or handling the hazardous substance; however,
an owner (or operator) who is not at fault may seek recovery of its damages from the actual wrongdoer.
The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, may be to
reduce the marketability and value of the parcel, because the purchaser, upon becoming an owner, may
become obligated to remedy the condition just as is the seller.
Geologic, Topographic and Climatic Conditions
The market value of the land and improvements within the District can be adversely affected by
factors which may affect infrastructure and other public improvements and private improvements of the
parcels in the District and the continued usability of such private improvements. These factors include,
without limitation, geologic conditions (such as earthquakes), topographic conditions (such as earth
movements) and climatic conditions (such as floods, droughts and fire hazard).
There are several earthquake faults in the greater San Francisco Bay Area that could result in
damage to the within the County and the District, buildings, roads, bridges, and property within the
County in the event of an earthquake. Past experiences, including the 1989 Loma Prieta earthquake,
measuring 7.1 on the Richter scale with an epicenter approximately 60 miles south of the County, have
resulted in minimal damage to the infrastructure and property in the County. Earthquake faults that could
affect the County include but may not be limited to the Hayward Fault in the western part of the County,
and the Concord/Green Valley, Diablo and Calaveras Faults within the eastern portions of the County.
It should be assumed that an earthquake or one or more of such other conditions may occur and
may cause damage to improvements on parcels in the District of varying seriousness, that such damage
may entail significant repair or replacement costs and that repair or replacement may never occur either
because of the cost or because repair or replacement will not facilitate usability or because other
considerations may preclude such repair or replacement. Consequently, the occurrence of any of these
conditions could result in a significant decrease in the market value of property in the District or in such
property becoming unmarketable.
The District is within a geological maintenance district established by the County to provide
funds to repair earth movement in the area of the District. The maintenance district was initially funded
by means of a contribution by the initial developer of the District, and its funding is augmented by annual
assessments on the parcels in the District. See “SPECIAL RISK FACTORS–Direct and Overlapping
Indebtedness.”
Flooding. Flood zones are identified by the Federal Emergency Management Agency
(“FEMA”). FEMA designates land located in a low- to moderate-risk flood zone (i.e. not in a floodplain)
as being within a Non-Special Flood Hazard Area (a “NSFHA”). FEMA defines an NSFHA as an area
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that has less than a 1% chance of flooding each year. The City of San Ramon is within a NSFHA where
severe, concentrated rainfall could result in localized flooding and river overflows. The occurrence of
flooding in the District could result in a reduction in the Special Tax and such a reduction could have an
adverse effect on the ability of the County to make payments on the 2013 Bonds when due.
Federal Government Interests in Property
The ability of the County to collect interest and penalties specified by State law and to foreclose
the lien of a delinquent Special Tax payment, may be limited in certain respects with regard to properties
in which the Internal Revenue Service, the Drug Enforcement Agency, the Federal Deposit Insurance
Corporation (the “FDIC”) or other similar federal agencies has or obtains an interest.
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 the Special Tax within the District but does not pay taxes and assessments levied
on the parcel (including the Special Tax), 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 delinquency in the
Special Tax, 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 Tax 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.
The County has not undertaken to determine whether any federal governmental entity currently
has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the
Special Tax within the District, and therefore expresses no view concerning the likelihood that the risks
described above will materialize while the 2013 Bonds are outstanding.
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 County to collect
interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Tax
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
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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 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 tax imposed under the Mello-Roos
Act and a special tax formula 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 Mello-Roos special taxes.
The County is unable to predict what effect the application of the Policy Statement would have in
the event of a delinquency in the payment of the Special Tax with respect to a parcel within the District in
which the FDIC has or obtains an interest, although prohibiting the lien of the Special Tax to be
foreclosed on at a judicial foreclosure sale would likely reduce the number of or eliminate the persons
willing to purchase such a parcel at a foreclosure sale. Owners of the 2013 Bonds should assume that the
County will be unable to foreclose on any parcel owned by the FDIC. Such an outcome would cause a
draw on the Reserve Fund and perhaps, ultimately, a default in payment of the 2013 Bonds. The County
has not undertaken to determine whether the FDIC currently has, or is likely to acquire, any interest in
any of the parcels, and therefore expresses no view concerning the likelihood that the risks described
above will materialize while the 2013 Bonds are outstanding.
Non-Cash Payments of the Special Tax
Under the Act, the Board of Supervisors may reserve to itself the right and authority to allow the
owner of any taxable parcel to tender a 2013 Bond in full or partial payment of any installment of the
Special Tax or the interest or penalties thereon. Any 2013 Bond so tendered is to be accepted at par and
credit is to be given for any interest accrued thereon to the date of the tender. Thus, if 2013 Bonds can be
purchased in the secondary market at a discount, it may be to the advantage of an owner of a taxable
parcel to pay the Special Tax applicable thereto by tendering a 2013 Bond. Such a practice would
decrease the cash flow available to the County to make payments with respect to 2013 Bonds then
outstanding; and, unless the practice was limited by the County, the Special Tax paid in cash could be
insufficient to pay the debt service due with respect to 2013 Bonds. In order to provide some protection
against the potential adverse impact on cash flows which might be caused by the tender of 2013 Bonds in
payment of the Special Tax, the Fiscal Agent Agreement includes a covenant pursuant to which the
County will not authorize owners of Taxable Property to satisfy Special Tax obligations by the tender of
2013 Bonds unless the County shall have first obtained a report of an Independent Financial Consultant
certifying that doing so would not result in the County having insufficient Special Tax to pay the
principal of and interest on all Outstanding 2013 Bonds when due.
Payment of the Special Tax is not a Personal Obligation of the Owners
An owner of a property is not personally obligated to pay the Special Tax. The Special Tax is an
obligation which is secured only by a lien against the property. If the value of a taxable parcel is not
sufficient, taking into account other liens imposed by public agencies, to secure fully the payment of the
Special Tax, the County has no recourse against the owner.
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Limitations on Remedies
Remedies available to the owners of the 2013 Bonds may be limited by a variety of factors and
may be inadequate to assure the timely payment of principal of and interest on the 2013 Bonds or to
preserve the tax-exempt status of the 2013 Bonds.
Bond Counsel has limited its opinion as to the enforceability of the 2013 Bonds and of the Fiscal
Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally
the enforcement of creditors’ rights, by equitable principles and by the exercise of judicial discretion.
The lack of availability of certain remedies or the limitation of remedies may entail risks of delay,
limitation or modification of the rights of the owners of the 2013 Bonds.
Loss of Tax Exemption
As discussed under the caption “TAX MATTERS” interest on the 2013 Bonds could become
includable in gross income for purposes of federal income taxation retroactive to the date the 2013 Bonds
were issued, as a result of future acts or omissions of the County in violation of its covenants in the Fiscal
Agent Agreement. Should such an event of taxability occur, the 2013 Bonds are not subject to a special
redemption and will remain outstanding until maturity or until redeemed under one of the other
redemption provisions contained in the Fiscal Agent Agreement.
Proceedings to Reduce or Terminate the Special Tax
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”)
was approved by the voters of the State of California at the November 5, 1996 general election. The
Initiative added Article XIIIC and Article XIIID to the California Constitution. According to the “Title
and Summary” of the Initiative prepared by the California Attorney General, the Initiative limits “the
authority of local governments to impose taxes and property-related assessments, fees and charges.”
Provisions of the Initiative have been and will continue to be interpreted by the courts. The Initiative
could potentially impact the collection of the Special Tax within the District as described below.
Among other things, Section 3 of Article XIII states that. “.. the initiative power shall not be
prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or
charge.” The Act provides for a procedure, which includes notice, hearing, protest and voting
requirements to alter the rate and method of apportionment of an existing special tax. However, the Act
prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate
the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative
body determines that the reduction or termination of the special tax would not interfere with the timely
retirement of that debt. On July 1, 1997, the Governor of the State signed a bill into law enacting
Government Code Section 5854, which states that:
Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5,
1996, general election, shall not be construed to mean that any owner or beneficial owner
of a municipal security, purchased before or after that date, assumes the risk of, or in any
way consents to, any action by initiative measure that constitutes an impairment of
contractual rights protected by Section 10 of Article I of the United States Constitution.
Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not
conferred on the voters the power to repeal or reduce the Special Tax if such reduction would interfere
with the timely retirement of the 2013 Bonds.
It may be possible, however, for voters or the County to reduce the Special Tax in a manner
which does not interfere with the timely repayment of the 2013 Bonds, but which does reduce the
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maximum amount of the Special Tax that may be levied in any year below the existing levels. Therefore,
no assurance can be given with respect to the levy of the Special Tax for Administrative Expenses.
Furthermore, no assurance can be given with respect to the future levy of the Special Tax in amounts
greater than the amount necessary for the timely retirement of the 2013 Bonds. Therefore, the County can
give no assurance with respect to the levy of the Special Tax for Administrative Expenses. The County
has covenanted in the Fiscal Agent Agreement that it will not initiate proceedings under the Act to reduce
the maximum Special Tax rates to less than an amount, for any Fiscal Year, equal to 110% of aggregate
of the debt service due on the 2013 Bonds in such Fiscal Year plus the amount reasonably necessary to
pay the annual Administrative Expenses for such Fiscal Year. No assurance can be given as to the
enforceability of the foregoing covenant.
The interpretation and application of the Initiative will ultimately be determined by the courts
with respect to a number of the matters discussed above, and it is not possible at this time to predict with
certainty the outcome of such determination or the timeliness of any remedy afforded by the courts.
Secondary Markets and Prices
The Underwriter is not obligated to repurchase the 2013 Bonds and there can be no guarantee that
there will be a secondary market for the 2013 Bonds or, if a secondary market exists, that any 2013 Bonds
can be sold for any particular price. Prices of municipal securities for which a market is being made will
depend upon then-prevailing circumstances. Such prices could be substantially different from the original
purchase price. No assurance can be given that the market price for the 2013 Bonds will not be affected
by the introduction or enactment of any future legislation, or changes in interpretation of existing law.
No Acceleration Provision
The 2013 Bonds do not contain a provision allowing for the acceleration of the unpaid principal
of the 2013 Bonds in the event of a payment default or other default under the terms of the 2013 Bonds or
the Fiscal Agent Agreement.
THE COUNTY
The County is located northeast of the San Francisco Bay and is the ninth most populous county
in California. The County seat is in the City of Martinez. As of January 1, 2012, the estimated
population within the County was 1,065,117, representing an increase of approximately 0.8% compared
to the estimated population as of January 1, 2011. Major industries in the County include petroleum
refining and telecommunications.
Under the Act, the Board of Supervisors of the County is authorized to establish and act as the
legislative body for community facilities districts. However, the County has no liability in connection
with the District or the 2013 Bonds, other than with respect to the pledge of the Special Tax and
funds set forth in the Fiscal Agent Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR
THE 2013 BONDS–Limited Liability.” See also APPENDIX D–“GENERAL COUNTY ECONOMIC AND
DEMOGRAPHIC INFORMATION” hereto for general information regarding the County.
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CONTINUING DISCLOSURE
The County has covenanted for the benefit of the beneficial owners of the 2013 Bonds to provide
certain financial information and operating data relating to the County and the District by no later than
eight months after the end of each Fiscal Year (which fiscal year currently ends June 30), commencing
with the report due for the Fiscal Year ended June 30, 2013 (each, an “Annual Report”), and to provide
notices of the occurrence of certain specified events. The Annual Report and notices of specified events
will be filed with the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic
Municipal Market Access site. The specific nature of the information to be contained in the Annual
Report or the notices of specified events is set forth in APPENDIX E–“FORM OF CONTINUING
DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in
complying with Rule 15c2-12 of the United States Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be amended from time to time (“Rule 15c2-12”).
[Description of County compliance, including JPA and former RDA, in the last five years with
prior undertakings under Rule 15c2-12. [TO COME]
In order to provide certain continuing disclosure with respect to the 2013 Bonds in accordance
with the Rule 15c2-12, the County entered into a Continuing Disclosure Certificate for the benefit of the
Owners of the 2013 Bonds and has appointed Digital Assurance Certification, L.L.C. (“DAC”) as
Dissemination Agent. The form of Continuing Disclosure Certificate is set forth in APPENDIX E–“FORM
OF CONTINUING DISCLOSURE CERTIFICATE.”
ABSENCE OF MATERIAL LITIGATION
At the time of delivery of and payment for the 2013 Bonds the County will deliver a certificate to
the effect that there is no known action, suit, proceeding, inquiry or investigation at law or in equity
before or by any court or regulatory agency against the County or the District affecting the existence of
the County or the District or seeking to restrain or to enjoin the issuance, sale or delivery of the 2013
Bonds, 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 2013 Bonds, or in
any way contesting or affecting the validity or enforceability of the 2013 Bonds, the Fiscal Agent
Agreement, the Special Tax Formula or any other applicable agreements or any action of the County
contemplated by any of said documents.
TAX MATTERS
Federal tax law contains a number of requirements and restrictions which apply to the 2013
Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States,
requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain
other matters. The County has covenanted in the Fiscal Agent Agreement to comply with all requirements
that must be satisfied in order for the interest on the 2013 Bonds to be excludable from gross income for
federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the
2013 Bonds to become includable in gross income for federal income tax purposes retroactively to the
date of issuance of the 2013 Bonds.
Subject to the County’s compliance with the above-referenced covenants, under present law, in
the opinion of Quint & Thimmig LLP, Bond Counsel, interest on the 2013 Bonds (i) is excludable from
the gross income of the owners thereof for federal income tax purposes, and (ii) is not included as an item
of tax preference in computing the federal alternative minimum tax for individuals and corporations, but
interest on the 2013 Bonds is taken into account, however, in computing an adjustment used in
determining the federal alternative minimum tax for certain corporations.
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In rendering its opinion, Bond Counsel will rely upon certifications of the County with respect to
certain material facts within the County’s knowledge. Bond Counsel’s opinion represents its legal
judgment based upon its review of the law and the facts that it deems relevant to render such opinion and
is not a guarantee of a result.
The Internal Revenue Code of 1986, as amended (the “Code”), includes provisions for an
alternative minimum tax (“AMT”) for corporations in addition to the corporate regular tax in certain
cases. The AMT, if any, depends upon the corporation’s alternative minimum taxable income (“AMTI”),
which is the corporation’s taxable income with certain adjustments. One of the adjustment items used in
computing the AMTI of a corporation (with certain exceptions) is an amount equal to 75% of the excess
of such corporation’s “adjusted current earnings” over an amount equal to its AMTI (before such
adjustment item and the alternative tax net operating loss deduction). “Adjusted current earnings” would
include certain tax-exempt interest, including interest on the 2013 Bonds.
Ownership of the 2013 Bonds may result in collateral federal income tax consequences to certain
taxpayers, including, without limitation, corporations subject to the branch profits tax, financial
institutions, certain insurance companies, certain S corporations, individual recipients of Social Security
or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued)
indebtedness to purchase or carry tax exempt obligations. Prospective purchasers of the 2013 Bonds
should consult their tax advisors as to applicability of any such collateral consequences.
The issue price (the “Issue Price”) for each maturity of the 2013 Bonds is the price at which a
substantial amount of such maturity of the 2013 Bonds is first sold to the public. The Issue Price of a
maturity of the 2013 Bonds may be different from the price set forth, or the price corresponding to the
yield set forth, on the inside cover page of this Official Statement.
If the Issue Price of a maturity of the 2013 Bonds is less than the principal amount payable at
maturity, the difference between the Issue Price of each such maturity, if any, of the 2013 Bonds (the
“OID 2013 Bonds”) and the principal amount payable at maturity is original issue discount.
For an investor who purchases an OID 2013 Bond in the initial public offering at the Issue Price
for such maturity and who holds such OID 2013 Bond to its stated maturity, subject to the condition that
the County comply with the covenants discussed above, (a) the full amount of original issue discount with
respect to such OID 2013 Bond constitutes interest which is excludable from the gross income of the
owner thereof for federal income tax purposes; (b) such owner will not realize taxable capital gain or
market discount upon payment of such OID 2013 Bond at its stated maturity; (c) such original issue
discount is not included as an item of tax preference in computing the alternative minimum tax for
individuals and corporations under the Code, but is taken into account in computing an adjustment used
in determining the alternative minimum tax for certain corporations under the Code, as described above;
and (d) the accretion of original issue discount in each year may result in an alternative minimum tax
liability for corporations or certain other collateral federal income tax consequences in each year even
though a corresponding cash payment may not be received until a later year. Owners of OID 2013 Bonds
should consult their own tax advisors with respect to the state and local tax consequences of original issue
discount on such OID 2013 Bonds.
Owners of 2013 Bonds who dispose of 2013 Bonds prior to the stated maturity (whether by sale,
redemption or otherwise), purchase 2013 Bonds in the initial public offering, but at a price different from
the Issue Price or purchase 2013 Bonds subsequent to the initial public offering should consult their own
tax advisors.
If a 2013 Bond is purchased at any time for a price that is less than the 2013 Bond’s stated
redemption price at maturity or, in the case of an OID 2013 Bond, its Issue Price plus accreted original
issue discount reduced by payments of interest included in the computation of original issue discount and
previously paid (the “Revised Issue Price”), the purchaser will be treated as having purchased a 2013
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Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis
rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a
2013 Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the
purchaser’s election, as it accrues. Such treatment would apply to any purchaser who purchases an OID
2013 Bond for a price that is less than its Revised Issue Price even if the purchase price exceeds par. The
applicability of the market discount rules may adversely affect the liquidity or secondary market price of
such 2013 Bond. Purchasers should consult their own tax advisors regarding the potential implications of
market discount with respect to the 2013 Bonds.
An investor may purchase a 2013 Bond at a price in excess of its stated principal amount. Such
excess is characterized for federal income tax purposes as “bond premium” and must be amortized by an
investor on a constant yield basis over the remaining term of the 2013 Bond in a manner that takes into
account potential call dates and call prices. An investor cannot deduct amortized bond premium relating
to a tax-exempt bond. The amortized bond premium is treated as a reduction in the tax-exempt interest
received. As bond premium is amortized, it reduces the investor’s basis in the 2013 Bond. Investors who
purchase a 2013 Bond at a premium should consult their own tax advisors regarding the amortization of
bond premium and its effect on the 2013 Bond’s basis for purposes of computing gain or loss in
connection with the sale, exchange, redemption or early retirement of the 2013 Bond.
There are or may be pending in the Congress of the United States legislative proposals, including
some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters
referred to above or affect the market value of the 2013 Bonds. It cannot be predicted whether or in what
form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to
enactment. Prospective purchasers of the 2013 Bonds should consult their own tax advisors regarding any
pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or
proposed federal tax legislation.
The Internal Revenue Service (the “Service”) has an ongoing program of auditing tax-exempt
obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is
includable in the gross income of the owners thereof for federal income tax purposes. It cannot be
predicted whether or not the Service will commence an audit of the 2013 Bonds. If an audit is
commenced, under current procedures the Service may treat the County as a taxpayer and the 2013
Bondholders may have no right to participate in such procedure. The commencement of an audit could
adversely affect the market value and liquidity of the 2013 Bonds until the audit is concluded, regardless
of the ultimate outcome.
Payments of interest on, and proceeds of the sale, redemption or maturity of, tax exempt
obligations, including the 2013 Bonds, are in certain cases required to be reported to the Service.
Additionally, backup withholding may apply to any such payments to any 2013 Bond owner who fails to
provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a
substantially identical form, or to any 2013 Bond owner who is notified by the Service of a failure to
report any interest or dividends required to be shown on federal income tax returns. The reporting and
backup withholding requirements do not affect the excludability of such interest from gross income for
federal tax purposes.
In the further opinion of Bond Counsel, interest on the 2013 Bonds is exempt from California
personal income taxes.
Ownership of the 2013 Bonds may result in other state and local tax consequences to certain
taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with
respect to the 2013 Bonds. Prospective purchasers of the 2013 Bonds should consult their tax advisors
regarding the applicability of any such state and local taxes.
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The complete text of the final opinion that Bond Counsel expects to deliver upon issuance of the
2013 Bonds is set forth in APPENDIX B–“PROPOSED FORM OF OPINION OF BOND COUNSEL.”
CERTAIN LEGAL MATTERS
Certain legal matters incident to the authorization and issuance of the 2013 Bonds are subject to
the approving opinion of Quint & Thimmig LLP, Bond Counsel. Certain legal matters will be passed
upon for the County and the District by the County Counsel and Lofton & Jennings, San Francisco,
California, Disclosure Counsel, and for the Underwriter by Jones Hall, A Professional Law Corporation,
San Francisco, California, Underwriter’s Counsel. Payment of the fees and expenses of Bond Counsel,
Disclosure Counsel and Underwriter’s Counsel is contingent upon the sale and issuance of the 2013
Bonds. The various legal opinions to be delivered concurrently with the delivery of the 2013 Bonds will
be qualified as to enforceability of the various legal instruments by limitations imposed by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors generally and by
equitable remedies and proceedings generally.
FINANCIAL ADVISOR
The County has retained Fieldman, Rolapp & Associates, Irvine, California, as Financial Advisor,
in connection with the authorization and delivery of the 2013 Bonds. The Financial Advisor is not
obligated to undertake, and has not undertaken to make, an independent verification or to assume
responsibility for the accuracy, completeness or fairness of the information contained in this Official
Statement. The Financial Advisor is an independent advisory service and is not engaged in underwriting
or trading of securities. The Financial Advisor will receive compensation that is contingent upon the sale,
issuance and delivery of the 2013 Bonds.
RATING
Standard & Poor’s, a division of the McGraw-Hill Companies (“S&P”) has assigned a rating of
“___” to the 2013 Bonds.
Certain information was supplied by the County to S&P to be considered in evaluating the 2013
Bonds. The rating expresses only the views of S&P and is not a recommendation to buy, sell or hold the
2013 Bonds. An explanation of the significance of the rating may be obtained from Standard & Poor’s, a
division of the McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041.
There is no assurance that the rating will continue for any given period of time or that it will not
be reduced or withdrawn entirely by S&P if in its judgment, circumstances so warrant. The County and
the Trustee undertake no responsibility to oppose any such revision or withdrawal. Any such downward
revision or withdrawal may have an adverse effect on the market price of the 2013 Bonds.
UNDERWRITING
Pursuant to the terms of a Bond Purchase Agreement with respect to the 2013 Bonds, dated
________, 2013 (the “Purchase Agreement”) by and between the County and Stifel, Nicolaus &
Company, Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus (the “Underwriter”), the
2013 Bonds will be purchased by the Underwriter for a price of $________, which is equal to the initial
principal amount of the 2013 Bonds, less an original issue discount of $________ and less an
Underwriter’s discount of $________. The Underwriter will purchase all of the 2013 Bonds, if any are
purchased.
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The obligation of the Underwriter to make such purchase is subject to certain terms and
conditions set forth in the Purchase Agreement.
The Underwriter may change the initial public offering prices and yields set forth on the inside
cover page of this Official Statement. The 2013 Bonds may be offered and sold to dealers, including the
Underwriter and dealers acquiring 2013 Bonds for their own account or an account managed by them, at
prices lower than the public offering price.
MISCELLANEOUS
This Official Statement is not to be construed as a contract or agreement between the County and
the purchasers of the 2013 Bonds. Any statements made in this Official Statement involving matters of
opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations
of fact, and no representation is made that any of the estimates will be realized. The information and
expressions of opinion herein are subject to change without notice and neither the delivery of the Official
Statement nor any sale made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the District or the County since the date hereof.
The execution and delivery of this Official Statement by the County has been duly authorized by
the Board of Supervisors.
COUNTY OF CONTRA COSTA, for and on
behalf of the COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
Catherine Kutsuris
Director, Department of Conservation and
Development
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APPENDIX A
SUMMARY OF THE FISCAL AGENT AGREEMENT
.
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B-1
APPENDIX B
PROPOSED FORM OF OPINION OF BOND COUNSEL
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APPENDIX C
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor’s Parcel in Community Facilities District No. 2001-1 (herein
“CFD No. 2001-1”) shall be levied and collected according to the tax liability determined by the Board of
Supervisors of the County of Contra Costa or its designee, as described below. All of the property in
CFD No. 2001-1, unless exempted by law or by the provisions of Section G below, shall be taxed for the
purposes, to the extent, and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre or Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or
if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final
map, parcel map, or other recorded County parcel map.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5,
(commencing with Section 53311), Division 2 of Title 5 of the Government Code of the State of
California.
“Administrative Expenses” means any or all of the following: the fees and expenses of any fiscal agent or
trustee (including any fees and expenses of its counsel) employed in connection with any 2013 Bonds;
any costs associated with the marketing or remarketing of the 2013 Bonds; the expenses of the
Administrator and the County in carrying out their respective duties under any fiscal agent agreement,
indenture or resolution with respect to the 2013 Bonds or CFD No. 2001-1, including, but not limited to,
the levy and collection of the Special Tax, the fees and expenses of legal counsel, charges levied by the
County or any division or office thereof in connection with the levy and collection of Special Taxes,
audits, continuing disclosure or other amounts needed to pay arbitrage rebate to the federal government
with respect to 2013 Bonds; costs associated with complying with continuing disclosure requirements;
costs associated with responding to public inquiries regarding Special Tax levies and appeals; attorneys’
fees and other costs associated with commencement or pursuit of foreclosure for delinquent Special
Taxes; costs associated with overhead expense allocations to CFD No. 2001-1; and all other costs and
expenses of the County, the Administrator, and any fiscal agent, escrow agent or trustee related to the
administration of CFD No. 2001-1.
“Administrator” shall mean the person or firm designated by the Board to administer the Special Tax
according to this Rate and Method of Apportionment of Special Tax.
“Annual Interest Component” means the total amount of interest on 2013 Bonds in the calendar year
commencing in such Fiscal Year.
“Assessor’s Parcel” or “Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned
Assessor’s Parcel number.
“Assessor’s Parcel Map” means an official map of the County Assessor of the County of Contra Costa
designating parcels by Assessor’s Parcel Number.
“2013 Bonds” means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one
or more series, issued by CFD No. 2001-1 under the Act.
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“Board” means the Board of Supervisors of the County of Contra Costa.
“Capitalized Interest” means funds in any capitalized interest account available to pay debt service on
2013 Bonds issued by CFD No. 2001-1.
“Capitalized Interest Requirement” means the least of: i) the Annual Interest Component, ii) the
difference between the Special Tax Requirement and the amount determined pursuant to Step 1 of
Section E hereof, or iii) the amount of Capitalized Interest available.
“County” means the County of Contra Costa.
“Developed Property” means Taxable Property for which a building permit for construction was issued
prior to June 1 of the preceding Fiscal Year.
“Fiscal Year” means the period starting July 1 and ending on the following June 30.
“Homeowners’ Association Property” means any property within the boundaries of CFD No. 2001-1
which is owned by a homeowners’ or property owners’ association.
“Land Use Class” means one of the defined land use categories for which a specific Maximum Special
Tax is identified in Table 1 in Section C below.
“Maximum Special Tax” means the maximum amount of Special Tax, determined in accordance with
Section C below, that can be levied in any Fiscal Year.
“Other Property” means Developed Property which is not Residential Property, Public Property, or
Homeowners’ Association Property.
“Planned Units” means the number of individual residential units that were expected to be constructed on
property within CFD No. 2001-1 as shown in Attachment 1.
“Proportionately” means, for Residential Property and Other Property, that the ratio of the actual Special
Tax levied in any Fiscal Year to the Maximum Special Tax authorized to be levied in that Fiscal Year is
equal for all Assessor’s Parcels of Residential Property and Other Property. For Undeveloped Property,
“Proportionately” means that the ratio of the actual Special Tax to the Maximum Special Tax is equal for
all Assessor’s Parcels of Undeveloped Property. For Homeowners’ Association Property and nonexempt
Public Property, “Proportionately” means that the ratio of the actual Special Tax to the Maximum Special
Tax is equal for all Assessor’s Parcels of Homeowners’ Association Property and Public Property.
“Public Property” means any property within the boundaries of CFD No. 2001-1 that is owned by or
irrevocably offered for dedication to the federal government, State of California or other local
governments or public agencies.
“Residential Property” means, in any Fiscal Year, any Parcel of Developed Property for the construction
of a residential structure which is not Homeowners’ Association Property or Public Property.
“Special Tax” means a special tax levied in any Fiscal Year that will be used to pay the Special Tax
Requirement, as defined below.
“Special Tax Requirement” means the total amount needed each Fiscal Year to (i) pay principal and
interest on 2013 Bonds in the calendar year commencing in such Fiscal Year, (ii) create or replenish
reserve funds, (iii) cure any delinquencies in the payment of principal or interest on indebtedness of CFD
No. 2001-1 which have occurred in the prior Fiscal Year or (based on delinquencies in the payment of
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Special Taxes which have already taken place) are expected to occur in the Fiscal Year in which the tax
will be collected, (iv) pay Administrative Expenses.
“Taxable Property” means all of the Assessor’s Parcels within the boundary of CFD No. 2001-1 which
are not exempt from the Special Tax pursuant to law or Section G below.
“Tentative Map” means the tentative map for Norris Canyon Estates approved by the Board in August
1997.
“Undeveloped Property” means any Parcel of Taxable Property within CFD No. 2001-1 for which a
building permit has not been issued prior to June 1 of the preceding Fiscal Year.
B. ASSIGNMENT TO LAND USE CLASS
Each Fiscal Year, the Administrator shall categorize each parcel of property in CFD No. 2001-1 as
Developed Property or Undeveloped Property, and Parcels of Developed Property shall be further
identified as either Residential Property, Other Property, Homeowners’ Association Property or Public
Property. For each Parcel of Other Property within the CFD, the Administrator shall determine how
many Planned Units had been expected on the Parcel in order to assign the Maximum Special Tax
pursuant to Section C below.
C. MAXIMUM SPECIAL TAX
Pursuant to Section 53321 (d) of the Act, a Maximum Special Tax must be established as a specific dollar
amount before a Parcel is first subject to the tax when in private residential use. The following maximum
rates shall apply to all Parcels of Taxable Property within CFD No. 2001-1 for each Fiscal Year in which
the Special Tax is collected:
TABLE 1
MAXIMUM SPECIAL TAX
(Fiscal Year 2001-02)
Land
Use Class
Description
Maximum Special Tax
(Fiscal Year 2001-02)
1 Residential Property $2,100 per Parcel
2 Other Property $2,100 per Planned Unit of the
Parcel before it became Other
Property
3 Undeveloped Property $3,360 per Acre
Pursuant to Section 53321 (d) of the Act, the Special Tax levied against a Parcel used for private
residential purposes shall under no circumstances increase more than ten percent (10%) as a consequence
of delinquency or default by the owner of any other Parcel or Parcels and shall, in no event, exceed the
Maximum Special Tax in effect for the Fiscal Year in which the Special Tax is being levied.
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D. MANDATORY PREPAYMENT OF SPECIAL TAX RESULTING FROM TENTATIVE
MAP REVISIONS
It is possible that a revision in the Tentative Map could result in less Special Tax revenue being available
from the CFD. To preclude this result, after CFD No. 2001-1 has been formed, the County shall apply the
following steps for every proposed Tentative Map revision:
Step 1: The County or its designee shall calculate the Maximum Special Tax revenues
that could be collected from the property affected by the proposed Tentative Map
revision (the “Affected Property”) prior to the revision being approved;
Step 2: The County or its designee shall calculate the Maximum Special Tax revenues
that could be collected from the Affected Property if the Tentative Map revision
is approved;
Step 3: If the amount determined in Step 2 is higher than that calculated in Step 1, the
Tentative Map revision may be approved without prepayment of the Special Tax.
If the revenues calculated in Step 2 are less than those calculated in Step 1, the
County may not approve the Tentative Map revision unless the landowner
requesting the Tentative Map revision prepays a portion of the Special Tax
obligation that would have applied to the Affected Property prior to approval of
the revision in an amount sufficient to retire a portion of the 2013 Bonds and
maintain 110% coverage on the 2013 Bonds’ debt service with the reduced
Maximum Special Tax revenues that will result after the Tentative Map revision
is approved. The required prepayment shall be calculated using the formula set
forth in Section H below. Property owners wishing to prepay the Special Tax as
a result of a Tentative Map revision cannot be delinquent on past Special Taxes
on the Affected Property.
E. METHOD OF LEVY AND COLLECTION OF THE SPECIAL TAX
Commencing with Fiscal Year 2001-02 and for each following Fiscal Year, the Administrator shall
determine the Special Tax Requirement for that Fiscal Year. The Special Tax shall then be levied as
follows:
Step 1: The Special Tax shall be levied Proportionately on each Parcel of Residential Property and Other
Property up to 100% of the Maximum Special Tax up to the Special Tax Requirement for each Land Use
Class for such Fiscal Year as determined pursuant to Section C. The Maximum Special Tax for a Parcel
of Other Property shall be the total Maximum Special Taxes for the Planned Units that the Other Property
replaced, as determined by the Administrator;
Step 2: Determine the Capitalized Interest Requirement, if any, and add it to the amount levied under
Step 1;
Step 3: If the total of the Capitalized Interest Requirement and the amount levied under Step 1 is less than
the Special Tax Requirement, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of
Undeveloped Property within the CFD, up to 100% of the Maximum Special Tax for Undeveloped
Property for such Fiscal Year determined pursuant to Section C;
Step 4: If additional monies are needed after applying the first three steps, the Special Tax shall be levied
Proportionately on each Parcel of Homeowners’ Association Property and Public Property which
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originally had Planned Units, up to 100% of the Maximum Special Tax for Undeveloped Property for
such Fiscal Year determined pursuant to Section C.
F. MANNER OF COLLECTION
The Special Taxes for CFD No. 2001-1 shall be collected in the same manner and at the same time as
ordinary ad valorem property taxes, provided, however, that prepayments are permitted as set forth in
Section H below (and may be required in the case of Tentative Map revisions) and provided further that
the County may directly bill the Special Tax, may collect Special Taxes at a different time or in a
different manner, and may collect delinquent Special Taxes through foreclosure or other available
methods.
The Special Tax shall be levied and collected until principal and interest on 2013 Bonds have been repaid
and authorized facilities to be constructed directly from Special Taxes proceeds have been completed.
However, in no event shall a Special Taxes be levied after Fiscal Year 2039-2040.
G. EXEMPTIONS
Notwithstanding any other provision of this Rate and Method of Apportionment of Special Tax, no
Special Taxes shall be levied on Public Property, except as otherwise provided in Sections 53317.3 and
53317.5 of the Act.
H. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section H:
“Future Facilities Costs” means the Public Facilities Requirements (as defined below) minus
public facility costs funded by Previously Issued Bonds, interest earnings on the construction
fund actually earned prior to the date of prepayment, Special Taxes, developer equity, and/or any
other source of funding.
“Outstanding Bonds” means all Previously Issued Bonds which remain outstanding, with the
following exception: if a Special Tax has been levied against, or already paid by, an Assessor’s
Parcel making a prepayment, and a portion of the Special Tax will be used to pay a portion of the
next principal payment on the 2013 Bonds that remain outstanding (as determined by the
Administrator), that next principal payment shall be subtracted from the total 2013 Bond
principal that remains outstanding, and the difference shall be used as the amount of “Outstanding
Bonds” for purposes of this prepayment formula.
“Previously Issued Bonds” means all 2013 Bonds that have been issued by CFD No. 2001-1 prior
to the date of prepayment.
“Public Facilities Requirements” means either $5,900,000 in 2001 dollars, which shall increase
by three percent (3%) on January 1, 2002, and on each January 1 thereafter, or such lower
number as shall be determined by the County as sufficient to fund public facilities to be provided
by CFD No. 2001-1 under the authorized bonding program for CFD No. 2001-1.
The Special Tax obligation applicable to an Assessor’s Parcel in CFD No. 2001-1 may be prepaid and the
obligation of the Assessor’s Parcel to pay the Special Tax permanently satisfied as described herein,
provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to
such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay
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the Special Tax obligation shall provide the County with written notice of intent to prepay. Within 30
days of receipt of such written notice, the County shall notify such owner of the prepayment amount of
such Assessor’s Parcel. Prepayment must be made not less than 75 days prior to any interest payment
date for 2013 Bonds to be redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount shall be calculated as follows (capitalized terms as defined below):
Bond Redemption Amount
plus Future Facilities Amount
plus Redemption Premium
plus Defeasance
plus Administrative Fees and Expenses
less Reserve Fund Credit
equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount shall be determined by application of the
following steps:
Step 1: Compute the total Maximum Special Tax that could be collected from the
Assessor’s Parcel prepaying the Special Tax in the Fiscal Year in which
prepayment would be received by the County.
Step 2: Divide the Maximum Special Tax computed pursuant to Step 1 for such
Assessor’s Parcel by the lesser of (i) the Maximum Special Tax revenues that
could be collected in that Fiscal Year from property in the entire CFD, or (ii) the
Maximum Special Tax revenues that could be generated at buildout of property
in the CFD based on anticipated land uses at the time the prepayment is
calculated.
Step 3: Multiply the quotient computed pursuant to Step 2 by the Outstanding Bonds to
compute the amount of Outstanding Bonds to be retired and prepaid. (the “Bond
Redemption Amount”).
Step 4: Compute the current Future Facilities Costs.
Step 5: Multiply the quotient computed pursuant to Step 2 by the amount determined
pursuant to Step 4 to compute the amount of Future Facilities Costs to be prepaid
(the “Future Facilities Amount”).
Step 6: Multiply the Bond Redemption Amount computed pursuant to Step 3 by the
applicable redemption premium, if any, on the Outstanding Bonds to be
redeemed (the “Redemption Premium”).
Step 7: Compute the amount needed to pay interest on the Bond Redemption Amount
starting with the first 2013 Bond interest payment date after which the
prepayment has been received until the earliest redemption date for the
Outstanding Bonds. However, if 2013 Bonds are callable at the first interest
payment date after the prepayment has been received, Steps 7, 8 and 9 of this
prepayment formula will not apply.
Step 8: Compute the amount of interest the County reasonably expects to derive from
reinvestment of the Bond Redemption Amount plus the Redemption Premium
from the first 2013 Bond interest payment date after which the prepayment has
been received until the redemption date for the Outstanding Bonds.
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Step 9: Take the amount computed pursuant to Step 7 and subtract the amount computed
pursuant to Step 8 (the “Defeasance”).
Step 10: The administrative fees and expenses of CFD No. 2001-1 are as calculated by the
County and include the costs of computation of the prepayment, the costs of
redeeming 2013 Bonds, and the costs of recording any notices to evidence the
prepayment and the redemption (the “Administrative Fees and Expenses”).
Step 11: A reserve fund credit shall be calculated as the reduction, if any, in the applicable
reserve fund for the Outstanding Bonds to be redeemed pursuant to the
prepayment (the “Reserve Fund Credit”).
Step 12: The Special Tax prepayment is equal to the sum of the amounts computed
pursuant to Steps 3, 5, 6, 9, and 10, less the amount computed pursuant to Step
11 (the “Prepayment Amount”).
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Attachment 1
Tentative Map for Norris Canyon Estates
on File with the County
D-i
APPENDIX D
GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION
TABLE OF CONTENTS
PAGE
General ...................................................................................................................................................... D-1
County Government .................................................................................................................................. D-1
Population ................................................................................................................................................. D-3
Industry and Employment ......................................................................................................................... D-4
Major Employers ...................................................................................................................................... D-5
Personal Income ........................................................................................................................................ D-6
Commercial Activity ................................................................................................................................. D-7
Construction Activity ................................................................................................................................ D-8
Transportation ........................................................................................................................................... D-9
Environmental Control Services ............................................................................................................ D-10
Education and Health Services ............................................................................................................... D-11
INDEX OF TABLES
PAGE
Table D-1 Population ............................................................................................................................ D-3
Table D-2 Employment and Unemployment of Resident Labor Force Wage and Salary
Employment by Industry Annual Averages ..................................................................... D-4
Table D-3 Major Employers in the East Bay with Employees in the County ...................................... D-5
Table D-4 Personal Income ................................................................................................................... D-6
Table D-5 Taxable Transactions ........................................................................................................... D-7
Table D-6 Residential Building Permit Valuations .............................................................................. D-8
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APPENDIX D
GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION
General
The County of Contra Costa, California (the “County”) was incorporated in 1850 as one of the
original 27 counties of the State of California (the “State”), with the City of Martinez as the County seat.
It is one of the nine counties in the San Francisco-Oakland Bay Area. The County covers about
733 square miles and extends from the northeastern shore of the San Francisco Bay easterly about
50 miles to San Joaquin County. The County is bordered on the south and west by Alameda County and
on the north by the Suisun and San Pablo Bays. The western and northern shorelines are highly
industrialized, while the interior sections are suburban/residential, commercial and light industrial. The
County contains 19 incorporated cities, including Richmond in the west, Antioch in the northeast, and
Concord in the middle.
A large part of the County is served by the San Francisco Bay Area Rapid Transit District
(“BART”), which has enabled the expansion of both residential and commercial development throughout
much of the County. In addition, economic development along the Interstate 680 corridor in the County
has been substantial and has accounted for significant job creation in the Cities of Concord, Walnut Creek
and San Ramon.
County Government
The County has a general law form of government. A five-member Board of Supervisors, each
member of which is elected to a four-year term, serves as the County’s legislative body. Also elected are
the County Assessor, Auditor-Controller (the “County Auditor-Controller”), Clerk-Recorder, District
Attorney-Public Administrator, Sheriff-Coroner and Treasurer-Tax Collector (the “County Treasurer”).
A County Administrator appointed by the Board of Supervisors runs the day-to-day business of the
County. The current County Administrator is David J. Twa.
CONTRA COSTA COUNTY
ELECTED OFFICIALS
Name Office Expiration of Current Term
John M. Gioia Supervisor, District 1 January 4, 2015
Candace Andersen Supervisor, District 2 January 7, 2013
Mary N. Piepho Supervisor, District 3 January 7, 2013
Karen Mitchoff Supervisor, District 4 January 4, 2015
Federal D. Glover Supervisor, District 5 January 7, 2013
Robert R. Campbell Auditor-Controller January 4, 2015
Russell V. Watts Treasurer-Tax Collector January 4, 2015
Gus S. Kramer Assessor January 4, 2015
Stephen L. Weir Clerk Recorder January 4, 2015
Mark A. Peterson District Attorney-Public Administrator January 4, 2015
David Livingston Sheriff-Coroner January 4, 2015
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Brief resumes of key County officials are set forth below.
David J. Twa, County Administrator. Mr. Twa was appointed County Administrator by the
Board of Supervisors in June 2008 and is responsible for the overall administration of County
government. Prior to his appointment, he served as the County Manager for Ramsey County, Minnesota
from 2003-2008. Prior to that, Mr. Twa served as the County Administrator in three counties in
Minnesota for over 20 years and served as an Elected County Attorney, Interim Property Records and
Revenue Director, Executive Director of Housing and Redevelopment Authority, and Interim Director of
Public Health and Long-term Care. Mr. Twa received his Juris Doctorate from the University of
Minnesota, as well as a degree in accounting, and is also a Certified Public Accountant. Under Mr. Twa’s
leadership Ramsey County, Minnesota maintained a triple-A credit rating, one of few counties in the
country to achieve this distinguished rating. He also oversaw the efforts of Ramsey County to institute a
Strategic Planning Program, address its health care cost liability, start a two year budget process, work
with community partners to improve public services in the Minneapolis-St. Paul Region, and institute
significant redevelopment projects. Mr. Twa was named the County Manager of the Year (2007) by the
Minnesota Association of County Administrators, for his innovation in public service.
Robert R. Campbell, Auditor-Controller. Mr. Campbell was elected Auditor-Controller of the
County by the voters on June 8, 2010 and was sworn into office on January 3, 2011. Mr. Campbell has
worked for the County for almost 25 years. He received a Bachelor of Science degree in business
administration from the California State University, Hayward. Mr. Campbell is an active member of the
State Association of County Auditors, a member of the Government Finance Officer’s Association and
the Association of Government Accountants. Mr. Campbell is a former president of the State Association
of County Auditors Property Tax and Payroll Managers’ committees, and served as a member on various
State Association’s Property Tax Guideline Committees.
Russell V. Watts, Treasurer-Tax Collector. Mr. Watts was elected Treasurer-Tax Collector by
the voters of the County on June 8, 2010 and was sworn into office on January 3, 2011. Mr. Watts has
been serving as Chief Deputy Treasurer-Tax Collector since 2002 where he has been responsible for the
administration of the department. He has 16 years of county treasury and tax collection experience with
administrative responsibilities in such areas as revenue collections, cash management, and investments.
Mr. Watts holds a Bachelor’s degree from Brigham Young University, Provo, UT, and a Masters degree
in Public Administration from the University of North Carolina, Chapel Hill, NC. He is an active
member of the California Association of County Treasurers and Tax Collectors (CACTTC) and the
Government Finance Officers Association of America. Mr. Watts serves on various State-wide CACTTC
committees. Mr. Watts will also serve on the Contra Costa County Employees’ Retirement Association
Board of Trustees. [TO BE REVIEWED]
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Population
The County is the ninth most populous county in California, with its population reaching
approximately 1,065,117 as of January 1, 2012. This represents an increase of approximately 0.4%
compared to the County’s population as of January 1, 2008. The availability of rapid transit, close
proximity to major employment hubs in San Francisco and Oakland, and relatively affordable existing
and new housing have combined to attract more residents to the County over the past decade.
Population growth in the County has been strongest in unincorporated areas as well as in the
cities of Antioch, Brentwood, Hercules, Oakley, Pittsburg and San Ramon.
The following is a summary of the County’s population levels since 2012.
Table D-1
COUNTY OF CONTRA COSTA
POPULATION†
(AS OF JANUARY 1)
2008 2009 2010 2011 2012
Antioch 100,957 101,041 102,330 103,055 103,833
Brentwood 51,908 51,950 52,492 52,030 52,575
Clayton 10,864 10,873 10,492 10,942 10,996
Concord 124,599 124,703 125,864 122,599 123,206
Danville 43,043 43,080 43,574 42,217 42,450
El Cerrito 23,440 23,461 23,666 23,649 23,774
Hercules 24,480 24,499 24,693 24,153 24,272
Lafayette 24,087 24,106 24,342 24,024 24,159
Martinez 36,348 36,378 36,663 36,055 36,225
Moraga 16,204 16,216 16,332 16,076 16,152
Oakley 34,468 34,500 35,846 35,998 36,532
Orinda 17,669 17,687 17,866 17,714 17,819
Pinole 19,383 19,400 19,555 18,461 18,560
Pittsburg 63,771 63,827 64,967 63,735 64,706
Pleasant Hill 33,547 33,576 33,844 33,280 33,440
Richmond 104,513 104,602 105,630 104,382 104,887
San Pablo 31,808 31,834 32,131 28,931 29,105
San Ramon 63,176 63,230 64,860 73,111 74,378
Walnut Creek 65,860 65,915 66,584 64,710 65,233
SUBTOTAL 890,125 890,878 901,731 895,122 902,302
Balance of County 170,310 170,447 171,054 161,184 162,815
TOTAL 1,060,435 1,061,325 1,073,055 1,056,306 1,065,117
California 38,292,687 38,255,508 38,648,090 37,427,946 37,678,563
_______________
† Columns may not total due to independent rounding.
Source: State Department of Finance, Table 2: E-4 Population Estimates for Cities, Counties and State, 2008-2009 with 2000
DRU Benchmark and E-1 Population Estimates for Cities, Counties and the State with Annual Percent Change –
January 1, 2009 and 2012.
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Industry and Employment
As shown below, the County’s civilian labor force was 524,100 in 2011. With average 2011
unemployment rates of 10.4% and 11.7% for the County and the State, respectively, the County has
achieved a lower unemployment rate than that of the State in each of the prior five calendar years.
Table D-2
COUNTY OF CONTRA COSTA
EMPLOYMENT AND UNEMPLOYMENT OF
RESIDENT LABOR FORCE
WAGE AND SALARY EMPLOYMENT BY INDUSTRY
ANNUAL AVERAGES (IN THOUSANDS)
2007 2008 2009 2010 2011
County Civilian Labor Force (1) 511.7 524.5 524.8 523.3 524.1
Employment 489.8 492.2 471.5 465.1 469.6
Unemployment 21.9 32.4 53.4 58.2 54.5
Unemployment Rate:
County 4.3% 6.2% 10.2% 11.1% 10.4%
State of California 5.4% 7.2% 11.3% 12.4% 11.7%
Wage and Salary Employment (2) 2007 2008 2009 2010 2011
Farm 0.7 0.7 0.8 0.7 0.9
Goods Producing 49.7 46.5 39.9 36.6 34.8
Trade, Transportation and Utilities 62.3 61.2 57.3 55.9 56.3
Information 13.0 11.8 10.4 9.6 9.0
Financial Activities 29.1 26.6 25.7 25.3 24.5
Professional and Business Services 49.4 49.3 45.9 43.8 45.5
Education and Health Services 44.6 45.6 47.7 48.4 49.2
Leisure and Hospitality 33.2 32.8 31.2 31.3 32.2
Other Services 12.5 12.4 11.7 11.8 12.5
Government 52.2 52.6 51.3 49.2 47.8
TOTAL (3) 346.8 339.5 321.8 312.6 312.7
_____________
(1) Based on place of residence.
(2) Based on place of work.
(3) Columns may not total due to independent rounding.
Source: State of California, Employment Development Department, and Labor Market Information Division, March 2011
Benchmark.
Major Employers
Major industries in the County include petroleum refining, telecommunications, financial and
retail services, steel manufacturing, prefabricated metals, chemicals, electronic equipment, paper products
and food processing. Most of the County’s heavy manufacturing is located along the County’s northern
boundary fronting on the Suisun Bay and San Pablo Bay leading to San Francisco Bay and the Pacific
Ocean.
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The County is located in the region east of the San Francisco Bay known as the “East Bay,”
which also includes the County of Alameda. The following Table D-3 provides a listing of major
employers headquartered or with locations in the County who participated in the data collection survey
and their estimated firm-wide employment levels.
Table D-3
MAJOR EMPLOYERS IN THE EAST BAY
WITH EMPLOYEES IN THE COUNTY
2011
Firm Primary Location Product or Service
Estimated No.
Employees
Kaiser Permanente Medical Center† Walnut Creek, Martinez Healthcare 16,587
State of California Countywide State Government 9,586
County of Contra Costa† Martinez County Government 8,142
Chevron Corp.† Countywide Energy, Oil and Gas 7,025
U.S. Postal Service Countywide Postal Services 6,399
John Muir Health† Walnut Creek Health Care 6,259
PG&E Corp. Countywide Gas and Electric Service 3,420
San Ramon Valley Unified School District Danville K-12 Education 2,675
Contra Costa Community College District Martinez Education 2,000
Bio-Rad Laboratories† Hercules Research 1,705
_______________
† Headquartered in the County.
Sources: County of Contra Costa Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2011 and San
Francisco Business Times, 2012 Bay Area Book of Lists. Data is for the reported entity’s latest fiscal year.
Personal Income
The United States Department of Commerce, Bureau of Economic Analysis (the “BEA”)
produces economic account statistics that enable government and business decision-makers, researchers,
and the public to follow and understand the performance of the national economy.
The BEA defines “personal income” as income received by persons from all sources, including
income received from participation in production as well as from government and business transfer
payments. Personal income represents the sum of compensation of employees (received), supplements to
wages and salaries, proprietors’ income with inventory valuation adjustment and capital consumption
adjustment (CCAdj), rental income of persons with CCAdj, personal income receipts on assets, and
personal current transfer receipts, less contributions for government social insurance. Per capita personal
income is calculated as the personal income divided by the resident population based upon the Census
Bureau’s annual midyear population estimates.
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Table D-4 below presents the latest available total income and per capita personal income for the
County, the State and the nation for the calendar years 2007 through 2011. The County has traditionally
had per capita income levels significantly higher than those of the State and the nation.
Table D-4
COUNTY OF CONTRA COSTA
PERSONAL INCOME
CALENDAR YEARS 2007 THROUGH 2011†
Year and Area
Personal Income
(millions of dollars)
Per Capita
Personal Income
(dollars)
2011†
County
State
United States
N/A
1,645,138
12,949,905
N/A
43,647
41,560
2010
County
State
United States
58,383
1,564,209
12,308,496
55,465
41,893
39,791
2009
County
State
United States
56,221
1,516,677
11,852,715
54,169
41,034
38,637
2008
County
State
United States
59,914
1,610,698
12,451,660
58,547
44,003
40,947
2007
County
State
United States
58,044
1,566,400
11,900,562
57,518
43,211
39,506
† Most recent year for which annual data is available for the County, the State and the United States.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System,
April 2012.
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Commercial Activity
Commercial activity comprises an important part of the County’s economy, with taxable
transactions totaling approximately $11.9 billion in calendar year 2010, the most recent year for which
complete annual data is available. Presented in Table D-5 below is a summary of taxable transactions in
the County since 2006.
Table D-5
COUNTY OF CONTRA COSTA
TAXABLE TRANSACTIONS
CALENDAR YEARS 2006 TO 2010†
($ IN 000’S)
2006 2007 2008 2009(1) 2010†(1)
Motor Vehicle and Parts Dealers – – – $1,184,803 $1,234,844
Furniture and Home Furnishings Stores – – – 225,331 227,432
Electronics and Appliance Stores – – – 385,742 356,124
Building Materials and Garden Equipment
and Supplies
– – – 711,475 718,405
Food and Beverage Stores – – – 657,337 673,326
Health and Personal Care Stores – – – 264,279 264,011
Gasoline Stations – – – 1,151,058 1,312,703
Clothing and Clothing Accessories Stores – – – 642,813 663,243
Sporting Goods, Hobby, Book, and Music
Stores
– – – 314,924 304,491
General Merchandise Stores – – – 1,380,111 1,406,756
Miscellaneous Store Retailers – – – 397,297 382,048
Nonstore Retailers – – – 47,224 46,613
Food Services and Drinking Places – – – 1,111,182 1,126,398
Apparel Stores $462,451 $470,507 $528,456 – –
General Merchandise Stores 1,882,310 1,878,711 1,753,124 – –
Specialty Stores 1,353,099 (2)(2) ––
Food Stores 607,062 616,296 594,275 – –
Eating and Drinking Places 1,098,793 1,125,644 1,134,412 – –
Home Furnishings and Appliances 468,008 427,995 471,620 – –
Building Materials and Farm Implements 1,027,731 944,683 747,773 – –
Gasoline Stations 1,190,703 1,351,405 1,514,897 – –
Automotive and Vehicle Dealers, Parts
and Supplies
1,871,103
1,812,785
1,406,932
––
All Other Retail Stores 314,647 1,481,678 1,332,819 –
Total Retail Outlets 10,275,907 10,109,704 9,484,307 8,473,578 8,716,393
Business and Personal Services 567,375 555,973 533,701 – –
All Other Outlets 3,024,379 3,420,618 3,289,673 3,409,471 3,237,454
TOTAL ALL OUTLETS $13,867,661 $14,086,295 $13,307,681 $11,883,049 $11,953,846
% CHANGE 2.9% 1.6% (5.5%) – 0.6%
_______________
† Most recent annual data available.
(1) Beginning in 2009, taxable sales and permits were summarized using NAICS codes. As a result of the coding change,
industry-level data for 2009 are not comparable to that of prior years.
(2) Beginning in 2007, the data for the category “Specialty Stores” is included in the total for All Other Retail Stores.
Source: State Board of Equalization.
Much of the County’s commercial activity is concentrated in central business districts of its cities
and unincorporated towns. Regional shopping centers, numerous smaller centers and several “big box”
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D-8
warehouse stores serve County residents. The County is served by all major banks including Bank of
America and Wells Fargo Bank. In addition there are numerous local banks and branches of smaller
California and foreign banks.
Construction Activity
The value of residential building permits in the County ________ by ___% in calendar year 2011
compared to calendar year 2010 levels. The _________ was due to ________.
The following Table D-6 provides a summary of residential building permit valuations and
number of new dwelling units authorized in the County since calendar year 2007.
Table D-6
COUNTY OF CONTRA COSTA
RESIDENTIAL BUILDING PERMIT VALUATIONS
CALENDAR YEARS 2007 THROUGH 2011
($ IN THOUSANDS)
Residential
Alterations
Single Family Mutlifamily and Total Nonresidential
Year Units Valuation Units Valuation Additions Residential Valuation Total
2007 2,698 $832,053 909 $94,505 $290,108 $1,216,665 $491,315 $1,707,980
2008 985 300,089 909 132,825 229,023 661,936 459,933 1,121,869
2009 1,038 300,363 163 34,119 170,150 504,632 314,301 818,934
2010 809 237,458 890 106,555 209,044 553,058 285,417 838,475
2011 718 211,418 355 47,305 197,219 455,942 214,521 670,463
______________
† Total represents the sum of residential building permit valuations. Data may not total due to independent rounding.
Source: Construction Industry Research Board.
An approximately 5,979 acre development located east of the City of San Ramon known as
“Dougherty Valley” is expected to add a total 11,000 new homes in the County. The development is
being constructed in nine phases with complete buildout expected in 2015. All phases of construction of
Dougherty Valley have been approved by the County. To date, approximately 8,900 homes have been
constructed, as well as the 2,200 student Dougherty Valley High School which opened in fall 2007; two
900-student middle schools and three 760-student kindergarten through grade 5 elementary schools. For
the 2011-12 academic year, approximately 2,000 students in grades 9 through 12 were enrolled in
Dougherty Valley High School.
Urban Limit Line. In November 2004, County voters approved Measure J, which extended a ½
percent transportation sales tax program within the County. Measure J included a continuation of the
Growth Management Program (the “GMP”) originally approved under the transportation sales tax
measure, known as “Measure C-1988,” and it carried forward six of eight compliance requirements from
the existing Measure C GMP. Measure J also added a new requirement that local jurisdictions adopt a
voter-approved Urban Limit Line (a boundary outside of which future growth is prohibited). In order to
remain eligible to receive the 18% Local Street Maintenance and Improvement Funds and the 5%
Transportation for Livable Communities funds under Measure J, each jurisdiction is required to adopt a
voter-approved Urban Limit Line.
On November 7, 2006, the voters in the County approved Measure L that: (i) extended the term
of the County’s Urban Limit Line to the Year 2026; (ii) requires voter approval to expand the Urban
Limit Line by more than 30 acres; (iii) adopted a new Urban Limit Line Map; and, (iv) established new
review procedures.
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D-9
On April 3, 2007, the County received a letter from the Contra Costa Transportation Authority
acknowledging that through the passage of Measure L, the County had a voter-approved Urban Limit
Line in compliance with the GMP under Measure J. To date, the County, and the cities of Antioch,
Brentwood, Pittsburg and San Ramon each have voter-approved Urban Limit Lines in compliance the
Measure C GMP.
Transportation
Availability of a broad transportation network has been one of the major factors in the County’s
economic and population growth. Interstate 80 connects the western portion of the County to San
Francisco and the central portion of the County to Sacramento and points north via Interstate 5, the major
north-south highway from Mexico to Canada. Interstate 680 connects the central County communities to
the rest of the Bay Area and portions of the Central Valley of the State via State Routes 4 and 24, the
County’s major east-west arteries.
Caltrans widened Interstate 80 in the western portion of the County at a cost of approximately
$200 million. This project was completed and opened to the public in fall 2009. Caltrans completed
construction of the Alfred Zampa Memorial span across the Carquinez Strait on Interstate Highway 80 in
2003; and completed a five lane bridge, with nine toll booths, over the Benicia – Martinez Bridge on
Interstate Highway 680 at a cost of approximately $1.3 billion in August 2007. The realignment of the
original Benicia-Martinez Bridge for four lanes of southbound traffic and two-way bicycle and pedestrian
traffic opened in August 2009.
Ground transportation is available to County residents from several service providers, as
described below:
Central Contra Costa Transit Authority provides local bus service to the central
area of the County including Walnut Creek, Pleasant Hill and Concord.
BART connects the County to Alameda County, San Francisco, including the
San Francisco International Airport, and Daly City and Colma in San Mateo
County with two main lines, one from the San Francisco area to Richmond and
the other to the Concord/Walnut Creek/Pittsburg/Bay Point area. BART has 43
stations and 104 miles of roadway in its system.
AC Transit provides local bus service and connects Contra Costa communities to
San Francisco and Oakland.
Other bus service is provided by Greyhound.
Commuter rail service is provided by the Capital Corridor, with daily runs
between the Bay Area and Sacramento that stop at the intermodal facility in
Martinez, the County seat.
The Santa Fe and Union Pacific Railroads’ main lines serve the County, both in
the industrial coastal areas and in the inland areas.
Commercial water transportation and docking facilities are available through a number of port
and marina locations in the County. The Port of Richmond on San Francisco Bay and several privately
owned industrial docks on both San Pablo and Suisun Bays serve the heavy industry located in the area.
The Port of Richmond, owned and operated by the City of Richmond, is comprised of seven city owned
terminals, five dry docks and 11 privately owned terminals, covers approximately 202 acres and handles
more than 20 million metric tons of general, liquid and dry bulk commodities annually. The majority of
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D-10
the shipments are bulk liquids, primarily petroleum, petroleum products, chemicals and petrochemicals,
coconut and other vegetable oils, tallow and molasses. Imports of automobiles, agricultural products,
vehicles, steel products, scrap metals and other diversified bulk cargo are significant components of Port
activities.
Major scheduled airline passenger and freight transportation for County residents is available at
either Oakland or San Francisco International Airports, located about 20 and 30 miles, respectively, from
the County. In addition there are two general aviation fields, one located in Byron and the other in
Concord.
Environmental Control Services
Water. The East Bay Municipal Utilities District (“EBMUD”) and the Contra Costa County
Water District (“CCWD”) supply water to the County. EBMUD supplies water to the western part of the
County, including Alamo, Crockett, Danville, Diablo, Hercules, Lafayette, Moraga, Orinda, Pinole,
portions of Pleasant Hill, Richmond, Rodeo, San Pablo, San Ramon Selby and portions of Walnut Creek.
Approximately 89% of its supply is from the Mokelumne River watershed stored at the 69.4 billion gallon
capacity Pardee Dam in Ione, California. EBMUD is entitled to 325 million gallons per day under a
contract with the State Water Resources Control Board, plus an additional 119 million gallons per day in
a single dry year under a contract with the U.S. Water and Power Resources Service (formerly the U.S.
Bureau of Reclamation). After dry winters in 2006 and 2007, EBMUD water supplies were at critically
low levels. To safeguard the shrinking supply, in spring 2008, EBMUD declared a drought emergency,
imposed mandatory water rationing goals ranging from 5% for industrial users to 19% for single family
residential users to 30% for irrigation user, and imposed drought surcharge rates commencing August 1,
2008. As a result of strong customer conservation and greater run-off in spring 2009, the mandatory
rationing program was terminated and was replaced with a voluntary 10% conservation program. The
voluntary conservation program was terminated on April 27, 2010.
CCWD obtains its water from the Sacramento-San Joaquin Delta and serves approximately
500,000 customers in the central and eastern part of the County, including Antioch, Bay Point, Clayton,
Clyde, Concord, Martinez, Oakley, portions of Pleasant Hill, Pittsburg and portions of Walnut Creek. It
is entitled under a contract with the U.S. Water and Power Resources Service to purchase 195,000 acre-
feet per year. Water purchased by CCWD has ranged between 80,000 and 110,000 acre-feet annually. In
addition, a number of industrial users and several municipalities draw water directly from the San Joaquin
River under their own riparian rights, so that actual water usage in the service area averages about
125,000 acre-feet annually. To provide expanded water storage capacity, CCWD constructed the Los
Vaqueros Reservoir with a capacity of 100,000 acre-feet south of the City of Antioch. In spring 2004,
62% the voters within CCWD approved the preparation of an economic analysis, a technical feasibility
report and environmental review to expand the reservoir up to 275,000 acre-feet. In March 2010, the
final Environmental Impact Statement/Environmental Impact Report to expand the reservoir to 160,000
square feet were certified. Construction was complete and the expanded reservoir was dedicated on
July 13, 2012.
Sewer. Sewer services in the County are provided by approximately 20 sanitation districts and
municipalities. Federal and State environmental requirements, plus grant money available from these two
sources, resulted in upgrading, expanding and/or building new facilities by approximately 14 agencies.
Flood Control. The Contra Costa County Flood Control and Water Conservation District (the
“District”) has been in operation since 1951 to plan, build, and operate flood control projects in
unincorporated areas of the County except for the Delta area on its eastern border. The Delta is
interspersed with inland waterways that fall under the jurisdiction of the U.S. Army Corps of Engineers
and the State Department of Water Resources. The District is responsible for meeting requirements set
forth by the Environmental Protection Agency (“EPA”) with respect to addressing potential pollutants in
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D-11
nonspecific groundwater runoff. The County is not presently able to estimate the cost of compliance with
EPA requirements, although such costs may be significant.
Education and Health Services
Education. Public school education in the County is available through nine elementary school
districts, two high school districts and seven unified school districts. As of Fiscal Year 2011-12, these
districts provided: 141 elementary schools; 46 middle, junior high and intermediate schools; five
alternative schools; 36 high schools; 13 continuation schools; four community day schools; four charter
elementary schools; on charter high school; five alternative schools; one independent school; juvenile
court education facilities; three adult schools; four special education facilities; and a number of
preschools. In addition, there are 116 private schools with six or more students in the County. School
enrollment for Fiscal Year 2011-12 (the most recent year for which data is available) numbered
approximately 169,400 students in public schools and approximately 16,300 in regular graded private
schools.
Higher education is available in the County through a combination of two-year community
colleges and four-year colleges, including the Contra Costa County Community College District which
has campuses in Brentwood, Pleasant Hill, Pittsburg, San Pablo, San Ramon and Walnut Creek;
California State University East Bay which operates a branch campus, called Contra Costa Center, in the
City of Concord where late afternoon and evening classes in business, education and liberal arts are
offered; and St. Mary’s College of California, a four-year private institution, located on a 100-acre
campus in Moraga. Also located within the County is the John F. Kennedy University with campuses in
Pleasant Hill and Pittsburg, the UC Berkeley Extension Contra Costa Center in San Ramon and the
University of Phoenix Campus in Concord.
Health Services. There are 12 privately operated hospitals and one public hospital in the County,
with a combined total of approximately 1,900 beds. The major public hospital is the Contra Costa
Regional Medical Center located in Martinez. See also “–Contra Costa Regional Medical Center.” Five
of the private hospitals are run by Kaiser, the largest health maintenance organization in the United States.
The Walnut Creek-based John Muir/Mt. Diablo Health System operates hospitals at its Walnut Creek and
Concord Campuses and outpatient services at its Brentwood Campus and in Rossmoor.
Doctors Medical Center. Doctors Medical Center is operated by the West Contra Costa Health
Care District (the “Health Care District”). This 247 bed facility is located in the western portion of the
County, which has a population of approximately 250,000, a large portion of whom are low income.
Doctors Medical Center provides medical services to the general public and is a critical component of the
County Emergency Medical Services system.
Contra Costa Regional Medical Center. The public hospital in the County is Contra Costa
Regional Medical Center (“CCRMC”), a 164-bed facility located in the City of Martinez. The County
completed a public health/clinical laboratory in 2001 on the CCRMC campus, converted the former Los
Medanos Hospital into the Pittsburg Health Center, completed construction of an ambulatory care clinic
on the campus of CCRMC and expanded clinics in Antioch, Concord and Brentwood. In 2009, the
County reopened the Bay Point Family Health Center in Pittsburg, following extensive renovations,
including construction of a state-of-the-art children’s dental clinic, and on October 9, 2012, the County
opened the West County Health Center in San Pablo, a two-story, 53,000 square foot health center.
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E-1
APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
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F-1
APPENDIX F
DTC AND THE BOOK ENTRY SYSTEM
The information in this Appendix F concerning The Depository Trust Company, New York, New
York (“DTC”) and DTC’s book-entry system has been obtained from DTC and the County takes no
responsibility for the completeness or accuracy thereof. The County cannot and does not give any
assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners
(a) payments of interest or principal with respect to the 2013 Bonds, (b) certificates representing
ownership interest in or other confirmation or ownership interest in the 2013 Bonds, or (c) redemption or
other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the 2013 Bonds, or that
they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in
the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the
Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing
with DTC Participants are on file with DTC.
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the
2013 Bonds. The 2013 Bonds will be issued as fully-registered securities registered in the name of Cede
& Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized
representative of DTC. One fully-registered security certificate will be issued for the maturity and CUSIP
number of the 2013 Bonds and will be deposited with DTC.
DTC, the world’s largest depository, is a limited-purpose trust company organized under the New
York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York
Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million
issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market
instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC.
DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants’ accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of
The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC,
National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are
registered clearing agencies. DTTC is owned by users of its regulated subsidiaries. Access to the DTC
system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, and clearing corporations that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s
rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchases of the 2013 Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the 2013 Bonds on DTC’s records. The ownership interest of
each actual purchaser of each 2013 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and
Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
2013 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the 2013 Bonds, except in the event that use of the book-entry system for the 2013
Bonds is discontinued.
12036\pos-3
F-2
To facilitate subsequent transfers, all 2013 Bonds deposited by Direct Participants with DTC are
registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of the 2013 Bonds with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the 2013 Bonds; DTC’s records
reflect only the identity of the Direct Participants to whose accounts such 2013 Bonds are credited, which
may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of the 2013 Bonds may wish to
take certain steps to augment the transmission to them of notices of significant events with respect to the
2013 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Fiscal Agent
Agreement. For example, Beneficial Owners of the 2013 Bonds may wish to ascertain that the nominee
holding the 2013 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners.
In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and
request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the 2013 Bonds within a maturity are
being redeemed. DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in each issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
the 2013 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct
Participants to whose accounts the 2013 Bonds are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the 2013 Bonds will be made to
Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s
practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail
information from the Issuer or the Fiscal Agent, on payable date in accordance with their respective
holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in “street name,” and will be the responsibility of such Participant
and not of DTC, the Fiscal Agent or the Issuer, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments (or
such other nominee as may be requested by an authorized representative of DTC) is the responsibility of
the Issuer or the Fiscal Agent, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through
its Participant, to Remarketing Agent, and shall effect delivery of such Securities by causing the Direct
Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to Remarketing
Agent. The requirement for physical delivery of Securities in connection with an optional tender or a
mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred
by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to
Remarketing Agent’s DTC account.
12036\pos-3
F-3
DTC may discontinue providing its services as depository with respect to the 2013 Bonds at any
time by giving reasonable notice to the Issuer or the Fiscal Agent. Under such circumstances, in the event
that a successor depository is not obtained, 2013 Bond certificates are required to be printed and
delivered.
The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a
successor securities depository). In that event, 2013 Bond certificates will be printed and delivered.
The information in this section concerning DTC and DTC’s book-entry system has been obtained
from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
200-12036\cda-3
L&J DRAFT #3
11/27/12
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “Disclosure Certificate”), is executed and delivered
by the County of Contra Costa, a political subdivision, organized and existing under the Constitution and
the laws of the State of California (the “County”), in connection with the execution and delivery by the
County of $_________ principal amount of County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds (the “2013 Bonds”). The 2013 Bonds are
issued pursuant to a Fiscal Agent Agreement, dated as of January 1, 2013, (the “Fiscal Agent
Agreement”), by and between the County for and on behalf of the County of Contra Costa Community
Facilities District No. 2001-1 (Norris Canyon) (the “District”), and The Bank of New York Mellon Trust
Company, N.A., as fiscal agent (the “Fiscal Agent”). The County covenants and agrees as follows:
SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed
and delivered by the County for the benefit of the Beneficial Owners of the 2013 Bonds and in order to
assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).
SECTION 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement,
which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
“Annual Disclosure Report” shall mean any Annual Disclosure Report provided by the County
pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote
or consent with respect to, or to dispose of ownership of any Bonds (including persons holding Bonds
through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for
federal income tax purposes.
“Disclosure Representative” shall mean the [Auditor-Controller of the County] or such other
official as may be designated in writing to the Dissemination Agent (if other than the County) from time
to time.
“Dissemination Agent” shall mean initially Digital Assurance Certification, L.L.C., acting in its
capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing
by the County and which has filed with the County a written acceptance of such designation.
“Filing Date” shall mean no later than eight (8) months following the end of each fiscal year of
the County (or the next succeeding business day if such day is not a business day), commencing with the
filing due eight months following the end of Fiscal Year 2012-13.
“MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated
or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until
otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB
are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB,
currently located at http://emma.msrb.org.
“Official Statement” means the Official Statement dated _______, 2013 relating to the 2013
Bonds.
200-12036\cda-3 2
“Participating Underwriter” shall mean the original underwriter of the 2013 Bonds required to
comply with the Rule in connection with offering of the 2013 Bonds.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“Specified Event” shall mean any of the events listed in Section 5(a) or Section 5(b) of this
Disclosure Certificate and any other event legally required to be reported pursuant to the Rule.
SECTION 3. Provision of Annual Disclosure Reports.
(a) The County shall provide, or shall cause the Dissemination Agent to provide, not later
than the Filing Date, to the MSRB an Annual Disclosure Report which is consistent with the requirements
of Section 4 of this Disclosure Certificate. The Annual Disclosure Report shall be submitted in electronic
format, accompanied by such identifying information as is prescribed by the MSRB, and may be
submitted as a single document or as separate documents comprising a package and may cross-reference
other information as provided in the Disclosure Certificate. If the fiscal year of the County changes, it
shall give notice of such change in the same manner as for a Specified Event under this Disclosure
Certificate.
(b) Not later than fifteen (15) Business Days prior to the Filing Date, the County shall
provide the Annual Disclosure Report to the Dissemination Agent (if other than the County). The County
shall provide, or cause the preparer of the Annual Disclosure Report to provide, a written certificate with
each Annual Disclosure Report furnished to the Dissemination Agent to the effect that such Annual
Disclosure Report constitutes the Annual Disclosure Report required to be furnished to it hereunder. The
Dissemination Agent may conclusively rely upon such certification and shall have no duty or obligation
to review such Annual Disclosure Report.
(c) If the County is unable to provide to the Annual Disclosure Report to the MSRB by the
date required in subsection (a), the County shall send a notice to the MSRB in substantially the form
attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) If not previously filed by the County, send a notice to the MSRB in substantially
the form attached as Exhibit A, if the County is unable to provide to the Annual Disclosure
Report to the MSRB by the date required in subsection (a).
(ii) File a report with the County certifying that the Annual Disclosure Report has
been provided pursuant to this Disclosure Certificate, stating the date it was provided.
SECTION 4. Content of Annual Disclosure Reports. The Annual Disclosure Report shall
contain or include by reference the following:
(a) The audited financial statements of the County for the prior fiscal year prepared in
accordance with generally accepted accounting principles in effect from time to time by the
Governmental Accounting Standards Board to apply to governmental entities. If the audited financial
statements are not available by the time the Annual Disclosure Report is required to be filed pursuant to
Section 3(a), the Annual Disclosure Report shall contain unaudited financial statements in a format
similar to the financial statements contained in the Official Statement, and the audited financial
200-12036\cda-3 3
statements shall be filed in the same manner as the Annual Disclosure Report when they become
available.
The audited financial statements of the County are provided solely to comply with the
interpretation by Securities and Exchange Commission staff of the Rule. No funds or assets of the
County are required to be used to pay debt service on the 2013 Bonds, and the County is not
obligated to advance available funds to cover any delinquencies. Investors should not rely on the
financial condition of the County in evaluating whether to buy, hold or sell the 2013 Bonds.
(b) The following information with respect to the 2013 Bonds and the District:
1. The principal amount of the 2013 Bonds outstanding.
2. The balances of all funds and accounts established by the Fiscal Agent
Agreement as of the end of the next preceding fiscal year.
3. Total assessed value of all parcels subject to the Special Tax.
4. Actual Special Tax levy for the most recent fiscal year, Special Tax and property
tax delinquency rate for parcels in the District for the most recent year.
5. Concerning delinquent parcels:
(i) number of parcels delinquent in payment of Special Tax,
(ii) amount of total delinquency and as a percentage of total Special Tax
levy, and
(iii) status of the County’s foreclosure proceedings upon delinquent
properties.
6. Identity of any delinquent tax payer obligated for more than 10% of the annual
Special Tax levy and:
(i) assessed value of applicable properties, and
(ii) summary of results of foreclosure sales, if available.
7. Significant amendments to land use entitlements for property in the District
known to the Director, of the Department of Conservation and Development.
8. Status of any significant legislative, administrative, and judicial challenges to the
construction of the development in the District known to the County’s Director of Community
Development, without independent inquiry, for any year in which construction activity has
occurred in the District.
(c) To the extent not otherwise provided pursuant to the preceding items 4(b)1- 4(b)8, annual
information required to be filed by the County for the District with the California Debt and Investment
Advisory Commission pursuant to Sections 50075.1, 50075.3, 53359.5(b), 53410(d) or 53411 of the
California Government Code.
(d) The presentation and format of the Annual Disclosure Reports may be modified from
time to time as determined in the judgment of the County to conform to changes in accounting or
disclosure principles or practices and legal requirements followed by or applicable to the County to reflect
200-12036\cda-3 4
changes in the business, structure, operations, legal form of the County or any mergers, consolidations,
acquisitions or dispositions made by or affecting the County; provided that any such modifications shall
comply with the requirements of the Rule.
Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues of the County or related public entities, which have been made
available to the public on the MSRB website. The County shall clearly identify each such other document
so included by reference.
SECTION 5. Reporting of Specified Events.
(a) Pursuant to the provisions of this Disclosure Certificate, the County shall give, or cause
to be given, notice of the occurrence of any of the following events with respect to the 2013 Bonds not
later than ten (10) business days after the occurrence of the event:
(i) Principal and interest payment delinquencies;
(ii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iii) Unscheduled draws on credit enhancements reflecting financial difficulties;
(iv) Substitution of credit or liquidity providers, or their failure to perform;
(v) Issuance by the Internal Revenue Service of proposed or final determination of
taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB);
(vi) Tender offers;
(vii) Defeasances;
(viii) Rating changes; or
(ix) Bankruptcy, insolvency, receivership or similar event of the obligated person.
This event is considered to occur upon the happening of any of the following: the appointment of
a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of the assets or business of
the obligated person, or if such jurisdiction has been assumed by leaving the existing
governmental body and officials or officers in possession but subject to the supervision and
orders of a court or governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) The County shall give, or cause to be given, notice to the MSRB of the occurrence of any
of the following events described in this Section 5(b) with respect to the 2013 Bonds, if material, not later
than ten (10) business days after the occurrence of the event:
(i) Unless described in Section 5(a)(v) above, adverse tax opinions or other material
notices or determinations by the Internal Revenue Service with respect to the tax status of the
2013 Bonds or other material events affecting the tax status of the 2013 Bonds;
200-12036\cda-3 5
(ii) Modifications to rights of the Bond holders;
(iii) Optional, unscheduled or contingent Bond calls;
(iv) Release, substitution, or sale of property securing repayment of the 2013 Bonds;
(v) Non-payment related defaults;
(vi) The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the obligated person, other
than in the ordinary course of business, the entry into a definitive agreement to undertake such an
action or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms; or
(vii) Appointment of a successor or additional fiscal agent or the change of name of a
fiscal agent.
(c) The County acknowledges that it is required to make a determination whether a Specified
Event in Section 5(b) above is material under applicable federal securities laws in order to determine
whether a filing with the MSRB is required under Section 5(b). Notwithstanding the foregoing, notice of
Specified Events described in Section 5(a)(vii) and Section 5(b)(iii) above need not be given any earlier
than the notice (if any) of the underlying event is given to Holders of affected 2013 Bonds pursuant to the
Fiscal Agent Agreement.
SECTION 6. Termination of Reporting Obligation. The obligations of the County under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all
of the 2013 Bonds. If such termination occurs prior to the final maturity of the 2013 Bonds, the County
shall give notice of such termination in the same manner as for a Specified Event under Section 5(c).
SECTION 7. Dissemination Agent. The County may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may
discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.
The Dissemination Agent may resign by providing thirty (30) days written notice to the County.
The initial dissemination agent shall be Digital Assurance Certification, L.L.C.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the County may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a) or 5(b), it
may only be made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or status of an obligated person with respect
to the 2013 Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of
nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the
original execution and delivery of the 2013 Bonds, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances; and
200-12036\cda-3 6
(c) The amendment or waiver either (i) is approved by the Holders of the 2013 Bonds in the
same manner as provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement
with the consent of Holders, or (ii) does not, in the opinion of a nationally recognized bond counsel,
materially impair the interests of the Holders or Beneficial Owners of the 2013 Bonds.
(d) Any amendment that modifies or increases the duties or obligations of the Dissemination
Agent shall be agreed to in writing by the Dissemination Agent.
In the event of any amendment or waiver of a provision of this Disclosure Certificate, the County
shall describe such amendment in the next Annual Disclosure Report, and shall include, as applicable, a
narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case
of a change of accounting principles, on the presentation) of financial information or operating data being
presented by the County. In addition, if the amendment relates to the accounting principles to be
followed in preparing financial statements, (i) notice of such change shall be given in the same manner as
for a Specified Event, and (ii) the Annual Disclosure Report for the year in which the change is made
shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the
financial statements as prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles.
SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the County from disseminating any other information, using the means of dissemination set forth
in this Disclosure Certificate or any other means of communication, or including any other information in
any Annual Disclosure Report or notice of occurrence of a Specified Event, in addition to that which is
required by this Disclosure Certificate. If the County chooses to include any information in any Annual
Disclosure Report or notice of occurrence of a Specified Event in addition to that which is specifically
required by this Disclosure Certificate, the County shall have no obligation under this Disclosure
Certificate to update such information or include it in any future Annual Disclosure Report or notice of
occurrence of a Specified Event.
SECTION 10. Default. This Disclosure Certificate shall be solely for the benefit of the holders
and beneficial owners from time to time of the 2013 Bonds. In the event of a failure of the County to
comply with any provision of this Disclosure Certificate, the Fiscal Agent may (and, at the request of the
Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding
Bonds and upon receipt of indemnity satisfactory to the Fiscal Agent, shall), or any Holder or Beneficial
Owner of the 2013 Bonds may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by order of a court of competent jurisdiction in Contra Costa County,
California, to cause the County to comply with its obligations under this Disclosure Certificate, provided
that any holder or beneficial owner seeking to require the County to comply with this Disclosure
Certificate shall first provide at least thirty (30) days prior written notice to the County of the failure of
the County, giving reasonable detail of such failure. Failure by the County to comply with any provision
of this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement,
and the sole remedy under this Disclosure Certificate in the event of any failure of the County to comply
with the terms of this Disclosure Certificate shall be an action to compel performance. No person or
entity shall be entitled to recover monetary damages under this Disclosure Certificate.
SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination
Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the
County agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and
agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the
exercise or performance of its powers and duties hereunder, including the costs and expenses (including
attorneys fees) of defending against any claim of liability, but excluding liabilities due to the
200-12036\cda-3 7
Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall be paid
compensation by the County for its services provided hereunder in accordance with its schedule of fees as
amended from time to time and all expenses, legal fees and advances made or incurred by the
Dissemination Agent in the performance of its duties hereunder. The obligations of the County under this
Section 11 shall survive resignation or removal of the Dissemination Agent and payment of the 2013
Bonds.
SECTION 12. Notices. Any notice or other communication to be given by the County or the
Dissemination Agent under this Disclosure Certificate may be given by delivering the same by first class
mail, postage prepaid, messenger, or overnight delivery to the addresses set forth below (until another
address is filed by the County or the Dissemination Agent with the Fiscal Agent):
To the County: County of Contra Costa
625 Court Street
Martinez, California 94553
Attention: Auditor-Controller
Telephone: 925-646-2181
Fax: 925-646-2649
With a Copy to:
Contra Costa County Department of
Conservation & Development
30 Muir Road
Martinez, California 94553
Attention: Community Development Bond Program Manager
Telephone: 925-674-7888
Fax: 925-674-7258
If to the Fiscal Agent: The Bank of New York Mellon Trust Company, N.A.
100 Pine Street, Suite 3100
San Francisco, California 94111
Attention: Corporate Trust Department
Telephone: 415-________
Fax: 415-________
Email: _________
If to the Dissemination Agent: Digital Assurance Certification, L.L.C.
390 North Orange Avenue, Suite 1750
Orlando, Florida 32801
Attention: ___________
Phone: 407-515-1100
Fax: ___________
Email: ____@dacbond.com
SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
County, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners
from time to time of the 2013 Bonds, and shall create no rights in any other person or entity.
SECTION 14. Record Keeping. The County shall maintain records of Annual Disclosure
Reports and notices of Specified Events, including the content of such disclosure, the name of the entities
with which such disclosure was filed and the date of filing of such disclosure.
200-12036\cda-3 8
SECTION 15. Governing Law. The laws of the State of California shall govern this Disclosure
Certificate, the interpretation thereof and any right or liability arising hereunder. Any action or
proceeding to enforce or interpret any provision of this Disclosure Certificate shall be brought,
commenced or prosecuted in any courts of the State located in Contra Costa County, California.
SECTION 16. Counterparts. This Disclosure Certificate may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
Dated: ___________, 2013
COUNTY OF CONTRA COSTA
By:________________________________________
[Name], [Title]
The undersigned hereby agrees to act as
Dissemination Agent to the County pursuant
to the terms and conditions of this
Continuing Disclosure Certificate
DIGITAL ASSURANCE CORPORATION, L.L.C.
By:________________________________________
Authorized Officer
200-12036\cda-3 A-1
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL DISCLOSURE REPORT
Name of Obligated Party: County of Contra Costa
Name of Bonds: County of Contra Costa Community Facilities District No. 2001-1
(Norris Canyon) 2013 Special Tax Refunding Bonds
Date of Delivery: _______, 2013
NOTICE IS HEREBY GIVEN that the County has not provided an Annual Disclosure Report with
respect to the above-named Bonds as required by the Continuing Disclosure Certificate, dated as of
January 1, 2013 with respect to the 2013 Bonds. [The County anticipates that the Annual Disclosure
Report will be filed by __________.]
DIGITAL ASSURANCE CORPORATION, L.L.C.,
as Dissemination Agent
By:________________________________________
Authorized Officer
cc: County
Quint & Thimmig LLP 11/9/12
11/21/12
MARKED TO SHOW CHANGES.
03007.27:J11943
FISCAL AGENT AGREEMENT
by and between
CONTRA COSTA COUNTY OF CONTRA COSTA, CALIFORNIA
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Fiscal Agent
dated as of January 1, 2013
relating to:
$__________
Contra Costa County of Contra Costa
Community Facilities District No. 2001-1
(Norris Canyon)
2013 Special Tax Ref unding Bonds
-i-
TABLE OF CONTENTS
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement..................................................................................................................................3
Section 1.02. Agreement for Benefit of Bondowners................................................................................................................3
Section 1.03. Definitions..........................................................................................................................................................................3
ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation...........................................................................................................................11
Section 2.02. Terms of 2013 Bonds ...................................................................................................................................................11
Section 2.03. Redemption....................................................................................................................................................................12
Section 2.04. Form of 2013 Bonds.....................................................................................................................................................14
Section 2.05. Execution of Bonds.......................................................................................................................................................14
Section 2.06. Transfer of Bonds..........................................................................................................................................................14
Section 2.07. Exchange of Bonds.......................................................................................................................................................15
Section 2.08. Bond Register.................................................................................................................................................................15
Section 2.09. Temporary Bonds........................................................................................................................................................15
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen....................................................................................................15
Section 2.11. Limited Obligation.....................................................................................................................................................16
Section 2.12. No Acceleration.............................................................................................................................................................16
Section 2.13. Book-Entry Only System.........................................................................................................................................16
Section 2.14. Issuance of Parity Bonds...........................................................................................................................................17
ARTICLE III
ISSUANCE OF 2013 BONDS
Section 3.01. Issuance and Delivery of 2013 Bonds................................................................................................................19
Section 3.02. Pledge of Special Tax Revenues...........................................................................................................................19
Section 3.03. Validity of Bonds..........................................................................................................................................................19
ARTICLE IV
PROCEEDS OF THE 2013 BONDS; FUNDS AND ACCOUNTS
Section 4.01. Application of Proceeds of Sale of 2013 Bonds...............................................................................................20
Section 4.02. Costs of Issuance Fund...............................................................................................................................................20
Section 4.03. Reserve Fund.................................................................................................................................................................21
Section 4.04. Bond Fund.......................................................................................................................................................................22
Section 4.05. Special Tax Fund..........................................................................................................................................................23
Section 4.06. Administrative Expense Fund.............................................................................................................................24
ARTICLE V
OTHER COVENANTS OF THE COUNTY
Section 5.10. Collection of Special Tax Revenues....................................................................................................................26
Section 5.02. Covenant to Foreclose................................................................................................................................................27
Section 5.03. Punctual Payment.......................................................................................................................................................27
Section 5.04. Limited Obligation.....................................................................................................................................................28
Section 5.05. Extension of Time for Payment.............................................................................................................................28
Section 5.06. Against Encumbrances.............................................................................................................................................28
Section 5.07. Books and Records.......................................................................................................................................................28
Section 5.08. Protection of Security and Rights of Owners.................................................................................................28
Section 5.09. Compliance with Law................................................................................................................................................28
Section 5.10. Private Activity Bond Limitation........................................................................................................................28
Section 5.11. Federal Guarantee Prohibition............................................................................................................................28
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Section 5.12. Further Assurances.....................................................................................................................................................28
Section 5.13. No Arbitrage..................................................................................................................................................................29
Section 5.14. Maintenance of Tax-Exemption............................................................................................................................29
Section 5.15. No Additional Bonds..................................................................................................................................................29
Section 5.16. Yield of the 2013 Bonds .............................................................................................................................................29
Section 5.17. Continuing Disclosure..............................................................................................................................................29
Section 5.18. Reduction of Special Taxes......................................................................................................................................29
Section 5.19. State Reporting Requirements.............................................................................................................................29
Section 5.20. Limits on Special Tax Waivers and Bond Tenders.....................................................................................30
Section 5.21. County Bid at Foreclosure Sale.............................................................................................................................31
ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE COUNTY
Section 6.01. Deposit and Investment of Moneys in Funds...............................................................................................32
Section 6.02. Rebate of Excess Investment Earnings to the United States..................................................................33
Section 6.03. Liability of County......................................................................................................................................................33
Section 6.04. Employment of Agents by County....................................................................................................................34
ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent................................................................................................................................35
Section 7.02. Liability of Fiscal Agent...........................................................................................................................................36
Section 7.03. Information; Books and Accounts........................................................................................................................37
Section 7.04. Notice to Fiscal Agent................................................................................................................................................37
Section 7.05. Compensation, Indemnification...........................................................................................................................38
ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted..........................................................................................................................................39
Section 8.02. Owners’ Meetings.......................................................................................................................................................39
Section 8.03. Procedure for Amendment with Written Consent of Owners.............................................................40
Section 8.04. Disqualified Bonds......................................................................................................................................................40
Section 8.05. Effect of Supplemental Agreement....................................................................................................................40
Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments................................................41
Section 8.07. Amendatory Endorsement of Bonds.................................................................................................................41
ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties.......................................................................................................42
Section 9.02. Successor is Deemed Included in All References to Predecessor........................................................42
Section 9.03. Discharge of Agreement..........................................................................................................................................42
Section 9.04. Execution of Documents and Proof of Ownership by Owners.............................................................43
Section 9.05. Waiver of Personal Liability..................................................................................................................................43
Section 9.06. Notices to and Demands on County and Fiscal Agent.............................................................................43
Section 9.07. Partial Invalidity..........................................................................................................................................................44
Section 9.08. Unclaimed Moneys.....................................................................................................................................................44
Section 9.09. Applicable Law.............................................................................................................................................................44
Section 9.10. Conflict with Act...........................................................................................................................................................44
Section 9.11. Conclusive Evidence of Regularity....................................................................................................................44
Section 9.12. Payment on Business Day.......................................................................................................................................44
Section 9.13. Counterparts...................................................................................................................................................................44
EXHIBIT A – FORM OF BOND
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FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the “Agreement”), dated as of January 1, 2013,
is by and between the Contra Costa County of Contra Costa, California, a political subdivision
of the State of California (the “County”), for and on behalf of the Contra Costa County of
Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) (the “District”), and
The Bank of New York Mellon Trust Company, N.A., 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 Supervisors of the County 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. 2001/244 of the Board
of Supervisors of the County adopted on June 5, 2001;
WHEREAS, the Board of Supervisors of the County, as the legislative body with
respect to the District, is authorized under the Act to levy special taxes to pay for the costs of
facilities eligible to be financed by the District and to authorize the issuance of bonds,
including bonds to refund any bonds of the County for the District, secured by said special
taxes under the Act;
WHEREAS, under the provisions of the Act, on June 28, 2001, the County, for and on
behalf of the District, issued $7,220,000 initial principal amount of its Contra Costa County of
Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) 2001 Special Tax
Bonds (the “2001 Bonds”);
WHEREAS, due to favorable interest rates in the financial markets, the Board of
Supervisors now has determined to refund the 2001 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 December 11, 2012, the Board of Supervisors of the County adopted its
Resolution No. 2012/____ (the “Resolution”), which resolution, among other matters,
authorized the issuance of the Contra Costa County of Contra Costa Community Facilities
District No. 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds (the “2013 Bonds”) to
provide moneys to defease and currently refund in whole the outstanding 2001 Bonds and
provided that said issuance would be in accordance with this Agreement, and authorized the
execution hereof;
WHEREAS, it is in the public interest and for the benefit of the County, the District, the
persons responsible for the payment of special taxes to be levied in the District and the owners
of the 2013 Bonds that the County enter into this Agreement to provide for the issuance of the
2013 Bonds, the disbursement of proceeds of the 2013 Bonds, the disposition of the special
taxes securing the 2013 Bonds and the administration and payment of the 2013 Bonds; and
WHEREAS, the County has determined that all things necessary to cause the 2013
Bonds, when authenticated by the County for 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 County for the District in accordance with their terms, and all
things necessary to cause the creation, authorization, execution and delivery of this Agreement
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and the creation, authorization, execution and issuance of the 2013 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:
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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 Bondowners. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the County shall be for the equal
benefit, protection and security of the Owners. 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 any or all of the following: the fees and expenses of
the Fiscal Agent (including any fees or expenses of its counsel), the expenses of the County in
carrying out its duties hereunder (including, but not limited to, the levying and collection of the
Special Taxes, and the foreclosure of the liens of delinquent Special Taxes) including the fees
and expenses of its counsel, an allocable share of the salaries of County staff related thereto
and a proportionate amount of County general administrative overhead related thereto, any
amounts paid by the County from its general funds pursuant to Section 6.02, any amounts
paid or payable to any persons or entities employed by the County in connection with the
discharge of any of the County’s obligations hereunder (including, but not limited to, the
calculation of the levy of the Special Taxes, foreclosures with respect to delinquent taxes, and
the calculation of amounts subject to rebate to the United States), any fees or expenses of the
Escrow Bank and any costs incurred by the County under or in connection with the Escrow
Agreement, and all other costs and expenses of the County or the Fiscal Agent incurred in
connection with the discharge of their respective duties hereunder or in connection with the
2013 Bonds or the refunding of the 2001 Bonds and, in the case of the County, in any way
related to the administration of the Bonds or the District. 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
4.06(A) hereof.
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“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, and (ii) the principal amount of the Outstanding Bonds due in such Bond Year.
“Auditor” means the Auditor-Controller of the County, as such other official at the
County who is responsible for preparing property tax bills.
“Authorized Officer” means the County Administrator, the Director of Conservation
and Development of the County, the Community Development Bond Program Manager of the
County, the Clerk of the Board or any other officer or employee authorized by the Board of
Supervisors of the County 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 attorney or other firm of
attorneys acceptable to the County 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 4.04(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 1st in each year and
ending on the day prior to September 1st in the following year except that the first Bond Year
shall begin on the Closing Date and end on August 31, 2013.
“Bonds” means, collectively, the 2013 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 corporate trust office
are authorized or obligated by law or executive order to be closed.
“Closing Date” means January __, 2013, being the date upon which there is a physical
delivery of the 2013 Bonds in exchange for the amount representing the purchase price of the
2013 Bonds by the Original Purchaser.
“Code” means the Internal Revenue Code of 1986 as in effect on the date of issuance of
the 2013 Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the 2013 Bonds, together with applicable
temporary and final regulations promulgated, and applicable official public guidance
published, under the Code.
“Continuing Disclosure Agreement ” means that certain Continuing Disclosure
Agreement Certificate relating to the 2013 Bonds between of the County and accepted by the
Dissemination Agent referenced therein, as originally executed by the County 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 County and related to the authorization, sale and issuance of the 2013 Bonds
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and the refunding and defeasance of the 2001 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
County in connection with the issuance of the 2013 Bonds and the defeasance and redemption
of the 2001 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, financial advisor’s fees and expenses, charges for execution, transportation and
safekeeping of the 2013 Bonds and other costs, charges and fees in connection with the
foregoing.
“Cost of Issuance Fund” means the fund by that name established by Section 4.02(A)
hereof.
“County” means the County of Contra Costa, California.
“County Counsel” means the County’s County Counsel or his or her designee.
“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
payable on the Bonds during the period of computation, excluding amounts scheduled during
such period which relate to principal which has been retired before the beginning of such
period.
“Depository” means (a) initially, DTC, and (b) any other Securities Depository acting
as Depository pursuant to Section 2.13.
“District ” means the Contra Costa County of Contra Costa Community Facilities
District No. 2001-1 (Norris Canyon), formed pursuant to the Act and the Resolution of
Formation.
“Escrow Agreement ” means the Escrow Agreement, dated as of January 1, 2013, by
and among the County and the Escrow Bank.
“Escrow Bank” means The Bank of New York Mellon Trust Company, N.A., 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
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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 County and acting as an
independent fiscal agent with the duties and powers herein provided, its successors and
assigns, and any other corporation or association which may at any time be substituted in its
place, as provided in Section 7.01.
“Fiscal Year” means the twelve-month period extending from July 1 in a calendar year
to June 30 of the succeeding year, both dates inclusive.
“Independent Financial Consultant ” means any consultant or firm of such consultants
appointed by the County or any Authorized Officer, 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 County; (iii) does not have any substantial interest, direct or
indirect, with or in the County, or any owner of real property in the District, or any real
property in the District; and (iv) is not connected with the County as an officer or employee of
the County, but who may be regularly retained to make reports to the County.
“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 County 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, 2013.
“Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond
Year after the calculation is made through the final scheduled maturity date for any
Outstanding Bonds.
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“Officer’s Certificate” means a written certificate of the County signed by an
Authorized Officer of the County.
“Ordinance” means Ordinance No. 2001/11, adopted by the Board of Supervisors of
the County on June 19, 2001, and any other ordinance of the County levying the Special Taxes.
“Original Purchaser” means the first purchaser of the 2013 Bonds from the County,
being Stifel, Nicolaus & Company, Incorporated dba Stone & Youngberg, a Division of Stifel
Nicolaus.
“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 County pursuant to this Agreement or any Supplemental Agreement.
“Owner” or “Bondowner” means any person who shall be the registered owner of any
Outstanding Bond.
“Parity Bonds” means bonds issued by the County for the District payable 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 the following, but only to the extent that the same are
acquired at Fair Market Value and are otherwise legal investments for funds of the County:
(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 Investors Service or
Standard and Poor’s Ratings Group, and which have a maximum term to maturity not
to exceed three years.
(c) Time certificates of deposit or negotiable certificates of deposit issued by a
state or nationally chartered bank or trust company, or a state or federal savings and
loan association which may include the Fiscal Agent and its affiliates; provided, that
the certificates of deposit shall be one or more of the following: continuously and fully
insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation, and/or continuously and fully secured by securities described
in subdivision (a) or (b) of this definition of Permitted Investments which shall have a
market value, as determined on a marked-to-market basis calculated at least weekly,
and exclusive of accrued interest, or not less than 102 percent of the principal amount
of the certificates on deposit.
(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 Investors Service or Standard and Poor’s Ratings Group, which commercial
paper is limited to issuing corporations that are organized and operating within the
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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 Investors Service or
Standard and Poor’s Ratings Group, 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 Investors Service and
Standard and Poor’s Ratings Group 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
Investors Service or Standard and Poor’s Ratings Group from the practice of rating that
debt, or reduced below “AA-” by Standard and Poor’s Ratings Group or below “Aa3”
by Moody’s Investors Service (these events are called “rating downgrades”) the
financial institution shall give notice to the County and, within the five-day period, and
for as long as the rating downgrade is in effect, shall deliver in the name of the County
or the Fiscal Agent to the County 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 Investors Service or below
“A-” by Standard and Poor’s Ratings Group, the Fiscal Agent or the County 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
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highest rating category (without regard to plus (+) or minus (-) designations) by
Moody's or S&P.
(i) The California Asset Management Program.
(j) Any other lawful investment for County funds.
“Principal Office” means the corporate trust office of the Fiscal Agent as identified
pursuant to Section 9.06 hereof; provided, however, for the purpose of maintenance of the
Registration Books and surrender of Bonds for payment, transfer or exchange such term means
the office at which the Fiscal Agent conducts its corporate agency business, or such other or
additional offices as may be designated by the Fiscal Agent.
“Project” means the facilities eligible to be funded by the District, as specified by the
Resolution of Formation.
“Rate and Method of Apportionment” means the Rate and Method of Apportionment
of Special Tax for the District, as approved by the Resolution of Formation, and as it may be
amended from time to time in accordance with the provisions of the Act.
“Rating Category” means one of the two highest rating categories then in effect under
the rating systems of Moody’s Investors Service or Standard and Poor’s Ratings Group, a
division of McGraw-Hill, without regard to plus or minus sign or numerical or other qualifying
designation.
“Record Date” means the fifteenth day of the month next preceding the month of the
applicable Interest Payment Date, whether or not such fifteenth (15th) day is a Business Day.
“Refunding Bonds” means bonds issued by the County 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.
“Refunding Fund ” means the fund by that name created by and held by the Escrow
Bank pursuant to the Escrow Agreement.
“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.
“Registration Books ” means the records maintained by the Fiscal Agent pursuant to
Section 2.08 for the registration and transfer of ownership of the Bonds.
“Regulations” means temporary and permanent regulations promulgated under the
Code.
“Reserve Fund ” means the fund by that name established pursuant to Section 4.03(A)
hereof.
“Reserve Requirement ” means, as of any date of calculation, an amount equal to fifty
percent (50%) of the lesser of (i) Maximum Annual Debt Service, (ii) one hundred twenty-five
percent (125%) of average Annual Debt Service, or (iii) ten percent (10%) of the initial principal
amount of the Bonds issued hereunder. The Reserve Requirement as of the Closing Date is
$__________.
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“Resolution” means Resolution No. 2012/____, adopted by the Board of Supervisors
of the County on December 11, 2012, authorizing the issuance of the 2013 Bonds.
“Resolution of Formation” means Resolution No. 2001/244, adopted by the Board of
Supervisors of the County on June 5, 2001.
“Securities Depositories ” means The Depository Trust Company, 55 Water Street, 1SL,
New York, New York 10041-0099 Attention: Call Notification Department, Fax (212) 855-
3274; and, in accordance with then current guidelines of the Securities and Exchange
Commission, such other addresses and/or such other securities depositories as the County
may designate in an Officer’s Certificate delivered to the Fiscal Agent.
“Special Tax Fund” means the fund by that name established by Section 4.05(A)
hereof.
“Special Tax Prepayments” means the proceeds of any prepayments of Special Taxes
received by the County, as calculated pursuant to the Rate and Method of Apportionment,
less any administrative fees or penalties collected as part of any such prepayment.
“Special Tax Prepayments Account” means the account by that name within the Bond
Fund established by Section 4.04(A) hereof.
“Special Tax Revenues” means the proceeds of the Special Taxes received by the
County, including any scheduled payments and any prepayments thereof, interest and
penalties thereon and proceeds of the redemption or sale of property sold as a result of
foreclosure of the lien of the Special Taxes to the amount of said lien, but shall not include
interest and penalties, if any, collected with the Special Taxes that are in excess of the rate of
interest payable on the Bonds.
“Special Taxes” means the special taxes levied within the District pursuant to the Act,
the Ordinance and this Agreement.
“Supplemental Agreement ” means an agreement the execution of which is authorized
by a resolution which has been duly adopted by the County 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.
“2001 Bonds” means the Contra Costa County of Contra Costa Community Facilities
District No. 2001-1 (Norris Canyon) 2001 Special Tax Bonds.
“2013 Bonds” means the Contra Costa County of Contra Costa Community Facilities
District No. 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds at any time
Outstanding under this Agreement.
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ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation. 2013 Bonds in the aggregate principal
amount of _______________ Dollars ($__________) are hereby authorized to be issued by the
County for the District under and subject to the terms of the Resolution, this Agreement, the
Act, the Refunding Law and other applicable laws of the State of California. The 2013 Bonds
are hereby designated the “Contra Costa County of Contra Costa Community Facilities
District No. 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds.”
Section 2.02. Terms of 2013 Bonds. The 2013 Bonds shall be issued in fully registered
form without coupons in denominations of $5,000 or any integral multiple in excess thereof.
The 2013 Bonds shall be dated the Closing Date, shall be in the principal amounts, shall
mature on September 1 in the years and shall bear interest (calculated on the basis of a 360-
day year of twelve 30-day months) at the rates per annum as follows:
Maturity Date
(September 1)
Principal
Amount
Interest Rate
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Interest on the 2013 Bonds shall be payable on each Interest Payment Date to the
person whose name appears on the registration books maintained by the Fiscal Agent as the
Owner thereof as of the Record Date immediately preceding each such Interest Payment Date,
such interest to be paid by check of the Fiscal Agent mailed by first class mail, postage
prepaid, on each Interest Payment Date to the Owner at the address of such Owner as it
appears on the registration books maintained by the Fiscal Agent as of the preceding Record
Date. Principal of and premium (if any) on any 2013 Bond shall be paid by check upon
presentation and surrender thereof, at maturity or the prior redemption thereof, at the
Principal Office of the Fiscal Agent. The principal of and interest and premium (if any) on the
2013 Bonds shall be payable in lawful money of the United States of America.
Each 2013 Bond shall bear interest from the Interest Payment Date next preceding the
date of authentication thereof, unless (a) it is authenticated after a Record Date and on or
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before the following Interest Payment Date, in which event it shall bear interest from such
Interest Payment Date; or (b) it is authenticated on or before August 15, 2013 in which event it
shall bear interest from the Closing Date; provided, however, that if, as of the date of
authentication of any 2013 Bond, interest thereon is in default, such 2013 Bond shall bear
interest from the Interest Payment Date to which interest has previously been paid or made
available for payment thereon.
“CUSIP” identification numbers shall be imprinted on the 2013 Bonds, but such
numbers shall not constitute a part of the contract evidenced by the 2013 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 2013 Bonds. In addition, failure on the part of the County
or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute
any violation of the County’s contract with such Owners and shall not impair the effectiveness
of any such notice.
All 2013 Bonds paid by the Fiscal Agent pursuant to this Article shall be canceled by
the Fiscal Agent. The Fiscal Agent shall destroy the canceled 2013 Bonds and, upon written
request of the County, issue a certificate of destruction thereof to the County.
Section 2.03. Redemption.
(A) Redemption Dates.
(i) No Optional Redemption. The 2013 Bonds are not subject to optional
redemption prior to their stated maturities.The 2013 Bonds maturing on or after
September 1, ____, are subject to optional redemption prior to their stated maturities
on any Interest Payment Date occurring on or after September 1, ____, as a whole or in
part, upon payment from any source of funds available for that purpose, at a
redemption price equal to the principal amount of the 2013 Bonds to be redeemed
together with accrued interest thereon to the date fixed for redemption, without
premium.
(ii) Mandatory Redemption From Special Tax Prepayments. The 2013 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 pursuant to Section 4.03(F), as a whole or in
part, at a redemption price equal to 103% of the principal amount of the 2013 Bonds to
be redeemed, together with accrued interest thereon to the date fixed for redemption.
(B) Notice to Fiscal Agent. The County shall give the Fiscal Agent written notice of its
intention to redeem 2013 Bonds pursuant to subsection (A)(ii) above 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) Priority of Redemption. Whenever provision is made in this Agreement for the
redemption of less than all of the 2013 Bonds or any given portion thereof, the Fiscal Agent
shall select the 2013 Bonds to be redeemed, from all 2013 Bonds or such given portion thereof
not previously called for redemption among maturities so as to maintain substantially level
debt service on the Bonds, and within a maturity by lot in any manner which the Fiscal Agent
in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds
shall be deemed to be comprised of separate $5,000 portions and such portions shall be
treated as separate Bonds which may be separately redeemed.
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(D) Purchase of Bonds in lieu of Redemption. In lieu of redemption under Section
2.03(A) above, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for
purchase of Outstanding 2013 Bonds, upon the filing with the Fiscal Agent of an Officer’s
Certificate requesting such purchase prior to the selection of 2013 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 2013 Bonds be purchased at a
price in excess of the principal amount thereof, plus interest accrued to the date of purchase.
(E) Redemption Procedure by Fiscal Agent . The Fiscal Agent shall cause notice of any
redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not
more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories
and to one or more Information Services (or by such other means as permitted by such
services), and to the respective registered Owners of any 2013 Bonds designated for
redemption, at their addresses appearing on the 2013 Bond registration books in the Principal
Office of the Fiscal Agent; but such mailing shall not be a condition precedent to such
redemption and failure to mail or to receive any such notice, or any defect therein, shall not
affect the validity of the proceedings for the redemption of such Bonds.
Such notice shall state the redemption date and the redemption price and, if less than
all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP
numbers and Bond numbers of the 2013 Bonds to be redeemed by giving the individual CUSIP
number and Bond number of each Bond to be redeemed or shall state that all Bonds between
two stated Bond numbers, both inclusive, are to be redeemed or that all of the 2013 Bonds of
one or more maturities have been called for redemption, shall state as to any 2013 Bond called
in part the principal amount thereof to be redeemed, and shall require that such Bonds be then
surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption
price, and shall state that further interest on such Bonds will not accrue from and after the
redemption date.
Notwithstanding the foregoing, in the case of any redemption of the 2013 Bonds under
Section 2.03(A)(i) or (ii) above, the notice of redemption may state that the redemption is
conditioned upon receipt by the Fiscal Agent of sufficient moneys to redeem the 2013 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 2013 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 2013 Bonds to be redeemed, the
Fiscal Agent shall send written notice to the owners of the 2013 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 2013 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 2013 Bonds being redeemed, each check
or other transfer of funds issued for such purpose shall, to the extent practicable, bear the
CUSIP number identifying, by issue and maturity, of the 2013 Bonds being redeemed with the
proceeds of such check or other transfer.
Upon surrender of 2013 Bonds redeemed in part only, the County shall execute and the
Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the
County, a new 2013 Bond or 2013 Bonds, of the same maturity, of authorized denominations
in aggregate principal amount equal to the unredeemed portion of the 2013 Bond or 2013
Bonds.
(F) 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 2013
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Bonds so called for redemption shall have been deposited in the 2013 Bond Fund, such Bonds
so called shall cease to be entitled to any benefit under this Agreement other than the right to
receive payment of the redemption price, and no interest shall accrue thereon on or after the
redemption date specified in such notice.
All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section shall
be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds and, upon
written request of the County, issue a certificate of destruction thereof to the County.
Section 2.04. Form of 2013 Bonds. The 2013 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
County by the facsimile signatures of the Chair of the Board of Supervisors of the County and
the Clerk of the Board who are in office on the date of adoption of this Agreement or at any
time thereafter, and the seal of the County shall be impressed, imprinted or reproduced by
facsimile signature thereon. If any officer whose signature appears on any Bond ceases to be
such officer before delivery of the Bonds to the owner, such signature shall nevertheless be as
effective as 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 County by such persons as at the
actual date of the execution of such Bond shall be the proper officers of the County although
at the nominal date of such Bond any such person shall not have been such officer of the
County.
Only such Bonds as shall bear thereon a certificate of authentication in substantially the
form set forth in Exhibit A executed manually and dated by the Fiscal Agent, shall be valid or
obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of
authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered
hereunder have been duly authenticated, registered and delivered hereunder and are entitled to
the benefits of this Agreement.
Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 by
the person in whose name it is registered, in person or by his duly authorized attorney, upon
surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument
of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any
expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the
County from any lawfully available funds of the District, including but not limited to amounts
in the Administrative Expense Fund. 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 County shall execute
and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate
principal amount.
No transfers of Bonds shall be required to be made (i) fifteen days prior to the date
established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a
Bond after such Bond has been selected for redemption.
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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
of the same series and of the same maturity. The cost for any services rendered or any
expenses incurred by the Fiscal Agent in connection with any such exchange shall be paid by
the County. 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 or (ii) with respect to a
Bond after such Bond has been selected for redemption.
Section 2.08. Bond Register. The Fiscal Agent will keep or cause to be kept, at its
Principal Office a Bond Register consisting of 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 County 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 County 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 County and the Fiscal Agent shall not be affected by any notice to the contrary. The
County 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 County, 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 County
upon the same conditions and in substantially the same manner as the definitive Bonds. If the
County 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 to 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 County, at the expense of the Owner of said Bond, shall execute, and the Fiscal
Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in
exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal
Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent
shall be canceled by it and destroyed by the Fiscal Agent.
If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft
may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity
for the County and the Fiscal Agent satisfactory to the Fiscal Agent shall be given, the County,
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 County may require payment of a sum not exceeding the actual
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cost of preparing each new Bond delivered under this Section and of the expenses which may
be incurred by the County 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 County 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 County under this Agreement
and the Bonds shall be special obligations of the County, payable solely from the Special Tax
Revenues and the funds pledged therefore hereunder. Neither the faith and credit nor the
taxing power of the County (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.
Section 2.12. No Acceleration. The principal of the Bonds shall not be subject to
acceleration hereunder. Nothing in this Section shall in any way prohibit the prepayment or
redemption of Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge
of this Agreement under Section 9.03 hereof.
Section 2.13. Book-Entry Only System. DTC shall act as the initial Depository for the
2013 Bonds. One 2013 Bond for each maturity of the 2013 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 2013 Bonds shall be registered in the Registration Books kept by the Fiscal Agent for the
Bonds in the name of Cede & Co., as nominee of DTC or such nominee as DTC shall appoint
in writing.
The representatives of the County 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 2013 Bonds for the Depository’s book-entry system, including the execution of the
Depository’s required representation letter.
With respect to Bonds registered in the Registration Books in the name of Cede & Co.,
as nominee of DTC, neither the County 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 County 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 County elects
to redeem the Bonds in part, (iv) the payment to any DTC Participant, any Beneficial Owner,
or any other person, other than DTC, of any amount with respect to the principal of or interest
on the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the
Bonds; except that so long as any Bond is registered in the name of Cede & Co., as nominee of
DTC, any Beneficial Owner of $1,000,000 or more in aggregate principal amount of any series
of Bonds who has filed a written request to receive notices, containing such Beneficial Owner’s
name and address, with the Fiscal Agent shall be provided with all notices relating to such
Bonds by the Fiscal Agent.
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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 Registration Books, and all such payments shall be valid and effective to fully
satisfy and discharge all obligations with respect to the principal of and interest on the Bonds
to the extent of the sums or sums so paid.
No person other than an Owner, as shown on the Registration Books, shall receive a
physical Bond. Upon delivery by DTC to the 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 2013
Bonds at any time by giving written notice to the Fiscal Agent during any time that the 2013
Bonds are Outstanding, and discharging its responsibilities with respect thereto under
applicable law. The County may terminate the services of DTC with respect to the 2013 Bonds
if it determines that DTC is unable to discharge its responsibilities with respect to the 2013
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 County 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 County determines that it is in the best interest of the Beneficial Owners of the 2013
Bonds that they be able to obtain certificated Bonds, the 2013 Bonds shall 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 name 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 2013 Bonds will be delivered to such Beneficial Owners as
soon as practicable.
Section 2.14. Issuance of Parity Bonds. The County may issue one or more series of
Parity Bonds, in addition to the 2013 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 County may issue Refunding Bonds that are Parity Bonds subject to the
following specific conditions precedent:
(A) Current Compliance. The County shall be in compliance 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 County to exceed the maximum authorized indebtedness of the District
under the provisions of the Act.
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(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 equal to the Reserve
Requirement.
(D) Officer’s Certificate. The County shall deliver to the Fiscal Agent an
Officer’s Certificate certifying that the proposed issue of Parity Bonds constitute
Refunding Bonds, and that the conditions precedent to the issuance of such Parity
Bonds set forth in subsections (A), (B) and (C) 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 and others selected
with due care, without the need for independent inquiry or certification.
Nothing in this Section 2.14 shall prohibit the County from issuing bonds or otherwise
incurring debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof
under Section 4.01 of this Agreement.
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ARTICLE III
ISSUANCE OF 2013 BONDS
Section 3.01. Issuance and Delivery of 2013 Bonds. At any time after the execution
of this Agreement, the County may issue the 2013 Bonds for the District in the aggregate
principal amount set forth in Section 2.01 and deliver the 2013 Bonds to the Original
Purchaser. The Authorized Officers of the County are hereby authorized and directed to
deliver any and all documents and instruments necessary to cause the issuance of the 2013
Bonds in accordance with the provisions of the Act, the Refunding Law, the Resolution and
this Agreement, to authorize the payment of Costs of Issuance and costs of the refunding of
the 2001 Bonds from the proceeds of the 2013 Bonds and to do and cause to be done any and
all acts and things necessary or convenient for delivery of the 2013 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 and all moneys deposited in the Bond Fund, the
Reserve Fund and, until disbursed as provided herein, in the Special Tax Fund. The Special
Tax Revenues and all moneys deposited into said funds (except as otherwise provided herein)
are hereby dedicated to the payment of the principal of, and interest and any premium on, the
Bonds as provided herein and in the Act until all of the Bonds have been paid and retired or
until moneys or Federal Securities have been set aside irrevocably for that purpose in
accordance with Section 9.03.
Amounts in the Administrative Expense Fund, the Costs of Issuance Fund and the
Refunding Fund are not pledged to the repayment of the Bonds. The facilities financed by the
District are not in any way pledged to pay the debt service on the Bonds. Any proceeds of the
sale, condemnation or destruction of any facilities financed by the District 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 his obligation with
respect to the Project.
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ARTICLE IV
PROCEEDS OF THE 2013 BONDS; FUNDS AND ACCOUNTS
Section 4.01. Application of Proceeds of Sale of 2013 Bonds. (A) The proceeds of the
purchase of the 2013 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 Reserve Fund $______________ (being an amount equal to
the initial Reserve Requirement).
(ii) Deposit in the Costs of Issuance Fund an amount equal to
$___________________.
(iii) Transfer to the Escrow Bank for deposit by the Escrow Bank in the
Refunding Fund an amount equal to $_________________________.
(B) In addition to the foregoing, on the Closing Date the County shall transfer or cause
to be transferred certain moneys held with respect to the 2001 Bonds as follows:
(i) Transfer from the administrative expense fund held with respect to the
2001 Bonds to the Auditor for deposit by the Auditor in the Administrative Expense
Fund, all amounts on deposit in such administrative expense fund.
(ii) Transfer from the special tax fund held with respect to the 2001 Bonds
(a) to the Escrow Bank for deposit by the Escrow Bank in the Refunding Fund
$_______________; and (b) to the Auditor for deposit by the Auditor in the Special
Tax Fund, all remaining amounts on deposit in such special tax fund.
(iii) Transfer from the reserve fund held with respect to the 2001 Bonds to the
Escrow Bank for deposit by the Escrow Bank in the Refunding Fund, the
$________________ on deposit in such reserve fund.
(iv) Transfer from the bond fund held with respect to the 2001 Bonds to the
Auditor for deposit by the Auditor in the Special Tax Fund, any amounts on deposit in
such bond fund.
(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. Costs of Issuance Fund.
(A) Establishment of Costs of Issuance Fund. There is hereby established as a
separate fund to be held by the Fiscal Agent, the Community Facilities District No. 2001-1
(Norris Canyon) 2013 Special Tax Refunding Bonds, Costs of Issuance Fund, to the credit of
which a deposit shall be made as required by clause (ii) of 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.
(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
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amounts to be paid to the designated payees, signed by an Authorized Officer and delivered
to the Fiscal Agent concurrently with the delivery of the 2013 Bonds. The Fiscal Agent shall
pay all Costs of Issuance upon receipt of an invoice from any such payee which requests
payment in an amount which is less than or equal to the amount set forth with respect to such
payee in such requisition, or upon receipt of an Officer’s Certificate requesting payment of a
Cost of Issuance not listed on the initial requisition delivered to the Fiscal Agent on the Closing
Date. Each such Officer’s Certificate 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. The Fiscal Agent shall maintain the Cost of Issuance Fund for a period of 120 days from
the Closing Date and then shall transfer any moneys remaining therein, including any
investment earnings thereon, to the Auditor for deposit by the Auditor to the Administrative
Expense Fund.
(C) Investment. Moneys in the Cost of Issuance Fund shall be invested by the Fiscal
Agent in accordance with Section 6.01. Interest earnings and profits resulting from said
investment shall be retained by the Fiscal Agent in the Cost of Issuance Fund to be used for the
purposes of such fund.
Section 4.03. Reserve Fund.
(A) Establishment of Reserve Fund. There is hereby established as a separate fund to
be held by the Fiscal Agent, the Community Facilities District No. 2001-1 (Norris Canyon)
2013 Special Tax Refunding Bonds, Reserve Fund to the credit of which a deposit shall be
made as required by clause (i) of Section 4.01(A), which deposit is equal to the initial Reserve
Requirement, and deposits shall be made as provided in subclause second of clause (ii) of the
second paragraph of Section 4.05(A), and Section 4.05(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 of Excess of Reserve Requirement. Whenever, on the Business Day before
any Interest Payment Date, or on any other date at the request of an Authorized Officer, the
amount in the Reserve Fund exceeds the then Reserve Requirement, the Fiscal Agent shall
provide written notice to the Auditor 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 4.04.
(D) Transfer for Rebate Purposes . Amounts in the Reserve Fund shall be withdrawn,
at the written request of an Authorized Officer, for purposes of making payment to the federal
government to comply with Section 6.02.
(E) Transfer When Balance Exceeds Outstanding Bonds . Whenever the balance in the
Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including
interest accrued to the date of payment or redemption and premium, if any, due upon
redemption, the Fiscal Agent shall transfer the amount in the Reserve Fund to the Bond Fund
to be applied, on the next succeeding Interest Payment Date to the payment, in accordance
with Section 4.0 4 2 , of all of the Outstanding Bonds. In the event that the amount so
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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
County 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 4.03(E) until after (i) the calculation, pursuant to Section 6.02, of any
amounts due to the federal government following payment of the Bonds and withdrawal of
any such amount under Section 4.03(D) for purposes of making such payment to the federal
government, and (ii) payment of any fees and expenses due to the Fiscal Agent.
(F) Transfer 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)(ii) and 4.04(B)(ii), a proportionate amount in the Reserve Fund (determined by the
Auditor on the basis of the principal of Bonds to be redeemed and the then original principal of
the Bonds) 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)(ii).
(G) Investment. Moneys in the Reserve Fund shall be invested by the Fiscal Agent in
accordance with Section 6.01. One Business Day before each Interest Payment Date, interest
earnings and profits resulting from said investment shall be transferred by the Fiscal Agent to
the Bond Fund to be used by the Fiscal Agent for the purposes of such fund, but any such
transfer shall be made only to the extent that following such transfer the amount on deposit in
the Reserve Fund equals the then Reserve Requirement.
Section 4.04. Bond Fund.
(A) Establishment of Bond Fund . There is hereby established as a separate fund to be
held by the Fiscal Agent, the Community Facilities District No. 2001-1 (Norris Canyon) 2013
Special Tax Refunding Bonds, Bond Fund to the credit of which deposits shall be made as
required by subclause first of clause (ii) of the second paragraph of Section 4.05(A), Section
4.05(B), and Section 4.03, and any other amounts required to be deposited therein by this
Agreement or the Act. Within the Bond Fund there is hereby established a Special Tax
Prepayments Account to the credit of which deposits shall be made as required by clause (iii)
of the second paragraph of Section 4.05(A). Moneys in the Bond Fund and the Special Tax
Prepayments Account 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.
(B) Disbursements. (i) Bond Fund Disbursements. At least ten (10) Business Days
before each Interest Payment Date, the Fiscal Agent shall notify the Auditor in writing as to the
principal and premium, if any, and interest due on the Bonds on the next Interest Payment
Date and the total amount of scheduled interest and principal due on Bonds in the calendar
year commencing in that Fiscal Year. On each Interest Payment Date, and following any
transfers required pursuant to Sections 4.05(B), 4.04(B)(ii) and 4.03(C), (E), (F) and (G) in
connection with such Interest Payment Date, the Fiscal Agent shall withdraw from the Bond
Fund and pay to the Owners of the Bonds the principal of, and interest and any premium, then
due and payable on the Bonds, including any amounts due on the Bonds by reason of a
redemption of the Bonds required by Section 2.03(A)(ii), such payments to be made in the
priority listed in the third succeeding paragraph. Notwithstanding the foregoing, amounts in
the Bond Fund as a result of a transfer pursuant to clause (ii) of the second paragraph of
Section 4.05(A) shall be immediately disbursed by the Fiscal Agent to pay past due amounts
owing on the Bonds.
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At least two (2) Business Days prior to each Interest Payment Date, the Fiscal Agent
shall determine if the amounts then on deposit in the Bond Fund are sufficient to pay the debt
service due on the Bonds on the next Interest Payment Date. In the event that amounts in the
Bond Fund are insufficient for such purpose, the Fiscal Agent promptly shall notify the
Auditor by telephone (and confirm in writing) of the amount of the insufficiency.
In the event that amounts in the Bond Fund are insufficient for the purpose set forth in
the second 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 by the Fiscal Agent in the
Bond Fund.
If, after the foregoing transfers, there are insufficient funds in the Bond Fund to make
the payments provided for in the first sentence of the first paragraph of this Section 4.02(B)(i),
the Fiscal Agent shall apply the available funds first to the payment of interest on the Bonds,
then to the payment of principal due on the Bonds.
(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 under Section 2.03(A)(ii) can timely be given by
the Fiscal Agent under Section 2.03(E), and shall be used (together with any amounts
transferred pursuant to Section 4.03(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 by the Fiscal Agent in accordance with Section 6.01. Interest earnings and
profits resulting from investment of amounts in the Bond Fund and the Special Tax
Prepayments Account shall be retained by the Fiscal Agent in the Bond Fund and the Special
Tax Prepayments Account, respectively, to be used for the purposes of such fund and account
as applicable.
(D) State 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/or interest on the Bonds, the Fiscal Agent shall notify the County in
writing of such failure or withdrawal, and (in addition to any notice required under the
Continuing Disclosure Agreement) the County shall notify the California Debt and Investment
Advisory Commission of such failure or withdrawal within 10 days of the failure to make
such payment or the date of such withdrawal.
Section 4.05. Special Tax Fund.
(A) Establishment of Special Tax Fund . There is hereby established as a separate fund
to be held by the Auditor, the Community Facilities District No. 2001-1 (Norris Canyon) 2013
Special Tax Refunding Bonds, Special Tax Fund. The County shall transfer or cause to be
transferred to the Auditor, as soon as practicable following receipt, all Special Tax Revenues
received by the County and any amounts required by Section 4.01(B)(ii)(b) and Section
4.01(B)(iv)(b) to be deposited to the Special Tax Fund, all which amounts shall be deposited
by the Auditor to the Special Tax Fund. In addition, the Auditor shall deposit in the Special
Tax Fund amounts to be transferred thereto pursuant to Section 4.06(B) hereof.
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Notwithstanding the foregoing,
(i) any Special Tax Revenues constituting payment of the portion of the Special
Tax levy for Administrative Expenses shall be deposited by the Auditor in the
Administrative Expense Fund;
(ii) any Special Tax Revenues constituting the collection of delinquencies in
payment of Special Taxes shall be transferred by the Auditor first, to the Fiscal Agent
for deposit by the Fiscal Agent in the Bond Fund to the extent needed to pay any past
due debt service on the Bonds; second, to the Fiscal Agent for deposit by the Fiscal
Agent 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; and third, shall be retained by
the Auditor in the Special Tax Fund for use as described in Section 4.05(B) below; and
(iii) any proceeds of Special Tax Prepayments shall be transferred by the
Auditor to the Fiscal Agent, for deposit by the Fiscal Agent in the Special Tax
Prepayments Account established pursuant to Section 4.04(A).
Moneys in the Special Tax Fund shall be held by the Auditor for the benefit of the
County and the Owners of the Bonds, shall be disbursed as provided below and, pending and
disbursement, shall be subject to a lien in favor of the Owners of the Bonds and the County.
(B) Disbursements. From time to time as needed to pay the obligations of the District,
but no later than the Business Day before each Interest Payment Date, the Auditor shall
withdraw from the Special Tax Fund and transfer the following amounts in the following order
of priority (i) to the Fiscal Agent for deposit by the Fiscal Agent in the Bond Fund an amount,
taking into account any amounts then on deposit in the Bond Fund and any expected transfers
from the Reserve Fund and the Special Tax Fund to the Bond Fund pursuant to Sections
4.03(C), (E) and (G), and 4.05(A), such that the amount in the Bond Fund equals the principal,
premium, if any, and interest due on the Bonds on the next Interest Payment Date, and (ii) to
the Fiscal Agent for deposit by the Fiscal Agent in 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; provided that no such transfers shall exceed the
amount then available to be transferred from the Special Tax Fund.
(C) Investment. Moneys in the Special Tax Fund shall be invested by the Auditor in
accordance with Section 6.01. Interest earnings and profits resulting from investment of
amounts in the Special Tax Fund shall be retained by the Auditor in the Special Tax Fund to be
used for the purposes thereof.
Section 4.06. Administrative Expense Fund.
(A) Establishment of Administrative Expense Fund. There is hereby established as a
separate fund to be held by the Auditor, the Community Facilities District No. 2001-1 (Norris
Canyon) 2013 Special Tax Refunding Bonds, Administrative Expense Fund, to the credit of
which deposits shall be made as required by Section 4.01(B)(i), clause (i) of the second
paragraph of Section 4.05(A) and Section 4.02(B). Moneys in the Administrative Expense
Fund shall be held by the Auditor for the benefit of the County, and shall be disbursed as
provided below.
(B) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn
by the Auditor and paid to the County or its order upon receipt by the Auditor of an Officer’s
Certificate stating the amount to be withdraw, that such amount is to be used to pay an
Administrative Expense, and the nature of such Administrative Expense. Amounts transferred
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to the Administrative Expense Fund pursuant to Section 4.02(B) shall be used for purposes of
such fund prior to using other available amounts therein.
Annually, on the last day of each Fiscal Year, the Auditor shall withdraw from the
Administrative Expense Fund and transfer to the Special Tax Fund any amounts then
remaining in the Administrative Expense Fund in excess of $20,000 plus any amount needed
to pay any Administrative Expenses incurred but not yet paid.
(C) Investment. Moneys in the Administrative Expense Fund shall be invested by the
Auditor in accordance with Section 6.01. Interest earnings and profits resulting from said
investment shall be retained by the Auditor in the Administrative Expense Fund to be used for
the purposes of such fund.
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ARTICLE V
OTHER COVENANTS OF THE COUNTY
Section 5.01. Collection of Special Tax Revenues. The County 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.
On or within five (5) Business Days of June 1 of each year, the Fiscal Agent shall
provide the Auditor with a notice stating the amounts then on deposit in the Bond Fund and
the Reserve Fund, and the total amount of the scheduled principal and interest due on the
Bonds in the next calendar year. The receipt of or failure to receive such notice by the Auditor
shall in no way affect the obligations of the Auditor under the following three paragraphs.
Upon receipt of such notice, the Auditor shall ascertain the relevant parcels on which the
Special Taxes are to be levied, taking into account any parcel splits during the preceding and
then current year. In computing the amount of Special Taxes to be levied, the Auditor shall
take into account funds available in the Bond Fund and the Special Tax Fund to make the
payment of debt service on the Bonds due on the Interest Payment Dates occurring in the next
calendar year, along with any transfers of investment earnings pursuant to Sections 4.03(C) or
4.03(G) to the Bond Fund expected to occur on such Interest Payment Date.
The Auditor shall effect the levy of the Special Taxes from time to time during each
Fiscal Year in accordance with the Ordinance and the Rate and Method of Apportionment.
Specifically, the Auditor shall compute the amount of Special Taxes to be so levied each Fiscal
Year before the final date on which the County will accept the transmission of the Special Tax
amounts for the parcels within the District for inclusion on the next secured or unsecured, as
applicable, real property tax roll. Upon the completion of the computation of the amounts of
the levy, the Auditor shall prepare or cause to be prepared such data as may be required to
include the levy of the Special Taxes on the next real property tax roll. The Special Taxes so
levied shall be payable and be collected in the same manner and at the same time and in the
same installment as the taxes on property levied on the tax roll are payable, and have the same
priority, become delinquent at the same times and in the same proportionate amounts and
bear the same proportionate penalties and interest after delinquency as do the general ad
valorem taxes levied on the Auditor tax roll.
In the event that the Auditor determines to levy all or a portion of the Special Taxes by
means of direct billing of the property owners within the District, and to the extent permitted
by the Ordinance, the Auditor shall, not less than forty-five (45) days prior to the first Interest
Payment Date for which the levy is being made, send bills to the property owners in the
District for Special Taxes necessary to meet the financial obligations of the District due on the
Interest Payment Dates for which the levy is being made, said bills to specify that the amounts
so levied shall be due and payable in two equal installments with each installment due not less
than thirty (30) days prior to the related Interest Payment Date and each installment shall be
delinquent if not paid when due.
In any event, the Auditor shall fix and levy the amount of Special Taxes within the
District required for the timely payment of principal of and interest on any outstanding Bonds
becoming due and payable, including any necessary replenishment or expenditure of the
Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the
Administrative Expenses, and shall take into account any prepayments of Special Taxes
theretofore received by the Auditor. The Special Taxes so levied shall not exceed the
maximum amounts as provided in the Rate and Method of Apportionment.
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The Auditor is hereby authorized to employ consultants to assist in computing the levy
of the Special Taxes hereunder and any reconciliation of amounts levied to amounts received.
The fees and expenses of such consultants and the costs and expenses of the Auditor
(including a charge for County staff time) in conducting the Auditor’s duties hereunder shall
be an Administrative Expense hereunder.
Section 5.02. Covenant to Foreclose. The County 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
County shall notify County Counsel of any such delinquency of which it is aware, and County
Counsel shall commence, or cause to be commenced, such proceedings.
The Auditor shall review its public records in connection with the collection of the
Special Taxes not later than July 1 of each year to determine the amount of the Special Taxes
collected in the Fiscal Year ending the preceding June 30, and:
(A) Individual Delinquencies. If the Auditor 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 (i) $7,500 or more if all of the property within the District is
on the Teeter Plan (as referenced in clause (xiii) of Section 5.19(A)); or (ii) $3,000 or
more if any property within the District is not on the Teeter Plan, then the Auditor shall
send or cause to be sent a notice of delinquency (and a demand for immediate payment
thereof) to the property owner within 45 days of such determination, and (if the
delinquency remains uncured) foreclosure proceedings shall be commenced by the
County within 120 days of such determination and shall be diligently pursued by the
County to completion. Notwithstanding the foregoing, the Auditor may defer any such
action if the amount then in the Reserve Fund is at least equal to the Reserve
Requirement.
(B) Aggregate Delinquencies. If the Auditor determines that the total amount
of delinquent Special Tax for the prior 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 prior Fiscal Year, the Auditor shall 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) within 45 days of such determination,
and the County shall commence foreclosure proceedings within 120 days of such
determination against each parcel of land in the District with a Special Tax delinquency
of (i) $7,500 or more if all of the property within the District is on the Teeter Plan (as
referenced in clause (xiii) of Section 5.19(A)); or (ii) $3,000 or more if any property
within the District is not on the Teeter Plan, and the County shall diligently pursue such
proceedings to completion.
The Auditor and the County Counsel, 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 County staff time) in conducting foreclosure proceedings shall
be an Administrative Expense hereunder.
Section 5.03. Punctual Payment. The County 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
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faithfully observe and perform all of the conditions, covenants and requirements of this
Agreement and all Supplemental Agreements and of the Bonds.
Section 5.04. Limited Obligation. The Bonds are limited obligations of the County on
behalf of the District and are payable solely from and secured solely by the Special Tax
Revenues and the amounts in the Bond Fund, the Reserve Fund and the Special Tax Fund
created hereunder.
Section 5.05. Extension of Time for Payment. In order to prevent any accumulation
of claims for interest after maturity, the County 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 County,
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 been so
extended or funded.
Section 5.06. Against Encumbrances. The County 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 5.07. Books and Records. The County will keep, or cause to be kept, proper
books of record and accounts, separate from all other records and accounts of the County, in
which complete and correct entries shall be made of all transactions relating to the
Administrative Expense Fund, the Special Tax Fund and the Special Tax Revenues. Such
books of record and accounts shall at all times during County business hours and following
reasonable prior written notice 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 5.08. Protection of Security and Rights of Owners. The County 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 County, the Bonds shall be incontestable by the County.
Section 5.09. Compliance with Law. The County will comply with all applicable
provisions of the Act in administering the District; provided that the County shall have no
obligation to advance any of its own funds for any purpose whatsoever under this Agreement.
Section 5.10. Private Activity Bond Limitation. The County shall assure that the
proceeds of the 2001 Bonds and of the 2013 Bonds are not so used as to cause the 2001 Bonds
or the 2013 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 5.11. Federal Guarantee Prohibition . The County shall not take any action or
permit or suffer any action to be taken if the result of the same would be to cause any of the
2013 Bonds to be “federally guaranteed” within the meaning of section 149(b) of the Code.
Section 5.12. Further Assurances. The County 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
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Agreement, and for the better assuring and confirming unto the Owners of the rights and
benefits provided in this Agreement.
Section 5.13. No Arbitrage. The County 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 2013 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 2013 Bonds would have caused the 2013
Bonds to be “arbitrage bonds” within the meaning of section 148 of the Code.
Section 5.14. Maintenance of Tax-Exemption. The County shall take all actions
necessary to assure the exclusion of interest on the 2013 Bonds from the gross income of the
owners of the 2013 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 2013 Bonds.
Section 5.15. No Additional Bonds. Except as expressly permitted by Section 2.14
hereof, the County 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 4.01 hereof; or (B) any
amounts in any funds or accounts established hereunder.
Section 5.16. Yield of the 2013 Bonds. In determining the yield of the 2013 Bonds to
comply with Section 5.13 and 6.02 hereof, the County will take into account redemption
(including premium, if any) in advance of maturity based on the reasonable expectations of
the County, as of the Closing Date, regarding prepayments of Special Taxes and use of
prepayments for redemption of the 2013 Bonds, without regard to whether or not
prepayments are received or 2013 Bonds redeemed.
Section 5.17. Continuing Disclosure. The County 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 County to comply with
the Continuing Disclosure Agreement shall not be considered a default on the Bonds or a
breach of any other provision of this Agreement; however, at the request of any Participating
Underwriter or the holders of at least a majority aggregate principal amount of Outstanding
2013 Bonds, and in either case upon receipt of satisfactory indemnity by the Fiscal Agent
(which indemnity shall include payment of its fees and expenses, including attorneys’ fees), the
Fiscal Agent shall, or in any event the Participating Underwriter or any 2013 Bondholder may,
take such actions as may be necessary and appropriate to compel performance by the County,
of its obligations under the Continuing Disclosure Agreement, including seeking mandate or
specific performance by court order.
Section 5.18. Reduction of Special Taxes. The County covenants and agrees to not
consent or conduct proceedings with respect to a reduction in the maximum Special Taxes that
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. State Reporting Requirements. The following requirements shall apply
to the 2013 Bonds, in addition to those requirements under Section 5.17:
(A) Annual Reporting. Annual Reporting. Not later than October 30 of each
calendar year, beginning with the October 30, 2013, and in each calendar year thereafter
until the October 30 following the final maturity of the Bonds, the County shall cause
the following information to be supplied to the California Debt and Investment
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Advisory Commission (“CDIAC”): (i) the name of the County; (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) that there is no balance in any improvement fund
for the District; (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 the County’s 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 County of such failure or withdrawal in writing. The County shall notify
CDIAC and the Original Purchaser of such failure or withdrawal within 10 days of
such failure or withdrawal, and the County shall provide notice under the Continuing
Disclosure Agreement of such event as required thereunder.
(C) Amendment. The reporting requirements of this Section 5.19 shall be
amended from time to time, without action by the County or the Fiscal Agent to reflect
any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act.
Notwithstanding the foregoing, any such amendment shall not, in itself, affect the
County’s obligations under the Continuing Disclosure Agreement. The County shall
notify the Fiscal Agent in writing of any such amendments which affect the reporting
obligations of the Fiscal Agent under this Agreement.
(D) No Liability. None of the County and its officers, agents and employees
(including but not limited to the County’s Treasury Manager), or the Fiscal Agent, shall
be liable for any inadvertent error in reporting the information required by this Section
5.19.
The Auditor shall provide copies of any reports prepared pursuant to this Section 5.19
to any Bondowner upon the written request of a Bondowner and payment by the person
requesting the information of the cost of the County to produce such information and pay any
postage or other delivery cost to provide the same, as determined by the Auditor. The term
“Bondowner” for purposes of this Section 5.19 shall include any beneficial owner of the Bonds.
Section 5.20. Limits on Special Tax Waivers and Bond Tenders. The County
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. The
County further covenants not to permit the tender of Bonds in payment of any Special Taxes
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except upon receipt of a certificate of an Independent Financial Consultant that to accept such
tender will not result in the County having insufficient Special Tax Revenues to pay the
principal of and interest on the Bonds that will remain Outstanding following such tender.
Section 5.21. County Bid at Foreclosure Sale . The County 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 County owns the property.
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ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;
LIABILITY OF THE COUNTY
Section 6.01. Deposit and Investment of Moneys in Funds. Moneys in any fund or
account created or established by this Agreement and held by the Fiscal Agent shall be
invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer’s
Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making
of such investments. The Officer’s Certificate shall contain a certification to the Fiscal Agent
that the investments being directed are Permitted Investments as required hereunder. In the
absence of any such Officer’s Certificate, the Fiscal Agent shall invest any such moneys in
Permitted Investments described in clause (h) of the definition thereof; 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.
Moneys in any fund or account created or established by this Agreement and held by
the Auditor shall be invested by the Auditor in any lawful investments that the County may
make or in any Permitted Investment, which in any event by their terms mature prior to the
date on which such moneys are required to be paid out hereunder. Obligations purchased as
an investment of moneys in any fund shall be deemed to be part of such fund or account,
subject, however, to the requirements of this Agreement for transfer of interest earnings and
profits resulting from investment of amounts in funds and accounts. Whenever in this
Agreement any moneys are required to be transferred by the County to the Fiscal Agent, such
transfer may be accomplished by transferring a like amount of Permitted Investments.
The Fiscal Agent or the Auditor may act as principal or agent in the acquisition or
disposition of any investment, and all investments may be made through the Fiscal Agent’s
investment department or that of its affiliates. The Fiscal Agent or its affiliates may act as
sponsor, agent manager or depository with regard to any Permitted Investment. Neither the
Fiscal Agent nor the Auditor shall incur any liability for losses arising from any investments
made pursuant to this Section.
Except as otherwise provided in the next sentence, the County shall direct or make
investments hereunder such that all investments of amounts deposited in any fund or account
created by or pursuant to this Agreement, or otherwise containing gross proceeds of the Bonds
(within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as
of the date that valuation is required by this Agreement or the Code) at Fair Market Value.
The County shall direct or make investments hereunder such that investments in funds or
accounts (or portions thereof) that are subject to a yield restriction under applicable provisions
of the Code and (unless valuation is undertaken at least annually) investments in the Reserve
Fund shall be valued at their present value (within the meaning of section 148 of the Code).
The Fiscal Agent shall have no duty in connection with the determination of the Fair Market
Value of any investment other than to follow: (A) its normal practices in the purchase, sale and
determining the value of Permitted Investments; and (B) the investment directions of the
County.
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
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amounts received or held by the Fiscal Agent or the Auditor hereunder, provided that the
Fiscal Agent or the Auditor, as applicable, shall at all times account for such investments
strictly in accordance with the funds and accounts to which they are credited and otherwise as
provided in this Agreement.
The Fiscal Agent shall sell in a commercially reasonably manner, 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 Auditor shall be
liable or responsible for any loss resulting from the acquisition or disposition of such
investment security in accordance herewith.
The County acknowledges that regulations of the Comptroller of the Currency grant the
County the right to receive brokerage confirmations of security transactions to be effected by
the Fiscal Agent hereunder as they occur. The County specifically waives the right to receive
such notification to the extent permitted by applicable law and agrees that it will instead
receive monthly cash transactions statements which include detail for the investment
transactions effected by the Fiscal Agent hereunder; provided, however, that the County
retains its rights to, upon written request to the Fiscal Agent, receive brokerage confirmation on
any investment transaction requested by the County.
Section 6.02. Rebate of Excess Investment Earnings to the United States. The
County 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 2013 Bonds.
The County shall direct the Fiscal Agent to withdraw such amounts from the Reserve
Fund pursuant to Section 4.03(D) as necessary to make any required rebate payments, and
pay such amounts to the federal government as required by the Code and the Regulations. In
the event of any shortfall in amounts available to make such payments under Section 4.03(D),
the County shall make such payment from any amounts available in the Administrative
Expense Fund or from any other lawfully available funds of the District or the County. Any
fees or expenses incurred by the County under or pursuant to this Section 6.02 shall be
Administrative Expenses.
In order to provide for the administration of this Section 6.02, the Auditor may provide
for the employment of independent attorneys, accountants and consultants compensated on
such reasonable basis as the Auditor may deem appropriate and in addition, and without
limitation of the provisions of Sections 7.01 and 7.02, the Auditor and the County 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.
The Fiscal Agent may rely conclusively upon the County’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 County’s calculations
hereunder.
Section 6.03. Liability of County. The County 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 County shall not be liable
in connection with the performance of its duties hereunder, except for its own negligence or
willful default. The County 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
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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 County, including the Auditor, 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 County and conforming to the requirements of this
Agreement. The County, including the Auditor, 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 County 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 County 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 County may consult with counsel, who may be County Counsel,
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 County 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 County 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 County, be
deemed to be conclusively proved and established by a certificate of the Fiscal Agent or other
appropriate agent or consultant, and such certificate shall be full warrant to the County 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 County 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 County. In order to perform its duties and
obligations hereunder, the County and/or the Auditor may employ such persons or entities as
it deems necessary or advisable. The County 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.
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ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent. The Bank of New York Mellon Trust
Company, N.A., at its corporate trust office in Los Angeles, California is hereby appointed
Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to perform such
duties, and only such duties, as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Fiscal Agent.
Any company or association into which the Fiscal Agent may be merged or converted
or with which it may be consolidated or any company or association resulting from any
merger, conversion or consolidation to which it shall be a party or any company or association
to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust
business, provided such company or association 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 Auditor written notice of any such succession hereunder.
The County may remove the Fiscal Agent initially appointed, and any successor
thereto, and may appoint a successor or successors thereto, but any such successor shall be a
bank, association 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, association 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, association or trust company shall be
deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published.
The Fiscal Agent may at any time resign by giving written notice to the County and by
giving to the Owners notice by mail of such resignation. Upon receiving notice of such
resignation, the County shall promptly appoint a successor Fiscal Agent by an instrument in
writing. Any resignation or removal of the Fiscal Agent shall become effective only upon
acceptance of appointment by the successor Fiscal Agent. 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 County written notice or after a vacancy in the office of the Fiscal Agent shall have
occurred by reason of its inability to act, the Fiscal Agent or any Bondowner may apply to any
court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may
thereupon, after such notice, 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 Auditor for the
benefit of the Owners. The County covenants for the direct benefit of the Owners that its
Auditor 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
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Fiscal Agent hereunder, in trust for the benefit of the Owners of the Bonds. In such event, the
Auditor 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 County, 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,
requisition, Officer’s Certificate, consent or waiver, certificate, statement, affidavit, or other
paper or document which it shall in good faith reasonably believe to be genuine and to have
been adopted or signed by the proper person or to have been prepared and furnished pursuant
to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make
any investigation or inquiry as to any statements contained or matters referred to in any such
instrument.
The Fiscal Agent shall not be liable for any error of judgment made in good faith by a
responsible officer unless it shall be proved that the Fiscal Agent was negligent in ascertaining
the pertinent facts.
No provision of this Agreement shall require the Fiscal Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.
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 security or indemnity
satisfactory to it against the fees, expenses and liabilities (including reasonable attorney’s fees)
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.
The Fiscal Agent may consult with counsel, who may be counsel of or to the County,
with regard to legal questions, and the opinion of such counsel shall be full and complete
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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.
The Fiscal Agent agrees to accept and act upon instructions or directions pursuant to
this Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured
electronic methods; provided, however, that the Fiscal Agent shall have received an
incumbency certificate listing persons designated to give such instructions or directions and
containing specimen signatures of such designated persons, which such incumbency certificate
shall be amended and replaced whenever a person is to be added or deleted from the listing. If
the County elects to give the Fiscal Agent e-mail or facsimile instructions (or instructions by a
similar electronic method) and the Fiscal Agent in its discretion elects to act upon such
instructions, the Fiscal Agent’s reasonable understanding of such instructions shall be deemed
controlling. The Fiscal Agent shall not be liable for any losses, costs or expenses arising directly
or indirectly from the Fiscal Agent’s reliance upon and compliance with such instructions
notwithstanding such instructions conflict or are inconsistent with a subsequent written
instruction. The County agrees to assume all risks arising out of the use of such electronic
methods to submit instructions and directions to the Fiscal Agent, including without limitation
the risk of interception and misuse by third parties.
The Fiscal Agent shall not be considered in breach of or in default in its obligations
hereunder or progress in respect thereto in the event of enforced delay (“unavoidable delay”) in
the performance of such obligations due to unforeseeable causes beyond its control and
without its fault or negligence, including, but not limited to, acts of god or of the public enemy
or terrorists, acts of a government, fires, floods, epidemics, quarantine restrictions, strikes,
freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general
sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in
the open market, malicious mischief, condemnation, and unusually severe weather or delays of
suppliers or subcontractors due to such causes or any similar event and/or occurrences
beyond the control of the Fiscal Agent.
Section 7.03. Information; Books and Accounts. The Fiscal Agent shall provide to the
County such information relating to the Bonds and the funds and accounts maintained by the
Fiscal Agent hereunder as the County or the Auditor shall reasonably request, including but
not limited to quarterly statements reporting funds held and transactions by the Fiscal Agent.
The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts,
separate from all other records and accounts of the Fiscal Agent, in which complete and correct
entries shall be made of all transactions relating to the expenditure of amounts disbursed from
the Bond Fund, the Special Tax Prepayments Account, the Reserve Fund and the Costs of
Issuance Fund. Such books of record and accounts shall upon reasonable prior notice at all
times during business hours be subject to the inspection of the County and the Owners of not
less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their
representatives duly authorized in writing.
Section 7.04. Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected
in acting or refraining from acting upon any notice, resolution, request, requisition, Officer’s
Certificate, consent, order, certificate, report, warrant, Bond or other paper or document
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believed 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 a certificate of the County, 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 County shall pay to the Fiscal
Agent from time to time, promptly upon written request, 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 County further agrees, to the extent permitted by applicable
law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents
harmless against any liabilities which it may incur in the exercise and performance of its
powers and duties hereunder (including legal fees and expenses) which are not due to its
negligence or willful misconduct. The obligation of the County 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 County arising under this
Section shall be limited solely to amounts on deposit in the Administrative Expense Fund.
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ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted. This Agreement and the rights and obligations
of the County 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 County 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 County of any pledge or
lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the
benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of
California or this Agreement), or reduce the percentage of Bonds required for the amendment
hereof. Any such amendment may not modify any of the rights or obligations of the Fiscal
Agent without its written consent.
This Agreement and the rights and obligations of the County 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 County 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 County;
(B) to make modifications not adversely affecting any outstanding series of
Bonds of the County 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 County 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 the exclusion from gross income, for purposes of federal income
taxation, of interest on the 2013 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.
Section 8.02. Owners’ Meetings. The County may at any time call a meeting of the
Owners. In such event the County is authorized to fix the time and place of said meeting and
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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
County 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. The County or the Fiscal Agent may obtain an opinion of Bond Counsel that such
Supplemental Agreement complies with the provisions of this Article VIII, and the County and
Fiscal Agent may rely conclusively upon such opinion. 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 County 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 County 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
County, excepting any pension or retirement fund, shall not be deemed Outstanding for the
purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided
for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other
action provided for in this Article VIII. Upon written request, the County shall specify to the
Fiscal Agent those Bonds disqualified pursuant to this Section 8.04. The Fiscal Agent may
conclusively rely upon such request.
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
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and obligations under this Agreement of the County 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 County 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 County, 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 County may select and
designate for that purpose, a suitable notation shall be made on such Bond. The County may
determine that new Bonds, so modified as in the opinion of the County 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.
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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 County, 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 County 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 County 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 County 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 County shall have the option to pay and
discharge the entire indebtedness on all or any portion of the Bonds Outstanding in any one or
more of the following ways:
(A) by well and truly paying or causing to be paid the principal of, and interest
and any premium on, such Bonds Outstanding, as and when the same become due and
payable;
(B) by depositing with the Fiscal Agent, in trust, at or before maturity, money
which, together with the amounts then on deposit in the Bond Fund and the Reserve
Fund is fully sufficient to pay such Bonds Outstanding, including all principal, interest
and redemption premiums; or
(C) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal
Securities in such amount as the County shall determine as confirmed by Bond
Counsel, an Independent Financial Consultant or an independent certified public
accountant will, together with the interest to accrue thereon and moneys then on
deposit in the Bond Fund and the Reserve Fund, 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 County 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 County, 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 County under this Agreement with respect to such Bonds Outstanding shall cease and
terminate. Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the
foregoing, the obligations of the County to pay or cause to be paid to the Owners of the Bonds
not so surrendered and paid all sums due thereon, to pay all amounts owing to the Fiscal
Agent pursuant to Section 7.05, and otherwise to assure that no action is taken or failed to be
taken if 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.
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Upon compliance by the County 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 County and any Special Taxes thereafter received by the County shall not be
remitted to the Fiscal Agent but shall be retained by the County 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
County or the Fiscal Agent in good faith and in accordance therewith.
Section 9.05. Waiver of Personal Liability. No Boardmember, officer, agent or
employee of the County shall be individually or personally liable for the payment of the
principal of, or interest or any premium on, the Bonds; but nothing herein contained shall
relieve any such member, officer, agent or employee from the performance of any official duty
provided by law.
Section 9.06. Notices to and Demands on County 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 County may be given or served by being deposited
postage prepaid in a post office letter box addressed (until another address is filed by the
County with the Fiscal Agent) as follows:
Contra Costa County, California
Department of Conservation and Development
30 Muir Road
Martinez, CA 94553
Attention: Community Development Bond Program Manager
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Any notice or demand which by any provision of this Agreement is required or
permitted to be given or served by the County to or on the Fiscal Agent may be given or served
by being deposited postage prepaid in a post office letter box addressed (until another address
is filed by the Fiscal Agent with the County) as follows:
The Bank of New York Mellon Trust Company, N.A.
100 Pine Street, Suite 3100
San Francisco, CA 94111
Attention: Corporate Trust Department
Section 9.07. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase
of this Agreement shall for any reason be held illegal or unenforceable, such holding shall not
affect the validity of the remaining portions of this Agreement. The County hereby declares
that it would have adopted this Agreement and each and every other Section, paragraph,
sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto
irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or
phrases of this Agreement may be held illegal, invalid or unenforceable.
Section 9.08. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge
of the principal of, and the interest and any premium on, the Bonds which remains unclaimed
for two (2) years after the date when the payments of such principal, interest and premium
have become payable, if such moneys were held by the Fiscal Agent at such date, shall be
repaid by the Fiscal Agent to the County as its absolute property free from any trust, and the
Fiscal Agent shall thereupon be released and discharged with respect thereto and the Bond
Owners shall look only to the County for the payment of the principal of, and interest and any
premium on, such Bonds. Any right of any Owner to look to the County for such payment
shall survive only so long as required under applicable law.
Section 9.09. Applicable Law. This Agreement shall be governed by and enforced in
accordance with the laws of the State of California applicable to contracts made and
performed in the State of California.
Section 9.10. Conflict with Act. In the event of a conflict between any provision of this
Agreement with any provision of the Act as in effect on the Closing Date, the provision of the
Act shall prevail over the conflicting provision of this Agreement.
Section 9.11. Conclusive Evidence of Regularity. Bonds issued pursuant to this
Agreement shall constitute conclusive evidence of the regularity of all proceedings under the
Act relative to their issuance and the levy of the Special Taxes.
Section 9.12. Payment on Business Day. In any case where the date of the maturity
of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption
of any Bonds or the date any action is to be taken pursuant to this Agreement is other than a
Business Day, the payment of interest or principal (and premium, if any) or the action need
not be made on such date but may be made on the next succeeding day which is a Business
Day with the same force and effect as if made on the date required and no interest shall accrue
for the period from and after such date.
Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
S-1
IN WITNESS WHEREOF, the County has caused this Agreement to be executed in its
name and the Fiscal Agent has caused this Agreement to be executed in its name, all as of
January 1, 2013.
COUNTY OF CONTRA COSTA,
CALIFORNIA, for and on behalf of the
CONTRA COSTA COUNTY OF CONTRA
COSTA COMMUNITY FACILITIES
DISTRICT NO. 2001-1 (NORRIS
CANYON)
By:
Catherine O. Kutsuris,
Director, Department of
Conservation and Development
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Fiscal Agent
By:
Authorized Officer
03007.27:J11943
Exhibit A
Page 1
EXHIBIT A
FORM OF BOND
No. $
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
CONTRA COSTA COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BOND
INTEREST RATE MATURITY DATE BOND DATE CUSIP
September 1, ____ January __, 2013 ___________
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The County of Contra Costa, California (the “County”), for and on behalf of the
County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) (the
“District”), for value received, hereby promises to pay solely from the Special Tax (as
hereinafter defined) to be collected in the District or amounts in the funds and accounts held
under the Agreement (as hereinafter defined), to the registered owner named above, or
registered assigns, on the maturity date set forth above, unless redeemed prior thereto as
hereinafter provided, the principal amount set forth above, and to pay interest on such
principal amount from the Bond Date shown above, or from the most recent Interest Payment
Date (defined below) to which interest has been paid or duly provided for, semiannually on
March 1 and September 1, commencing September 1, 2013 (each, an “Interest Payment Date”),
at the interest rate set forth above, until the principal amount hereof is paid or made available
for payment. The principal of this Bond is payable to the registered owner hereof in lawful
money of the United States of America upon presentation and surrender of this Bond at the
principal corporate trust office of The Bank of New York Mellon Trust Company, N.A. (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.
Interest on this Bond shall be payable from the interest payment date next preceding
the date of authentication hereof, unless (i) it is authenticated on an interest payment date, in
which event it shall bear interest for such Interest Payment Date, or (ii) such date of
authentication is after a Record Date but on or prior to an Interest Payment Date, in which
event interest will be payable from such Interest Payment Date, or (iii) such date of
Exhibit A
Page 2
authentication is prior to the first Record Date, in which event interest will be payable from the
Bond Date shown 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.
This Bond is one of a duly authorized issue of bonds in the aggregate principal amount
of $____________ approved by the Board of Supervisors of the County on December 11, 2012
pursuant to the California Government Code (the “Act”) for the purpose of refunding the
County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) 2001
Special Tax Bonds, and is one of the series of Bonds designated “County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds”
(the “Bonds”). The creation of the Bonds and the terms and conditions thereof are provided
for the Fiscal Agent Agreement, dated as of January 1, 2013, between the County, for and on
behalf of the District, 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
Agreement, additional bonds may be issued by the County from time to time secured by a lien
on funds held under the Agreement on a parity with the lien securing the Bonds. The
Agreement is authorized under and this Bond is issued under, and both are to be construed in
accordance with, the laws of the State of California.
The Bonds are not general obligations of the County, but are limited obligations
payable solely from the revenues and funds pledged therefor under the Agreement. Neither the
faith and credit nor the taxing power of the County (except to the extent of the Special Tax
levy in the District, as set forth in the Agreement) or the State of California or any political
subdivision thereof is pledged to the payment of the Bonds.
Pursuant to the Act, and the Agreement, the principal of and interest on this Bond are
payable solely from the annual Special Tax authorized under the Mello-Roos Community
Facilities Act of 1982 to be collected within the District and certain funds held under the
Agreement. 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 County, as may be permitted by law.
The Bonds do not constitute obligations of the County for which said County is obligated to
levy or pledge, or has levied or pledged, general or special taxation other than described
hereinabove.
The County has covenanted for the benefit of the owners of the Bonds that it will
commence and pursue to completion appropriate foreclosure actions in the event of
delinquencies of any Special Tax installments levied for payment of principal and interest as
more particularly set forth in the Agreement.
The Bonds are not subject to optional redemption prior to their stated maturity.
The Bonds maturing on or after September 1, ____, are subject to optional redemption
prior to their stated maturity on any Interest Payment Date occurring on or after September 1,
____, as a whole, or in part among maturities as provided in the Agreement, 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 are 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 among maturities as provided in the Agreement, at
a redemption price equal to 103% of the principal amount of the Bonds to be redeemed,
together with accrued interest to the date fixed for redemption.
Exhibit A
Page 3
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 redemption from Special Tax Prepayments 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.
The Bonds are issuable as fully registered Bonds without coupons in denominations of
$5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the
charges, if any, provided in the Agreement, Bonds may be exchanged at the Principal Office of
the Fiscal Agent for a like aggregate principal amount and maturity of Bonds of other
authorized denominations.
Each registration and transfer of registration of this Bond shall be entered by the Fiscal
Agent in books kept by it for this purpose and authenticated by its 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 or (ii) with respect to a Bond after such
Bond has been selected for redemption.
The Agreement and the rights and obligations of the County thereunder may be
modified or amended as set forth therein. The Agreement contains provisions permitting the
County to make provision for the payment of the interest on, and the principal of the Series
2013 Bonds so that such Series 2013 Bonds shall no longer be deemed to be outstanding under
the terms of the Agreement.
This Bond shall not become valid or obligatory for any purpose until the certificate of
authentication and registration hereon endorsed shall have been dated and manually signed by
the Fiscal Agent.
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.
Exhibit A
Page 4
IN WITNESS WHEREOF, the County of Contra Costa, California, has caused this
Bond to be dated the Bond Date shown above, to be signed by the facsimile signature of a
Supervisor of the County and countersigned by the facsimile signature of the County Clerk.
COUNTY OF CONTRA COSTA,
CALIFORNIA
By:
Chair of the Board
[S E A L]
Attest:
Clerk of the Board
FISCAL AGENT’S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the Resolution and the Agreement which has been
authenticated on .
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Fiscal Agent
By:
Authorized Signatory
Exhibit A
Page 5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer unto
(Name, address and Tax identification Number of Assignee)
the within-mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s)
attorney,
to transfer the same on the books of the Fiscal Agent with full power of substitution in the
premises.
Dated:
Signatures Guaranteed:
Note: Signature guarantee shall be made by a
guarantor institution participating in the
Securities Transfer Agents Medallion
Program or in such other guarantee program
acceptable to the Fiscal Agent.
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 11/9/12
11/21/12
MARKED TO SHOW CHANGES.
03007.27:J11946
ESCROW AGREEMENT
by and between the
COUNTY OF CONTRA COSTA, CALIFORNIA
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Escrow Bank
dated as of January 1, 2013
relating to:
County of Contra Costa
Community Facilities District No. 2001-1
(Norris Canyon)
2001 Special Tax Bonds
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TABLE OF CONTENTS
Section 1. Establishment of Refunding Fund........................................................................................................................1
Section 2. Deposit into Refunding Fund; Investment of Amounts.............................................................................2
Section 3. Instructions as to Application of Refunding Fund.........................................................................................2
Section 4. Application of Proceeds from Prior Bond Funds............................................................................................2
Section 5. Application of Certain Terms of Prior Fiscal Agent Agreement...........................................................3
Section 6. Proceedings for Redemption of Prior Bonds.....................................................................................................3
Section 7. Compensation to Escrow Bank.................................................................................................................................3
Section 8. Liabilities and Obligations of Escrow Bank ......................................................................................................3
Section 9. Resignation of Escrow Bank......................................................................................................................................5
Section 10. Amendment......................................................................................................................................................................5
Section 11. Unclaimed Moneys........................................................................................................................................................5
Section 12. Execution in Counterparts..........................................................................................................................................5
Section 13. Applicable Law................................................................................................................................................................5
EXHIBIT A: SCHEDULE OF PAYMENTS ON PRIOR BONDS
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ESCROW AGREEMENT
This ESCROW AGREEMENT (this “Agreement”), dated as of January 1, 2013, is by
and between the COUNTY OF CONTRA COSTA, CALIFORNIA, a political subdivision of the
State of California (the “County”), for and on behalf of the COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1 (NORRIS CANYON) (the “District”), and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking
association organized and existing under the laws of the United States of America, acting as
successor Fiscal Agent for the Prior Bonds hereinafter referred to and acting as escrow bank
hereunder (the “Escrow Bank”).
RECITALS:
WHEREAS, the Board of Supervisors of the County has conducted proceedings under
and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, to form the
District, to authorize the levy of special taxes upon the land within the District, and to issue
bonds secured by said special taxes to finance certain facilities; and
WHEREAS, pursuant to a Fiscal Agent Agreement, dated as of June 1, 2001 (the “Prior
Fiscal Agent Agreement”), between the County and The Bank of New York Mellon Trust
Company, N.A. (successor to BNY Western Trust Company), as fiscal agent (the “Fiscal
Agent”), the County has issued its County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) 2001 Special Tax Bonds (the “Prior Bonds”); and
WHEREAS, the County has determined to issue, for and on behalf of the District,
pursuant to a Fiscal Agent Agreement, dated as of January 1, 2013 (the “2013 Agreement”),
between the County and The Bank of New York Mellon Trust Company, N.A., as fiscal agent,
special tax refunding bonds in the aggregate principal amount of $__________ (the
“Refunding Bonds”) at this time for the purposes of providing funds to currently refund and
defease the Prior Bonds; and
WHEREAS, the County and the Escrow Bank wish to enter into this Agreement for the
purpose of providing the terms and conditions relating to the deposit and application of
moneys to provide for the payment and redemption of the Prior Bonds in full, pursuant to and
in accordance with the provisions of Section 9.03(B) of the Prior Fiscal Agent Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the above premises and of the mutual
promises and covenants herein contained and for other valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
Section 1. Establishment of Refunding Fund . There is hereby created an escrow fund
(the “Refunding Fund”) to be held in trust by the Escrow Bank as an irrevocable escrow
securing the payment of the Prior Bonds, as hereinafter set forth. The Escrow Bank shall
administer the Refunding Fund as provided in this Agreement. All cash in the Refunding Fund
are hereby irrevocably pledged as a special fund for the payment of the principal of and
interest and premium, if any, on the Prior Bonds in accordance with the provisions of this
Agreement and the Prior Fiscal Agent Agreement. If at any time the Escrow Bank shall receive
actual knowledge that the cash in the Refunding Fund will not be sufficient to make any
payment required by Section 3 hereof, the Escrow Bank shall notify the County of such fact
and the County shall immediately cure such deficiency from any source of funds legally
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available to the District. The Escrow Bank shall have no obligation whatsoever to use its own
funds to cure any such deficiency.
Section 2. Deposit into Refunding Fund; No Investment of Amounts . Concurrent with
delivery of the Refunding Bonds, the County shall cause to be transferred to the Escrow Bank
for deposit into the Refunding Fund the amount of $__________ in immediately available
funds, which shall be derived from (a) proceeds of sale of the Refunding Bonds in the amount
of $__________, (b) the moneys on deposit in the reserve fund established under the Prior
Fiscal Agent Agreement (the “Reserve Fund”) in the amount of $__________, and (c) the
moneys held in the special tax fund established under the Prior Fiscal Agent Agreement (the
“Special Tax Fund”) in the amount of $__________. The Escrow Bank, in its capacity as
Fiscal Agent for the Prior Bonds, is hereby directed by the County to make a transfer of funds
from the Reserve Fund under the Prior Fiscal Agent Agreement to the Refunding Fund as
described in clause (b) of the preceding sentence. The County shall direct the Auditor (as
defined in the Prior Fiscal Agent Agreement) to make the transfer of funds from the Special
Tax Fund under the Prior Fiscal Agent Agreement to the Refunding Fund as described in
clause (c) of the second preceding sentence.
The moneys deposited into the Refunding Fund pursuant to the preceding paragraph
shall be held by the Escrow Bank in cash, uninvested. The funds deposited with and held by
the Escrow Bank in the Refunding Fund shall be used by the Escrow Bank solely for the uses
and purposes set forth herein. The Escrow Bank shall have no lien upon or right of set off
against the funds at any time on deposit in the Refunding Fund.
Section 3. Instructions as to Application of Refunding Fund . The total amount held in
the Refunding Fund hereunder shall be applied by the Escrow Bank for the sole purpose of
paying the principal of and interest, and premium, on the Prior Bonds in accordance with
Section 2.03(A)(ii) of the Prior Fiscal Agent Agreement and the schedule set forth in Exhibit A
hereto. Following payment in full of the principal of and interest, and premium, on the Prior
Bonds, all amounts on deposit in the Refunding Fund shall be transferred by the Escrow Bank
on March 2, 2013 to Auditor (as defined in the 2013 Agreement), for deposit by the Auditor in
the Special Tax Fund established pursuant to Section 4.05 of the 2013 Agreement.
The Escrow Bank, in its capacity as Fiscal Agent under the Prior Fiscal Agent
Agreement, is hereby directed to apply the amounts in the Refunding Fund to the payment
and redemption of the Prior Bonds pursuant to the preceding paragraph.
Section 4. Application of Proceeds from Prior Bond Funds. Upon receipt by the Escrow
Bank from the Fiscal Agent for the Prior Bonds and the County, as applicable, of certain
amounts on deposit in the funds and accounts established under the Prior Fiscal Agent
Agreement as of the date of delivery of the Refunding Bonds, such amount received shall be
applied by the Escrow Bank as follows:
(a) of amounts on deposit in the Reserve Fund established under the Prior
Fiscal Agent Agreement, $__________ transferred by the Fiscal Agent for the Prior
Bonds to the Escrow Bank shall be deposited by the Escrow Bank in the Refunding
Fund; and
(b) of amounts on deposit in the Special Tax Fund established under the
Prior Fiscal Agent Agreement ($__________) shall be deposited in the Refunding Fund.
After making the foregoing deposits and transfers, any other amounts remaining on
deposit in or accruing to any funds and accounts established under the Prior Fiscal Agent
Agreement shall be disposed of as provided in the 2012 Agreement.
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Section 5. Application of Certain Terms of Prior Fiscal Agent Agreement . All of the
terms of the Prior Fiscal Agent Agreement relating to the making of payments of the principal
of and interest on the Prior Bonds are incorporated in this Agreement as if set forth in full
herein.
Section 6. Proceedings for Redemption of Prior Bonds . The County hereby irrevocably
elects to redeem all of the outstanding Prior Bonds in full on March 1, 2013 pursuant to the
provisions of Section 2.03(A)(ii) of the Prior Fiscal Agent Agreement. The Escrow Bank is
hereby directed to provide notice of redemption (on behalf of and at the direction and expense
of the County) required under Section 2.03(D)(i) of the Prior Fiscal Agent Agreement as
necessary to comply with Section 9.03(B) of the Prior Fiscal Agent Agreement and to so
redeem the Prior Bonds on March 1, 2013.
Section 7. Compensation to Escrow Bank. The County shall pay the Escrow Bank,
promptly upon written request, full compensation for its duties under this Agreement,
including out-of-pocket costs such as publication costs, redemption expenses, legal fees
(including fees of outside counsel and the allocated costs of internal attorneys) and other costs
and expenses relating hereto. Under no circumstances shall amounts deposited in or credited
to the Refunding Fund be deemed to be available for said purposes. The obligation of the
County under this Section 7 to pay compensation already earned by the Escrow Bank and to
pay costs and expenses already incurred shall survive termination of this Agreement and shall
survive the resignation or removal of the Escrow Bank.
Section 8. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no
obligation to make any payment or disbursement of any type or incur any financial liability in
the performance of its duties under this Agreement unless the County shall have deposited
sufficient funds therefor with the Escrow Bank. The Escrow Bank may rely and shall be fully
protected in acting upon the written instructions of the County or its agents relating to any
matter or action as Escrow Bank under this Agreement.
The County covenants to indemnify, defend and hold harmless the Escrow Bank and its
officers, employees, directors and agents, solely from funds of the District, against any loss,
liability or expense, including legal fees (including the fees of outside counsel and internal
attorneys), incurred in connection with the performance of any of the duties of Escrow Bank
hereunder, except the Escrow Bank shall not be indemnified against any loss, liability or
expense resulting from its negligence or willful misconduct. The indemnity provided in this
Section 8 shall survive the termination of this Agreement and shall survive the resignation or
removal of the Escrow Bank.
The Escrow Bank shall have such duties as are expressly set forth herein and no implied
duties shall be read into this Agreement against the Escrow Bank. The Escrow Bank shall not
be liable for any act or omission of the County under this Agreement or the Prior Fiscal Agent
Agreement.
The Escrow Bank shall not be liable for the accuracy of any calculations provided as to
the sufficiency of moneys deposited with it to pay the principal of and interest and premium
on the Prior Bonds.
Any bank, federal savings association, national association or trust company into
which the Escrow Bank may be merged or with which it may be consolidated shall become the
Escrow Bank without any action of the County.
-4-
The Escrow Bank shall have no liability or obligation to the holders of the Prior Bonds or
the Refunding Bonds with respect to the payment of debt service by the County or with respect
to the observance or performance by the County of the other conditions, covenants and terms
contained in the Prior Fiscal Agent Agreement or the 2013 Fiscal Agent Agreement
(collectively, the “Bond Agreements”), or with respect to the investment of any moneys in any
fund or account established, held or maintained by the County pursuant to the Bond
Agreements.
The Escrow Bank may conclusively rely, as to the trust of the statements and
correctness of the opinions expressed therein, on any certificate or opinion furnished to it in
accordance with this Agreement or the Prior Fiscal Agent Agreement. The Escrow Bank may
consult with counsel, whose opinion shall be full and complete authorization and protection to
the Escrow Bank if it acts in accordance with such opinion.
The Escrow Bank shall not be liable for any error of judgment made in good faith by an
authorized officer.
Nothing herein should be interpreted to require the Escrow Bank to expend, advance or
risk its own funds or otherwise incur financial liability in the performance of any of its duties
or the exercise of any of its rights hereunder, if it believes that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured.
Any corporation or association succeeding to all or substantially all of the corporate
trust business of the Escrow Bank shall be the successor of the Escrow Bank hereunder,
without the execution or filing of any paper or any further act on the part of the any of the
parties hereto.
The Escrow Bank shall not have any liability hereunder except to the extent of its own
negligence or willful misconduct. In no event shall the Escrow Bank be liable for any special
indirect or consequential damages.
The Escrow Bank shall not be responsible for any of the recitals or representations
contained herein.
The Escrow Bank may execute any of the trusts or powers under this Agreement or
perform any duties under this Agreement either directly or by or through agents, attorneys,
custodians or nominees, and shall not be responsible for any willful misconduct or negligence
on the part of any agent, attorney, custodian or nominee so appointed with due care.
The Escrow Bank agrees to accept and act upon instructions or directions pursuant to
this Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured
electronic methods; provided, however, that, the Escrow Bank shall have received an
incumbency certificate listing persons designated to give such instructions or directions and
containing specimen signatures of such designated persons, which such incumbency certificate
shall be amended and replaced whenever a person is to be added or deleted from the listing. If
the County elects to give the Escrow Bank e-mail or facsimile instructions (or instructions by a
similar electronic method) and the Escrow Bank in its discretion elects to act upon such
instructions, the Escrow Bank’s reasonable understanding of such instructions shall be deemed
controlling. The Escrow Bank shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Escrow Bank’s reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent with a subsequent
written instruction. The County agrees to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Escrow Bank, including
-5-
without limitation the risk of the Escrow Bank acting on unauthorized instructions, and the
risk of interception and misuse by third parties.
Section 9. Resignation of Escrow Bank. The Escrow Bank may at any time resign by
giving written notice to the County, which notice shall indicate the date on which the
resignation is to be effective (the “resignation date”). The County shall promptly appoint a
successor Escrow Bank by the resignation date. Resignation of the Escrow Bank will be
effective only upon acceptance of appointment by a successor Escrow Bank. If the County
does not appoint a successor Escrow Bank by the resignation date, the Escrow Bank may, at
the expense of the County, petition any court of competent jurisdiction for the appointment of
a successor Escrow Bank, which court may thereupon, after such notice, if any, as it may deem
proper and prescribe and as may be required by law, appoint a successor Escrow Bank.
Section 10. Amendment . This Agreement may be amended or modified by the parties
hereto, but only if there shall have been filed with the County and the Escrow Bank (a) a
written opinion of Bond Counsel stating that such amendment will not materially adversely
affect the interests of the owners of the Prior Bonds, and that such amendment will not cause
interest on the Prior Bonds or the Refunding Bonds to become includable in the gross income of
the owners thereof for federal income tax purposes, and (b) a certification of Bond Counsel or
an independent certified public accountant that the funds on deposit in the Refunding Fund
will be in an amount at all times at least sufficient to make the payments specified in Section 3
hereof.
Section 11. Unclaimed Moneys . Anything contained herein to the contrary
notwithstanding, any moneys held by the Escrow Bank in trust for the payment and discharge
of the principal of, and the interest and any premium on, the Prior Bonds which remains
unclaimed for two (2) years after the date when the payment of such principal, interest and
premium have become payable, if such moneys were held by the Escrow Bank at such date,
shall be repaid by the Escrow Bank to the County as its absolute property free from any trust,
and the Escrow Bank shall thereupon be released and discharged with respect thereto and the
owners of such Prior Bonds shall look only to the County for the payment of the principal of,
and interest and any premium on, such Prior Bonds. Any right of any Prior Bondowner to look
to the County for such payment shall survive only so long as required under applicable law.
Section 12. Execution in Counterparts . This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument.
Section 13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts made and
performed in California.
S-1
IN WITNESS WHEREOF, the County and the Escrow Bank have each caused this
Agreement to be executed by their duly authorized officers all as of the date first above
written.
COUNTY OF CONTRA COSTA,
CALIFORNIA, for and on behalf of the
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT
NO. 2001-1 (NORRIS CANYON)
By
Catherine O. Kutsuris,
Director, Department of
Conservation and Development
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Escrow Bank
By
Vice President
03007.27:J11946
Exhibit A
EXHIBIT A
SCHEDULE OF PAYMENTS ON PRIOR BONDS
Payment
Date Interest
Called
Principal Premium Total Due
March 1, 2013 $ $ $ $
29079-220 JH:CKL 11-16-12
11-21-12v2
11-26-12
BOND PURCHASE AGREEMENT
$_______
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
_______, 2013
County of Contra Costa, California
30 Muir Road
Martinez, CA 94553
Attention: Director, Department of Conservation and Development
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated dba Stone & Youngberg, a Division of Stifel
Nicolaus (the “Underwriter”) offers to enter into this Bond Purchase Agreement (this “Purchase
Contract”) with the County of Contra Costa, California (the “Issuer”), for and on behalf of the
County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) (the
“District”), which, upon your acceptance of this offer, will be binding upon the Issuer and the
Underwriter. Capitalized terms used in this Purchase Contract and not otherwise defined herein
have the meanings given to such terms in the Fiscal Agent Agreement described below.
This offer is made subject to the acceptance by the Issuer of this Purchase Contract on
or before 5:00 p.m. on the date set forth above.
1. Upon the terms and conditions and in reliance upon the respective
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the Issuer, and the Issuer hereby agrees to sell to the Underwriter, all (but not less than all)
of the above-captioned bonds (the “Bonds”) at a purchase price (the “Purchase Price”) of
$_______ (equal to the par amount of the Bonds ($_______.00) plus a net original issue
premium/less a net original issue discount of $_____, less an Underwriter’s discount of
$________).
The Bonds will be issued by the Issuer for and on behalf of the District under the
authority of the Mello-Roos Community Facilities Act of 1982 (constituting Section 53311 et seq.
of the California Government Code) (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”) and Resolution No. _______ adopted on ______, 2012 (the “Bond Resolution”) by the
Board of Supervisors of the Issuer (the “Board of Supervisors”) acting as the legislative body
of the District. The special taxes that will provide a source of payment for the Bonds (the
“Special Taxes”) are being levied pursuant to (i) Resolution No. 2001/244, adopted by the
Board of Supervisors of the Issuer on June 5, 2001 (the “Resolution of Formation”), which
established the District and authorized the levy of a special tax within the District, (ii) a two-
2
thirds vote of the qualified electors at an election held in the District on June 5, 2001, and (iii)
Ordinance No. 2001/11 enacted by the Board of Supervisors of the Issuer on June 19, 2001
(the “Ordinance”), pursuant to which the Special Taxes were levied in the District. Together, the
Bond Resolution, the Resolution of Formation and the Ordinance are referred to as the
“Resolutions and the Ordinance” in this Purchase Contract.
The Bonds will be issued pursuant to the terms of a Fiscal Agent Agreement (the “Fiscal
Agent Agreement”), dated as of January 1, 2013, between the Issuer, for and on behalf of the
District, and The Bank of New York Mellon Trust Company, N.A., San Francisco, California, as
fiscal agent (the “Fiscal Agent”). The proceeds of the sale of the Bonds will be applied in
accordance with the Fiscal Agent Agreement to (i) refund in full the County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon) 2001 Special Tax Bonds (the “Prior
Bonds”); (ii) fund a debt service reserve fund for the Bonds; and (iii) pay costs of issuing the
Bonds.
The refunding of the Prior Bonds will be accomplished as described in an Escrow
Agreement, dated as of January 1, 2013 (the “Escrow Agreement”), by and between the
Issuer, for and on behalf of the District, and The Bank of New York Mellon Trust Company, N.A.,
as escrow bank (the “Escrow Bank”).
2. The Bonds will mature on the dates and in the principal amounts, and will bear
interest at the rates, as set forth in Exhibit B hereto. The Bonds will be subject to redemption as
set forth in Exhibit B. The Underwriter agrees to make a bona fide public offering of all of the
Bonds at the offering prices set forth on Exhibit B hereto.
3. The Issuer agrees to deliver to the Underwriter as many copies of the Official
Statement dated the date hereof relating to the Bonds (as supplemented and amended from
time to time, the “Final Official Statement”) as the Underwriter shall reasonably request as
necessary to comply with paragraph (b)(4) of Rule 15c2-12 under the Securities Exchange Act
of 1934, as amended (the “Rule”). The Issuer agrees to deliver such Final Official Statements
within seven (7) business days after the execution hereof, or such earlier date identified by the
Underwriter to be necessary to allow the Underwriter to meet its obligations under the Rule and
Rule G-32 of the Municipal Securities Rulemaking Board (“MSRB”). The Underwriter agrees to
file the Final Official Statement with the MSRB on or as soon as practicable after the Closing
Date (defined below). The Underwriter agrees to deliver a copy of the Final Official Statement
to each of its customers purchasing Bonds no later than the settlement date of the transaction.
The Issuer has authorized and approved the Preliminary Official Statement dated _____,
2012 relating to the Bonds (the “Preliminary Official Statement”) and the Final Official
Statement and consents to their distribution and use by the Underwriter in connection with the
offer and sale of the Bonds. The Issuer deems such Preliminary Official Statement final as of its
date for purposes of the Rule, except for information allowed by the Rule to be omitted, and has
executed a certificate to that effect in the form of Exhibit C.
In connection with issuance of the Bonds, and in order to assist the Underwriter in
complying with the Rule, the Issuer will execute a Continuing Disclosure Certificate dated the
date of issuance of the Bonds (the “Continuing Disclosure Certificate”). The form of the
Continuing Disclosure Certificate is attached as Appendix E to the Final Official Statement.
Digital Assurance Certification, L.L.C. will initially act as dissemination agent under the
Continuing Disclosure Certificate.
3
4. The Issuer represents and warrants to the Underwriter that:
(a) The District is a community facilities district duly organized and validly
existing under the laws of the State of California (the “State”), including the Act. The
Issuer is duly organized and validly existing under the laws of the State, with the power
to act as the legislative body of the District, and has the full legal right, power and
authority, among other things, (i) upon satisfaction of the conditions in this Purchase
Contract and the Fiscal Agent Agreement, to issue the Bonds for the District for the
purpose specified in Section 1 hereof, (ii) to secure the Bonds in the manner
contemplated in the Fiscal Agent Agreement and (iii) to levy the Special Taxes according
to the rate and method of apportionment of special taxes for the District (the “Rate and
Method”).
(b) The Board of Supervisors has the full legal right, power and authority to
adopt the Resolutions and the Ordinance, and the Issuer has the full legal right, power
and authority for and on behalf of the District (i) to enter into this Purchase Contract, the
Fiscal Agent Agreement, the Escrow Agreement and the Continuing Disclosure
Certificate (such documents are collectively referred to herein as the “Issuer
Documents”), (ii) to issue, sell and deliver the Bonds to the Underwriter as provided
herein, and (iii) to carry out and consummate all other transactions on its part
contemplated by each of the Issuer Documents and the Resolutions and the Ordinance,
and the Issuer and the Board of Supervisors have complied with all provisions of
applicable law, including the Act and the Refunding Law, in all matters relating to such
transactions.
(c) The Issuer has duly authorized (i) the execution and delivery by the
Issuer for and on behalf of the District of the Bonds and the execution, delivery and due
performance by the Issuer of its obligations under the Issuer Documents, (ii) the
distribution and use of the Preliminary Official Statement and execution, delivery and
distribution of the Final Official Statement, and (iii) the taking of any and all such action
as may be required on the part of the Issuer to carry out, give effect to and consummate
the transactions on its part contemplated by such instruments. All consents or approvals
necessary to be obtained by the Issuer in connection with the foregoing have been
received, and the consents or approvals so received are still in full force and effect.
(d) The Resolutions and the Ordinance have been duly adopted by the Board
of Supervisors and are in full force and effect; and the Issuer Documents, when
executed and delivered by the Issuer and the other party thereto, will constitute legal,
valid and binding obligations of the Issuer for and on behalf of the District enforceable
against the Issuer in accordance with its terms, except as enforceability thereof may be
limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally.
(e) When delivered to the Underwriter, the Bonds will have been duly
authorized by the Board of Supervisors and duly executed, issued and delivered by the
Issuer and will constitute legal, valid and binding obligations of the Issuer for and on
behalf of the District enforceable against the Issuer in accordance with their respective
terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other
laws affecting creditors’ rights generally, and will be entitled to the benefit and security of
the Fiscal Agent Agreement.
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(f) The information relating to the Issuer and the District contained in the
Preliminary Official Statement is, and as of the Closing Date such information in the
Final Official Statement will be, true and correct in all material respects, and neither the
Preliminary Official Statement nor the Final Official Statement will as of the Closing Date
contain any untrue or misleading statement of a material fact relating to the Issuer or the
District or omit to state any material fact relating to the Issuer or the District necessary to
make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(g) If, at any time prior to the date twenty-five (25) days following the later of
the Closing (as described in Section 6 below) or the date the Underwriter no longer
retains, directly or as a member of an underwriting syndicate, an unsold balance of the
Bonds for sale to the public, which date shall be provided to the Issuer by written notice
of the Underwriter (the "End of the Underwriting Period"), any event of which the
Issuer has knowledge shall occur which might or would cause the Final Official
Statement to contain an untrue statement of a material fact or to omit to state any
material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, the Issuer
will promptly notify the Underwriter in writing of the circumstances and details of such
event. If, as a result of such event or any other event, it is necessary, in the opinion of
the Underwriter, the Issuer or their respective counsel, to amend or supplement the Final
Official Statement in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Issuer will forthwith
cooperate with the Underwriter in the prompt preparation and furnishing to the
Underwriter of a reasonable number of copies of an amendment of or a supplement to
the Final Official Statement, in form and substance reasonably satisfactory to the
Underwriter, which will so amend or supplement the Final Official Statement so that, as
amended or supplemented, it will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(h) None of the adoption of the Resolutions and the Ordinance, the execution
and delivery of the Issuer Documents or the Final Official Statement, the consummation
of the transactions on the part of the Issuer contemplated herein or therein and the
compliance by the Issuer with the provisions hereof or thereof will conflict with, or
constitute on the part of the Issuer, a material violation of, or a material breach of or
default under, (i) any indenture, mortgage, commitment, note or other agreement or
instrument to which the Issuer is a party or by which it is bound, (ii) any provision of the
State Constitution, or (iii) any existing law, rule, regulation, ordinance, judgment, order or
decree to which the Issuer (or the members of the Board of Supervisors or any of its
officers in their respective capacities as such) is subject, that would have a material
adverse affect on the ability of the Issuer to perform its obligations under the Issuer
Documents.
(i) The Issuer has never been in default at any time, as to principal of or
interest on any obligation which it has issued, including those which it has issued as a
conduit for another entity, which default may have an adverse effect on the ability of the
Issuer to consummate the transactions on its part under the Issuer Documents, except
as specifically disclosed in the Final Official Statement; and other than the Fiscal Agent
Agreement, the Issuer has not entered into any contract or arrangement of any kind
5
which might give rise to any lien or encumbrance on the Special Taxes following
issuance of the Bonds.
(j) Except as is specifically disclosed in the Final Official Statement, there is
no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending with respect to which the Issuer or the District has
been served with process or known by the official of the Issuer executing this Purchase
Contract to be threatened, which in any way questions the powers of the Board of
Supervisors or the Issuer referred to in paragraph (b) above, or the validity of any
proceeding taken by the Board of Supervisors in connection with the issuance of the
Bonds, or wherein an unfavorable decision, ruling or finding could materially adversely
affect the transactions on the part of the Issuer contemplated by this Purchase Contract,
or of any other Issuer Document, or which, in any way, could adversely affect the validity
or enforceability of the Resolutions, the Ordinance, the Fiscal Agent Agreement, the
Escrow Agreement, the Bonds or this Purchase Contract or, to the knowledge of the
official of the Issuer executing this Purchase Contract, which in any way questions the
exclusion from gross income of the recipients thereof of the interest on the Bonds for
federal income tax purposes or in any other way questions the status of the Bonds under
State tax laws or regulations.
(k) Any certificate signed by an official of the Issuer authorized to execute
such certificate and delivered to the Underwriter in connection with the transactions
contemplated by the Issuer Documents shall be deemed a representation and warranty
by the Issuer to the Underwriter as to the truth of the statements therein contained.
(l) The Issuer has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The Bonds will be paid from Special Tax Revenues (as defined in the
Fiscal Agent Agreement) received by the Issuer and moneys held in certain funds and
accounts established under the Fiscal Agent Agreement and pledged thereunder to the
payment of the Bonds.
(n) The Special Taxes may lawfully be levied in accordance with the Rate
and Method, and the Ordinance, and, when levied, will be secured by a lien on the
property on which they are levied.
(o) The Fiscal Agent Agreement creates a valid pledge of and first lien upon
the Special Tax Revenues deposited thereunder, and the moneys in certain funds and
accounts established pursuant to the Fiscal Agent Agreement, 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.
(p) Except as disclosed in the Preliminary Official Statement and the Final
Official Statement, the Issuer has not failed in any material respect to comply with any
undertaking of the Issuer under the Rule in the previous five years.
(q) The Issuer acknowledges and agrees that: (i) the purchase and sale of
the Bonds pursuant to this Purchase Contract is an arm’s length, commercial transaction
between the Issuer and the Underwriter, (ii) in connection with such transaction, the
6
Underwriter is acting solely as a principal and is not acting as a municipal advisor,
financial advisor or fiduciary to the Issuer; (iii) the Underwriter has not assumed any
advisory or fiduciary responsibility to the Issuer with respect to the transaction
contemplated hereby and the discussions, undertakings and proceedings leading thereto
(irrespective of whether the Underwriter has provided other services or is currently
providing other services to the Issuer on other matters) or any other obligation to the
Issuer except the obligations expressly set forth in this Purchase Contract and (iv) the
Issuer has consulted its own legal, accounting, tax, financial and other advisors, as
applicable, to the extent it has deemed appropriate in connection with the transaction
contemplated herein.
5. The Issuer covenants with the Underwriter that the Issuer will cooperate with the
Underwriter (at the cost and written directions of the Underwriter), in qualifying the Bonds for
offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as
the Underwriter may reasonably request; provided, however, that the Issuer shall not be
required to consent to suit or to service of process, or to qualify to do business, in any
jurisdiction. The Issuer consents to the use by the Underwriter of the Issuer Documents, the
Preliminary Official Statement and the Final Official Statement in the course of its compliance
with the securities or Blue Sky laws of the various jurisdictions related to the offering and sale of
the Bonds.
6. At 9:00 a.m. on _____, 2013 (the “Closing Date”) or at such other time and/or
date as shall have been mutually agreed upon by the Issuer and the Underwriter, the Issuer will
deliver or cause to be delivered to the Underwriter the Bonds in definitive form duly executed
and authenticated by the Fiscal Agent together with the other documents mentioned in Section
8 hereof; and the Underwriter will accept such delivery and pay the Purchase Price of the Bonds
by delivering to the Fiscal Agent for the account of the Issuer a check payable in federal funds
or making a wire transfer in federal funds payable to the order of the Fiscal Agent.
The activities relating to the final execution and delivery of the Bonds and the Fiscal
Agent Agreement and the payment therefor and the delivery of the certificates, opinions and
other instruments as described in Section 8 of this Purchase Contract shall occur at the offices
of Quint & Thimmig LLP, San Francisco, California (“Bond Counsel”). The payment for the
Bonds and simultaneous delivery of the Bonds to the Underwriter is herein referred to as the
“Closing.” The Bonds will be delivered as fully registered, book-entry only Bonds initially in
denominations equal to the principal amount of each maturity thereof. The Bonds will be
registered in the name of Cede & Co., as nominee of The Depository Trust Company, and will
be made available for checking by the Underwriter at such place as the Underwriter and the
Fiscal Agent shall agree not less than 24 hours prior to the Closing.
7. The Underwriter shall have the right to cancel its obligations to purchase the
Bonds if between the date hereof and the date of Closing:
(a) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it, or shall have
passed or recommended favorably, legislation introduced previous to the date hereof,
which legislation, if enacted in its form as introduced or as amended, would have the
purpose or effect of imposing federal income taxation upon revenues or other income of
the general character to be derived by the Issuer or by any similar body under the Fiscal
Agent Agreement or upon interest received on obligations of the general character of the
Bonds, or of causing interest on obligations of the general character of the Bonds, to be
7
includable in gross income for purposes of federal income taxation, and such legislation,
in the Underwriter’s opinion, materially adversely affects the market price of the Bonds;
or
(b) a tentative decision with respect to legislation shall be reached by a
committee of the House of Representatives or the Senate of the Congress of the United
States, or legislation shall be favorably reported or re-reported by such a committee or
be introduced, by amendment or otherwise, in or be passed by the House of
Representatives or the Senate, or recommended to the Congress of the United States
for passage by the President of the United States, or be enacted or a decision by a
federal court of the United States or the United States Tax Court shall have been
rendered, or a ruling, release, order, circular, regulation or official statement by or on
behalf of the United States Treasury Department, the Internal Revenue Service or other
governmental agency shall have been made or proposed to be made having the
purpose or effect, or any other action or event shall have occurred which has the
purpose or effect, directly or indirectly, of adversely affecting the federal income tax
consequences of owning the Bonds, including causing interest on the Bonds to be
included in gross income for purposes of federal income taxation, or imposing federal
income taxation upon revenues or other income of the general character to be derived
by the Issuer under the Fiscal Agent Agreement or upon interest received on obligations
of the general character of the Bonds, or the Bonds and also including adversely
affecting the tax-exempt status of the Issuer under the Code, which, in the opinion of the
Underwriter, materially adversely affects the market price of or market for the Bonds; or
(c) legislation shall have been enacted, or actively considered for enactment
with an effective date prior to the Closing, or a decision by a court of the United States
shall have been rendered, the effect of which is that the Bonds, including any underlying
obligations, or the Fiscal Agent Agreement, as the case may be, is not exempt from the
registration, qualification or other requirements of the Securities Act of 1933, as
amended and as then in effect, the Securities Exchange Act of 1934, as amended and
as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect;
or
(d) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the
subject matter shall have been issued or made or any other event occurs, the effect of
which is that the issuance, offering or sale of the Bonds, including any underlying
obligations, or the execution and delivery of the Fiscal Agent Agreement as
contemplated hereby or by the Final Official Statement, is or would be in violation of any
provision of the federal securities laws, including the Securities Act of 1933, as amended
and as then in effect, the Securities Exchange Act of 1934, as amended and as then in
effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or
(e) any event shall have occurred or any information shall have become
known to the Underwriter which causes the Underwriter to reasonably believe that the
Final Official Statement includes an untrue statement of a material fact, or omits to state
any material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and the Issuer fails to amend or
supplement such Final Official Statement to cure such omission or misstatement
pursuant to Section 4(g); or
8
(f) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the
financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the
Bonds; or
(g) there shall be in force a general suspension of trading on the New York
Stock Exchange, the effect of which on the financial markets of the United States is such
as, in the reasonable judgment of the Underwriter, would materially adversely affect the
market for or market price of the Bonds; or
(h) a general banking moratorium shall have been declared by federal, New
York or State authorities; or
(i) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the Issuer or the District; or
(j) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by
any national securities exchange which adversely affects the Underwriter’s ability to sell
the Bonds; or
(k) the New York Stock Exchange or other national securities exchange, or
any governmental authority, shall impose, as to the Bonds or obligations of the general
character of the Bonds, any material restrictions not now in force, or increase materially
those now in force, with respect to the extension of credit by, or the charge to the net
capital requirements of, the Underwriter; or
(l) an amendment to the federal or State constitution shall be enacted or
action taken by any federal or State court, legislative body, regulatory body or other
authority materially adversely affecting the tax status of the Issuer, its property, income
or securities (or interest thereon), the validity or enforceability of the Special Tax or the
ability of the Issuer to issue the Bonds and levy the Special Tax as contemplated by the
Fiscal Agent Agreement, the Rate and Method and the Final Official Statement; or
(m) any rating on the Bonds shall have been downgraded or withdrawn by a
national rating service, which, in the Underwriter’s reasonable opinion, materially
adversely affects the marketability of the Bonds or the sale, at the contemplated offering
prices, by the Underwriter of the Bonds.
8. The obligation of the Underwriter to purchase the Bonds shall be subject (a) to
the performance by the Issuer of its obligations to be performed by it hereunder at and prior to
the Closing, (b) to the accuracy as of the date hereof and as of the time of the Closing of the
representations and warranties of the Issuer herein, and (c) to the following conditions, including
the delivery by the Issuer of such documents as are enumerated herein in form and substance
satisfactory to the Underwriter:
(a) At the time of Closing, (i) the Final Official Statement, this Purchase
Contract, the Continuing Disclosure Certificate, the Escrow Agreement and the Fiscal
Agent Agreement shall be in full force and effect and shall not have been amended,
modified or supplemented except as may have been agreed to by the Underwriter, and
9
(ii) the Issuer shall have duly adopted and there shall be in full force and effect such
resolutions and ordinances (including, but not limited to, the Resolutions and the
Ordinance) as, in the opinion of Bond Counsel, shall be necessary in connection with the
transactions contemplated hereby.
(b) Receipt of the Bonds, executed by the Issuer and authenticated by the
Fiscal Agent, at or prior to the Closing. The terms of the Bonds, when delivered, shall in
all instances be as described in Final Official Statement.
(c) At or prior to the Closing, the Underwriter shall receive the following
documents in such number of counterparts as shall be mutually agreeable to the
Underwriter and the Issuer:
(i) A final approving opinion of Bond Counsel dated the date of
Closing in the form attached to the Final Official Statement as Appendix B
(ii) A letter or letters of Bond Counsel addressed to the Underwriter,
which includes a statement to the effect that Bond Counsel’s final approving
opinion may be relied upon by the Underwriter to the same extent as if such
opinion were addressed to the Underwriter, and further provides:
(A) the statements contained in the Official Statement on the
cover page and under the captions “INTRODUCTION,” “THE 2013
BONDS” (other than information relating to DTC and its book-entry only
system, as to which no opinion need be expressed), “SECURITY AND
SOURCES OF PAYMENT FOR THE 2013 BONDS,” and “TAX
MATTERS,” and in Appendices A and B thereto, are accurate insofar as
such statements expressly summarize certain provisions of the Bonds,
the Fiscal Agent Agreement and Bond Counsel’s opinion concerning
certain federal tax matters relating to the Bonds;
(B) this Purchase Contract and the Escrow Agreement
constitute legal, valid and binding obligations of the Issuer enforceable
against the Issuer in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws affecting
enforcement of creditors’ rights in general and to the application of
equitable principles if equitable remedies are sought; and
(C) 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 pursuant to the Trust Indenture
Act of 1939, as amended.
(iii) A letter of Lofton & Jennings, A Professional Law Corporation
(“Disclosure Counsel”), addressed to the Issuer and the Underwriter, to the
effect that:
(A) during the course of serving as Disclosure Counsel in
connection with the issuance of the Bonds and without having undertaken
to determine independently or assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the
10
Final Official Statement, no information came to the attention of the
attorneys in such firm rendering legal services in connection with the
issuance of the Bonds that would lead them to believe that the Final
Official Statement (excluding therefrom the financial statements, any
financial or statistical data, or forecasts, charts, numbers, estimates,
projections, assumptions or expressions of opinion included in the Official
Statement, information regarding DTC, and the appendices to the Official
Statement, as to which no opinion need be expressed), as of the date
thereof or the Closing Date, contains any untrue statement of a material
fact or omits to state a 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;
(B) the Bonds are exempt from registration pursuant to the
Securities Act of 1933, as amended; and
(C) the Continuing Disclosure Certificate constitutes a legal,
valid and binding obligation of the Issuer enforceable against the Issuer in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws affecting enforcement of
creditors’ rights in general and to the application of equitable principles if
equitable remedies are sought.
(iv) The Final Official Statement executed on behalf of the Issuer by a
duly authorized officer of the Issuer.
(v) Certified copies of the Resolutions and the Ordinance.
(vi) Evidence of recordation in the real property records of the County
of Contra Costa of the Notice of Special Tax Lien in the form required by the Act.
(vii) A certificate, in form and substance as set forth in Exhibit A
hereto, of the Issuer, dated as of the Closing Date.
(viii) Evidence that Federal Form 8038 has been executed by the
Issuer and will be filed with the Internal Revenue Service.
(ix) Executed copies of the Fiscal Agent Agreement, the Escrow
Agreement and the Continuing Disclosure Certificate.
(x) An arbitrage certificate in form satisfactory to Bond Counsel.
(xi) An opinion, dated the Closing Date and addressed to the
Underwriter, of the County Counsel, to the effect that:
(A) the Issuer is duly organized and validly existing as a municipal
corporation under and by virtue of the Constitution and laws of the State,
with full legal right, power and authority to adopt the Resolutions and the
Ordinance;
11
(B) the Resolutions and the Ordinance were each duly adopted at a
meeting of the Board of Supervisors, acting as legislative body of the
District which was called and held pursuant to law and with all public
notice required by law and at which a quorum was present and acting
throughout, and the Resolutions and the Ordinance are in full force and
effect and have not been amended or repealed, except as set forth
therein;
(C) 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 with respect to which the Issuer has been served with process or
to the knowledge of the County Counsel, is threatened, in any way
affecting the existence of the Issuer or the titles of the Issuer’s officials to
their respective offices, or seeking to restrain or to enjoin the issuance,
sale or delivery of the Bonds or the application of the proceeds thereof in
accordance with the Fiscal Agent Agreement, or the collection or
application of the Special Taxes to pay the principal of and interest on the
Bonds, or in any way contesting or affecting the validity or enforceability
of the Bonds, the Issuer Documents or any action of the Issuer
contemplated by any of said documents, or in any way contesting the
completeness or accuracy of the Final Official Statement or the powers of
the Issuer or its authority with respect to the Bonds, the Issuer
Documents or any action on the part of the Issuer contemplated by any of
said documents, wherein an unfavorable decision, ruling, or finding could
materially adversely affect the validity or enforceability of the Bonds or the
Issuer Documents;
(D) the execution and delivery of the Bonds and the Issuer
Documents, and compliance with the provisions of each, will not conflict
with or constitute a breach of or default under any loan agreement, note,
ordinance, resolution, indenture, contract, agreement or other instrument
of which the Issuer is a party or is otherwise subject or bound, a
consequence of which could be to materially and adversely affect the
ability of the Issuer to perform its obligations under the Bonds or the
Issuer Documents;
(E) all approvals, consents, authorization, elections and orders of or
filings or registrations with any 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 ability of the Issuer, to perform its obligations under the Bonds or the
Issuer Documents, have been obtained or made, as the case may be,
and are in full force and effect; and
(F) based upon the information made available to the County Counsel
in the course of his participation in the transaction and without having
undertaken to determine independently or assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Final Official Statement, nothing has come to the attention of the County
Counsel which has led the County Counsel to believe that the Final
Official Statement (excluding therefrom the financial and statistical data
12
included in the Final Official Statement, as to which no opinion need be
expressed) contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading in any material respect;
(xii) In connection with printing and distribution of the Preliminary
Official Statement, an executed certificate of the Issuer in the form attached
hereto as Exhibit C.
(xiii) A certificate in form and substance as set forth in Exhibit D hereto
of the Fiscal Agent/Escrow Bank and an opinion of its counsel in form and
substance satisfactory to the Underwriter.
(xiv) A certificate in form and substance as set forth in Exhibit E hereto,
of Goodwin Consulting Group (“Special Tax Consultant”), dated as of the
Closing Date.
(xv) A defeasance opinion of Bond Counsel with respect to the Prior
Bonds.
(xvi) The report of an independent certified public accountant that
satisfies the requirements of Section 9.03 of the Fiscal Agent Agreement, dated
as of June 1, 2001, relating to the Prior Bonds.
(xvii) Evidence satisfactory to the Underwriter and Underwriter’s
Counsel that (A) the disclosure in the Official Statement regarding the
compliance by the County and certain related entities identified by the County
and the Underwriter in the previous five years with their continuing disclosure
undertakings is true and accurate and (B) the County has established reasonable
procedures to ensure compliance with its continuing disclosure undertakings,
including the Continuing Disclosure Certificate, in the future.
(xviii) A rating letter evidencing the rating disclosed in the Official
Statement.
(xix) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter or Bond Counsel may
reasonably request to evidence compliance by the Issuer with legal
requirements, the truth and accuracy, as of the time of Closing, of the respective
representations of the Issuer herein contained and the due performance or
satisfaction by the Issuer at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied.
If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter
contained in this Purchase Contract, or if the obligations of the Underwriter to purchase and
accept delivery of the Bonds shall be terminated for any reason permitted by this Purchase
Contract, this Purchase Contract shall terminate and neither the Underwriter nor the Issuer shall
be under further obligation hereunder; except that the respective obligations to pay expenses,
as provided in Section 11 hereof shall continue in full force and effect.
13
9. The obligations of the Issuer to issue and deliver the Bonds on the Closing Date
shall be subject, at the option of the Issuer, to the performance by the Underwriter of its
obligations to be performed hereunder at or prior to the Closing Date, and to the delivery by
Bond Counsel of the opinion described in Section 8(c)(i) and by Disclosure Counsel of the letter
described in Section 8(iii).
10. All representations, warranties and agreements of the Issuer hereunder shall
remain operative and in full force and effect, regardless of any investigations made by or on
behalf of the Underwriter, and shall survive the Closing.
11. The Issuer shall pay or cause to be paid from any lawfully available funds of the
District all expenses incident to the performance of its obligations under this Purchase Contract,
including, but not limited to, delivery of the Bonds, costs of printing the Bonds, the Preliminary
Official Statement and the Final Official Statement, any amendment or supplement to the
Preliminary Official Statement or Final Official Statement and this Purchase Contract, fees and
disbursements of Bond Counsel and Disclosure Counsel, the financial advisor and other
consultants engaged by the Issuer, including the fees and expenses of the Special Tax
Consultant, the California Debt Investment and Advisory Commission fee, fees of the Fiscal
Agent and the Escrow Bank, and fees and disbursements in connection with the qualification of
the Bonds for sale under the securities or “Blue Sky” laws of the various jurisdictions and the
preparation of “Blue Sky” memoranda.
The Underwriter shall pay all advertising expenses in connection with the public offering
of the Bonds, and all other expenses incurred by it in connection with its public offering and
distribution of the Bonds, including fees and expenses of its counsel, if any.
12. Any notice or other communication to be given to the Issuer under this Purchase
Contract may be given by delivering the same in writing at its address set forth above, and any
notice or other communication to be given to the Underwriter under this Purchase Contract may
be given by delivering the same in writing to the following: Stifel, Nicolaus & Company,
Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus, One Ferry Building, San
Francisco, CA 94111, Attention: Eileen Gallagher, Managing Director.
13. This Purchase Contract is made solely for the benefit of the Issuer and the
Underwriter (including the successors or assigns of the Underwriter) and no other person,
including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue
hereof.
14. This Purchase Contract shall be governed by and construed in accordance with
the laws of the State applicable to contracts made and performed in the State.
14
15. This Purchase Contract shall become effective upon acceptance hereof by the
Issuer.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED DBA STONE &
YOUNGBERG, A DIVISION OF
STIFEL NICOLAUS
By:
Authorized Representative
Accepted and agreed to as of
the date first above written:
COUNTY OF CONTRA COSTA,
CALIFORNIA, for and on behalf of
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
Catherine Kutsuris
Director, Department of Conservation and
Development
A-1
EXHIBIT A
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
ISSUER CLOSING CERTIFICATE
I, the undersigned, hereby certify that I am the _________ of the County of Contra
Costa, California, the Board of Supervisors of which is the legislative body for County of Contra
Costa Community Facilities District No. 2001-1 (Norris Canyon) (the “Community Facilities
District”), a community facilities district duly organized and existing under the laws of the State
of California (the “State”) and that as such, I am authorized to execute this Certificate on behalf
of the Issuer in connection with the issuance of the above-referenced 2013 Special Tax
Refunding Bonds (the “Bonds”).
I hereby further certify on behalf of the Issuer that:
(A) no litigation is pending with respect to which the Issuer has been served
with process or, to my best knowledge after reasonable inquiry, threatened (1) to restrain
or enjoin the issuance of any of the Bonds or the collection of Special Taxes pledged
under the Fiscal Agent Agreement; (2) in any way contesting or affecting the authority for
the issuance of the Bonds or the validity or enforceability of the Bonds, the Fiscal Agent
Agreement, the Escrow Agreement, the Continuing Disclosure Certificate or the
Purchase Contract; or (3) in any way contesting the existence or powers of the Issuer;
(B) the representations and warranties made by the Issuer in the Issuer
Documents are true and correct in all material respects on the Closing Date, with the
same effect as if made on the Closing Date;
(C) no event has occurred since the date of the Final Official Statement that,
as of the Closing Date, would cause any statement or information contained in the Final
Official Statement to be incorrect or incomplete in any material respect or would cause
the information in the Final Official Statement to contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make such statements
therein, in the light of the circumstances under which they were made, not misleading;
and
(D) as of the date hereof, the Fiscal Agent Agreement is in full force and
effect in accordance with its terms and has not been amended, modified or
supplemented except in such case as may have been agreed to by the Underwriter; and
(E) the Issuer has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under the Issuer Documents prior to
issuance of the Bonds.
Capitalized terms used in this Certificate and not defined herein shall have the same
meaning set forth in the Bond Purchase Agreement dated ______, 2013, between the Issuer,
A-2
for and on behalf of the Community Facilities District, and Stifel, Nicolaus & Company,
Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
hereinbelow set forth.
Dated: [Closing Date]
COUNTY OF CONTRA COSTA, CALIFORNIA, for
and on behalf of the COUNTY OF CONTRA
COSTA COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
[to come]
B-1
EXHIBIT B
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
Serial Bonds
Maturity
Date
Principal
Amount
Interest
Rate
Yield
Price
Term Bond
Redemption Provisions
[to come]
C-1
EXHIBIT C
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
RULE 15C2-12 CERTIFICATE
The undersigned hereby certifies and represents that she is the duly elected and acting
Community Development Bond Program Manager of the County of Contra Costa, California (the
“Issuer”), the Board of Supervisors of which is the legislative body of the County of Contra
Costa Community Facilities District No. 2001-1 (Norris Canyon) (the “District”), and is duly
authorized to execute and deliver this Certificate and further hereby certifies on behalf of the
Issuer as follows:
(1) This Certificate is delivered in connection with the offering and sale of the
above-referenced bonds (the “Bonds”) in order to enable the underwriter of the Bonds to
comply with Securities and Exchange Commission Rule 15c2-12 under the Securities
Exchange Act of 1934, as amended (the “Rule”).
(2) In connection with the offering and sale of the Bonds, there has been
prepared a Preliminary Official Statement, setting forth information concerning the
Bonds, the Issuer and the District (the “Preliminary Official Statement”).
(3) As used herein, “Permitted Omissions” shall mean the offering price(s),
interest rate(s), selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings and other terms of the Bonds depending on such
matters, all with respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of the Rule.
IN WITNESS WHEREOF, I have hereunto set my hand as of _____, 2012.
COUNTY OF CONTRA COSTA,
CALIFORNIA, for and on behalf of the
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
Community Development Bond Program
Manager
D-1
EXHIBIT D
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF FISCAL AGENT/ESCROW BANK
The undersigned hereby states and certifies that the undersigned is an authorized officer
of The Bank of New York Mellon Trust Company, N.A., (the “Bank”), which is acting (A) as fiscal
agent (the “Fiscal Agent”) under that certain Fiscal Agent Agreement, dated as of January 1,
2013 (the “Fiscal Agent Agreement”), by and between the County of Contra Costa, California
(the “Issuer”), for and on behalf of the County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) (the “District”) and the Fiscal Agent, relating to the captioned bonds
(the “Bonds”), and (B) as escrow bank (the “Escrow Bank”) under the Escrow Agreement,
dated as of January 1, 2013 (the “Escrow Agreement”), between the Issuer, for and on behalf
of the District, and the Escrow Bank, and as such, is familiar with the following facts and is
authorized and qualified to certify the following facts on behalf of the Bank:
(1) The Bank is duly organized and existing as a national banking association
under the laws of the United States of America, having the full power and authority to
enter into and perform its duties under the Fiscal Agent Agreement and the Escrow
Agreement.
(2) The Fiscal Agent Agreement and the Escrow Agreement have been duly
authorized, executed and delivered by the Bank, and are legal, valid and binding
agreements of the Bank enforceable upon the Bank in accordance with their respective
terms.
(3) The Bonds have been authenticated by a duly authorized representative of
the Bank in accordance with the Fiscal Agent Agreement.
(4) To the best knowledge of the Bank, after due inquiry, there is no action, suit,
proceeding or investigation, at law or in equity, before or by any court or governmental
agency, public board or body pending against the Bank or threatened against the Bank
which in the reasonable judgment of the Bank would affect the existence of the Bank or
in any way contesting or affecting the validity or enforceability of the Fiscal Agent
Agreement or the Escrow Agreement or contesting the powers of the Bank or its
authority to enter into and perform its obligations under the Fiscal Agent Agreement and
the Escrow Agreement.
Dated: [closing date] THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
By
Authorized Officer
E-1
EXHIBIT E
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF SPECIAL TAX CONSULTANT
Goodwin Consulting Group, Inc. (the “Special Tax Consultant”) has been retained as
Special Tax administrator for the County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) (the “District”) and has reviewed the Rate and Method of
Apportionment of Special Tax for the District (the “Rate and Method”), a copy of which is set
forth in Appendix C to the Official Statement, dated ______, 2013 (the “Official Statement”)
relating to the above-captioned bonds (the “Bonds”).
Based upon such review, the Special Tax Consultant hereby certifies that the Special
Tax, if collected in the maximum amounts permitted pursuant to the Rate and Method on the
date hereof, would generate the debt service coverage shown in Table _____ of the Official
Statement, provided that the annual debt service figures on the attached debt service schedule,
which were relied upon by Special Tax Consultant, are substantially true and correct.
Although the Special Tax, if collected in the maximum amounts pursuant to the Rate and
Method, would generate the debt service coverage shown in Table _____ of the Official
Statement, no representation is made herein as to actual amounts that will be collected in future
years.
All information with respect to the Rate and Method in the Official Statement and all
other information sourced to the Special Tax Consultant is true and correct as of the date of the
Official Statement and as of the date hereof, and a true and correct copy of the Rate and
Method is attached to the Official Statement as Appendix B.
Dated: ____, 2013
Goodwin Consulting Group, Inc.
By:
Susan Goodwin
Formatted: Left: 1", Right: 1",
Suppress Endnotes
12036\pos-3
L&J DRAFT #3
11/27/12
PRELIMINARY OFFICIAL STATEMENT DATED ________________, 2013
NEW ISSUE–BOOK-ENTRY ONLY S&P: _____
(See “RATINGS”)
In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject
however, to certain qualifications described in this Official Statement, under existing law, interest on the
2013 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 2013 Bonds is exempt
from personal income taxation imposed by the State of California. See “Tax Matters”
$5,885,000*
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
Dated: Date of Delivery Due: September 1, as shown below
The County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) 2013
Special Tax Refunding Bonds (the “2013 Bonds”) are being issued to provide funds to: (i) refund and
defease all of the $5,720,000 outstanding principal amount of County of Contra Costa Community
Facilities District No 2001-1 (Norris Canyon) 2001 Special Tax Bonds; (ii) fund a reserve fund as
security for the 2013 Bonds; and (iii) pay certain costs associated with the issuance of the 2013 Bonds.
See “PLAN OF REFUNDING” and “ESTIMATED SOURCES AND USES OF FUNDS.” The 2013 Bonds
are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended
(constituting Section 53311 et seq. of the California Government Code) (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”) and a Fiscal Agent Agreement (the “Fiscal Agent
Agreement”), dated as of January 1, 2013, by and between the County of Contra Costa (the “County”) for
and on behalf of the County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon)
(the “District”) and The Bank of New York Mellon Trust Company, N.A., San Francisco, California, as
Fiscal Agent.
The 2013 Bonds are limited obligations of the County payable solely from a special tax (the
“Special Tax”) levied by the County on certain real property within the District and are secured by a
pledge of all Special Tax Revenues (defined herein) and certain moneys deposited in certain funds
established under the Fiscal Agent Agreement. The Special Tax is levied according to the rate and
method of apportionment of the Special Tax and does not constitute a personal indebtedness of the
respective property owners. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–
Special Tax Authorization,” “–Special Tax Formula” and APPENDIX A–“RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX.”
The 2013 Bonds will be issued as fully registered bonds, without coupons, in the denomination of
$5,000 or any integral multiple thereof, in book-entry form, initially registered in the name of Cede &
Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchases of
beneficial interests in the 2013 Bonds will not receive physical certificates representing their interest in
the 2013 Bonds. For so long as the 2013 Bonds are registered in the name of Cede & Co., the Fiscal
12036\pos-3
Agent will make all payments of principal and interest on the 2013 Bonds to DTC, which, in turn, is
obligated to remit such principal and interest to DTC Participants (defined herein) for subsequent
disbursement to the Beneficial Owners (defined herein) of the 2013 Bonds. See APPENDIX F–“DTC
AND THE BOOK-ENTRY ONLY SYSTEM.” Interest on the 2013 Bonds will be payable on March 1 and
September 1 of each year (each an “Interest Payment Date”), commencing September 1, 2013. See “THE
2013 BONDS–Description of the 2013 Bonds.”
The 2013 Bonds are subject to optional redemption prior to their stated maturities. The 2013
Bonds are subject to mandatory redemption prior to their stated maturities, as a whole or in part, on any
Interest Payment Date, at a redemption price equal to 103% of the 2013 Bonds to be redeemed from
prepayments of the Special Tax. See “THE 2013 BONDS–Redemption Provisions.”
The Series 2013 Bonds are limited obligations of the County on behalf of the District payable
solely from the Special Tax (including any prepayments thereof and proceeds collected from the sale of
property pursuant to foreclosure provisions as set forth in the Fiscal Agent Agreement for delinquency
in payment of the Special Tax) and certain funds established pursuant to the Fiscal Agent Agreement
and held by the Fiscal Agent, as more fully described herein. Neither the faith and credit nor any
general taxing power of the County or the State of California or any political subdivision thereof is
pledged to the payment of the 2013 Bonds. Except for the Special Tax, no other taxes are pledged to
the payment of the 2013 Bonds.
MATURITY SCHEDULE
(See inside cover page)
This cover page contains certain information for quick reference only. It is not a complete
summary of the terms of this bond issue. Investors must read the entire Official Statement to obtain
information essential to the making of an informed investment decision with respect to the 2013 Bonds.
See “CERTAIN RISK FACTORS” for a discussion of certain risk factors that should be considered, in
addition to the other matters discussed herein, in considering the investment quality of the 2013 Bonds.
The 2013 Bonds are offered when, as and if issued by the County for the District and accepted by
the Underwriter, subject to the approval as to their legality by Quint & Thimmig, LLP, San Francisco,
California, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for
the County and the District by County Counsel, and Lofton & Jennings, San Francisco, California,
Disclosure Counsel, and for the Underwriter by Jones Hall, A Professional Law Corporation, San
Francisco, California, Underwriter’s Counsel. It is anticipated that the 2013 Bonds will be available for
delivery in book-entry only form through the facilities of DTC in New York, New York on or about
__________, 2013.
Stone & Youngberg, a Division of Stifel Nicolaus
Dated: __________________, 2013
_______________
* Preliminary, subject to change.
12036\pos-3
$5,885,000*
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
MATURITY SCHEDULE
Maturity Date Principal Interest
(September 1) Amount Rate Yield CUSIP No.†
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
_______________
† Copyright 2013, American Bankers Association. CUSIP data herein is provided by Standard and Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in
any way as a substitute for the CUSIP Service. CUSIP numbers are provided for reference only. Neither the County nor
the Underwriter is responsible for the accuracy, the selection or uses of the CUSIP numbers, and no representation is made
as to their correctness on the applicable 2013 Bonds or as included herein. The CUSIP numbers of specific maturities are
subject to change following the issuance of the 2013 Bonds as a result of various actions, including, but not limited to, a
refunding in whole or in part or as the result of the procurement of a secondary market portfolio insurance or other similar
enhancement by investors that is applicable to all or a portion of certain maturities of the 2013 Bonds.
12036\pos-3
i
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No dealer, broker, salesperson or other person has been authorized by the County or the District to give any
information or to make any representation with respect to the 2013 Bonds other than those contained herein and, if given
or made, such other information or representation must not be relied upon as having been authorized by any of the
foregoing. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy nor shall there
be any sale of the 2013 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer,
solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers of the 2013 Bonds. Statements
contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so
described herein, are intended solely as such and are not to be construed as a representation of facts.
The information set forth herein has been obtained from the County and the District and from other sources and
is believed to be reliable but is not guaranteed as to accuracy or completeness. The information and expressions of
opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the County
or the District since the date hereof. This Official Statement is submitted in connection with the sale of the 2013 Bonds
referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in
writing by the County. All summaries of the documents and laws are made subject to the provisions thereof and do not
purport to be complete statements of any or all such provisions. All capitalized terms used herein, unless noted otherwise,
shall have the meanings prescribed in the Fiscal Agent Agreement. This Official Statement, including any supplement or
amendment hereto, is intended to be deposited with the Electronic Municipal Market Access site maintained by the
Municipal Securities Rulemaking Board.
Any statement made in this Official Statement involving any forecast or matter of estimates or opinion, whether
or not expressly stated, is intended solely as such and not as a representation of fact. Certain statements included or
incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the
United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act
of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended (the “Securities Act”).
Such forward-looking statements are generally identified by use of the words “plan,” “project,” “expect,” “estimate,”
“budget” or other similar words. Such forward-looking statements refer to the achievement of certain results or other
expectations or performance which involve known and unknown risks, uncertainties and other factors. These risks,
uncertainties and other factors may cause actual results, performance or achievements to be materially different from any
projected results, performance or achievements described or implied by such forward looking statements. Neither the
County nor the District plans to issue updates or revisions to such forward-looking statements if or when the expectations,
events, conditions or circumstances on which such statements are based, occur, or if actual results, performance or
achievements are materially different from any results, performance or achievements described or implied by such
forward-looking statements.
The 2013 Bonds have not been registered with the Securities and Exchange Commission by reason of the
provisions of Section 3(a)(2) of the Securities Act of 1933, as amended. The registration or qualification of the 2013
Bonds in accordance with applicable provisions of Securities Laws of the states in which these Bonds have been registered
or qualified, and the exemption from registration or qualification in other states, shall not be regarded as a recommendation
thereof. Neither these states nor any of their agencies have passed upon the merits of the securities or the accuracy or
completeness of this Official Statement. Any representation to the contrary may be a criminal offense.
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, their 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 completeness of such information.
In connection with the offering of the 2013 Bonds, the Underwriter may overallot or effect transactions which
stabilize or maintain the market price of the 2013 Bonds offered hereby at a level above that which might otherwise prevail
in the open market. Such stabilization, if commenced, may be discontinued at any time. The Underwriter may offer and
sell the 2013 Bonds to certain dealers, institutional investors and others at prices lower than the public offering prices
stated on the inside cover page hereof and said public offering prices may be changed from time to time by the
Underwriter.
The County maintains a website. Unless specifically indicated otherwise, the information presented on that
website is not incorporated by reference as part of this Official Statement and should not be relied upon in making
investment decisions with respect to the 2013 Bonds.
12036\pos-3
ii
COUNTY OF CONTRA COSTA
Board of Supervisors
Mary N. Piepho
(District 3)
Chair
John M. Gioia Candace Andersen
(District 1) (District 2)
Vice Chair
Karen Mitchoff Federal D. Glover
(District 4) (District 5)
County Staff
David J. Twa
Clerk of the Board and County Administrator
Catherine Kutsuris
Director, Department of Conservation and Development
Robert R. Campbell Russell V. Watts
Auditor-Controller Treasurer-Tax Collector
Sharon L. Anderson Stephen L. Weir
County Counsel County Clerk-Recorder
SPECIAL SERVICES
Quint & Thimmig LLP
San Francisco, California
Bond Counsel
Goodwin Consulting Group, Inc.
Sacramento, California
Special Tax Consultant
Lofton & Jennings
San Francisco, California
Disclosure Counsel
The Bank of New York Mellon Trust Company, N.A.
San Francisco, California
Fiscal Agent
Fieldman, Rolapp & Associates
Irvine, California
Financial Advisor
12036\pos-3
iii
TABLE OF CONTENTS
Page Page
INTRODUCTION ..................................................... 1
General; Authority for Issuance ............................. 1
Purpose .................................................................. 2
The County ............................................................ 2
The District ............................................................ 2
Security and Sources of Payment for the
2013 Bonds ................................................... 2
Risks to Bondowners ............................................. 3
Continuing Disclosure ........................................... 3
Tax Matters ............................................................ 3
Additional Information .......................................... 4
PLAN OF REFUNDING .......................................... 4
ESTIMATED SOURCES AND USES OF FUNDS . 6
DEBT SERVICE SCHEDULE ................................. 7
Debt Service Schedule ........................................... 7
THE 2013 BONDS .................................................... 8
Authority for Issuance ........................................... 8
Description ............................................................. 8
Redemption Provisions .......................................... 8
Purchase of Bonds in Lieu of Redemption ............ 9
Redemption Procedures ......................................... 9
SECURITY AND SOURCES OF PAYMENT FOR
THE 2013 BONDS ......................................... 10
General ................................................................. 10
Special Tax Authorization ................................... 10
Special Tax is not a Personal Obligation ............. 12
Special Tax Formula ............................................ 12
Reserve Fund ....................................................... 13
Deposit of Special Tax; Flow of Funds ............... 14
The Teeter Plan .................................................... 14
Covenant to Foreclose ......................................... 15
Limited Obligation ............................................... 16
Limited Issuance of Parity Bonds Only
for Refunding .............................................. 16
THE DISTRICT ...................................................... 17
General; Location and Description ...................... 17
Status of Development ......................................... 17
Projected Debt Service Coverage ........................ 19
Property Values in the District ............................. 20
Secured Property Tax Levies, Collections
and Delinquencies ....................................... 22
Residential Mortgage Foreclosure
Activity ........................................................ 22
Public Utilities ..................................................... 22
Direct and Overlapping Debt ............................... 23
CERTAIN RISK FACTORS ................................... 24
Insufficiency of Special Tax Revenues ................ 24
Bankruptcy and Foreclosure Delays .................... 25
Hazardous Materials ............................................ 27
Geologic, Topographic and Climatic
Conditions ................................................... 27
Federal Government Interests in Property ........... 28
Non-Cash Payments of the Special Tax ............... 29
Payment of the Special Tax is not a
Personal Obligation of the Owners ............. 29
Limitations on Remedies ..................................... 30
Loss of Tax Exemption ........................................ 30
Proceedings to Reduce or Terminate the
Special Tax .................................................. 30
Secondary Markets and Prices ............................. 31
No Acceleration Provision ................................... 31
THE COUNTY ........................................................ 31
CONTINUING DISCLOSURE .............................. 32
ABSENCE OF MATERIAL LITIGATION ........... 32
TAX MATTERS ..................................................... 32
CERTAIN LEGAL MATTERS .............................. 35
FINANCIAL ADVISOR ......................................... 35
RATING .................................................................. 35
UNDERWRITING .................................................. 35
MISCELLANEOUS ................................................ 36
MAPS AND TABLES
Page
Table 1 – Prior Bonds .................................................................................................................................................... 5
Table 2 – Debt Service Schedule ................................................................................................................................... 7
Table 3 – Maximum Special Tax by Land Use Classification ................................................................................... 18
Table 4 – Projected Debt Service Coverage ................................................................................................................ 19
Table 5 – Historical Assessed Value of Taxable Property ......................................................................................... 20
Table 6 – Assessed Value of Residential Property-to-Special Tax Lien Categories .................................................. 21
Table 7 – Historical Special Tax Delinquency ............................................................................................................ 22
Table 8 – Direct and Overlapping Debt Report ........................................................................................................... 23
Table 9 – Typical Property Tax Bill ............................................................................................................................ 24
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iv
APPENDICES
Page
APPENDIX A SUMMARY OF THE FISCAL AGENT AGREEMENT ............................................................ A-1
APPENDIX B PROPOSED FORM OF OPINION OF BOND COUNSEL......................................................... B-1
APPENDIX C RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ....................................... C-1
APPENDIX D GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION ....................... D-1
APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE ....................................................... E-1
APPENDIX F DTC AND THE BOOK ENTRY SYSTEM ................................................................................. F-1
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v
[INSERT AREA MAP HERE]
12036\pos-3
$5,885,000*
COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO. 2001-1
(NORRIS CANYON)
2013 SPECIAL TAX REFUNDING BONDS
INTRODUCTION
This introduction contains only a brief summary of certain of the terms of the 2013 Bonds being
offered, and a full review should be made of the entire Official Statement including the cover page, the
table of contents and the appendices for a more complete description of the terms of the 2013 Bonds. All
statements contained in this introduction are qualified in their entirety by reference to the entire Official
Statement. All capitalized terms used in this Official Statement and not otherwise defined herein have the
meanings given to such terms as set forth in the Fiscal Agent Agreement (defined below). See
APPENDIX A–“SUMMARY OF THE FISCAL AGENT AGREEMENT–DEFINITIONS.”
General; Authority for Issuance
The purpose of this Official Statement, including the cover page, the inside cover page and the
appendices, is to furnish information in connection with the sale and delivery by the County of Contra
Costa (the “County”) of $5,885,000* principal amount of County of Contra Costa Community Facilities
District No 2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds (the “2013 Bonds”).
The 2013 Bonds are issued pursuant to the provisions of the Mello-Roos Community Facilities
Act of 1982, as amended (being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the
State of California, constituting Section 53311 et seq. of the California Government Code) (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”), and pursuant to a Fiscal Agent Agreement, dated as
of January 1, 2013 (the “Fiscal Agent Agreement”), by and between the County, for and on behalf of the
County of Contra Costa Community Facilities District No 2001-1 (Norris Canyon) (the “District”), and
The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”).
Under the Act, the Board of Supervisors of the County (the “Board of Supervisors”), as the
legislative body of the District, is authorized to issue bonds and levy and collect a special tax within the
District to repay such indebtedness.
The 2013 Bonds are secured solely by a pledge of the annual special tax (the “Special Tax”)
levied by the County (including any prepayment thereof and proceeds from foreclosure sales pursuant to
the Fiscal Agent Agreement) on Taxable Property within the District pursuant to the Act and the funds
and accounts established pursuant to the Fiscal Agent Agreement. See “SECURITY AND SOURCES OF
PAYMENT FOR THE 2013 BONDS.” The Special Tax is levied in accordance with the Rate and Method
of Apportionment of Special Tax (the “Special Tax Formula”) in an amount sufficient to pay the principal
and interest on the 2013 Bonds, pay the administrative expenses of the District and to make any
replenishments to the Reserve Fund consistent with the Special Tax Formula. The Special Tax is
included on the regular property tax bill sent to the record owners of properties within the District. The
County covenants for the benefit of the owners of the 2013 Bonds, under certain circumstances described
herein, to commence foreclosure actions against property with delinquent Special Tax and to diligently
pursue such actions to completion. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013
BONDS–Special Tax Authorization” and “–Covenant for Foreclosure.”
_____________
* Preliminary, subject to change.
12036\pos-3
2
Purpose
The 2013 Bonds are being issued to provide funds to: (i) refund and defease all of the outstanding
$5,720,000 principal amount of County of Contra Costa Community Facilities District No 2001-1 (Norris
Canyon) 2001 Special Tax Bonds (the “Prior Bonds”); (ii) fund a reserve fund as security for the 2013
Bonds; and (iii) pay certain costs associated with the issuance of the 2013 Bonds. See “PLAN OF
REFUNDING” and “ESTIMATED SOURCES AND USES OF FUNDS.”
The County
The County is located northeast of the San Francisco Bay and is the ninth most populous County
in the State of California. As of January 1, 2012, the population within the County was 1,065,117. For
economic and demographic information with respect to the County, see APPENDIX A–“GENERAL
COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION.”
The District
The District, created in 2001, is located in an unincorporated portion of the County near the
western edge of the City of San Ramon. For the location of the District, see the map on page v. The
District is comprised of approximately 1,189 gross acres, of which approximately 800 acres is open space.
For Fiscal Year 2012-13, the Special Tax was levied on 271 parcels of Residential Property (as defined
herein) of the total 361 parcels within the District. The development within the District, known as “Norris
Canyon Estates,” is a gated community, featuring large, single-family homes on one-third to one-half acre
sites, walking trails, tennis and basketball courts, playground and community centers. The aggregate
Fiscal Year 2012-13 assessed value of the 271 parcels of Residential Property subject to the Fiscal Year
2012-13 Special Tax levy is $373,218,307, which is more than 62* times the principal amount of the
2013 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–Special Tax
Formula” and “THE DISTRICT–Value of the District” and “–Direct and Overlapping Debt.”
Security and Sources of Payment for the 2013 Bonds
Payments of interest on and principal of the 2013 Bonds will be made solely from the proceeds of
the Special Tax received by the County, including any scheduled payments thereof, interest and proceeds
of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Tax to the
amount of said interest, but shall not include any interest in excess of the interest due on the 2013 Bonds
or any penalties collected in connection with any such foreclosure (the “Special Tax Revenues”). The
Special Tax is authorized to be levied annually by the Board of Supervisors, acting as the legislative body
of the District, on all Taxable Property in the District under and pursuant to the Act and the election held
in the District on June 5, 2001. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–
Special Tax Authorization.”
The Series 2013 Bonds are limited obligations of the County on behalf of the District payable
solely from the Special Tax (including any prepayments thereof and proceeds collected from the sale of
property pursuant to foreclosure provisions as set forth in the Fiscal Agent Agreement for delinquency
in payment of the Special Tax) and certain funds established pursuant to the Fiscal Agent Agreement
and held by the Fiscal Agent, as more fully described herein. Neither the faith and credit nor any
general taxing power of the County or the State of California or any political subdivision thereof is
pledged to the payment of the 2013 Bonds. Except for the Special Tax, no other taxes are pledged to
the payment of the 2013 Bonds.
_______________
* Preliminary, subject to change.
12036\pos-3
3
If the Special Tax is not paid when due, the only other source of funds to repay the 2013 Bonds
will be the amounts held by the Fiscal Agent in certain of the funds established under the Fiscal Agent
Agreement, including amounts held in the Reserve Fund and the proceeds, if any, from foreclosure sales
of land with delinquent Special Tax. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013
BONDS–Covenant to Foreclose.”
Reserve Fund. A reserve fund for the 2013 Bonds (the “Reserve Fund”) is established under the
Fiscal Agent Agreement. The Reserve Fund is required to be maintained in the amount of the Reserve
Requirement (defined herein).
Upon the issuance and delivery of the 2013 Bonds, proceeds of the 2013 Bonds in the amount of
$___,000 will be deposited into the Reserve Fund, which amount is equal to the Reserve Requirement.
See “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–Reserve Fund.”
Risks to Bondowners
Certain events could affect the ability of the County to pay debt service on the 2013 Bonds when
due and an investment in the 2013 Bonds involves risks that should be considered in addition to other
matters described herein in evaluating the investment quality of the 2013 Bonds. See “CERTAIN RISK
FACTORS” for a discussion of certain factors that should be considered, in addition to other matters set
forth herein, in evaluating an investment in the 2013 Bonds
Continuing Disclosure
The County has covenanted for the benefit of the beneficial owners of the 2013 Bonds to provide
certain financial information and operating data relating to the County and the District by no later than
eight months after the end of each Fiscal Year (which fiscal year currently ends June 30), commencing
with the report due for the Fiscal Year ended June 30, 2013 (each, an “Annual Report”), and to provide
notices of the occurrence of certain specified events. The Annual Report and notices of specified events
will be filed with the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic
Municipal Market Access site. The specific nature of the information to be contained in the Annual
Report or the notices of specified events is set forth in APPENDIX E–“FORM OF CONTINUING
DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in
complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
In order to provide certain continuing disclosure with respect to the 2013 Bonds in accordance
with the Rule 15c2-12, the County entered into a Continuing Disclosure Certificate for the benefit of the
Owners of the 2013 Bonds and has appointed Digital Assurance Certification, L.L.C. (“DAC”) as
Dissemination Agent. The form of Continuing Disclosure Certificate is set forth in APPENDIX E–“FORM
OF CONTINUING DISCLOSURE CERTIFICATE.”
See “CONTINUING DISCLOSURE” for a summary of the County’s compliance in the previous
five years with its continuing disclosure undertakings.
Tax Matters
In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject
however, to certain qualifications described in this Official Statement, under existing law, interest on the
2013 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 2013 Bonds is exempt from personal
12036\pos-3
4
income taxation imposed by the State of California. See “TAX MATTERS” and APPENDIX B–
“PROPOSED FORM OF OPINION OF BOND COUNSEL.”
Additional Information
This Official Statement contains brief descriptions of, among other things, the 2013 Bonds, the
security for the 2013 Bonds, the District, and the Fiscal Agent Agreement and certain other documents.
Such descriptions do not purport to be comprehensive or definitive. All references herein to the Fiscal
Agent Agreement are qualified in their entirety by reference to such documents, copies of which are
available for inspection at the office of Fiscal Agent, The Bank of New York Mellon Trust Company,
N.A., 100 Pine Street, Suite 3100, San Francisco, California 94111; Attention: Corporate Trust
Department.
PLAN OF REFUNDING
A portion of the proceeds from the sale of the 2013 Bonds will be used by the County together
with other available moneys, to establish an irrevocable escrow (the “Refunding Fund”) to redeem all of
the County of Contra Costa Community Facilities District No. 2001-1 (Norris Canyon) 2001 Special Tax
Refunding Bonds in the outstanding principal amount of $5,720,000 (the “Prior Bonds”) on
March 1, 2013 at a redemption price equal to 101% of the principal amount of the 2013 Bonds, plus
accrued interest to the redemption date.
The Prior Bonds were issued by the County to finance the design and construction of various off-
site public improvements within the District, including street, water and utility facilities, construction of
landscaping and irrigation facilities, and acquisition of all necessary real property interests in real
property and to pay fees required by public agencies for sewer, water, schools, parks, traffic mitigation
and other related fees, charges and expenses (collectively, the “Facilities”). All of the Facilities have
been completed and installed. See “THE DISTRICT.”
(Remainder of this Page Intentionally Left Blank)
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5
The Prior Bonds consist of the following:
Table 1
$5,720,000
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Maturity Date
(September 1)
Amount
Interest
Rate
CUSIP†
2013 $175,000 5.400% 212288BQ6
2014 185,000 5.500 212288BR4
2015 195,000 5.600 212288BS2
2016 210,000 5.650 212288BT0
2017 220,000 5.750 212288BU7
2018 230,000 5.850 212288BV5
2019 240,000 5.900 212288BW3
2026 2,190,000 6.000 212288BX1
2031 2,205,000 6.100 212288BY9
_______________
† Copyright 2013, American Bankers Association. CUSIP data herein is provided by Standard and Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in
any way as a substitute for the CUSIP Service. CUSIP numbers are provided for reference only. Neither the County nor
the Underwriter take any responsibility for the accuracy of such numbers.
Upon the sale of the 2013 Bonds, the County will apply a portion of the proceeds therefrom,
together with certain other available moneys, to establish the Refunding Fund pursuant to the Escrow
Agreement, dated January 1, 2013 (the “Escrow Agreement”) by and between the County and The Bank
of New York Mellon Trust Company, N.A., as escrow bank (the “Escrow Bank”). Amounts deposited in
the Refunding Fund will be held in cash, uninvested, in an amount sufficient to pay the principal of,
interest on and redemption premium of, the Prior Bonds on March 1, 2013.
(Remainder of this Page Intentionally Left Blank)
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6
ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds are summarized as follows:
Sources of Funds
Par Amount of 2013 Bonds ........................
Transfer of Prior Bonds Funds ...................
Less: Net Original Issue Discount .............
TOTAL SOURCES .................................
Uses of Funds
Deposit to the Refunding Fund(1) ...............
Deposit to Reserve Fund ............................
Deposit to Costs of Issuance Fund(2) ..........
Underwriters’ Discount ..............................
TOTAL USES ........................................
______________
(1) See “PLAN OF REFUNDING.”
(2) Includes the fees and expenses of Bond Counsel and Disclosure Counsel, fees and expenses of the Fiscal Agent, the
Financial Advisor and the Special Tax Consultant, printing costs, rating agency fees and other costs related to the issuance
of the 2013 Bonds.
(Remainder of this Page Intentionally Left Blank)
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7
DEBT SERVICE SCHEDULE
Debt Service Schedule
The table below sets forth the scheduled annual debt service payments on the 2013 Bonds,
assuming no optional redemption, or redemption from prepayments of the Special Tax.
Table 2
Debt Service Schedule
Year Ending
September 1
Principal
Interest
Total
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
TOTAL
(Remainder of this Page Intentionally Left Blank)
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8
THE 2013 BONDS
Authority for Issuance
Pursuant to the Act, the Board of Supervisors established the District on June 5, 2001, and an
election of the sole property owner was held authorizing the issuance of bonded indebtedness, in an
amount not to exceed $7,220,000, and approving the Special Tax Formula. For a description of the
Special Tax Formula and the amount of the Special Tax that can be collected from the Taxable Property
within the District, see “SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS,” “THE
DISTRICT” and APPENDIX A–“RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Description
The 2013 Bonds will be dated as of the date of initial delivery, issued only in fully registered
form, without coupons, in the denomination of $5,000 or any integral multiple thereof. The 2013 Bonds
will mature in the principal amounts, and will bear interest at the respective rates shown on the inside
cover page of this Official Statement. Interest on the 2013 Bonds will be payable on each March 1 and
September 1, commencing September 1, 2013 (each an “Interest Payment Date”). Interest on the 2013
Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months.
The 2013 Bonds will be dated the date issued in fully registered form, without coupons, and,
registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New
York (“DTC”). DTC will act as securities depository for the 2013 Bonds. Ownership interests in the
2013 Bonds may be purchased in book-entry form only. Purchasers will not receive certificates
representing their interests in the 2013 Bonds purchased.
Interest on the 2013 Bonds will be payable on each Interest Payment Date to the person whose
name appears on the registration books maintained by the Fiscal Agent as the Owner thereof as of the
15th day of the month next preceding the month of the applicable Interest Payment Date, whether or not
such 15th day is a Business Day (the “Record Date”) immediately preceding each such Interest Payment
Date, such interest to be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, on
each Interest Payment Date to the Owner at the address of such Owner as it appears on the registration
books maintained by the Fiscal Agent as of the preceding Record Date. Principal of and premium (if any)
on any 2013 Bond will be paid by check upon presentation and surrender thereof, at maturity or the prior
redemption thereof, at the Principal Office of the Fiscal Agent.
So long as the 2013 Bonds are registered in the name of the Cede & Co., all payments of
principal of, and interest on, the 2013 Bonds will be paid by the Fiscal Agent to DTC, which is obligated
in turn to remit such principal and interest to its DTC Participants for subsequent disbursement to the
beneficial owners of the 2013 Bonds. See APPENDIX F–“DTC AND THE BOOK-ENTRY ONLY
SYSTEM.”
Redemption Provisions
Optional Redemption. The 2013 Bonds maturing on or after September 1, 20 __, are subject to
optional redemption prior to their stated maturities on any Interest Payment Date occurring on or after
September 1, 20 __, as a whole or in part, upon payment from any source of funds available for that
purpose, at a redemption price equal to the principal amount of the 2013 Bonds to be redeemed together
with accrued interest thereon to the date fixed for redemption, without premium.
Mandatory Redemption From Special Tax Prepayments The 2013 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 pursuant to the
Fiscal Agent Agreement, as a whole or in part, on any Interest Payment Date, at a redemption price
12036\pos-3
9
(expressed as a percentage of the principal amount of the 2013 Bonds to be redeemed), together with
accrued interest thereon to the date fixed for redemption, as set forth below:
Redemption Dates Redemption Prices
March 1, 2013 to and including March 1, 20__ ____%
September 1, 20__ and March 1, 20__ ____
September 1, 20__ and March 1, 20__ ____
September 1, 20__ and thereafter ____
Purchase of Bonds in Lieu of Redemption
In lieu of redemption of the 2013 Bonds pursuant to the Fiscal Agent Agreement, moneys in the
Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2013 Bonds,
upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase prior to the
selection of 2013 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
2013 Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the
date of purchase.
Redemption Procedures
Selection of Bonds for Redemption. Whenever provision is made in the Fiscal Agent Agreement
for the redemption of less than all of the 2013 Bonds or any given portion thereof, the Fiscal Agent is
required to select the 2013 Bonds to be redeemed, from all 2013 Bonds or such given portion thereof not
previously called for redemption among maturities so as to maintain substantially level debt service on
the 2013 Bonds, and within a maturity by lot in any manner which the Fiscal Agent in its sole discretion
deemed appropriate and fair.
For purposes of such selection, all 2013 Bonds are deemed to be comprised of separate $5,000
portions and such portions shall be treated as separate Bonds which will be separately redeemed.
Notice of Redemption. The Fiscal Agent will cause notice of any redemption to be mailed by
first class mail, postage prepaid, 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 (or by such other
means as permitted by such services), and to the respective registered Owners of any 2013 Bonds
designated for redemption, at their addresses appearing on the 2013 Bond registration books in the
Principal Office of the Fiscal Agent; but is mailing shall not a condition precedent to such 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 2013 Bonds.
Such notice is required to state the redemption date and the redemption price and, if less than all
of the then Outstanding 2013 Bonds are to be called for redemption, designate the CUSIP numbers and
Bond numbers of the 2013 Bonds to be redeemed by giving the individual CUSIP number and Bond
number of each 2013 Bond to be redeemed or state that all 2013 Bonds between two stated Bond
numbers, both inclusive, are to be redeemed or that all of the 2013 Bonds of one or more maturities have
been called for redemption, state as to any 2013 Bond called in part the principal amount thereof to be
redeemed, and require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for
redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue
from and after the redemption date.
So long as the 2013 Bonds are registered in the name of the Cede & Co., all notices with respect
to such 2013 Bonds will be made and given to DTC. See APPENDIX F–“DTC AND THE BOOK-ENTRY
ONLY SYSTEM.”
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Conditional Notice of Redemption. In the case of any redemption of the 2013 Bonds, the notice
of redemption may state that the redemption is conditioned upon receipt by the Fiscal Agent of sufficient
moneys to redeem the 2013 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 2013 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 2013 Bonds to be redeemed, the Fiscal Agent is required to send written notice to
the owners of the 2013 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 2013 Bonds for which
notice of redemption was given will remain Outstanding for all purposes of the Fiscal Agent Agreement.
Partial Redemption of 2013 Bonds. In the event only a portion of any 2013 Bond is called for
redemption, then upon surrender of such 2013 Bond, the County is required to execute and the Fiscal
Agent is required to authenticate and deliver to the registered Owner, at the expense of the County, a new
2013 Bond or 2013 Bonds, in authorized denominations, equal in aggregate principal amount to the
unredeemed portion of the 2013 Bond or 2013 Bonds surrendered.
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 2013 Bonds so called for redemption
have been deposited in the 2013 Bond Fund, such 2013 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.
All 2013 Bonds redeemed and purchased by the Fiscal Agent pursuant to the Fiscal Agent
Agreement will be canceled by the Fiscal Agent.
SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS
General
The 2013 Bonds constitute limited obligations of the District payable as to both principal and
interest and redemption premium, if any, from the Special Tax levied by the County on Taxable Property
within the District, including proceeds from the sale of property collected as result of foreclosure of the
lien of the Special Tax, net of the cost to the County of administering the District, and certain funds and
accounts held under the Fiscal Agent Agreement.
The Series 2013 Bonds are limited obligations of the County on behalf of the District payable
solely from the Special Tax (including any prepayments thereof and proceeds collected from the sale of
property pursuant to foreclosure provisions as set forth in the Fiscal Agent Agreement for delinquency
in payment of the Special Tax) and certain funds established pursuant to the Fiscal Agent Agreement
and held by the Fiscal Agent, as more fully described herein. Neither the faith and credit nor any
general taxing power of the County or the State of California or any political subdivision thereof is
pledged to the payment of the 2013 Bonds. Except for the Special Tax, no other taxes are pledged to
the payment of the 2013 Bonds.
Special Tax Authorization
Pursuant to the Act, on June 5, 2001, the Board of Supervisors adopted a resolution establishing
the District and calling a special election to authorize the issuance of bonds and the levy of the Special
Tax. On June 5, 2011, at an election held pursuant to the Act, Toll Land XXII Limited Partners, an
affiliate of Toll Brothers, Inc. (the “Developer”) as the sole property owner within the District authorized
the issuance of bonded indebtedness in an amount not to exceed $7,220,000 and approved the Special Tax
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Formula to pay the principal of, and interest on, and redemption premium, if any, the authorized bonded
indebtedness. The District issued the Prior Bonds pursuant to this authorization. Pursuant to Government
Code Section 53362.7, the 2013 Bonds do not reduce the principal amount of Bonds that may be issued
pursuant to the authorization. The Special Tax is levied according to the Special Tax Formula which is
set forth in full in APPENDIX C. The Board of Supervisors, as the legislative body of the District, is
required to establish tax rates, and levy and apportion the Special Tax against property within the District
on an annual basis.
Covenant to Levy. Pursuant to the Fiscal Agent Agreement, so long as any Bonds are
outstanding, the County is required annually to levy the Special Tax on behalf of the District, subject to
the maximum tax rates approved by the landowner voters, against all Taxable Property in the District and
to make provision for the collection of the Special Tax in amounts that, together with other moneys
available to the District, will be sufficient to pay the principal of and interest on the Bonds when due, to
pay the annual expenses of administering the District, to cure delinquencies in the payment of debt
service on the Bonds that have occurred or are expected to occur in the current fiscal year, and to
replenish the Reserve Fund to an amount equal to the Reserve Requirement.
In the opinion of Bond Counsel, the Special Tax is excepted from the tax rate limitation of
California Constitution Article XIII A pursuant to Section 4 thereof as a “special tax” authorized by two-
thirds vote of the qualified electors as set forth in the Act. Consequently, the County, on behalf of the
District, has the power and is obligated to cause the levy and collection of the Special Tax in an amount
determined according to the Special Tax Formula.
The Act prohibits the Board of Supervisors, as the legislative body of the District, from adopting
a resolution to initiate proceedings to reduce the rate of the Special Tax or terminate the levy of the
Special Tax unless the Board of Supervisors, as the legislative body of the District, determines that the
reduction or termination of the Special Tax “would not interfere with the timely retirement” of
outstanding Bonds secured by the Special Tax.
Manner of Collection. The Special Tax will be collected in the manner and at the same time as
ad valorem property taxes are collected by the County and, except as described below under the
“–Covenant to Foreclose,” will be subject to the same penalties and the same procedures, sale and lien
priority in the case of delinquency as is provided for ad valorem property taxes. Taxes are levied by the
County for each fiscal year on taxable real property that is situated in the County as of the preceding
January 1. For collection purposes, property is classified either as “secured” or “unsecured” and is listed
accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll
containing State-assessed public utilities property and real property having a tax lien that is sufficient, in
the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed and
collected on the “unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of
each fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and
a 10% penalty attaches to any delinquent payment. Property on the secured roll with respect to which
taxes are delinquent become tax defaulted on June 30 of the fiscal year; such property may thereafter be
redeemed by payment of a penalty of 1.5% per month to the date of redemption, together with the
defaulted taxes, the delinquency penalty, costs, and a redemption fee. If taxes are unpaid for a period of
five years or more, the property is subject to auction sale by the County.
Property taxes on the unsecured roll are due as of the lien date and become delinquent, if unpaid,
on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at
5:00 p.m. on October 31, an additional penalty of 1.5% attaches to them on the first day of each month
until paid. The County has four ways of collecting delinquent unsecured property taxes: (i) bringing a
civil action against the taxpayer; (ii) filing a certificate in the office of the County Clerk specifying certain
facts in order to obtain a lien on certain property of the taxpayer; (iii) filing a certificate of delinquency
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for record in the County Clerk and County Recorder’s office in order to obtain a lien on certain property
of the taxpayer; and (iv) seizing and selling personal property, improvements, or possessory interests
belonging or assessed to the assessee.
Special Tax is not a Personal Obligation
Although the Special Tax constitutes a lien on Taxable Property, it does not constitute a personal
indebtedness of the owners of such property. There is no assurance that the owners will be financially
able to pay the Special Tax or that they will pay such tax even if financially able to do so. The risk of the
property owners not paying the Special Tax is more fully described in “CERTAIN RISK FACTORS–
Collection of the Special Tax.”
Special Tax Formula
The Special Tax Formula is used to allocate the amount of Special Tax that is needed to be
collected each Fiscal Year from all non-exempt parcels within the District (the “Taxable Property”), based
upon the land use class of the property (i.e. Residential Property, Undeveloped Property, or Other
Property), subject to a maximum tax rate (the “Maximum Special Tax”) that may be levied against each
land use class. Currently, there is no property within the District classified as “Other.”
The County collects the Special Tax on all Taxable Property at a level sufficient to pay the debt
service and related administrative costs for the 2013 Bonds and any Parity Bonds for refunding in
accordance with the Special Tax Formula. The Special Tax Formula is set forth in full in APPENDIX C–
“RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” A summary of the Special Tax
Formula is set forth below.
The Special Tax is first levied proportionately on each Parcel of Residential Property up
to the Maximum Special Tax in an amount equal to $2,100 per Taxable Parcel as needed to
satisfy the Special Tax Requirement. “Residential Property” includes any parcels for which a
building permit was issued prior to June 1 of the preceding Fiscal Year.
If the amount levied on Residential Property is less than the Special Tax Requirement
then the Special Tax is levied proportionately on each Parcel of Undeveloped Property up to the
Maximum Special Tax rate equal to $3,360 per acres, as needed to satisfy the Special Tax
Requirement.
If additional revenue is needed, the Special Tax is then levied proportionately on each
parcel of Homeowners’ Association Property and Public Property which originally had Planned
Units, up to the Maximum Special Tax for Undeveloped Property in an amount up to $3,360 per
acre for such Fiscal Year determined pursuant to the Special Tax Formula.
Pursuant to Section 53340 of the Act, the Special Tax Formula exempts public property
(i.e. property owned by or irrevocably offered for dedication to the federal government, the State or local
governments or public agencies), except that the Special Tax on property not otherwise exempt that is
acquired by a public entity shall be required to be permanently satisfied pursuant to Sections 53317.3 and
53317.5 of the Act. Parcels for which the owner has prepaid and satisfied the Special Tax are also
exempt from further Special Tax.
The Act provides that the Special Tax levied against any parcel used for private residential
purposes may not be increased as a consequence of delinquency or default by the owners of any other
parcels by more than 10% above the amount that would have been levied had there been no such
delinquencies or defaults.
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Reserve Fund
The 2013 Bonds are secured by a Reserve Fund in an amount equal to the “Reserve
Requirement,” which is held by the Fiscal Agent for the benefit of the Owners of the 2013 Bonds as a
reserve for the payment of the principal of, and interest and any premium on the 2013 Bonds. The
“Reserve Requirement” means, as of any date of calculation, an amount equal to 50% of the lesser of
(i) Maximum Annual Debt Service, (ii) 125% of average Annual Debt Service on the 2013 Bonds, or
(iii) 10% of the initial principal amount of the 2013 Bonds.
Upon the issuance and delivery of the 2013 Bonds, proceeds in the amount of $_______, which is
equal to the Reserve Requirement, will be deposited into the Reserve Fund.
Use of Reserve Fund. Except as otherwise provided in the Fiscal Agent Agreement, all amounts
on deposit in the Reserve Fund will be used solely and withdrawn by the Fiscal Agent 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 2013 Bonds or
in accordance with the Fiscal Agent Agreement for the purpose of redeeming 2013 Bonds from the Bond
Fund.
If amounts on deposit in the Special Tax Fund together with any other amounts transferred to
replenish the Reserve Fund are inadequate to restore the Reserve Fund to the Reserve Requirement, then
the County is required to include the amount necessary to fully restore the Reserve Fund to the Reserve
Requirement in the next annual Special Tax levy to the extent of the maximum permitted Special Tax
rates.
Transfer of Excess of Reserve Requirement. Whenever, on the Business Day before any Interest
Payment Date, or on any other date at the request of an Authorized Officer, the amount in the Reserve
Fund exceeds the then Reserve Requirement, the Fiscal Agent is required to provide written notice to the
Auditor of the amount of the excess and 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 2013 Bonds on the next Interest Payment
Date in accordance with the Fiscal Agent Agreement.
Transfer When Balance Exceeds Outstanding 2013 Bonds. Whenever the balance in the
Reserve Fund exceeds the amount required to redeem or pay the Outstanding 2013 Bonds, including
interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the
Fiscal Agent is required to transfer the amount in the Reserve Fund to the Bond Fund to be applied, on the
next succeeding Interest Payment Date to the payment of all of the Outstanding 2013 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 2013 Bonds, the balance in the Reserve Fund is required to be
transferred to the County 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 until after (i) the calculation, pursuant to the Fiscal Agent Agreement, of any amounts due
to the federal government following payment of the 2013 Bonds and withdrawal of any such amount for
purposes of making such payment to the federal government, and (ii) payment of any fees and expenses
due to the Fiscal Agent.
Transfer Upon Special Tax Prepayment. Whenever the Special Tax is prepaid and 2013 Bonds
are to be redeemed with the proceeds of such prepayment pursuant to the Fiscal Agent Agreement, a
proportionate amount in the Reserve Fund (determined by the Auditor on the basis of the principal of
2013 Bonds to be redeemed and the then original principal of the 2013 Bonds) is required to 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 2013 Bonds pursuant to the Fiscal Agent Agreement.
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Deposit of Special Tax; Flow of Funds
Pursuant to the Fiscal Agent Agreement, a separate fund, the “Community Facilities District No.
2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds, Special Tax Fund” (the “Special Tax
Fund”), is established and held by the Auditor for the benefit of the County and the Owners of the 2013
Bonds. The Special Tax Fund is subject to a lien in favor of the Owners of the Bonds and the County.
The County is required to transfer or cause to be transferred to the Auditor, as soon as practicable
following receipt, all Special Tax Revenues received by the County and any amounts required by Fiscal
Agent Agreement to be deposited to the Special Tax Fund. In addition, the Auditor is required to deposit
in the Special Tax Fund amounts to be transferred thereto from the Administrative Expense Fund.
Pursuant to the Fiscal Agent Agreement, the Auditor is required to withdraw and transfer from
the Special Tax Fund from time to time, but no later than the Business day before each Interest Payment
Date, the following amounts to the Fiscal Agent in the following order of priority:
First: for deposit by the Fiscal Agent in the Bond Fund an amount, taking into account any
amounts then on deposit in the Bond Fund and any expected transfers from the Reserve Fund and the
Special Tax Fund to the Bond Fund pursuant to the Fiscal Agent Agreement, such that the amount in the
Bond Fund equals the principal, premium, if any, and interest due on the 2013 Bonds on the next Interest
Payment Date
Second: for deposit by the Fiscal Agent in 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; provided that no such transfers shall exceed the amount then available to be
transferred from the Special Tax Fund.
The Teeter Plan
In 1949, the California Legislature enacted an alternative method for the distribution of secured
ad valorem property taxes to local agencies. This method, known as the Teeter Plan, is set forth in
Sections 4701-4717 of Revenue and Taxation Code of the State of California. Generally, the Teeter Plan
provides for a tax distribution procedure by which secured roll taxes are distributed to taxing agencies
within the County included in the Teeter Plan on the basis of the tax levy, rather than on the basis of
actual tax collections. The constitutionality of the Teeter Plan was upheld in Corrie v. County of Contra
Costa, 110 Cal. App. 2d 210 (1952). The Teeter Plan was named after Desmond Teeter, the then
Auditor-Controller of the County who originated this method of tax distribution. The County was the
first Teeter Plan county in the State.
Pursuant to the Teeter Plan, the County apportions to the local agencies 100% of the amount of
the taxes which are levied regardless of the amount collected from property owners. The County retains
all penalties and interest which are collected with delinquent taxes. So long as the Special Tax levied on
Taxable Property within the District is subject to the Teeter Plan, the District will receive 100% of the
Special Tax which is levied in each Fiscal Year.
If any tax or assessment which was distributed to a Teeter Plan participant is subsequently
changed by correction, cancellation or refund, a pro rata adjustment for the amount of the change is made
on the records of the treasurer of the County and the County Auditor. Such an adjustment would be an
offset to future distributions of tax revenues to the District.
The County’s Teeter Plan remains in effect in perpetuity unless the Board of Supervisors orders
its discontinuance or unless, prior to the commencement of a fiscal year, a petition for discontinuance is
received and joined in by resolutions of the governing bodies of not less than two-thirds of the
participating districts in the County. The County may, however, opt to discontinue the Teeter Plan with
respect to any levying agency in the County if the Board of Supervisors, by action taken not later than
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July 15 of a fiscal year, elects to discontinue the procedure with respect to such levying agency and the
rate of secured tax delinquencies in that agency in any year exceeds 3% of the total of all taxes and
assessments levied on the secured roll by that agency. No assurance can be given that the County will
continue to include special taxes levied within community facilities districts in the Teeter Plan, and the
County could decide to discontinue the inclusion of such special taxes in the Teeter Plan at any time, or to
discontinue the Teeter Plan in its entirety.
Covenant to Foreclose
General. The Fiscal Agent Agreement provides that the Special Tax is to be collected in the
same manner as ordinary ad valorem property taxes are collected and, except as provided in the special
covenant for foreclosure described below and in the Act, are subject to the same penalties and the same
procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes.
Pursuant to Section 53356.1 of the Act, if any payment of the Special Tax for a parcel of Taxable
Property is delinquent, the County may order the institution of a court action to foreclose the lien on the
Taxable Property within specified time limits. In such an action, the real property subject to the unpaid
amount may be sold at judicial foreclosure sale. The ability of the County to foreclose the lien of any
delinquent unpaid Special Tax may be limited in certain instances and may require prior consent of the
property owner if the property is owned by or in receivership of the Federal Deposit Insurance
Corporation (the “FDIC”). See “CERTAIN RISK FACTORS–Bankruptcy and Foreclosure Delays.”
The County covenants in the Fiscal Agent Agreement for the benefit of the Owners of the 2013
Bonds that it will order, and cause to be commenced and thereafter diligently prosecute to judgment
(unless such delinquency is brought current), an action in the superior court to foreclose the lien of any
Special Tax or installment thereof not paid when due. The County is required to notify County Counsel
of any such delinquency of which it is aware, and County Counsel is required to commence, or cause to
be commenced, such proceedings.
Pursuant to the Fiscal Agent Agreement, the Auditor is required to review its public records in
connection with the collection of the Special Tax not later than July 1 of each year to determine the
amount of the Special Tax collected in the Fiscal Year ending the preceding June 30, and:
Individual Delinquencies. If the Auditor determines that any single parcel subject to the
Special Tax in the District is delinquent in the payment of the Special Tax in the aggregate
amount of (i) $7,500 or more if all of the property within the District is on the Teeter Plan; or (ii)
$3,000 or more if any property within the District is not on the Teeter Plan, then the Auditor is
required to send or cause to be sent a notice of delinquency (and a demand for immediate
payment thereof) to the property owner within 45 days of such determination, and (if the
delinquency remains uncured) foreclosure proceedings shall be commenced by the County within
120 days of such determination and will be diligently pursued by the County to completion.
Notwithstanding the foregoing, the Auditor may defer any such action if the amount then in the
Reserve Fund is at least equal to the Reserve Requirement.
Aggregate Delinquencies. If the Auditor determines that the total amount of delinquent
Special Tax for the prior Fiscal Year for the entire District, (including the total of individual
delinquencies described above), exceeds 5% of the total Special Tax due and payable for the prior
Fiscal Year, the Auditor is required to notify or cause to be notified property owners who are then
delinquent in the payment of the Special Tax (and demand immediate payment of the
delinquency) within 45 days of such determination, and the County is required to commence
foreclosure proceedings within 120 days of such determination against each parcel of land in the
District with a Special Tax delinquency of (i) $7,500 or more if all of the property within the
District is on the Teeter Plan; or (ii) $3,000 or more if any property within the District is not on
the Teeter Plan, and the County is required to diligently pursue such proceedings to completion.
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Subject to the Maximum Special Tax Rate, the Special Tax Formula is designed to generate from
all Taxable 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 equal to the prior
year’s delinquencies. However, if foreclosure actions are necessary, and the Reserve Fund has been
depleted, there could be a delay in payments to Bondowners pending prosecution of the foreclosure
proceedings and receipt by the County of the proceeds of the foreclosure sale. See “CERTAIN RISK
FACTORS–Bankruptcy.”
Priority of Lien. The Act specifies that the Special Tax will have the same lien priority as
ad valorem property taxes in the case of delinquency but does not further specify the priority relationship,
if any, between the Special Tax and other special taxes and ad valorem taxes on a taxed parcel. See “THE
DISTRICT–General” and “–Direct and Overlapping Debt,” and “CERTAIN RISK FACTORS–Parity Taxes
and Special Assessments.”
If foreclosure proceedings were ever instituted, any holder of a mortgage or deed of trust on the
affected property could, but would not be required to, advance the amount of the delinquent Special Tax
payment to protect its security interest.
Sufficiency of Foreclosure Sale Proceeds. 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. The Act does not require the County to purchase or
otherwise acquire any lot or parcel of property sold if there is no other purchaser at such sale. 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 2013 Bonds is obtained.
Limited Obligation
Neither the full faith and credit nor the general taxing power of the County, the State, or any
political subdivision thereof, other than the District, is pledged to the payment of the 2013 Bonds. The
2013 Bonds are not general obligations of the County but are limited obligations of the County on
behalf of the District payable solely from the proceeds of the Special Tax (and other sources
described in the Fiscal Agent Agreement). The 2013 Bonds are secured by a pledge of and lien upon
the Special Tax and from amounts on deposit in the Interest Account, the Principal Account, and the
Reserve Fund. Amounts on deposit in the Costs of Issuance Fund and the Rebate Account are not
pledged to the payment of the 2013 Bonds. Moneys held in any of the accounts or special funds under
the Fiscal Agent Agreement are required to be invested at the written direction of the District only in
Permitted Investments, as defined in the Fiscal Agent Agreement.
Limited Issuance of Parity Bonds Only for Refunding
Under the Fiscal Agent Agreement, the County may at any time issue one or more series of
Bonds only for the purpose of refunding all or a portion of the 2013 Bonds or any Parity Bonds then
Outstanding, without the consent of Bondowners, payable from the Special Tax and other amounts
deposited in the Special Tax Fund (other than in the Administrative Expenses Account therein) and
secured by a lien and charge upon such amounts equal to the lien and charge securing the 2013 Bonds and
any other Parity Bonds.
Nothing in the Fiscal Agent Agreement prohibits the County from issuing bonds or otherwise
incurring debt secured by a pledge of Special Tax Revenues subordinate to the pledge thereof securing
the 2013 Bonds under the Fiscal Agent Agreement.
See also APPENDIX C–“SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT
AGREEMENT–ISSUANCE OF PARITY BONDS.”
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THE DISTRICT
General; Location and Description
The District, a gated, single-family community of approximately 1,189 acres known as “Norris
Canyon Estates,” is located in an unincorporated portion of the County, near the western edge of the City
of San Ramon. Norris Canyon Estates features homes on one-third to one-half acre sites, walking trails,
tennis and basketball courts, playgrounds, community centers and approximately 800 acres of open space.
The general area surrounding the District is one of predominantly single-family detached homes
bounded on the north by Crow Canyon Road, on the east by Interstate 680, on the south by Montevideo
Drive and on the west by a low range of hills which separates the County from Alameda County to the
west. While there is some attached housing along Bollinger Canyon Road, the vast majority of the homes
in this area consist of single-family homes built during the late 1960’s and 1970’s. The property in the
District is separated from the single-family neighborhoods by the Bishop Ranch Regional Open Space, an
undeveloped park land of approximately 380 acres.
Freeway access to the District is provided at the intersection of I-680 and Crow Canyon Road and
Bollinger Canyon Road. The Crow Canyon Road/I-680 intersection is heavily improved with retail and
some office use. There is a neighborhood shopping center on the west side of I-680, south of Crow
Canyon Road, and a regional shopping complex on the east side of I-680 surrounding Crow Canyon
Road. Retail uses are located at the intersection of I-680 and Bollinger Canyon Road, and larger, regional
shopping centers are available at the Stoneridge Mall, approximately eight miles south of the District in
Pleasanton (located in Alameda County), and approximately eight miles north of the District in Walnut
Creek (located in the County).
Approximately two miles to the northeast of the District, on the east side of Interstate 680 within
the City of San Ramon, is the Bishop Ranch Business Park, a major regional employment center. Two of
the county’s largest employers, Chevron and Pacific Bell, have large facilities within the Bishop Ranch
Business Park.
Status of Development
The District has been developed as a gated community comprised of 361 parcels planned for the
construction of single-family homes. Production homes were planned for 289 lots with a minimum size
of 12,000 square feet and custom homes were planned for the remaining significantly larger 72 lots, some
of which are in excess of one acre. To date, 271 homes have been constructed, of which 255 have been
sold to individual owners. The Developer and another entity, Norris Canyon Associates, continue to
build and market homes on the remaining parcels intended for development.
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Table 3 below summarizes the assessed property values, the Maximum Special Tax Revenue and
the actual Special Tax levy for Fiscal Year 2012-13.
Table 3
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Maximum Special Tax by Land Use Classification
(As of the Fiscal Year 2012-13 Special Tax Levy)
Total Actual Percentage
Assessed Maximum Levy of Actual
Land Use Classification Parcels Value Levy Fiscal Levy
Residential Property
Individually Owned(1) 255 $327,385,983 $529,200 $495,825 92.99%
Developer Owned(2)
Norris Associates LLC 8 3,583,808 16,800 15,740 2.95
Toll Land Entities(3) 8 7,219,032 16,800 15,740 2.95
SUBTOTAL RESIDENTIAL PROPERTY 271 $341,967,443 $569,100 $533,209 100.00
Undeveloped Property(4)
Norris Associates LLC 34 14,122,398 92,254 0 0.00
Toll Land Entities(3) 48 17,128,466 92,254 0 0.00
SUBTOTAL UNDEVELOPED PROPERTY 82 31,250,864 186,850 0 0.00
TOTAL TAXABLE PROPERTY(4) 353 $373,218,307 $755,950
$533,209 100.00%
Parcels Not Subject to Tax
Prepaid Parcels 8 11,124,982 0 0 0.00
TOTAL PARCELS IN THE DISTRICT 361 $384,343,289(3)$755,950 $533,209 100.00%
_______________
(1) Includes three parcels owned by financial institutions.
(2) Includes 11 parcels with no improvement value as of the Fiscal Year 2012-13 tax roll, but for which building permits were
issued as of June 1, 2012.
(3) The County tax rolls list three entities Toll Land XXII LP, Toll Land XXIII Ltd Partnership and Toll Land XXII LP that
appear to be the same or related entities as the original developer, Toll Land XII Limited Partnership, the general partner of
which was a wholly-owned subsidiary of Toll Holdings and in turn, Toll Brothers, Inc.
(4) Includes two parcels with completed model homes. As of November 6, 2012, seven additional building permits have been
issued. These parcels will be taxed as Residential Property in Fiscal Year 2013-14.
Sources: Goodwin Consulting Group, Inc.
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Projected Debt Service Coverage
Table 4 shows projected annual scheduled debt service on the 2013 Bonds, without regard to any
optional redemption and the estimated annual coverage from Maximum Special Tax Revenue based on
the development status in the District as of Fiscal Year 2012-13.
Table 4
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Projected Debt Service Coverage
Coverage from
Maximum Maximum
Special Special
Coverage Tax Revenue Tax Revenue
from from from
2013 Bonds Maximum Maximum
Total Special Special Residential Residential
Fiscal Year(1) Debt Service(2) Tax Revenue(3) Tax Revenue Property(4) Property
2012-13 $436,598 $755,950 173% $529,200 121%
2013-14 435,825 755,950 173 529,200 121
2014-15 439,075 755,950 172 529,200 121
2015-16 437,025 755,950 173 529,200 121
2016-17 437,425 755,950 173 529,200 121
2017-18 437,425 755,950 173 529,200 121
2018-19 437,025 755,950 173 529,200 121
2019-20 436,225 755,950 173 529,200 121
2020-21 435,025 755,950 174 529,200 122
2021-22 438,425 755,950 172 529,200 121
2022-23 436,225 755,950 173 529,200 121
2023-24 435,736 755,950 173 529,200 121
2024-25 439,361 755,950 172 529,200 120
2025-26 437,461 755,950 173 529,200 121
2026-27 434,756 755,950 174 529,200 122
2027-28 436,688 755,950 173 529,200 121
2028-29 437,625 755,950 173 529,200 121
2029-30 438,000 755,950 173 529,200 121
2030-31 436,800 755,950 173 529,200 121
_______________
(1) Represents Debt Service payable for the Bond Year which ends September 1, following the Fiscal Year.
(2) Preliminary, subject to change. Assumes an “A” rating by Standard & Poor’s, a division of the McGraw-Hill Companies,
Inc. and market conditions as of November 16, 2012 plus 25 basis points.
(3) Reflects the Maximum Special Tax as of Fiscal Year 2012-13, assuming no further development or prepayments of the
Special Tax.
(4) Reflects the Maximum Special Tax on individually owned Residential Property, including three parcels owned by financial
institutions, as of Fiscal Year 2012-13, assuming no further development or prepayments of the Special Tax
Sources: Stifel, Nicolaus & Company, Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus for the projected debt
service on the 2013 Bonds and Goodwin Consulting Group, Inc. for the Maximum Special Tax revenue.
12036\pos-3
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Property Values in the District
The assessed value of Taxable Property in the District for Fiscal Year 2012-13 is $373,218,307.
This value is not necessarily representative of the actual market value of the property in the District,
however, since Article XIII A of the California Constitution limits any increase in assessed value to no
more than 2% per year unless property is sold or transferred. As a consequence, assessed values are
typically less than actual market values unless the property has recently changed ownership. This value
does not account for any reassessments based on changes in ownership or improvements to property
occurring after January 1, 2012
Table 5 summarizes the assessed value for Taxable Property within the District by land use
classification for Fiscal Years 2008-09 through 2012-13.
Table 5
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Historical Assessed Value of Taxable Property
Fiscal Years 2008-09 through 2012-13
Total
Fiscal Year Land Value Improved Value Assessed Value
2007-08 $226,957,875 $202,115,066 $429,072,941
2008-09 238,896,950 231,783,192 470,680,142
2009-10 214,707,495 207,398,292 422,105,787
2010-11 172,268,002 169,296,253 341,564,255
2011-12 180,142,061 198,281,855 378,423,916
2012-13 178,526,561 197,989,023 376,515,584
_______________
Source: Goodwin Consulting Group, Inc.
(Remainder of this Page Intentionally Left Blank)
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Following the issuance of the 2013 Bonds the average assessed value of Residential Property is
more than 58* times the principal amount of the 2013 Bonds. See also “–Direct and Overlapping Debt.”
A summary of the assessed value of Residential Property-to-Special Tax lien categories,
including the 2013 Bonds and excluding parcels that were not subject to the Fiscal Year 2012-13 Special
Tax levy, is set forth in Table 6.
Table 6
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Assessed Value of Residential Property(1)-to-Special Tax Lien Categories
As of the Fiscal Year 2012-13 Special Tax Levy
Fiscal Year
Total 2012-13
Value- Land Improved Assessed Actual Percentage Share
to-Lien Parcels(1) Value Value Value Levy of Levy of Debt(2)
50:1 and Greater 243 $134,012,496 $185,820,170 $319,832,666 $478,117 89.67% $5,276,956
20:1 ≤ X < 50:1 22 10,586,900 9,364,553 19,951,453 43,286 8.12 477,749
10:1 ≤ X < 20:1 6 2,183,324 0 2,183,324 11,805 2.21 130,295
Less than 10:1 0 0 0 0 0 0.00 0
TOTAL 271 $146,782,720 $195,184,723 $341,967,443 $553,209 100.00% $5,885,000
Aggregate Assessed Value of Residential Property-to-Special Tax Lien Coverage: 58*:1x
_______________
(1) Excludes 82 parcels classified as Taxable Property but not subject to the Fiscal Year 2012-13 levy.
(2) The amount of outstanding bonds excludes the principal payment due on September 1, 2013, and are allocated based on the
actual Fiscal Year 2012-13 Special Tax levy.
* Preliminary, subject to change.
Source: Goodwin Consulting Group, Inc.
_______________
* Preliminary subject to change.
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Secured Property Tax Levies, Collections and Delinquencies
Historically, delinquencies for each property tax installment period are higher immediately
following the respective installment payment due date. Late payments received after the respective due
date reduce the outstanding delinquencies for each installment period, to a level of approximately 1%
after 18 months.
Table 7 summarizes of payment history for taxes levied in the District for the past eight Fiscal
Years.
Table 7
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Historical Special Tax Delinquency
As of Fiscal Year End As of November 20, 2012†
Total Number of Number of
Fiscal Special Amount % Parcels Parcels Amount
Year Tax Levy Delinquent Delinquent Delinquent Delinquent Delinquent
2004-05 $536,230 $10,500 1.96% 8 0 $0
2005-06 542,605 2,100 0.39 2 0 0
2006-07 546,460 28,350 5.19 19 0 0
2007-08 537,639 45,150 8.40 28 0 0
2008-09 570,730 49,504 8.67 29 0 0
2009-10 447,601 20,107 4.49 15 0 0
2010-11 514,111 18,930 3.68 13 1 996
2011-12 504,193 25,017 4.96 17 3 4,811
_______________
† Property taxes are due in two installments and become delinquent on December 10 with respect to the installment due on
November 1, and on April 10 with respect to the installment due on February 1. Delinquency information with respect to
the November 1 installment is not yet available.
Source: Goodwin Consulting Group, Inc.
Residential Mortgage Foreclosure Activity
Residential mortgage loan defaults and foreclosures between 2005 and 2010 increased
significantly in connection with the collapse of the sub-prime sector of the residential mortgage market
and broader economic pressures. In California, the greatest impacts to date are in regions of the Central
Valley and the Inland Empire (both areas that are outside of the County), although the County has been
impacted as well, particularly in the eastern portions of the County where the largest number of new
mortgages were originated as growth in residential development occurred.
Such foreclosure activity has not significantly affected the District. Based on information
provided by MDA DataQuick Information, an independent data collection service, for calendar-years
2008 through 2011, mortgage holders had sent a total of 23 notices of default with respect to properties
located within the District, and 16 trustee deeds had been recorded (indicating that the property has been
lost to foreclosure) during that period. In 2009, the number of trustee deeds recorded within the District
peaked at nine.
Public Utilities
The East Bay Municipal Water District supplies water to the District. The Contra Costa County
Sanitary District, supplies sanitary sewer service, Pacific Gas and Electric Company supplies electricity
and natural gas services, and Pacific Bell supplies telephone services to the District.
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Direct and Overlapping Debt
Numerous overlapping local agencies provide public services to properties in the District; many
of these local agencies have outstanding debt. The direct and overlapping debt (the “Debt Report”) of the
District as of December 1, 2012, is shown in Table 8, was prepared by California Municipal Statistics,
Inc. The Debt Report is included for general information purposes only. The County has not reviewed
this report for completeness or accuracy and makes no representation in connection therewith.
The Debt Report generally includes long term obligations sold in the public credit markets by
public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long
term obligations other than the 2013 Bonds are not payable from the Special Tax. In many cases, long
term obligations issued by a public agency are payable only from the general fund or other revenues of
such public agency. Table 9 summarizes a typical tax bill for Taxable Property within the District in
accordance with the Special Tax Formula for Fiscal Year 2012-13.
Table 8
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Direct and Overlapping Debt Report
[Ordered]
____________
Source: California Municipal Statistics, Inc.
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To provide an indication of the tax burden on individual homeowners in the District a typical
Fiscal Year 2012-13 tax bill for a parcel of Taxable Property with an assessed value closet to the median
assessed value for Residential Property is summarized below.
Table 9
County of Contra Costa
Community Facilities District No. 2001-1 (Norris Canyon)
Typical Property Tax Bill for Fiscal Year 2012-13
Description Amount
1% Base property tax $13,015
General Obligation overrides 1,153
Norris Canyon Special Tax 1,968
Other special assessments 1,619
TOTAL TAX BILL $17,755
Total Fiscal Year 2012-13 value $1,301,500
Effective total tax rate 1.36%
___________
Source: Contra Costa County Assessor Website.
CERTAIN RISK FACTORS
Investment in the 2013 Bonds involves risks which may not be appropriate for certain investors.
The following is a discussion of certain risk factors which should be considered, in addition to other
matters set forth herein, in evaluating the investment quality of the 2013 Bonds which are not rated by
any municipal bond rating agency. This discussion does not purport to be comprehensive or definite, and
the risk factors are not listed in any particular order of importance. The occurrence of one or more of the
events discussed herein could adversely affect the ability or willingness of property owners in the District
to pay their Special Tax when due. Such failure to pay the Special Tax could result in the inability of the
District to make full and punctual payments of debt service on the 2013 Bonds. In addition, the
occurrence of one or more of the events discussed herein could adversely affect the value of the Taxable
Property in the District.
Insufficiency of Special Tax Revenues
In order to pay debt service on the 2013 Bonds, it is necessary that the Special Tax levied against
land within the District be paid in a timely manner. Should the Special Tax not be paid on time, the
County has established the Reserve Fund to pay debt service on the 2013 Bonds to the extent other funds
are not available therefor. Although the County may levy the Special Tax in an amount sufficient to
replenish the Reserve Fund, the levy would be subject to the maximum amounts set forth in the Special
Tax Formula. See the section of this Official Statement entitled “SECURITY AND SOURCES OF
PAYMENT FOR THE 2013 BONDS–Special Tax Authorization.”
The Act provides that, if any property within the District not otherwise exempt from the Special
Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax
will continue to be levied on and enforceable against the public entity that acquired the property. The
Bondowners will be dependent on the ability and/or willingness of the public entity to pay the Special
Tax levied on such property when due. 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 is to be treated as if it were a special assessment and be paid
from the eminent domain award. The constitutionality and operation of these provisions of the Act have
12036\pos-3
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not been tested. If for any reason property subject to the Special Tax becomes exempt from taxation by
reason of ownership by a non-taxable entity such as the federal government, or another public agency,
subject to the limitation of the maximum authorized rate of levy, the Special Tax will be reallocated to the
remaining taxable properties within the District, but in no case more than the maximum authorized
Special Tax for such properties. If a substantial portion of land within the District became exempt from
the Special Tax because of public ownership or otherwise, the maximum Special Tax which could be
levied upon the remaining acreage might not be sufficient to pay principal of and interest on the 2013
Bonds when due and a default may occur with respect to the payment of such principal and interest.
The County covenants to institute foreclosure proceedings to sell any Taxable Property with any
delinquent unpaid Special Tax in order to obtain funds to pay debt service on the 2013 Bonds. 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 Tax to protect its security interest. See
“SECURITY AND SOURCES OF PAYMENT FOR THE 2013 BONDS–Covenant to Foreclose” for
provisions which apply in the event foreclosure is required and which the County is required to follow in
the event of delinquency in the payment of the Special Tax. In the event such superior court foreclosure
or foreclosures are necessary, there could be a delay in payments to Bondowners pending prosecution of
the foreclosure sale, if the County removes the District from the Reserve Fund and Teeter Plan were
depleted.
No assurances can be given that the real property subject to foreclosure and sale at a judicial
foreclosure sale will be sold, or, if sold, that the proceeds of such sale will be sufficient to pay any
delinquent Special Tax. Although the Act authorizes and the Fiscal Agent Agreement obligates the
County to cause such an action to be commenced and diligently pursued to completion, the Act does not
obligate the County to purchase or otherwise acquire any lot or parcel of property sold at the execution
sale pursuant to the judgment in any such action if there is no other purchaser at such sale.
Bankruptcy and Foreclosure Delays
The payment of the Special Tax and the ability of the County to foreclose the lien of a delinquent
unpaid Special Tax, as discussed in the section herein entitled “SECURITY AND SOURCES OF
PAYMENT FOR THE 2013 BONDS–Covenant to Foreclose,” may be limited by bankruptcy, insolvency,
or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial
foreclosure. In addition, the prosecution of a foreclosure could be delayed due to crowded local court
calendars or legal delaying tactics.
The various legal opinions to be delivered concurrently with the delivery of the 2013 Bonds
(including Bond Counsel’s approving legal opinion) will be qualified as to the enforceability of the
various legal instruments by bankruptcy, reorganization, insolvency or other similar laws affecting the
rights of creditors generally.
Regardless of the priority of the Special Tax securing the 2013 Bonds over non-governmental
liens on a parcel, the exercise by the County of the foreclosure and sale remedy may be forestalled or
delayed by bankruptcy, reorganization, insolvency, or other similar proceedings of the owner of, or
anyone else who claims an interest in, a parcel. The federal bankruptcy laws provide for an automatic
stay of foreclosure and sale proceedings, thereby delaying such proceedings perhaps for an extended
period. Delay in exercise of remedies or the institution of bankruptcy proceedings may cause Special Tax
collections to be insufficient to pay debt service on the 2013 Bonds.
Further, should remedies be exercised under the bankruptcy law against a parcel, payment of the
Special Tax may be subordinated to other claims in the bankruptcy proceedings. Thus, certain claims
may have priority over a claim for unpaid any Special Tax, even though, in the absence of the bankruptcy
proceedings, no such priority would exist.
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On July 30, 1992 the United States Court of Appeals for the Ninth Circuit issued an opinion in a
bankruptcy case entitled In re Glasply Marine Industries holding that ad valorem property taxes levied by
a county in the State of Washington after the date that the property owner filed a petition for bankruptcy
would not be entitled to priority over the claims of a secured creditor with a prior lien on the property.
Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid
taxes imposed subsequent to the filing of the bankruptcy petition were declared to be “administrative
expenses” of the bankruptcy estate, payable after the claims of all secured creditors. As a result, the
secured creditor was able to foreclose on the subject property and retain all the proceeds from the sale
thereof except the amount of the pre-petition taxes. Pursuant to this holding, post-petition taxes would be
paid only as administrative expenses and only if a bankruptcy estate has sufficient assets to do so. In
certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the
property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would be subject
only to current ad valorem taxes (i.e., not those accruing during the bankruptcy proceeding).
Glasply was controlling precedent on bankruptcy courts in the State of California for several
years subsequent to the date of the Ninth Circuit’s holding. Pursuant to state law, the lien date for general
ad valorem property taxes levied in the State of California is the January 1 preceding the Fiscal Year for
which the taxes are levied. Under the Glasply holding, a bankruptcy petition filing would have prevented
the lien for general ad valorem property taxes levied in Fiscal Years subsequent to the filing of a
bankruptcy petition from attaching and becoming a lien so long as the property was a part of the estate in
bankruptcy. However, the Glasply holding was for the most part subsequently rendered inoperative with
respect to the composition of a lien for and the collection of ad valorem taxes by amendments to the
federal Bankruptcy Code (Title 11 U.S.C.) which were part of the Bankruptcy Reform Act of 1994 (the
“Bankruptcy Reform Act”) passed by Congress during the later part of 1994. The Bankruptcy Reform
Act added a provision to the automatic stay section of the Bankruptcy Code which, pursuant to Section
362(b)(18) thereof, excepts from the Bankruptcy Code’s automatic stay provisions, “the creation of a
statutory lien for an ad valorem property tax imposed by . . . a political subdivision of a state, if such tax
comes due after the filing of the petition” by a debtor in bankruptcy court. The effect of this provision is
to continue the secured interest of ad valorem taxes on real property (i.e., post-petition taxes) in effect
during the period following the filing of a bankruptcy petition, including during the period bankruptcy
proceedings are pending.
Without further clarification by the courts or Congress, the original rationale of the Glasply
holding could, however, still result in the treatment of post-petition special taxes (and assessments) as
“administrative expenses,” rather than as tax liens secured by real property, at least during the pendency
of bankruptcy proceedings. First, special taxes have a different lien date than the lien date for general
ad valorem taxes in the State of California noted above. The lien of a Mello-Roos special tax attaches
upon recordation of the notice of the special tax lien as provided for in Section 53328.3 of the Mello-
Roos Act, as opposed to the January 1 lien date for general ad valorem taxes. Thus, in deciding whether
the original Glasply ruling is applicable to a bankruptcy proceeding involving special taxes rather than
general ad valorem property taxes, a court might consider the differences in the statutory provisions for
creation of the applicable tax lien (general ad valorem or special tax) in determining whether there is a
basis for post-petition special taxes to be entitled to a lien on the property during pending bankruptcy
proceedings. If a court were to apply Glasply to eliminate the priority of the special tax lien as a secured
claim against property with respect to post petition levy of the Special Tax made against property owners
within the District who file for bankruptcy, collections of the Special Tax from such property owners
could be reduced as the result of being treated as “administrative expenses” of the bankruptcy estate.
Second, and most importantly, is the fact that the original holding in Glasply and the mitigation of that
holding by the Bankruptcy Reform Act of 1994 both appear to be applicable only to general ad valorem
taxes, and, therefore, the exemption from the automatic stay in Section 362(b)(18) discussed above may
not be applicable to special taxes or assessments since they were not expressly mentioned or provided for
in this section, nor defined to be included within the term “ad valorem taxes.”
12036\pos-3
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Any prohibition of the enforcement of the Special Tax lien, or any such non-payment or delay
would increase the likelihood of a delay or default in payment of the principal of and interest on the 2013
Bonds.
Hazardous Materials
While government taxes, assessments and charges are a common claim against the value of a
taxed parcel, other less common claims may be relevant. One of the most serious in terms of the potential
reduction in the value that may be realized to pay the Special Tax is a claim with regard to a hazardous
substance. In general, the owners and operators of a Taxable Property may be required by law to remedy
conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal
Comprehensive Environmental Response, Compensation and Liability Act of 1989, sometimes referred to
as “CERCLA” or “Superfund Act,” is a well known one of these laws, but California laws with regard to
hazardous substances are also stringent and somewhat similar. Under many of these laws, the owner (or
operator) is obligated to remediate hazardous substances on, under or about the property whether or not
the owner (or operator) has anything to do with creating or handling the hazardous substance; however,
an owner (or operator) who is not at fault may seek recovery of its damages from the actual wrongdoer.
The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, may be to
reduce the marketability and value of the parcel, because the purchaser, upon becoming an owner, may
become obligated to remedy the condition just as is the seller.
Geologic, Topographic and Climatic Conditions
The market value of the land and improvements within the District can be adversely affected by
factors which may affect infrastructure and other public improvements and private improvements of the
parcels in the District and the continued usability of such private improvements. These factors include,
without limitation, geologic conditions (such as earthquakes), topographic conditions (such as earth
movements) and climatic conditions (such as floods, droughts and fire hazard).
There are several earthquake faults in the greater San Francisco Bay Area that could result in
damage to the within the County and the District, buildings, roads, bridges, and property within the
County in the event of an earthquake. Past experiences, including the 1989 Loma Prieta earthquake,
measuring 7.1 on the Richter scale with an epicenter approximately 60 miles south of the County, have
resulted in minimal damage to the infrastructure and property in the County. Earthquake faults that could
affect the County include but may not be limited to the Hayward Fault in the western part of the County,
and the Concord/Green Valley, Diablo and Calaveras Faults within the eastern portions of the County.
It should be assumed that an earthquake or one or more of such other conditions may occur and
may cause damage to improvements on parcels in the District of varying seriousness, that such damage
may entail significant repair or replacement costs and that repair or replacement may never occur either
because of the cost or because repair or replacement will not facilitate usability or because other
considerations may preclude such repair or replacement. Consequently, the occurrence of any of these
conditions could result in a significant decrease in the market value of property in the District or in such
property becoming unmarketable.
The District is within a geological maintenance district established by the County to provide
funds to repair earth movement in the area of the District. The maintenance district was initially funded
by means of a contribution by the initial developer of the District, and its funding is augmented by annual
assessments on the parcels in the District. See “SPECIAL RISK FACTORS–Direct and Overlapping
Indebtedness.”
Flooding. Flood zones are identified by the Federal Emergency Management Agency
(“FEMA”). FEMA designates land located in a low- to moderate-risk flood zone (i.e. not in a floodplain)
as being within a Non-Special Flood Hazard Area (a “NSFHA”). FEMA defines an NSFHA as an area
12036\pos-3
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that has less than a 1% chance of flooding each year. The City of San Ramon is within a NSFHA where
severe, concentrated rainfall could result in localized flooding and river overflows. The occurrence of
flooding in the District could result in a reduction in the Special Tax and such a reduction could have an
adverse effect on the ability of the County to make payments on the 2013 Bonds when due.
Federal Government Interests in Property
The ability of the County to collect interest and penalties specified by State law and to foreclose
the lien of a delinquent Special Tax payment, may be limited in certain respects with regard to properties
in which the Internal Revenue Service, the Drug Enforcement Agency, the Federal Deposit Insurance
Corporation (the “FDIC”) or other similar federal agencies has or obtains an interest.
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 the Special Tax within the District but does not pay taxes and assessments levied
on the parcel (including the Special Tax), 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 delinquency in the
Special Tax, 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 Tax 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.
The County has not undertaken to determine whether any federal governmental entity currently
has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the
Special Tax within the District, and therefore expresses no view concerning the likelihood that the risks
described above will materialize while the 2013 Bonds are outstanding.
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 County to collect
interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Tax
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
12036\pos-3
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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 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 tax imposed under the Mello-Roos
Act and a special tax formula 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 Mello-Roos special taxes.
The County is unable to predict what effect the application of the Policy Statement would have in
the event of a delinquency in the payment of the Special Tax with respect to a parcel within the District in
which the FDIC has or obtains an interest, although prohibiting the lien of the Special Tax to be
foreclosed on at a judicial foreclosure sale would likely reduce the number of or eliminate the persons
willing to purchase such a parcel at a foreclosure sale. Owners of the 2013 Bonds should assume that the
County will be unable to foreclose on any parcel owned by the FDIC. Such an outcome would cause a
draw on the Reserve Fund and perhaps, ultimately, a default in payment of the 2013 Bonds. The County
has not undertaken to determine whether the FDIC currently has, or is likely to acquire, any interest in
any of the parcels, and therefore expresses no view concerning the likelihood that the risks described
above will materialize while the 2013 Bonds are outstanding.
Non-Cash Payments of the Special Tax
Under the Act, the Board of Supervisors may reserve to itself the right and authority to allow the
owner of any taxable parcel to tender a 2013 Bond in full or partial payment of any installment of the
Special Tax or the interest or penalties thereon. Any 2013 Bond so tendered is to be accepted at par and
credit is to be given for any interest accrued thereon to the date of the tender. Thus, if 2013 Bonds can be
purchased in the secondary market at a discount, it may be to the advantage of an owner of a taxable
parcel to pay the Special Tax applicable thereto by tendering a 2013 Bond. Such a practice would
decrease the cash flow available to the County to make payments with respect to 2013 Bonds then
outstanding; and, unless the practice was limited by the County, the Special Tax paid in cash could be
insufficient to pay the debt service due with respect to 2013 Bonds. In order to provide some protection
against the potential adverse impact on cash flows which might be caused by the tender of 2013 Bonds in
payment of the Special Tax, the Fiscal Agent Agreement includes a covenant pursuant to which the
County will not authorize owners of Taxable Property to satisfy Special Tax obligations by the tender of
2013 Bonds unless the County shall have first obtained a report of an Independent Financial Consultant
certifying that doing so would not result in the County having insufficient Special Tax to pay the
principal of and interest on all Outstanding 2013 Bonds when due.
Payment of the Special Tax is not a Personal Obligation of the Owners
An owner of a property is not personally obligated to pay the Special Tax. The Special Tax is an
obligation which is secured only by a lien against the property. If the value of a taxable parcel is not
sufficient, taking into account other liens imposed by public agencies, to secure fully the payment of the
Special Tax, the County has no recourse against the owner.
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Limitations on Remedies
Remedies available to the owners of the 2013 Bonds may be limited by a variety of factors and
may be inadequate to assure the timely payment of principal of and interest on the 2013 Bonds or to
preserve the tax-exempt status of the 2013 Bonds.
Bond Counsel has limited its opinion as to the enforceability of the 2013 Bonds and of the Fiscal
Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally
the enforcement of creditors’ rights, by equitable principles and by the exercise of judicial discretion.
The lack of availability of certain remedies or the limitation of remedies may entail risks of delay,
limitation or modification of the rights of the owners of the 2013 Bonds.
Loss of Tax Exemption
As discussed under the caption “TAX MATTERS” interest on the 2013 Bonds could become
includable in gross income for purposes of federal income taxation retroactive to the date the 2013 Bonds
were issued, as a result of future acts or omissions of the County in violation of its covenants in the Fiscal
Agent Agreement. Should such an event of taxability occur, the 2013 Bonds are not subject to a special
redemption and will remain outstanding until maturity or until redeemed under one of the other
redemption provisions contained in the Fiscal Agent Agreement.
Proceedings to Reduce or Terminate the Special Tax
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”)
was approved by the voters of the State of California at the November 5, 1996 general election. The
Initiative added Article XIIIC and Article XIIID to the California Constitution. According to the “Title
and Summary” of the Initiative prepared by the California Attorney General, the Initiative limits “the
authority of local governments to impose taxes and property-related assessments, fees and charges.”
Provisions of the Initiative have been and will continue to be interpreted by the courts. The Initiative
could potentially impact the collection of the Special Tax within the District as described below.
Among other things, Section 3 of Article XIII states that. “.. the initiative power shall not be
prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or
charge.” The Act provides for a procedure, which includes notice, hearing, protest and voting
requirements to alter the rate and method of apportionment of an existing special tax. However, the Act
prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate
the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative
body determines that the reduction or termination of the special tax would not interfere with the timely
retirement of that debt. On July 1, 1997, the Governor of the State signed a bill into law enacting
Government Code Section 5854, which states that:
Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5,
1996, general election, shall not be construed to mean that any owner or beneficial owner
of a municipal security, purchased before or after that date, assumes the risk of, or in any
way consents to, any action by initiative measure that constitutes an impairment of
contractual rights protected by Section 10 of Article I of the United States Constitution.
Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not
conferred on the voters the power to repeal or reduce the Special Tax if such reduction would interfere
with the timely retirement of the 2013 Bonds.
It may be possible, however, for voters or the County to reduce the Special Tax in a manner
which does not interfere with the timely repayment of the 2013 Bonds, but which does reduce the
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maximum amount of the Special Tax that may be levied in any year below the existing levels. Therefore,
no assurance can be given with respect to the levy of the Special Tax for Administrative Expenses.
Furthermore, no assurance can be given with respect to the future levy of the Special Tax in amounts
greater than the amount necessary for the timely retirement of the 2013 Bonds. Therefore, the County can
give no assurance with respect to the levy of the Special Tax for Administrative Expenses. The County
has covenanted in the Fiscal Agent Agreement that it will not initiate proceedings under the Act to reduce
the maximum Special Tax rates to less than an amount, for any Fiscal Year, equal to 110% of aggregate
of the debt service due on the 2013 Bonds in such Fiscal Year plus the amount reasonably necessary to
pay the annual Administrative Expenses for such Fiscal Year. No assurance can be given as to the
enforceability of the foregoing covenant.
The interpretation and application of the Initiative will ultimately be determined by the courts
with respect to a number of the matters discussed above, and it is not possible at this time to predict with
certainty the outcome of such determination or the timeliness of any remedy afforded by the courts.
Secondary Markets and Prices
The Underwriter is not obligated to repurchase the 2013 Bonds and there can be no guarantee that
there will be a secondary market for the 2013 Bonds or, if a secondary market exists, that any 2013 Bonds
can be sold for any particular price. Prices of municipal securities for which a market is being made will
depend upon then-prevailing circumstances. Such prices could be substantially different from the original
purchase price. No assurance can be given that the market price for the 2013 Bonds will not be affected
by the introduction or enactment of any future legislation, or changes in interpretation of existing law.
No Acceleration Provision
The 2013 Bonds do not contain a provision allowing for the acceleration of the unpaid principal
of the 2013 Bonds in the event of a payment default or other default under the terms of the 2013 Bonds or
the Fiscal Agent Agreement.
THE COUNTY
The County is located northeast of the San Francisco Bay and is the ninth most populous county
in California. The County seat is in the City of Martinez. As of January 1, 2012, the estimated
population within the County was 1,065,117, representing an increase of approximately 0.8% compared
to the estimated population as of January 1, 2011. Major industries in the County include petroleum
refining and telecommunications.
Under the Act, the Board of Supervisors of the County is authorized to establish and act as the
legislative body for community facilities districts. However, the County has no liability in connection
with the District or the 2013 Bonds, other than with respect to the pledge of the Special Tax and
funds set forth in the Fiscal Agent Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR
THE 2013 BONDS–Limited Liability.” See also APPENDIX D–“GENERAL COUNTY ECONOMIC AND
DEMOGRAPHIC INFORMATION” hereto for general information regarding the County.
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CONTINUING DISCLOSURE
The County has covenanted for the benefit of the beneficial owners of the 2013 Bonds to provide
certain financial information and operating data relating to the County and the District by no later than
eight months after the end of each Fiscal Year (which fiscal year currently ends June 30), commencing
with the report due for the Fiscal Year ended June 30, 2013 (each, an “Annual Report”), and to provide
notices of the occurrence of certain specified events. The Annual Report and notices of specified events
will be filed with the Municipal Securities Rulemaking Board (the “MSRB”) through its Electronic
Municipal Market Access site. The specific nature of the information to be contained in the Annual
Report or the notices of specified events is set forth in APPENDIX E–“FORM OF CONTINUING
DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in
complying with Rule 15c2-12 of the United States Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be amended from time to time (“Rule 15c2-12”).
[Description of County compliance, including JPA and former RDA, in the last five years with
prior undertakings under Rule 15c2-12. [TO COME]
In order to provide certain continuing disclosure with respect to the 2013 Bonds in accordance
with the Rule 15c2-12, the County entered into a Continuing Disclosure Certificate for the benefit of the
Owners of the 2013 Bonds and has appointed Digital Assurance Certification, L.L.C. (“DAC”) as
Dissemination Agent. The form of Continuing Disclosure Certificate is set forth in APPENDIX E–“FORM
OF CONTINUING DISCLOSURE CERTIFICATE.”
ABSENCE OF MATERIAL LITIGATION
At the time of delivery of and payment for the 2013 Bonds the County will deliver a certificate to
the effect that there is no known action, suit, proceeding, inquiry or investigation at law or in equity
before or by any court or regulatory agency against the County or the District affecting the existence of
the County or the District or seeking to restrain or to enjoin the issuance, sale or delivery of the 2013
Bonds, 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 2013 Bonds, or in
any way contesting or affecting the validity or enforceability of the 2013 Bonds, the Fiscal Agent
Agreement, the Special Tax Formula or any other applicable agreements or any action of the County
contemplated by any of said documents.
TAX MATTERS
Federal tax law contains a number of requirements and restrictions which apply to the 2013
Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States,
requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain
other matters. The County has covenanted in the Fiscal Agent Agreement to comply with all requirements
that must be satisfied in order for the interest on the 2013 Bonds to be excludable from gross income for
federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the
2013 Bonds to become includable in gross income for federal income tax purposes retroactively to the
date of issuance of the 2013 Bonds.
Subject to the County’s compliance with the above-referenced covenants, under present law, in
the opinion of Quint & Thimmig LLP, Bond Counsel, interest on the 2013 Bonds (i) is excludable from
the gross income of the owners thereof for federal income tax purposes, and (ii) is not included as an item
of tax preference in computing the federal alternative minimum tax for individuals and corporations, but
interest on the 2013 Bonds is taken into account, however, in computing an adjustment used in
determining the federal alternative minimum tax for certain corporations.
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In rendering its opinion, Bond Counsel will rely upon certifications of the County with respect to
certain material facts within the County’s knowledge. Bond Counsel’s opinion represents its legal
judgment based upon its review of the law and the facts that it deems relevant to render such opinion and
is not a guarantee of a result.
The Internal Revenue Code of 1986, as amended (the “Code”), includes provisions for an
alternative minimum tax (“AMT”) for corporations in addition to the corporate regular tax in certain
cases. The AMT, if any, depends upon the corporation’s alternative minimum taxable income (“AMTI”),
which is the corporation’s taxable income with certain adjustments. One of the adjustment items used in
computing the AMTI of a corporation (with certain exceptions) is an amount equal to 75% of the excess
of such corporation’s “adjusted current earnings” over an amount equal to its AMTI (before such
adjustment item and the alternative tax net operating loss deduction). “Adjusted current earnings” would
include certain tax-exempt interest, including interest on the 2013 Bonds.
Ownership of the 2013 Bonds may result in collateral federal income tax consequences to certain
taxpayers, including, without limitation, corporations subject to the branch profits tax, financial
institutions, certain insurance companies, certain S corporations, individual recipients of Social Security
or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued)
indebtedness to purchase or carry tax exempt obligations. Prospective purchasers of the 2013 Bonds
should consult their tax advisors as to applicability of any such collateral consequences.
The issue price (the “Issue Price”) for each maturity of the 2013 Bonds is the price at which a
substantial amount of such maturity of the 2013 Bonds is first sold to the public. The Issue Price of a
maturity of the 2013 Bonds may be different from the price set forth, or the price corresponding to the
yield set forth, on the inside cover page of this Official Statement.
If the Issue Price of a maturity of the 2013 Bonds is less than the principal amount payable at
maturity, the difference between the Issue Price of each such maturity, if any, of the 2013 Bonds (the
“OID 2013 Bonds”) and the principal amount payable at maturity is original issue discount.
For an investor who purchases an OID 2013 Bond in the initial public offering at the Issue Price
for such maturity and who holds such OID 2013 Bond to its stated maturity, subject to the condition that
the County comply with the covenants discussed above, (a) the full amount of original issue discount with
respect to such OID 2013 Bond constitutes interest which is excludable from the gross income of the
owner thereof for federal income tax purposes; (b) such owner will not realize taxable capital gain or
market discount upon payment of such OID 2013 Bond at its stated maturity; (c) such original issue
discount is not included as an item of tax preference in computing the alternative minimum tax for
individuals and corporations under the Code, but is taken into account in computing an adjustment used
in determining the alternative minimum tax for certain corporations under the Code, as described above;
and (d) the accretion of original issue discount in each year may result in an alternative minimum tax
liability for corporations or certain other collateral federal income tax consequences in each year even
though a corresponding cash payment may not be received until a later year. Owners of OID 2013 Bonds
should consult their own tax advisors with respect to the state and local tax consequences of original issue
discount on such OID 2013 Bonds.
Owners of 2013 Bonds who dispose of 2013 Bonds prior to the stated maturity (whether by sale,
redemption or otherwise), purchase 2013 Bonds in the initial public offering, but at a price different from
the Issue Price or purchase 2013 Bonds subsequent to the initial public offering should consult their own
tax advisors.
If a 2013 Bond is purchased at any time for a price that is less than the 2013 Bond’s stated
redemption price at maturity or, in the case of an OID 2013 Bond, its Issue Price plus accreted original
issue discount reduced by payments of interest included in the computation of original issue discount and
previously paid (the “Revised Issue Price”), the purchaser will be treated as having purchased a 2013
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Bond with market discount subject to the market discount rules of the Code (unless a statutory de minimis
rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a
2013 Bond is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the
purchaser’s election, as it accrues. Such treatment would apply to any purchaser who purchases an OID
2013 Bond for a price that is less than its Revised Issue Price even if the purchase price exceeds par. The
applicability of the market discount rules may adversely affect the liquidity or secondary market price of
such 2013 Bond. Purchasers should consult their own tax advisors regarding the potential implications of
market discount with respect to the 2013 Bonds.
An investor may purchase a 2013 Bond at a price in excess of its stated principal amount. Such
excess is characterized for federal income tax purposes as “bond premium” and must be amortized by an
investor on a constant yield basis over the remaining term of the 2013 Bond in a manner that takes into
account potential call dates and call prices. An investor cannot deduct amortized bond premium relating
to a tax-exempt bond. The amortized bond premium is treated as a reduction in the tax-exempt interest
received. As bond premium is amortized, it reduces the investor’s basis in the 2013 Bond. Investors who
purchase a 2013 Bond at a premium should consult their own tax advisors regarding the amortization of
bond premium and its effect on the 2013 Bond’s basis for purposes of computing gain or loss in
connection with the sale, exchange, redemption or early retirement of the 2013 Bond.
There are or may be pending in the Congress of the United States legislative proposals, including
some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters
referred to above or affect the market value of the 2013 Bonds. It cannot be predicted whether or in what
form any such proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to
enactment. Prospective purchasers of the 2013 Bonds should consult their own tax advisors regarding any
pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or
proposed federal tax legislation.
The Internal Revenue Service (the “Service”) has an ongoing program of auditing tax-exempt
obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is
includable in the gross income of the owners thereof for federal income tax purposes. It cannot be
predicted whether or not the Service will commence an audit of the 2013 Bonds. If an audit is
commenced, under current procedures the Service may treat the County as a taxpayer and the 2013
Bondholders may have no right to participate in such procedure. The commencement of an audit could
adversely affect the market value and liquidity of the 2013 Bonds until the audit is concluded, regardless
of the ultimate outcome.
Payments of interest on, and proceeds of the sale, redemption or maturity of, tax exempt
obligations, including the 2013 Bonds, are in certain cases required to be reported to the Service.
Additionally, backup withholding may apply to any such payments to any 2013 Bond owner who fails to
provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a
substantially identical form, or to any 2013 Bond owner who is notified by the Service of a failure to
report any interest or dividends required to be shown on federal income tax returns. The reporting and
backup withholding requirements do not affect the excludability of such interest from gross income for
federal tax purposes.
In the further opinion of Bond Counsel, interest on the 2013 Bonds is exempt from California
personal income taxes.
Ownership of the 2013 Bonds may result in other state and local tax consequences to certain
taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with
respect to the 2013 Bonds. Prospective purchasers of the 2013 Bonds should consult their tax advisors
regarding the applicability of any such state and local taxes.
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The complete text of the final opinion that Bond Counsel expects to deliver upon issuance of the
2013 Bonds is set forth in APPENDIX B–“PROPOSED FORM OF OPINION OF BOND COUNSEL.”
CERTAIN LEGAL MATTERS
Certain legal matters incident to the authorization and issuance of the 2013 Bonds are subject to
the approving opinion of Quint & Thimmig LLP, Bond Counsel. Certain legal matters will be passed
upon for the County and the District by the County Counsel and Lofton & Jennings, San Francisco,
California, Disclosure Counsel, and for the Underwriter by Jones Hall, A Professional Law Corporation,
San Francisco, California, Underwriter’s Counsel. Payment of the fees and expenses of Bond Counsel,
Disclosure Counsel and Underwriter’s Counsel is contingent upon the sale and issuance of the 2013
Bonds. The various legal opinions to be delivered concurrently with the delivery of the 2013 Bonds will
be qualified as to enforceability of the various legal instruments by limitations imposed by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors generally and by
equitable remedies and proceedings generally.
FINANCIAL ADVISOR
The County has retained Fieldman, Rolapp & Associates, Irvine, California, as Financial Advisor,
in connection with the authorization and delivery of the 2013 Bonds. The Financial Advisor is not
obligated to undertake, and has not undertaken to make, an independent verification or to assume
responsibility for the accuracy, completeness or fairness of the information contained in this Official
Statement. The Financial Advisor is an independent advisory service and is not engaged in underwriting
or trading of securities. The Financial Advisor will receive compensation that is contingent upon the sale,
issuance and delivery of the 2013 Bonds.
RATING
Standard & Poor’s, a division of the McGraw-Hill Companies (“S&P”) has assigned a rating of
“___” to the 2013 Bonds.
Certain information was supplied by the County to S&P to be considered in evaluating the 2013
Bonds. The rating expresses only the views of S&P and is not a recommendation to buy, sell or hold the
2013 Bonds. An explanation of the significance of the rating may be obtained from Standard & Poor’s, a
division of the McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041.
There is no assurance that the rating will continue for any given period of time or that it will not
be reduced or withdrawn entirely by S&P if in its judgment, circumstances so warrant. The County and
the Trustee undertake no responsibility to oppose any such revision or withdrawal. Any such downward
revision or withdrawal may have an adverse effect on the market price of the 2013 Bonds.
UNDERWRITING
Pursuant to the terms of a Bond Purchase Agreement with respect to the 2013 Bonds, dated
________, 2013 (the “Purchase Agreement”) by and between the County and Stifel, Nicolaus &
Company, Incorporated dba Stone & Youngberg, a Division of Stifel Nicolaus (the “Underwriter”), the
2013 Bonds will be purchased by the Underwriter for a price of $________, which is equal to the initial
principal amount of the 2013 Bonds, less an original issue discount of $________ and less an
Underwriter’s discount of $________. The Underwriter will purchase all of the 2013 Bonds, if any are
purchased.
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The obligation of the Underwriter to make such purchase is subject to certain terms and
conditions set forth in the Purchase Agreement.
The Underwriter may change the initial public offering prices and yields set forth on the inside
cover page of this Official Statement. The 2013 Bonds may be offered and sold to dealers, including the
Underwriter and dealers acquiring 2013 Bonds for their own account or an account managed by them, at
prices lower than the public offering price.
MISCELLANEOUS
This Official Statement is not to be construed as a contract or agreement between the County and
the purchasers of the 2013 Bonds. Any statements made in this Official Statement involving matters of
opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations
of fact, and no representation is made that any of the estimates will be realized. The information and
expressions of opinion herein are subject to change without notice and neither the delivery of the Official
Statement nor any sale made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the District or the County since the date hereof.
The execution and delivery of this Official Statement by the County has been duly authorized by
the Board of Supervisors.
COUNTY OF CONTRA COSTA, for and on
behalf of the COUNTY OF CONTRA COSTA
COMMUNITY FACILITIES DISTRICT NO.
2001-1 (NORRIS CANYON)
By:
Catherine Kutsuris
Director, Department of Conservation and
Development
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APPENDIX A
SUMMARY OF THE FISCAL AGENT AGREEMENT
.
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APPENDIX B
PROPOSED FORM OF OPINION OF BOND COUNSEL
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APPENDIX C
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor’s Parcel in Community Facilities District No. 2001-1 (herein
“CFD No. 2001-1”) shall be levied and collected according to the tax liability determined by the Board of
Supervisors of the County of Contra Costa or its designee, as described below. All of the property in
CFD No. 2001-1, unless exempted by law or by the provisions of Section G below, shall be taxed for the
purposes, to the extent, and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre or Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or
if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final
map, parcel map, or other recorded County parcel map.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5,
(commencing with Section 53311), Division 2 of Title 5 of the Government Code of the State of
California.
“Administrative Expenses” means any or all of the following: the fees and expenses of any fiscal agent or
trustee (including any fees and expenses of its counsel) employed in connection with any 2013 Bonds;
any costs associated with the marketing or remarketing of the 2013 Bonds; the expenses of the
Administrator and the County in carrying out their respective duties under any fiscal agent agreement,
indenture or resolution with respect to the 2013 Bonds or CFD No. 2001-1, including, but not limited to,
the levy and collection of the Special Tax, the fees and expenses of legal counsel, charges levied by the
County or any division or office thereof in connection with the levy and collection of Special Taxes,
audits, continuing disclosure or other amounts needed to pay arbitrage rebate to the federal government
with respect to 2013 Bonds; costs associated with complying with continuing disclosure requirements;
costs associated with responding to public inquiries regarding Special Tax levies and appeals; attorneys’
fees and other costs associated with commencement or pursuit of foreclosure for delinquent Special
Taxes; costs associated with overhead expense allocations to CFD No. 2001-1; and all other costs and
expenses of the County, the Administrator, and any fiscal agent, escrow agent or trustee related to the
administration of CFD No. 2001-1.
“Administrator” shall mean the person or firm designated by the Board to administer the Special Tax
according to this Rate and Method of Apportionment of Special Tax.
“Annual Interest Component” means the total amount of interest on 2013 Bonds in the calendar year
commencing in such Fiscal Year.
“Assessor’s Parcel” or “Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned
Assessor’s Parcel number.
“Assessor’s Parcel Map” means an official map of the County Assessor of the County of Contra Costa
designating parcels by Assessor’s Parcel Number.
“2013 Bonds” means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one
or more series, issued by CFD No. 2001-1 under the Act.
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“Board” means the Board of Supervisors of the County of Contra Costa.
“Capitalized Interest” means funds in any capitalized interest account available to pay debt service on
2013 Bonds issued by CFD No. 2001-1.
“Capitalized Interest Requirement” means the least of: i) the Annual Interest Component, ii) the
difference between the Special Tax Requirement and the amount determined pursuant to Step 1 of
Section E hereof, or iii) the amount of Capitalized Interest available.
“County” means the County of Contra Costa.
“Developed Property” means Taxable Property for which a building permit for construction was issued
prior to June 1 of the preceding Fiscal Year.
“Fiscal Year” means the period starting July 1 and ending on the following June 30.
“Homeowners’ Association Property” means any property within the boundaries of CFD No. 2001-1
which is owned by a homeowners’ or property owners’ association.
“Land Use Class” means one of the defined land use categories for which a specific Maximum Special
Tax is identified in Table 1 in Section C below.
“Maximum Special Tax” means the maximum amount of Special Tax, determined in accordance with
Section C below, that can be levied in any Fiscal Year.
“Other Property” means Developed Property which is not Residential Property, Public Property, or
Homeowners’ Association Property.
“Planned Units” means the number of individual residential units that were expected to be constructed on
property within CFD No. 2001-1 as shown in Attachment 1.
“Proportionately” means, for Residential Property and Other Property, that the ratio of the actual Special
Tax levied in any Fiscal Year to the Maximum Special Tax authorized to be levied in that Fiscal Year is
equal for all Assessor’s Parcels of Residential Property and Other Property. For Undeveloped Property,
“Proportionately” means that the ratio of the actual Special Tax to the Maximum Special Tax is equal for
all Assessor’s Parcels of Undeveloped Property. For Homeowners’ Association Property and nonexempt
Public Property, “Proportionately” means that the ratio of the actual Special Tax to the Maximum Special
Tax is equal for all Assessor’s Parcels of Homeowners’ Association Property and Public Property.
“Public Property” means any property within the boundaries of CFD No. 2001-1 that is owned by or
irrevocably offered for dedication to the federal government, State of California or other local
governments or public agencies.
“Residential Property” means, in any Fiscal Year, any Parcel of Developed Property for the construction
of a residential structure which is not Homeowners’ Association Property or Public Property.
“Special Tax” means a special tax levied in any Fiscal Year that will be used to pay the Special Tax
Requirement, as defined below.
“Special Tax Requirement” means the total amount needed each Fiscal Year to (i) pay principal and
interest on 2013 Bonds in the calendar year commencing in such Fiscal Year, (ii) create or replenish
reserve funds, (iii) cure any delinquencies in the payment of principal or interest on indebtedness of CFD
No. 2001-1 which have occurred in the prior Fiscal Year or (based on delinquencies in the payment of
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Special Taxes which have already taken place) are expected to occur in the Fiscal Year in which the tax
will be collected, (iv) pay Administrative Expenses.
“Taxable Property” means all of the Assessor’s Parcels within the boundary of CFD No. 2001-1 which
are not exempt from the Special Tax pursuant to law or Section G below.
“Tentative Map” means the tentative map for Norris Canyon Estates approved by the Board in August
1997.
“Undeveloped Property” means any Parcel of Taxable Property within CFD No. 2001-1 for which a
building permit has not been issued prior to June 1 of the preceding Fiscal Year.
B. ASSIGNMENT TO LAND USE CLASS
Each Fiscal Year, the Administrator shall categorize each parcel of property in CFD No. 2001-1 as
Developed Property or Undeveloped Property, and Parcels of Developed Property shall be further
identified as either Residential Property, Other Property, Homeowners’ Association Property or Public
Property. For each Parcel of Other Property within the CFD, the Administrator shall determine how
many Planned Units had been expected on the Parcel in order to assign the Maximum Special Tax
pursuant to Section C below.
C. MAXIMUM SPECIAL TAX
Pursuant to Section 53321 (d) of the Act, a Maximum Special Tax must be established as a specific dollar
amount before a Parcel is first subject to the tax when in private residential use. The following maximum
rates shall apply to all Parcels of Taxable Property within CFD No. 2001-1 for each Fiscal Year in which
the Special Tax is collected:
TABLE 1
MAXIMUM SPECIAL TAX
(Fiscal Year 2001-02)
Land
Use Class
Description
Maximum Special Tax
(Fiscal Year 2001-02)
1 Residential Property $2,100 per Parcel
2 Other Property $2,100 per Planned Unit of the
Parcel before it became Other
Property
3 Undeveloped Property $3,360 per Acre
Pursuant to Section 53321 (d) of the Act, the Special Tax levied against a Parcel used for private
residential purposes shall under no circumstances increase more than ten percent (10%) as a consequence
of delinquency or default by the owner of any other Parcel or Parcels and shall, in no event, exceed the
Maximum Special Tax in effect for the Fiscal Year in which the Special Tax is being levied.
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C-4
D. MANDATORY PREPAYMENT OF SPECIAL TAX RESULTING FROM TENTATIVE
MAP REVISIONS
It is possible that a revision in the Tentative Map could result in less Special Tax revenue being available
from the CFD. To preclude this result, after CFD No. 2001-1 has been formed, the County shall apply the
following steps for every proposed Tentative Map revision:
Step 1: The County or its designee shall calculate the Maximum Special Tax revenues
that could be collected from the property affected by the proposed Tentative Map
revision (the “Affected Property”) prior to the revision being approved;
Step 2: The County or its designee shall calculate the Maximum Special Tax revenues
that could be collected from the Affected Property if the Tentative Map revision
is approved;
Step 3: If the amount determined in Step 2 is higher than that calculated in Step 1, the
Tentative Map revision may be approved without prepayment of the Special Tax.
If the revenues calculated in Step 2 are less than those calculated in Step 1, the
County may not approve the Tentative Map revision unless the landowner
requesting the Tentative Map revision prepays a portion of the Special Tax
obligation that would have applied to the Affected Property prior to approval of
the revision in an amount sufficient to retire a portion of the 2013 Bonds and
maintain 110% coverage on the 2013 Bonds’ debt service with the reduced
Maximum Special Tax revenues that will result after the Tentative Map revision
is approved. The required prepayment shall be calculated using the formula set
forth in Section H below. Property owners wishing to prepay the Special Tax as
a result of a Tentative Map revision cannot be delinquent on past Special Taxes
on the Affected Property.
E. METHOD OF LEVY AND COLLECTION OF THE SPECIAL TAX
Commencing with Fiscal Year 2001-02 and for each following Fiscal Year, the Administrator shall
determine the Special Tax Requirement for that Fiscal Year. The Special Tax shall then be levied as
follows:
Step 1: The Special Tax shall be levied Proportionately on each Parcel of Residential Property and Other
Property up to 100% of the Maximum Special Tax up to the Special Tax Requirement for each Land Use
Class for such Fiscal Year as determined pursuant to Section C. The Maximum Special Tax for a Parcel
of Other Property shall be the total Maximum Special Taxes for the Planned Units that the Other Property
replaced, as determined by the Administrator;
Step 2: Determine the Capitalized Interest Requirement, if any, and add it to the amount levied under
Step 1;
Step 3: If the total of the Capitalized Interest Requirement and the amount levied under Step 1 is less than
the Special Tax Requirement, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of
Undeveloped Property within the CFD, up to 100% of the Maximum Special Tax for Undeveloped
Property for such Fiscal Year determined pursuant to Section C;
Step 4: If additional monies are needed after applying the first three steps, the Special Tax shall be levied
Proportionately on each Parcel of Homeowners’ Association Property and Public Property which
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C-5
originally had Planned Units, up to 100% of the Maximum Special Tax for Undeveloped Property for
such Fiscal Year determined pursuant to Section C.
F. MANNER OF COLLECTION
The Special Taxes for CFD No. 2001-1 shall be collected in the same manner and at the same time as
ordinary ad valorem property taxes, provided, however, that prepayments are permitted as set forth in
Section H below (and may be required in the case of Tentative Map revisions) and provided further that
the County may directly bill the Special Tax, may collect Special Taxes at a different time or in a
different manner, and may collect delinquent Special Taxes through foreclosure or other available
methods.
The Special Tax shall be levied and collected until principal and interest on 2013 Bonds have been repaid
and authorized facilities to be constructed directly from Special Taxes proceeds have been completed.
However, in no event shall a Special Taxes be levied after Fiscal Year 2039-2040.
G. EXEMPTIONS
Notwithstanding any other provision of this Rate and Method of Apportionment of Special Tax, no
Special Taxes shall be levied on Public Property, except as otherwise provided in Sections 53317.3 and
53317.5 of the Act.
H. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section H:
“Future Facilities Costs” means the Public Facilities Requirements (as defined below) minus
public facility costs funded by Previously Issued Bonds, interest earnings on the construction
fund actually earned prior to the date of prepayment, Special Taxes, developer equity, and/or any
other source of funding.
“Outstanding Bonds” means all Previously Issued Bonds which remain outstanding, with the
following exception: if a Special Tax has been levied against, or already paid by, an Assessor’s
Parcel making a prepayment, and a portion of the Special Tax will be used to pay a portion of the
next principal payment on the 2013 Bonds that remain outstanding (as determined by the
Administrator), that next principal payment shall be subtracted from the total 2013 Bond
principal that remains outstanding, and the difference shall be used as the amount of “Outstanding
Bonds” for purposes of this prepayment formula.
“Previously Issued Bonds” means all 2013 Bonds that have been issued by CFD No. 2001-1 prior
to the date of prepayment.
“Public Facilities Requirements” means either $5,900,000 in 2001 dollars, which shall increase
by three percent (3%) on January 1, 2002, and on each January 1 thereafter, or such lower
number as shall be determined by the County as sufficient to fund public facilities to be provided
by CFD No. 2001-1 under the authorized bonding program for CFD No. 2001-1.
The Special Tax obligation applicable to an Assessor’s Parcel in CFD No. 2001-1 may be prepaid and the
obligation of the Assessor’s Parcel to pay the Special Tax permanently satisfied as described herein,
provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to
such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay
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C-6
the Special Tax obligation shall provide the County with written notice of intent to prepay. Within 30
days of receipt of such written notice, the County shall notify such owner of the prepayment amount of
such Assessor’s Parcel. Prepayment must be made not less than 75 days prior to any interest payment
date for 2013 Bonds to be redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount shall be calculated as follows (capitalized terms as defined below):
Bond Redemption Amount
plus Future Facilities Amount
plus Redemption Premium
plus Defeasance
plus Administrative Fees and Expenses
less Reserve Fund Credit
equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount shall be determined by application of the
following steps:
Step 1: Compute the total Maximum Special Tax that could be collected from the
Assessor’s Parcel prepaying the Special Tax in the Fiscal Year in which
prepayment would be received by the County.
Step 2: Divide the Maximum Special Tax computed pursuant to Step 1 for such
Assessor’s Parcel by the lesser of (i) the Maximum Special Tax revenues that
could be collected in that Fiscal Year from property in the entire CFD, or (ii) the
Maximum Special Tax revenues that could be generated at buildout of property
in the CFD based on anticipated land uses at the time the prepayment is
calculated.
Step 3: Multiply the quotient computed pursuant to Step 2 by the Outstanding Bonds to
compute the amount of Outstanding Bonds to be retired and prepaid. (the “Bond
Redemption Amount”).
Step 4: Compute the current Future Facilities Costs.
Step 5: Multiply the quotient computed pursuant to Step 2 by the amount determined
pursuant to Step 4 to compute the amount of Future Facilities Costs to be prepaid
(the “Future Facilities Amount”).
Step 6: Multiply the Bond Redemption Amount computed pursuant to Step 3 by the
applicable redemption premium, if any, on the Outstanding Bonds to be
redeemed (the “Redemption Premium”).
Step 7: Compute the amount needed to pay interest on the Bond Redemption Amount
starting with the first 2013 Bond interest payment date after which the
prepayment has been received until the earliest redemption date for the
Outstanding Bonds. However, if 2013 Bonds are callable at the first interest
payment date after the prepayment has been received, Steps 7, 8 and 9 of this
prepayment formula will not apply.
Step 8: Compute the amount of interest the County reasonably expects to derive from
reinvestment of the Bond Redemption Amount plus the Redemption Premium
from the first 2013 Bond interest payment date after which the prepayment has
been received until the redemption date for the Outstanding Bonds.
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Step 9: Take the amount computed pursuant to Step 7 and subtract the amount computed
pursuant to Step 8 (the “Defeasance”).
Step 10: The administrative fees and expenses of CFD No. 2001-1 are as calculated by the
County and include the costs of computation of the prepayment, the costs of
redeeming 2013 Bonds, and the costs of recording any notices to evidence the
prepayment and the redemption (the “Administrative Fees and Expenses”).
Step 11: A reserve fund credit shall be calculated as the reduction, if any, in the applicable
reserve fund for the Outstanding Bonds to be redeemed pursuant to the
prepayment (the “Reserve Fund Credit”).
Step 12: The Special Tax prepayment is equal to the sum of the amounts computed
pursuant to Steps 3, 5, 6, 9, and 10, less the amount computed pursuant to Step
11 (the “Prepayment Amount”).
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C-8
Attachment 1
Tentative Map for Norris Canyon Estates
on File with the County
D-i
APPENDIX D
GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION
TABLE OF CONTENTS
PAGE
General ...................................................................................................................................................... D-1
County Government .................................................................................................................................. D-1
Population ................................................................................................................................................. D-3
Industry and Employment ......................................................................................................................... D-4
Major Employers ...................................................................................................................................... D-5
Personal Income ........................................................................................................................................ D-6
Commercial Activity ................................................................................................................................. D-7
Construction Activity ................................................................................................................................ D-8
Transportation ........................................................................................................................................... D-9
Environmental Control Services ............................................................................................................ D-10
Education and Health Services ............................................................................................................... D-11
INDEX OF TABLES
PAGE
Table D-1 Population ............................................................................................................................ D-3
Table D-2 Employment and Unemployment of Resident Labor Force Wage and Salary
Employment by Industry Annual Averages ..................................................................... D-4
Table D-3 Major Employers in the East Bay with Employees in the County ...................................... D-5
Table D-4 Personal Income ................................................................................................................... D-6
Table D-5 Taxable Transactions ........................................................................................................... D-7
Table D-6 Residential Building Permit Valuations .............................................................................. D-8
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D-1
APPENDIX D
GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION
General
The County of Contra Costa, California (the “County”) was incorporated in 1850 as one of the
original 27 counties of the State of California (the “State”), with the City of Martinez as the County seat.
It is one of the nine counties in the San Francisco-Oakland Bay Area. The County covers about
733 square miles and extends from the northeastern shore of the San Francisco Bay easterly about
50 miles to San Joaquin County. The County is bordered on the south and west by Alameda County and
on the north by the Suisun and San Pablo Bays. The western and northern shorelines are highly
industrialized, while the interior sections are suburban/residential, commercial and light industrial. The
County contains 19 incorporated cities, including Richmond in the west, Antioch in the northeast, and
Concord in the middle.
A large part of the County is served by the San Francisco Bay Area Rapid Transit District
(“BART”), which has enabled the expansion of both residential and commercial development throughout
much of the County. In addition, economic development along the Interstate 680 corridor in the County
has been substantial and has accounted for significant job creation in the Cities of Concord, Walnut Creek
and San Ramon.
County Government
The County has a general law form of government. A five-member Board of Supervisors, each
member of which is elected to a four-year term, serves as the County’s legislative body. Also elected are
the County Assessor, Auditor-Controller (the “County Auditor-Controller”), Clerk-Recorder, District
Attorney-Public Administrator, Sheriff-Coroner and Treasurer-Tax Collector (the “County Treasurer”).
A County Administrator appointed by the Board of Supervisors runs the day-to-day business of the
County. The current County Administrator is David J. Twa.
CONTRA COSTA COUNTY
ELECTED OFFICIALS
Name Office Expiration of Current Term
John M. Gioia Supervisor, District 1 January 4, 2015
Candace Andersen Supervisor, District 2 January 7, 2013
Mary N. Piepho Supervisor, District 3 January 7, 2013
Karen Mitchoff Supervisor, District 4 January 4, 2015
Federal D. Glover Supervisor, District 5 January 7, 2013
Robert R. Campbell Auditor-Controller January 4, 2015
Russell V. Watts Treasurer-Tax Collector January 4, 2015
Gus S. Kramer Assessor January 4, 2015
Stephen L. Weir Clerk Recorder January 4, 2015
Mark A. Peterson District Attorney-Public Administrator January 4, 2015
David Livingston Sheriff-Coroner January 4, 2015
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D-2
Brief resumes of key County officials are set forth below.
David J. Twa, County Administrator. Mr. Twa was appointed County Administrator by the
Board of Supervisors in June 2008 and is responsible for the overall administration of County
government. Prior to his appointment, he served as the County Manager for Ramsey County, Minnesota
from 2003-2008. Prior to that, Mr. Twa served as the County Administrator in three counties in
Minnesota for over 20 years and served as an Elected County Attorney, Interim Property Records and
Revenue Director, Executive Director of Housing and Redevelopment Authority, and Interim Director of
Public Health and Long-term Care. Mr. Twa received his Juris Doctorate from the University of
Minnesota, as well as a degree in accounting, and is also a Certified Public Accountant. Under Mr. Twa’s
leadership Ramsey County, Minnesota maintained a triple-A credit rating, one of few counties in the
country to achieve this distinguished rating. He also oversaw the efforts of Ramsey County to institute a
Strategic Planning Program, address its health care cost liability, start a two year budget process, work
with community partners to improve public services in the Minneapolis-St. Paul Region, and institute
significant redevelopment projects. Mr. Twa was named the County Manager of the Year (2007) by the
Minnesota Association of County Administrators, for his innovation in public service.
Robert R. Campbell, Auditor-Controller. Mr. Campbell was elected Auditor-Controller of the
County by the voters on June 8, 2010 and was sworn into office on January 3, 2011. Mr. Campbell has
worked for the County for almost 25 years. He received a Bachelor of Science degree in business
administration from the California State University, Hayward. Mr. Campbell is an active member of the
State Association of County Auditors, a member of the Government Finance Officer’s Association and
the Association of Government Accountants. Mr. Campbell is a former president of the State Association
of County Auditors Property Tax and Payroll Managers’ committees, and served as a member on various
State Association’s Property Tax Guideline Committees.
Russell V. Watts, Treasurer-Tax Collector. Mr. Watts was elected Treasurer-Tax Collector by
the voters of the County on June 8, 2010 and was sworn into office on January 3, 2011. Mr. Watts has
been serving as Chief Deputy Treasurer-Tax Collector since 2002 where he has been responsible for the
administration of the department. He has 16 years of county treasury and tax collection experience with
administrative responsibilities in such areas as revenue collections, cash management, and investments.
Mr. Watts holds a Bachelor’s degree from Brigham Young University, Provo, UT, and a Masters degree
in Public Administration from the University of North Carolina, Chapel Hill, NC. He is an active
member of the California Association of County Treasurers and Tax Collectors (CACTTC) and the
Government Finance Officers Association of America. Mr. Watts serves on various State-wide CACTTC
committees. Mr. Watts will also serve on the Contra Costa County Employees’ Retirement Association
Board of Trustees. [TO BE REVIEWED]
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D-3
Population
The County is the ninth most populous county in California, with its population reaching
approximately 1,065,117 as of January 1, 2012. This represents an increase of approximately 0.4%
compared to the County’s population as of January 1, 2008. The availability of rapid transit, close
proximity to major employment hubs in San Francisco and Oakland, and relatively affordable existing
and new housing have combined to attract more residents to the County over the past decade.
Population growth in the County has been strongest in unincorporated areas as well as in the
cities of Antioch, Brentwood, Hercules, Oakley, Pittsburg and San Ramon.
The following is a summary of the County’s population levels since 2012.
Table D-1
COUNTY OF CONTRA COSTA
POPULATION†
(AS OF JANUARY 1)
2008 2009 2010 2011 2012
Antioch 100,957 101,041 102,330 103,055 103,833
Brentwood 51,908 51,950 52,492 52,030 52,575
Clayton 10,864 10,873 10,492 10,942 10,996
Concord 124,599 124,703 125,864 122,599 123,206
Danville 43,043 43,080 43,574 42,217 42,450
El Cerrito 23,440 23,461 23,666 23,649 23,774
Hercules 24,480 24,499 24,693 24,153 24,272
Lafayette 24,087 24,106 24,342 24,024 24,159
Martinez 36,348 36,378 36,663 36,055 36,225
Moraga 16,204 16,216 16,332 16,076 16,152
Oakley 34,468 34,500 35,846 35,998 36,532
Orinda 17,669 17,687 17,866 17,714 17,819
Pinole 19,383 19,400 19,555 18,461 18,560
Pittsburg 63,771 63,827 64,967 63,735 64,706
Pleasant Hill 33,547 33,576 33,844 33,280 33,440
Richmond 104,513 104,602 105,630 104,382 104,887
San Pablo 31,808 31,834 32,131 28,931 29,105
San Ramon 63,176 63,230 64,860 73,111 74,378
Walnut Creek 65,860 65,915 66,584 64,710 65,233
SUBTOTAL 890,125 890,878 901,731 895,122 902,302
Balance of County 170,310 170,447 171,054 161,184 162,815
TOTAL 1,060,435 1,061,325 1,073,055 1,056,306 1,065,117
California 38,292,687 38,255,508 38,648,090 37,427,946 37,678,563
_______________
† Columns may not total due to independent rounding.
Source: State Department of Finance, Table 2: E-4 Population Estimates for Cities, Counties and State, 2008-2009 with 2000
DRU Benchmark and E-1 Population Estimates for Cities, Counties and the State with Annual Percent Change –
January 1, 2009 and 2012.
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D-4
Industry and Employment
As shown below, the County’s civilian labor force was 524,100 in 2011. With average 2011
unemployment rates of 10.4% and 11.7% for the County and the State, respectively, the County has
achieved a lower unemployment rate than that of the State in each of the prior five calendar years.
Table D-2
COUNTY OF CONTRA COSTA
EMPLOYMENT AND UNEMPLOYMENT OF
RESIDENT LABOR FORCE
WAGE AND SALARY EMPLOYMENT BY INDUSTRY
ANNUAL AVERAGES (IN THOUSANDS)
2007 2008 2009 2010 2011
County Civilian Labor Force (1) 511.7 524.5 524.8 523.3 524.1
Employment 489.8 492.2 471.5 465.1 469.6
Unemployment 21.9 32.4 53.4 58.2 54.5
Unemployment Rate:
County 4.3% 6.2% 10.2% 11.1% 10.4%
State of California 5.4% 7.2% 11.3% 12.4% 11.7%
Wage and Salary Employment (2) 2007 2008 2009 2010 2011
Farm 0.7 0.7 0.8 0.7 0.9
Goods Producing 49.7 46.5 39.9 36.6 34.8
Trade, Transportation and Utilities 62.3 61.2 57.3 55.9 56.3
Information 13.0 11.8 10.4 9.6 9.0
Financial Activities 29.1 26.6 25.7 25.3 24.5
Professional and Business Services 49.4 49.3 45.9 43.8 45.5
Education and Health Services 44.6 45.6 47.7 48.4 49.2
Leisure and Hospitality 33.2 32.8 31.2 31.3 32.2
Other Services 12.5 12.4 11.7 11.8 12.5
Government 52.2 52.6 51.3 49.2 47.8
TOTAL (3) 346.8 339.5 321.8 312.6 312.7
_____________
(1) Based on place of residence.
(2) Based on place of work.
(3) Columns may not total due to independent rounding.
Source: State of California, Employment Development Department, and Labor Market Information Division, March 2011
Benchmark.
Major Employers
Major industries in the County include petroleum refining, telecommunications, financial and
retail services, steel manufacturing, prefabricated metals, chemicals, electronic equipment, paper products
and food processing. Most of the County’s heavy manufacturing is located along the County’s northern
boundary fronting on the Suisun Bay and San Pablo Bay leading to San Francisco Bay and the Pacific
Ocean.
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D-5
The County is located in the region east of the San Francisco Bay known as the “East Bay,”
which also includes the County of Alameda. The following Table D-3 provides a listing of major
employers headquartered or with locations in the County who participated in the data collection survey
and their estimated firm-wide employment levels.
Table D-3
MAJOR EMPLOYERS IN THE EAST BAY
WITH EMPLOYEES IN THE COUNTY
2011
Firm Primary Location Product or Service
Estimated No.
Employees
Kaiser Permanente Medical Center† Walnut Creek, Martinez Healthcare 16,587
State of California Countywide State Government 9,586
County of Contra Costa† Martinez County Government 8,142
Chevron Corp.† Countywide Energy, Oil and Gas 7,025
U.S. Postal Service Countywide Postal Services 6,399
John Muir Health† Walnut Creek Health Care 6,259
PG&E Corp. Countywide Gas and Electric Service 3,420
San Ramon Valley Unified School District Danville K-12 Education 2,675
Contra Costa Community College District Martinez Education 2,000
Bio-Rad Laboratories† Hercules Research 1,705
_______________
† Headquartered in the County.
Sources: County of Contra Costa Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2011 and San
Francisco Business Times, 2012 Bay Area Book of Lists. Data is for the reported entity’s latest fiscal year.
Personal Income
The United States Department of Commerce, Bureau of Economic Analysis (the “BEA”)
produces economic account statistics that enable government and business decision-makers, researchers,
and the public to follow and understand the performance of the national economy.
The BEA defines “personal income” as income received by persons from all sources, including
income received from participation in production as well as from government and business transfer
payments. Personal income represents the sum of compensation of employees (received), supplements to
wages and salaries, proprietors’ income with inventory valuation adjustment and capital consumption
adjustment (CCAdj), rental income of persons with CCAdj, personal income receipts on assets, and
personal current transfer receipts, less contributions for government social insurance. Per capita personal
income is calculated as the personal income divided by the resident population based upon the Census
Bureau’s annual midyear population estimates.
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D-6
Table D-4 below presents the latest available total income and per capita personal income for the
County, the State and the nation for the calendar years 2007 through 2011. The County has traditionally
had per capita income levels significantly higher than those of the State and the nation.
Table D-4
COUNTY OF CONTRA COSTA
PERSONAL INCOME
CALENDAR YEARS 2007 THROUGH 2011†
Year and Area
Personal Income
(millions of dollars)
Per Capita
Personal Income
(dollars)
2011†
County
State
United States
N/A
1,645,138
12,949,905
N/A
43,647
41,560
2010
County
State
United States
58,383
1,564,209
12,308,496
55,465
41,893
39,791
2009
County
State
United States
56,221
1,516,677
11,852,715
54,169
41,034
38,637
2008
County
State
United States
59,914
1,610,698
12,451,660
58,547
44,003
40,947
2007
County
State
United States
58,044
1,566,400
11,900,562
57,518
43,211
39,506
† Most recent year for which annual data is available for the County, the State and the United States.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System,
April 2012.
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D-7
Commercial Activity
Commercial activity comprises an important part of the County’s economy, with taxable
transactions totaling approximately $11.9 billion in calendar year 2010, the most recent year for which
complete annual data is available. Presented in Table D-5 below is a summary of taxable transactions in
the County since 2006.
Table D-5
COUNTY OF CONTRA COSTA
TAXABLE TRANSACTIONS
CALENDAR YEARS 2006 TO 2010†
($ IN 000’S)
2006 2007 2008 2009(1) 2010†(1)
Motor Vehicle and Parts Dealers – – – $1,184,803 $1,234,844
Furniture and Home Furnishings Stores – – – 225,331 227,432
Electronics and Appliance Stores – – – 385,742 356,124
Building Materials and Garden Equipment
and Supplies
– – – 711,475 718,405
Food and Beverage Stores – – – 657,337 673,326
Health and Personal Care Stores – – – 264,279 264,011
Gasoline Stations – – – 1,151,058 1,312,703
Clothing and Clothing Accessories Stores – – – 642,813 663,243
Sporting Goods, Hobby, Book, and Music
Stores
– – – 314,924 304,491
General Merchandise Stores – – – 1,380,111 1,406,756
Miscellaneous Store Retailers – – – 397,297 382,048
Nonstore Retailers – – – 47,224 46,613
Food Services and Drinking Places – – – 1,111,182 1,126,398
Apparel Stores $462,451 $470,507 $528,456 – –
General Merchandise Stores 1,882,310 1,878,711 1,753,124 – –
Specialty Stores 1,353,099 (2)(2) ––
Food Stores 607,062 616,296 594,275 – –
Eating and Drinking Places 1,098,793 1,125,644 1,134,412 – –
Home Furnishings and Appliances 468,008 427,995 471,620 – –
Building Materials and Farm Implements 1,027,731 944,683 747,773 – –
Gasoline Stations 1,190,703 1,351,405 1,514,897 – –
Automotive and Vehicle Dealers, Parts
and Supplies
1,871,103
1,812,785
1,406,932
––
All Other Retail Stores 314,647 1,481,678 1,332,819 –
Total Retail Outlets 10,275,907 10,109,704 9,484,307 8,473,578 8,716,393
Business and Personal Services 567,375 555,973 533,701 – –
All Other Outlets 3,024,379 3,420,618 3,289,673 3,409,471 3,237,454
TOTAL ALL OUTLETS $13,867,661 $14,086,295 $13,307,681 $11,883,049 $11,953,846
% CHANGE 2.9% 1.6% (5.5%) – 0.6%
_______________
† Most recent annual data available.
(1) Beginning in 2009, taxable sales and permits were summarized using NAICS codes. As a result of the coding change,
industry-level data for 2009 are not comparable to that of prior years.
(2) Beginning in 2007, the data for the category “Specialty Stores” is included in the total for All Other Retail Stores.
Source: State Board of Equalization.
Much of the County’s commercial activity is concentrated in central business districts of its cities
and unincorporated towns. Regional shopping centers, numerous smaller centers and several “big box”
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D-8
warehouse stores serve County residents. The County is served by all major banks including Bank of
America and Wells Fargo Bank. In addition there are numerous local banks and branches of smaller
California and foreign banks.
Construction Activity
The value of residential building permits in the County ________ by ___% in calendar year 2011
compared to calendar year 2010 levels. The _________ was due to ________.
The following Table D-6 provides a summary of residential building permit valuations and
number of new dwelling units authorized in the County since calendar year 2007.
Table D-6
COUNTY OF CONTRA COSTA
RESIDENTIAL BUILDING PERMIT VALUATIONS
CALENDAR YEARS 2007 THROUGH 2011
($ IN THOUSANDS)
Residential
Alterations
Single Family Mutlifamily and Total Nonresidential
Year Units Valuation Units Valuation Additions Residential Valuation Total
2007 2,698 $832,053 909 $94,505 $290,108 $1,216,665 $491,315 $1,707,980
2008 985 300,089 909 132,825 229,023 661,936 459,933 1,121,869
2009 1,038 300,363 163 34,119 170,150 504,632 314,301 818,934
2010 809 237,458 890 106,555 209,044 553,058 285,417 838,475
2011 718 211,418 355 47,305 197,219 455,942 214,521 670,463
______________
† Total represents the sum of residential building permit valuations. Data may not total due to independent rounding.
Source: Construction Industry Research Board.
An approximately 5,979 acre development located east of the City of San Ramon known as
“Dougherty Valley” is expected to add a total 11,000 new homes in the County. The development is
being constructed in nine phases with complete buildout expected in 2015. All phases of construction of
Dougherty Valley have been approved by the County. To date, approximately 8,900 homes have been
constructed, as well as the 2,200 student Dougherty Valley High School which opened in fall 2007; two
900-student middle schools and three 760-student kindergarten through grade 5 elementary schools. For
the 2011-12 academic year, approximately 2,000 students in grades 9 through 12 were enrolled in
Dougherty Valley High School.
Urban Limit Line. In November 2004, County voters approved Measure J, which extended a ½
percent transportation sales tax program within the County. Measure J included a continuation of the
Growth Management Program (the “GMP”) originally approved under the transportation sales tax
measure, known as “Measure C-1988,” and it carried forward six of eight compliance requirements from
the existing Measure C GMP. Measure J also added a new requirement that local jurisdictions adopt a
voter-approved Urban Limit Line (a boundary outside of which future growth is prohibited). In order to
remain eligible to receive the 18% Local Street Maintenance and Improvement Funds and the 5%
Transportation for Livable Communities funds under Measure J, each jurisdiction is required to adopt a
voter-approved Urban Limit Line.
On November 7, 2006, the voters in the County approved Measure L that: (i) extended the term
of the County’s Urban Limit Line to the Year 2026; (ii) requires voter approval to expand the Urban
Limit Line by more than 30 acres; (iii) adopted a new Urban Limit Line Map; and, (iv) established new
review procedures.
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D-9
On April 3, 2007, the County received a letter from the Contra Costa Transportation Authority
acknowledging that through the passage of Measure L, the County had a voter-approved Urban Limit
Line in compliance with the GMP under Measure J. To date, the County, and the cities of Antioch,
Brentwood, Pittsburg and San Ramon each have voter-approved Urban Limit Lines in compliance the
Measure C GMP.
Transportation
Availability of a broad transportation network has been one of the major factors in the County’s
economic and population growth. Interstate 80 connects the western portion of the County to San
Francisco and the central portion of the County to Sacramento and points north via Interstate 5, the major
north-south highway from Mexico to Canada. Interstate 680 connects the central County communities to
the rest of the Bay Area and portions of the Central Valley of the State via State Routes 4 and 24, the
County’s major east-west arteries.
Caltrans widened Interstate 80 in the western portion of the County at a cost of approximately
$200 million. This project was completed and opened to the public in fall 2009. Caltrans completed
construction of the Alfred Zampa Memorial span across the Carquinez Strait on Interstate Highway 80 in
2003; and completed a five lane bridge, with nine toll booths, over the Benicia – Martinez Bridge on
Interstate Highway 680 at a cost of approximately $1.3 billion in August 2007. The realignment of the
original Benicia-Martinez Bridge for four lanes of southbound traffic and two-way bicycle and pedestrian
traffic opened in August 2009.
Ground transportation is available to County residents from several service providers, as
described below:
Central Contra Costa Transit Authority provides local bus service to the central
area of the County including Walnut Creek, Pleasant Hill and Concord.
BART connects the County to Alameda County, San Francisco, including the
San Francisco International Airport, and Daly City and Colma in San Mateo
County with two main lines, one from the San Francisco area to Richmond and
the other to the Concord/Walnut Creek/Pittsburg/Bay Point area. BART has 43
stations and 104 miles of roadway in its system.
AC Transit provides local bus service and connects Contra Costa communities to
San Francisco and Oakland.
Other bus service is provided by Greyhound.
Commuter rail service is provided by the Capital Corridor, with daily runs
between the Bay Area and Sacramento that stop at the intermodal facility in
Martinez, the County seat.
The Santa Fe and Union Pacific Railroads’ main lines serve the County, both in
the industrial coastal areas and in the inland areas.
Commercial water transportation and docking facilities are available through a number of port
and marina locations in the County. The Port of Richmond on San Francisco Bay and several privately
owned industrial docks on both San Pablo and Suisun Bays serve the heavy industry located in the area.
The Port of Richmond, owned and operated by the City of Richmond, is comprised of seven city owned
terminals, five dry docks and 11 privately owned terminals, covers approximately 202 acres and handles
more than 20 million metric tons of general, liquid and dry bulk commodities annually. The majority of
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D-10
the shipments are bulk liquids, primarily petroleum, petroleum products, chemicals and petrochemicals,
coconut and other vegetable oils, tallow and molasses. Imports of automobiles, agricultural products,
vehicles, steel products, scrap metals and other diversified bulk cargo are significant components of Port
activities.
Major scheduled airline passenger and freight transportation for County residents is available at
either Oakland or San Francisco International Airports, located about 20 and 30 miles, respectively, from
the County. In addition there are two general aviation fields, one located in Byron and the other in
Concord.
Environmental Control Services
Water. The East Bay Municipal Utilities District (“EBMUD”) and the Contra Costa County
Water District (“CCWD”) supply water to the County. EBMUD supplies water to the western part of the
County, including Alamo, Crockett, Danville, Diablo, Hercules, Lafayette, Moraga, Orinda, Pinole,
portions of Pleasant Hill, Richmond, Rodeo, San Pablo, San Ramon Selby and portions of Walnut Creek.
Approximately 89% of its supply is from the Mokelumne River watershed stored at the 69.4 billion gallon
capacity Pardee Dam in Ione, California. EBMUD is entitled to 325 million gallons per day under a
contract with the State Water Resources Control Board, plus an additional 119 million gallons per day in
a single dry year under a contract with the U.S. Water and Power Resources Service (formerly the U.S.
Bureau of Reclamation). After dry winters in 2006 and 2007, EBMUD water supplies were at critically
low levels. To safeguard the shrinking supply, in spring 2008, EBMUD declared a drought emergency,
imposed mandatory water rationing goals ranging from 5% for industrial users to 19% for single family
residential users to 30% for irrigation user, and imposed drought surcharge rates commencing August 1,
2008. As a result of strong customer conservation and greater run-off in spring 2009, the mandatory
rationing program was terminated and was replaced with a voluntary 10% conservation program. The
voluntary conservation program was terminated on April 27, 2010.
CCWD obtains its water from the Sacramento-San Joaquin Delta and serves approximately
500,000 customers in the central and eastern part of the County, including Antioch, Bay Point, Clayton,
Clyde, Concord, Martinez, Oakley, portions of Pleasant Hill, Pittsburg and portions of Walnut Creek. It
is entitled under a contract with the U.S. Water and Power Resources Service to purchase 195,000 acre-
feet per year. Water purchased by CCWD has ranged between 80,000 and 110,000 acre-feet annually. In
addition, a number of industrial users and several municipalities draw water directly from the San Joaquin
River under their own riparian rights, so that actual water usage in the service area averages about
125,000 acre-feet annually. To provide expanded water storage capacity, CCWD constructed the Los
Vaqueros Reservoir with a capacity of 100,000 acre-feet south of the City of Antioch. In spring 2004,
62% the voters within CCWD approved the preparation of an economic analysis, a technical feasibility
report and environmental review to expand the reservoir up to 275,000 acre-feet. In March 2010, the
final Environmental Impact Statement/Environmental Impact Report to expand the reservoir to 160,000
square feet were certified. Construction was complete and the expanded reservoir was dedicated on
July 13, 2012.
Sewer. Sewer services in the County are provided by approximately 20 sanitation districts and
municipalities. Federal and State environmental requirements, plus grant money available from these two
sources, resulted in upgrading, expanding and/or building new facilities by approximately 14 agencies.
Flood Control. The Contra Costa County Flood Control and Water Conservation District (the
“District”) has been in operation since 1951 to plan, build, and operate flood control projects in
unincorporated areas of the County except for the Delta area on its eastern border. The Delta is
interspersed with inland waterways that fall under the jurisdiction of the U.S. Army Corps of Engineers
and the State Department of Water Resources. The District is responsible for meeting requirements set
forth by the Environmental Protection Agency (“EPA”) with respect to addressing potential pollutants in
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D-11
nonspecific groundwater runoff. The County is not presently able to estimate the cost of compliance with
EPA requirements, although such costs may be significant.
Education and Health Services
Education. Public school education in the County is available through nine elementary school
districts, two high school districts and seven unified school districts. As of Fiscal Year 2011-12, these
districts provided: 141 elementary schools; 46 middle, junior high and intermediate schools; five
alternative schools; 36 high schools; 13 continuation schools; four community day schools; four charter
elementary schools; on charter high school; five alternative schools; one independent school; juvenile
court education facilities; three adult schools; four special education facilities; and a number of
preschools. In addition, there are 116 private schools with six or more students in the County. School
enrollment for Fiscal Year 2011-12 (the most recent year for which data is available) numbered
approximately 169,400 students in public schools and approximately 16,300 in regular graded private
schools.
Higher education is available in the County through a combination of two-year community
colleges and four-year colleges, including the Contra Costa County Community College District which
has campuses in Brentwood, Pleasant Hill, Pittsburg, San Pablo, San Ramon and Walnut Creek;
California State University East Bay which operates a branch campus, called Contra Costa Center, in the
City of Concord where late afternoon and evening classes in business, education and liberal arts are
offered; and St. Mary’s College of California, a four-year private institution, located on a 100-acre
campus in Moraga. Also located within the County is the John F. Kennedy University with campuses in
Pleasant Hill and Pittsburg, the UC Berkeley Extension Contra Costa Center in San Ramon and the
University of Phoenix Campus in Concord.
Health Services. There are 12 privately operated hospitals and one public hospital in the County,
with a combined total of approximately 1,900 beds. The major public hospital is the Contra Costa
Regional Medical Center located in Martinez. See also “–Contra Costa Regional Medical Center.” Five
of the private hospitals are run by Kaiser, the largest health maintenance organization in the United States.
The Walnut Creek-based John Muir/Mt. Diablo Health System operates hospitals at its Walnut Creek and
Concord Campuses and outpatient services at its Brentwood Campus and in Rossmoor.
Doctors Medical Center. Doctors Medical Center is operated by the West Contra Costa Health
Care District (the “Health Care District”). This 247 bed facility is located in the western portion of the
County, which has a population of approximately 250,000, a large portion of whom are low income.
Doctors Medical Center provides medical services to the general public and is a critical component of the
County Emergency Medical Services system.
Contra Costa Regional Medical Center. The public hospital in the County is Contra Costa
Regional Medical Center (“CCRMC”), a 164-bed facility located in the City of Martinez. The County
completed a public health/clinical laboratory in 2001 on the CCRMC campus, converted the former Los
Medanos Hospital into the Pittsburg Health Center, completed construction of an ambulatory care clinic
on the campus of CCRMC and expanded clinics in Antioch, Concord and Brentwood. In 2009, the
County reopened the Bay Point Family Health Center in Pittsburg, following extensive renovations,
including construction of a state-of-the-art children’s dental clinic, and on October 9, 2012, the County
opened the West County Health Center in San Pablo, a two-story, 53,000 square foot health center.
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E-1
APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
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F-1
APPENDIX F
DTC AND THE BOOK ENTRY SYSTEM
The information in this Appendix F concerning The Depository Trust Company, New York, New
York (“DTC”) and DTC’s book-entry system has been obtained from DTC and the County takes no
responsibility for the completeness or accuracy thereof. The County cannot and does not give any
assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners
(a) payments of interest or principal with respect to the 2013 Bonds, (b) certificates representing
ownership interest in or other confirmation or ownership interest in the 2013 Bonds, or (c) redemption or
other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the 2013 Bonds, or that
they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in
the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the
Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing
with DTC Participants are on file with DTC.
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the
2013 Bonds. The 2013 Bonds will be issued as fully-registered securities registered in the name of Cede
& Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized
representative of DTC. One fully-registered security certificate will be issued for the maturity and CUSIP
number of the 2013 Bonds and will be deposited with DTC.
DTC, the world’s largest depository, is a limited-purpose trust company organized under the New
York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York
Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million
issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market
instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC.
DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants’ accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of
The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC,
National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are
registered clearing agencies. DTTC is owned by users of its regulated subsidiaries. Access to the DTC
system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, and clearing corporations that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s
rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchases of the 2013 Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the 2013 Bonds on DTC’s records. The ownership interest of
each actual purchaser of each 2013 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and
Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
2013 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the 2013 Bonds, except in the event that use of the book-entry system for the 2013
Bonds is discontinued.
12036\pos-3
F-2
To facilitate subsequent transfers, all 2013 Bonds deposited by Direct Participants with DTC are
registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of the 2013 Bonds with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the 2013 Bonds; DTC’s records
reflect only the identity of the Direct Participants to whose accounts such 2013 Bonds are credited, which
may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of the 2013 Bonds may wish to
take certain steps to augment the transmission to them of notices of significant events with respect to the
2013 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Fiscal Agent
Agreement. For example, Beneficial Owners of the 2013 Bonds may wish to ascertain that the nominee
holding the 2013 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners.
In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and
request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the 2013 Bonds within a maturity are
being redeemed. DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in each issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
the 2013 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct
Participants to whose accounts the 2013 Bonds are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the 2013 Bonds will be made to
Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s
practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail
information from the Issuer or the Fiscal Agent, on payable date in accordance with their respective
holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in “street name,” and will be the responsibility of such Participant
and not of DTC, the Fiscal Agent or the Issuer, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments (or
such other nominee as may be requested by an authorized representative of DTC) is the responsibility of
the Issuer or the Fiscal Agent, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through
its Participant, to Remarketing Agent, and shall effect delivery of such Securities by causing the Direct
Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to Remarketing
Agent. The requirement for physical delivery of Securities in connection with an optional tender or a
mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred
by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to
Remarketing Agent’s DTC account.
12036\pos-3
F-3
DTC may discontinue providing its services as depository with respect to the 2013 Bonds at any
time by giving reasonable notice to the Issuer or the Fiscal Agent. Under such circumstances, in the event
that a successor depository is not obtained, 2013 Bond certificates are required to be printed and
delivered.
The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a
successor securities depository). In that event, 2013 Bond certificates will be printed and delivered.
The information in this section concerning DTC and DTC’s book-entry system has been obtained
from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
200-12036\cda-3
L&J DRAFT #3
11/27/12
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “Disclosure Certificate”), is executed and delivered
by the County of Contra Costa, a political subdivision, organized and existing under the Constitution and
the laws of the State of California (the “County”), in connection with the execution and delivery by the
County of $_________ principal amount of County of Contra Costa Community Facilities District No.
2001-1 (Norris Canyon) 2013 Special Tax Refunding Bonds (the “2013 Bonds”). The 2013 Bonds are
issued pursuant to a Fiscal Agent Agreement, dated as of January 1, 2013, (the “Fiscal Agent
Agreement”), by and between the County for and on behalf of the County of Contra Costa Community
Facilities District No. 2001-1 (Norris Canyon) (the “District”), and The Bank of New York Mellon Trust
Company, N.A., as fiscal agent (the “Fiscal Agent”). The County covenants and agrees as follows:
SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed
and delivered by the County for the benefit of the Beneficial Owners of the 2013 Bonds and in order to
assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).
SECTION 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement,
which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
“Annual Disclosure Report” shall mean any Annual Disclosure Report provided by the County
pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote
or consent with respect to, or to dispose of ownership of any Bonds (including persons holding Bonds
through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for
federal income tax purposes.
“Disclosure Representative” shall mean the [Auditor-Controller of the County] or such other
official as may be designated in writing to the Dissemination Agent (if other than the County) from time
to time.
“Dissemination Agent” shall mean initially Digital Assurance Certification, L.L.C., acting in its
capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing
by the County and which has filed with the County a written acceptance of such designation.
“Filing Date” shall mean no later than eight (8) months following the end of each fiscal year of
the County (or the next succeeding business day if such day is not a business day), commencing with the
filing due eight months following the end of Fiscal Year 2012-13.
“MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated
or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until
otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB
are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB,
currently located at http://emma.msrb.org.
“Official Statement” means the Official Statement dated _______, 2013 relating to the 2013
Bonds.
200-12036\cda-3 2
“Participating Underwriter” shall mean the original underwriter of the 2013 Bonds required to
comply with the Rule in connection with offering of the 2013 Bonds.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“Specified Event” shall mean any of the events listed in Section 5(a) or Section 5(b) of this
Disclosure Certificate and any other event legally required to be reported pursuant to the Rule.
SECTION 3. Provision of Annual Disclosure Reports.
(a) The County shall provide, or shall cause the Dissemination Agent to provide, not later
than the Filing Date, to the MSRB an Annual Disclosure Report which is consistent with the requirements
of Section 4 of this Disclosure Certificate. The Annual Disclosure Report shall be submitted in electronic
format, accompanied by such identifying information as is prescribed by the MSRB, and may be
submitted as a single document or as separate documents comprising a package and may cross-reference
other information as provided in the Disclosure Certificate. If the fiscal year of the County changes, it
shall give notice of such change in the same manner as for a Specified Event under this Disclosure
Certificate.
(b) Not later than fifteen (15) Business Days prior to the Filing Date, the County shall
provide the Annual Disclosure Report to the Dissemination Agent (if other than the County). The County
shall provide, or cause the preparer of the Annual Disclosure Report to provide, a written certificate with
each Annual Disclosure Report furnished to the Dissemination Agent to the effect that such Annual
Disclosure Report constitutes the Annual Disclosure Report required to be furnished to it hereunder. The
Dissemination Agent may conclusively rely upon such certification and shall have no duty or obligation
to review such Annual Disclosure Report.
(c) If the County is unable to provide to the Annual Disclosure Report to the MSRB by the
date required in subsection (a), the County shall send a notice to the MSRB in substantially the form
attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) If not previously filed by the County, send a notice to the MSRB in substantially
the form attached as Exhibit A, if the County is unable to provide to the Annual Disclosure
Report to the MSRB by the date required in subsection (a).
(ii) File a report with the County certifying that the Annual Disclosure Report has
been provided pursuant to this Disclosure Certificate, stating the date it was provided.
SECTION 4. Content of Annual Disclosure Reports. The Annual Disclosure Report shall
contain or include by reference the following:
(a) The audited financial statements of the County for the prior fiscal year prepared in
accordance with generally accepted accounting principles in effect from time to time by the
Governmental Accounting Standards Board to apply to governmental entities. If the audited financial
statements are not available by the time the Annual Disclosure Report is required to be filed pursuant to
Section 3(a), the Annual Disclosure Report shall contain unaudited financial statements in a format
similar to the financial statements contained in the Official Statement, and the audited financial
200-12036\cda-3 3
statements shall be filed in the same manner as the Annual Disclosure Report when they become
available.
The audited financial statements of the County are provided solely to comply with the
interpretation by Securities and Exchange Commission staff of the Rule. No funds or assets of the
County are required to be used to pay debt service on the 2013 Bonds, and the County is not
obligated to advance available funds to cover any delinquencies. Investors should not rely on the
financial condition of the County in evaluating whether to buy, hold or sell the 2013 Bonds.
(b) The following information with respect to the 2013 Bonds and the District:
1. The principal amount of the 2013 Bonds outstanding.
2. The balances of all funds and accounts established by the Fiscal Agent
Agreement as of the end of the next preceding fiscal year.
3. Total assessed value of all parcels subject to the Special Tax.
4. Actual Special Tax levy for the most recent fiscal year, Special Tax and property
tax delinquency rate for parcels in the District for the most recent year.
5. Concerning delinquent parcels:
(i) number of parcels delinquent in payment of Special Tax,
(ii) amount of total delinquency and as a percentage of total Special Tax
levy, and
(iii) status of the County’s foreclosure proceedings upon delinquent
properties.
6. Identity of any delinquent tax payer obligated for more than 10% of the annual
Special Tax levy and:
(i) assessed value of applicable properties, and
(ii) summary of results of foreclosure sales, if available.
7. Significant amendments to land use entitlements for property in the District
known to the Director, of the Department of Conservation and Development.
8. Status of any significant legislative, administrative, and judicial challenges to the
construction of the development in the District known to the County’s Director of Community
Development, without independent inquiry, for any year in which construction activity has
occurred in the District.
(c) To the extent not otherwise provided pursuant to the preceding items 4(b)1- 4(b)8, annual
information required to be filed by the County for the District with the California Debt and Investment
Advisory Commission pursuant to Sections 50075.1, 50075.3, 53359.5(b), 53410(d) or 53411 of the
California Government Code.
(d) The presentation and format of the Annual Disclosure Reports may be modified from
time to time as determined in the judgment of the County to conform to changes in accounting or
disclosure principles or practices and legal requirements followed by or applicable to the County to reflect
200-12036\cda-3 4
changes in the business, structure, operations, legal form of the County or any mergers, consolidations,
acquisitions or dispositions made by or affecting the County; provided that any such modifications shall
comply with the requirements of the Rule.
Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues of the County or related public entities, which have been made
available to the public on the MSRB website. The County shall clearly identify each such other document
so included by reference.
SECTION 5. Reporting of Specified Events.
(a) Pursuant to the provisions of this Disclosure Certificate, the County shall give, or cause
to be given, notice of the occurrence of any of the following events with respect to the 2013 Bonds not
later than ten (10) business days after the occurrence of the event:
(i) Principal and interest payment delinquencies;
(ii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iii) Unscheduled draws on credit enhancements reflecting financial difficulties;
(iv) Substitution of credit or liquidity providers, or their failure to perform;
(v) Issuance by the Internal Revenue Service of proposed or final determination of
taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB);
(vi) Tender offers;
(vii) Defeasances;
(viii) Rating changes; or
(ix) Bankruptcy, insolvency, receivership or similar event of the obligated person.
This event is considered to occur upon the happening of any of the following: the appointment of
a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of the assets or business of
the obligated person, or if such jurisdiction has been assumed by leaving the existing
governmental body and officials or officers in possession but subject to the supervision and
orders of a court or governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) The County shall give, or cause to be given, notice to the MSRB of the occurrence of any
of the following events described in this Section 5(b) with respect to the 2013 Bonds, if material, not later
than ten (10) business days after the occurrence of the event:
(i) Unless described in Section 5(a)(v) above, adverse tax opinions or other material
notices or determinations by the Internal Revenue Service with respect to the tax status of the
2013 Bonds or other material events affecting the tax status of the 2013 Bonds;
200-12036\cda-3 5
(ii) Modifications to rights of the Bond holders;
(iii) Optional, unscheduled or contingent Bond calls;
(iv) Release, substitution, or sale of property securing repayment of the 2013 Bonds;
(v) Non-payment related defaults;
(vi) The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the obligated person, other
than in the ordinary course of business, the entry into a definitive agreement to undertake such an
action or the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms; or
(vii) Appointment of a successor or additional fiscal agent or the change of name of a
fiscal agent.
(c) The County acknowledges that it is required to make a determination whether a Specified
Event in Section 5(b) above is material under applicable federal securities laws in order to determine
whether a filing with the MSRB is required under Section 5(b). Notwithstanding the foregoing, notice of
Specified Events described in Section 5(a)(vii) and Section 5(b)(iii) above need not be given any earlier
than the notice (if any) of the underlying event is given to Holders of affected 2013 Bonds pursuant to the
Fiscal Agent Agreement.
SECTION 6. Termination of Reporting Obligation. The obligations of the County under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all
of the 2013 Bonds. If such termination occurs prior to the final maturity of the 2013 Bonds, the County
shall give notice of such termination in the same manner as for a Specified Event under Section 5(c).
SECTION 7. Dissemination Agent. The County may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may
discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.
The Dissemination Agent may resign by providing thirty (30) days written notice to the County.
The initial dissemination agent shall be Digital Assurance Certification, L.L.C.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the County may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a) or 5(b), it
may only be made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or status of an obligated person with respect
to the 2013 Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of
nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the
original execution and delivery of the 2013 Bonds, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances; and
200-12036\cda-3 6
(c) The amendment or waiver either (i) is approved by the Holders of the 2013 Bonds in the
same manner as provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement
with the consent of Holders, or (ii) does not, in the opinion of a nationally recognized bond counsel,
materially impair the interests of the Holders or Beneficial Owners of the 2013 Bonds.
(d) Any amendment that modifies or increases the duties or obligations of the Dissemination
Agent shall be agreed to in writing by the Dissemination Agent.
In the event of any amendment or waiver of a provision of this Disclosure Certificate, the County
shall describe such amendment in the next Annual Disclosure Report, and shall include, as applicable, a
narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case
of a change of accounting principles, on the presentation) of financial information or operating data being
presented by the County. In addition, if the amendment relates to the accounting principles to be
followed in preparing financial statements, (i) notice of such change shall be given in the same manner as
for a Specified Event, and (ii) the Annual Disclosure Report for the year in which the change is made
shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the
financial statements as prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles.
SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the County from disseminating any other information, using the means of dissemination set forth
in this Disclosure Certificate or any other means of communication, or including any other information in
any Annual Disclosure Report or notice of occurrence of a Specified Event, in addition to that which is
required by this Disclosure Certificate. If the County chooses to include any information in any Annual
Disclosure Report or notice of occurrence of a Specified Event in addition to that which is specifically
required by this Disclosure Certificate, the County shall have no obligation under this Disclosure
Certificate to update such information or include it in any future Annual Disclosure Report or notice of
occurrence of a Specified Event.
SECTION 10. Default. This Disclosure Certificate shall be solely for the benefit of the holders
and beneficial owners from time to time of the 2013 Bonds. In the event of a failure of the County to
comply with any provision of this Disclosure Certificate, the Fiscal Agent may (and, at the request of the
Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding
Bonds and upon receipt of indemnity satisfactory to the Fiscal Agent, shall), or any Holder or Beneficial
Owner of the 2013 Bonds may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by order of a court of competent jurisdiction in Contra Costa County,
California, to cause the County to comply with its obligations under this Disclosure Certificate, provided
that any holder or beneficial owner seeking to require the County to comply with this Disclosure
Certificate shall first provide at least thirty (30) days prior written notice to the County of the failure of
the County, giving reasonable detail of such failure. Failure by the County to comply with any provision
of this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement,
and the sole remedy under this Disclosure Certificate in the event of any failure of the County to comply
with the terms of this Disclosure Certificate shall be an action to compel performance. No person or
entity shall be entitled to recover monetary damages under this Disclosure Certificate.
SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination
Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the
County agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and
agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the
exercise or performance of its powers and duties hereunder, including the costs and expenses (including
attorneys fees) of defending against any claim of liability, but excluding liabilities due to the
200-12036\cda-3 7
Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall be paid
compensation by the County for its services provided hereunder in accordance with its schedule of fees as
amended from time to time and all expenses, legal fees and advances made or incurred by the
Dissemination Agent in the performance of its duties hereunder. The obligations of the County under this
Section 11 shall survive resignation or removal of the Dissemination Agent and payment of the 2013
Bonds.
SECTION 12. Notices. Any notice or other communication to be given by the County or the
Dissemination Agent under this Disclosure Certificate may be given by delivering the same by first class
mail, postage prepaid, messenger, or overnight delivery to the addresses set forth below (until another
address is filed by the County or the Dissemination Agent with the Fiscal Agent):
To the County: County of Contra Costa
625 Court Street
Martinez, California 94553
Attention: Auditor-Controller
Telephone: 925-646-2181
Fax: 925-646-2649
With a Copy to:
Contra Costa County Department of
Conservation & Development
30 Muir Road
Martinez, California 94553
Attention: Community Development Bond Program Manager
Telephone: 925-674-7888
Fax: 925-674-7258
If to the Fiscal Agent: The Bank of New York Mellon Trust Company, N.A.
100 Pine Street, Suite 3100
San Francisco, California 94111
Attention: Corporate Trust Department
Telephone: 415-________
Fax: 415-________
Email: _________
If to the Dissemination Agent: Digital Assurance Certification, L.L.C.
390 North Orange Avenue, Suite 1750
Orlando, Florida 32801
Attention: ___________
Phone: 407-515-1100
Fax: ___________
Email: ____@dacbond.com
SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
County, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners
from time to time of the 2013 Bonds, and shall create no rights in any other person or entity.
SECTION 14. Record Keeping. The County shall maintain records of Annual Disclosure
Reports and notices of Specified Events, including the content of such disclosure, the name of the entities
with which such disclosure was filed and the date of filing of such disclosure.
200-12036\cda-3 8
SECTION 15. Governing Law. The laws of the State of California shall govern this Disclosure
Certificate, the interpretation thereof and any right or liability arising hereunder. Any action or
proceeding to enforce or interpret any provision of this Disclosure Certificate shall be brought,
commenced or prosecuted in any courts of the State located in Contra Costa County, California.
SECTION 16. Counterparts. This Disclosure Certificate may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
Dated: ___________, 2013
COUNTY OF CONTRA COSTA
By:________________________________________
[Name], [Title]
The undersigned hereby agrees to act as
Dissemination Agent to the County pursuant
to the terms and conditions of this
Continuing Disclosure Certificate
DIGITAL ASSURANCE CORPORATION, L.L.C.
By:________________________________________
Authorized Officer
200-12036\cda-3 A-1
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL DISCLOSURE REPORT
Name of Obligated Party: County of Contra Costa
Name of Bonds: County of Contra Costa Community Facilities District No. 2001-1
(Norris Canyon) 2013 Special Tax Refunding Bonds
Date of Delivery: _______, 2013
NOTICE IS HEREBY GIVEN that the County has not provided an Annual Disclosure Report with
respect to the above-named Bonds as required by the Continuing Disclosure Certificate, dated as of
January 1, 2013 with respect to the 2013 Bonds. [The County anticipates that the Annual Disclosure
Report will be filed by __________.]
DIGITAL ASSURANCE CORPORATION, L.L.C.,
as Dissemination Agent
By:________________________________________
Authorized Officer
cc: County