Professional Documents
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City Council and Successor Agency Regular Packet 05-23-17
City Council and Successor Agency Regular Packet 05-23-17
AGENDA
Agenda/Packet: The Agenda/Packet is available for review at Fillmore City Hall and online at
www.fillmoreca.com/cityhall/agendas 72 hours before the scheduled meeting (but generally available
the Thursday prior to the scheduled Tuesday meeting). Materials related to an item on this agenda
submitted to the City Council/Successor Agency after distribution of the agenda packet are available
for public inspection in the City Clerks Office during regular business hours and on the Citys website
subject to staffs ability post the documents before the meeting.
Americans with Disabilities Act: In compliance with the ADA, if you need special assistance to
participate in this meeting or other services in conjunction with this meeting, please contact the City
Clerks Office at (805) 524-3701. Notification 48 hours prior to the meeting will enable the City to
make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 35.102-35.104 ADA
Title II)
Audible Devices: Please ensure all audible devices (pagers, telephones, etc.) are off or otherwise not
audible when the City Council/SA is in session. Thank you.
Challenging City Council/Successor Agency Decisions: Any legal action by an applicant seeking to
obtain a judicial review of the City Council/Successor Agencys decision on a hearing or issue listed
on this Agenda may be subject to the 90-day filing period of, and governed by, Code of Civil
Procedure 1094.6. Additionally, if you challenge the actions of the City Council/Successor Agency
in court, you may be limited to raising only those issues you or someone else raised at the public
hearing described in the public notice, or in written correspondence delivered to the City
Council/Successor Agency at, or prior to, the public hearing pursuant to California Government Code
65009.
Consent Calendar: Items listed on the Consent Calendar are considered to be routine in nature, not
discussed individually, and are normally approved by one motion. If a Councilmember or member of
the public wishes to comment on a particular item, that item shall be removed for separate action.
No New Business will be considered by the City Council/Successor Agency after 11:30 p.m. unless a
majority of the legislative body determines to continue.
Public Input: If you wish to address the Council/Successor Agency regarding an item listed on this
agenda, please complete and submit an Audience Participation Form to the City Clerk prior to
consideration of that agenda item. Public Comments is the time for presentations/comments not on
this agenda but within the subject-matter jurisdiction of the City Council/Successor Agency. Please
complete and submit an Audience Participation Form to the City Clerk prior to the beginning of Public
Comments. Pursuant to California Government Code/Brown Act, the City Council/Successor Agency
ordinarily cannot take action on any item that is not listed on the agenda. As a result, matters
identified during Public Comment will be referred to staff for follow-up or considered on a future
agenda. In accordance with Resolution No. 09-3175, speakers are provided five (5) minutes for items
listed on the agenda and no more than five (5) minutes to speak during Public Comments. Please
stay within the time allotment indicated by the Mayor.
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Replay Schedule: City Council/SA meetings will be re-broadcast on Channel 10 daily at 6:00 p.m.
CITY OF FILLMORE
CITY COUNCIL AND SUCCESSOR AGENCY REGULAR
TUESDAY, MAY 23, 2017
6:30 PM
CITY HALL
250 CENTRAL AVENUE
AGENDA
1. CALL TO ORDER
2. PLEDGE OF ALLEGIANCE
3. ROLL CALL - MAYOR CARRIE BROGGIE, MAYOR PRO TEM MANUEL MINJARES,
COUNCILMEMBERS DIANE MCCALL, MARK AUSTIN AND TIM HOLMGREN
4. APPROVAL OF AGENDA
5. PUBLIC COMMENTS
7. OLD BUSINESS
7.A ADOPTION OF RESOLUTION AUTHORIZING AND DIRECTING THE EXECUTION OF A
JOINT EXERCISE OF POWERS AGREEMENT CREATING THE FILLMORE AND
PIRU BASINS GROUNDWATER SUSTAINABILITY AGENCY AND ADOPTION OF A
RESOLUTION APPOINTING A CITY COUNCIL REPRESENTATIVE TO THE BOARD
OF DIRECTORS
Staff Report JPA Packet.pdf
8. NEW BUSINESS
8.A INTRODUCTION OF ORDINANCE NO. 17-879 TO ADOPT CHANGES TO CLARIFY 3
THE CITY MANAGERS CONTRACTING AUTHORITY AND THRESHOLDS FOR
FORMAL AND INFORMAL BIDDING REQUIREMENTS FOR CONSISTENCY WITH
THE STATES UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT (ACT)
CC Report UPCCAA Update Ordinance FINAL wATTCH.pdf
8.B AWARD OF CONTRACT FOR THE DOG PARK FENCE INSTALLATION PROJECT AT
TWO RIVERS PARK
CC Report Dog Park Fencing Contract Award FINAL.pdf
8.H CONDUCT PUBLIC HEARING AND ADOPT RESOLUTION NO. 17-3596 TO ALLOW
COLLECTION OF THE DELINQUENT WATER AND SEWER UTILITY ACCOUNTS BY
PLACING THEM ON THE PROPERTY TAX ROLL
Staff Report - Delinquent Accounts Public Hearing 5-23-2017.pdf
13. ADJOURNMENT - MAYOR CARRIE BROGGIE ADJOURNS THE MEETING TO THE NEXT
SPECIAL JOINT CITY COUNCIL AND FILLMORE UNIFIED SCHOOL DISTRICT BOARD MEETING
AT 6:30 P.M. ON TUESDAY, MAY 30TH AT 277 CHAMBERSBURG ROAD, FILLMORE, CA.
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CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
REQUEST
The City Council and Board of Directors of the Fillmore Successor Redevelopment
Agency are being requested to adopt the attached policy (Attachment A) that will govern
the management of debt. Prudent financial management dictates that the City
Council/Agency Board adopt a debt policy to ensure that public funds are properly
utilized and debt is effectively and carefully managed.
DISCUSSION
The City adopted a new debt policy in March 2016 and is now updating the policy to
bring the City into compliance with new rules enacted by Senate Bill No. 1029. This bill
required the City to review its debt policy to ensure it included the components of this
bill. Upon review of the policy, two key items were required to be added that pertained
to 1) the need for long-term financial planning and 2) the ability to maintain proper levels
of capital reserves to fund normal wear and tear of infrastructure and facility
improvements. Additionally, it was also determined that the City needed to add
information on funding and utilizing the Rate Stabilization Fund. These items have all
been incorporated into the updated Debt Management Policy.
The City incorporates the GFOA's best practices into the debt policy and following is a
description:
Debt management policies are written guidelines, allowances, and restrictions that
guide the debt issuance practices of state or local governments, including the
issuance process, management of a debt portfolio, and adherence to various laws
and regulations. A debt management policy should improve the quality of
decisions, articulate policy goals, provide guidelines for the structure of debt
issuance, and demonstrate a commitment to long-term capital and financial
planning. Adherence to a debt management policy signals to rating agencies and
the capital markets that a government is well managed and therefore is likely to
meet its debt obligations in a timely manner. Debt management policies should be
written with attention to the issuers specific needs and available financing options
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Debt Management Policy
March 23, 2017
Page 2 of 2
and are typically implemented through more specific operating procedures. Finally,
debt management policies should be approved by the issuers governing body to
provide credibility, transparency and to ensure that there is a common
understanding among elected officials and staff regarding the issuers approach to
debt financing.
The updated Debt Management Policy is a comprehensive policy that complies with the
GFOA definition for debt management and the new SB 1029 requirements.
FISCAL IMPACT
This adoption of the Debt Policy has no fiscal impact.
RECOMMENDATION
It is recommended that the City Council/Agency Board approve the attached Debt
Management Policy.
ATTACHMENTS
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City of Fillmore Debt Policy
City of Fillmore
Debt Management Policy
This Debt Management Policy, established for the City of Fillmore, is intended to
guide the Finance Department in its debt issuance in the course of its customary
practices. From time to time, certain circumstances arise which could cause the
Finance Department to deviate from the policies herein.
Issue and manage short and long-term financings (bonds, TRANs (as defined
later herein), etc.), both for capital improvement and operating needs, by
balancing market and credit risk with satisfactory economic benefits and proper
fiscal controls.
The City may utilize several types of municipal debt obligations to finance long-
term capital projects. Long-term debt is only issued to finance the acquisition
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01148.0007/287754.4 Page 1 of 14
City of Fillmore Debt Policy
GO bonds are bonds secured by a pledge of full faith and credit of the
issuer and/or by a promise to levy taxes in an unlimited amount as
necessary to pay debt service. With very few exceptions, local agencies
are not authorized to issue full faith and credit bonds. The GO bonds of
such agencies are typically payable only from ad valorem property taxes,
which are required to be levied in an amount sufficient to pay interest and
principal on the bonds maturing in each year.
01148.0007/287754.4 Page 2 of 14
City of Fillmore Debt Policy
Tax Allocation Bonds. Using former tax increment funds as a pledge for
repayment, the Successor Agency may issue Tax Allocation Bonds as
provided by the Dissolution Act. The City may, in connection with the
formation of other replacement redevelopment financing mechanisms like
EIFDs (Enhanced Infrastructure Financing Districts) issue debt secured by
the appropriate property taxes as provided by law, taking into account its
prior redevelopment debt. Careful consideration must be taken by the City
or relevant entity when issuing these bonds, to ensure that the revenue
source is not already pledged to some other encumbrance.
01148.0007/287754.4 Page 3 of 14
City of Fillmore Debt Policy
01148.0007/287754.4 Page 4 of 14
City of Fillmore Debt Policy
The City intends to issue debt for the purposes stated in this Debt Policy and to
implement policy decisions incorporated in the Citys capital improvements
budget. Notwithstanding the Constitutional and statutory limitations on issuing
debt, it is the policy of the City that aggregate debt service payments funded from
General Fund sources shall be no greater than 12% of current General Fund
revenues. Payments on bonds that are tied to a specified revenue stream other
than General Fund sources (e.g. enterprise revenue bonds, tax allocation bonds
and assessment bonds) are not subject to this 12% limit. Each proposed
financing will be individually assessed by the Finance Department and subject to
the approval policies contained herein.
The City will strive to fund the upkeep and maintenance of its infrastructure and
facilities due to normal wear and tear through the expenditure of available
operating revenues. The City will seek to avoid the use of debt to fund
infrastructure and facilities improvements that are the result of normal wear and
tear. The City will also integrate its debt issuances with the goals of its capital
improvements budget by timing the issuance of debt to ensure that projects are
available when needed in furtherance of the Citys public purposes.
V. Methods of Sale
The Finance Director in consultation with the City Manager and the Financial
Advisor shall review each transaction on a case-by-case basis to determine the
most appropriate method of sale.
Underwriters submit closed bids to the issuer on the day and time
designated in the official notice of sale. The bonds are awarded to
the underwriter that has submitted the best bid, i.e. the lowest true
interest cost bid. No structural aspects of the bonds are changed
regardless of the success or failure of the underwriter/underwriting
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01148.0007/287754.4 Page 5 of 14
City of Fillmore Debt Policy
1. All Bonds.
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01148.0007/287754.4 Page 6 of 14
City of Fillmore Debt Policy
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City of Fillmore Debt Policy
xi. Budgeting Debt Service budget shall be for gross debt service
including applicable trustee and other
fees.
2. Variable Rate Bonds. The City, upon consultation with its advisors and in
limited circumstances, may elect to issue any bonds as variable rate
bonds. Prior to issuing variable rate debt, the City shall adopt standards
with respect to the issuance of variable rate debt to the extent it
determines to issue such bonds to ensure that the city is adequately
advised and protected.
Derivative products and other financial instruments can be beneficial interest rate
management tools that can assist the City as part of its overall debt and
investment management program, but need to be monitored very closely and
understood. Derivative products may be used by the City to reduce risk
exposures or reduce interest costs, but may not be used for speculative
purposes. Should the City determine to pursue derivative products, the City shall
first receive appropriate education on such products and shall develop a
separate policy regarding its use of derivative products.
VIII. Professional Assistance. The City Council shall make the final
determination with respect to all advisors and underwriters on the bond
issue, either by designation pursuant to a resolution or by contract.
01148.0007/287754.4 Page 8 of 14
City of Fillmore Debt Policy
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01148.0007/287754.4 Page 9 of 14
City of Fillmore Debt Policy
Upon recommendation of the Finance Director, the City may retain a firm to
assist it in maintaining compliance with all continuing disclosure requirements.
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City of Fillmore Debt Policy
Annual CAFRs
01148.0007/287754.4 Page 11 of 14
City of Fillmore Debt Policy
The Finance Director and other appropriate City personnel shall consult with
bond counsel and other legal counsel and advisors, as needed, throughout the
Bond issuance process to identify requirements and to establish procedures
necessary or appropriate so that the Bonds will continue to qualify for the
appropriate tax status. Those requirements and procedures shall be
documented in a City resolution(s), Tax Certificate(s) and / or other documents
finalized at or before issuance of the Bonds. Those requirements and
procedures shall include future compliance with applicable arbitrage rebate
requirements and all other applicable post-issuance requirements of federal tax
law throughout (and in some cases beyond) the term of the Bonds.
The Finance Director and other appropriate City personnel also shall consult with
bond counsel and other legal counsel and advisors, as needed, following
issuance of the Bonds to ensure that all applicable post-issuance requirements in
fact are met. This shall include, without limitation, consultation in connection with
future contracts with respect to the use of Bond-financed assets and future
contracts with respect to the use of output or throughput of Bond-financed
assets.
Whenever necessary or appropriate, the City shall engage expert advisors (each
a Rebate Service Provider) to assist in the calculation of arbitrage rebate
payable in respect of the investment of Bond proceeds.
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City of Fillmore Debt Policy
01148.0007/287754.4 Page 13 of 14
City of Fillmore Debt Policy
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CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
TO: Mayor and City Council
REQUEST
Adoption of Resolution No. 17-3593 Authorizing and Directing the Execution of a Joint Exercise of
Powers Agreement Creating the Fillmore and Piru Basins Groundwater Sustainability Agency and
Adoption of Resolution No. 17-3594 Appointing a City Council Representative to the JPAs Board of
Directors.
DISCUSSION
The Sustainable Groundwater Management Act (SGMA), which was enacted at the end of 2014,
empowers local agencies to adopt groundwater management plans that are tailored to the resources
and needs of their communities. Good groundwater management will provide a buffer against drought
and climate change, and contribute to reliable water supplies regardless of weather patterns. This new
legislation defines sustainable groundwater management as the management and use of groundwater
in a manner that can be maintained during the planning and implementation horizon without causing
undesirable results. The SGMA provides for financial and enforcement tools to carry out effective
local sustainable groundwater management through formation of Groundwater Sustainability Agencies
(GSAs).
As a result, staff has been meeting with all agencies having an interest in groundwater basins and
forming partnerships to create a GSA for the Fillmore-Piru Basins. These include United Water
Conservation District (UWCD), Ventura County, several private water purveyors, and various
pumpers associations. These discussions have included establishing a GSA for the Fillmore and Piru
Basins as required by the SGMA. The basins and local agency boundaries are attached.
As previously discussed, the parties agreed that the GSA should be formed under the authority of a
Joint Exercise of Powers Agreement. Attached is the proposed Joint Exercise of Powers Agreement
creating the Fillmore and Piru Basins Groundwater Sustainability Agency (FPBGSA.) After several
meetings the following changes are being proposed in the JPA: 50
1. Representative means and employee of The County of Ventura authorized to act on behalf
of the Board of Supervisors, or an employee of the City of Fillmore authorized to act on behalf
of the Fillmore City Council, or an employee of United Water Conservation District authorized
to act on behalf of the United Water Conservation District Board of Directors.
3. 6.4.3 One (1) Member Director appointed by the Board of Directors for the United Water
Conservation District. The Member Director will be a member of the United Water
Conservation District Board of Directors or its Representative.
4. 6.4.4 C Environmental Stakeholder Director. The Member Directors shall consider, and if
acceptable, approve (by simple majority vote) the Environmental Stakeholder Director, which
will be a nominee nominated by the following environmental organizations collectively:
Supervisor Kelly Long was appointed the Member Director for Ventura County at their Tuesday, April
18, 2017 Board of Supervisors meeting.
Once an agreement forming this joint powers authority is approved, notice will need to be given to the
California Department of Water Resources that the FPBGSA will become the GSA for the Fillmore
and Piru Basins. This notice must be sent by June 30, 2017. The GSA will then be required to adopt a
GSP (defined below) by January 31, 2022, and thereafter manage the Fillmore and Piru Basins within
its sustainable yield.
FISCAL IMPACT 51
Fiscal impacts should be minimal for establishing a groundwater sustainability agency (GSA) for the
Fillmore and Piru Basins, since most of the work has already been accomplished. Additional staff time
and fiscal resources may be necessary to develop a Groundwater Sustainability Plan (GSP) for the
basins and the subsequent administration, management and updating of the GSP, and the exercise of
powers and authorities under the SGMA. Staff will provide an update as more is known about any
such costs.
RECOMMENDATION
1. Adopt Resolution No. 17-3593 Authorizing and Directing the Execution of a Joint Exercise of
Powers Agreement Creating the Fillmore and Piru Basins Groundwater Sustainability Agency; and
2. Adopt Resolution No. 17-3594 Appointing A City Council Member as Director to the Board of
Directors of the Fillmore and Piru Basins Groundwater Sustainability Agency.
ATTACHMENTS
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RESOLUTION 17-3593
WHEREAS, the California Legislature has adopted, and the Governor has signed into
law, the Sustainable Groundwater Management Act of 2014 ("SGMA"), which authorizes local
agencies to manage groundwater in a sustainable fashion; and
WHEREAS, the City of Fillmore, United Water Conservation District, and the County
of Ventura, ("Member Agencies") are all local agencies, as SGMA defines that term; and
WHEREAS, the Member Agencies each exercise jurisdiction upon lands overlying the
Fillmore Basin and Piru Basins (designated basin numbers 4-4.05, and 4-4.06 respectively in the
California Department of Water Resources' CASGEM groundwater basin system) ("Basins") and
are all committed to the sustainable management of the Basins groundwater resources; and
WHEREAS, the Member Agencies have determined that the sustainable management of
the Basins pursuant to SGMA may best be achieved through the cooperation of the Member
Agencies operating through a joint powers authority; and
WHEREAS, the City, upon authorization of the City Council, may pursuant to Article 1
(commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code
("JPA Act"), enter into a joint exercise of powers agreement with one or more other public
agencies pursuant to which such contracting parties may jointly exercise any power common to
them or conferred on them by the JPA Act; and
WHEREAS, all of the Member Agencies are public agencies as defined in the JPA
Act; and
WHEREAS, the Member Agencies intend to enter into a joint exercise of powers
agreement pursuant to the JPA Act ("JPA Agreement") pursuant to which the Fillmore and Piru
Basins Groundwater Sustainability Agency ("FPBGSA") will be created to, among other things,
take all actions deemed necessary by the FPBGSA to ensure sustainable management of the
basins as required by SGMA; and
WHEREAS, under California law and the JPA Agreement, the FPBGSA will be a
public entity separate and apart from the parties to the JPA Agreement and the debts, liabilities,
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01148.0001/371584.1
and obligations of the FPBGSA will not be the debts, liabilities, or obligations of the City or of
the other Member Agencies, or of any representatives of either the City or the other Member
Agencies serving on the governing body of the FPBGSA ("FPBGSA Board").
Section 1. That it is in the City's best interest and in the public interest to execute the
JPA Agreement attached to this Resolution as Exhibit 1 and that this JPA Agreement is hereby
approved.
Section 2. That the adoption of this resolution does not constitute a "project" under
the California Environmental Quality Act (CEQA) because it involves organizational or
administrative activities that will not result in direct or indirect physical changes in the
environment (CEQA Guidelines Section 15378(b)(5).).
Section 3. That the Mayor is hereby authorized to sign the JPA Agreement on
behalf of the City.
Section 4. That the City Clerk is hereby authorized and directed to attest the
signature of the authorized signatory, and to affix and attest the seal of the City of Fillmore as
may be required or appropriate in connection with the execution and delivery of the JPA
Agreement.
ATTEST:
APPROVED AS TO FORM:
CITY OF FILLMORE )
COUNTY OF VENTURA )
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01148.0001/371584.1
STATE OF CALIFORNIA )
I, Oliva Carrera Lopez, City Clerk of the City of Fillmore, California, do hereby certify
that the foregoing Resolution No. 17-3593 was duly passed and adopted by the City Council of
the City of Fillmore at the regular meeting thereof, held on the ___th day of _______, 2017, and
was signed by the Mayor of the said City, and that the same was passed and adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Oliva Carrera Lopez, City Clerk
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01148.0001/371584.1
RESOLUTION 17-3594
WHEREAS, the United Water Conservation District, the City of Fillmore, and the
County of Ventura ("Member Agencies") intend to enter into a joint exercise of powers
agreement ("JPA Agreement") creating the Fillmore and Piru Basins Groundwater Sustainability
Agency ("FPBGSA"); and
WHEREAS, the JPA Agreement requires the governing board of each Member Agency
to appoint a Director to the FPBGSA Board of Directors ("FPBGSA Board") by resolution; and
WHEREAS, the City Council of the City of Fillmore desire to appoint a Councilmember
or representative to the FPBGSA Board.
Section 2. That the City Council hereby confirms that the person appointed pursuant
to this Resolution is authorized to represent the Citys interests with respect to all matters that
come before the FPBGSA Board.
ATTEST:
APPROVED AS TO FORM:
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01148.0001/371582.1
CITY OF FILLMORE )
COUNTY OF VENTURA )
STATE OF CALIFORNIA )
I, Oliva Carrera Lopez, City Clerk of the City of Fillmore, California, do hereby certify
that the foregoing Resolution No. 17-3594 was duly passed and adopted by the City Council of
the City of Fillmore at the regular meeting thereof, held on the ___th day of _______, 2017, and
was signed by the Mayor of the said City, and that the same was passed and adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Oliva Carrera Lopez, City Clerk
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01148.0001/371582.1
Exhibit 1
by and among
and
creating
April 2017
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Table of Contents
Page
RECITALS.. 1
TERMS OF AGREEMENT 2
ARTICLE 1 DEFINITIONS 2
ARTICLE 2 CREATION OF AGENCY..... 3
ARTICLE 3 TERM. 4
ARTICLE 4 POWERS 4
ARTICLE 5 MEMBERSHIP.. 6
ARTICLE 6 BOARD OF DIRECTORS. 6
ARTICLE 7 OFFICERS. 89
ARTICLE 8 DIRECTOR MEETINGS.. 810
ARTICLE 9 VOTING 910
ARTICLE 10 EXECUTIVE DIRECTOR AND STAFF 110
ARTICLE 11 BYLAWS. 140
ARTICLE 12 COMMITTEES 120
ARTICLE 13 ACCOUNTING PRACTICES. 120
ARTICLE 14 BUDGET AND EXPENSES 121
ARTICLE 15 LIABILITIES 131
ARTICLE 16 WITHDRAWAL OF MEMBERS 142
ARTICLE 17 MISCELLANEOUS PROVISIONS. 153
-i-
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JOINT EXERCISE OF POWERS AGREEMENT
THE FILLMORE AND PIRU BASINS GROUNDWATER SUSTAINABILITY AGENCY
This Joint Exercise of Powers Agreement (Agreement) is made and effective on the
last date executed (Effective Date), by and among the City of Fillmore, the County of Ventura,
and United Water Conservation District, sometimes referred to herein individually as a Member
and collectively as the Members for purposes of forming the Piru Fillmore Groundwater
Sustainability Agency (Agency) and setting forth the terms pursuant to which the Agency shall
operate. Capitalized defined terms used herein shall have the meanings given to them in Article 1
of this Agreement.
RECITALS
C. The Piru Basin (designated basin number 4-4.06 in the DWRs Bulletin No. 118)
is designated as a high priority sub-basin of the Santa Clara River Valley Basin. The Fillmore
Basin (designated basin number 4-4.05 in the DWRs Bulletin No. 118) is designated as a medium-
priority sub-basin of the Santa Clara River Valley Basin.
E. The Members have determined that the sustainable management of the Basins
pursuant to SGMA may best be achieved through the cooperation of the Members operating
through a joint powers agreement.
F. The Joint Exercise of Powers Act of 2000 (Act) authorizes the Members to create
a joint powers authority, and to jointly exercise any power common to the Members and to exercise
additional powers granted under the Act.
G. The Act, including the Marks-Roos Local Bond Pooling Act of 1985 (Government
Code sections 6584, et seq.), authorizes an entity created pursuant to the Act to issue bonds, and
under certain circumstances, to purchase bonds issued by, or to make loans to, the Members for
financing public capital improvements, working capital, liability and other insurance needs or
projects whenever doing so would result in significant public benefits, as determined by the
Members. The Act further authorizes and empowers a joint powers authority to sell bonds so
issued or purchased to public or private purchasers at public or negotiated sales.
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H. Based on the foregoing legal authority, the Members desire to create a joint powers
authority for the purpose of taking all actions deemed necessary by the joint powers authority to
ensure sustainable management of the Basins as required by SGMA.
I. The governing board of each Member has determined it to be in the Members best
interest and in the public interest that this Agreement be executed.
TERMS OF AGREEMENT
In consideration of the mutual promises and covenants herein contained, the Members
agree as follows:
ARTICLE 1
DEFINITIONS
The following terms have the following meanings for purposes of this Agreement:
1.1 Act means the Joint Exercise of Powers Act, set forth in Chapter 5 of Division 7
of Title 1 of the Government Code, sections 6500, et seq., including all laws
supplemental thereto.
1.3 Auditor means the auditor of the financial affairs of the Agency appointed by the
Board of Directors pursuant to Section 13.3 of this Agreement.
1.5 Basins means the Fillmore Basin and Piru Basin, collectively.
1.6 Board of Directors or Board means the governing body of the Agency as
established by Article 6 of this Agreement.
1.7 Bylaws means the bylaws adopted by the Board of Directors pursuant to Article
11 of this Agreement to govern the day-to-day operations of the Agency.
1.10 Effective Date has the meaning assigned thereto in the Preamble.
1.11 Executive Director means the chief administrative officer of the Agency to be
appointed by the Board of Directors pursuant to Article 10 of this Agreement.
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1.13 FBPA means the Fillmore Basin Pumpers Association, Inc.
1.14 Fillmore Basin means the Fillmore Groundwater Basin as designated in DWRs
Bulletin 118 as basin number 4-4.05.
1.17 Member has the meaning assigned thereto in the Preamble and further means
each party to this Agreement that satisfies the requirements of Section 5.1 of this
Agreement, including any new members as may be approved by the parties,
pursuant to Section 17.3 of this Agreement.
1.19 Officer(s) means the Chair and Vice Chair/Secretary to be appointed by the
Board of Directors pursuant to Section 7.1 of this Agreement.
1.21 Piru Basin means the Piru Groundwater Basin as designated in DWRs Bulletin
118 as basin number 4-4.06.
ARTICLE 2
CREATION OF THE AGENCY
2.1 Creation of Agency. There is hereby created pursuant to the Act a joint powers
authority, which will be a public entity separate from the Members to this Agreement and shall be
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known as the Fillmore and Piru Basins Groundwater Sustainability Agency (Agency). Within
thirty (30) days after the Effective Date of this Agreement and after any amendment, the Agency
shall cause a notice of this Agreement or amendment to be prepared and filed with the office of
the California Secretary of State containing the information required by Government Code section
6503.5. Within ten (10) days after the Effective Date of this Agreement, the Agency shall cause a
statement of the information concerning the Agency, required by Government Code section 53051,
to be filed with the office of the California Secretary of State and with the County Clerk for the
County of Ventura, setting forth the facts required to be stated pursuant to Government Code
section 53051(a).
2.2 Purpose of the Agency. Each Member to this Agreement has in common the power
to study, plan, develop, finance, acquire, construct, maintain, repair, manage, operate, control, and
govern water supply, projects and exercise groundwater management authority within either or
both of the Basins either alone or in cooperation with other public or private non-member entities,
and each is a local agency eligible to serve as the GSA, either alone or jointly through a joint
powers agreement as provided for by SGMA. This Agreement is being entered into in order to
jointly exercise some or all of the foregoing common powers, as appropriate, and for the exercise
of such additional powers as may be authorized by law in the manner herein set forth, in order to
effectuate the purposes of this Agreement. The purpose of this Agency is to serve as the GSA for
the Basins and to develop, adopt, and implement the GSPs for the Basins pursuant to SGMA and
other applicable provisions of law.
ARTICLE 3
TERM
This Agreement shall become effective upon its execution by each of the Members and
shall remain in effect until terminated pursuant to the provisions of Article 16 (Withdrawal of
Members) of this Agreement.
ARTICLE 4
POWERS
The Agency shall possess the power in its own name to exercise any and all common
powers of its Members reasonably related to the purposes of the Agency, including but not limited
to the following powers, together with such other powers as are expressly set forth in SGMA and
as it may be amended in the future. For purposes of Government Code section 6509, the powers
of the Agency shall be exercised subject to the restrictions upon the manner of exercising such
powers as are imposed on the County of Ventura, and in the event of the withdrawal of the County
of Ventura as a Member under this Agreement, then the manner of exercising the Agencys powers
shall be those restrictions imposed on the City of Fillmore.
4.1 To exercise all powers afforded to the Agency under SGMA, including without
limitation:
4.1.1 To adopt rules, regulations, policies, bylaws and procedures governing the
operation of the Agency.
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4.1.2 To develop, adopt and implement a GSP for the Basins, and to exercise
jointly the common powers of the Members in doing so.
4.1.3 To obtain rights, permits and other authorizations for, or pertaining to,
implementation of a GSP for the Basins.
4.1.4 To collect and monitor data on the extraction of groundwater from, and the
quality of groundwater in, the Basin.
4.1.5 To acquire property and other assets by grant, lease, purchase, bequest,
devise, gift, or eminent domain, and to hold, enjoy, lease or sell, or otherwise dispose of,
property, including real property, water rights, and personal property, necessary for the full
exercise of the Agencys powers.
4.1.6 To establish and administer a conjunctive use program for the purposes of
maintaining sustainable yields in the Basins consistent with the requirements of SGMA.
4.1.9 To spread, sink and inject water into the basin to recharge the groundwater
Basins.
4.1.10 To store, transport, recapture, recycle, purify, treat or otherwise manage and
control water for beneficial use.
4.1.11 To develop and facilitate market-based solutions for the use, sale, or lease,
and management of water rights.
4.1.14 To perform other ancillary tasks relating to the operation of the Agency
pursuant to SGMA, including without limitation, environmental review, engineering, and
design.
4.2 To apply for, accept and receive licenses, permits, water rights, approvals,
agreements, grants, loans, contributions, donations or other aid from any agency of the United
States, the State of California or other public agencies or private persons or entities necessary for
the Agencys purposes.
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4.3 To make and enter contracts necessary to the full exercise of the Agencys power.
4.4 To employ, designate, or otherwise contract for the services of, agents, officers,
employees, attorneys, engineers, planners, financial consultants, technical specialists, advisors,
and independent contractors.
4.6 To cooperate, act in conjunction and contract with the United States, the State of
California, or any agency thereof, counties, municipalities, public and private corporations of any
kind (including without limitation, investor-owned utilities), and individuals, or any of them, for
any and all purposes necessary or convenient for the full exercise of the powers of the Agency.
4.8 To provide for the prosecution of, defense of, or other participation in, actions or
proceedings at law or in public hearings in which the Members, pursuant to this Agreement, have
an interest and employ counsel and other expert assistance for these purposes.
4.9 To accumulate operating and reserve funds for the purposes herein stated.
4.10 To invest money that is not required for the immediate necessities of the Agency,
as the Agency determines is advisable, in the same manner and upon the same conditions as
Members, pursuant to Government Code section 53601, as that section now exists or may hereafter
be amended.
4.12 To perform all other acts necessary or proper to carry out fully the purposes of this
Agreement.
ARTICLE 5
MEMBERSHIP
5.1 Members. The Members of the Agency shall be the City of Fillmore, the County
of Ventura, and United Water Conservation District, as long as they have not, pursuant to the
provisions hereof, withdrawn from this Agreement.
ARTICLE 6
BOARD OF DIRECTORS
6.1 Formation of the Board of Directors. The Agency shall be governed by a Board of
Directors (Board of Directors or Board). The Board shall consist of six (6) Directors
comprised of representatives who shall be appointed in the manner set forth in Section 6.4 as
follows:
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6.1.1 Three (3) Member Directors, with one Member director appointed by the
governing board of each Member;
6.2 Stakeholder Director Qualifications. For each of the respective Piru and Fillmore
Pumper Stakeholder Directors, the Stakeholder Director shall be an individual, or a duly
authorized representative of an entity or individual, that either: (i) owns land from which
groundwater was produced from the Fillmore or Piru Basin, respectively, for beneficial uses
within the year preceding the Stakeholder Directors appointment to the Board; (ii) is a party to
an unexpired contract entitling the individual or entity to produce groundwater from land
overlying the Fillmore or Piru Basins, respectively, that is owned by another party to the contract
and groundwater has been produced pursuant to such contract within the year preceding the
Stakeholder Directors appointment to the Board; or (iii) is a mutual water company that produces
and serves groundwater from the Fillmore or Piru Basin, respectively, to its shareholders. For the
Environmental Stakeholder Director, the Stakeholder Director shall be an active member of a
nonprofit, 501(c)(3) organization which has an adopted budget and, at the sole discretion of the
Member Directors, meets the following requirements: (i) is currently active within lands
overlying the Fillmore Basin or Piru Basin, or both; and (ii) has a mission that advances, or is
furthered by, groundwater sustainability.
6.3 Duties of the Board of Directors. The business and affairs of the Agency, and all
of the powers of the Agency, including without limitation all powers set forth in Article 4 (Powers),
are reserved to and shall be exercised by and through the Board of Directors, except as may be
expressly delegated to the Executive Director or others pursuant to this Agreement, Bylaws, or by
specific action of the Board of Directors.
6.4.1 One (1) Member Director appointed by the City Council for the City of
Fillmore, which Member Director shall be a member of the City Council for the City of Fillmore
or a representative.
6.4.2 One (1) Member Director appointed by the County of Ventura Board of
Supervisors. Member Director will be a Supervisor or representative. Strong consideration should
be given to appoint the Supervisor representing a district that overlies the Basins at least in part.
6.4.3 One (1) Member Director appointed by the Board of Directors for the
United Water Conservation District. The Member Director will be a member of the United Water
Conservation District Board of Directors or a Representative.from the Board of Directors for the
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United Water Conservation District chosen from among the Directors representing a district that
overlies the Basins at least in part unless the chosen Director is unable or unwilling to serve in this
capacity or is subsequently removed pursuant to Section 6.5, in which case, the United Water
Conservation District Board of Directors shall appoint another Director as its Member Director.
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6. Los Padres Forest Watch
7. Central Coast Alliance United for a Sustainable Economy
8. The Nature Conservancy
9. Wishtoyo
10. Keep Sespe Wild
11. Surfrider
12. CFROG (Citizens for Responsible Oil & Gas)
or, The Nature Conservancy if, and only if the aforementioned list of
organizations is unwilling or unable to nominate a potential Environmental
Stakeholder Director. If the Member Directors do not accept a potential
Environmental Stakeholder Director nominated by aforementioned list of
organizations or The Nature Conservancy, as applicable, the Member
Directors shall request an additional nomination, as necessary. The
aforementioned list of organizations, shall submit its nominee to the
Member Directors pursuant to a process specified in the Bylaws, unless
directed otherwise by Member Directors. The Member Directors shall
consider the nominees at a regular meeting and at that meeting shall approve
and appoint the Environmental Stakeholder Director.
6.6 Vacancies. A vacancy on the Board of Directors shall occur when a Director
resigns, is removed, or at the end of the Directors term as set forth in Section 6.5. For Member
Directors, a vacancy shall also occur when he or she is removed by his or her appointing Member.
Upon the vacancy of a Director, the seat shall remain vacant until a replacement Director is
appointed as set forth in Section 6.4. Members shall submit any changes in Director positions to
the Executive Director by written notice signed by an authorized representative of the Member.
The written notice shall include a resolution of the governing board of the Member directing such
change in the Director position.
ARTICLE 7
OFFICERS
7.1 Officers. Officers of the Agency shall be a chair and vice chair/secretary. A
treasurer shall be appointed consistent with the provisions of Section 13.3. The vice
chair/secretary shall exercise all powers of the chair in the chairs absence or inability to act.
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7.2 Appointment of Officers. Officers shall be elected annually by, and serve at the
pleasure of, the Board of Directors. Officers shall be elected at the first Board meeting, and
thereafter at the first Board meeting following January 1st of each year. An Officer may serve
for multiple consecutive terms, with no term limit. Any Officer may resign at any time upon
written notice to the Board, and may be removed and replaced by a simple majority vote of the
full Board.
7.3 Principal Office. The principal office of the Agency shall be established by the
Board of Directors, and may thereafter be changed by a simple majority vote of the full Board.
The principal office of the Agency shall be located within the jurisdictional boundaries of one or
more of the Members.
ARTICLE 8
DIRECTOR MEETINGS
8.1 Initial Meeting. The initial meeting of the Board of Directors shall be held in the
County of Ventura, California within sixty (60) days of the Effective Date of this Agreement.
8.2 Time and Place. The Board of Directors shall meet at least quarterly, at a date,
time and place set by the Board within the jurisdictional boundaries of one or more of the
Members, and at such times as may be determined by the Board.
8.3 Special Meetings. Special meetings of the Board of Directors may be called in
accordance with the Ralph M. Brown Act (Government Code section 54950 et seq.).
8.4 Conduct. All meetings of the Board of Directors, including special meetings, shall
be noticed, held, and conducted in accordance with the Ralph M. Brown Act (Government Code
sections 54950, et seq.). The Board may use teleconferencing in connection with any meeting in
conformance with and to the extent authorized by applicable law.
8.5 Local Conflict of Interest Code. The Board of Directors shall adopt a local conflict
of interest code pursuant to the provisions of the Political Reform Act of 1974 (Government Code
sections 81000, et seq.) at the first meeting following the appointment of the three Stakeholder
Directors.
ARTICLE 9
VOTING
9.1 Quorum. A quorum of any meeting of the Board of Directors prior to the approval
of the Stakeholder Directors shall consist of two (2) of the Member Directors. Upon approval of
the Stakeholder Directors by the Board of Directors, a quorum of any meeting of the Board of
Directors shall consist of a majority of the Directors. In the absence of a quorum, any meeting of
the Directors may be adjourned by a vote of a simple majority of Directors present, but no other
business may be transacted. For purposes of this Article, a Director shall be deemed present if
the Director appears at the meeting in person or participates telephonically or by other electronic
means, provided the telephone or electronic appearance is consistent with the requirements of the
Ralph M. Brown Act.
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9.2 Director Votes. Voting by the Board of Directors shall be made on the basis of
one vote for each Director, provided however that if the matter to be voted on exclusively
concerns one of the Basins and not the other, the pumper Stakeholder Director representing
pumper interests in the unaffected Basin may participate in Board discussions of the matter but
shall not vote on the matter. Examples of matters that exclusively concern one of the Basins and
not the other include, without limitation, a water budget for one Basin, identification of
undesirable results in one Basin, groundwater extraction fees applicable to one Basin,
groundwater extraction allocations in one Basin, retention of consultants to study or advise the
Board concerning an issue in one Basin, and adoption of a GSP for one Basin. For matters that
concern both Basins, both of the pumper Stakeholder Directors may vote on the matter.
ARTICLE 10
EXECUTIVE DIRECTOR AND STAFF
10.1 Appointment. The Board of Directors may appoint an Executive Director, who
may be, though need not be, an officer, employee, or representative of one of the Members. The
Executive Directors compensation, if any, shall be determined by the Board of Directors.
10.2 Duties. If appointed, the Executive Director shall be the chief administrative
officer of the Agency, shall serve at the pleasure of the Board of Directors, and shall be
responsible to the Board for the proper and efficient administration of the Agency. The Executive
Director shall have the powers designated by the Board, or otherwise as set forth in the Bylaws.
10.3 Term and Termination. The Executive Director shall serve until he/she resigns or
the Board of Directors terminates his/her appointment.
10.4 Staff and Services. The Executive Director may employ such additional full-time
and/or part-time employees, assistants and independent contractors who may be necessary from
time to time to accomplish the purposes of the Agency, subject to the approval of the Board of
Directors. The Agency may contract with a Member or other public agency or private entity for
various services, including without limitation, those related to the Agencys finances, purchasing,
risk management, information technology and human resources. A written agreement shall be
entered between the Agency and the Member or other public agency or private entity contracting
to provide such service, and that agreement shall specify the terms on which such services shall
be provided, including without limitation, the compensation, if any, that shall be made for the
provision of such services.
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ARTICLE 11
BYLAWS
The Board of Directors shall cause to be drafted, approve, and amend Bylaws of the
Agency to govern the day-to-day operations of the Agency. The Bylaws shall be adopted at or
before the first anniversary of the Boards first meeting.
ARTICLE 12
COMMITTEES
The Board of Directors may from time to time appoint one or more advisory committees
or establish standing or ad hoc committees to assist in carrying out the purposes and objectives of
the Agency. The Board shall determine the purpose and need for such committees and the
necessary qualifications for individuals appointed to them. Each standing or ad hoc committee
shall include a Director as the chair thereof. Other members of each committee may be composed
of those individuals approved by the Board of Directors for participation on the committee.
However, no committee or participant on such committee shall have any authority to act on behalf
of the Agency.
ARTICLE 13
ACCOUNTING PRACTICES
13.1 General. The Board of Directors shall establish and maintain such funds and
accounts as may be required by generally accepted public agency accounting practices. The
Agency shall maintain strict accountability of all funds and report all receipts and disbursements
of the Agency.
13.2 Fiscal Year. Unless the Board of Directors decides otherwise, the fiscal year for
the Agency shall run concurrent with the calendar year.
13.3 Appointment of Treasurer and Auditor; Duties. The treasurer and Auditor shall
be appointed in the manner, and shall perform such duties and responsibilities, specified in
sections 6505, 6505.5 and 6505.6 of the Act. The treasurer shall be bonded in accordance with
the provisions of section 6505.1 of the Act. The treasurer of one of the Members shall be the
treasurer of the Agency, to be the depository and have custody of all money of the Agency from
whatever source, provided that the Board of Directors may at any time select another treasurer.
The Auditor shall be of the same public agency as treasurer, and shall draw all warrants to pay
demands against the Agency approved by the Board.
ARTICLE 14
BUDGET AND EXPENSES
14.1 Budget. Within ninety (90) days after the first meeting of the Board of Directors,
and thereafter prior to the commencement of each fiscal year, the Board shall adopt a budget for
the Agency for the ensuing fiscal year. In the event that a budget is not so approved, the prior
years budget shall be deemed approved for the ensuing fiscal year, and any groundwater
extraction fee or assessment(s) of contributions of Members, or both, approved by the Board
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during the prior fiscal year shall again be assessed in the same amount and terms for the ensuing
fiscal year.
14.2 Agency Funding and Contributions. For the purpose of funding the expenses and
ongoing operations of the Agency, the Board of Directors shall maintain a funding account in
connection with the annual budget process. The Board of Directors may fund the Agency as
provided in Chapter 8 of SGMA, commencing with section 10730 of the Water Code. As
authorized by Government Code Section 6504, the Members may make initial contributions,
payments and advances for operating the Agency, all of which shall be repaid to the Members
pursuant to, and with accrued interest, as set forth in Section 14.3 herein. The Members agree
that the Agency, and not the Members, have the sole responsibility to develop and implement a
funding program to fiscally and fully implement the Agencys SGMA compliance efforts and
ongoing operations.
14.4 Issuance of Indebtedness. The Agency may issue bonds, notes or other forms of
indebtedness, as permitted under Section 4.5, provided such issuance be approved at a meeting
of the Board.
ARTICLE 15
LIABILITIES
15.1 Liability. In accordance with Government Code section 6507, and as authorized
by Government Code Section 6508.1, the debt, liabilities and obligations of the Agency shall be
the debts, liabilities and obligations of the Agency alone, and not the Members.
15.2 Indemnity. To the fullest extent permitted by law, funds of the Agency may be
used to defend, indemnify, and hold harmless the Agency, each Member, each Director, and any
officers, agents and employees of the Agency for their actions taken within the course and scope
of their duties while acting on behalf of the Agency. To the fullest extent permitted by law, the
Agency agrees to save, indemnify, defend and hold harmless each Member from any liability,
claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory
proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened,
including attorneys fees and costs, court costs, interest, defense costs, and expert witness fees,
where the same arise out of, or are in any way attributable in whole or in part, to acts or omissions
of the Agency or its employees, officers or agents or negligent acts or omissions (not including
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gross negligence or wrongful conduct) of the employees, officers or agents of any Member, while
acting within the course and scope of a Member relationship with the Agency. In addition, to the
fullest extent permitted by law, the Agency shall indemnify, defend and hold harmless, each
Member from any liabilities incurred as a result of handling, receipt, use, or disposal of hazardous
materials, hazardous substances, and hazardous wastes how so ever defined under Federal, State,
or local laws, ordinances, or regulations.
15.3 Privileges and Immunities. All of the privileges and immunities from liability,
exemption from laws, ordinances and rules, all pension, relief, disability, workers compensation,
and other benefits which apply to the activity of officers, agents, or employees of any of the
Members when performing their respective functions shall apply to them to the same degree and
extent while engaged in the performance of any of the functions and other duties under this
Agreement. None of the officers, agents, or employees appointed by the Board of Directors shall
be deemed, by reason of their employment by the Board of Directors, to be employed by any of
the Members or, by reason of their employment by the Board of Directors to be subject to any of
the requirements of such Members.
15.4 Liability Insurance. The Board of Directors shall obtain, and maintain in effect,
appropriate liability insurance to cover the activities of the Agencys Directors and staff in the
ordinary course of their duties.
ARTICLE 16
WITHDRAWAL OF MEMBERS
16.1 Unilateral Withdrawal. Subject to the Dispute Resolution provisions set forth is
Section 17.9, a Member may unilaterally withdraw from this Agreement without causing or
requiring termination of this Agreement, effective upon one hundred eighty (180) days written
notice to the Executive Director.
16.2 Rescission or Termination of Agency. This Agreement may be rescinded and the
Agency terminated by unanimous written consent of all Members, except during the outstanding
term of any Agency indebtedness.
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16.4 Return of Contribution. Upon termination of this Agreement, any surplus money
on-hand shall be returned to the Members in proportion to their contributions made. To the extent
permitted by law, the Board of Directors shall first offer any property, works, rights and interests
of the Agency for sale to the Members on terms and conditions determined by the Board of
Directors. If no such sale to Members is consummated, the Board of Directors shall offer the
property, works, rights, and interest of the Agency for sale to any non-member for good and
adequate consideration. The net proceeds from any sale shall be distributed among the Members
in proportion to their contributions made.
ARTICLE 17
MISCELLANEOUS PROVISIONS
17.4 Agreement Complete. The foregoing constitutes the full and complete Agreement
of the Members. This Agreement supersedes all prior agreements and understandings, whether
in writing or oral, related to the subject matter of this Agreement that are not set forth in writing
herein.
17.5 Severability. Should any part, term or provision of this Agreement be decided by
a court of competent jurisdiction to be illegal or in conflict with any applicable federal law or any
law of the State of California, or otherwise be rendered unenforceable or ineffectual, the validity
of the remaining parts, terms, or provisions of this Agreement shall not be affected thereby,
provided, however, that if the remaining parts, terms, or provisions do not comply with the Act,
this Agreement shall terminate.
17.6 Withdrawal by Operation of Law. Should the participation of any Member to this
Agreement be decided by the courts to be illegal or in excess of that Members authority or in
conflict with any law, the validity of this Agreement as to the remaining Members shall not be
affected thereby.
17.7 Assignment. The rights and duties of the Members may not be assigned or
delegated without the written consent of all other Members. Any attempt to assign or delegate
such rights or duties in contravention of this Agreement shall be null and void.
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17.8 Binding on Successors. This Agreement shall inure to the benefit of, and be
binding upon, the successors, and assigns of the Members, whose assignments have complied
with Section 17.7 herein.
17.9 Dispute Resolution. In the event that any dispute arises among the Members
relating to (i) this Agreement, (ii) the rights and obligations arising from this Agreement, (iii) a
Member proposing to withdraw from membership in the Agency, or (iv) a Member proposing to
initiate litigation in relation to legal rights to groundwater within, or the management of, either of
the Basins, the aggrieved Member or Members proposing to withdraw from membership shall
provide written notice to the other Members of the controversy or proposal to withdraw from
membership. Within thirty (30) days after such written notice, the Members shall attempt in good
faith to resolve the controversy through informal means. If the Members cannot agree upon a
resolution of the controversy within thirty (30) days from the providing of written notice specified
above, the dispute shall be submitted to mediation prior to commencement of any legal action or
prior to withdrawal of a Member proposing to withdraw from membership. The mediation shall
be no less than a full day (unless agreed otherwise among the Members) and the cost of mediation
shall be paid in equal proportion among the Members. The mediator shall be either voluntarily
agreed to, or, if the parties cannot agree upon a mediator, appointed by the Superior Court upon
a suit and motion for appointment of a neutral mediator. Upon completion of mediation, if the
controversy has not been resolved, any Member may exercise all rights to bring a legal action
relating to the controversy or withdraw from membership as otherwise authorized pursuant to this
Agreement. The Agency shall also participate in mediation upon request by a Stakeholder
Director concerning a dispute alleged by the Stakeholder Director concerning the management of
either of the Basins or rights to extract groundwater from either of the Basins, with the terms of
such mediation to be conducted in the same manner provided for in this Section 17.9 for disputes
between or among Members.
17.11 Singular Includes Plural. Whenever used in this Agreement, the singular form of
any term includes the plural form and the plural form includes the singular form.
17.12 Member Authorization. The governing bodies of the Members have each
authorized execution of this Agreement, as evidenced by the respective signatures below.
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CITY OF FILLMORE
DATED:
APPROVED AS TO FORM:
By: By:
Title: Title:
COUNTY OF VENTURA
DATED:
APPROVED AS TO FORM:
By: By:
Title: Title:
DATED:
APPROVED AS TO FORM:
By: By:
Title: Title:
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0 1 2 3 4
Miles SCR VALLEY EAST
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ORDINANCE NO. 17-879
Summary: This ordinance raises the dollar amounts for certain public projects
eligible for informal bidding procedures, clarifies the city managers contracting
authority, and makes other minor updates consistent with State law.
WHEREAS, Fillmore Municipal Code Section 2.60.220 authorizes the City Manager to
sign contracts for consultants or special services that do not exceed $10,000 if the funding for
such work has already been approved; however, this section is poorly written and would benefit
from slight revisions; and
WHEREAS, State law requires that public projects as defined in Public Contract Code
section 20161 expected to cost more than $5,000 be advertised, bid and awarded in accordance
with formal bidding procedures; and
WHEREAS, the Uniform Public Construction Cost Accounting Act (the Act), Public
Contract Code Sections 22030 et seq., authorizes a general law city to adopt the uniform
construction cost accounting procedures and thereafter to adopt an ordinance establishing
informal bidding procedures which comply with the provisions of the Act; and
WHEREAS, on March 11, 1997, the City Council adopted Resolution No. 97-2169
electing to become subject to such procedures for eligible public projects, approved the
introduction of Ordinance No. 97-719 to enact Fillmore Municipal Code Chapter 5.40 Informal
Bidding and notified the State Controller of such election; and
WHEREAS, on March 25, 1997, Ordinance No. 97-719 was adopted; and
WHEREAS, since the adoption of Ordinance No. 97-719, State law has been updated to
increase the dollar limits for projects where a city may take advantage of information bidding
procedures; and
WHEREAS, the City Council desires to update its informal bidding procedures for the
selection of contractors to be consistent with the current dollar limits allowed by State law and
make other minor updates consistent with state law.
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SECTION 1. Subsection b of Section 2.60.220, Contracts for consultants or special
services, of the Fillmore Municipal Code is amended to read as follows:
Authorization.
(1) Council. The council has the authority to approve and enter into all contracts
specified in this section.
(2) City Manager. Notwithstanding the provisions of subsection (b)(1) of this section, the
city manager may execute contracts for special services and consultants when both of the
following apply:
(A) The contract is for a sum not to exceed ten thousand dollars to be paid by the
city; and
(B) The funds required for the payment of the contract are in the city's approved
and current budget for that purpose.
(b) "Informal contract" means a contract in the amount of one hundred seventy-five
thousand dollars or less.
(c) "Formal contract" means a contract greater than one hundred seventy-five
thousand dollars.
(a) Public projects of forty-five thousand dollars or less may be performed by the
employees of the city by force account, or awarded by negotiated contract, in accordance
with the following:
(1) Solicitation of Proposals. If the estimated cost of the public project exceeds
five thousand dollars and will not be performed by City employees, the City Engineer
shall solicit written proposals from prospective contractors to perform such public
project. Such solicitation shall be made in writing, by telephone, or otherwise and shall
be made to sufficient numbers of prospective contractors as may be deemed by the City
Manager to be consistent with the policy of the City Council regarding the award of
contracts for public projects;
(2) Award and Execution of Contract. If a contract is awarded pursuant to this
subsection, the contract shall be awarded to the lowest responsible bidder. The City
Manager may award and execute a contract awarded pursuant to this subsection when
both of the following apply:
(i) The contract is for a sum not to exceed forty-five thousand dollars to be
paid by the city; and
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(ii) The funds required for the payment of the contract are in the city's
approved and current budget for that purpose.
(b) Public projects of one hundred seventy-five thousand dollars or less may be let to
contract by informal procedures as set forth in per FMC Section 5.40.050.
(c) Public projects of more than one hundred seventy-five thousand dollars shall,
except as otherwise provided in this ordinance, be let to contract by formal bidding
procedure.
(d) Emergencies. The City Council may act contrary to this Section under any
emergency authority granted by the Uniform Public Construction Cost Accounting Act or
by any other provision of the California Public Contract Code. Furthermore, in the case
of an emergency, as that term is used in the Uniform Public Construction Cost
Accounting Act, the City Manager is delegated the authority to take such actions
authorized by the Act without compliance with the procedures of this Section.
(b) All contractors on the list for the category of work being bid or all construction
trade journals specified by the commission for Ventura County, or both, shall be mailed,
faxed, or emailed a notice inviting informal bids unless the product or service is
proprietary.
(c) All mailing, faxing, or emailing of notices to contractors and construction trade
journals pursuant to subdivision (b) shall be completed not less than ten calendar days
before bids are due.
(e) Bids shall be in writing and sealed and shall be opened at the time and place
designated in the notice. If a contract is awarded, the contract shall be awarded by the
City Council to the lowest responsible bidder. The Mayor shall execute the contract
unless otherwise provided by the City Council.
(f) If all bids received are in excess of one hundred seventy-five thousand dollars, the
city council may, by passage of a resolution by a four-fifths vote, award the contract, at
one hundred eighty-seven thousand five hundred dollars, or less, to the lowest responsible
bidder, if it determines the city's cost estimate is reasonable.
99
-3-
5.40.060 - Publication of notice inviting formal bids, bid security and bonds required.
(a) Notice inviting formal bids shall state the time and place for the receiving and
opening of sealed bids and distinctly describe the project. The notice shall be published
at least 14 calendar days before the date of opening the bids in a newspaper of general
circulation printed and published or circulated in the city. The notice inviting formal bids
shall also be sent electronically, if available, and by either facsimile or electronic mail
and mailed to all construction trade journals specified by the commission for Ventura
County. The notice shall be sent at least 15 calendar days before the date of opening the
bids. In addition to notice required by this section, the city may give such other notice as
it deems proper.
(b) When deemed necessary by the city manager and in all contracts for more than
forty-five thousand dollars, bidders security will be required and identified in the notices
inviting bids. Bidders shall be entitled to return of bid security, provided that a successful
bidder shall forfeit his or her bid security upon refusal or failure to execute the contract
within ten days after the notice of award of contract has been mailed, unless the city is
responsible for the delay. The city may, on refusal or failure of the successful bidder to
execute the contract, award the bid to the next lowest responsible bidder. If the city
awards the contract to the next lowest bidder, the amount of the lowest bidders security
shall be applied by the city to the difference between the low bid and the second lowest
bid, and the surplus, if any, shall be returned to the initial lowest bidder.
(c) The city shall require bonds, before entering into a contract, in such amount as
required to comply with State law and as reasonably necessary to protect the best
interests of the city. When bonds are required the form and amount of the bonds shall be
described in the notice inviting bids.
The city council shall adopt plans, specifications, and working details for all public
projects exceeding one hundred seventy-five thousand dollars.
SECTION 8. The City Clerk shall cause a summary of this Ordinance to be published
once, within fifteen (15) calendar days after its passage, in the Fillmore Gazette, a newspaper of
100
-4-
general circulation, printed, published and circulated in the City, and shall cause a copy of this
Ordinance and its certification, together with proof of publication, to be entered in the Book of
Ordinances of the City.
SECTION 9. This Ordinance shall become effective on the thirty-first (31st) day after
its passage.
ATTEST:
APPROVED AS TO FORM:
CITY OF FILLMORE )
COUNTY OF VENTURA )
STATE OF CALIFORNIA )
I, Oliva Carrera Lopez, City Clerk of the City of Fillmore, California, do hereby certify
that the foregoing Resolution No. 17-879 was duly passed and adopted by the City Council of
the City of Fillmore at the regular meeting thereof, held on the ___th day of _______, 2017, and
was signed by the Mayor of the said City, and that the same was passed and adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Oliva Carrera Lopez, City Clerk
101
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CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
REQUEST
Request City Council to award a contract for the Dog Park Fence Installation Project
construction at Two Rivers Park to the lowest qualified bidder, C&W Construction Specialties,
Inc. and authorize the City Manager to approve contract change orders up to 10% above
contracted amount.
DISCUSSION
On October 11, 2016, the City Council adopted the Planning Commissions recommendation for
the future development of a community dog park on the area that is currently a dirt lot at Two
Rivers Park. The dirt lot is the site of proposed future parking lot expansion for Two Rivers
Park, as designed in the Park construction drawings.
This report presents the results of the public bidding for Dog Park Fence Installation Project at
Two Rivers Park, and staffs recommendation on award of contract for this project.
The City received a total of two (2) bids for the subject project. Bids were opened on May 18,
20174 at 10 AM in Council Chambers. The following bids were received:
The engineers estimate of probable construction cost was $24,865. C&W Construction
Specialties, Inc. submitted the low bid of $16,221.20, which is 34.7% below the engineers
estimate.
Staff identified no irregularities in the bid. Staff verified the low bidders bid and qualifications
as follows:
1. The low bidder submitted the bid on the required forms and provided all requested
information.
102
Award of Contract for the Dog Park Fence Installation Project at Two Rivers Park
May 23, 2017
Page 2 of 3
2. The low bidder computed the extended amounts correctly, however the total bid
amount is one dollar off, stating the total amount at $16,222.20. As set forth in the
Instructions to Bidders, the actual sum total of the item price totals at $16,221.20 is
considered to be the Total Contract Amount for this bid.
3. Staff verified with the State Contractors License Board (www.cslb.ca.gov) and the
California Department of Industrial Relations
(https://efiling.dir.ca.gov/PWCR/Search.action) that the low bidder and all
subcontractors hold current and active State Contractors Licenses and are registered
with the DIR.
4. Staff verified that the low bidders Workers Compensation Insurance coverage is
current.
5. A bid guarantee accompanied the bid in the form of a Bid Bond totaling ten percent
(10%) of the bid. The low bidder signed and properly notarized the Bid Bond.
7. Staff verified that neither the low bidder nor any of its key personnel appear on the
Federal or State debarment lists (https://sam.gov/portal/public/SAM;
http://www.dir.ca.gov/dlse/debar.html; http://www.dir.ca.gov/das/debarment.htm).
8. The low bidder has successfully completed several recent projects in Southern
California, including previous work within Ventura County.
The construction work includes installation of chain link fencing and gates surrounding the
existing dirt area between C Street and the existing fencing west of C Street at Two Rivers
Park. See attached project construction drawing for details.
103
Award of Contract for the Dog Park Fence Installation Project at Two Rivers Park
May 23, 2017
Page 3 of 3
FISCAL IMPACT
Developer impact fee (DIF) funds in the amount of $1,000,000 have been received for the
purpose of developing and constructing improvements at Two Rivers Park. This amount has
been budgeted under account 464-6911-0044-401 for improvements to the park. A list of the
additional projects needed to best utilize these funds has not yet been developed. At the October
11, 2016 meeting, the City Council designated $41,500 of these funds for the construction of a
dog park at Two Rivers Park. The total contract amount plus 10% contingency is $17,843.32.
RECOMMENDATION
It is recommended that the City Council award a contract to C&W Construction Specialties, Inc.
in the amount of $16,221.20 for the construction of the Dog Park Fence Installation Project at
Two Rivers Park, authorize the Mayor and City Clerk to sign and execute a construction
agreement for this project on behalf of the City and authorize the City Manager to approve
contract change orders up to 10% of the contracted amount.
ATTACHMENTS
1. Construction Drawing: Dog Park Fence Installation Project at Two Rivers Park
2. Dog Park Fence Installation Project Agreement with C&W Construction Specialties, Inc.
104
105
C 62381
Exp. 093017
DESIGN:
DRAWN:
DATE:
DATE:
PROJECT NO. FENCE PLAN
OF
ARTICLE I: For and in consideration of the payments and agreements hereinafter mentioned to
be made and performed by said City, said Contractor agrees with said City to construct the work
under the City's specification entitled DOG PARK FENCE INSTALLATION PROJECT,
SPEC NO. 17-02 and to perform and complete in a good and workmanlike manner all the work
pertaining thereto shown on the drawings and described in the specifications herein, to furnish at
his or her own proper cost and expense all tools, equipment, labor, and materials necessary
therefor, except such material and equipment as in said specifications as expressly stipulated to be
furnished by said City, and to do everything required by this Agreement and the said specifications
and drawings.
ARTICLE II: For furnishing all said materials and labor, furnishing and removing all plant,
temporary works or structures, tools and equipment and doing all the work contemplated and
embraced in this Agreement, also for all loss and damage arising out of the nature of the work
aforesaid, or from the action of the elements, or from any unforeseen difficulties which may arise
from or be encountered in the prosecution of the work until its acceptance by said City, and for all
risks of every description connected with the work; also for all expenses incurred by or in
consequence of the suspension or discontinuance of work, except such as in the said specifications
are expressly stipulated to be borne by said City, and for well and faithfully completing the work
the whole thereof, in the manner shown and described in said drawings and specifications and in
accordance with the requirements of the Engineer, said City will pay and said Contractor shall
receive in full compensation therefor the prices named in the Bidding Schedule of the Bid hereto
attached.
ARTICLE III: All work to be done under this contract shall be completed within TEN (10)
consecutive working days, exclusive of maintenance periods, beginning on the date stipulated in
the written Notice to Proceed issued by the Engineer. Any changes in time and/or price are to be
submitted to the City Engineer, in writing, within 3 days of the occurrence giving rise to the request
and shall request a formal decision from the City within 3 days and shall include data supporting
the request.
ARTICLE IV: The City hereby promises and agrees with said Contractor to employ, and does
hereby employ, said Contractor to provide the materials and to do the work according to the terms
and conditions herein contained and referred to for the price aforesaid, and hereby contracts to pay
for the same, at the time, in the manner, and upon the conditions set forth in said specifications;
and the said parties for themselves, their heirs, executors, administrators, successors, and assigns,
do hereby agree to the full performance of the covenants herein contained.
106
ARTICLE V: The Notice Inviting Sealed Bids, the Instructions to Bidders, the Bid, the
Specifications, and the Drawings mentioned therein, all addenda issued prior to the opening of the
bid by the City, all contract change orders issued after execution of the Contract Agreement, the
Special Provisions, Non-Collusion Declaration, Faithful Performance Bond, Payment Bond, all of
which are essential parts of this contract, are hereby incorporated in and made part of this
Agreement.
ARTICLE VI: Contractor acknowledges the provisions of the State Labor Code requiring every
employer to be insured against liability for worker's compensation, or to undertake self-insurance
in accordance with the provisions of that code, and certifies that it is in compliance with such
provisions.
Contractor further acknowledges and agrees to comply with the provisions of the State Labor Code
requiring every employer to pay at least the minimum prevailing rate of per diem wages for each
craft, classification, or type of workman needed to execute this contract. State general prevailing
wage determination as established by the California Department of Industrial Relations (available
at http://www.dir.ca.gov/DLSR/PWD/index.htm). The statutory provisions for penalties for
failure to pay prevailing wages and/or failure to otherwise comply with state's wage and hour laws
will be enforced.
ARTICLE VII: The Contractor shall supply the City with a Certificate evidencing insurance
policies which shall provide coverage for commercial general liability, owned and non-owned
automobiles, manufacturer's and contractor's liability, and broad form property damage in any case
where the Contractor has any property belonging to the City in his or her care, custody, or control;
owner's and contractor's protective liability, blanket contractual liability, products and completed
operations coverage, and coverage for collapse. Additional detail regarding the requirements for
sufficient insurance is set forth in the Instructions to Bidders.
ARTICLE VIII: The Contractor certifies that he or she is aware of the provisions of Section
3700 of the Labor Code, which requires every employee to be insured against liability for Worker's
Compensation, or to undertake self-insurance in accordance with the provisions of that Code, and
will comply with such provisions before commencing the work of this contract.
ARTICLE IX: The Contractor hereby agrees that the Contactor, and any subcontractor under the
Contractor, shall pay not less than the general prevailing rate of per diem wages, as determined by
the Director of the Department of Industrial Relations, to all workers employed in the execution
of this contract as required under Subsection 7-2.2 of the Standard Specifications for Public Works
Construction, and shall submit weekly to the City, certified copies of the payroll records for all
said workers and shall comply with all statutory requirements relating to certified copies of payroll
records, including the maintenance of the records, their certification, and their availability for
inspection as required by Labor Code Section 1776 and as required under Subsection 7-2.6 of said
Standard Specifications for Public Works Construction. In addition, the Contractor and any
subcontractors must furnish electronic certified payroll records directly to the Labor Commissioner
(aka Division of Labor Standards Enforcement) in a format prescribed by the Labor Commissioner
no less than monthly as follows:
107
Any project that was being monitored by the DIRs Compliance Monitoring Unit/Labor
Commissioner as of June 20, 2014 will continue to be monitored by the Labor Commissioner
and the contractors on those projects must continue to furnish certified payroll records to the
Labor Commissioner until the project is complete.
For all new projects awarded on or after April 1, 2015, the contractors and subcontractors must
furnish electronic certified payroll records to the Labor Commissioner.
For projects besides those listed above, the Labor Commissioner may at any time require the
contractors and subcontractors to furnish electronic certified payroll records.
As of January 1, 2016, the requirement to furnish electronic certified payroll records to the
Labor Commissioner will apply to all public works projects, whether new or ongoing.
Exceptions: The Labor Commissioner may (but is not required to) excuse contractors and
subcontractors from furnishing electronic certified payroll records to the Labor Commissioner on
a project that is under the jurisdiction of one of the four legacy DIR-approved labor compliance
programs (Caltrans, City of Ventura, Ventura Unified School District, and County of
Sacramento) or that is covered by a qualifying project labor agreement.
These new requirements will apply to all public works projects that are subject to the prevailing
wage requirements of the Labor Code without regard to funding source.
The prevailing rate of per diem wages are on file at the City of Fillmore, Department of Public
Works, 250 Central Avenue, Fillmore, California 93015, and are available to any interested party
on request. The Contractor is required to post at the job site the prevailing rate of per diem wages
as determined by the Director of the Department of Industrial Relations and other notices prescribed
by regulation.
ARTICLE X: The Contractor hereby agrees to indemnify and defend the City, its officers, agents,
and employees against, and to hold and save them and each of them harmless from, any and all
actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors,
omissions, or liabilities (hereinafter Claims or Liabilities) that may be asserted or claimed by
any person, firm, or entity arising out of or in connection with this Agreement, the construction of
the project, any alleged breach or breach of any provision set forth in this Agreement or the plans
or specifications for the project, design defects, any alleged violation or violation of any federal,
state, or local, law, ordinance, statute, rule, regulation, or order, any failure or alleged failure to
secure any applicable regulatory permit, license, or agreement, and the errors and omissions,
willful misconduct, or negligence, whether said negligence is concurrent, active or passive, of the
Contractor, its officers, agents, employees, or any other persons, except that the Contractor shall
not be required to indemnify, defend, and hold harmless the City, its officers, agents, and
employees against Claims or Liabilities caused by the sole negligence or willful misconduct or
active negligence of the City, its officers, agents, or employees.
ARTICLE XI: The City, in accordance with Public Contract Code Section 22300, shall permit
the substitution of securities for any moneys withheld by the City to secure performance under a
contract. The City hereby incorporates herein all of the provisions set forth in Public Contract
Code Section 22300.
108
ARTICLE XII: In the performance of this agreement, the Contractor shall not engage in, nor
permit others he or she may hire to engage in, discrimination in the employment of persons because
of their race, religious creed, color, or national origin, except as provided in Government Code
Section 12940. Violation of this provision may result in the imposition of penalties as provided in
Labor Code Section 1735.
ARTICLE XIII: It is to be made known that the improvement contemplated in the performance
of this contract is a federal-aid improvement over which the State of California shall exercise
general supervision; the State of California, therefore, shall have the right to assume full and direct
control over this contract whenever the State of California, at its sole discretion, shall determine
that its responsibility to the United States so requires.
ARTICLE XIV: The Contractor shall maintain accounts and records, including personnel,
property, and financial records, adequate to identify and account for all costs pertaining to the
contract and such other records as may be deemed necessary by the City to assure proper
accounting for all project funds, both federal and non-federal shares. These records will be made
available for audit purposes to the City or any authorized representative and will be retained for 3
years after the expiration of this contract, unless permission to destroy them is granted by the City.
ARTICLE XV: No officer or employee of the City shall have any financial interest in this
Agreement nor shall any such officer or employee participate in any decision relating to the
Agreement which affects his or her financial interest or the financial interest of any corporation,
partnership or association in which he or she is interested, in violation of any State statute or
regulation. Similarly, Contractor warrants that it has not paid or given and will not pay or give
any third party any money or other consideration for obtaining this Agreement.
ARTICLE XVI: The persons executing this Agreement on behalf of the parties hereto warrant
that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver
this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally
bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not
violate any provision of any other Agreement to which said party is bound.
ARTICLE XVII: Legal actions concerning any dispute, claim or matter arising out of or in
relation to this Agreement shall be instituted in the Superior Court of the County of Ventura, State
of California, or any other appropriate court in such county, and Contractor agrees to submit to the
personal jurisdiction of such court in the event of such action.
ATTEST:
109
Diana Impeartrice, Deputy City Clerk
Approved as to form:
_______________________________
CITY ATTORNEY
By:
AUTHORIZED REPRESENTATIVE
TITLE
By:
AUTHORIZED REPRESENTATIVE
TITLE
110
CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
TO: Mayor and City Council
REQUEST
Adopt Resolution No. 17-3598 approving the 2015 Ventura County Multi-Hazard Mitigation Plan.
DISCUSSION
The Disaster Mitigation Act of 2000 (DMA) requires that hazard mitigation plans be reviewed and
updated to ensure continued eligibility for grant funding opportunities. City staff participated in the
2015 update of the Ventura County Multi-Hazard Mitigation Plan (Plan), with respect to areas
pertaining to Fillmores hazard vulnerabilities and forms of mitigation.
The Plan was completed in 2015 and had approved by the Federal Emergency Management Agency
(FEMA) in July 2016. (See Att. 2.) In this letter FEMA notifies the Ventura County Office of
Emergency Services (OES) that participating agencies also need to formally adopt the Plan no later
than July 22. 2017. Therefore, the updated Plan is now before the City Council for consideration.
Appendix I of the Plan list specifics for City of Fillmore.
The DMA requires that hazard mitigation plans be reviewed and updated. As noted, Fillmore and
eight of the other nine cities in the county, as well as agencies and special districts, contributed to the
2015 update of the Plan. The Plan assesses the risks and vulnerable facilities in each jurisdiction, with
respect to natural and human-caused incidents, and provides mitigation strategies, resources, and
programs for reducing these risks.
Updates to the Plan addressed Fillmores vulnerabilities and forms of mitigation. Primary hazards of
concern for Fillmore are listed in the Threats Summary section of the Citys most recent Emergency
Operations Plan, and include:
A copy of the plan is available for review in hard copy format on the City Clerk public counter, or
online at: http://www.vcfloodinfo.com/ventura-county-hazards-mitigation-plan. FEMAs approval of 111
the 2015 Ventura County Multi-Hazard Mitigation Plan is a prerequisite for receiving certain forms of
disaster assistance by the County and cities covered by the Plan.
01148.0001/376889.1
FISCAL IMPACT
RECOMMENDATION
1. Recommend Council adopt Resolution 17-3598 approving the 2015 Ventura county Multi-
Hazard Mitigation Plan.
Alternatives:
1. Do not adopt Resolution 17-3598 and provide further direction to staff.
ATTACHMENTS
112
01148.0001/376889.1
Appendix I
City of Fillmore
113
Appendix I City of Fillmore
114
I-1
City of Fillmore Appendix I
Table I-3. City of Fillmore, Summary of Impacts for Population and Residential Buildings
Hazard Population % of Population No. of Residential Buildings % of Residential Buildings
Climate Change - Rising Tide 0 0.00% 0 0.00%
Climate Change - Coastal Storm 0 0.00% 0 0.00%
Dam Failure Inundation 12,895 85.95% 3,331 84.13%
Earthquake Ground Shaking - Extreme 15,002 100.00% 3,959 100.00%
Earthquake Ground Shaking - Violent 0 0.00% 0 0.00%
Earthquake Ground Shaking - Severe 0 0.00% 0 0.00%
Liquefaction 14,673 97.81% 3,850 97.24%
Flood - 100 Year 410 2.73% 172 4.34%
Flood - 500 Year 2 0.02% 1 0.02%
Landslide Susceptibility Class VIII 34 0.23% 11 0.29%
Landslide Susceptibility Class IX 161 1.07% 54 1.35%
Landslide Susceptibility Class X 156 1.04% 52 1.33%
Reduced Flood Risks Due to Levees 7,109 47.39% 1,656 41.83%
Tsunami Evacuation Area - Phase 3 0 0.00% 0 0.00%
Tsunami Evacuation Area - Max 0 0.00% 0 0.00%
Wildfire - High 2 0.01% 1 0.01%
Wildfire - Very High 1,461 9.74% 476 12.03%
115
I-2
Appendix I City of Fillmore
Table I-4. City of Fillmore, Summary of Impacts for Critical Facilities and Infrastructure
Hazard No. of Critical Facilities and Infrastructure % of Critical Facilities and Infrastructure
Climate Change - Rising Tide 0 0.00%
Climate Change - Coastal Storm 0 0.00%
Dam Failure Inundation 10 100.00%
Earthquake Ground Shaking - Extreme 10 100.00%
Earthquake Ground Shaking - Violent 0 0.00%
Earthquake Ground Shaking - Severe 0 0.00%
Liquefaction 10 100.00%
Flood - 100 Year 1 10.00%
Flood - 500 Year 0 0.00%
Landslide Susceptibility Class VIII 0 0.00%
Landslide Susceptibility Class IX 0 0.00%
Landslide Susceptibility Class X 0 0.00%
Reduced Flood Risks Due to Levees 3 30.00%
Tsunami Evacuation Area - Phase 3 0 0.00%
Tsunami Evacuation Area - Max 0 0.00%
Wildfire - High 0 0.00%
Wildfire - Very High 0 0.00%
116
I-3
City of Fillmore Appendix I
Table I-5. City of Fillmore, Human and Technical Resources for Hazard Mitigation
Staff/Personnel Resources Department or Agency Principal Activities Related to Hazard Mitigation
Planner(s), engineer(s) and technical staff with Planning Department Develops and maintains the General Plan, including the
knowledge of land development, land management Safety Element.
practices, and human-caused and natural hazards. Develops area plans based on the General Plan, to provide
more specific guidance for the development of more specific
areas.
Reviews private development projects and proposed capital
improvements projects and other physical projects involving
property for consistency and conformity with the General
Plan.
Anticipates and acts on the need for new plans, policies, and
Code changes.
Applies the approved plans, policies, code provisions, and
other regulations to proposed land uses.
Engineer(s), Building Inspectors/Code Building & Safety Department Oversees the effective, efficient, fair, and safe enforcement of
Enforcement Officers or other professional(s) and the California Building Code
technical staff trained in construction requirements
and practices related to existing and new buildings.
Engineers, construction project managers, and Building & Safety Department Provides direct or contract civil, structural, and mechanical
supporting technical staff. engineering services, including contract, project, and
construction management.
Engineer(s), project manager(s), technical staff, Building & Safety Department Maintains and operates of a wide range of local equipment
equipment operators, and maintenance and and facilities as well as providing assistance to members of
construction staff. the public. These include providing sufficient clean fresh
water, reliable sewer services, street maintenance, storm
drainage systems, street cleaning, street lights and traffic
signals.
Floodplain Administrator Engineering Department Reviews and ensures that new development proposals do not
increase flood risk, and that new developments are not
located below the 100 year flood level. In addition, the
Floodplain Administrator is responsible for planning and
managing flood risk reduction projects throughout the local
jurisdiction.
117
I-4
Appendix I City of Fillmore
Table I-5. City of Fillmore, Human and Technical Resources for Hazard Mitigation
Staff/Personnel Resources Department or Agency Principal Activities Related to Hazard Mitigation
Emergency Manager Fire Department, City Manager Maintains and updates the Emergency Operations Plan for the
local jurisdiction. In addition, coordinates local response and
relief activities within the Emergency Operation Center, and
works closely with County, state, and federal partners to
support planning and training and to provide information and
coordinate assistance.
Procurement Services Manager Assistant City Manager Provides a full range of municipal financial services,
administers several licensing measures, and functions as the
local jurisdictions Procurement Services Manager.
118
I-5
City of Fillmore Appendix I
Hazard Mitigation Federal Supports pre- and post-disaster mitigation Available to California communities after a
Grant Program Emergency plans and projects. Presidentially declared disaster has occurred
(HMGP) Management in California. Grant award based on specific
Agency (FEMA) projects as they are identified by eligible
applicants.
Pre-Disaster FEMA Supports pre-disaster mitigation plans and Available on an annual basis as a nationally
Mitigation (PDM) projects. competitive grant. Grant award based on
Federal
grant program specific projects as they are identified (no
more than $3M federal share for projects).
Flood Mitigation FEMA Mitigates repetitively flooded structures and Available on an annual basis, distributed to
Assistance (FMA) infrastructure. California communities by the California
grant program Governors Office of Emergency Services
(Cal OES). Grant award based on specific
projects as they are identified. 119
I-6
Appendix I City of Fillmore
120
I-7
City of Fillmore Appendix I
121
I-8
Appendix I City of Fillmore
Table I-7. City of Fillmore, Legal and Regulatory Resources for Hazard Mitigation
Mitigation, Affects
Preparedness, Development
Regulatory Hazards Response, or in Hazard
Tool Name Description (Effect on Hazard Mitigation) Addressed Recovery Areas?
General Plan: Safety Element Describes hazard areas and regulates current and future Seismic setting Mitigation & Yes
1988-2010 development based on known hazard areas. and earthquake Preparedness
hazards,
liquefaction,
erosion, 100-year
flood, levee
failure, dam
failure, fire
hazards, and toxic
materials release
Plans
Emergency Operations Plan Describes what the local jurisdictions actions will be Seismic setting Response No
2013 during a response to an emergency. Includes annexes that and earthquake
describe in more detail the actions required of the local hazards,
jurisdictions departments/agencies. Further, this plan liquefaction,
describes the role of the Emergency Operation Center erosion, 100-year
(EOC) and the coordination that occurs between the EOC flood, levee
and the local jurisdictions departments and other failure, dam
response agencies. Finally, this plan describes how the failure, fire
EOC serves as the focal point among local, state, and hazards, and toxic
federal governments in times of disaster. materials release
Stormwater Quality Describes measures that the local jurisdiction will take to Stormwater Mitigation & Yes
Management Program minimize stormwater pollution. The SWQMP is required Preparedness
(SWQMP) (2010 - City of by the National Pollutant Discharge Elimination System
Fillmore participates through Phase II regulations, which became effective in March
the Countywide Program) 2003.
Programs National Flood Insurance Makes affordable flood insurance available to Flood Mitigation, Yes
Program (NFIP) homeowners, business owners, and renters in participating Preparedness &
communities. In exchange, those communities must adopt Recovery
and enforce minimum floodplain management regulations
to reduce the risk of damage from future floods. The City
of Fillmore joined the NFIP in 1986. 122
I-9
City of Fillmore Appendix I
Table I-7. City of Fillmore, Legal and Regulatory Resources for Hazard Mitigation
Mitigation, Affects
Preparedness, Development
Regulatory Hazards Response, or in Hazard
Tool Name Description (Effect on Hazard Mitigation) Addressed Recovery Areas?
Title 5 Buildings and Adoption of Fire and Prevention Code Fire Mitigation and Yes
Construction; Chapter 5.01 Preparedness
Adoption of Construction
and Fire Prevention Codes
Title 5 Buildings and Adoption of the California Existing Building Code Earthquake Mitigation and Yes
Construction; 5.04.080 - Preparedness
California Existing Building
Code
Policies Title 6 Land Development To promote the public health, safety and general welfare, Floods Mitigation and Yes
(Municipal and Use; Chapter 6.16 and to minimize public and private losses due to flood Preparedness
Code) Flood Damage Prevention conditions in specific areas.
Title 15 Peace, Safety and To provide for the preparation and carrying out of plans Various Mitigation, No
Morals; Chapter 15.04 for the protection of persons and property within the city Preparedness,
Civil Defense and Disasters in the event of an emergency, the direction of the Response and
emergency organization, and the coordination of the Recovery
emergency functions of the city with all persons and all
other public agencies.
Ordinance List and Rebuilding earthquake-damaged buildings Earthquake Recovery Yes
Disposition Table
123
I-10
Appendix I City of Fillmore
Table I-8. City of Fillmore, Current and Completed Hazard Mitigation Projects and Programs
Status
(Current or Complete) Project / Program Name Description Year(s)
Current Heritage Valley Parks Specific Plan The HVPSP was adopted in 2002. 1-1/2 miles of On-going
(HVPSP) soil cement levees were constructed, a large debris
basin and storm drain system incorporated to
protect proposed 750 residential project. The import
of soil addressed liquefaction.
Current Staff Review Committee All development Projects are reviewed by On-going
department heads
Current Identify Potential Funding Sources Work with county, state, and Federal government to On-going
for Property Owners identify potential funding sources for economic and
noneconomic incentives for property owners to
implement mitigation strategies to eliminate or
reduce damage to unreinforced structures, mobile
and modular structures due to seismic events.
Current Voluntary Flood Insurance Public Develop a public outreach program that informs Ongoing
Outreach Program property owners located in the dam and levee
failure inundation areas about voluntary flood
insurance.
Current Site-specific Studies Require site-specific studies to evaluate specific On-going for every
hazards in hazard-prone areas and identify development project
alternative site design criteria to mitigate hazards to
the maximum extent possible.
Complete Demolition of Dilapidated Buildings Following the 1994 Northridge Earthquake every 2009
or Seismically Retrofit un-reinforced building in the City of Fillmore was
seismically retro-fitted or demolished.
Complete Business Park Master Plan Levee Business Park Master Plan adopted in 2008. This 2009
included construction of a solid cement levee to
protect the Sewer Plant that was constructed in
2009.
124
I-11
City of Fillmore Appendix I
Table I-8. City of Fillmore, Current and Completed Hazard Mitigation Projects and Programs
Status
(Current or Complete) Project / Program Name Description Year(s)
Not Completed General Plan Update, Safety Element Update Fillmores General Plan periodically and Not Completed
Improvements recommend improvements to the Safety Element.
The Safety Element was completed in 1988 and
needs to be updated.
125
I-12
Appendix I City of Fillmore
I-13
City of Fillmore Appendix I
127
I-14
Appendix I City of Fillmore
I-15
City of Fillmore Appendix I
129
I-16
Appendix I City of Fillmore
130
I-17
City of Fillmore Appendix I
131
I-18
132
RESOLUTION 17-3598
WHEREAS, the Ventura County Emergency Planning Council has updated the Countys
Multi-Hazard Mitigation Plan to advance better mitigation planning and projects within the
County; and
WHEREAS, each city, local agency, special district member and the public listed in the
Multi-Hazard Mitigation Plan has contributed to this planning update under the direction of the
Federal Disaster Mitigation Act of 2000; and
WHEREAS, Assembly Bill 2140 (2007) requires that the Citys emergency plans are
coordinated with the Citys General Plan Safety Element.
Section 1. The recitals above are true and correct and incorporated herein by this reference.
Section 2. The revision of the Multi-Hazard Mitigation Plan was undertaken in compliance
with the requirements of Assembly Bill 2140.
Section 3. That the City Council of the City of Fillmore has read and agrees to abide by the
Disaster Mitigation Act 2000 guidance and grant guidelines and this Multi-Hazard Mitigation
Plan represents the compliance with same.
Section 4. That the 2015 Ventura County Multi-Hazard Mitigation Plan is approved and
adopted as a regional plan and a guidebook to a more disaster resistant community.
ATTEST:
APPROVED AS TO FORM:
133
Tiffany J. Israel, City Attorney
CITY OF FILLMORE )
COUNTY OF VENTURA )
STATE OF CALIFORNIA )
I, Oliva Carrera Lopez, City Clerk of the City of Fillmore, California, do hereby certify
that the foregoing Resolution No. 17-3598 was duly passed and adopted by the City Council of
the City of Fillmore at the regular meeting thereof, held on the ___th day of _______, 2017, and
was signed by the Mayor of the said City, and that the same was passed and adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Oliva Carrera Lopez, City Clerk
134
01148.0001/376995.1
CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
TO: Mayor and City Council
FROM: Claire Faith and Abel Duque, Parks and Recreation Coordinators
REQUEST
Adoption of Resolution No. 17-3597 adjusting several of the fees collected by Community Services to
revise some of pool fees and establish a percentage deposit for all field reservations.
DISCUSSION
Community Services Fees were previously adopted as Exhibit F to City Council Resolution 16-3548,
which adopted an updated Schedule of Fees and Charges for City Services on August 9, 2016.
The new Parks and Recreation Coordinators have worked to streamline the reservation and payment
process for usage of City parks and fields. When community organizations, such as sports groups,
reserve a City facility for the season they are required to pay the full use fee and/or deposit at the time
the reservation is made. However, the current fee schedule does not have a deposit amount for
reserving fields. In order to ease the financial burden of full payment, City staff is recommending that
the City Council establish a 20% deposit for all field reservations.
Additionally, as staff was reviewing the fees for the upcoming pool season, they noticed some fees
were unclear and/or wrong. Staff is requesting the following changes to the adopted fee schedule:
AQUATIC CENTER
Program Details Notes Current Proposed
Adult Splash Pass 20 Visits No incentive for purchasing 20 $90.00 $85.50
instead of 10 (5% discount)
Splash Pass Senior 10 Visits No discount is being provided & the $45.00 Eliminate
Discount (62+) discount would violate Prop 26
Splash Pass Senior 20 Visit No discount is being provided & the $90.00 Eliminate
Discount (62+) discount would violate Prop 26
Group Swim Lessons Session Per Person (no discount for group fee) $120.00 $75.00
Private Swim Lessons Session Per Person $120.00 $120.00
The City currently offers a splash pass which allows one adult 20 visits to the pool for $90. The City
believes that the City can recover its costs to provide this service for the reduced fee of $85.50. There 135
is also a Senior Discount (62+) splash pass however the rate does not actually provide a discount.
As Proposition 26 prohibits providing discounted fees to a certain classification of people when the
discount is subsidized by other people paying that fee, staff recommends eliminating the two line items
01148.0001/376563.5
for senior discounted splash passes from the fee schedule.
Group swim lessons and private swim lessons are currently offered at the same rate of $120.00 per
Session. As group lessons are typically provided a lower fee than private lessons, staff is
recommending that the fee for group swim lessons be reduced to $75.00 per session.
With respect to the reservation of a City facility for a season of sports all field reservations for each
park require a 20% deposit for the dates booked and will be billed monthly, in advance, in even
installment payments. Any organization seeking to make a season long reservation can either elect to
pay via the deposit and monthly billing option or pay in full at the time of the reservation.
FISCAL IMPACT
The fiscal impact of these proposed changes is unknown at this time as staff does not have an estimate
of how many people may purchase the discounted swim passes or private swim lessons over group.
The alternative billing structure for sports reservations should have no fiscal impact on the City.
RECOMMENDATION
1. That the Council adopt Resolution 17-3597 revising Exhibit F, on Council Resolution 16-3548,
the Schedule of Fees and Charges for City Services to adjust some Community Service Fees.
Alternatives:
1. Do not adopt Resolution 17-3597 and provide further direction to staff.
ATTACHMENTS
136
01148.0001/376563.5
RESOLUTION 17-3597
WHEREAS, the Community Services Fees were previously adopted in Exhibit F of City
Council Resolution 16-3548, the Schedule of Fees and Charges for City Services adopted on
August 9, 2016; and
WHEREAS, the City Council desires to amend the adopted fee schedule to include a
deposit amount and monthly payment option for field reservations to establish and alternative
payment process for seasonal field reservations; and
WHEREAS, the City Council also desires to reduce some of the Aquatic Center fees.
Section 1. The City Council hereby amends Exhibit F to City Council Resolution 16-3548, the
Schedule of Fees and Charges for City Services, to adjust some of the fees collected by
Community Services as set forth on Exhibit 1, attached hereto and incorporated herein.
ATTEST:
APPROVED AS TO FORM:
137
01148.0001/377013.3
EXHIBIT 1
AQUATIC CENTER
Program Unit Notes Current Effective May 29,
2017
Item 5 Aquatic 20 Visits No incentive for purchasing 20 $90.00 $85.50
Center Adult Splash instead of 10 (5% discount)
Pass
Item 6 Aquatic 10 Visits No discount $45.00 This line item is
Center Splash Pass eliminated
Senior Discount (62+)
Item 7 Aquatic 20 Visits No discount $90.00 This line items is
Center Splash Pass eliminated
Senior Discount (62+)
Item 8 Aquatic Per Per Person (no discount for group $120.00 $75.00
Center Group Swim Session fee)
Lessons
Add a new Item 57, Field Deposits, to Exhibit F to City Council Resolution 16-3548 to read as
follows:
Field reservations require full payment or a 20% deposit at the time of reservation. If an
organization or individual elects to pay the deposit they will be billed monthly, in advance, in
even installments.
138
01148.0001/377013.3
CITY OF FILLMORE )
COUNTY OF VENTURA )
STATE OF CALIFORNIA )
I, Oliva Carrera Lopez, City Clerk of the City of Fillmore, California, do hereby certify
that the foregoing Resolution No. 17-3598 was duly passed and adopted by the City Council of
the City of Fillmore at the regular meeting thereof, held on the ___th day of _______, 2017, and
was signed by the Mayor of the said City, and that the same was passed and adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Oliva Carrera Lopez, City Clerk
139
01148.0001/377013.3
CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
REQUEST
Staff is requesting that the City Council adopt a resolution authorizing the sale and
issuance of City of Fillmore Wastewater Refunding Revenue Bonds, Series 2017 (the
2017 Bonds) for refunding savings. This includes the request to approve the form of
certain documents necessary to the issuance of 2017 Bonds.
Staff is requesting that the Board of Directors of the Fillmore Public Financing Authority
adopt a resolution to approve the form of the Escrow Agreement and other actions
necessary to the issuance of the 2017 Bonds.
DISCUSSION
Due to the current low interest rate environment, an opportunity exists to partially
refinance (refund) the Fillmore Public Financing Authority Revenue Bonds, Series 2007
(City of Fillmore Wastewater System Financing Project) (the "2007 Bonds") at
substantial savings to the Sewer Enterprise Fund. The 2007 Bonds were sold on June
14, 2007 and were issued to finance capital projects related to the Citys Water
Recycling Plant. The 2007 Bonds have a current principal balance of $52,770,000 and
a final maturity date of May 1, 2047.
The proposed City of Fillmore Wastewater Refunding Revenue Bonds, Series 2017
("2017 Bonds") will partially refund the 2007 Bonds at an estimated savings of
approximately $425,000 annually, which would result in a net present value savings
of approximately $5.44 million. The 2017 Bonds will maintain the same final maturity
date as the 2007 Bonds of May 1, 2047, and no project funding will be raised in
conjunction with this bond offering. The proceeds of the 2017 Bonds will be used: (i)
140
Issuance of the City of Fillmore Wastewater Refunding Revenue Bonds, Series 2017
May 23, 2017
Page 2 of 3
to provide funds to partially refund the 2007 Bonds, and (ii) to pay costs of issuance
associated with the 2017 Bonds. Of the $52,770,000 in outstanding 2007 Bonds, only
$36,765,000 is eligible to be refunded through the issuance of the 2017 Bonds. The
2017 Bonds will be secured on a parity basis with net revenues of the wastewater
systems to the city obligations securing the 2007 Bonds.
The approval of the Sale of the Bonds - City Resolution No 17-3600 (Attachment No. 1)
accomplishes the following:
o Indenture of Trust (Attachment No. 3): describes terms of the 2017 Bonds
o Purchase Contract (Attachment No. 4): describes terms under which the
underwriter will purchase the bonds
o Escrow Agreement (Attachment No. 5): describes the partial payoff of the
2007 Bonds
o Preliminary Official Statement (Attachment No. 6): describes material
information related to the bonds and must be accurate and the resolution also
approves executing its final form.
o Authorizes the Mayor, City Manager, or the Finance Director to execute all of
the above documents as necessary, and such other documents and
certifications that may be necessary to consummate the transaction. The
authorization also allows for the purchase of bond insurance, a reserve fund
surety.
o Approves the sale of the 2017 Bonds to the underwriter, Merrill Lynch, Pierce,
Fenner & Smith Incorporated Bank of America, N.A. Issuance of the 2017
Bonds shall provide present value savings of at least 3.0% of the refunded par
amount of the 2007 Bonds and a not to exceed underwriters discount of
0.425% of the par amount of the Bonds (actual underwriters discount is
expected to be 0.397% of the par amount).
The approval of the Fillmore Public Financing Authority Resolution No. 17-3599
(Attachment No. 2) accomplishes the following:
141
Issuance of the City of Fillmore Wastewater Refunding Revenue Bonds, Series 2017
May 23, 2017
Page 3 of 3
It is anticipated that the 2017 Bonds will be sold the week of June 5, 2017 and proceeds
of the sale of the 2017 Bonds are expected to be received by the week of June 19,
2017.
FISCAL IMPACT
There is no financial impact to the current Fiscal Year 2016-17 budget resulting from
the issuance of the 2017 Bonds. From Fiscal Year 2017-18 through Fiscal Year 2046-
47, the Sewer Enterprise Fund will save approximately $425,000 annually from the
issuance of the 2017 Bonds, at a net present value savings of approximately $5.44
million. Actual savings may vary depending at time of sale.
RECOMMENDATION
That City Council adopt a resolution authorizing the sale, issuance, and delivery of not
more than $44,000,000 in principal amount of City of Fillmore Wastewater Refunding
Revenue Bonds, Series 2017, and approving certain documents and authorizing
certain actions in connection therewith.
That the Fillmore Public Financing Authority adopt a resolution approving the Escrow
Agreement and authorizing certain actions in connection therewith.
ATTACHMENTS
142
RESOLUTION NO. 17-3600
WHEREAS, the City has heretofore entered into an Installment Sale Agreement,
dated as of June 1, 2007 (2007 Installment Sale Agreement), by and between the City
and the Fillmore Public Financing Authority (the Authority), which 2007 Installment
Sale Agreement secured the issuance of $59,490,000 Fillmore Public Financing
Authority Revenue Bonds, Series 2007 (City of Fillmore Wastewater System Financing
Project) (the 2007 Bonds) for the purpose of financing the improvement and expansion
of certain facilities within the wastewater system of the City, including a new water
recycling plant; and
WHEREAS, the 2007 Bonds were issued pursuant to an Indenture of Trust, dated
as of June 1, 2007 (2007 Indenture), between the Authority and Union Bank of
California, N. A., the predecessor to the MUFG Union Bank, National Association (the
Trustee); and
WHEREAS, the City may prepay a portion of the City Obligations and refund a
portion of the 2007 Bonds pursuant to the provisions of the Refunding Bond Law,
constituting Sections 53570 and 53580 et. seq. of the California Government Code
(Bond Law); and
WHEREAS, the City is authorized pursuant to the provisions of the Bond Law,
the 2007 Installment Payment Agreement and the 2007 Indenture, to issue its revenue
bonds for the purpose of refunding all or part of the City Obligations and Prior Bonds;
and
WHEREAS, interest rates are favorable for the refinancing of a portion of the
City Obligations and the 2007 Bonds; and
WHEREAS, the City, after due investigation and deliberation, has determined
that it is in the interests of the City at this time to provide for the issuance of revenue
bonds to refinance a portion of the City Obligations and 2007 Bonds; and 143
01148.0057/361982.301148.0057/361982.301148.0057/361982.3
Resolution No.
Page 2 of 5
WHEREAS, to that end, the City desires to issue its revenue bonds, to be
designated as the City of Fillmore Wastewater Refunding Revenue Bonds, Series 2017,
in the principal amount of $44,000,000 (the Bonds), to be secured by a pledge of the
net revenues derived from the operation of the wastewater system; and
WHEREAS, the Bonds will be issued on a parity with the pledge of net revenues
with the City Obligations under the 2007 Installment Sale Agreement, subject to the
provisions therein; and
WHEREAS, the proceeds of the Bonds will be used to (a) partially prepay the
City Obligations and refund a portion of the outstanding 2007 Bonds, (b) pay certain
costs of issuance in connection with the Bonds and (c) fund a reserve fund or reserve
fund surety in connection with the Bonds; and
WHEREAS, the City will issue the Bonds pursuant to the terms of the Indenture
of Trust (the Indenture), by and between the City and the Trustee; and
WHEREAS, the Bonds will be sold to Merrill Lynch, Pierce, Fenner & Smith
Incorporated (Underwriter) pursuant to the terms of a Bond Purchase Contract to be
entered into with the Underwriter; and
WHEREAS, to provide for the sale of the Bonds to the public by the
Underwriter, the City has prepared a preliminary official statement (the Preliminary
Official Statement); and
WHEREAS, in connection with the issuance of the Bonds, the City Council
desires to approve the Indenture, the Preliminary Official Statement, the Purchase
Contract, the Continuing Disclosure Certificate (as hereinafter defined) and the Escrow
Agreement (as hereinafter defined), and any other agreements, certificates or documents
necessary to issue the Bonds (collectively, the Financing Documents);
Section 1. The above recitals, and each of them, are true and correct.
Section 2. This City Council hereby approves of the issuance by the City of
its aggregate principal amount not to exceed $44,000,000 of the Bonds, designated as
City of Fillmore Wastewater Refunding Revenue Bonds, Series 2017, in accordance
with the terms and provisions of the Indenture. The form of Indenture on file with the
City Clerk is hereby approved with such changes as may be approved by the Mayor, City
Manager or the Finance Director (or the designees of the Mayor, City Manager or
Finance Director) (each, an Authorized Officer), such approval to be conclusively
evidenced by the execution and delivery thereof. Each Authorized Officer, acting alone,
is hereby authorized and directed for and in the name of the City to execute and the City
Clerk or Assistant or Deputy City Clerk (the City Clerk) is authorized to attest to the
Indenture. 144
01148.0057/361982.301148.0057/361982.301148.0057/361982.3
Resolution No.
Page 3 of 5
Section 3. The form of Purchase Contract on file with the City Clerk (the
Purchase Contract), is hereby approved with such changes as may be approved by an
Authorized Officer, such approval to be conclusively evidenced by the execution and
delivery thereof. Each Authorized Officer, acting alone, is hereby authorized and
directed for and in the name of the City to execute the Purchase Contract. The execution
of the Purchase Contract shall be a conclusive determination of approval of such changes.
The terms of such negotiated sale shall provide for present value savings of at least 3.0%
of the refunded par amount of the Prior Bonds and a not to exceed underwriters discount
of 0.425% of the par amount of the Bonds.
Section 4. The form of escrow agreement on file with the City Clerk (the
Escrow Agreement), by and among the City, the Fillmore Public Financing Authority
and MUFG Union Bank, National Association, and relating to the prepaid City
Obligations and 2007 Bonds, is hereby approved with such changes as may be approved
by an Authorized Officer, such approval to be conclusively evidenced by the execution
and delivery thereof. Each Authorized Officer, acting alone, is hereby authorized and
directed for and in the name of the City to execute the Escrow Agreement.
Section 7. The Authorized Officers, or the City Clerk, or their designees, and
each and every officer thereof is authorized and directed, jointly and severally, to do any
and all things and to execute and deliver any and all documents which they may deem
necessary or advisable in order to consummate the sale and delivery of the Bonds and
otherwise effectuate the purpose of this Resolution, including but not limited to insurance
commitments and agreements, tax certificates and other certifications of officers.
145
01148.0057/361982.3
Resolution No.
Page 4 of 5
Section 8. The firm of Aleshire & Wynder, LLP has been appointed as Bond
Counsel in connection with the issuance of the Bonds.
Section 10. The firm of Jones Hall, a Professional Corporation, has been
appointed as Disclosure Counsel in connection with the issuance of the Bonds.
__________________________
Carrie Broggie, Mayor
ATTEST:
______________________________
Oliva Carrera Lopez, City Clerk
APPROVED AS TO FORM:
______________________________
Tiffany J. Israel, City Attorney
146
01148.0057/361982.3
Resolution No.
Page 5 of 5
STATE OF CALIFORNIA )
COUNTY OF VENTURA ) ss.
CITY OF FILLMORE )
I, Oliva Carrera Lopez, City Clerk of the City of Fillmore, California, do hereby
certify that the foregoing Resolution No. _____ was duly passed and adopted by the City
Council of the City of Fillmore at the regular meeting thereof, held on the ___th day of
________, 2017, and was signed by the Mayor of the said City, and that the same was
passed and adopted by the following vote.
AYES:
NOES:
ABSENT:
ABSTAIN:
__________________________
Oliva Carrera Lopez, City Clerk
147
01148.0057/361982.301148.0057/361982.301148.0057/361982.3
RESOLUTION NO. 17-3599
RESOLVED by the Board of Directors of the Fillmore Public Financing Authority (the
Authority), at a regular meeting duly called and held on May 23,2017, at the business office of
the Authority, 250 Central Avenue, Fillmore, CA 90315, as follows:
WHEREAS, the City of Fillmore (the "City") is a municipal corporation duly organized
and existing under the law, and is authorized pursuant to Articles 10 and 11, Division 2, Title 5
(commencing with Section 53570) of the California Government Code, as amended (the
"Refunding Law") to borrow money for the purpose of refinancing indebtedness of the City; and
WHEREAS, the Authority is a duly organized joint exercise of powers authority created
by that Joint Exercise of Powers Agreement, dated as of September 25, 1990, between the City
and Fillmore Redevelopment Agency pursuant to the Joint Exercise of Powers Act, constituting
Government Code Sections 6500 et. seq.;
WHEREAS, the Authority previously caused the execution and delivery of $59,490,000
Fillmore Public Financing Authority Revenue Bonds, Series 2007 (City of Fillmore Wastewater
System Financing Project) (the 2007 Bonds), currently outstanding in the amount of
$53,540,000; and
WHEREAS, the proceeds of the 2007 Bonds were used by the Authority to fund a water
recycling plant pursuant to the terms of the Installment Sale Agreement, dated as of June 1, 2007
(2007 Installment Sale Agreement), by and between the Authority and the City; and
WHEREAS, under the 2007 Installment Sale Agreement, the City agreed to make
installment payments to the Authority (the 2007 Installment Payments) at such time and in such
amounts as are sufficient for the Authority to make all payments of principal and interest on the
2007 Bonds when due; and
WHEREAS, interest rates are currently at historical lows and the City has determined that
substantial savings may be had by prepaying a portion of the 2007 Installment Sale Agreement
and thereby refunding the 2007 Bonds; and
WHEREAS, after due investigation and deliberation, the City has determined that it is in
the interests of the City and prudent in the management of its fiscal affairs at this time to provide
for the
148
Resolution No. ____
Page 2 of 4
refinancing of a portion of its 2007 Installment Payments and payoff a portion of the 2007 Bonds
(collectively, the Prior Obligations); and
WHEREAS, in order to provide funds to refinance a portion of the Prior Obligations, the
City proposes to issue City of Fillmore Wastewater Refunding Revenue Bonds, Series 2017, in the
aggregate principal amount of not to exceed $44,000,000 (the "Bonds"), pursuant to an Indenture
of Trust (the "Indenture"), currently dated as of June 1, 2017, between the City and MUFG Union
Bank, National Association, as trustee (the "Trustee"); and
WHEREAS, the Authority, the City and MUFG Union Bank, National Association will
enter into an Escrow Agreement, a form of which is on file with the Secretary (the Escrow
Agreement), in connection with paying off a portion of the Prior Obligations; and
WHEREAS, the Authority has duly considered such document and actions and determines
that such actions are in the best interest of the Authority and the City; and
Section 1. Recitals. The findings set forth in the recitals hereof are true and correct and
by this reference incorporated herein.
Section 2. Escrow Agreement. The Authority hereby approves of the execution of the
Escrow Agreement, the form of which is on file with the Secretary of the Authority. The Chair or
Executive Director of the Authority is hereby authorized and directed, for and on behalf of the
Authority, to execute and deliver the Escrow Agreement, in substantially the form presented to
this meeting, with such changes therein as such officer may require or approve, such approval to
be conclusively evidenced by the execution and delivery thereof.
Section 3. Official Action. The officers and staff of the Authority are hereby
authorized and directed, for and in the name and on behalf of the Authority, to do any and all things
and take any and all actions, which they, or any of them, may deem necessary or advisable in order
to consummate the refinancing of the Prior Obligations by the City.
Section 4. Effective Date. This Resolution shall take effect immediately upon
adoption.
149
Resolution No. ____
Page 3 of 4
__________________________
Carrie Broggie, Chair
ATTEST:
____________________________
Oliva Carrera Lopez, Secretary
150
Resolution No. ____
Page 4 of 4
STATE OF CALIFORNIA )
COUNTY OF VENTURA )
CITY OF FILLMORE )
I, Oliva Carrera Lopez, Secretary of the Fillmore Public Financing Authority, Fillmore,
California, do hereby certify that the foregoing Resolution No. _____ was duly passed and adopted
by the Board of the Fillmore Public Financing Authority at the regular meeting thereof, held on the
____the day of _______, 2017, and was signed by the Chair, and that that same was passed and
adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_____________________________
Oliva Carrera Lopez, Secretary
151
INDENTURE OF TRUST
CITY OF FILLMORE
and
Relating to the
$_______
City of Fillmore
Wastewater Refunding Revenue Bonds, Series 2017
152
01148.0051/355925.4
TABLE OF CONTENTS
Page
156
01148.0051/355925.4 iv
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, is dated as of June 1, 2017, by and between the CITY
OF FILLMORE, a municipal corporation organized and existing under the constitution and laws
of the State of California (the City), and MUFG UNION BANK, N.A., a national banking
association organized and existing under the laws of the United States of America, with a corporate
trust office in [Los Angeles], California, and being qualified to accept and administer the trusts
hereby created (the Trustee);
WITNESSETH:
WHEREAS, the City is general law city and municipal corporation duly organized and
existing under the laws of the State of California, and pursuant to the provisions of Articles 10
and 11 of Chapter 3 of Division 2 of Title 5 of the of the California Government Code (the Act)
is authorized to issue refunding bonds to refinance outstanding obligations of the City;
WHEREAS, the City has heretofore entered into an Installment Sale Agreement, dated as
of June 1, 2007 (2007 Installment Sale Agreement), by and between the City and the Fillmore
Public Financing Authority (the Authority), which 2007 Installment Sale Agreement secured the
issuance of $59,490,000 Fillmore Public Financing Authority Revenue Bonds, Series 2007 (City
of Fillmore Wastewater System Financing Project) (the 2007 Bonds); for the purpose of
financing the improvement, and expansion of certain facilities within the wastewater system of the
City, including a new water recycling plant;
WHEREAS, the 2007 Bonds were issued pursuant to an Indenture of Trust, dated as of
June 1, 2007, between the Authority and Union Bank of California, N. A.;
WHEREAS, the payments under the 2007 Installment Sale Agreement are secured by a
pledge of the net revenues derived from the operation by the City of its sewer system;
WHEREAS, the City is authorized pursuant to the provisions of the Act to issue its revenue
bonds for the purpose of prepaying the 2007 Installment Sale Agreement and redeeming all or part
of the 2007 Bonds;
WHEREAS, the City, after due investigation and deliberation, has determined that it is in
the interests of the City at this time to provide for the issuance of revenue bonds to prepay a portion
of the 2007 Installment Sale Agreement and refund a portion of the 2007 Bonds;
WHEREAS, to that end, the City has determined to issue its revenue bonds, to be
designated as the City of Fillmore Wastewater Refunding Revenue Bonds (Wastewater System
Financing Project), Series 2017, in the principal amount of $____ (the Bonds), to be secured by
a pledge of the net revenues derived from the operation of the wastewater system;
WHEREAS, the Bonds are being issued on a parity with the remaining payments under the
2007 Installment Sale Agreement;
157
01148.0051/355925.4 1
WHEREAS, in order to provide for the authentication and delivery of the Bonds from time
to time and in such series as may be established by the City, to establish and declare the terms and
conditions upon which the Bonds are to be issued and secured and to secure the payment of the
principal thereof and premium (if any) and of the interest thereon, the City Council of the City has
authorized the execution of this Indenture;
WHEREAS, all Bonds issued under this Indenture will be secured by a pledge of the Net
Revenues, as defined herein, and certain other moneys and securities held by the Trustee
hereunder; and
WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when
executed by the City, authenticated and delivered by the Trustee, the duly issued, valid, binding
and legal special obligations of the City, and to constitute this Indenture a valid and binding
agreement for the uses and purposes herein set forth, in accordance with its terms, have been done
and taken; and the execution and delivery of this Indenture have been in all respects duly
authorized.
ARTICLE I
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this
Section 1.01 shall for all purposes of this Indenture and of any Supplemental Indenture and of any
certificate, opinion, request or other documents herein mentioned, have the meanings herein
specified, to be equally applicable to both the singular and plural forms of any of the terms herein
defined.
Additional Payments means the payments so designated and required to be paid by the
City pursuant to Sections 4.9, 4.10 and 4.11 of the 2007 Installment Sale Agreement related to the
outstanding 2007 Bonds.
Authorized Representative means, with respect to the City, the City Manager, Finance
Director or Treasurer of the City or any other person designated as an Authorized Representative
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of the City by a Certificate of the City signed by the City Manager, Finance Director or Treasurer
of the City and filed with the Trustee.
Bond Fund means the fund by that name established pursuant to Section 5.02.
Bond Registration Books means the books maintained by the Trustee pursuant to Section
2.08 for the registration and transfer of ownership of the Bonds.
Bond Year means any twelve-month period commencing on May 2 in a year and ending
on the next succeeding May 1, both dates inclusive; provided, however, that the first Bond Year
shall commence on the Closing Date relating to the Bonds and shall end on [May 1, 2018].
Bonds means the City's City of Fillmore Wastewater Refunding Revenue Bonds
(Wastewater System Financing Project), Series 2017, issued and at any time Outstanding
hereunder.
Business Day means a day of the year other than a Saturday and Sunday, and any day of
the year on which banks in Los Angeles, California, and the principal corporate Trust Office of
the Trustee are not required or authorized to remain closed and on which The New York Stock
Exchange is not closed.
City means the City of Fillmore, a general law city and municipal corporation organized
and existing under the constitution and laws of the State, and any successor thereto.
Closing Date means the date upon which there is an exchange of the Bonds for the
proceeds representing the purchase of the Bonds by the Original Purchaser thereof.
Code means the Internal Revenue Code of 1986 as in effect on the Closing Date, or as it
may be amended to apply to obligations issued on the Closing Date, together with applicable
temporary and final regulations promulgated under the Code.
Costs of Issuance means all expenses directly or indirectly payable by the City and
related to the authorization, issuance, sale and delivery of Bonds, including but not limited to
advertising and printing costs, costs of preparation and reproduction of documents, filing and
recording fees, initial fees and charges of the Trustee, compensation, fees and expenses of the City,
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the Trustee and the Escrow Bank and their respective counsel, compensation to any financial
consultants or underwriters, legal fees and expenses, rating agency fees, bond insurance fees, fees
and charges for preparation, execution, transportation and safekeeping of Bonds, and any other
cost, charge or fee in connection with the original issuance of Bonds.
Costs of Issuance Fund means the fund so designated and established pursuant to Section
3.03.
Current Gross Revenues means all gross charges received for, and all other gross income
and receipts derived by the City from, the ownership and operation of the Enterprise or otherwise
arising from the Enterprise, including but not limited to investment earnings thereon; but excluding
the proceeds of any ad valorem property taxes levied for the purpose of paying general obligation
bonds of the City relating to the Enterprise, and the proceeds of any special assessments or special
taxes levied upon real property within any improvement district served by the City levied for the
purpose of paying special assessment bonds or special tax obligations of the City relating to the
Enterprise.
DBO Contract means that certain agreement, dated November 28, 2006, by and between
the City and American Water Operations and Maintenance, Inc., providing for the design,
construction and operation of the Project.
Debt Service means, during any period of computation, the amount obtained for such
period by totaling the following amounts:
(a) The principal amount of all Outstanding Bonds coming due and payable by their
terms in such period; and
(b) The interest which would be due during such period on the aggregate principal
amount of Bonds which would be Outstanding in such period if the Bonds are retired as scheduled,
but deducting and excluding from such aggregate amount the amount of Bonds no longer
Outstanding.
Defeasance Obligations means (a) cash, and (b) Federal Securities. Any security used
for defeasance must provide for the timely payment of principal and interest and cannot be callable
or pre-payable prior to maturity or earlier redemption of the rated debt (excluding securities that
do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity
or call date).
Enterprise means entire municipal wastewater system of the City, comprising any and
all facilities, properties and improvements at any time owned, controlled or operated by the City
for the collection, treatment, disposal or reuse of wastewater, including sewage treatment plants,
intercepting and collecting sewers, outfall sewers, force mains, pumping stations, ejector stations,
pipes, valves, machinery and all other appurtenances necessary, useful or convenient for the
collection, treatment, disposal or reuse of sewage, and any necessary lands, rights of way and other
real or personal property useful in connection therewith.
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Escrow Agreement means the Escrow Deposit and Trust Agreement, dated the Closing
Date, by and among the City, the Authority and the Escrow Bank, relating to the refunding a
portion of each of the 2007 Installment Sale Agreement and the 2007 Bonds.
Escrow Bank means MUFG UNION BANK, N.A., a national banking association
organized and existing under and pursuant to the laws of the United States of America.
Escrow Fund means the Escrow Fund established and held by the Escrow Bank pursuant
to the Escrow Agreement.
Event of Default means any of the events of default described in Section 8.01.
Federal Securities means (a) cash, (b) direct obligations (other than an obligation subject
to variation in principal repayment) of the United States of America (U.S. Treasury Obligations),
(c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest
by the United States of America, (d) obligations fully and unconditionally guaranteed as to timely
payment of principal and interest by any agency or instrumentality of the United Sates of America
when such obligations are backed by the full faith and credit of the United States of America, or
(e) evidences of ownership of proportionate interests in future interest and principal payments on
obligations described above held by a bank or trust company as custodian, under which the owner
of the investment is the real party in interest and has the right to proceed directly and individually
against the obligator and the underlying government obligations are not available to any person
claiming through the custodian or to whom the custodian may be obligated.
Fiscal Year means the period commencing on July 1 of each year and terminating on the
next succeeding June 30.
Gross Revenues means Current Gross Revenues plus deposits to the Wastewater Fund
from amounts on deposit in the Rate Stabilization Fund, but only as and to the extent specified in
Section 5.07 of the Indenture and the documents related to Parity Obligations, less amounts
transferred to the Rate Stabilization Fund.
Indenture means this Indenture of Trust, as originally executed or as it may from time to
time be supplemented, modified or amended by any Supplemental Indenture pursuant to the
provisions hereof.
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Installment Payments means the amounts payable by the City pursuant to the 2007
Installment Sale Agreement, which are secured by a pledge of Net Revenues under the 2007
Installment Sale Agreement.
Insurance and Condemnation Proceeds Fund means the fund by that name established
pursuant to Section 7.04.
Insurance Consultant means a person (which may be the City's insurance agent or broker)
having experience and a favorable reputation in consulting on the insurance requirements of
wastewater utilities in the State of the general size and character of the Enterprise, selected by the
City.
Interest Account means the account by that name in the Bond Fund established pursuant
to Section 5.02.
Interest Payment Date means May 1 and November 1 in each year, beginning November
1, 2017, and continuing so long as any Bonds remain Outstanding.
Maximum Aggregate Annual Debt Service means, as of the date of calculation, the
maximum amount of Debt Service for the current or any future Bond Year with respect to all
Bonds and any Parity Obligations Outstanding.
Moody's means Moody's Investors Service, New York, New York, or its successors.
Net Revenues means, for any period, an amount equal to all of the Gross Revenues
received with respect to any period, minus the amount required to pay all Operation and
Maintenance Costs becoming payable with respect to such period.
Operation and Maintenance Costs means the reasonable and necessary costs and
expenses paid by the City for maintaining and operating the Enterprise, including but not limited
to (a) payments made under and pursuant to the DBO Contract relating to the operation of the
Project, (b) costs of electricity and other forms of energy supplied to the Enterprise, (c) the
reasonable expenses of management and repair and other costs and expenses necessary to maintain
and preserve the Enterprise in good repair and working order, and (d) the reasonable administrative
costs of the City attributable to the operation and maintenance of the Enterprise; but in all cases
excluding (i) debt service payable on obligations incurred by the City with respect to the Enterprise
including but not limited to the Installment Payments and any Parity Obligations, (ii) depreciation,
replacement and obsolescence charges or reserves therefor, and (iii) amortization of intangibles or
other bookkeeping entries of a similar nature.
Optional Redemption Account means the account by that name in the Redemption Fund
established pursuant to Section 5.06.
Original Purchaser means the first purchaser of the Bonds from the City.
Outstanding when used as of any particular time with reference to Bonds, means all
Bonds theretofore executed, issued and delivered by the City under this Indenture except:
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(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for
cancellation;
(b) Bonds paid or deemed to have been paid within the meaning of Section 11.01; and
(c) Bonds in lieu of or in substitution for which other Bonds shall have been executed,
issued and delivered by the City pursuant to this Indenture or any Supplemental Indenture.
Owner or Bond Owner, when used with respect to any Bond, means the person in
whose name the ownership of such Bond shall be registered on the Bond Registration Books.
Parity Obligations means any leases, loan agreements, installment sale agreements,
bonds, notes, interest rate swap agreements, currency swap agreements, forward payment
agreements, futures, or contracts providing for payments based on levels of, or changes in, interest
rates, currency exchange rates, stock or other indices, or contracts to exchange cash flows or a
series of payments, or contracts, including, without limitation, interest rate floors or caps, options,
puts or calls to hedge payment, currency, rate, spread, or similar exposure (except termination
payments relating thereto which shall be payable on a subordinate basis) or other obligations of
the City payable from and secured by a pledge of and lien upon any of the Net Revenues on a
parity with the Installment Payments and the 2017 Bonds, entered into or issued pursuant to and
in accordance with the Indenture.
Participating Underwriter shall have the meaning ascribed thereto in the Continuing
Disclosure Certificate.
(c) The following listed obligations from government-sponsored agencies which are
not backed by the full faith and credit of the United States of America:
(ii) Farm Credit System (formerly Federal Land Banks, Federal Intermediate
Credit Banks and Banks for Cooperatives) consolidated system-wide bonds and notes,
(iii) Federal Home Loan Banks (FHL Banks) consolidated debt obligations, and
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(d) Deposits the aggregate amount of which are fully insured by the Federal Deposit
Insurance Corporation, in banks which have capital and surplus of at least $15 million or
collateralized by Federal Securities for amounts in excess of FDIC insurance;
(e) Unsecured certificates of deposit, time deposits, and bankers' acceptances (having
maturities of not more than 365 days) of any bank the short-term obligations of which are rated
A-1+ or better by S&P and Prime-1 by Moody's, which may include the Trustee and its
affiliates.
(f) Money market funds rated Aam by S&P, or better and if rated by Moody's rated
Aa2 or better, including funds for which the Trustee, its parent holding company, if any, or any
affiliates or subsidiaries of the Trustee provide investment advisory or other management services
but excluding funds with a floating net asset value.
(g) Commercial paper (having original maturities of not more than 270 days) rated A-
1+ by S&P and Prime-1 by Moody's.
(h) Direct general obligations of any state of the United States of America or any
subdivision of agency thereof to which is pledged the full faith and credit of a state the unsecured
general obligation debt of which is rated at least A3 by Moody's and at least A- by S&P, or
any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose
unsecured general obligation debt is so rated,
(b) Special Revenue Bonds (as defined in the United States Bankruptcy Code)
of any state or state agency described in (a) above and rated AA- or better by S&P and Aa3
or better by Moody's.
(i) Pre-refunded municipal obligations rated AAA by S&P and Aaa by Moody's
meeting the following requirements:
(i) the municipal obligations are (A) not subject to redemption prior to maturity
or (B) the trustee for the municipal obligations has been given irrevocable instructions concerning
their call and redemption and the issuer of the municipal obligations has covenanted not to redeem
such municipal obligations other than as set forth in such instructions,
(ii) the municipal obligations are secured by cash or U.S. Treasury Obligations
which may be applied only to payment of the principal of, interest and premium on such municipal
obligations,
(iii) the principal of and interest on the U.S. Treasury Obligations (plus any cash
in the escrow) has been verified by the report of independent certified public accountants to be
sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on
the municipal obligations (Verification Report),
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(iv) the cash or U.S. Treasury Obligations serving as security for the municipal
obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations
(vi) the cash or U.S. Treasury Obligations are not available to satisfy any other
claims, including those by or against the trustee or escrow agent.
(j) the Local Agency Investment Fund of the State, created pursuant to section 16429.1
of the California Government Code, to the extent the Trustee is authorized to register such
investment in its name.
(k) any other investments permitted under the laws of the State of California for public
entities like the City.
Principal Account means the account by that name in the Bond Fund established pursuant
to Section 5.02.
Principal Payment Date means May 1 in each year, beginning May 1, 2018, and
continuing so long as any Bonds remain Outstanding.
Proceeds Fund means the fund so designated and established pursuant to Section 3.02.
Rate Stabilization Fund means the fund of such name created by the City and described
in Section 5.07 hereof.
Rating Category means, with respect to any Permitted Investment, one or more of the
generic categories of rating by Moody's and/or S&P applicable to such Investment Security,
without regard to any refinement or gradation of such rating category by a plus or minus sign.
Record Date means the fifteenth (15th) calendar day of the month immediately preceding
an Interest Payment Date.
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Redemption Fund means the fund by that name established pursuant to Section 5.06.
Redemption Price means, with respect to any Bond (or portion thereof) the principal
amount of such Bond (or portion) plus the applicable premium, if any, payable upon redemption
thereof pursuant to the provisions of such Bond and this Indenture.
Reserve Account means the account by that name in the Bond Fund so designated and
established pursuant to Section 5.02.
Revenue Fund means the Wastewater Fund held by the City into which all Revenues,
as received, are deposited.
S&P means S&P Global, Inc., New York, New York, or its successors.
Securities Depositories means The Depository Trust Company; and, in accordance with
then current guidelines of the Securities and Exchange Commission, such other addresses and/or
such other securities depositories as the City may designate in a Certificate of the City delivered
to the Trustee.
Special Record Date means the date established by the Trustee pursuant to Section 2.02
as a record date for the payment of defaulted interest on Bonds.
Special Redemption Account means the account by that name in the Redemption Fund
established pursuant to Section 5.06.
Supplemental Indenture means any indenture hereafter duly authorized and entered into
between the City and the Trustee, amendatory of or supplemental to this Indenture, but only if and
to the extent that such Supplemental Indenture is specifically authorized hereunder.
Trust Office means the principal corporate trust office of the Trustee in Los Angeles,
California; provided, however, that the Trustee may from time to time designate other offices for
purposes of payment, transfer, exchange or registration of Bonds.
Trustee means MUFG Union Bank, N.A., a national banking association, appointed by
the City to act as trustee hereunder pursuant to Section 9.01, and its assigns or any other
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corporation or association which may at any time be substituted in its place, as provided in Section
10.01.
2007 Installment Sale Agreement has the meaning given to such term in the preambles
hereto, and includes any amendments thereto.
Wastewater Fund means, collectively, the Citys existing wastewater enterprise fund,
established and held by the City with respect to the Enterprise.
Section 1.03. Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract between the
City and the Owners from time to time of the Bonds; and the covenants and agreements herein set
forth to be performed on behalf of the City shall be for the equal and proportionate benefit, security
and protection of all Owners of the Bonds without preference, priority or distinction as to security
or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or
the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as
expressly provided therein or herein.
ARTICLE II
THE BONDS
Section 2.01. Authorization of the Bonds. At any time after the adoption, execution and
delivery of this Indenture, the City may execute and the Trustee, upon Request of the City, shall
authenticate and deliver Bonds in the aggregate principal amount of __________ ($_____).
Section 2.02. Terms of the Bonds. The Bonds shall be issued in fully registered form
without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Bond
shall have more than one maturity date. The Bonds shall be dated as of their date of delivery, shall
mature on May 1 in each of the years and in the amounts, and shall bear interest at the rates, as
follows:
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Interest on the Bonds shall be payable on each Interest Payment Date to the person whose
name appears on the Bond Registration Books as the Owner thereof as of the Record Date
immediately preceding each such Interest Payment Date, such interest to be paid on such Interest
Payment Date by check or, at the option of any Owner of at least $1,000,000 aggregate principal
amount of Bonds and upon written notice received by the Trustee prior to the Record Date, by
wire transfer, at the Owner's address as it appears on the Bond Registration Books or to such
account as shall have been identified by the Owner in the notice requesting payment by wire
transfer. Interest on the Bonds shall be computed on the basis of a year consisting of 360 days and
twelve 30-day months. Principal of and premium (if any) on any Bond shall be paid upon
presentation and surrender thereof at the Trust Office of the Trustee. Both the principal of and
interest and premium (if any) on the Bonds shall be payable in lawful money of the United States
of America.
Each Bond shall bear interest from the Interest Payment Date next preceding the
authentication thereof, unless (a) it is authenticated after a Record Date and on or before the
following Interest Payment Date, in which event it shall bear interest from such Interest Payment
Date; or (b) it is authenticated on or before October 15, 2017, in which event it shall bear interest
from its date of delivery; provided, however, that if, as of the date of authentication of any Bond,
interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which
interest has previously been paid or made available for payment thereon.
Any such interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Owner on such Record Date and shall be paid to the person in whose name the Bond
is registered at the close of business on a Special Record Date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof being given to the Owners not less than ten (10)
days prior to such Special Record Date.
Section 2.03. Form of Bonds. The Bonds, the form of Trustee's certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the
respective forms 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
Indenture.
Section 2.04. Execution of Bonds. The Bonds shall be signed in the name and on behalf
of the City with the manual or facsimile signature of its Mayor and attested by the manual or
facsimile signature of its Secretary. The Bonds shall then be delivered to the Trustee for
authentication by it. In case any officer who shall have signed any of the Bonds shall cease to be
such officer before the Bonds so signed shall have been authenticated or delivered by the Trustee
or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and,
upon such authentication, delivery and issue, shall be as binding upon the City as though the
individual who signed the same had continued to be such officer of the City. Also, any Bond may
be signed on behalf of the City by any individual who on the actual date of the execution of such
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Bond shall be the proper officer although on the nominal date of such Bond such individual shall
not have been such officer of the City.
Only such of the Bonds as shall bear thereon a certificate of authentication in substantially
the form set forth in Exhibit A, manually executed by the Trustee, shall be valid or obligatory for
any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be
conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered
hereunder and are entitled to the benefits of this Indenture.
Section 2.05. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the Bond Registration Books, by the person in whose name it is registered, in
person or by his duly authorized attorney, upon surrender of such Bond for cancellation, endorsed
or accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee,
duly executed. Every Bond so surrendered to the Trustee shall be canceled by it and destroyed.
Whenever any Bond shall be surrendered for transfer, the City shall execute and the Trustee shall
thereupon authenticate and deliver to the transferee a new Bond or Bonds of like maturity and
aggregate principal amount of authorized denominations. The Trustee shall require the Owner
requesting such transfer to pay any tax or other charge required to be paid with respect to such
transfer. No Bond, the notice of redemption of which has been mailed pursuant to Section 4.03,
shall be subject to transfer pursuant to this Section 2.05. No transfer shall be required during the
period established by the Trustee for the selection of Bonds for redemption.
Section 2.06. Exchange of Bonds. Bonds may be exchanged at the Trust Office of the
Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the
same maturity. The Trustee shall require the Owner requesting such exchange to pay any tax or
other charge required to be paid with respect to such exchange. No Bond, the notice of redemption
of which has been mailed pursuant to Section 4.03, shall be subject to exchange pursuant to this
Section 2.06. No exchange of Bonds shall be required during the period established by the Trustee
for the selection of Bonds for redemption.
Section 2.07. Temporary Bonds. The Bonds may be issued initially in temporary form
exchangeable for definitive Bonds when ready for delivery. Any temporary Bond may be printed,
lithographed or typewritten, shall be of such denomination as may be determined by the City and
may contain such reference to any of the provisions of this Indenture as may be appropriate. A
temporary Bond may be in the form of a single registered bond payable in installments, each on
the date, in the amount and at the rate of interest established for the Bonds maturing on such date.
Every temporary Bond shall be executed by the City and authenticated by the Trustee upon the
same conditions and in the same manner as the definitive Bonds. If the City issues temporary
Bonds, it will execute and deliver definitive Bonds as promptly thereafter as practicable, and
thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the
Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such
temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations of the same maturity or maturities. Until so exchanged, the temporary Bonds shall
be entitled to the same benefits under this Indenture as definitive Bonds authenticated and
delivered hereunder. Bond Registration Books. The Trustee will keep or cause to be kept at its
Trust Office sufficient books for the registration and transfer of the Bonds, which shall at all times
during regular business hours be open to inspection by the City; and, upon presentation for such
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purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or
transfer or cause to be registered or transferred, on said books, Bonds as hereinbefore provided.
Section 2.09. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the City shall execute, and the Trustee shall thereupon authenticate and deliver, a new
Bond of like tenor and authorized denomination in exchange and substitution for the Bond so
mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond
so surrendered to the Trustee shall be canceled by it and destroyed in accordance with Section
13.05 hereof. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such
loss, destruction or theft may be submitted to the City and the Trustee and, if such evidence be
satisfactory to the Trustee and indemnity for the City and the Trustee satisfactory to the Trustee
shall be given, the City, at the expense of the Bond Owner, shall execute, and the Trustee shall
thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the
Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been called
for redemption, instead of issuing a substitute Bond, the Trustee may pay the same without
surrender thereof upon receipt of the aforementioned indemnity). The City may require payment
of a reasonable fee for each new Bond issued under this Section 2.09 and of the expenses which
may be incurred by the City and the Trustee in connection therewith. Any Bond issued under the
provisions of this Section 2.09 in lieu of any Bond alleged to be lost, destroyed or stolen shall
constitute an original contractual obligation on the part of the City whether or not the Bond alleged
to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other Bonds secured by this
Indenture.
Section 2.10. Book Entry System. Notwithstanding any provision of this Indenture to the
contrary:
(a) At the request of the Original Purchaser, the Bonds shall be initially issued
registered in the name of Cede & Co., as nominee of The Depository Trust Company, the
depository designated by the Original Purchaser, and shall be evidenced by one Bond maturing on
each of the maturity dates set forth in Section 2.02 hereof to be in a denomination corresponding
to the total principal therein designated to mature on such date. Registered ownership of such
Bonds, or any portions thereof, may not thereafter be transferred except:
(ii) to any substitute depository designated in a written request of the City, upon
(A) the resignation of The Depository Trust Company or its successor (or any substitute depository
or its successor) from its functions as depository or (B) a determination by the City that The
Depository Trust Company or its successor is no longer able to carry out its functions as
depository; provided that any such substitute depository shall be qualified under any applicable
laws to provide the services proposed to be provided by it; or
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(iii) to any person as provided below, upon (A) the resignation of The
Depository Trust Company or its successor (or any substitute depository or its successor) from its
functions as depository or (B) a determination by the City that The Depository Trust Company or
its successor is no longer able to carry out its functions as depository; provided that no substitute
depository which is not objected to by the City and the Trustee can be obtained.
(b) In the case of any transfer pursuant to paragraph (i) or paragraph (ii) of subsection
(a) of this Section 2.10, upon receipt of all Outstanding Bonds by the Trustee, together with a
written request of an Authorized Representative of the City to the Trustee, a single new Bond shall
be issued, authenticated and delivered for each maturity of such Bond then outstanding, registered
in the name of such successor or such substitute depository or their nominees, as the case may be,
all as specified in such written request of an Authorized Representative of the City. In the case of
any transfer pursuant to paragraph (iii) of subsection (a) of this Section 2.10, upon receipt of all
Outstanding Bonds by the Trustee together with a written request of an Authorized Representative
of the City, new Bonds shall be issued, authenticated and delivered in such denominations and
registered in the names of such persons as are requested in a written request of the City provided
the Trustee shall not be required to deliver such new Bonds within a period less than sixty (60)
days from the date of receipt of such a written request of an Authorized Representative of the City.
(c) In the case of partial redemption or a partial advance refunding of any Bonds
evidencing all of the principal maturing in a particular year, The Depository Trust Company shall,
at the City's expense, deliver the Bonds to the Trustee for cancellation and re-registration to reflect
the amounts of such reduction in principal.
(d) The City and the Trustee shall be entitled to treat the person in whose name any
Bond is registered as the absolute Owner thereof for all purposes of this Indenture and any
applicable laws, notwithstanding any notice to the contrary received by the Trustee or the City;
and the City and the Trustee shall have no responsibility for transmitting payments to,
communication with, notifying or otherwise dealing with any beneficial owners of the Bonds.
Neither the City nor the Trustee will have any responsibility or obligations, legal or otherwise, to
the beneficial owners of the Bonds or to any other party including The Depository Trust Company
or its successor (or substitute depository or its successor), except for the registered owner of any
Bond.
(e) So long as all outstanding Bonds are registered in the name of Cede & Co. or its
registered assign, the City and the Trustee shall reasonably cooperate with Cede & Co., as sole
registered Owner, or its registered assign in effecting payment of the principal and redemption
premium, if any, and interest due with respect to the Bonds by arranging for payment in such
manner that funds for such payments are properly identified and are made immediately available
on the date they are due.
(f) So long as all Outstanding Bonds are registered in the name of Cede & Co. or its
registered assigns (hereinafter, for purposes of this paragraph (f), the Owner):
(i) All notices and payments addressed to the Owners shall contain the Bonds'
CUSIP number.
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(ii) Notices to the Owner shall be forwarded in the manner set forth in the form
of blanket issuer letter of representations (prepared by The Depository Trust Company) executed
by the City and received and accepted by The Depository Trust Company.
ARTICLE III
Section 3.01. Issuance of Bonds. At any time after the adoption, execution and delivery
of this Indenture, the City may execute and the Trustee, upon Request of the City, shall authenticate
and deliver Bonds in the aggregate principal amount of _________ ($______).
(a) The Trustee shall deposit the proceeds derived from the sale of the Bonds
($_______), being the principal amount of the Bonds of $ , less underwriters' discount of
$____, [less net original issue discount][plus an original issue premium] of $_____, less the
premium for the [Insurance Policy] of $___ which the Underwriter will transfer directly to the
[Insurer] into a temporary account called the Proceeds Fund which the Trustee shall establish and
disburse in full on the Delivery Date (whereupon said temporary account shall be closed), as
follows:
(i) The Trustee shall deposit to the Costs of Issuance Fund the sum of $____;
(ii) The Trustee shall deposit to the Reserve Account the sum of $____;
(iii) The Trustee shall transfer to the Escrow Bank with respect to the 2007
Bonds, for deposit by the Escrow Bank in the Escrow Fund, the sum of $____.
(b) The Trustee may establish temporary funds or accounts on its records to facilitate
such transfers.
(a) The Trustee shall establish, maintain and hold in trust a separate fund designated as
the Costs of Issuance Fund. The moneys in the Costs of Issuance Fund shall be used and
withdrawn by the Trustee to pay Costs of Issuance upon receipt by the Trustee of a Requisition of
the City stating the person to whom payment is to be made, the amount to be paid, the purpose for
which the obligation was incurred and that such payment is a proper charge against said account.
At the end of six months from the Closing Date, or upon earlier receipt of a Certificate of
the City stating that amounts in the Costs of Issuance Fund are no longer required for the payment
of Costs of Issuance, the Costs of Issuance Fund shall be closed and any amounts then remaining
in said account shall be transferred to the Bond Fund.
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(a) The City has reviewed all proceedings heretofore taken relative to the authorization
of the Bonds and has found, as a result of such review, and hereby finds and determines that all
acts, conditions and things required by law to exist, happen or be performed precedent to and in
the issuance of the Bonds do exist, have happened and have been performed in due time, form and
manner as required by law, and the City is now authorized, pursuant to each and every requirement
of the Act to issue the Bonds in the form and manner provided in this Indenture and the Bonds
shall be entitled to the benefit, protection and security of the provisions of this Indenture.
(b) From and after the issuance of the Bonds, the findings and determinations of the
City respecting the Bonds shall be conclusive evidence of the existence of the facts so found and
determined in any action or proceeding in any court in which the validity of the Bonds is at issue,
and no bona fide purchaser of any of the Bonds shall be required to see to the existence of any fact
or to the performance of any condition or to the taking of any proceeding required prior to such
issuance or to the application of the proceeds of sale of the Bonds. The recital contained in the
Bonds that the same are issued pursuant to the Act and this Indenture shall be conclusive evidence
of their validity and of the regularity of their issuance and all Bonds shall be incontestable from
and after their issuance. The Bonds shall be deemed to be issued, within the meaning of this
Indenture, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) have
been delivered to the purchaser thereof and the proceeds of sale thereof received.
ARTICLE IV
REDEMPTION OF BONDS
(a) Mandatory Sinking Fund Redemption. The Bonds maturing on May 1, ___, are
also subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking
Account Payments in the amounts and on the dates shown below deposited in the Term Bonds
Sinking Account pursuant to Section 5.04(c), on each May 1 on or after May 1, ____, at the
principal amount thereof and interest accrued thereon to the date fixed for redemption, without
premium
*Maturity
In lieu of such redemption, the Trustee may apply amounts in the Sinking Account to the purchase
of the Term Bonds at public or private sale, as and when and at such prices (including brokerage
and other charges, but excluding accrued interest, which is payable from the Interest Account) as
may be directed by the City, except that the purchase price (exclusive of accrued interest) may not
exceed the redemption price then applicable to the Term Bonds, as set forth in a Written Request
of the City.
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(b) Optional Redemption. The Bonds maturing on or after May 1, ___ are subject to
redemption prior to their respective stated maturities, from moneys deposited in the Optional
Redemption Account from any other source of available funds, at the option of the City, in whole
on any date, or in part by such maturities as are selected by the City and by lot within a maturity
on any date, on or after May 1, ___, at a redemption price equal to the principal amount of Bonds
called for redemption, without premium, together with accrued interest to the date fixed for
redemption.
When Bonds are to be redeemed at the option of the City as set forth in this Section 4.01,
the City shall give written notice to the Trustee of the exercise of such option at least forty-five
(45) days prior to the proposed redemption date, along with the form of notice to be sent to the
bondholders. Such notice shall state the proposed redemption date, the principal amount of Bonds
to be redeemed and the maturity or maturities from which such redemption shall be made.
Section 4.02. Selection of Bonds for Redemption. Whenever provision is made in this
Indenture for the redemption of less than all of the Bonds or any given portion thereof, and unless
otherwise specified in Section 4.01, the Trustee shall select the Bonds to be redeemed, from all
Bonds of or such given portion thereof not previously called for redemption, in inverse order of
maturity or, at the election of the City evidenced by a Certificate of the City filed with the Trustee,
on a pro rata basis among maturities, and by lot within a maturity. The Trustee shall promptly
notify the City in writing of the Bonds or portions thereof so selected for redemption.
(a) The Trustee on behalf and at the expense of the City shall send (by first class mail,
postage prepaid, or, with respect to notices to be sent to DTC or its nominee, the Information
Services or the Securities Depository by a transmission method that is acceptable to such entity)
notice of any redemption at least thirty (30) but not more than sixty (60) days prior to the
redemption date, (i) to any Insurer and to the Owners of any Bonds designated for redemption at
their respective addresses appearing on the Registration Books, and (ii) to the Securities
Depositories and one or more Information Services; but such mailing shall not be a condition
precedent to such redemption and neither failure to receive any such notice nor any defect therein
shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of
the accrual of interest thereon. Such notice shall state the redemption date and the redemption
price, shall state, in the case of a redemption pursuant to 4.02 (b) above, that such redemption is
conditioned upon the timely delivery of the redemption price by the City to the Trustee for deposit
in the Redemption Account, shall designate the CUSIP number of the Bonds to be redeemed, shall
state the individual number of each Bond to be redeemed or shall state that all Bonds between two
stated numbers (both inclusive) or all of the Bonds Outstanding are to be redeemed, and shall
require that such Bonds be then surrendered at the Principal Corporate Trust Office of the Trustee
for redemption at the redemption price, giving notice also that further interest on such Bonds will
not accrue from and after the redemption date.
The City shall have the right to rescind any optional redemption by written notice to the
Trustee on or prior to the date fixed for redemption. Any such notice of optional redemption shall
be canceled and annulled if for any reason funds will not be or are not available on the date fixed
for redemption for the payment in full of the Bonds then called for redemption, and such
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cancellation shall not constitute an Event of Default under this Indenture. The City and the Trustee
shall have no liability to the Owners or any other party related to or arising from such rescission
of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner
and to the same recipients as the original notice of redemption was sent; provided, however, the
notice of rescission shall not be required to be mailed within the time period required for the notice
of redemption.
Upon the payment of the redemption price of Bonds being redeemed, each check or other
transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number
identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or
other transfer.
(b) Notice of redemption of Bonds shall be given by the Trustee, at the expense of the
City, for and on behalf of the City.
(c) Notwithstanding the foregoing, in the case of any optional redemption of the Bonds
under Section 4.01(b), the notice of redemption may state that the redemption is conditioned upon
receipt by the Trustee of sufficient moneys to redeem the Bonds on the anticipated redemption
date, and that the optional redemption shall not occur if, by no later than the scheduled redemption
date, sufficient moneys to redeem the Bonds have not been deposited with the Trustee. In the event
that the Trustee does not receive sufficient funds by the scheduled optional redemption date to so
redeem the Bonds to be optionally redeemed, such event shall not constitute an Event of Default;
the Trustee shall send written notice to the Owners, 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 Bonds for which notice of optional redemption was given shall remain Outstanding for all
purposes of this Indenture.
Section 4.04. Partial Redemption of Bonds. Upon surrender of any Bond redeemed in
part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof,
at the expense of the City, a new Bond or Bonds of authorized denominations, and of the same
maturity, equal in aggregate principal amount to the unredeemed portion of the Bond surrendered.
Section 4.05. Effect of Redemption. Notice of redemption having been duly given as
aforesaid, and moneys for payment of the Redemption Price of, together with interest accrued to
the redemption date on, the Bonds (or portions thereof) so called for redemption being held by the
Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called
for redemption shall become due and payable at the Redemption Price specified in such notice
plus interest accrued thereon to the redemption date, interest on the Bonds so called for redemption
shall cease to accrue, said Bonds (or portions thereof) shall cease to be entitled to any benefit or
security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof
except to receive payment of said Redemption Price and accrued interest.
All Bonds redeemed pursuant to the provisions of this Article IV shall be canceled upon
surrender thereof and destroyed in accordance with Section 13.05 hereof.
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ARTICLE V
Section 5.01. Pledge of Net Revenues. Subject to the provisions of Section 9.06, the
Bonds, the Installment Payments and any Parity Obligations shall be secured by a first pledge of
all of the Net Revenues. In addition, the Bonds shall be secured by a pledge of all of the moneys
in all funds and accounts held by the Trustee hereunder, including all amounts derived from the
investment of such moneys. Such pledge shall constitute a lien on the Net Revenues and such other
moneys for the payment of the principal of and interest and premium (if any) on the Bonds in
accordance with the terms hereof. The Bonds, the Installment Payments and any Parity Obligations
shall be equally secured by a pledge, charge and lien upon the Net Revenues, without priority for
number or date. So long as any of the Bonds are Outstanding, the Net Revenues and such moneys
shall not be used for any other purpose, except as set forth in this Section 5.01 and in Parity
Obligations except, that out of the Net Revenues, there may be apportioned such sums, for such
purposes, as are expressly permitted by Section 5.02.
In consideration of the acceptance of the Bonds by those who shall hold the same from
time to time, this Indenture shall be deemed to be and shall constitute a contract between the City
and the Owners from time to time of the Bonds and the covenants and agreements herein set forth
to be performed by or on behalf of the City shall be for the equal and proportionate benefit, security
and protection of all Owners of the Bonds without preference, priority or distinction as to security
or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or
the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as
expressly provided therein or herein.
The City hereby represents and warrants that it has not heretofore made a pledge of, granted
a lien on or security interest in, or made an assignment or sale of the Net Revenues that ranks prior
to the pledge granted hereunder, except to secure the obligations disclosed herein that will be
outstanding upon issuance of the Bonds. The City also hereby represents and warrants that it has
not described the Net Revenues in a Uniform Commercial Code financing statement that will
remain effective when the Bonds are issued, except in connection with the foregoing pledges,
assignments, liens, and security interests. The City shall not hereafter make or suffer to exist any
pledge or assignment of, lien on, or security interest in the Net Revenues that ranks prior to or on
a parity with the pledge granted hereunder, or file any financing statement describing any such
pledge, assignment, lien, or security interest, except as expressly permitted under this Indenture.
The pledge of Net Revenues and all moneys in all funds and accounts held by the Trustee
hereunder constitutes a lien on and security interest in the Net Revenues and such amounts, and
shall attach, be perfected and be valid and binding from and after the Closing Date without the
need for any physical delivery thereof or further act.
Section 5.02. Receipt, Deposit and Application of Revenues and Net Revenues.
(a) Application of Revenues. The City has previously established the Revenue Fund
to be held by the City. All of the Gross Revenues shall be deposited by the City, immediately
upon receipt in the Revenue Fund. Upon receipt of Gross Revenues, the City shall segregate such
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amounts as shall be estimated to pay all Operation and Maintenance Costs for the period beginning
on such date and ending on the next anticipated date of receipt of Gross Revenues. Amounts
remaining on deposit in the Revenue Fund shall be Net Revenues. All Net Revenues shall be held
in trust by the City, in the Revenue Fund for the benefit of the holder of the Bonds, the Installment
Payments and Parity Obligations.
(b) Transfers of Net Revenues. On or before the twenty-fifth (25th) day of each month,
commencing October 25, 2017, the City shall withdraw from the Revenue Fund, after deducting
the amounts in (a), and shall take the following actions:
(i) The City shall transfer to the Trustee, for deposit in a special fund
designated as the Bond Fund which the Trustee shall establish and which it shall maintain and
hold in trust (and transfer on a parity to such similar funds or accounts established for the payment
of Parity Obligations such amounts as are required for the payment thereof), an amount which,
together with the balance then on deposit in the Bond Fund, the Interest Account and the Principal
Account (other than amounts resulting from the prepayment of Bonds pursuant to Section __ and
other than amounts required for payment of principal of or interest on any Bonds which have
matured or been called for redemption but which have not been presented for payment), that is
equal to one-sixth (1/6) of the aggregate amount of interest amount coming due and payable on
the Bonds on the next succeeding Interest Payment Date and one-twelfth (1/12) of the principal
coming due and payable on the Bonds on the next succeeding principal payment date;
(ii) After making the payments, allocations and transfers provided for in
subparagraphs (b)(i) above, (A) if the balance in the Reserve Account is less than the Reserve
Account Requirement, the notice of which deficiency shall have been given by the Trustee to the
City, or (B) if the balance in a bond reserve account established for any Parity Obligations is less
than the bond reserve requirement established for such Parity Obligations, or (C) if any reserve
surety bond for the Bonds or for any Parity Obligations has been drawn upon to make delinquent
payments, the notice of which deficiency shall have been given to the City, the deficiency shall be
restored by transfers by the City from the first moneys which become available in the Revenue
Fund to the Trustee for deposit by the Trustee in the Reserve Account and transfers to the
applicable party for deposit in the bond reserve account established for such Parity Obligations to
increase the amount on deposit to the Reserve Account requirement for such Parity Obligations;
(iii) to pay all other amounts pledged and/or payable under Parity Obligations
and pledged or payable under the Indenture;
(iv) to pay all amounts when due and payable to any Subordinate Debt.
(c) Surplus/ Release from Lien. Following all the transfers described in (b)(i)-(iv) of
this Section 5.02, excess Net Revenues shall be released from the lien of this Indenture and shall
be available for any lawful purpose of the City.
(d) Application of Net Revenues. On or before the Business Day preceding each
Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following
respective accounts (each of which the Trustee shall establish and maintain within the Bond Fund),
the following amounts, in the following order of priority, the requirements of each such account
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(including the making up of any deficiencies in any such account resulting from lack of Net
Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied
before any transfer is made to any account subsequent in priority:
First: to the Interest Account, the aggregate amount of interest becoming due and payable
on the next succeeding Interest Payment Date on all Bonds then Outstanding;
Second: to the Principal Account, the aggregate amount of principal becoming due and
payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if any; and
Third: to the Reserve Account, the aggregate amount of each prior withdrawal from the
Reserve Account for the purpose of making up a deficiency in the Interest Account or Principal
Account; provided that no deposit need be made into the Reserve Account so long as the balance
in said account shall be at least equal to the Reserve Account Requirement.
Section 5.03. Application of Interest Account. All amounts in the Interest Account shall
be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it
shall become due and payable (including accrued interest on any Bonds purchased or redeemed
prior to maturity pursuant to this Indenture).
(a) All amounts in the Principal Account shall be used and withdrawn by the Trustee
solely for the purposes of paying the principal of the Bonds when due and payable, except that all
amounts in the Sinking Accounts shall be used and withdrawn by the Trustee solely to purchase
or redeem or pay at maturity Term Bonds, as provided herein.
(b) The Trustee shall when needed establish and maintain within the Principal Account
a subaccount for the Term Bonds. On or before the second Business Day preceding each
Mandatory Sinking Account Payment date, the Trustee shall transfer the amount deposited in the
Principal Account pursuant to Section 5.02 for the purpose of making a Mandatory Sinking
Account Payment from the Principal Account to the Sinking Account.
With respect to the Sinking Account, on each Mandatory Sinking Account Payment date
established for the Sinking Account, the Trustee shall apply the Mandatory Sinking Account
Payment required on that date to the redemption (or payment at maturity, as the case may be) of
Term Bonds, upon the notice and in the manner provided in Article IV; provided that, at any time
prior to giving such notice of such redemption, the Trustee upon the Order of the City shall apply
moneys in the Revenue Fund to the purchase of Term Bonds made by the City at public or private
sale, as and when and at such prices (including brokerage and other charges, but excluding accrued
interest, which is payable from the Interest Account) as shall be directed by the City, except that
the purchase price (excluding accrued interest) shall not exceed the Redemption Price that would
be payable for such Bonds upon redemption by application of such Mandatory Sinking Account
Payment. If, during the twelve-month period immediately preceding said Mandatory Sinking
Account Payment date, the City has purchased Term Bonds with moneys in the Sinking Account,
or, during said period and prior to giving said notice of redemption, the City has deposited Term
Bonds with the Trustee, or Term Bonds were at any time purchased by the City or redeemed by
the Trustee from the Redemption Fund and allocable to said Mandatory Sinking Account Payment,
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such Bonds so purchased or deposited or redeemed shall be applied, to the extent of the full
principal amount thereof, to reduce said Mandatory Sinking Account Payment. All Bonds
purchased or deposited pursuant to this subsection shall be canceled and destroyed by the Trustee
in accordance with Section 13.05 hereof. Any amounts remaining in the Sinking Account when all
of the Term Bonds are no longer Outstanding shall be withdrawn by the Trustee and transferred to
the City for deposit in the Revenue Fund. All Term Bonds purchased from the Sinking Account or
deposited by the City with the Trustee shall be allocated first to the next succeeding Mandatory
Sinking Account Payment, then pro-rata to the remaining Mandatory Sinking Account Payments
in proportion to the amount of such Mandatory Sinking Account Payments.
Notwithstanding the foregoing, if some but not all of the Term Bonds have been theretofore
redeemed pursuant to Sections 4.01(b), the total amount of all future Mandatory Sinking Account
Payments set forth in Section 5.04(c) shall be reduced by the aggregate principal amount of Term
Bonds so redeemed, allocated among such Mandatory Sinking Account Payments on a pro rata
basis in integral multiples of $5,000 as determined by the City (notice of which determination shall
be given to the Trustee).
Any amounts remaining in the Sinking Account when all of the Term Bonds are no longer
Outstanding shall be withdrawn by the Trustee and transferred to the Revenue Fund.
Section 5.05. Application of Reserve Account. All amounts in the Reserve Account shall
be used and withdrawn by the Trustee solely for the purpose of (a) paying interest on or principal
of the Bonds when due and payable to the extent that moneys deposited in the Interest Account or
Principal Account, respectively, are not sufficient for such purpose, and (b) making the final
payments of principal of and interest on the Bonds. On the date on which all Bonds shall be retired
hereunder or provision made therefor pursuant to Article X, all moneys then on deposit in the
Reserve Account shall be withdrawn by the Trustee and paid to the City.
Amounts in the Reserve Account shall be valued by the Trustee no less often than
semiannually on or before an Interest Payment Date. If, on any date of computation, moneys and
securities on deposit in the Reserve Account are less than the Reserve Account Requirement
(unless such deficiency is a result of a transfer therefrom), the City covenants and agrees that it
will, within twelve months thereof, increase the amount therein to the Reserve Account
Requirement. If such deficiency is a result of a transfer therefrom, the City covenants and agrees
that it will, within twenty-four months thereof, increase the amount therein to the Reserve Account
Requirement. If, on any date of computation, moneys and securities on deposit in the Reserve
Account are in excess of the Reserve Account Requirement, the Trustee shall withdraw such
excess amount and transfer such amount to the Interest Account.
The City shall have the right at any time to direct the Trustee to release funds from the
Reserve Account, in whole or in part, by tendering to the Trustee: (1) a Qualified Reserve Account
Credit Instrument, and (2) an opinion of Bond Counsel stating that such release will not, of itself,
cause interest with respect to the Bonds to become includable in gross income for purposes of
federal income taxation. Upon tender of such items to the Trustee, the Trustee shall transfer such
funds from the Reserve Account to the Bond Fund or, if permitted by an opinion of Bond Counsel
to a segregated account maintained by the City and used exclusively for the acquisition,
construction and installation of improvements to the Enterprise. Prior to the expiration of any
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Qualified Reserve Account Credit Instrument, the City shall be obligated either (a) to replace such
Qualified Reserve Account Credit Instrument with a new Qualified Reserve Account Credit
Instrument, or (b) to remit or cause to be remitted to the Trustee for deposit in the Reserve Account
an amount of moneys equal to the Reserve Account Requirement, to be derived from Net
Revenues; provided, however, that if the City shall fail to replace an expiring Qualified Reserve
Account Credit Instrument or to deposit moneys equal to the Reserve Account Requirement, the
Trustee shall draw on such Qualified Reserve Account Credit Instrument before such expiration
and deposit the proceeds of such draw in the Reserve Account.
In the event that the Reserve Account Requirement shall at any time be maintained in the
form of a combination of cash and a Qualified Reserve Account Credit Instrument, the Trustee
shall apply the amount of such cash to make any payment required to be made from the Reserve
Account before the Trustee shall draw any moneys under such Qualified Reserve Account Credit
Instrument for such purpose. In the event that more than one Qualified Reserve Account Credit
Instrument shall be maintained as all or a portion of the Reserve Account Requirement, and the
Trustee is otherwise required hereunder to draw on such Qualified Reserve Account Credit
Instruments, the Trustee shall draw pro rata on each such Qualified Reserve Account Credit
Instrument. In the event that the Trustee shall at any time draw funds under a Qualified Reserve
Account Credit Instrument to make any payment then required to be made from the Reserve
Account, the Net Revenues thereafter received by the Trustee, to the extent remaining after making
the other deposits (if any) then required to be made pursuant to this Section 5.05, shall be used to
reinstate the Qualified Reserve Account Credit Instrument.
Notwithstanding any other provision of this Indenture, the City need not replace any
Qualified Reserve Account Credit Instrument or deposit cash in the Reserve Account in the event
that the provider of the Qualified Reserve Account Credit Instrument is downgraded by S&P or
Moody's or fails to honor a draw thereon; it being the intent of the City that if the Qualified Reserve
Account Credit Instrument meets the requirement of this Indenture at the time it is delivered to the
Trustee, it will remain a Qualified Reserve Account Credit Instrument for its stated term.
Section 5.06. Application of Redemption Fund. The Trustee shall establish and maintain
within the Redemption Fund (which the Trustee shall establish when needed, maintain and hold in
trust) a separate Optional Redemption Account and a separate Special Redemption Account. The
City may at any time deposit moneys into the Optional Redemption Account for the purposes of
redeeming Bonds in accordance with the terms of Section 4.01(b). The City may at any time
deposit moneys into the Special Redemption Account for the purposes of redeeming Bonds in
accordance with the terms of Sections 7.04 or Section 7.06. All amounts deposited in the Optional
Redemption Account and in the Special Redemption Account shall be used and withdrawn by the
Trustee solely for the purpose of redeeming Bonds, in the manner and upon the terms and
conditions specified in Article IV, at the next succeeding date of redemption for which notice has
been given and at the redemption prices then applicable to redemptions from the Optional
Redemption Account and the Special Redemption Account, respectively; provided that, at any
time prior to giving such notice of redemption, the Trustee upon Order of the City shall apply such
amounts to the purchase of Bonds made by the City at public or private sale, as and when and at
such prices (including brokerage and other charges, but excluding accrued interest, which is
payable from the Interest Account) as shall be directed by the City, except that the purchase price
(exclusive of accrued interest) may not exceed the par value of such Bonds.
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Section 5.07. Rate Stabilization Fund. The City has previously established a special fund
called the Rate Stabilization Fund. The Rate Stabilization Fund is not pledged or intended to be
security for the Bonds. From time to time, the City may deposit in the Rate Stabilization Fund
from Current Gross Revenues such amounts as the City may determine, provided that deposits for
each Fiscal Year may be made until (but not after) one hundred eighty (180) days following the
end of such Fiscal Year. The City may withdraw amounts from the Rate Stabilization Fund only
for transfer to the Wastewater Fund for inclusion in Gross Revenues for any Fiscal Year, such
withdrawals to be made until (but not after) one hundred eighty (180) days after the end of such
Fiscal Year. All interest or other earnings on deposits in the Rate Stabilization Fund shall be
withdrawn therefrom and accounted for as Gross Revenues. Notwithstanding the foregoing, (i) no
deposit of Current Gross Revenues to the Rate Stabilization Fund may be made to the extent that
such Current Gross Revenues were included in an engineer's or independent consultant's certificate
submitted in accordance with Section 6.08 hereof and withdrawal of the Current Gross Revenues
to be deposited in the Rate Stabilization Fund from Gross Revenues employed in rendering the
parity test and (ii) no deposit of Net Revenues shall be made in the Rate Stabilization Fund to the
extent that such deposit would cause noncompliance with the rate covenant in any Fiscal Year.
The Rate Stabilization Fund is not pledged to secure the payment of the Installment Payments, the
payments with respect to any Parity Obligations or the payment with respect to any Subordinate
Debt.
Section 5.08. Investment of Moneys in Funds and Accounts. All moneys in any of the
funds and accounts established pursuant to this Indenture shall, upon Request of the City provided
at least two Business Days prior to the date of investment, be invested by the Trustee, but solely
in Permitted Investments. In the absence of such Request of the City, the Trustee shall invest
available moneys in investments described in paragraph (f) of the definition of Permitted
Investments, to the extent practicable; provided, however, that the City shall identify in writing
the specific fund or funds authorized for such investments and, provided further, that in the absence
of timely and specific written direction of the specific fund by the City, amounts shall be held
uninvested by the Trustee. All Permitted Investments shall be acquired subject to the limitations
as to maturities hereinafter set forth in this Section 5.08 and such additional limitations or
requirements consistent with the foregoing as may be established by Request of the City.
Moneys in the Reserve Account shall be invested in Permitted Investments maturing prior
to the final maturity of the Bonds. Moneys in the remaining funds and accounts held by the Trustee
shall be invested in Permitted Investments maturing not later than the date on which it is estimated
that such moneys will be required by the Trustee. Moneys held by the City may be invested in
lawful investments permitted under the laws of the State.
All interest, profits and other income received from the investment of moneys in any other
fund or account established pursuant to this Indenture shall be deposited when received in the
Bond Fund. Notwithstanding anything to the contrary contained in this paragraph, an amount of
interest received with respect to any Permitted Investment equal to the amount of accrued interest,
if any, paid as part of the purchase price of such Permitted Investment shall be credited to the fund
or account for the credit of which such Permitted Investment was acquired.
The Trustee may commingle any of the funds or accounts established pursuant to this
Indenture into a separate fund or funds for investment purposes only, provided that all funds or
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accounts held by the Trustee hereunder shall be accounted for separately as required by this
Indenture. The Trustee may act as principal or agent in the making or disposing of any investment.
The Trustee may sell, or present for redemption, any Permitted Investments so purchased
whenever it shall be necessary to provide moneys to meet any required payment, transfer,
withdrawal or disbursement from the fund or account to which such Permitted Investment is
credited, and, subject to the provisions of Section 9.03, the Trustee shall not be liable or responsible
for any loss resulting from such investment.
The City acknowledges that, to the extent regulations of the Comptroller of the Currency
or other applicable regulatory entity grants the City the right to receive brokerage confirmations
of security transactions as they occur, the City specifically waives receipt of such confirmations to
the extent permitted by law. The City further understands that trade confirmations for securities
transactions effected by the Trustee will be available upon request and at no additional cost and
other trade confirmations may be obtained from the applicable broker. The Trustee will furnish
the City periodic cash transaction statements which include detail for all investment transactions
made by the Trustee hereunder. Upon the Citys election, such statements will be delivered via the
Trustees online service and upon electing such service, paper statements will be provided only
upon request. The Trustee may make any investments hereunder through its own bond or
investment department or trust investment department, or those of its parent or any affiliate.
The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection
with any investments made by the Trustee hereunder.
ARTICLE VI
Section 6.01. Punctual Payment. The City shall punctually pay or cause to be paid the
principal or Redemption Price and interest to become due in respect of all the Bonds, in strict
conformity with the terms of the Bonds and of this Indenture, according to the true intent and
meaning thereof, but only out of Net Revenues and other assets pledged for such payment as
provided in this Indenture.
Section 6.02. Extension of Payment of Bonds. The City shall not directly or indirectly
extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any
of the claims for interest by the purchase or funding of such Bonds or claims for interest or by any
other arrangement and in case the maturity of any of the Bonds or the time of payment of any such
claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case
of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in
full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon
which shall not have been so extended. Nothing in this Section 6.02 shall be deemed to limit the
right of the City to issue Bonds for the purpose of refunding any Outstanding Bonds, and such
issuance shall not be deemed to constitute an extension of maturity of Bonds.
Section 6.03. Discharge of Claims. The City covenants that in order to fully preserve and
protect the priority and security of the Bonds the City shall pay from the Net Revenues and
discharge all lawful claims for labor, materials and supplies furnished for or in connection with
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the Enterprise which, if unpaid, may become a lien or charge upon the Net Revenues prior or
superior to the lien of the Bonds and impair the security of the Bonds. The City shall also pay from
the Net Revenues all taxes and assessments or other governmental charges lawfully levied or
assessed upon or in respect of the Enterprise or upon any part thereof or upon any of the Net
Revenues therefrom.
Section 6.04. Operation of Enterprise in Efficient and Economical Manner. The City
covenants and agrees to operate, or cause to be operated, the Enterprise in an efficient and
economical manner and to operate, maintain and preserve the Enterprise in good repair and
working order
Section 6.05. Against Encumbrance. Except as provided herein, the City covenants that
the property, facilities and improvements of the Enterprise shall not be mortgaged or otherwise
encumbered, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially
as a whole unless: (a) the City shall cause to be filed with the Trustee written evidence from
Moody's, if Moody's is rating the Bonds, and/or S&P, if S&P is rating the Bonds, that such sale or
other disposition will not cause a reduction or withdrawal of the uninsured rating then assigned to
the Bonds by each such rating agency; and (b) such sale or other disposition shall be so arranged
as to provide for a continuance of payments into the Bond Fund sufficient in amount to permit
payment therefrom of the principal of and interest on and premiums, if any, due upon the call and
redemption thereof, of the Outstanding Bonds, and also to provide for such payments into the funds
as are required under the terms of this Indenture.
The City further covenants that the Net Revenues or any other funds pledged or otherwise
made available to secure payment of the principal of and interest on the Outstanding Bonds shall
not be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed of
or used except as authorized by the terms of this Indenture. The City further covenants that it will
not enter into any agreement which impairs the operation of the Enterprise or any part of it
necessary to secure adequate Net Revenues to pay the principal and interest of the Bonds or which
otherwise would impair the rights of the Bond Owners with respect to the Net Revenues. If any
substantial part of the Enterprise is sold the payment therefor shall either be used for the acquisition
and/or construction of improvements and extensions of the Enterprise or shall be deposited with
the Trustee in the Redemption Fund and shall be used to redeem the Outstanding Bonds on a pro
rata basis.
Section 6.06. Records and Accounts. The City covenants that it shall keep proper books
of record and accounts of the Enterprise, separate from all other records and accounts, in which
complete and correct entries shall be made of all transactions relating to the Enterprise. Said books
shall, upon reasonable request, be subject to the inspection of the Owners of not less than ten
percent (10%) of the Outstanding Bonds or their representatives authorized in writing.
The City covenants that it will cause the books and accounts of the Enterprise to be audited
annually by an Independent Accountant and will make available for inspection by the Bond
Owners at the Trust Office of the Trustee, upon reasonable request, a copy of the report of such
Independent Accountant. Any such audit may be combined with and be a part of the general audit
of the City's financial records.
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Section 6.07. Rates and Charges
(a) Covenant Regarding Gross Revenues. The City covenants to fix, prescribe, revise
and collect rates, fees and charges for the Enterprise for each Fiscal Year as a whole for the services
and facilities furnished by the Enterprise during each Fiscal Year which are at least sufficient, after
making allowances for contingencies and error in the estimates, to yield Revenues that are
sufficient to pay the following amounts:
(i) all current Operation and Maintenance Costs of the Enterprise for such
Fiscal Year;
(ii) Debt Service payments on the Bonds and on any Parity Obligations as they
become due and payable during such Fiscal Year, without preference or priority, except to the
extent such Debt Service payments are payable from the proceeds of the Bonds or Parity
Obligations or from any other source of legally available funds of the City that have been deposited
with the Trustee for purposes prior to the commencement of such Fiscal Year;
(iii) All payments required for compliance with the terms of the Indenture and
of the 2007 Installment Sale Agreement, including amounts required to replenish the Reserve
Account or to reimburse a draw on a Qualified Reserve Account Credit Instrument; and
(iv) All payments to meet any other obligations of the City which are charges,
liens or encumbrances upon, or payable from, the Gross Revenues.
The City may make or permit to be made adjustments from time to time in such rates, fees
and charges and may make or permit to be made such classification thereof as it deems necessary,
but shall not reduce or permit to be reduced such rates, fees and charges below those then in effect
unless the Gross Revenues from such reduced rates, fees and charges will at all times be sufficient
to meet the requirements of the rate covenant.
(b) Parity Obligations. The City further covenants that it will not issue or incur any
Parity Obligations unless:
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(i) The City is not in default under the terms of the Indenture or any agreements
relating to then existing Parity Obligations;
(ii) Either:
Either or both of the following items may be added to such Net Revenues for the
purpose of applying the restriction contained in this subsection (b)(ii)(A):
(2) An allowance for any increase in the charges made for service from
the Enterprise which has become effective prior to the incurring of such Parity
Obligations but which, during all or any part of such Fiscal Year or the twelve (12)
month period out of the most recent eighteen months selected by the City ending
not more than sixty (60) days prior to the adoption of the resolution pursuant to
which such Parity Obligations are authorized to be issued or incurred, was not in
effect, in an amount equal to 100% of the amount by which the Net Revenues would
have been increased if such increase in charges had been in effect during the whole
of such Fiscal Year or the twelve (12) month period out of the most recent eighteen
months selected by the City ending not more than sixty (60) days prior to the
adoption of the resolution pursuant to which such Parity Obligations are authorized
to be issued or incurred, as shown by the certificate or opinion of a qualified
independent consultant employed by the City;
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Obligations are to be issued, or (ii) the date on which substantially all projects financed
with the proposed Parity Obligations are expected to commence operations, shall have
amounted to at least 1.15 times the maximum amount of debt service on the Bonds and all
Parity Obligations outstanding immediately subsequent to the incurring of such additional
obligations coming due and payable in any future Fiscal Year.
Either or both of the following items may be added to such Net Revenues for the
purpose of applying the restriction contained in this subsection (b)(ii)(B):
(1) An allowance for revenues that are estimated to be derived from any
increase in the rates, fees and charges in effect and being charged or from any
increase in the rates, fees and charges that have been approved but are not yet in
place; and
(c) Subordinate Debt. There shall be no limitations on the ability of the City to issue
or incur Subordinate Debt so long as the City is not in default under the terms of this Indenture,
any agreements relating to then existing Parity Obligations or any agreement relating to then
existing Subordinate Debt.
(d) Calculating Debt Service on Variable Rate Debt. For all purposes, variable rate
indebtedness shall be assumed to bear interest at the highest of: (i) the actual rate on the date of
calculation, or if the indebtedness is not yet outstanding, the initial rate (if established and binding),
(ii) if the indebtedness has been outstanding for at least twelve months, the average rate over the
twelve months immediately preceding the date of calculation, or (iii) (A) if interest on the
indebtedness is excludable from gross income under the applicable provisions of the Code, the
most recently published Bond Buyer Revenue Bond Index (or comparable index if no longer
published), or (B) if interest is not so excludable, the interest rate on direct U.S. Treasury
Obligations with comparable maturities plus 50 basis points; provided, however, that for purposes
of any rate covenant measuring actual debt service coverage during a test period, variable rate
indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the
test period.
(e) Calculating Debt Service on Swaps. If any interest rate swap agreement under
which the City is obligated to make payments based on a fixed interest rate is in place with respect
to variable rate Parity Obligations, the amount payable by the City with respect to such variable
rate Parity Obligations shall be assumed to be the fixed rate payable under such interest rate swap
agreement.
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Section 6.09. Further Assurances. The City 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 Indenture, and for the better
assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this
Indenture.
Section 6.10. Waiver of Laws. The City shall not at any time insist upon or plead in any
manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or
at any time hereafter in force that may affect the covenants and agreements contained in this
Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly
waived by the City to the extent permitted by law.
Section 6.11. Private Activity Bond Limitations. The City shall assure that the proceeds
of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section
141(b) of the Code.
Section 6.12. Private Loan Financing Limitation. The City shall assure that the proceeds
of the Bonds are not so used as to cause the Bonds to satisfy the private loan financing test of
Section 141(c) of the Code.
Section 6.13. Federal Guarantee Prohibition. The City 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 Bonds to be
federally guaranteed within the meaning of Section 149(b) of the Code.
Section 6.14. Rebate Requirement. The City 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.
Section 6.15. No Arbitrage. The City shall not take, or permit or suffer to be taken by the
Trustee or otherwise, any action with respect to the proceeds of the Bonds which, if such action
had been reasonably expected to have been taken, or had been deliberately and intentionally taken,
on the Closing Date would have caused the Bonds, to be arbitrage bonds within the meaning of
Section 148 of the Code.
Section 6.16. Maintenance of Tax Exemption. The City shall take all actions necessary
to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds
to the same extent as such interest is permitted to be excluded from gross income under the Code
as in effect on the Closing Date.
Section 6.17. Continuing Disclosure. The City hereby covenants and agrees that it will
comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of the Indenture, failure of the City to comply with the
Continuing Disclosure Certificate shall not be considered an event of default; however, any holder
or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to
compel performance, including seeking mandate or specific performance by court order.
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ARTICLE VII
Section 7.01. Maintenance and Operation of the Enterprise. The City covenants and
agrees that it will operate and maintain the Enterprise in accordance with all applicable
governmental laws, ordinances, approvals, rules, regulations and requirements including, without
limitation, such zoning, sanitary, pollution and safety ordinances and laws and such rules and
regulations thereunder as may be binding upon the City.
Section 7.02. Taxes, Assessments, Other Government Charges and Utility Charges. The
City covenants and agrees that it will pay and discharge all taxes, assessments, governmental
charges of any kind whatsoever, and utility charges which may be or have been assessed or which
may have become liens upon the Enterprise or the interest therein of the Trustee or of the Owners
of the Bonds, and will make such payments or cause such payments to be made, respectively, in
due time to prevent any delinquency thereon or any forfeiture or sale of the Enterprise or any part
thereof, and upon request, will furnish to the Trustee receipts for all such payments, or other
evidence satisfactory to the Trustee; provided, however, that the City shall not be required to pay
any tax, assessment, rate or charge as herein provided as long as it shall in good faith contest the
validity thereof, provided that the City shall have set aside adequate reserves with respect thereto.
Section 7.03. Public Liability and Property Damage Insurance. The City shall maintain
or cause to be maintained, so long as any Bonds or Parity Obligations remain outstanding, but only
if and to the extent available at reasonable cost from reputable insurers, a standard comprehensive
general insurance policy or policies in protection of the City, the City and their respective
members, officers, agents, assignees and employees. Said policy or policies shall provide for
indemnification of said parties against direct or contingent loss or liability for damages for bodily
and personal injury, death or property damage occasioned by reason of the operation of the
Enterprise. Said policy or policies shall provide coverage in such liability amounts and shall be
subject to such deductibles as shall be customary with respect to works and property of a like
character. Such liability insurance may be maintained as part of or in conjunction with any other
liability insurance coverage carried by the City, and may be maintained in whole or in part in the
form of self-insurance by the City in the form of the participation by the City in a joint powers
agency or other program providing pooled insurance. The proceeds of such liability insurance shall
be applied toward extinguishment or satisfaction of the liability with respect to which such
proceeds have been paid.
Section 7.04. Casualty Insurance. The City shall procure and maintain or cause to be
procured and maintained, so long as any Bonds or Parity Obligations remain outstanding, but only
in the event and to the extent available from reputable insurers at reasonable cost, casualty
insurance against loss or damage to any improvements constituting any part of the Enterprise,
covering such hazards as are customarily covered with respect to works and property of like
character. Such insurance may be subject to deductible clauses which are customary with respect
to works and property of a like character. Such insurance may be maintained as part of or in
conjunction with any other casualty insurance coverage carried by the City and may be maintained,
in whole or in part, in the form of self-insurance by the City, or in the form of the participation by
the City in a joint powers agency or other program providing pooled insurance. All amounts
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collected from insurance against accident to or destruction of any portion of the Enterprise shall
be used to repair, rebuild or replace such damaged or destroyed portion of the Enterprise and, to
the extent not so applied or to the extent the City determines it is not economically feasible or in
the best interests of the City to so repair, rebuild or replace such damaged or destroyed portion of
the Enterprise, shall be applied pro rata to payments on the Bonds and Parity Obligations or be
applied to redeem the Bonds pro rata with any Parity Obligations, if applicable.
Section 7.05. Insurance Net proceeds; Form of Policies. The City shall pay or cause to
be paid when due the premiums for all insurance policies required by the Indenture. The City shall
annually, on or before November 1, deliver to the Trustee a certificate to the effect that the City
has complied with the requirements of Sections 7.03 and 7.04 hereof
Section 7.06. Eminent Domain. Any amounts received as awards as a result of the taking
of all or any part of the Enterprise by the lawful exercise of eminent domain, at the election of the
City (evidenced by a Written Certificate of the City filed with the Trustee and the City) shall either
(a) be used for the lease, acquisition or construction of improvements or extensions of the
Enterprise in replacement of the condemned portions thereof, or (b) applied pro rata as a credit
against the Citys Obligation to make payments with respect to the Bonds and any Parity
Obligations or be applied to redeem the Bonds pro rata with any Parity Obligations, if applicable.
ARTICLE VIII
Section 8.01. Events of Default. The following events shall be Events of Default:
(a) default in the due and punctual payment of the principal of any Bond or Parity
Obligation when and as the same shall become due and payable, whether at maturity as therein
expressed, by proceedings for redemption, by declaration or otherwise, in the amounts and at the
times provided therefor;
(b) default in the due and punctual payment of any installment of interest on any Bond
or Parity Obligation when and as such interest installment shall become due and payable;
(c) default by the City in the observance of any of the covenants, agreements or
conditions on its part in this Indenture or in the Bonds contained (other than as referred to in
subsections (a) or (b) of this Section 8.01), if such default shall have continued for a period of
thirty (30) days after written notice thereof, specifying such default and requiring the same to be
remedied, shall have been given to the City by the Trustee, or to the City and the Trustee by the
Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds at
the time Outstanding; or
(d) the City's filing a petition in voluntary bankruptcy, for the composition of its affairs
or for its corporate reorganization under any state or federal bankruptcy or insolvency law, or
making an assignment for the benefit of creditors, or admitting in writing to its insolvency or
inability to pay debts as they mature, or consenting in writing to the appointment of a trustee or
receiver for itself or for the whole or any substantial part of the Enterprise.
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Section 8.02. Acceleration of Maturities. If an Event of Default shall occur, then, and in
each and every such case during the continuance of such Event of Default, the Trustee or the
Owners of not less than a majority in aggregate principal amount of the Bonds at the time
Outstanding shall be entitled, upon notice in writing to the City, to declare the principal of all of
the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Bonds contained to the contrary notwithstanding.
Any such declaration, however, is subject to the condition that if, at any time after such
declaration and before any judgment or decree for the payment of the moneys due shall have been
obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all the principal
or Redemption Price of and installments of interest on the Bonds payment of which is overdue,
with interest on such overdue principal at the rate borne by the respective Bonds, and the
reasonable charges and expenses of the Trustee, and any and all other defaults known to the Trustee
(other than in the payment of principal of and interest on the Bonds due and payable solely by
reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee
or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in
every such case, the Owners of not less than a majority in aggregate principal amount of the Bonds
then Outstanding, by written notice to the City and the Trustee, or the Trustee if such declaration
was made by the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such
declaration and its consequences and waive such default; but no such rescission and annulment
shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power
consequent thereon.
Section 8.03. Application of Net Revenues and Other Funds After Default. If an Event
of Default shall occur and be continuing, all Net Revenues and any other funds then held or
thereafter received by the Trustee under any of the provisions of this Indenture (subject to Section
13.10) shall be applied by the Trustee as follows and in the following order:
(a) To the payment of any expenses necessary in the opinion of the Trustee to protect
the interests of the Owners of the Bonds and payment of reasonable charges and expenses of the
Trustee (including, but not limited to, reasonable fees and disbursements of its counsel) incurred
in and about the performance of its powers and duties under this Indenture;
(b) To the payment of the principal or Redemption Price of and interest then due on
the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only
partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture
(including Section 6.02), as follows:
(i) Unless the principal of all of the Bonds shall have become or have been
declared due and payable,
First: To the payment to the persons entitled thereto of all installments of interest then due
in the order of the maturity of such installments, and, if the amount available shall not be sufficient
to pay in full any installment or installments maturing on the same date, then to the payment thereof
ratably, according to the amounts due thereon, to the persons entitled thereto, without any
discrimination or preference; and
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Second: To the payment to the persons entitled thereto of the unpaid principal or
Redemption Price of any Bonds which shall have become due, whether at maturity or by call for
redemption, in the order of their due dates, with interest on the overdue principal at the rate borne
by the respective Bonds, and, if the amount available shall not be sufficient to pay in full all the
Bonds due on any date, together with such interest, then to the payment thereof ratably, according
to the amounts of principal or Redemption Price due on such date to the persons entitled thereto,
without any discrimination or preference.
(ii) If the principal of all of the Bonds shall have become or have been declared
due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds,
with interest on the overdue principal at the rate borne by the respective Bonds, and, if the amount
available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the
payment thereof ratably, without preference or priority of principal over interest, or of interest over
principal, or of any installment of interest over any other installment of interest, or of any Bond
over any other Bond, according to the amounts due respectively for principal and interest, to the
persons entitled thereto without any discrimination or preference.
Section 8.04. Trustee to Represent Owners. The Trustee is hereby irrevocably appointed
(and the successive respective Owners of the Bonds, by taking and holding the same, shall be
conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-
fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such
rights and remedies as may be available to such Owners under the provisions of the Bonds, this
Indenture, the Act and applicable provisions of any other law. Upon the occurrence and
continuance of an Event of Default or other occasion giving rise to a right in the Trustee to
represent the Owners, the Trustee in its discretion may, and shall, upon the written request of the
Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds
then Outstanding, (or, if more than one such request is received, the written request executed by
the Owners of the greatest percentage of Bonds then Outstanding in excess of twenty-five percent
(25%)), and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce
its rights or the rights of such Owners by such appropriate action, suit, mandamus or other
proceedings as it shall deem most effectual to protect and enforce any such right, at law or in
equity, either for the specific performance of any covenant or agreement contained herein, or in
aid of the execution of any power herein granted, or for the enforcement of any other appropriate
legal or equitable right or remedy vested in the Trustee or in such Owners under this Indenture,
the Act or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a
matter of right, to the appointment of a receiver of the Net Revenues and other assets pledged
under this Indenture, pending such proceedings. All rights of action under this Indenture or the
Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any
of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit
and protection of all the Owners of such Bonds, subject to the provisions of this Indenture
(including Section 6.02).
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taken by the Trustee hereunder, provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture, and that the Trustee shall have the right
to decline to follow any such direction which in the opinion of the Trustee would be unjustly
prejudicial to Owners not parties to such direction or would expose the Trustee to liability for
which it has not been indemnified to its satisfaction.
Section 8.06. Limitation on Owners Rights to Sue. No Owner of any Bond shall have
the right to institute any suit, action or proceeding at law or in equity, for the protection or
enforcement of any right or remedy under this Indenture, the Act or any other applicable law with
respect to such Bond, unless (1) such Owner shall have given to the Trustee written notice of the
occurrence of an Event of Default; (2) the Owners of not less than twenty-five per cent (25%) in
aggregate principal amount of the Bonds then Outstanding (or, if more than one such request is
received, the written request executed by the Owners of the greatest percentage of Bonds then
Outstanding in excess of twenty-five percent (25%)) shall have made written request upon the
Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding
in its own name; (3) such Owner or said Owners shall have tendered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;
and (4) the Trustee shall have refused or omitted to comply with such request for a period of sixty
(60) days after such written request shall have been received by, and said tender of indemnity shall
have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared,
in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy
hereunder or under law; it being understood and intended that no one or more Owners of Bonds
shall have any right in any manner whatever by his or their action to affect, disturb or prejudice
the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right
under this Indenture, the Act, the Government Code of the State or other applicable law with
respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in
equity to enforce any such right shall be instituted, had and maintained in the manner herein
provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the
provisions of this Indenture (including Section 6.02).
Section 8.07. Absolute Obligation of City. Nothing in Section 8.06 or in any other
provision of this Indenture, or in the Bonds, contained shall affect or impair the obligation of the
City, which is absolute and unconditional, to pay the principal or Redemption Price of and interest
on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon
call for redemption, as herein provided, but only out of the Net Revenues and other assets herein
pledged therefor, or affect or impair the right of such Owners, which is alto absolute and
unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.
Section 8.08. Termination of Proceedings. In case any proceedings taken by the Trustee
or any one or more Owners on account of any Event of Default shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Trustee or the Owners,
then in every such case the City, the Trustee and the Owners, subject to any determination in such
proceedings, shall be restored to their former positions and rights hereunder, severally and
respectively, and all rights, remedies, powers and duties of the City, the Trustee and the Owners
shall continue as though no such proceedings had been taken.
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Section 8.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or
remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and
in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.
Section 8.10. No Waiver of Default. No delay or omission of the Trustee or of any Owner
of the Bonds to exercise any right or power arising upon the occurrence of any default shall impair
any such right or power or shall be construed to be a waiver of any such default or an acquiescence
therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of
the Bonds may be exercised from time to time and as often as may be deemed expedient.
ARTICLE IX
THE TRUSTEE
(a) MUFG UNION BANK, N.A. is hereby appointed to serve as Trustee under this
Indenture. By execution hereof, the Trustee accepts such appointment.
(b) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all
Events of Default which may have occurred, perform such duties and only such duties as are
specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of
Default (which has not been cured or waived), exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own affairs.
(c) The City may remove the Trustee at any time unless an Event of Default shall have
occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by
an instrument or concurrent instruments in writing signed by the Owners of not less than a majority
in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized
in writing) or if at any time the Trustee shall cease to be eligible in accordance with subsection (f)
of this Section 9.01, or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall
take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, in each case by giving written notice of such removal to the Trustee,
and thereupon shall appoint a successor Trustee by an instrument in writing.
(d) The Trustee may at any time resign by giving ninety days prior written notice of
such resignation to the City and by giving the Owners notice of such resignation by mail to the
addresses shown on the Bond Registration Books. Upon receiving such notice of resignation, the
City shall promptly appoint a successor Trustee by an instrument in writing.
(e) Any removal or resignation of the Trustee and appointment of a successor Trustee
shall become effective upon acceptance of appointment by the successor Trustee. If no successor
Trustee shall have been appointed and have accepted appointment within forty-five (45) days of
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giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner
(on behalf of himself and all other Owners) may petition any court of competent jurisdiction for
the appointment of a successor Trustee, and such court may thereupon, after such notice (if any)
as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under
this Indenture, shall signify its acceptance of such appointment by executing and delivering to the
City and to its predecessor Trustee a written acceptance thereof, and thereupon such successor
Trustee, without any further act, deed or conveyance, shall become vested with all the moneys,
estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with
like effect as if originally named Trustee herein; but, nevertheless at the Request of the City or the
request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all
instruments of conveyance or further assurance and do such other things as may reasonably be
required for more fully and certainly vesting in and confirming to such successor Trustee all the
right, title and interest of such predecessor Trustee in and to any property held by it under this
Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or
other property subject to the trusts and conditions herein set forth. Upon request of the successor
Trustee, the City shall execute and deliver any and all instruments as may be reasonably required
for more fully and certainly vesting in and confirming to such successor Trustee all such moneys,
estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment
by a successor Trustee as provided in this subsection, the City shall mail a notice of the succession
of such Trustee to the trusts hereunder to the Owners at the addresses shown on the registration
books maintained by the Trustee. If the City fails to mail such notice within fifteen (15) days after
acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice
to be mailed at the expense of the City.
(f) Any Trustee appointed under the provisions of this Section 9.01 in succession to
the Trustee shall be a trust company, national banking association or bank having the powers of a
trust company having a corporate trust office in the State, having a combined capital and surplus
of at least one hundred million dollars ($100,000,000), and subject to supervision or examination
by federal or state authority. If such bank, national banking association or trust company publishes
a report of condition at least annually, pursuant to law or to the requirements of any supervising
or examining City above referred to, then for the purpose of this subsection the combined capital
and surplus of such bank, national banking association or trust company shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the provisions of this
subsection (f), the Trustee shall resign immediately in the manner and with the effect specified in
this Section 9.01.
Section 9.02. Merger or Consolidation. Any company or association into which the
Trustee 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 Trustee may sell or transfer all or substantially all of its
corporate trust business, provided such company or association shall be eligible under subsection
(f) of Section 9.01, shall be the successor to such Trustee, as the case may be, without the execution
or filing of any paper or any further act, anything herein to the contrary notwithstanding.
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(a) The recitals of facts herein and in the Bonds contained shall be taken as statements
of the City, and the Trustee assumes no responsibility for the correctness of the same, or makes
any representations as to the validity or sufficiency of this Indenture 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 Trustee shall, however, be responsible for its
representations contained in its certificate of authentication on the Bonds. The Trustee shall not be
liable in connection with the performance of its duties hereunder, except for its own negligence or
willful misconduct. The Trustee may become the owner of Bonds with the same rights it would
have if it were not Trustee, and, to the extent permitted by law, may act as depository for and
permit any of its officers or directors to act as a member of, or in any other capacity with respect
to, any committee formed to protect the rights of Owners, whether or not such committee shall
represent the Owners of a majority in principal amount of the Bonds then Outstanding.
(b) The Trustee shall not be liable for any error of judgment made in good faith by a
responsible officer, unless the Trustee was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Owners of not less than twenty-
five percent (25%) in aggregate principal amount of the Bonds at the time Outstanding or the
Financial Guaranty Insurer relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture.
(d) The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the Owners or the Financial
Guaranty Insurer, pursuant to the provisions of this Indenture, unless such Owners or the Financial
Guaranty Insurer shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby.
(e) The Trustee shall not be liable for any action taken by it in good faith and believed
by it to be authorized or within the discretion or rights or powers conferred upon it by this
Indenture.
(f) No provision in this Indenture shall require the Trustee to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder.
The Trustee shall provide the City with seven days' notice prior to making any advance of its own
funds hereunder, and, if the City does not provide moneys in the amount needed, the Trustee shall
be entitled to interest on the amounts advanced at a rate equal to the then 3-month certificates of
deposit rate (by reference to the Wall Street Journal); provided that no such prior notice shall need
be given and such interest on amounts advanced shall accrue from the date of any such advance
following the occurrence of an Event of Default hereunder.
(g) The Trustee makes no representation, express or implied as to the title, value,
design, compliance with specifications or legal requirements, quality, durability, operation,
condition, merchantability or fitness for any particular purpose or fitness for the use contemplated
by the City of the Enterprise.
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(h) The Trustee shall not be deemed to have knowledge of an Event of Default
hereunder unless and until it shall have actual knowledge thereof.
(i) The Trustee shall have no responsibility with respect to any information, statement
or recital in any official statement, offering memorandum or other disclosure material prepared or
distributed with respect to the Bonds.
(j) The immunities extended to the Trustee also extend to its directors, officers,
employees and agents.
(k) The permissive right of the Trustee to do things enumerated in this Indenture shall
not be construed as a duty.
(1) The Trustee may execute any of the trusts or powers hereof and perform any of its
duties through attorneys, agents and receivers and shall not be answerable for the same if appointed
by it with reasonable care.
(m) The Trustee shall not be liable to the parties hereto or deemed in breach or default
hereunder if and to the extent its performance hereunder is prevented by reason of force majeure.
The term force majeure means an occurrence that is beyond the control of the Trustee and could
not have been avoided by exercising due care. Force majeure shall include, but not be limited to,
acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar
occurrences.
(n) The Trustee agrees to accept and act upon instructions or directions pursuant to this
Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic
methods, provided, however, that, the Trustee 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 City elects to give the Trustee
e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in
its discretion elects to act upon such instructions, the Trustees understanding of such instructions
shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses
arising directly or indirectly from the Trustees reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent with a subsequent
written instruction. The City agrees to assume all risks arising out of the use of such electronic
methods to submit instructions and directions to the Trustee, including without limitation the risk
of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third
parties.
Section 9.04. Right of Trustee to Rely on Documents. The Trustee shall be protected in
acting upon any notice, resolution, request, requisition, consent, order, certificate, report, opinion,
note or other paper or document believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Trustee may consult with counsel, who may be counsel of or to
the City, 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.
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Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established by a Certificate
of the City, and such Certificate shall be full warrant to the Trustee for any action taken or suffered
in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its
discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require
such additional evidence as to it may seem reasonable.
Section 9.05. Preservation and Inspection of Documents. All documents received by the
Trustee under the provisions of this Indenture shall be retained in its possession in accordance with
its document retention policies and shall be subject during regular business hours with reasonable
prior notice to the inspection of the City and any Owner, and their agents and representatives duly
authorized in writing, at the Trust Office of the Trustee and under reasonable conditions.
Section 9.06. Compensation of Trustee. The City covenants to pay to the Trustee from
time to time, from available moneys of the City, and the Trustee shall be entitled to, reasonable
compensation for all services rendered by it in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and the City will pay or reimburse the Trustee upon its request,
from available moneys of the City, for all expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all persons not regularly
in its employ) except any such expense, disbursement or advance as may arise from its negligence
or bad faith.
Section 9.07. Indemnification. The City covenants to indemnify the Trustee and to hold
it harmless against any loss, liability, expenses or advance, including fees and expenses of counsel
and other experts, incurred or made without negligence or bad faith on the part of the Trustee, in
the exercise and performance of any of the powers and duties hereunder by the Trustee, including
the costs and expenses of defending itself against any claim of liability arising under this Indenture.
Such indemnification shall survive the termination or discharge of this Indenture and the
resignation or removal of the Trustee.
ARTICLE X
(a) This Indenture and the rights and obligations of the City and of the Owners of the
Bonds and of the Trustee may be modified or amended from time to time and at any time by a
Supplemental Indenture, which the City and the Trustee may execute when the written consent of
the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have
been filed with the Trustee; provided that if such modification or amendment will, by its terms,
not take effect so long as any Bonds of any particular maturity remain Outstanding, the consent of
the Owners of such Bonds shall not be required and such Bonds shall not be deemed to be
Outstanding for the purpose of any calculation of Bonds Outstanding under this Section 10.01. No
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such modification or amendment shall (1) extend the fixed maturity of any Bond, or reduce the
amount of principal thereof, provided in this Indenture for the payment of any Bond, or reduce the
rate of interest thereon, or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the Owner of each Bond so affected,
or (2) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to
effect any such modification or amendment, or permit the creation of any lien on the Net Revenues
and other assets pledged under this Indenture prior to or on a parity with the lien created by this
Indenture, other than Parity Obligations, or deprive the Owners of the Bonds of the lien created by
this Indenture on such Net Revenues and other assets (except as expressly provided in this
Indenture), or terminate the insurance of the Bonds, without the consent of the Owners of all of
the Bonds then Outstanding. It shall not be necessary for the consent of the Owners to approve the
particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall
approve the substance thereof. Promptly after the execution by the City and the Trustee of any
Supplemental Indenture pursuant to this subsection (a), the Trustee shall mail a notice, setting forth
in general terms the substance of such Supplemental Indenture to the Owners at the addresses
shown on the Bond Registration Books. Any failure to give such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such Supplemental Indenture
(b) This Indenture and the rights and obligations of the City, of the Trustee and of the
Owners of the Bonds may also be modified or amended from time to time and at any time by a
Supplemental Indenture, which the City and the Trustee may execute without the consent of any
Owners, but only to the extent permitted by law and only for any one or more of the following
purposes:
(i) to add to the covenants and agreements of the City in this Indenture
contained other covenants and agreements thereafter to be observed, to pledge or assign additional
security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved
to or conferred upon the City, provided, that no such covenant, agreement, pledge, assignment or
surrender shall materially adversely affect the interests of the Owners of the Bonds;
(ii) to make such provisions for the purpose of curing any ambiguity,
inconsistency or omission, or of curing or correcting any defective provision, contained in this
Indenture, or in regard to matters or questions arising under this Indenture, as the City may deem
necessary or desirable and not inconsistent with this Indenture, and which shall not materially
adversely affect the interests of the Owners of the Bonds;
(c) No such Supplemental Indenture shall modify any of the rights or obligations of
the Trustee without its prior written consent thereto; nor shall the Trustee be required to consent
to any such Supplemental Indenture which affects its rights or obligations hereunder.
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Section 10.02. Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this Article X, this Indenture shall be
deemed to be modified and amended in accordance therewith, and the respective rights, duties and
obligations under this Indenture of the City, the Trustee and all Owners of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of any such Supplemental Indenture
shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 10.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after
any Supplemental Indenture becomes effective pursuant to this Article X may, and if the Trustee
so determines shall, bear a notation by endorsement or otherwise in form approved by the City and
the Trustee as to any modification or amendment provided for in such Supplemental Indenture,
and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such execution
and presentation of his Bond for the purpose at the Trust Office of the Trustee or at such additional
offices as the Trustee may select and designate for that purpose, a suitable notation shall be made
on such Bond. If the Supplemental Indenture shall so provide, new Bonds so modified as to
conform, in the opinion of the City and the Trustee, to any modification or amendment contained
in such Supplemental Indenture, shall be prepared and executed by the City and authenticated by
the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged
at the Trust Office of the Trustee, without cost to any Owner, for Bonds then Outstanding, upon
surrender for cancellation of such Bonds, in equal aggregate principal amounts of the same
maturity.
Section 10.04. Amendment of Particular Bonds. The provisions of this Article X 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.
ARTICLE XI
DEFEASANCE
Section 11.01. Discharge of Indenture. Any or all of the Bonds may be paid by the City in
any of the following ways; provided that the City also pays or causes to be paid any other sums
payable hereunder by the City:
(a) by paying or causing to be paid the principal or Redemption Price of and interest
on such Bonds Outstanding, as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity, money or Permitted
Investments described in paragraph (a) of the definition thereof (Defeasance Obligations) in the
necessary amount (as provided in Section 11.10) to pay or redeem such Bonds Outstanding; or
(c) by delivering to the Trustee, for cancellation by it, such Bonds Outstanding.
If the City shall pay all Bonds Outstanding and shall also pay or cause to be paid all other
sums payable hereunder by the City, then and in that case, at the election of the City (evidenced
by a Certificate of the City, filed with the Trustee, signifying the intention of the City to discharge
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all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been
surrendered for payment, this Indenture and the pledge of Net Revenues and other assets made
under this Indenture and all covenants, agreements and other obligations of the City under this
Indenture shall cease, terminate, become void and be completely discharged and satisfied, except
only as provided in Section 11.02. In such event, upon Request of the City, the Trustee shall cause
an accounting for such period or periods as may be requested by the City to be prepared and filed
with the City and shall execute and deliver to the City all such instruments as may be necessary or
desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer,
assign or deliver to the City all moneys or securities or other property held by it pursuant to this
Indenture which are not required for the payment or redemption of Bonds not theretofore
surrendered for such payment or redemption.
Section 11.02. Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust,
at or before maturity, of money or securities in the necessary amount (as provided in Section 11.10)
to pay or redeem any Outstanding Bond (whether upon or prior to its maturity or the redemption
date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such
redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee
shall have been made for the giving of such notice, then all liability of the City in respect of such
Bond shall cease, terminate and be completely discharged, except only that thereafter the Owner
thereof shall be entitled to payment of the principal of and interest to the maturity or redemption
date on such Bond by the City, and the City shall remain liable for such payment, but only out of
such money or securities deposited with the Trustee as aforesaid for such payment, provided
further, however, that the provisions of Section 11.04 shall apply in all events.
The City may at any time surrender to the Trustee for cancellation by it any Bonds
previously issued and delivered which the City may have acquired in any manner whatsoever, and
such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
Section 11.03. Deposit of Money or Securities with Trustee. Whenever in this Indenture
it is provided or permitted that there be deposited with or held in trust by the Trustee money or
Defeasance Obligations in the necessary amount to pay or redeem any Bonds, the money or
Defeasance Obligations so to be deposited or held may include money or Defeasance Obligations
held by the Trustee in the funds and accounts established pursuant to this Indenture and shall be:
(a) lawful money of the United States of America in an amount equal to the principal
amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds
which are to be redeemed prior to maturity and in respect of which notice of such redemption shall
have been given as in Article IV provided or provision satisfactory to the Trustee shall have been
made for the giving of such notice, the amount to be deposited or held shall be the principal amount
or Redemption Price of such Bonds and all unpaid interest thereon to the redemption date; or
(b) Defeasance Obligations the principal of and interest on which when due will
provide money sufficient, in the opinion of an Independent Accountant, to pay the principal or
Redemption Price of and all unpaid interest to maturity, or to the redemption date, as the case may
be, on the Bonds to be paid or redeemed, as such principal or Redemption Price and interest
become due, provided that, in the case of Bonds which are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as in Article IV provided or provision
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satisfactory to the Trustee shall have been made for the giving of such notice; provided, in each
case, that the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by
Request of the City) to apply such money to the payment of such principal or Redemption Price
and interest with respect to such Bonds.
ARTICLE XII
ARTICLE XIII
MISCELLANEOUS
Section 13.03. Limitation of Rights to Parties and Owners. Except as provided in Article
XII hereof, nothing in this Indenture or in the Bonds expressed or implied is intended or shall be
construed to give to any person other than the City, the Trustee, the Financial Guaranty Insurer
and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of
this Indenture or any covenant, condition or provision therein or herein contained; and all such
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covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit
of the City, the Trustee and the Owners of the Bonds.
Section 13.04. Waiver of Notice. Whenever the giving of notice by mail or otherwise is
required in this Indenture, the giving of such notice may be waived in writing by the person entitled
to receive such notice and in any such case the giving or receipt of such notice shall not be a
condition precedent to the validity of any action taken in reliance upon such waiver.
Section 13.05. Destruction of Bonds. Whenever in this Indenture provision is made for
the cancellation by the Trustee of any Bonds, the Trustee shall destroy such Bonds and deliver a
certificate of such destruction to the City.
Section 13.06. Severability of Invalid Provisions. If any one or more of the provisions
contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions shall be deemed severable from
the remaining provisions contained in this Indenture and such invalidity, illegality or
unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be
construed as if such invalid or illegal or unenforceable provision had never been contained herein.
The City hereby declares that it would have adopted this Indenture and each and every other
Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds
pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences,
clauses or phrases of this Indenture may be held illegal, invalid or unenforceable.
Section 13.07. Notices. Any notice, request, complaint, demand, communication or other
paper shall be sufficiently given and shall be deemed given when delivered or mailed by first class,
registered or certified mail, postage prepaid, or sent by telecopy, or overnight mail, courier,
electronic transmission, to the address (or such other address as may have been filed with the
Trustee in writing) set forth below:
If to the Insurer:
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Section 13.08. Evidence of Rights to Owners. Any request, consent or other instrument
required or permitted by this Indenture to be signed and executed by Owners may be in any number
of concurrent instruments of substantially similar tenor and shall be signed or executed by such
Owners in person or by an agent or agents duly appointed in writing. Proof of the execution of any
such request, consent or other instrument or of a writing appointing any such agent, or of the
holding by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this
Indenture and shall be conclusive in favor of the Trustee and of the City if made in the manner
provided in this Section 13.08.
The fact and date of the execution by any person of any such request, consent or other
instrument or writing may be proved by the certificate of any notary public or other officer of any
jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the
person signing such request, consent or other instrument acknowledged to him the execution
thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public
or other officer.
The ownership of registered Bonds shall be proved by the Bond Registration Books held
by the Trustee.
Any request, consent, or other instrument or writing of the Owner of any Bond shall bind
every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor
or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the City in
accordance therewith or reliance thereon.
Section 13.09. Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent
or waiver under this Indenture, Bonds which are owned or held by or for the account of the City
or by any other obligor on the Bonds, or by any person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the City or any other obligor on
the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such
determination. Bonds so owned which have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section 13.09 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Bonds and that the pledgee is not a person directly
or indirectly controlling or controlled by, or under direct or indirect common control with, the City
or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the
Trustee, the City shall specify, in a certificate to the Trustee, those Bonds disqualified pursuant to
this Section 13.09 and the Trustee may conclusively rely on such certificate.
Section 13.10. Money Held for Particular Bonds. The money held by the Trustee for the
payment of the interest, principal or Redemption Price due on any date with respect to particular
Bonds (or portions of Bonds in the case of registered Bonds redeemed in part only) shall, on and
after such date and pending such payment, be set aside on its books and held in trust by it without
liability for interest thereon for the Owners of the Bonds entitled thereto, subject, however, to the
provisions of Section 11.04.
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Section 13.11. Funds and Accounts. Any fund required by this Indenture to be established
and maintained by the Trustee may be established and maintained in the accounting records of the
Trustee, either as a fund or an account, and may, for the purposes of such records, any audits
thereof and any reports or statements with respect thereto, be treated either as a fund or as an
account; but all such records with respect to all such funds shall at all times be maintained in
accordance with customary standards of the corporate trust industry, to the extent practicable, and
with due regard for the protection of the security of the Bonds and the rights of every holder
thereof.
Section 13.12. Article and Section Headings and References. The headings or titles of the
several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be
solely for convenience of reference and shall not affect the meaning, construction or effect of this
Indenture.
All references herein to Articles, Sections and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Indenture; the words herein, hereof,
hereby, hereunder and other words of similar import refer to this Indenture as a whole and not
to any particular Article, Section or subdivision hereof; and words of the masculine gender shall
mean and include words of the feminine and neuter genders.
Section 13.13. Wavier of Personal Liability. No member of the City Council, officer,
agent or employee of the City shall be individually or personally liable for the payment of the
principal or Redemption Price of or interest on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof; but nothing herein contained shall relieve any
such member of the City Council, officer, agent or employee from the performance of any official
duty provided by law or by this Indenture.
Section 13.14. Execution in Several Counterparts. This Indenture may be executed in any
number of counterparts and each of such counterparts shall for all purposes be deemed to be an
original; and all such counterparts, or as many of them as the City and the Trustee shall preserve
undestroyed, shall together constitute but one and the same instrument.
Section 13.15. Governing Law. This Indenture shall be construed in accordance with and
governed by the Constitution and laws of the State. If this Indenture shall be the subject of
litigation, venue shall reside in the federal or state courts of California.
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IN WITNESS WHEREOF, the CITY OF FILLMORE has caused this Indenture to be
signed in its name by the Mayor or City Manager of the City and attested by the City Clerk, and
MUFG UNION BANK, N.A., in token of its acceptance of the trust created hereunder, has caused
this Indenture to be signed in its corporate name by one of its authorized officers, all as of the day
and year first above written.
CITY OF FILLMORE
By______________________________
Mayor
Attest:
_________________
City Clerk
By________________________________
Authorized Officer
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EXHIBIT A
FORM OF BOND
CITY OF FILLMORE
The CITY OF FILLMORE, a municipal corporation duly organized and existing under the
laws of the State of California (the City), for value received, hereby promises to pay to the
Registered Owner named above or registered assigns (the Owner), on the Maturity Date stated
above (subject to any right of prior redemption hereinafter provided for), the Principal Amount
stated above in lawful money of the United States of America, and to pay interest thereon in like
lawful money from the May 1 or November 1 (each an Interest Payment Date) next preceding
the date of authentication hereof, unless said date of authentication is an Interest Payment Date, in
which event such interest is payable from such date of authentication, and unless said date of
authentication is on or before October 15, 2017, in which event such interest is payable from the
Dated Date stated above; provided, however, that if at the time of authentication of this Bond,
interest is in default on this Bond, this Bond shall bear interest from the date to which interest has
previously been paid or made available for payment on this Bond in full at the Interest Rate per
annum stated above, payable semiannually on each Interest Payment Date, commencing
November 1, 2017. The principal amount of this Bond is payable at the principal corporate trust
office of MUFG UNION BANK, N.A., as trustee (the Trustee), in Los Angeles, California, or
at such office as the Trustee may designate, upon presentation and surrender of this Bond to the
Trustee. Payment of the interest on this Bond will be made to the person whose name appears on
the bond registration books of the Trustee as the Owner thereof as of the fifteenth day of the month
immediately preceding an Interest Payment Date whether or not said day is a business day (the
Record Date), such interest to be paid by check mailed on the Interest Payment Date to the
Owner or, at the option of any Owner of at least $1,000,000 aggregate principal amount of Bonds
and upon written notice received by the Trustee prior to the Record Date, by wire transfer, at the
Owner's address as it appears on such bond registration books or to such account as shall have
been identified by the Owner in the notice requesting payment by wire transfer. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable to the Owner on
such Record Date and shall be paid to the person in whose name the Bond is registered at the close
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of business on a special record date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof being given to the Owners not less than ten (10) days prior to such special
record date.
Capitalized terms used herein and not otherwise defined are used with the meanings
ascribed to them in the Indenture (as hereinafter defined).
This Bond is one of a series of Bonds of various maturities designated as City of Fillmore
Wastewater Refunding Revenue Bonds, Series 2017 (the Bonds), issued in the aggregate
principal amount of $_______, all of like tenor (except for such variations, if any, as may be
required to designate varying numbers, maturities, interest rates or redemption provisions), issued
under and pursuant to an Indenture of Trust (the Indenture) by and between the City and the
Trustee, dated as of June 1, 2017, approved by the City by Resolution No. ___ adopted by the City
Council of the City on _____, under and pursuant to the provisions of Articles 10 and 11 of Chapter
3 of Division 2 of Title 5 of the of the California Government Code. A copy of the Indenture is on
file at the office of the Trustee, and reference to the Indenture and any and all supplements thereto
and modifications and amendments thereof and to the Act is made for a description of the terms
on which the Bonds are issued, the provisions with regard to the nature and extent of the Net
Revenues, as that term is defined in the Indenture, and the rights of the Owners of the Bonds. All
the terms of the Indenture and the Act are hereby incorporated herein and constitute a contract
between the City and the Owners from time to time of this Bond, and to all the provisions thereof
the Owner of this Bond, by his acceptance hereof, consents and agrees. Each taker and subsequent
Owner hereof shall have recourse to all of the provisions of the Act and the Indenture and shall be
bound by all of the terms and conditions thereof.
The Bonds are issued to (a) refund, on a current basis, the certain outstanding obligations
of the City delivered in 2007 related to the Enterprise, (b) fund a reserve fund or reserve fund
surety for the Bonds, and (c) pay the costs of issuance of the Bonds.
The Bonds are payable from the net revenues (the Net Revenues) of the City's combined
sewer enterprise (the Enterprise), derived primarily from charges and revenues received by the
City from the operation of the Enterprise, less the costs of the operation and maintenance of the
Enterprise, and the Net Revenues are pledged, as a first and prior lien thereon, to pay the principal
of and premium, if any, and interest on the Bonds, and any parity obligations hereafter issued or
incurred by the City in accordance with the Indenture. Additional series of bonds payable from the
Net Revenues may be issued on a parity with the Bonds, but only subject to the conditions and
limitations contained in the Indenture.
The principal or redemption price of and interest on the Bonds are payable solely from the
Net Revenues, and the City is not obligated to pay the Bonds except from the Net Revenues. The
general fund of the City is not liable, and the full faith and credit or taxing power of the City is not
pledged, for the payment of the principal or redemption price of and interest on the Bonds. The
Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any
of the property of the City or any of its income or receipts, except the Net Revenues.
The City covenants that, so long as any of the Bonds are outstanding, it will fix, prescribe
and collect charges so as to yield Net Revenues at least equal to the amounts thereof prescribed by
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the Indenture and sufficient to pay the principal or redemption price of and interest on the Bonds
in accordance with the provisions of the Indenture.
The Bonds maturing on or after May 1, ___ are also subject to redemption prior to their
respective stated maturities, from moneys deposited in the Optional Redemption Account from
any other source of available funds, at the option of the City, in whole on any date, or in part by
such maturities as are selected by the City and by lot within a maturity on any date, on or after
May 1, ___, at a redemption price equal to the principal amount of Bonds called for redemption,
without premium, together with accrued interest to the date fixed for redemption.
The Bonds maturing on May 1, ___ are also subject to mandatory redemption, on May 1
in each year, commencing May 1, ___, at a redemption price equal to the principal amount thereof
to be redeemed together with accrued interest thereon to the redemption date, without premium,
from mandatory sinking fund account payments made by the City under the Indenture in the years
and amounts as follows:
[Insert Table]
*Maturity
As provided in the Indenture, notice of redemption shall be given by first class mail not
less than thirty days prior to the redemption date to the respective registered Owners of the Bonds
designated for redemption at their addresses appearing on the bond registration books, but no
defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption.
If this Bond is called for redemption and payment is duly provided therefor as specified in
the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds
may be declared due and payable upon the conditions, in the manner and with the effect provided
in the Indenture, but such declaration and its consequences may be rescinded and annulled as
further provided in the Indenture.
This Bond is transferable, as provided in the Indenture, only upon the books of the City
kept for that purpose at the office of the Trustee, by the Owner hereof in person, or by his attorney
duly authorized in writing, upon the surrender of this Bond together with a written instrument of
transfer satisfactory to the Trustee duly executed by the registered Owner or his attorney duly
authorized in writing, and thereupon a new Bond or Bonds, without coupons, and in the same
aggregate principal amount and of the same maturity, shall be issued to the transferee in exchange
herefor, as provided in the Indenture, and upon the payment of charges, if any, including, after the
first exchange, the cost of preparing new Bonds therein prescribed.
The rights and obligations of the City and of the Owners of the Bonds may be modified or
amended at any time in the manner, to the extent and upon the terms provided in the Indenture. No
such modification or amendment shall permit a change in the terms of redemption or maturity of
the principal of any outstanding Bond or of any installment of interest thereon or a reduction in
the principal amount or the redemption price thereof or in the rate of interest thereon without the
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consent of the Owner of such Bond, or shall reduce the percentages or otherwise affect the classes
of Bonds, the consent of the Owners of which is required to effect any such modification or
amendment, all as more fully set forth in the Indenture.
It is hereby certified that all of the conditions, things and acts required to exist, to have
happened or to have been performed precedent to and in the issuance of this Bond do exist, have
happened or have been performed in due time, form and manner as required by law and that the
amount of this Bond, together with all other indebtedness of the City, does not exceed any limit
prescribed by the Constitution or laws of the State of California, and is not in excess of the amount
of Bonds permitted to be issued under the Indenture.
IN WITNESS WHEREOF, the City of Fillmore has caused this Bond to be executed in its
name and on its behalf with the manual or facsimile signature of its Mayor and the manual or
facsimile signature of its City Clerk and its seal, if available, to be reproduced hereon all as of the
Bond Date stated above.
CITY OF FILLMORE
By____________________________
Mayor
ATTEST:
___________________
City Clerk
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture, which has been
By ____________________________
Authorized Officer
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ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___
______________________________________________________________________________
___
______________________________________________________________________________
_
attorney; to transfer the same on the Bond registration books of the Trustee with full power of
substitution in the premises.
Dated: ________________
Signature Guaranteed:
____________________________________ ____________________________________
Notice: Signature guarantee shall be made by a Note: The signature(s) on this Assignment must
guarantor institution participating in the Securities correspond with the name(s) as written on the
Transfer Agents Medallion Program or in such other face of the within Bond in every particular
guarantee program acceptable to the Trustee without alteration or enlargement or any change
whatsoever.
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ESCROW DEPOSIT AND TRUST AGREEMENT
the
CITY OF FILLMORE
and
Relating to the
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ESCROW DEPOSIT AND TRUST AGREEMENT
This ESCROW DEPOSIT AND TRUST AGREEMENT is dated this ___ day of June __,
2017, by and among the FILLMORE PUBLIC FINANCING AUTHORITY, a joint exercise of
powers authority organized and existing under the laws of the State of California (the Authority),
CITY OF FILLMORE, a municipal corporation duly organized and existing under the laws of the
State of California (the City), and MUFG Union Bank, N.A., as escrow bank hereunder and as
2007 Trustee (as defined herein) (the Escrow Bank);
W I T N E S S E T H:
WHEREAS, the Authority and the City have previously provided for the issuance of
Fillmore Public Financing Authority Revenue Bonds, Series 2007 (City of Fillmore Wastewater
System Financing Project) (the 2007 Bonds) pursuant to the Indenture of Trust, dated as of June
1, 2007 (the 2007 Indenture), by and between the Authority and Union Bank of California, now
known as MUFG Union Bank, N.A., as trustee (the 2007 Trustee);
WHEREAS, the proceeds of the 2007 Bonds were applied by the Authority to finance the
certain wastewater facilities for the City, which facilities were sold by the Authority to the City
under an Installment Sale Agreement, dated as of June 1, 2007 (the 2007 Installment Sale
Agreement), by and between the Authority and the City;
WHEREAS, under the 2007 Installment Sale Agreement, the City agreed to make
installment payments to the Authority (the 2007 Installment Payments) at such time and in such
amounts as are sufficient for the Authority to make all payments of principal of and interest on the
2007 Bonds when due;
WHEREAS, the City's obligation to make 2007 Installment Payments is secured by a first
lien on the net revenues (the Net Revenues) derived by the City from the operation of its water
system;
WHEREAS, section 53570 et seq. of the California Government Code (the Refunding
Bond Law) authorizes the City to issue its refunding revenue bonds for the purpose of refunding
revenue obligations of the City such as the 2007 Installment Sale Agreement;
WHEREAS, after due investigation and deliberation, the City has determined that it is in
the interests of the City at this time to provide for the issuance of bonds under the Refunding Bond
Law to provide for the prepayment of its obligations under the 2007 Installment Sale Agreement
(and thereby providing for the refunding of the 2007 Bonds);
WHEREAS, Sections 10.01 and 10.03 of the 2007 Indenture provides that the Authority
may pay and discharge any or all of the outstanding 2007 Bonds by irrevocably depositing with
the 2007 Trustee, as Escrow Bank, in trust, Defeasance Obligations (as defined in the 2007
Indenture) in such amount as independent nationally recognized certified accountant shall opine
will, together with the interest to accrue thereon and available moneys then on deposit in the funds
and accounts established pursuant to the 2007 Indenture, be fully sufficient to pay the principal of,
and interest and premium (if any) on the portion of the 2007 Bonds to be paid or redeemed as such
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principal and interest and premium become due and discharge the indebtedness on such the
applicable 2007 Bonds (including all principal, interest and redemption premiums) at or before
their respective maturity dates);
WHEREAS, in order to defease the 2007 Bonds, the City must prepay or provide a security
deposit pursuant to Sections 9.1 and 9.2 of the 2007 Installment Sale Agreement;
WHEREAS, the Authority and the City propose to make such deposit of moneys and to
appoint the Escrow Bank for the purpose of applying said deposit to the payment and redemption
of the 2007 Bonds in accordance with the 2007 Indenture and the 2007 Installment Sale
Agreement, and the Escrow Bank desires to accept said appointment;
WHEREAS, to that end, the City has determined to issue its City of Fillmore Wastewater
Refunding Revenue Bonds, Series 2017 (the Bonds), pursuant to an Indenture of Trust (the
Indenture), dated as of June 1, 2017, by and between the City and MUFG Union Bank, N.A.
(the Trustee);
WHEREAS, under California law, the Escrow Bank has full powers to act with respect to
the irrevocable escrow created herein and to perform the duties and obligations to be undertaken
pursuant to this Escrow Deposit and Trust Agreement;
NOW, THEREFORE, in consideration of the above premises and of the mutual promises
and covenants herein contained, the parties hereto DO HEREBY AGREE as follows:
Section 1. Definitions. Capitalized terms used, but not otherwise defined, herein, shall
have the meanings ascribed thereto in the Indenture or in the 2007 Indenture.
Section 2. Appointment of Escrow Bank. The Authority and the City hereby appoint
the Escrow Bank as escrow bank for all purposes of this Escrow Deposit and Trust Agreement and
in accordance with the terms and provisions of this Escrow Deposit and Trust Agreement, and the
Escrow Bank hereby accepts such appointment.
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(a) $______ from the proceeds of sale of the Bonds, which shall be transferred
by the Trustee pursuant to the Indenture; and
(b) $_______ from the Reserve Fund held under the 2007 Indenture (the 2007
Reserve Fund); and
The Escrow Bank shall hold all of the moneys deposited in the Escrow Fund pursuant to
the preceding paragraph ($____) uninvested.
The Escrow Securities, if any, shall be held by the Escrow Bank in the Escrow Fund solely
for the uses and purposes set forth herein.
The Escrow Bank shall not be liable or responsible for any loss resulting from its full
compliance with the provisions of this Escrow Deposit and Trust Agreement.
(a) The total amount moneys deposited in the Escrow Fund pursuant to Section
4 shall be transferred by the Escrow Bank to the 2007 Trustee for the sole purpose of paying the
principal of, redemption premium and interest on the 2007 Bonds at the times and in the amounts
set forth in Exhibit B attached hereto and by this reference incorporated herein. The City has on
this date received a report of ________.,. an Independent Accountant, verifying that the amounts
in the Escrow Fund at the times provided herein, shall be sufficient to make the payments at the
times described in Exhibit B hereto.
(b) The Authority and the City hereby instruct the Escrow Bank, in its capacity
as 2007 Trustee, and the Escrow Bank, as 2007 Trustee, hereby agrees to give notice of redemption
of the 2007 Bonds in the form attached as Exhibit D hereto, such notice of redemption to be given
timely for redemption of such 2007 Bonds on the applicable redemption date, in accordance with
the applicable provisions of Section 4.03 of the 2007 Indenture, and to cause the redemption of
such 2007 Bonds on the applicable redemption date, as set forth in Exhibit B attached hereto and
by this reference incorporated herein.
Section 6. Application of 2007 Bonds Funds. On the date of original delivery of the
Bonds and the deposit of a portion of the proceeds thereof in the Escrow Fund pursuant to Section
4, the Escrow Bank, as 2007 Trustee, is hereby directed to withdraw all amounts on deposit in the
2007 Reserve Fund and transfer such sum to the Escrow Bank for deposit in the Escrow Fund
pursuant to Section 4 hereof.
Section 7. Amounts Remaining in Funds and Accounts under the 2007 Indenture. Any
amounts remaining on deposit in any fund or account established under the 2007 Indenture for the
2007 Bonds or the 2007 Installment Purchase Contract (except the funds described in Section 4
and 6 hereof), including any investment earnings received after the date of original delivery of the
Bonds, shall be transferred by the Escrow Bank, as 2007 Trustee, to the Trustee, for deposit in the
Bond Fund created by the Indenture and used for the purposes of such fund.
Section 8. Application of Certain Terms of 2007 Indenture. All of the terms of the
2007 Indenture relating to the making of payments of principal and interest with respect to the
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2007 Bonds and Unclaimed Moneys are incorporated in this Escrow Deposit and Trust Agreement
as if set forth in full herein. The provisions of the 2007 Indenture relating to the limitations from
liability and protections afforded the 2007 Trustee and the resignation and removal of the 2007
Trustee are also incorporated in this Escrow Deposit and Trust Agreement as if set forth in full
herein and shall be the procedure to be followed with respect to any resignation or removal of the
Escrow Bank hereunder.
Section 9. Notice of Defeasance. The City hereby instructs the Escrow Bank to provide
notice of defeasance of the Bonds within 10 days of the deposit of funds into the Escrow Fund
substantially in the form attached hereto as Exhibit C.
Section 10. Compensation to Escrow Bank. The City shall pay the Escrow Bank full
compensation for its duties under this Escrow Deposit and Trust Agreement, including out-of
pocket costs such as publication costs, prepayment or redemption expenses, legal fees and other
costs and expenses relating hereto and, in addition, fees, costs and expenses relating to the purchase
of any federal securities after the date of delivery of the Bonds. Under no circumstances shall
amounts deposited in the Escrow Fund be deemed to be available for said purposes.
Section 11. 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 Escrow Deposit and Trust Agreement unless the City shall
have deposited sufficient funds with the Escrow Bank. The Escrow Bank may rely and shall be
protected in acting upon the written instructions of the City or its agents relating to any matter or
action as Escrow Bank under this Escrow Deposit and Trust Agreement.
The Escrow Bank and its respective successors, assigns, agents and servants shall not be
held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the
execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the
Escrow Fund, the acceptance of the moneys or any securities deposited therein, the purchase of
the securities to be purchased pursuant hereto, the retention of such securities or the proceeds
thereof, the sufficiency of the securities or any uninvested moneys held hereunder to accomplish
the purposes set forth in Section 5 hereof, or any payment, transfer or other application of moneys
or securities by the Escrow Bank in accordance with the provisions of this Escrow Deposit and
Trust Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent
error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact
contained in the whereas clauses herein shall be taken as the statement of the City and the
Authority, and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow
Bank makes no representations as to the sufficiency of the securities to be purchased pursuant
hereto and any uninvested moneys to accomplish the purposes set forth in Section 5 hereof or to
the validity of this Escrow Deposit and Trust Agreement as to the City and, except as otherwise
provided herein, the Escrow Bank shall incur no liability in respect thereof. The Escrow Bank shall
not be liable in connection with the performance of its duties under this Escrow Deposit and Trust
Agreement except for its own negligence, willful misconduct or default, and the duties and
obligations of the Escrow Bank shall be determined by the express provisions of this Escrow
Deposit and Trust Agreement. The Escrow Bank may consult with counsel, who may or may not
be counsel to the City, and in reliance upon the written opinion of such counsel shall have full and
complete authorization and protection in respect of any action taken, suffered or omitted by it in
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good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or
desirable that a matter be proved or established prior to taking, suffering, or omitting any action
under this Escrow Deposit and Trust Agreement, such matter (except the matters set forth herein
as specifically requiring a certificate of a nationally recognized firm of independent certified public
accountants or an opinion of counsel) may be deemed to be conclusively established by a written
certification of the City.
The City hereby assumes liability for, and hereby agrees (whether or not any of the
transactions contemplated hereby are consummated), to the extent permitted by law, to indemnify,
protect, save and hold harmless the Escrow Bank and its respective successors, assigns, agents and
servants from and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of
whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any
time, the Escrow Bank (whether or not also indemnified against by any other person under any
other agreement or instrument) and in any way relating to or arising out of the execution and
delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the
retention of the moneys therein and any payment, transfer or other application of moneys or
securities by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust
Agreement, or as may arise by reason of any act, omission or error of the Escrow Bank made in
good faith in the conduct of its duties; provided, however, that the City shall not be required to
indemnify the Escrow Bank against its own negligence or misconduct. The indemnities contained
in this Section 11 shall survive the termination of this Escrow Deposit and Trust Agreement or the
resignation or removal of the Escrow Bank.
The Escrow Bank shall furnish the City periodic cash transaction statements which include
detail for all investment transactions effected by the Escrow Bank or brokers selected by the City.
Upon the Citys election, such statements will be delivered via the Escrow Banks online service
and upon electing such service, paper statements will be provided only upon request. The City
waives the right to receive brokerage confirmations of security transactions effected by the Escrow
Bank as they occur, to the extent permitted by law. The City further understands that trade
confirmations for securities transactions effected by the Escrow Bank will be available upon
request and at no additional cost.
Section 12. Amendment. This Escrow Deposit and Trust Agreement may be modified
or amended at any time by a supplemental agreement which shall become effective when the
written consents of the owners of one hundred percent (100%) in aggregate principal amount of
the 2007 Bonds shall have been filed with the Escrow Bank. This Escrow Deposit and Trust
Agreement may be modified or amended at any time by a supplemental agreement, without the
consent of any such owners, but only (1) to add to the covenants and agreements of any party,
other covenants to be observed, or to surrender any right or power herein or therein reserved to the
City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein,
(3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may
deem necessary or desirable and which, in the opinion of counsel, shall not materially adversely
affect the interests of the owners of the 2007 Bonds or the Bonds, and that such amendment will
not cause interest on the 2007 Bonds or the Bonds to become subject to federal income taxation.
In connection with any contemplated amendment or revocation of this Escrow Deposit and Trust
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Agreement, prior written notice thereof and draft copies of the applicable legal documents shall be
provided by the City to each rating agency then rating the 2007 Bonds.
Section 13. Severability. If any section, paragraph, sentence, clause or provision of this
Escrow Deposit and Trust Agreement shall for any reason be held to be invalid or unenforceable,
the invalidity or unenforceability of such section, paragraph, sentence clause or provision shall not
affect any of the remaining provisions of this Escrow Deposit and Trust Agreement. Notice of any
such invalidity or unenforceability shall be provided to each rating agency then rating the 2007
Bonds.
Section 14. Notice of Escrow Bank, City and Authority. Any notice to or demand upon
the Escrow Bank may be served and presented, and such demand may be made, at the Principal
Corporate Trust Office of the Escrow Bank as specified by the Escrow Bank as 2007 Trustee in
accordance with the provisions of the 2007 Indenture. Any notice to or demand upon the City and
the Authority, respectively, shall be deemed to have been sufficiently given or served for all
purposes by being mailed by first class mail, and deposited, postage prepaid, in a post office letter
box, addressed to such party as provided in the 2007 Installment Sale Agreement or 2007 Indenture
(or such other address as may have been filed in writing by the City or the Authority with the
Escrow Bank).
Section 15. Merger or Consolidation of Escrow Bank. Any company into which the
Escrow Bank may be merged or converted or with which it may be consolidated or any company
resulting from any merger, conversion or consolidation to which it shall be a party or any company
to which the Escrow Bank may sell or transfer all or substantially all of its corporate trust business,
provided such company shall be eligible to act as trustee under the 2007 Indenture, shall be the
successor hereunder to the Escrow Bank without the execution or filing of any paper or any further
act.
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IN WITNESS WHEREOF, the Authority, the City and the Escrow Bank have each caused
this Escrow Deposit and Trust Agreement to be executed by their duly authorized officers all as of
the date first above written.
By:__________________________________
Chairman
CITY OF FILLMORE
By:__________________________________
City Manager
By:__________________________________
Authorized Officer
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EXHIBIT A
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EXHIBIT B
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EXHIBIT C
NOTICE OF DEFEASANCE
NOTICE IS HEREBY GIVEN to the owners of the bonds described above (the Refunded
Bonds), that pursuant to the Escrow Deposit and Trust Agreement (the Agreement) entered into
and dated June __, 2017, by and among the CITY OF FILLMORE, a City duly organized under
the laws of the State of California (the City), FILLMORE PUBLIC FINANCING
AUTHORITY, a joint powers authority duly organized under the laws of the State of California
(the Authority) and MUFG UNION BANK, N.A., a national banking association organized and
existing under the laws of the United States of America having a corporate trust office in ___,
California, as escrow bank, 2007 Trustee and Trustee (as those terms are defined in the Agreement)
(collectively, the Escrow Bank), that:
The City has irrevocably deposited in an Escrow Fund with the Escrow Bank cash [plus
escrow securities], in amounts, which are fully sufficient, upon maturity, to pay such Refunded
Bonds, including all principal, interest and premiums (if any) on the Refunded Bonds as the same
shall become due and payable to and including ____, the date of early redemption of the Refunded
Bonds. Pursuant to Sections 10.01 and 10.03 of the Indenture of Trust, dated as of June 1, 2007,
by and between the Authority and the 2007 Trustee, (the 2007 Indenture), the Refunded Bonds
are deemed paid and the 2007 Indenture and is deemed discharged as of June __, 2017.
The Escrow Bank has been instructed by the City to pay the Refunded Bonds as they shall
become due and payable and redeem the Refunded Bonds maturing ___ to _____ on _____ at the
Redemption price of 100%.
1
The City and the Escrow Bank shall not be responsible for the use of the CUSIP number(s)
selected, nor is any representation made as to their correctness indicated in the notice or as printed
on any Refunded Bond. They are included solely for the convenience of the owners of the Refunded
Bonds.
222
01148.0057/363928.3 AL C-1
THIS IS NOT A NOTICE OF REDEMPTION
223
01148.0057/363928.3 AL C-2
EXHIBIT D
NOTICE OF REDEMPTION
224
01148.0057/363928.3 AL C-3
$________________
City of Fillmore
Wastewater Refunding Revenue Bonds, Series 2017
____________, 2017
City of Fillmore
250 Central Avenue
Fillmore, CA 93015-1907
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the Underwriter) hereby offers to
enter into this Bond Purchase Agreement (the Purchase Agreement) with the City of Fillmore,
(the City), whereby the Underwriter will purchase and the City will sell the Bonds (as defined
and described below). The Underwriter is making this offer subject to the acceptance by the City
at or before 5:00 P.M., California Time, on the date hereof. If the City accepts this Purchase
Agreement, this Purchase Agreement shall be in full force and effect in accordance with its terms
and shall bind both the City and the Underwriter. The Underwriter may withdraw this Purchase
Agreement upon written notice delivered by the Underwriter to the City Manager of the City at
any time before the City accepts this Purchase Agreement. Terms used but not defined in this
Purchase Agreement are defined in the Indenture (as defined below).
1. Purchase and Sale. Upon the terms and conditions and in reliance upon the
representations, warranties and agreements herein set forth, the Underwriter hereby agrees to
purchase from the City, and the City hereby agrees to sell and deliver to the Underwriter, all (but
not less than all) of the following bonds: $______________ City of Fillmore Wastewater
Refunding Revenue Bonds, Series 2017 (the Bonds), at the purchase price of
$______________, representing the aggregate principal amount of the Bonds less an
Underwriters discount of $____________ [plus net original issue premium of
$____________/less net original discount of $____________].
The City acknowledges and agrees that: (i) the primary role of the Underwriter, as an
underwriter, is to purchase securities, for resale to investors, in an arms length commercial
transaction between the City and the Underwriter and the Underwriter has financial and other
interests that differ from those of the City; (ii) the Underwriter is acting solely as a principal and
is not acting as a municipal advisor, financial advisor or fiduciary to the City and has not
assumed any advisory or fiduciary responsibility to the City with respect to the transaction
contemplated hereby and the discussions, undertakings and procedures leading thereto
(irrespective of whether the Underwriter has provided other services or is currently providing
other services to the City on other matters); (iii) the only obligations the Underwriter has to the
City with respect to the transaction contemplated hereby expressly are set forth in this Purchase
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Agreement; and (iv) the City has consulted its own financial and/or municipal, legal, accounting,
tax and other advisors, as applicable, to the extent it has deemed appropriate.
2. Description and Purpose of the Bonds. The Bonds have been authorized pursuant
to Articles 10 (commencing with Section 53570) and 11 (commencing with Section 53580) of
Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the Code) and
a Resolution, adopted by the City Council of the City on ___________, 2017 (the Authorizing
Resolution). The Bonds shall be dated the date of delivery. The Bonds shall be issued and
secured under and pursuant to the Indenture of Trust, dated as of June 1, 2017 (the Indenture),
by and between the City and MUFG Union Bank, N.A., as trustee (the Trustee).
The proceeds of the sale of the Bonds will be used to (i) refund and defease a portion of
the outstanding bonds captioned $59,490,000 Fillmore Public Financing Authority Revenue
Bonds, Series 2007 (City of Fillmore Wastewater System Financing Project) (the Prior
Bonds), (ii) fund a debt service reserve fund for the 2017 Bonds, and (iii) pay certain costs of
issuance associated with the Bonds.
The Bonds will be secured under the provisions of the Code and the Indenture. The
Bonds shall mature in the years, bear interest, be purchased at the prices and be subject to
optional and mandatory redemption at the times and in the amounts, all as set forth in Schedule I
attached hereto. The Authorized Denominations, Record Dates, Interest Payment Dates, Sinking
Fund Payment Dates, and other details and particulars of the Bonds shall be as described in the
Indenture and the Official Statement (as defined below) of the City.
In order to effect the refunding of the Prior Bonds, the City has entered into an Escrow
Agreement dated as of the Closing Date (the Escrow Agreement) between the City and MUFG
Union Bank, N.A., the trustee for the 2007 Bonds, as escrow agent (the Escrow Agent).
3. Public Offering. The Underwriter agrees to make a bona fide public offering of
the Bonds at a price not in excess of the initial offering price or prices or yields not less than the
yields set forth on the inside cover page of the printed paper form of the Official Statement of the
City; provided, however, the Underwriter reserves the right to change such initial public offering
prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with
the marketing of the Bonds, and may offer and sell the Bonds to certain dealers, unit investment
trusts and money market funds, certain of which may be sponsored or managed by the
Underwriter at prices lower than the public offering prices or yields greater than the yields set
forth therein. The Underwriter shall provide to the City a certificate setting forth the offering
prices of the Bonds in substantially the form set forth on Exhibit A.
(a) The City has delivered or caused to be delivered to the Underwriter copies
of the Preliminary Official Statement dated ______________, 2017, which, together with the
cover page and appendices thereto, is herein referred to as the Preliminary Official Statement.
It is acknowledged by the City that the Underwriter may deliver the Preliminary Official
Statement and a final Official Statement (as hereinafter defined) electronically over the internet
and in printed paper form. For purposes of this Purchase Agreement, the printed paper form of
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the Preliminary Official Statement and the Official Statement are deemed controlling. The City
deems the Preliminary Official Statement final as of its date and as of the date hereof for
purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended
(Rule 15c2-12), except for any information which is permitted to be omitted therefrom in
accordance with paragraph (b)(1) thereof.
(b) Within seven (7) business days from the date hereof, and in any event not
later than two (2) business days before the Closing Date, the City shall deliver to the Underwriter
a final Official Statement relating to the Bonds dated the date hereof (such Official Statement,
including the cover page, and all appendices attached thereto, together with all information
previously permitted to have been omitted by Rule 15c2-12 and any amendments or supplements
and statements incorporated by reference therein or attached thereto, as have been approved by
the City, Bond Counsel, Disclosure Counsel and the Underwriter, is referred to herein as the
Official Statement) and such additional conformed copies thereof as the Underwriter may
reasonably request in sufficient quantities to comply with Rule 15c2-12, rules of the Municipal
Securities Rulemaking Board (MSRB) and to meet potential customer requests for copies of
the Official Statement. The Underwriter agrees to file a copy of the Official Statement,
including any amendments or supplements thereto prepared by the City, with the MSRB on its
Electronic Municipal Markets Access (EMMA) system. The City shall execute the Official
Statement by an authorized officer of the City. The Official Statement shall be in substantially
the same form as the Preliminary Official Statement and, other than information previously
permitted to have been omitted by Rule 15c2-12, the City shall only make such other additions,
deletions and revisions in the Official Statement which are approved by the Underwriter. The
Underwriter hereby agrees to cooperate and assist in the preparation of the Official Statement.
The City hereby agrees to deliver to the Underwriter an electronic copy of the Official Statement
in a form that permits the Underwriter to satisfy its obligations under the rules and regulations of
the MSRB and the U.S. Securities and Exchange Commission (SEC). The City hereby ratifies,
confirms and approves the use and distribution by the Underwriter before the date hereof of the
Preliminary Official Statement and hereby authorizes the Underwriter to use the Official
Statement and the Indenture in connection with the public offering and sale of the Bonds.
(c) In order to assist the Underwriter in complying with Rule 15c2-12, the
City will undertake, pursuant to the Continuing Disclosure Certificate, dated as of
_____________, 2017 (the Disclosure Certificate), by the City, as dissemination agent or any
successor dissemination agent designated in writing by the City and which has filed with the City
a written acceptance of such designation (the Dissemination Agent), to provide annual
financial information and notices of the occurrence of specified events. A description of the
Disclosure Certificate is set forth in, and a form of such certificate is attached as an appendix
to/contained in, the Preliminary Official Statement and the Official Statement.
5. Representations. The City represents to and agrees with the Underwriter that:
(a) The City is general law city and municipal corporation duly organized and
validly existing under the laws of the State of California, with full legal right, power and
authority to issue, sell and deliver the Bonds to the Underwriter pursuant to the Indenture, and
execute, deliver and perform its obligations, as the case may be, under this Purchase Agreement,
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the Indenture, the Bonds, the Disclosure Certificate and any other applicable agreements to
which the City is a party (collectively, the Legal Documents) and to perform and consummate
all obligations and transactions required or contemplated by each of the Legal Documents and
the Official Statement.
(b) The Authorizing Resolution approving and authorizing the execution and
delivery by the City of the Legal Documents was duly adopted at a meeting of the City Council
of the City 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 is in full force and effect and has not
been amended or repealed.
(c) The Indenture and the Bonds conform to the descriptions thereof
contained in the Official Statement and the Bonds, when duly issued and authenticated in
accordance with the Indenture and delivered to the Underwriter as provided herein, will be
validly issued and outstanding obligations of the City, entitled to the benefits of the Indenture
and payable from the sources therein specified.
(d) The City has executed and delivered, or will execute and deliver on or
before the Closing Date, each of the Legal Documents. Each of the Legal Documents
constitutes, or will, as of the Closing Date, constitute, a legal, valid and binding obligation of the
City enforceable in accordance with its terms, subject to any applicable bankruptcy, insolvency
or other laws affecting creditors rights or remedies heretofore or hereafter enacted. To the best
knowledge of the City, each of the Legal Documents has been executed and delivered, or will be
executed and delivered on or before the Closing Date, by each respective signatory and is
currently in full force and effect or, as of the Closing Date, will be in full force and effect.
(e) Except as described in the Official Statement, the City is not in any
material respect in breach of or default under any constitutional provision, law or administrative
regulation of the State or of the United States or any agency or instrumentality of either, or of
any other governmental agency, or any Material Judgment or Agreement (as defined below), and
no event has occurred and is continuing which with the passage of time or the giving of notice,
or both, would constitute a default or event of default under any Material Judgment or
Agreement; and the adoption of the Authorizing Resolution, the issuance, delivery and sale of
the Bonds and the execution and delivery of the Legal Documents and compliance with and
performance of the Citys obligations therein and herein will not in any material respect conflict
with, violate or result in a breach of or constitute a default under, any such constitutional
provision, law, administrative regulation or any Material Judgment or Agreement, nor will any
such execution, delivery, adoption or compliance result in the creation or imposition of any lien,
charge or other security interest or encumbrance of any nature whatsoever upon any of the
property or assets of the City or under the terms of any such law, administrative regulation or
Material Judgment or Agreement. As used herein, the term Material Judgment or Agreement
means any judgment or decree or any loan agreement, indenture, bond, note or resolution or any
material agreement or other instrument to which the City is a party or to which the City or any of
its property or assets is otherwise subject (including, without limitation, the Code, the
Authorizing Resolution and the Legal Documents).
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(f) All approvals, consents and orders of any governmental authority, board,
agency, council, commission or other body having jurisdiction which would constitute a
condition precedent to the performance by the City of its obligations hereunder and under the
Legal Documents have been obtained; provided, that the City makes no representations as to any
approvals, consents or other actions which may be necessary to qualify the Bonds for offer and
sale under Blue Sky or other state securities laws or regulations.
(g) Any certificates executed by any officer of the City and delivered to the
Underwriter pursuant hereto or in connection herewith shall be deemed a representation and
warranty of the City as to the accuracy of the statements therein made.
(h) Between the date hereof and the time of the Closing, the City shall not,
without the prior written consent of the Underwriter, offer or issue in any material amount any
bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or
contingent, except in the course of normal business operations of the City or except for such
borrowings as may be described in or contemplated by the Official Statement.
(i) The financial statements of the City as of June 30, 2016 fairly represent
the receipts, expenditures, assets, liabilities and cash balances of such amounts and, insofar as
presented, other funds of the City as of the dates and for the periods therein set forth. Except as
disclosed in the Official Statement or otherwise disclosed in writing to the Underwriter, there has
not been any materially adverse change in the financial condition of the City or in its operations
since June 30, 2016 and there has been no occurrence, circumstance or combination thereof
which is reasonably expected to result in any such materially adverse change.
(k) The Official Statement is, as of its date and at all times after the date of the
Official Statement (excluding therefrom the information under the captions
UNDERWRITING and APPENDIX F: DTC AND THE BOOK-ENTRY ONLY SYSTEM,
as to which no representations or warranties are made) up to and including the Closing Date will
be, true and correct in all material respects and will not contain any untrue or misleading
statement of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(m) If between the date hereof and the time of Closing, any event shall occur
which might or would cause the Official Statement, as then supplemented or amended, to contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, the City shall notify the Underwriter thereof, and if, in the opinion of the
Underwriter, such event requires the preparation and publication of a supplement or amendment
to the Official Statement, the City shall promptly (and in any event before the Closing) prepare
and furnish (at the expense of the City) a reasonable number of copies of an amendment of or
supplement to the Official Statement in form and substance satisfactory to the Underwriter.
(o) Except as disclosed in the Official Statement, during the last five years,
the City has not failed to materially comply with any previous undertaking relating to continuing
disclosure of information pursuant to Rule 15c2-12.
All representations, warranties and agreements of the City shall remain operative and in
full force and effect, regardless of any investigations made by the Underwriter or on the
Underwriters behalf, and shall survive the delivery of the Bonds.
6. Closing. At ____ A.M., Pacific Time, on _________, 2017, or at such other time
or date as the Underwriter and the City may mutually agree upon as the date and time of the
Closing (the Closing Date), the City will deliver or cause to be delivered to the Underwriter, at
the offices of Aleshire & Wynder, LLP (Bond Counsel), 18881 Von Karman Avenue, Suite
1700, Irvine, California 92612, or at such other place as the Underwriter and the City may
mutually agree upon, the Bonds, through the facilities of The Depository Trust Company, New
York, New York (DTC), duly executed and authenticated, and the other documents specified
in Section 7. At the Closing, (a) upon satisfaction of the conditions herein specified, the
Underwriter shall accept the delivery of the Bonds, and pay the purchase price therefor in federal
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funds payable to the order of the Trustee for the account of the City and (b) the City shall deliver
or cause to be delivered the Bonds to the Underwriter through the facilities of DTC in definitive
or temporary form, duly executed by the City and in the authorized denominations as specified
by the Underwriter at the Closing and the City shall deliver the other documents hereinafter
mentioned. The Bonds shall be made available to the Underwriter at least one (1) business day
before the Closing Date for purposes of inspection.
7. Conditions Precedent. The Underwriter has entered into this Purchase Agreement
in reliance upon the representations and agreements of the City contained herein and the
performance by the City of its obligations hereunder, both as of the date hereof and as of the
Closing Date.
(a) The Underwriters obligations under this Purchase Agreement are and shall be
subject to the following further conditions:
(i) The representations of the City contained herein shall be true, complete
and correct in all material respects on the date of acceptance hereof and on and as of the Closing
Date.
(ii) At the time of the Closing, the Official Statement, the Authorizing
Resolution and the Legal Documents shall be in full force and effect and shall not have been
amended, modified or supplemented except as may have been agreed to in writing by the
Underwriter.
(iii) The City shall perform or have performed all of its obligations required
under or specified in the Authorizing Resolution, the Legal Documents, and the Official
Statement to be performed at or prior to the Closing.
(iv) The City shall have delivered to the Underwriter final Official Statements
by the time, and in the numbers, required by Section 4 of this Purchase Agreement.
(v) As of the date hereof and at the time of Closing, all necessary official
action of the City relating to the Legal Documents and the Official Statement shall have been
taken and shall be in full force and effect and shall not have been amended, modified or
supplemented in any material respect.
(vi) After the date hereof, up to and including the time of the Closing, there
shall not have occurred any change in or particularly affecting the City, the Code, the
Authorizing Resolution, the Legal Documents or the Indenture as the foregoing matters are
described in the Official Statement, which in the reasonable professional judgment of the
Underwriter materially impairs the investment quality of the Bonds.
(vii) At or prior to the Closing, the Underwriter shall receive the following
documents (in each case with only such changes as the Underwriter shall approve):
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Official Statement, and a reliance letter with respect thereto addressed to the
Underwriter;
(A) This Purchase Agreement has been duly executed and delivered by
the City and is a legal, valid and binding obligation of the City
enforceable in accordance with its terms, subject to laws relating to
bankruptcy, insolvency, reorganization or creditors' rights
generally, to the application of equitable principles, the exercise of
judicial discretion and the limitations on legal remedies against
public entities in the State;
(C) The Bonds are not subject to the registration requirements of the
Securities Act of 1933, as amended (the 1933 Act) and the
Indenture is exempt from qualification pursuant to the Trust
Indenture Act of 1939, as amended (the Trust Indenture Act);
(3) A letter, dated the Closing Date and addressed to the Underwriter,
from Jones Hall, Disclosure Counsel, to the effect that:
(A) The Bonds are exempt from the registration requirements of the
1933 Act and the Indenture is exempt from qualification under the
Trust Indenture Act; and
(B) Based upon the information made available to them in the course
of their participation in the preparation of the Official Statement
and without passing on and without assuming any responsibility
for the accuracy, completeness and fairness of the statements in the
Official Statement, and having made no independent investigation
or verification thereof, nothing has come to their attention which
would lead them to believe that the Official Statement as of its date
and as of the Closing Date (excluding therefrom any information in
the Official Statement relating to DTC, the operation of the book-
entry system or any other financial or statistical data or projections
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or estimates or expressions of opinion included in the Official
Statement and the appendices thereto, as to which no opinion need
be expressed) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading in any material respect;
(4) The opinion of the City Attorney of the City, dated the date of the
Closing and addressed to the Underwriter, to the effect that:
(A) The City has been duly organized and is validly existing under the
Constitution and laws of the State of California, and has all
requisite power and authority thereunder: (a) to adopt the
Authorizing Resolution, and to enter into, execute, deliver and
perform its covenants and agreements under the Legal Documents;
(b) to approve and authorize the use, execution and distribution of
the Preliminary Official Statement and the Official Statement;
(c) to issue, sell, execute and deliver the Bonds; (d) to pledge the
Net Revenues as contemplated by the Legal Documents; and (e) to
carry on its activities as currently conducted;
(B) The City has taken all actions required to be taken by it before the
Closing Date material to the transactions contemplated by the
documents mentioned in paragraph (a) above, and the City has
duly authorized the execution and delivery of, and the due
performance of its obligations under, the Legal Documents;
(C) The Authorizing Resolution was duly adopted by the City Council
of the City at a meeting of the governing body of the City which
was called and held pursuant to law and with all required notices
and in accordance with all applicable open meetings laws and at
which a quorum was present and acting at the time of the adoption
of the Authorizing Resolution;
(I) To the best of such counsels knowledge after due inquiry, the City
is not in breach of or default under any applicable law or
administrative regulation of the State or any applicable judgment
or decree or any loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the City is a party or is
otherwise subject, which breach or default would materially
adversely affect the Citys ability to enter into or perform its
obligations under the Legal Documents, and no event has occurred
and is continuing which, with the passage of time or the giving of
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notice, or both, would constitute a default or an event of default
under any such instrument and which would materially adversely
affect the Citys ability to enter into or perform its obligations
under the Legal Documents;
(C) The execution, delivery and performance of the Indenture will not
conflict with or cause a default under any law, ruling, agreement,
administrative regulation or other instrument by which the Trustee
is bound;
(D) All authorizations and approvals required by law and the articles of
association and bylaws of the Trustee in order for the Trustee to
execute and deliver and perform its obligations under Indenture to
which it is a party have been obtained; and
(6) The opinion of counsel to the Escrow Agent, dated the date of the
Closing, addressed to the Underwriter, to the effect that:
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(A) The Escrow Agent is a national banking association, duly
organized and validly existing under the laws of the United States
of America, having full corporate power to enter into the Escrow
Agreement;
(B) The Escrow Agreement has been duly authorized, executed and
delivered by the Escrow Agent and, assuming due authorization,
execution and delivery by the other party thereto, the Escrow
Agreement constitutes the valid and binding obligation of the
Escrow Agent enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or
other laws affecting the enforcement of creditors rights generally
and by the application of equitable principles, if equitable remedies
are sought;
(A) Such counsel is of the opinion that the Bonds are not subject to the
registration requirements of the Securities Act of 1933, as
amended, and the Indenture is exempt from qualification under the
Trust Indenture Act of 1939, as amended;
(B) While such counsel has not verified and is not passing upon and
does not assume responsibility for, the accuracy, completeness or
fairness of the statements contained in the Official Statement, such
counsel has participated in conferences with representatives of and
counsel for the District and Bond Counsel and representatives of
the Underwriter at which the contents of the Official Statement
were discussed and revised. Based on such counsels
representation of the Underwriter in connection with the issuance
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of the Bonds, no facts came to the attention of the attorneys in such
firm rendering legal services in connection with such
representation which caused such counsel to believe that the
Official Statement contained as of its date or as of the date of
Closing contains any untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading in any
material respect (except that no opinion or belief is expressed as to
(i) the expressions of opinion, the assumptions, the projections, the
financial statements, or other financial, numerical, economic,
demographic or statistical data contained in the Official Statement,
(ii) the information with respect to DTC and its book-entry system,
and (iii) the information contained in Appendix A, Appendix C, or
Appendix D to the Official Statement); and
(B) The Legal Documents have been duly authorized and executed and
are in full force and effect;
(D) The Official Statement is true and correct in all material respects
and does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
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made, not misleading, except no representation is made with
respect to information relating to DTC or DTCs book-entry
system;
(14) Evidence from Standard & Poors Ratings Services, a Standard &
Poors Financial Services LLC business and Moodys Investors Service that the
Bonds have been assigned ratings of ___, and ___, respectively;
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(B) The Trustee is duly authorized to enter into the Indenture and to
authenticate and deliver the Bonds to the Underwriter pursuant to
the Indenture;
(C) When delivered to and paid for by the Underwriter at the Closing,
the Bonds will have been duly authenticated and delivered by the
Trustee;
(D) The execution and delivery of the Indenture and compliance with
the provisions on the Trustees part contained therein, will not
conflict with or constitute a breach of or default under any law,
administrative regulation, judgment, decree, loan agreement,
indenture, note, resolution, agreement or other instrument to which
the Trustee is a party or is otherwise subject (except that no
representation, warranty or agreement is made with respect to any
federal or state securities or blue sky laws or regulations), which
conflict, breach or default would materially impair the ability of
the Trustee to perform its obligations under the Indenture, nor will
any such execution, delivery, adoption or compliance result in the
creation or imposition of any lien, charge or other security interest
or encumbrance of any nature whatsoever upon any of the
properties or assets held by the Trustee pursuant to the lien created
by the Indenture under the terms of any such law, administrative
regulation, judgment, decree, loan agreement, indenture, bond,
note, resolution, agreement or other instrument, except as provided
by the Indenture; and
(E) To the best of the knowledge of the Trustee, it has not been served
with any action, suit, proceeding, inquiry or investigation in law or
in equity, before or by any court, governmental agency, public
board or body, nor is any such action or other proceeding
threatened against the Trustee, affecting the existence of the
Trustee, or the titles of its officers to their respective offices or
seeking to prohibit, restrain, or enjoining the execution and
delivery of the Bonds or the collection of revenues to be applied to
pay the principal, premium, if any, and interest with respect to the
Bonds, or the pledge thereof, or in any way contesting or affecting
the validity or enforceability of the Indenture, or contesting the
powers of the Trustee or its authority to enter into, adopt or
perform its obligations under any of the foregoing to which it is a
party, wherein an unfavorable decision, ruling or funding would
materially adversely affect the validity or enforceability of the
Indenture or the power and authority of the Trustee to enter into
and perform its duties under the Indenture and to authenticate and
deliver the Bonds to or upon the order of the Underwriter;
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(18) A certificate, dated the date of Closing, signed by a duly
authorized official of the Escrow Agent satisfactory in form and substance to the
Underwriter, to the effect that:
(B) The Escrow Agent is duly authorized to enter into the Escrow
Agreement and has duly executed and delivered the Escrow
Agreement, and assuming due authorization and execution by the
other party thereto, the Escrow Agreement is legal, valid and
binding upon the Escrow Agent, and enforceable against the
Escrow Agent in accordance with its terms; and
(21) Evidence that a Form 8038-G relating to the Bonds has been
executed by the City and will be filed with the Internal Revenue Service (the
IRS) within the applicable time limit:
(22) A copy of the Blue Sky Survey with respect to the Bonds;
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8. Termination. If the City shall be unable to satisfy the conditions of the
Underwriters obligations contained in this Purchase Agreement or if the Underwriters
obligations shall be terminated for any reason permitted by this Purchase Agreement, this
Purchase Agreement may be cancelled by the Underwriter at, or at any time before, the time of
the Closing. Notice of such cancellation shall be given by the Underwriter to the City in writing,
or by telephone confirmed in writing. The performance by the City of any and all conditions
contained in this Purchase Agreement for the benefit of the Underwriter may be waived by the
Underwriter.
(a) The Underwriter shall also have the right, before the time of Closing, to cancel its
obligations to purchase the Bonds, by written notice by the Underwriter to the City, if between
the date hereof and the time of Closing:
(ii) The market for the Bonds or the market prices of the Bonds or the ability
of the Underwriter to enforce contracts for the sale of the Bonds shall have been materially and
adversely affected, in the professional judgment of the Underwriter, by:
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authority, with respect to federal or State of California taxation upon revenues or
other income of the general character to be derived by the City or upon interest
received on obligations of the general character of the Bonds which, in the
judgment of the Underwriter, may have the purpose or effect, directly or,
indirectly, of affecting the tax status of the City, its property or income, its
securities (including the Bonds) or the interest thereon, or any tax exemption
granted or authorized by State of California legislation; or
(iv) Any change in or particularly affecting the City, the Act, the Authorizing
Resolution, the Legal Documents or the Net Revenues as the foregoing matters are described in
the Official Statement, which in the professional judgment of the Underwriter materially impairs
the investment quality of the Bonds; or
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(without limitation) any provision of applicable federal securities laws as amended and then in
effect; or
(vi) A stop order, ruling, regulation or official statement by the SEC or any
other governmental agency having jurisdiction of the subject matter shall have been issued or
made or any other event occurs, the effect of which is that the issuance, offering or sale of the
Bonds, or the execution and delivery of any Legal Documents, as contemplated hereby or by the
Preliminary Official Statement or the Official Statement, is or would be in violation of any
applicable law, rule or regulation, including (without limitation) any provision of applicable
federal securities laws, including the 1933 Act, the Securities Exchange Act of 1934 or the Trust
Indenture Act, each as amended and as then in effect; or
(vii) Any litigation shall be instituted or be pending at the time of the Closing
to restrain or enjoin the issuance, sale or delivery of the Bonds, or in any way contesting or
affecting any authority for or the validity of the proceedings authorizing and approving the Code,
the Authorizing Resolution, the Legal Documents or the existence or powers of the City with
respect to its obligations under the Legal Documents; or
10. Expenses. All expenses and costs of the City incident to the performance of its
obligations in connection with the authorization, issuance and sale of the Bonds to the
Underwriter, including the costs of printing or reproduction of the Bonds, the Legal Documents
and the Official Statement in reasonable quantities, fees of consultants, fees of rating agencies,
advertising expenses, fees and expenses of the Trustee and its counsel and fees and expenses of
counsel to the City and Bond Counsel, shall be paid by the City from the proceeds of the Bonds
or other revenues of the City. The City shall be solely responsible for and shall pay for any
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expenses incurred by the Underwriter on behalf of the Citys employees and representatives
which are incidental to implementing this Purchase Agreement, including, but not limited to,
meals, transportation, lodging, and entertainment of those employees and representatives. All
expenses and costs of the Underwriter incurred under or pursuant to this Purchase Agreement,
including, without limitation, the cost of preparing this Purchase Agreement and other
Underwriter documents, travel expenses and the fees and expenses of counsel to the Underwriter,
shall be paid by the Underwriter (which may be included as an expense component of the
Underwriters discount).
11. Use of Documents. The City hereby authorizes the Underwriter to use, in
connection with the public offering and sale of the Bonds, this Purchase Agreement, the
Preliminary Official Statement, the Official Statement and the Legal Documents, and the
information contained herein and therein.
12. Qualification of Securities. The City will furnish such information, execute such
instruments and take such other action in cooperation with the Underwriter as the Underwriter
may reasonably request to qualify the Bonds for offer and sale under the Blue Sky or other
securities laws and regulations of such states and other jurisdictions of the United States as the
Underwriter may designate and to provide for the continuance of such qualification; provided,
however, that the City will not be required to qualify as a foreign corporation or to file any
general or special consents to service of process under the laws of any state.
13. Notices. Any notice or other communication to be given to the City under this
Purchase Agreement may be given by delivering the same in writing to City of Fillmore, 250
Central Avenue, Fillmore, California 93015-1907, and any such notice or other communication
to be given to the Underwriter may be given by delivering the same in writing to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Bank of America, N.A. 333 South Hope Street, Suite
2310, Los Angeles, California 90071.
14. Benefit. This Purchase Agreement is made solely for the benefit of the City and
the Underwriter (including their successors or assigns) and no other person, partnership,
association or corporation shall acquire or have any right hereunder or by virtue hereof. Except
as otherwise expressly provided herein, all of the agreements and representations of the City
contained in this Purchase Agreement and in any certificates delivered pursuant hereto shall
remain operative and in full force and effect regardless of: (i) any investigation made by or on
behalf of the Underwriter; (ii) delivery of and payment for the Bonds hereunder; or (iii) any
termination of this Purchase Agreement, other than pursuant to Section 8.
15. Attorneys Fees. In the event of a dispute arising under this Purchase Agreement,
the prevailing party shall have the right to collect from the other party its reasonable costs and
necessary disbursements and attorneys' fees incurred in enforcing this Purchase Agreement.
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17. Counterparts. This Purchase Agreement may be executed in several counterparts,
each of which shall be deemed an original hereof.
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Very truly yours,
By:_________________________________
Authorized Signatory
CITY OF FILLMORE
By:_________________________________
Authorized Signatory
I-1 247
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EXHIBIT A
This Certificate is furnished by Merrill Lynch, Pierce, Fenner & Smith Incorporated as
the underwriter (the Underwriter) in connection with the sale and issuance by the City of
Fillmore (the Issuer) of its $_________ aggregate principal amount of City of Fillmore
Wastewater Refunding Revenue Bonds, Series 2017 (the Bonds) issued ________, 2017, and
the Underwriter hereby certifies and represents the following, based upon information available
to us:
2. All of the Bonds have actually been offered to the Public in a bona fide public
offering at prices not higher than, or, in the case of obligations sold on a yield basis, at yields not
lower than, the Initial Offering Prices.
3. The first price, or yield in the case of obligations sold on a yield basis, at which
ten percent (10%) of each maturity of the Bonds has been sold to the Public was at a price not
higher than, or, in the case of obligations sold on a yield basis, at a yield not lower than, the
Initial Offering Prices [except for the Bonds with the following maturities:].
4. The Underwriter had no reason to believe that any of the Initial Offering Prices of
the Bonds exceeded the expected fair market value of the Bonds as of the Sale Date.
We understand that the foregoing information will be relied upon by the Issuer with
respect to certain of the representations set forth in the Tax Certificate and by Aleshire &
Wynder, in connection with rendering its opinion to the Issuer that the interest on the Bonds is
not includable in gross income of the owners thereof for federal income tax purposes. The
undersigned is certifying only as to facts in existence on the date hereof. Nothing herein
represents the undersigneds interpretation of any laws; in particular the regulations under the
Internal Revenue Code of 1986, or the application of any laws to these facts. The certifications
contained herein are not necessarily based on personal knowledge, but may instead be based on
either inquiry deemed adequate by the undersigned or institutional knowledge (or both)
regarding the matters set forth herein. Although certain information furnished in this Certificate
has been derived from other purchasers, bond houses and brokers and cannot be independently
verified by us, we have no reason to believe it to be untrue in any material respect.
A-1 248
126219686
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as Underwriter
By:
[NAME]
[TITLE]
A-2 249
126219686
16039-07 JH:SRF 4/12/2017
5/03/2017
5/10/2017
5/15/2017
time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the
In the Opinion of Aleshire & Wynder, LLP, Bond Counsel, based on existing statutes, regulations, rulings and court decisions
and assuming, among other matters, compliance with certain covenants, interest on the 2017 Bonds is excludable from gross income
for federal income tax purposes, and is exempt from State of California personal income taxes. In the opinion of Bond Counsel, interest
on the 2017 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes,
although Bond Counsel observes that it is included in adjusted current earnings in calculating corporate alternative minimum taxable
income. Bond Counsel expresses no opinion regarding other federal or State tax consequences relating to the ownership or disposition
of, or the accrual or receipt of interest on, the 2017 Bonds. See TAX MATTERS.
$_____________*
City of Fillmore
Wastewater Refunding Revenue Bonds, Series 2017
Dated: Date of Delivery Due: May 1, as shown on inside cover
Authority for Issuance. The bonds captioned above (the 2017 Bonds) are being issued by the City of Fillmore (the City)
under an Indenture of Trust dated as of June 1, 2017 (the Indenture), by and between the City and MUFG Union Bank, N.A., as
trustee. See THE 2017 BONDS Authority for Issuance.
Security for the 2017 Bonds. The 2017 Bonds are special obligations of the City, payable solely from Net Revenues of the
Citys municipal wastewater system (the Enterprise), and amounts on deposit in the funds and accounts established under the
Indenture as and to the extent provided in the Indenture. See SECURITY FOR THE 2017 BONDS.
Future Parity Debt. Additional series of bonds or other debt may be issued that are payable from Net Revenues on a parity with
the 2017 Bonds and the portion of the Prior Bond (as defined below) that will remain outstanding following the issuance of the 2017
Bonds, subject to the conditions contained in the Indenture. See SECURITY FOR THE 2017 BONDS Parity Debt.
Use of Proceeds. The 2017 Bonds are expected to be issued to provide funds to (i) refund and defease a portion of the
outstanding bonds captioned $59,490,000 Fillmore Public Financing Authority Revenue Bonds, Series 2007 (City of Fillmore
Wastewater System Financing Project) (the Prior Bonds), (ii) provide a debt service reserve for the 2017 Bonds through the
purchase of a debt service reserve insurance policy to be issued by the Bond Insurer (as defined below), and (iii) pay the costs of
issuing the 2017 Bonds. See FINANCING PLAN.
Bond Terms; Book-Entry Only. The 2017 Bonds will bear interest at the rates shown on the inside cover, payable semiannually
on November 1 and May 1 of each year, commencing on November 1, 2017, and will be issued in fully registered form without coupons
in the denomination of $5,000 or any integral multiple of $5,000. The 2017 Bonds will be issued in book-entry only form, initially
registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (DTC). Purchasers of
the 2017 Bonds will not receive certificates representing their interests in the 2017 Bonds. Payments of the principal of, premium, if
any, and interest on the 2017 Bonds will be made by to DTC, which is obligated in turn to remit such principal, premium, if any, and
interest to its DTC Participants for subsequent disbursement to the beneficial owners of the 2017 Bonds. See THE 2017 BONDS
General Provisions.
Redemption. The 2017 Bonds are subject to optional redemption and mandatory sinking fund redemption prior to
maturity. See THE 2017 BONDS Redemption.
Municipal Bond Insurance. The scheduled payment of principal of and interest on the 2017 Bonds maturing on September 1,
20__ through September 1, 20__ (the Insured Bonds), when due, will be guaranteed under an insurance policy to be issued
concurrently with the delivery of the Insured Bonds by _____________.
BOND INSURER LOGO
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY IS PLEDGED TO THE PAYMENT OF
THE 2017 BONDS OR INTEREST THEREON. THE 2017 BONDS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE
OF, OR CHARGE, OR LIEN, OR ENCUMBRANCE UPON, ANY OF THE PROPERTY OF THE CITY OR ANY OF ITS INCOME OR
RECEIPTS, EXCEPT THE NET REVENUES OF THE ENTERPRISE AND AMOUNTS ON DEPOSIT IN THE FUNDS AND
ACCOUNTS ESTABLISHED UNDER THE INDENTURE AS AND TO THE EXTENT PROVIDED IN THE INDENTURE.
MATURITY SCHEDULE
(see inside cover)
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF
THIS ISSUE OF BONDS. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION
ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE OF THE 2017
BONDS. INVESTMENT IN THE BONDS INVOLVES RISKS THAT MAY NOT BE APPROPRIATE FOR SOME INVESTORS. SEE
BOND OWNERS RISKS.
The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Aleshire
& Wynder, Irvine, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed upon for the
City by Jones Hall, A Professional Law Corporation, San Francisco, California, as disclosure counsel, and by Aleshire & Wynder, LLP,
as City Attorney. ________________, _____________, California, is serving as counsel to the Underwriter. It is anticipated that the
2017 Bonds, in book-entry only form, will be available through the facilities of DTC on or about _____________________, 2017.
BofA Merrill Lynch
The date of this Official Statement is: _________________, 2017
250
MATURITY SCHEDULE*
$ ___ __% Term Bond due May 1, 20__, Yield: __%, Price: __%
CUSIP No. __
Copyright 2017, American Bankers Association. CUSIP data herein are provided for convenience of reference only. Neither the
City nor the Underwriter assumes any responsibility for the accuracy of CUSIP data.
251
CITY OF FILLMORE
CITY COUNCIL
CITY OFFICIALS
___________________________________
PROFESSIONAL SERVICES
BOND COUNSEL
Aleshire & Wynder, LLP
Irvine, California
DISCLOSURE COUNSEL
Jones Hall, A Professional Law Corporation
San Francisco, California
MUNICIPAL ADVISOR
First Southwest, a Division of Hilltop Securities Inc.
Encino, California
TRUSTEE
MUFG Union Bank, N.A.
Los Angeles, California
252
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has
been authorized to give any information or to make any representations with respect to the 2017 Bonds other than as
contained in this Official Statement, and if given or made, such other information or representation must not be relied
upon as having been authorized.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of
an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion
contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement
nor any sale of the 2017 Bonds will, under any circumstances, create any implication that there has been no change in
the affairs of the City or the Enterprise since the date of this Official Statement.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the 2017 Bonds
referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement
is not a contract with the purchasers of the 2017 Bonds.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained from
sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has
reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors
under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does
not guarantee the accuracy or completeness of such information.
Document References and Summaries. All references to and summaries of the Indenture or other documents
contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete
statements of those documents.
Stabilization of and Changes to Offering Prices. The Underwriters may over allot or take other steps that stabilize
or maintain the market price of the 2017 Bonds at a level above that which might otherwise prevail in the open market.
If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and
sell the 2017 Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering
prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time
to time by the Underwriter.
Bonds are Exempt from Securities Laws Registration. The issuance and sale of the 2017 Bonds have not been
registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in
reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the
Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.
Estimates and Projections. 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. Such statements are generally identifiable by the terminology used such
as plan, expect, estimate, budget or other similar words.
Internet Site. The City maintains an internet site; however, none of the information contained on that internet site is
incorporated by reference in this Official Statement.
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[REGIONAL MAP]
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TABLE OF CONTENTS
Page Page
INTRODUCTION................................................ 2 Projection of Revenues, Expenditures and
FINANCING PLAN ............................................. 4 Debt Service Coverage............................ 36
Refunding Plan ...............................................4 Investments .................................................. 37
Estimated Sources and Uses of Funds ..........5 CONSTITUTIONAL LIMITATIONS ON
THE 2017 BONDS ............................................. 6 APPROPRIATIONS AND CHARGES ............. 38
Authority for Issuance ....................................6 Article XIIIB .................................................. 38
General Bond Terms ......................................6 Proposition 218 ............................................ 38
Redemption ....................................................7 Future Initiatives ........................................... 40
Registration, Transfer and Exchange ............9 BOND OWNERS RISKS ................................. 41
DEBT SERVICE SCHEDULE .......................... 11 Limited Obligations ...................................... 41
SECURITY FOR THE 2017 BONDS ............... 12 Accuracy of Assumptions............................. 41
General .........................................................12 Wastewater System Demand ...................... 41
Receipt, Deposit and Application of Gross Enterprise Expenses .................................... 41
Revenues and Net Revenues ..................13 Limitations on Remedies Available to Bond
Reserve Account ..........................................15 Owners..................................................... 41
Rate Stabilization Fund ................................16 Statutory and Regulatory Compliance ......... 42
Rate Covenants............................................17 Seismic and Environmental Considerations 43
Parity Obligations .........................................18 Loss of Tax-Exemption ................................ 43
Eminent Domain Proceeds ..........................20 Proposition 218 ............................................ 43
Public Liability, Property and Casualty Secondary Market for Bonds ....................... 44
Insurance .................................................20 Future Parity Obligations ............................. 44
THE ENTERPRISE .......................................... 23 TAX MATTERS ................................................ 45
History and Facilities of the Enterprise.........23 CERTAIN LEGAL MATTERS .......................... 47
Insurance ......................................................24 LITIGATION ..................................................... 47
Management ................................................24 RATINGS ......................................................... 48
Service Area and Users ...............................25 CONTINUING DISCLOSURE .......................... 48
Capital Improvement Program .....................26 UNDERWRITING............................................. 49
Regulatory Compliance ................................27 MUNICIPAL ADVISOR .................................... 51
Rate Setting Process ...................................28 PROFESSIONAL FEES .................................. 51
Rates and Charges ......................................29 EXECUTION .................................................... 51
Billing and Collection of Sewer Service
Charge .....................................................32
Financial Statements ....................................33
Historical Revenues and Expenditures ........34
255
i
__________________________________
OFFICIAL STATEMENT
__________________________________
$__________*
City of Fillmore
Wastewater Refunding Revenue Bonds, Series 2017
INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description
of and guide to, and is qualified by, more complete and detailed information contained in the entire
Official Statement, including the cover page and appendices hereto, and the documents
summarized or described herein. A full review should be made of the entire Official Statement.
Capitalized terms used but not defined in this Official Statement have the meanings given in the
Indenture (as defined below). See APPENDIX A Summary of Certain Provisions of the
Indenture.
Authority for Issuance. The bonds captioned above (the 2017 Bonds) are being
issued by the City of Fillmore (the City) under an Indenture of Trust dated as of June 1, 2017
(the Indenture), by and between the City and MUFG Union Bank, N.A., as trustee (the
Trustee). See THE 2017 BONDS Authority for Issuance.
The City. The City is located in central Ventura County about mid-way between the larger
cities of Ventura and Santa Clarita. For economic and demographic information regarding the
area in and around the City, see APPENDIX A. The administration headquarters of the City are
located at 250 Central Avenue, Fillmore, California.
Security for the 2017 Bonds. The 2017 Bonds are special obligations of the City,
payable solely from Net Revenues of the Citys municipal wastewater system (the Enterprise),
and amounts on deposit in the funds and accounts established under the Indenture as and to the
extent provided in the Indenture. Net Revenues are generally defined in the Indenture as the
Gross Revenues received with respect to the Enterprise each Fiscal Year, less the amount of
Operation and Maintenance Costs of the Enterprise becoming payable in such Fiscal Year (as
those terms are defined in the Indenture). See SECURITY FOR THE 2017 BONDS.
Future Parity Debt. Additional series of bonds or other debt may be issued that are
payable from Net Revenues on a parity with the 2017 Bonds and the Outstanding Prior Bonds
(as defined below), subject to the conditions contained in the Indenture. See SECURITY FOR
THE 2017 BONDS Parity Debt.
Purpose of the 2017 Bonds. The 2017 Bonds are expected to be issued to provide funds
to:
2
(i) prepay in part and Installment Sale Agreement dated as of June 1, 2007 (Prior
Installment Sale Agreement), by and between the City and the Fillmore Public
Financing Authority (the Authority), and cause the simultaneous refunding and
defeasance, on a current basis, of a portion of the outstanding bonds of the Authority
captioned $59,490,000 Fillmore Public Financing Authority Revenue Bonds, Series 2007
(City of Fillmore Wastewater System Financing Project) (the Prior Bonds), and
(ii) provide a debt service reserve for the 2017 Bonds through the purchase of a
debt service reserve insurance policy (the Reserve Policy) to be issued by the Bond
Insurer (as defined below), and
Rate Covenant. Under the Indenture, the City is obligated to fix, prescribe, revise, and
collect charges for the Enterprise during each Fiscal Year that are sufficient to yield Net Revenues
of at least 1.15 times debt service payments on the 2017 Bonds, outstanding installment
payments with respect to the Prior Installment Sale Agreement, and any Parity Bonds in that
Fiscal Year. See SECURITY FOR THE 2017 BONDS Rate Covenants.
Reserve Fund. As additional security for the 2017 Bonds, the City will establish a debt
service reserve fund (the Reserve Account) through the purchase of the Reserve Policy in an
amount equal to the Reserve Account Requirement, which is defined in the Indenture as:
(a) 50% of Maximum Annual Debt Service on the Bonds for the then-current or
every subsequent Bond Year,
(b) 125% of average Annual Debt Service on the Bonds for the then current or
every subsequent Bond Year, and
Municipal Bond Insurance. Concurrently with the issuance of the 2017 Bonds,
_________________ (the "Bond Insurer") will issue its Municipal Bond Insurance Policy (the
"Bond Insurance Policy") for the 2017 Bonds maturing on September 1, 20__ through
September 1, 20__ (the Insured Bonds). The Policy guarantees the scheduled payment of
principal of and interest on the Insured Bonds when due as set forth in the form of the Policy
included as APPENDIX G to this Official Statement.
The remainder of the 2017 Bonds, maturing on September 1, 20__ through September 1,
20__ (the Uninsured Bonds), will not be guaranteed by any municipal bond insurance policy,
but will be secured by the Reserve Policy.
Risks of Investment. The 2017 Bonds are repayable only from certain money available
to the City from the Enterprise. For a discussion of some of the risks associated with the purchase
of the 2017 Bonds, see BOND OWNERS RISKS.
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3
THE 2017 BONDS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF,
OR CHARGE, OR LIEN, OR ENCUMBRANCE UPON, ANY OF THE PROPERTY OF THE CITY
OR ANY OF ITS INCOME OR RECEIPTS, EXCEPT THE NET REVENUES OF THE
ENTERPRISE AND AMOUNTS ON DEPOSIT IN THE FUNDS AND ACCOUNTS ESTABLISHED
UNDER THE INDENTURE AS AND TO THE EXTENT PROVIDED IN THE INDENTURE.
FINANCING PLAN
Refunding Plan
Prior Installment Sale Agreement and Prior Bonds. The Authority issued the Prior
Bonds in June 2007 in the original principal amount of $57,490,000 to finance capital
improvements to the Enterprise consisting generally of a new water recycling plant and
improvements to the collection system of the Enterprise and related effluent disposal and reuse.
The Prior Bonds are secured by installment payments made by the City under the Prior Installment
Sale Agreement.
The 2007 Bonds are currently outstanding in the principal amount of $53,540,000, of which
$38,765,000 (the Refunded Prior Bonds) will be redeemed and defeased, on a current basis,
on ____________ 1, 2017 (the Redemption Date), at a redemption price equal to the principal
amount thereof, together with interest coming due and payable on the redemption date, without
premium. The Refunded Prior Bonds are further described below:
The remaining Prior Bonds, in an outstanding principal amount of $14,775,000 (the Non-
Refunded Prior Bonds), will remain outstanding following the Closing Date and will continue to
be secured by the payment by the City of installment payments (the Installment Payments)
under the Prior Installment Sale Agreement.
In order to accomplish the refinancing plan, a portion of the net proceeds of the 2017
Bonds, together with certain other funds on hand with respect to the Refunded Prior Bonds, will
be deposited in an escrow fund (the Escrow Fund) established under an Escrow Deposit and
Trust Agreement dated as of the Closing Date (the Escrow Agreement) between the City and
MUFG Union Bank, N.A., the trustee for the 2007 Bonds, as escrow agent (the Escrow Agent).
The Escrow Agent will hold all amounts on deposit in the Escrow Fund in cash, uninvested.
These funds will be sufficient to prepay a portion of the Prior Installment Sale Agreement on the
Closing Date, the prepayment of which will be used to redeem the Refunded Prior Bonds on the
Redemption Date and to defease the Refunded Prior Bonds on the Closing Date.
Amounts held in the Escrow Fund are not available to pay debt service on the 2017 Bonds.
258
4
Estimated Sources and Uses of Funds
The estimated sources and uses of funds relating to the 2017 Bonds are as follows:
Sources:
Principal Amount $
Plus Original Issue Premium / Less Original Issue Discount
Plus Funds Related to Refunded Prior Bonds
TOTAL SOURCES $
Uses:
Deposit to Escrow Fund [1] $
Deposit to Cost of Issuance Fund [2]
Underwriters Discount
TOTAL USES $
[1] Represents funds to be used to refund and defease the Refunded Prior Bonds. See Refunding
Plan above.
[2] Represents funds to be used to pay Costs of Issuance, which include legal fees, municipal advisors
fee, printing costs, rating agency fees, Bond Insurance Policy and Reserve Policy premiums, and
other expenses.
259
5
THE 2017 BONDS
This section provides summaries of the 2017 Bonds and certain provisions of the
Indenture. See APPENDIX A for a more complete summary of the Indenture. Capitalized terms
used but not defined in this section have the meanings given in APPENDIX A.
The 2017 Bonds are being issued by the City under a Resolution adopted by the City
Council of the City on _____________, 2017; Articles 10 (commencing with Section 53570) and
11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the California
Government Code; and the Indenture.
Bond Terms. The 2017 Bonds will be issued in fully registered form without coupons in
denominations of $5,000 or any integral multiple of $5,000, so long as no 2017 Bond has more
than one maturity date.
The 2017 Bonds will be dated as of their date of delivery, will mature on May 1 in each of
the years and in the amounts, and will bear interest at the rates, as set forth on the inside cover
page of this Official Statement.
Payments. Interest on the 2017 Bonds will be payable on November 1 and May 1 of each
year to maturity, beginning November 1, 2017 (each an Interest Payment Date).
Interest on the 2017 Bonds will be payable on each Interest Payment Date to the person
whose name appears on the Bond Registration Books as the Owner thereof as of the Record
Date immediately preceding each such Interest Payment Date, such interest to be paid on such
Interest Payment Date by check or, at the option of any Owner of at least $1,000,000 aggregate
principal amount of 2017 Bonds and upon written notice received by the Trustee prior to the
Record Date, by wire transfer, at the Owner's address as it appears on the Bond Registration
Books or to such account as has been identified by the Owner in the notice requesting payment
by wire transfer.
Principal of and premium (if any) on any 2017 Bond will be paid upon presentation and
surrender thereof at the Trust Office of the Trustee.
Both the principal of and interest and premium (if any) on the Bonds will be payable in
lawful money of the United States of America.
However, as long as Cede & Co. is the registered owner of the 2017 Bonds, as described
below, payments of the principal of, premium, if any, and interest on the 2017 Bonds will be made
directly to DTC, or its nominee, Cede & Co.
Calculation of Interest. Interest on the 2017 Bonds will be computed on the basis of a
year consisting of 360 days and twelve 30-day months.
Each 2017 Bond will bear interest from the Interest Payment Date next preceding the
authentication thereof, unless
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6
(a) it is authenticated after a Record Date and on or before the following Interest
Payment Date, in which event it will bear interest from such Interest Payment Date; or
(b) it is authenticated on or before October 15, 2017, in which event it will bear
interest from its date of delivery;
provided, however, that if, as of the date of authentication of any 2017 Bond, interest thereon is
in default, such 2017 Bond will bear interest from the Interest Payment Date to which interest has
previously been paid or made available for payment thereon.
Any such interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Owner on such Record Date and will be paid to the person in whose name the
2017 Bond is registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof being given to the Owners not
less than 10 days prior to such Special Record Date.
Record Date. The Indenture defines the Record Date as the 15th calendar day of the
month immediately preceding an Interest Payment Date.
Book-Entry Only System. The 2017 Bonds will be registered in the name of Cede & Co.,
as nominee of the Depository Trust Company (DTC), New York, New York, as the initial
securities depository for the 2017 Bonds. Ownership interests in the 2017 Bonds may be
purchased in book-entry form only. Purchasers of the 2017 Bonds will not receive physical bonds
representing their ownership interests in the 2017 Bonds purchased.
Principal and interest payments with respect to the 2017 Bonds are payable directly to
DTC by the Trustee. Upon receipt of payments of principal and interest, DTC will in turn distribute
such payments to the beneficial owners of the 2017 Bonds. See APPENDIX F DTC and the
Book-Entry Only System.
So long as the 2017 Bonds are registered in the name of Cede & Co., as nominee of DTC,
references in this Official Statement to the owners mean Cede & Co., and not the purchasers or
Beneficial Owners of the 2017 Bonds. See APPENDIX F DTC and the Book-Entry Only
System.
Redemption
Optional Redemption. The 2017 Bonds maturing on or after May 1, 20___, are subject
to redemption prior to their respective stated maturities, from moneys deposited in the Optional
Redemption Account under the Indenture or from any other source of available funds, at the option
of the City, in whole on any date, or in part by such maturities as are selected by the City (or, if
the City fails to designate such maturities, then in inverse order of maturity) and by lot within a
maturity on any date, on or after May 1, 20___, at a redemption price equal to the principal amount
of 2017 Bonds called for redemption, without premium, together with accrued interest to the date
fixed for redemption.
Mandatory Sinking Fund Redemption. The 2017 Bonds maturing on May 1, 20___, are
also subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking
Account Payments deposited in the Term Bonds Sinking Account under the Indenture, on each
May 1 on or after May 1, 20____, at a redemption price equal to the principal amount thereof and
interest accrued thereon to the date fixed for redemption, without premium, as set forth below.
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20__ Term Bond
Sinking Fund
Redemption Date
(May 1) Sinking Payments
$
(maturity)
Selection of Bonds for Redemption. Whenever provision is made in the Indenture for
the redemption of less than all of the 2017 Bonds or any given portion thereof, and unless
otherwise specified in the Indenture, the Trustee will select the 2017 Bonds to be redeemed from
all 2017 Bonds of or such given portion thereof not previously called for redemption, in inverse
order of maturity or, at the election of the City evidenced by a Certificate of the City filed with the
Trustee, on a pro rata basis among maturities, and by lot in any manner which the Trustee in its
sole discretion deems appropriate and fair.
However, while the 2017 Bonds are subject to DTCs book-entry system, the Trustee will
be required to give notice of redemption only to DTC as provided in the letter of representations
executed by the City and received and accepted by DTC. DTC and the Participants will have sole
responsibility for providing any such notice of redemption to the beneficial owners of the 2017
Bonds to be redeemed. Any failure of DTC to notify any Participant, or any failure of Participants
to notify the Beneficial Owner of any 2017 Bonds to be redeemed, of a notice of redemption or its
content or effect will not affect the validity of the notice of redemption, or alter the effect of
redemption set forth in the Indenture.
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Selection of Bonds for Partial Redemption. Upon surrender of any 2017 Bond
redeemed in part only, the City will execute and the Trustee will authenticate and deliver to the
Owner thereof, at the expense of the City, a new 2017 Bond or 2017 Bonds of authorized
denominations, and of the same maturity, equal in aggregate principal amount to the unredeemed
portion of the 2017 Bond surrendered.
Bond Registration Books. The Trustee will keep or cause to be kept at its Trust Office
sufficient books for the registration and transfer of the 2017 Bonds, which will at all times during
regular business hours be open to inspection by the City; and, upon presentation for such
purpose, the Trustee will, under such reasonable regulations as it may prescribe, register or
transfer or cause to be registered or transferred, on said books, 2017 Bonds as provided in the
Indenture.
Transfer of 2017 Bonds. Any 2017 Bond may, in accordance with its terms, be
transferred, upon the Bond Registration Books, by the person in whose name it is registered, in
person or by his duly authorized attorney, upon surrender of such 2017 Bond for cancellation,
endorsed or accompanied by delivery of a written instrument of transfer in a form acceptable to
the Trustee, duly executed. Every 2017 Bond so surrendered to the Trustee will be canceled by
it and destroyed.
Whenever any 2017 Bond will be surrendered for transfer, the City will execute and the
Trustee will thereupon authenticate and deliver to the transferee a new 2017 Bond or 2017 Bonds
of like maturity and aggregate principal amount of authorized denominations. The Trustee will
require the Owner requesting such transfer to pay any tax or other charge required to be paid with
respect to such transfer.
No 2017 Bond, the notice of redemption of which has been mailed pursuant to the
Indenture, will be subject to transfer pursuant to the Indenture. No transfer will be required during
the period established by the Trustee for the selection of 2017 Bonds for redemption.
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Exchange of 2017 Bonds. 2017 Bonds may be exchanged at the Trust Office of the
Trustee, for a like aggregate principal amount of 2017 Bonds of other authorized denominations
of the same maturity. The Trustee will require the Owner requesting such exchange to pay any
tax or other charge required to be paid with respect to such exchange.
No Bond, the notice of redemption of which has been mailed pursuant to the Indenture,
will be subject to exchange pursuant to the Indenture. No exchange of Bonds will be required
during the period established by the Trustee for the selection of Bonds for redemption.
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DEBT SERVICE SCHEDULE
Annual debt service on the 2017 Bonds and the Non-Refunded Prior Bonds is presented
below.
Total:
[1] The Non-Refunded Prior Bonds are payable from the Installment Payments under the Prior
Installment Sale Agreement on a parity with the payment of debt service on the 2017 Bonds. See
FINANCING PLAN Refunding Plan.
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SECURITY FOR THE 2017 BONDS
This section provides summaries of the security for the 2017 Bonds, and certain provisions
of the Indenture. See APPENDIX A for a more complete summary of the Indenture. Capitalized
terms used but not defined in this section have the meanings given in APPENDIX A.
Allgemein
Transfer and Pledge of Net Revenues. Under the Indenture, subject to the provisions
thereof regarding compensation to the Trustee, the 2017 Bonds, the Installment Payments and
any Parity Obligations will be secured by a first pledge of all of the Net Revenues.
In addition, the 2017 Bonds will be secured by a pledge of all of the moneys in all funds
and accounts held by the Trustee under the Indenture, including all amounts derived from the
investment of such moneys.
Such pledge will constitute a lien on the Net Revenues and such other moneys for the
payment of the principal of and interest and premium (if any) on the 2017 Bonds in accordance
with the terms of the Indenture.
The 2017 Bonds, the Installment Payments and any Parity Obligations will be equally
secured by a pledge, charge and lien upon the Net Revenues, without priority for number or date.
So long as any of the 2017 Bonds are Outstanding, the Net Revenues and such moneys will not
be used for any other purpose, except as set forth in the Indenture and in any Parity Obligations,
except that out of the Net Revenues, there may be apportioned such sums, for such purposes,
as are expressly permitted by the Indenture.
In consideration of the acceptance of the 2017 Bonds by those who hold the 2017 Bonds
from time to time, the Indenture will be deemed to be and will constitute a contract between the
City and the Owners from time to time of the 2017 Bonds and the covenants and agreements
therein set forth to be performed by or on behalf of the City will be for the equal and proportionate
benefit, security and protection of all Owners of the 2017 Bonds without preference, priority or
distinction as to security or otherwise of any of the 2017 Bonds over any of the others by reason
of the number or date thereof or the time of sale, execution and delivery thereof, or otherwise for
any cause whatsoever, except as expressly provided therein or in the Indenture.
The City hereby represents and warrants that it has not heretofore made a pledge of,
granted a lien on or security interest in, or made an assignment or sale of the Net Revenues that
ranks on a parity with or prior to the pledge granted under the Indenture, except to secure the
obligations disclosed herein that will be outstanding upon issuance of the 2017 Bonds. The City
also hereby represents and warrants that it has not described the Net Revenues in a Uniform
Commercial Code financing statement that will remain effective when the 2017 Bonds are issued,
except in connection with the foregoing pledges, assignments, liens, and security interests. The
City shall not hereafter make or suffer to exist any pledge or assignment of, lien on, or security
interest in the Net Revenues that ranks prior to or on a parity with the pledge granted hereunder,
or file any financing statement describing any such pledge, assignment, lien, or security interest,
except as expressly permitted under the Indenture.
Limited Obligation of the City. The principal or redemption price of and interest on the
2017 Bonds are payable solely from the Net Revenues, and the City is not obligated to pay the
2017 Bonds except from the Net Revenues. The general fund of the City is not liable, and the full
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faith and credit or taxing power of the City is not pledged, for the payment of the principal or
redemption price of and interest on the 2017 Bonds. The 2017 Bonds are not secured by a legal
or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or
any of its income or receipts, except the Net Revenues.
Net Revenues. The Indenture defines Net Revenues as, for any period, an amount
equal to all of the Gross Revenues received with respect to any period, minus the amount required
to pay all Operation and Maintenance Costs becoming payable with respect to such period.
Current Gross Revenues. The Indenture defines Current Gross Revenues as all
gross charges received for, and all other gross income and receipts derived by the City from, the
ownership and operation of the Enterprise or otherwise arising from the Enterprise, including but
not limited to investment earnings thereon; but excluding the proceeds of any ad valorem property
taxes levied for the purpose of paying general obligation bonds of the City relating to the
Enterprise, and the proceeds of any special assessments or special taxes levied upon real
property within any improvement district served by the City levied for the purpose of paying special
assessment bonds or special tax obligations of the City relating to the Enterprise.
(a) payments made under the DBO Contract relating to the operation of the Project,
(b) costs of electricity and other forms of energy supplied to the Enterprise,
(c) the reasonable expenses of management and repair and other costs and
expenses necessary to maintain and preserve the Enterprise in good repair and working
order, and
(d) the reasonable administrative costs of the City attributable to the operation and
maintenance of the Enterprise;
but in all cases excluding (i) debt service payable on obligations incurred by the City with respect
to the Enterprise including but not limited to the Installment Payments and any Parity Obligations,
(ii) depreciation, replacement and obsolescence charges or reserves therefor, and (iii)
amortization of intangibles or other bookkeeping entries of a similar nature.
Application of Revenues. The City has previously established the Revenue Fund to be
held by the City. All of the Gross Revenues will be deposited by the City, immediately upon
receipt, in the Revenue Fund. Upon receipt of Gross Revenues, the City will segregate such
amounts as are estimated to pay all Operation and Maintenance Costs for the period beginning
on such date and ending on the next anticipated date of receipt of Gross Revenues.
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Amounts remaining on deposit in the Revenue Fund are Net Revenues. All Net Revenues
will be held in trust by the City in the Revenue Fund for the benefit of the holder of the 2017 Bonds
and Parity Obligations.
Transfers of Net Revenues. On or before the 25th day of each month, commencing
October 25, 2017, the City shall withdraw from the Revenue Fund, after deducting the amounts
segregated to pay Operation and Maintenance Costs as described above, and take the following
actions:
(i) The City will transfer to the Trustee, for deposit in a special fund designated
as the "Bond Fund" which the Trustee has previously established with respect to the 2017
Bonds and which it will continue to maintain and hold in trust (and transfer on a parity to
such similar funds or accounts established for the payment of Parity Obligations such
amounts as are required for the payment thereof), an amount which, together with the
balance then on deposit in the Bond Fund, the Interest Account and the Principal Account
(other than amounts resulting from the prepayment of 2017 Bonds pursuant to Section __
and other than amounts required for payment of principal of or interest on any 2017 Bonds
which have matured or been called for redemption but which have not been presented for
payment), that is equal to 1/6th of the aggregate amount of interest amount coming due
and payable on the 2017 Bonds on the next succeeding Interest Payment Date and 1/12th
of the principal coming due and payable on the 2017 Bonds on the next succeeding
principal payment date, provided that any amounts on deposit in the Bond Fund
representing capitalized interest or on deposit in a similar fund created with respect to
Parity Obligations, as provided in the Parity Obligations, shall be credited against the Citys
obligation to make such deposits or transfers therein.
(ii) After making the payments, allocations and transfers described in the
paragraph above, (A) if the balance in the Reserve Account is less than the Reserve
Account Requirement, the notice of which has been given by the Trustee to the City, or
(B) if the balance in a bond reserve account established for any Parity Obligations is less
than the bond reserve requirement established for such Parity Obligations, or (C) if any
reserve surety bond for the Bonds or for any Parity Obligations has been drawn upon to
make delinquent payments, and notice of such deficiency has been given to the City, the
deficiency must be restored by transfers from the first moneys that become available in
the Revenue Fund to the Trustee for deposit in the Reserve Account and for deposit in
the bond reserve account established for such Parity Obligations to increase the amount
on deposit to the Reserve Account requirement for such Parity Obligations.
(iii) The City will pay all other amounts pledged and/or payable under Parity
Obligations and pledged or payable under the Indenture.
(iv) The City will pay all amounts when due and payable to any Subordinate
Debt.
Surplus/Release from Lien. Following all the transfers described in paragraphs (i)-(iv)
above, excess Net Revenues will be released from the lien of the Indenture and will be available
for any lawful purpose of the City.
Application of Net Revenues. On or before the Business Day preceding each Interest
Payment Date, the Trustee will transfer from the Bond Fund and deposit into the following
respective accounts (each of which the Trustee will establish and maintain within the Bond Fund),
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the following amounts, in the following order of priority, the requirements of each such account
(including the making up of any deficiencies in any such account resulting from lack of Net
Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied
before any transfer is made to any account subsequent in priority:
First: to the Interest Account, the aggregate amount of interest becoming due and
payable on the next succeeding Interest Payment Date on all Bonds then Outstanding.
Second: to the Principal Account, the aggregate amount of principal becoming due
and payable on the Outstanding Bonds on the next succeeding Interest Payment Date, if
any.
Third: to the Reserve Account, the aggregate amount of each prior withdrawal from
the Reserve Account for the purpose of making up a deficiency in the Interest Account or
Principal Account; provided that no deposit need be made into the Reserve Account so
long as the balance therein at least equals the Reserve Account Requirement.
Reserve Account
The Reserve Account will be maintained in an amount equal to the Reserve Account
Requirement, which is defined in the Indenture, as of any date of calculation, as $_________,
or the least of
(a) 50% of Maximum Annual Debt Service on the Bonds for the then-current or
every subsequent Bond Year,
(b) 125% of average Annual Debt Service on the Bonds for the then current or
every subsequent Bond Year, and
Application of Reserve Account. All amounts in the Reserve Account shall be used and
withdrawn by the Trustee solely for the purpose of (a) paying interest on or principal of the Bonds
when due and payable to the extent that moneys deposited in the Interest Account or Principal
Account, respectively, are not sufficient for such purpose, and (b) making the final payments of
principal of and interest on the Bonds. On the date on which all Bonds are retired under the
Indenture or provision made therefor pursuant to the provisions of the Indenture regarding
defeasance, all moneys then on deposit in the Reserve Account will be withdrawn by the Trustee
and paid to the City.
Cash amounts in the Reserve Account, if any, will be valued by the Trustee not less often
than semi-annually. If, on any date of computation, moneys and securities on deposit in the
Reserve Account are less than the Reserve Account Requirement (unless such deficiency is a
result of a transfer therefrom), the City covenants and agrees that it will, within 12 months thereof,
increase the amount therein to the Reserve Account Requirement. If such deficiency is a result
of a transfer therefrom, the City covenants and agrees that it will, within 24 months thereof,
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increase the amount therein to the Reserve Account Requirement. If, on any date of computation,
moneys and securities on deposit in the Reserve Account are in excess of the Reserve Account
Requirement, the Trustee shall withdraw such excess amount and transfer such amount to the
Interest Account.
Qualified Reserve Account Credit Instrument. The City will have the right at any time
to direct the Trustee to release funds from the Reserve Account, in whole or in part, by tendering
to the Trustee: (1) a Qualified Reserve Account Credit Instrument, and (2) an opinion of Bond
Counsel stating that such release will not, of itself, cause interest with respect to the Bonds to
become includable in gross income for purposes of federal income taxation. Upon tender of such
items to the Trustee, the Trustee shall transfer such funds from the Reserve Account to the City
for deposit by the City in the Bond Fund or, if permitted by an opinion of Bond Counsel to a
segregated account maintained by the City and used exclusively for the acquisition, construction
and installation of improvements to the Enterprise.
(a) has an assigned long-term credit rating that, at the time of the original issuance
of the Bonds, is A or higher from S&P or A2 or higher from Moodys, without regard to
modifiers;
(b) such letter of credit or surety bond has a term of at least 12 months;
(c) such letter of credit or surety bond has a stated amount at least equal to the
portion of the Reserve Account Requirement with respect to which funds are proposed to
be released pursuant to the Indenture; and
(d) the Trustee is authorized under such letter of credit or surety bond to draw
thereunder an amount equal to any deficiencies which may exist from time to time in the
Interest Account or the Principal Account for the purpose of making debt service payments
required under the Indenture.
Prior to the expiration of any Qualified Reserve Account Credit Instrument, the City will be
obligated either (a) to replace such Qualified Reserve Account Credit Instrument with a new
Qualified Reserve Account Credit Instrument, or (b) to remit or cause to be remitted to the Trustee
for deposit in the Reserve Account an amount of moneys equal to the Reserve Account
Requirement, to be derived from Net Revenues; provided, however, that if the City fails to replace
an expiring Qualified Reserve Account Credit Instrument or to deposit moneys equal to the
Reserve Account Requirement, the Trustee will draw on such Qualified Reserve Account Credit
Instrument before such expiration and deposit the proceeds of such draw in the Reserve Account.
See APPENDIX A for a more complete summary of the terms relating to the Reserve
Account.
Under the Indenture, the City has previously established a special fund called the Rate
Stabilization Fund, which is not pledged or intended to be security for the Bonds.
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From time to time, the City may deposit in the Rate Stabilization Fund from Current Gross
Revenues such amounts as the City may determine, provided that deposits for each Fiscal Year
may be made until (but not after) 180 days following the end of such Fiscal Year.
The City may withdraw amounts from the Rate Stabilization Fund only for transfer to the
Wastewater Fund for inclusion in Gross Revenues for any Fiscal Year, such withdrawals to be
made until (but not after) 180 days after the end of such Fiscal Year. All interest or other earnings
on deposits in the Rate Stabilization Fund shall be withdrawn therefrom and accounted for as
Gross Revenues.
(i) no deposit of Current Gross Revenues to the Rate Stabilization Fund may be
made to the extent that such Current Gross Revenues were included in an engineer's or
independent consultant's certificate submitted in accordance with the provisions of the
Indenture regarding the issuance of Parity Obligations and withdrawal of the Current
Gross Revenues to be deposited in the Rate Stabilization Fund from Gross Revenues
employed in rendering the parity test and
(ii) no deposit of Net Revenues may be made in the Rate Stabilization Fund to the
extent that such deposit would cause noncompliance with the rate covenant in any Fiscal
Year.
The Rate Stabilization Fund is not pledged to secure the payment of the Installment
Payments, the payments with respect to any Parity Obligations or the payment with respect to
any Subordinate Debt.
Rate Covenants
Sum Sufficient. Under the Indenture, the City covenants to fix, prescribe, revise and
collect rates, fees and charges for the Enterprise for each Fiscal Year as a whole for the services
and facilities furnished by the Enterprise during each Fiscal Year that are at least sufficient, after
making allowances for contingencies and error in the estimates, to yield Gross Revenues that are
sufficient to pay the following amounts:
(i) all current Operation and Maintenance Costs of the Enterprise for such
Fiscal Year;
(ii) Debt Service payments on the 2017 Bonds and on any Parity Obligations
as they become due and payable during such Fiscal Year, without preference or priority,
except to the extent such Debt Service payments are payable from the proceeds of the
2017 Bonds or Parity Obligations or from any other source of legally available funds of the
City that have been deposited with the Trustee for purposes prior to the commencement
of such Fiscal Year;
(iii) all payments required for compliance with the terms of the Indenture and
of the 2007 Installment Sale Agreement, including amounts required to replenish the
Reserve Account or to reimburse a draw on a Qualified Reserve Account Credit
Instrument; and
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(iv) all payments to meet any other obligations of the City that are charges,
liens or encumbrances upon, or payable from, the Gross Revenues.
Covenant Regarding Net Revenues. In addition, under the Indenture the City covenants
that it will fix, prescribe and collect rates, fees and charges for the services and facilities of the
Enterprise for each Fiscal Year so as to yield Net Revenues during such Fiscal Year equal to at
least 1.15 times the debt service payable on the 2017 Bonds, the Installment Payments and all
payments required with respect to all Parity Obligations in such Fiscal Year.
The City may make or permit to be made adjustments from time to time in such rates, fees
and charges and may make or permit to be made such classification thereof as it deems
necessary, but may not reduce or permit to be reduced such rates, fees and charges below those
then in effect unless the Gross Revenues from such reduced rates, fees and charges will at all
times be sufficient to meet the requirements of the rate covenant.
Parity Obligations
Parity Obligations. The City further covenants that it will not issue or incur any Parity
Obligations unless the following conditions are met:
(i) The City is not in default under the terms of the Indenture or any agreements
relating to then existing Parity Obligations.
(ii) Either:
Either or both of the following items may be added to such Net Revenues for the
purpose of applying this provision:
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and extensions, all as shown by the certificate or opinion of a qualified independent
consultant employed by the City.
(2) An allowance for any increase in the charges made for service from
the Enterprise which has become effective prior to the incurring of such Parity
Obligations but which, during all or any part of such Fiscal Year or the 12-month
period out of the most recent 18 months selected by the City ending not more than
60 days prior to the adoption of the resolution pursuant to which such Parity
Obligations are authorized to be issued or incurred, was not in effect, in an amount
equal to 100% of the amount by which the Net Revenues would have been
increased if such increase in charges had been in effect during the whole of such
Fiscal Year or the 12-month period out of the most recent 18 months selected by
the City ending not more than 60 days prior to the adoption of the resolution
pursuant to which such Parity Obligations are authorized to be issued or incurred,
as shown by the certificate or opinion of a qualified independent consultant
employed by the City;
oder
Either or both of the following items may be added to such Net Revenues for the
purpose of applying this provision:
Subordinate Debt. There will be no limitations on the ability of the City to issue or incur
Subordinate Debt so long as the City is not in default under the terms of the Indenture, any
agreements relating to then existing Parity Obligations or any agreement relating to then-existing
Subordinate Debt.
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Eminent Domain Proceeds
Any amounts received as awards as a result of the taking of all or any part of the Enterprise
by the lawful exercise of eminent domain, at the election of the City (evidenced by a Written
Certificate of the City filed with the Trustee and the City) will either (a) be used for the lease,
acquisition or construction of improvements or extensions of the Enterprise in replacement of the
condemned portions thereof, or (b) be applied pro rata as a credit against the Citys Obligation to
make payments with respect to the 2017 Bonds and any Parity Obligations or be applied to
redeem the Bonds pro rata with any Parity Obligations, if applicable.
Public Liability and Property Damage Insurance. Under the Indenture, the City will
maintain or cause to be maintained, so long as any 2017 Bonds or Parity Obligations remain
outstanding, but only if and to the extent available at reasonable cost from reputable insurers, a
standard comprehensive general insurance policy or policies in protection of the City, the City and
their respective members, officers, agents, assignees and employees. Said policy or policies
shall provide for indemnification of said parties against direct or contingent loss or liability for
damages for bodily and personal injury, death or property damage occasioned by reason of the
operation of the Enterprise.
Said policy or policies shall provide coverage in such liability amounts and shall be subject
to such deductibles as shall be customary with respect to works and property of a like character.
Such liability insurance may be maintained as part of or in conjunction with any other liability
insurance coverage carried by the City, and may be maintained in whole or in part in the form of
self-insurance by the City, in the form of the participation by the City in a joint powers agency or
other program providing pooled insurance.
Casualty Insurance. Under the Indenture, the City will procure and maintain or cause to
be procured and maintained, so long as any 2017 Bonds or Parity Obligations remain outstanding,
but only in the event and to the extent available from reputable insurers at reasonable cost,
casualty insurance against loss or damage to any improvements constituting any part of the
Enterprise, covering such hazards as are customarily covered with respect to works and property
of like character.
Such insurance may be subject to deductible clauses which are customary with respect
to works and property of a like character. Such insurance may be maintained as part of or in
conjunction with any other casualty insurance coverage carried by the City and may be
maintained, in whole or in part, in the form of self-insurance by the City, subject to the provisions
of the Indenture described below, or in the form of the participation by the City in a joint powers
agency or other program providing pooled insurance.
All amounts collected from insurance against accident to or destruction of any portion of
the Enterprise will be used to repair, rebuild or replace such damaged or destroyed portion of the
Enterprise and, to the extent not so applied or to the extent the City determines it is not
economically feasible or in the best interests of the City to so repair, rebuild or replace such
damaged or destroyed portion of the Enterprise, will be applied pro rata to payments on the 2017
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Bonds and Parity Obligations or be applied to redeem the Bonds pro rata with any Parity
Obligations, if applicable.
Insurance Net proceeds; Form of Policies. The City will pay or cause to be paid when
due the premiums for all insurance policies required by the Indenture.
The City will annually, on or before November 1, deliver to the Trustee a certificate to the
effect that the City has complied with the requirements of the Indenture to maintain insurance
described above.
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MUNICIPAL BOND INSURANCE
[TO COME]
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THE ENTERPRISE
General. The City was incorporated in 1914. Wastewater services are provided to all
developed areas within the City's boundaries. The existing Enterprise consists of the collection
system, the Water Recycling Plant, and the recycled water distribution system.
The table below summarizes the total length of each size of sewer in the collection system.
The majority of the sewer lines are made up of vitrified clay pipe. Other pipe materials in the
system include PVC and cast iron. The pipes range from recently constructed to about 60 years
old.
The small pipes (typically 4 inches in diameter) that connect homes and businesses to the
collection system sewer mains are called service laterals. The service laterals located from the
connection to the sewer main to the building being served are maintained by the private property
owner, who are responsible for their maintenance and repair. The City has no responsibility for
the service laterals.
Water Recycling Plant. A portion of the proceeds of the Prior Bonds were used to finance
a portion of the costs of the Citys water recycling plant (the Water Recycling Plant). The Water
Recycling Plant is a tertiary plant located west of E Street at the end of River Street adjacent to
the confluence of the Santa Clara River and Sespe Creek. The plant is protected by a 100-year
storm flood control levee.
Plant operations are under a multi-year contract with American Water Enterprises, Inc.
(see Management below), which is responsible to operate the plant in conformance with the
Waste Discharge Requirements permit and the Title 22 California Health Department permit
within the capability of the plant.
The primary technology is Membrane Bio Reactor and produces water to full Title 22
Recycled Water Standards. The permitted capacity of the Water Recycling Plant is 1.8 MGD1 with
some components, such as the headworks pump station that would be difficult to expand while in
continuous daily use, were constructed with a 2.4 MGD capacity. Current flow is 0.9 MGD.
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The plant discharges its treated water to on-site percolation ponds; there is no river
discharge. In high groundwater situations where the percolation ponds may not perform as
intended, the plant has the capability to pump its entire volume of treated water to an off-site
underground percolation facility. The facility is located under a school sports field near the
geographical center of the City and at an elevation 45 feet higher than the plant site. This
capability has been tested, but never required in the 9 years the plant has been in operation.
The site was laid out with space reserved to construct the additional tankage needed to
expand treatment capacity to 2.4 MGD. The primary plant components are a headworks pump
station, solids screens, flow equalization basin, biological reaction chambers, membranes,
ultraviolet disinfection, biosolids dewatering with a screw press, odor control system with a
biofilter, standby power generation for power outages, finished (recycled) water holding tank and
finished (recycled) water pump station. The plant also includes a mechanical maintenance
building and office/laboratory building.
Recycled Water Distribution System. A portion of the proceeds of the Prior Bonds was
used in conjunction with a State grant to finance a portion of the costs of the new recycled water
distribution system, which consists of approximately 5 miles of ductile iron and PVC pipes ranging
in size from 18 inches to 6 inches. The pipes to carry the recycled water back into the community
where it is used to irrigate turf and other landscaping that would otherwise be an added demand
on the Citys potable water system.
Usage varies with the season, over the last 24 months usage has been 17% of the daily
recycled water production. The balance of the daily production is placed into the on-site
percolation ponds for groundwater discharge.
Future Growth. The City is looking to expand the distribution system and recycled water
uses as the City grows in the future. New development projects within a reasonable distance of
the existing distribution system are routinely conditioned to extend the distribution system and
use recycled water for landscape irrigation as part of their land use entitlement.
Insurance
The City maintains property insurance on major components of the Enterprise, including
the Water Recycling Plant building, pipes, equipment, recycled water distribution system and
personal property ($7,945,128 coverage). The City, including the Enterprise, is self-insured for
general liability through the California Joint Powers Authority (JPIA) Risk Pool for up to
$50,000,000 per occurrence. The City also has statutory workers' compensation coverage
through the California Joint Powers Authority (JPIA) Risk Pool.
Management
Water Recycling Plant. The City's Public Works Department is responsible for the
management and operation of the Enterprise. The City Manager manages the City's operations
contract with American Water Enterprises, Inc. (AWE) under a 20-year contract (11 years
remain) and is the person with management and financial oversight and is responsible for capital
project development, rate setting, and strategic planning.
AWE staffs the treatment plant eight hours a day Monday through Friday and four hours
on Saturday and Sunday. AWE's operations and maintenance staff consists of one plant
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manager, five operators and one laboratory technician. Operators perform daily operations,
sampling, monitoring, and preventive maintenance tasks.
Critical operations are monitored and alarmed through mechanical and electronic means.
If an alarm condition occurs during off duty hours, the on-call operator is dispatched.
When expertise beyond that of staff is required, contractors are used. Collection system
cleaning and video inspection is provided by AWE staff in conformance with regulatory
requirements (100% cleaned and video inspected every 5 years).
The laboratory technician performs data collection and many of the routine laboratory
analysis needed for daily operational control of the plant. The majority of the tests required in the
operating permit are being performed by outside professional laboratories. The plant manager is
responsible for records keeping associated with laboratory data.
American Water is responsible for all maintenance and repair costs of the plant. It has
provided a guaranteed maximum electricity usage per season of the year per year. The cost of
any usage above this value is borne by AWE.
The City provides wastewater collection, transmission, treatment, and disposal services
for the developed area within the City limits. The service area of the Enterprise covers
approximately 2,111 acres (3.25 square miles) and serves a population of approximately 15,247.
The Enterprise includes over 4,386 sewer customer accounts, of which 4,158 (approximately
95%) are residential customers and the remaining 228 accounts are commercial (retail/office),
schools, churches and industrial users.
ERUs in the City's service area over the next five years are expected to increase at a
similar rate as in recent years. However, for financial planning purposes, the City has used a more
conservative growth projection. The projected number of residential, commercial, and industrial
customer ERUs incorporated for financial planning purposes is shown in the table below.
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Estimated Future Residential, Commercial, and Industrial Customers
The ten largest customers of the Enterprise for the year ended June 30, 2016, were
responsible for approximately 13.9% of Enterprise Gross Revenues during such year.
For the last 20-years or more, most new sewage collection system construction in the City
has been conducted as part of extending the system to serve new areas of development.
Construction of new sewage collection system sewers is the responsibility of the development
project (developer), although it is the City's policy to reimburse developers for the construction of
trunk sewers. The trunk sewer construction reimbursements occur through the City's Sewer
Development Impact Fee Program and Conditions of Development.
To provide for the orderly and logical expansion of the wastewater collection system and
ensure that the collection system would have sufficient capacity to convey existing as well as
future sewage flows, the City completed three reports:
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In 2005, in order to provide for the upgrade and expansion of the wastewater treatment
system that has now been constructed, the City completed the WRPR. The WRPR serves as the
guideline for the City's wastewater treatment and treated effluent disposal and reuse facilities for
the next 20+ years to build-out within the City's sphere of influence.
In 2006, in order to provide for the efficient and reliable disposal and reuse of the treated
effluent, the City completed the PIEDMP. The PIEDMP supplements the WRPR as the guideline
for the disposal and reuse of the City's treated effluent. That report is currently being updated to
cover already constructed parts and plan for the future.
The SSMP included an assessment of the collection system that includes 200,000 feet of
6-inch through 30-inch diameter pipes. The SSMP serves as the guideline for the City's approval
of sewer plans for new developments for the build-out within the City's sphere of influence. The
SSMP includes projects recommended with suggested alignments and estimated facility costs,
along with proposed facility, needs schedules. The near-term projects recommended in the SSMP
are included in the City's multi-year capital improvement plan. The City has also planned for other
capital improvements to address structural and maintenance issues in the existing sewage
collection system.
Regulatory Compliance
Regulations with respect to sanitary sewer systems pertain to the prohibition against
overflows or bypasses of untreated wastewater. In general, such overflows and bypasses that
reach the surface waters of the United States are violations of the Federal Clean Water Act (CWA)
and subject to fines by the State Water Resources Control Board (SWRCB) and the Regional
Water Quality Control Board-Los Angeles (RWQCB-LA), which have the authority to enforce the
provisions of the CWA in California. The City falls under the jurisdiction of the RWQCB-LA.
Many sewer systems experience sanitary sewer overflows (SSOs) to varying degrees,
particularly during wet weather periods due to infiltration and inflow of extraneous groundwater
and storm water entering pipe and manhole defects and illegal drainage connections. SSOs have
been recognized as a national problem, and over the past years, the EPA has conducted a
national "policy dialog" to develop consensus on a national policy on SSOs that can be formulated
into regulations. The policy dialog has been conducted by the SSO Advisory Subcommittee to the
USEPA Urban Wet Weather Flows Federal Advisory Committee, formed under the Federal
Advisory Committee Act.
The USEPA has formulated issue papers that form the basis for the national SSO policy.
Among other provisions, the proposed policy includes standards for Capacity Management,
Operations, and Maintenance (CMOM) programs to ensure that sewerage agencies are
implementing proper management, operational procedures, and preventive maintenance of their
systems to prevent avoidable SSOs. While not yet specifically spelled out in the EPA policy
documents, the interpretation of an "avoidable" wet weather SSO would be one that resulted due
to inadequate capacity in the system to handle the flows from a storm of a specified recurrence
frequency. (For example, the flow for a five-year design storm would be the peak flow rate that
would be exceeded in the system no more frequently that once in five years.) Therefore, to comply
with regulatory requirements with respect to SSOs, the City must follow proper CMOM Practices
and procedures, and ensure that its sewer facilities are designed to handle an appropriate design
storm event.
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The City currently requires that trunk sewer facilities be designed to convey the peak flows
from a 10-year frequency design storm without surcharge. The City has utilized flow monitoring
and land use, together with a computerized hydraulic model of its sewage collection system, to
identify existing pipe segments that currently or in the future do not have sufficient capacity to
handle a 10-year frequency design storm. The need to provide sufficient capacity for new
collection sewers, or for existing collection sewers that are currently or in the future will be deficient
in capacity, is one of the driving forces of the City's capital improvement plan.
While the City does not experience significant wet weather problems, there are some
areas of the system that are subject to large amounts of infiltration and inflow and potentially
vulnerable to overflows during large storm events. Therefore, the City has identified the need for
sewer rehabilitation in these areas to reduce infiltration and inflow, avoid overflows, and reduce
cost to treat and dispose of excess wastewater.
The RWQCB-LA establishes treatment levels based on the ultimate disposal. Treated
wastewater discharged to the percolation ponds must meet discharge requirements as defined in
the Waste Discharge Requirements (WDRs) established by the RWQCB-LA.
The water quality requirements for WDRs are based on the following:
Water Quality Control Plan - Los Angeles Region (No. 4) - 1994 as amended on
January 27, 1997 (Basin Plan)
The City's new Water Recycling Plant utilizes Membrane Bio Reactor wastewater
treatment technology as the primary treatment process to obtain the water quality and
environmental improvement goals of the City. This treatment process is designed to allow the City
to achieve a treatment level that is compliant with the City's WDRs for treated effluent from the
Water Recycling Plant. Disposal of the treated wastewater effluent is by in-city conventional
overhead spray irrigation (OSI), subsurface drip irrigation (SDI), and percolation.
The Water Recycling Plant meets the City's projected wastewater flows through build-out.
The City built the WRP utilizing a phased construction program to reach the ultimate capacity
design. Initially, certain basic systems were installed providing a capacity of 1.8 MGD. Original
projections anticipated this would provide capacity until at least 2018; however, the national
housing crash in 2008 slowed City growth projections and the 1.8 MGD capacity will last longer.
When needed in the future the WRP and related disposal system will require an additional
expansion to meet the full build out capacity of 2.4 MGD. At this time, the future expansion is
envisioned to be relatively minor and limited to a 33 percent expansion of the aeration basin,
Membrane Bio Reactor equipment, and pumping facilities. Major reconstruction of process
equipment is not anticipated.
The sewer service charge, the sewer connection fee, and other miscellaneous fees and
charges are established by ordinance adopted by a 2/3rds majority vote of the City Council and
become effective after a posting period of 30 days. Prior to rate increases being implemented
they must be presented to the rate payers through a Proposition 218 protest hearing process.
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This process was most recently completed for the rate increases for 2017 through 2021. See
"CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS
Utility rates and charges are reviewed as part of the City's budgetary process. Once results
of operations for the various enterprise funds are known, a determination is made as to whether
it is appropriate for rate adjustments to be made. The timing of rate adjustments may or may not
coincide with the budget adoption process, but the implications of any rate adjustments are
considered in budget development. The process used to set rates follows State regulations
concerning the operation of local government utilities. Typically, several public hearings are held
to review staff studies and recommendations concerning rate adjustments before final adoption
of rate changes. Annually, a compilation of charges for all City services is done to produce a
comprehensive fee schedule for the City.
Prior to June 1 each year, the City Finance Director submits to the City Council a proposed
preliminary budget for the next fiscal year. The City's fiscal year is July 1 through June 30. The
proposed budget includes all funds, including the Wastewater Fund and capital projects. The
proposed budget includes expected expenditures (or expenses, as appropriate) and the means
of financing them. Typically, extensive City Council review occurs during May, and public hearings
are conducted in June to obtain citizen comments. The preliminary budget is legally adopted prior
to July 1 with the final budget adopted after the State adopts its annual budget in August of each
year.
In each year, total expenditures of any fund may not exceed total appropriations for that
fund. However, the City Council may legally amend the budget at any time during the fiscal year
by the adoption of supplemental appropriations and transfers within the programs.
Current Rates. The City currently recovers the cost of Enterprise operation, maintenance
and replacement and capital expansion through a user fee system plus federal and State grants.
The three primary components of the user fees currently imposed by the City are:
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required by the Environmental Protection Agency. At this time the City has an informal IPP
and does not have a special charge for this service. If in the future, the RWQCB-LA
requires an IPP the City will institute this fee.
The following tables show recent historical rate data for the Enterprise:
Fiscal Year (June 30) Sewer Rate ($ per ERU) Sewer Rate Revenues
2013 $84.46 $5,097,321
2014 $86.99 5,367,294
2015 $89.60 5,535,047
2016 $92.29 5,722,139
2017 [1] $92.29 6,162,497
[1] Fiscal Year 2017 based on Adopted City Budget
Source: City of Fillmore.
Rate changes are enacted by the City Council based upon the recommendations of the
City Finance Director. On December 13, 2016, the City Council adopted a schedule of maximum
rate increases to cover Fiscal Years 2017 through 2021. The changes to the City's wastewater
rate structure were effective February 9, 2017. This five-year rate structure is set forth in the table
below.
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Current Wastewater Rate Structure
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Comparative Sewer Rates and Charges. The tables below present a comparison of the
City's current average monthly residential sewer charge and connection fee with other nearby
communities.
Sewer Rate
Community ($/mo)
Ventura County Waterworks Dist. 1-Moorpark $26.00
Ventura County Waterworks Dist. 16-Piru 71.38
Fillmore, City of 103.36
Triunfo Sanitary District 47.41
Santa Paula, City of 77.21
Ojai Valley Sanitation 57.91
Thousand Oaks Municipal Sewer District 28.78
Camarillo Sanitary District 51.04
Source: City of Fillmore
Connection Charge
Community per ERU
Fillmore, City of $12,377
Triunfo Sanitation District 12,525
Thousand Oaks Municipal Sewer District 7,893
Ventura, City of 4,761
Ojai Valley Sanitary District 16,024
Santa Paula, City of 3,546
Simi Valley, City of 4,374
Ventura County Waterworks Dist. 1-Moorpark 4,985
Oxnard, City of 5,236
Camarillo Sanitary District 4,317
Camrosa Water District 4,675
Ventura County Waterworks Dist. 16-Piru 4,570
Source: City of Fillmore
Billing and collection services for the sewer service charge are provided by the City's
Finance Department. All customers are billed monthly for 30 days of service. The Finance
Department prepares a single bill covering charges for water and sewer service. As payments are
received, they are credited to customer accounts and to the cash balances of the appropriate
funds. Cash is credited first to the Water Fund and then to the Sewer Fund. Payments received
for prior billing periods are credited first to the amounts in arrears and then to current amounts for
each utility in the order stated previously.
When a customer account is in arrears for the length of one billing period (30 days), a
delinquency notice is sent. The customer is given 10 days from date of delinquency notice to
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make his account current. If no payment is received by the 11th day of the date of the delinquency
notice, a hang tag is created and hung on the customer's door, giving the customer an additional
48 hours to make his account current and avoid water service turn off. If no payment is made
within this additional 48-hour time period, water service is disconnected. Any payment received
after the shutoff date includes a charge for service restoration. As payment of all charges is a
condition for continuation of water service, the City experiences very few bad debts.
Financial Statements
The financial section of the City's Comprehensive Annual Financial Report for the fiscal
year ended June 30, 2016, which include the financial results of the Enterprise, are attached
hereto as APPENDIX B.
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Historical Revenues and Expenditures
The following table presents Enterprise revenues and expenditures for each of the fiscal
years ended June 30, 2012, through June 30, 2016:
Revenue Available for Debt Service $3,656,098 $3,971,969 $4,166,386 $3,996,944 $4,239,354
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Source: City of Fillmore
Operation and maintenance expense excludes depreciation and capital outlay.
Includes American Water Enterprises, Inc. water recycling plant operating costs.
Fiscal Year 2016 excludes $355,219 transferred to the Capital Reserve Fund.
Fiscal Year 2015 includes $100,000 from the Rate Stabilization Fund not transferred by a journal entry.
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Projection of Revenues, Expenditures and Debt Service Coverage
The following table presents a projection of Enterprise revenues and expenditures for each
of the six fiscal years ending June 30, 2017, through June 30, 2021, including debt service
coverage for the Bonds.
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No assurances are provided by the City as to the certainty of the projected Enterprise
revenues shown on the foregoing tables. Actual revenues may be higher or lower than what has
been projected.
The City has estimated that the share of the Citys overall pension liability allocable to the
Enterprise is approximately 6.33%, or $282,496 based on the total Fiscal Year 2015-16 City
pension liability of $4,462,812. The City allocates monthly pension expenses to the various funds
based on current budget.
The Citys OPEB liability is minimal because the City generally does not pay post-
employment benefits once an employee is retired (with the exception of the two grandfathered
employees).
Investments
The City has an adopted investment policy (the "Investment Policy"), last reviewed and
adopted in November 2016, 2005, to cover all funds and investment activities of the City, except
investments governed by bond indentures and employee deferred compensation funds.
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CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES
Article XIIIB
Article XIIIB of the State Constitution limits the annual appropriations of the State and of
any district, county, school district, corporation or other political subdivision of the State to the
level of appropriations of the particular governmental entity for the prior fiscal year, as adjusted
for changes in the cost of living and population. The base year for establishing such
appropriation limit is the 1978-1979 State fiscal year and the limit is to be adjusted annually to
reflect changes in population and consumer prices. Adjustments in the appropriations limit of an
entity may also be made if: (a) the financial responsibility for a service is transferred to another
public entity or to a private entity; (b) the financial source for the provision of services is transferred
from taxes to other revenues; or (c) the voters of the entity approve a change in the limit for a
period of time not to exceed four years.
Appropriations subject to Article XIIIB generally include the proceeds of taxes levied by
the State or other entity of local government, exclusive of certain State subventions and refunds
of taxes. Proceeds of taxes include, but are not limited to, all tax revenues and the proceeds to
an entity of government from: (i) regulatory licenses, user charges, and user fees (but only to the
extent that such proceeds exceed the cost of providing the service or regulation); and (ii) the
investment of tax revenues. Article XIIIB includes a requirement that if an entitys revenues in
any year exceed the amounts permitted to be spent, the excess would have to be returned by
revising tax rates or fee schedules over the subsequent two years.
Certain expenditures are excluded from the appropriations limit, including payments of
indebtedness existing or legally authorized as of January 1, 1979, or of bonded indebtedness
thereafter approved by the voters and payments required to comply with court or federal
mandates which without discretion require an expenditure for additional services or which
unavoidably make the provision of existing services more costly.
The City is of the opinion that its charges for wastewater service do not exceed the costs
it reasonably bears in providing such services and therefore are not subject to the limits of
Article XIIIB.
Proposition 218
General. An initiative measure entitled the Right to Vote on Taxes Act (the Initiative)
was approved by the voters of the State at the November 5, 1996 general election. The Initiative
added Articles XIIIC and XIIID to the State Constitution. According to the Title and Summary of
the Initiative prepared by the State Attorney General, the Initiative limits the authority of local
governments to impose taxes and property-related assessments, fees and charges.
Article XIIID. Article XIIID defines the terms fee and charge to mean any levy other
than an ad valorem tax, a special tax or an assessment, imposed by an agency upon a parcel or
upon a person as an incident of property ownership, including user fees or charges for a
property-related service. A property-related service is defined as a public service having a
direct relationship to property ownership. Article XIIID further provides that reliance by an agency
on any parcel map (including an assessors parcel map) may be considered a significant factor in
determining whether a fee or charge is imposed as an incident of property ownership.
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Article XIIID requires that any agency imposing or increasing any property-related fee or
charge must provide written notice thereof to the record owner of each identified parcel upon
which such fee or charge is to be imposed and must conduct a public hearing with respect thereto.
The proposed fee or charge may not be imposed or increased if a majority of owners of the
identified parcels file written protests against it. As a result, if and to the extent that a fee or charge
imposed by a local government for water or wastewater service is ultimately determined to be a
fee or charge as defined in Article XIIID, the local governments ability to increase such fee or
charge may be limited by a majority protest.
In addition, Article XIIID includes a number of limitations applicable to existing fees and
charges including provisions to the effect that: (a) revenues derived from the fee or charge may
not exceed the funds required to provide the property-related service; (b) such revenues may not
be used for any purpose other than that for which the fee or charge was imposed; (c) the amount
of a fee or charge imposed upon any parcel or person as an incident of property ownership may
not exceed the proportional cost of the service attributable to the parcel; and (d) no such fee or
charge may be imposed for a service unless that service is actually used by, or immediately
available to, the owner of the property in question. Property-related fees or charges based on
potential or future use of a service are not permitted.
Based upon the California Court of Appeal decision in Howard Jarvis Taxpayers
Association v. City of Los Angeles, 85 Cal. App. 4th 79 (2000), which was denied review by the
State Supreme Court, it was generally believed that Article XIIID did not apply to charges for water
services that are primarily based on the amount consumed (i.e., metered water rates), which
had been held to be commodity charges related to consumption of the service, not property
ownership. The State Supreme Court stated in Bighorn-Desert View Water Agency v. Verjil, 39
Cal. 4th 205 (2006) (the Bighorn Case), however, that fees for ongoing water service through
an existing connection were property-related fees and charges. The Supreme Court specifically
disapproved the holding in Howard Jarvis Taxpayers Association v. City of Los Angeles that
metered water rates are not subject to Proposition 218. The City has complied with the notice
and public hearing requirements of Article XIIID in determining whether to change Wastewater
Enterprise rates and charges since its first post-Bighorn Case rate increase in 2009.
Article XIIIC. Article XIIIC provides that the initiative power may not be prohibited or
otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge and
that the power of initiative to affect local taxes, assessments, fees and charges is applicable to all
local governments. Article XIIIC does not define the terms local tax, assessment, fee or
charge, so it was unclear whether the definitions set forth in Article XIIID referred to above are
applicable to Article XIIIC. Moreover, the provisions of Article XIIIC are not expressly limited to
local taxes, assessments, fees and charges imposed after November 6, 1996. On July 24, 2006,
the State Supreme Court held in the Bighorn Case that the provisions of Article XIIIC included
rates and fees charged for domestic water use. In the decision, the Court noted that the decision
did not address whether an initiative to reduce fees and charges could override statutory rate
setting obligations. In any event, the City does not believe that Article XIIIC grants to the voters
within the City the power to repeal or reduce rates and charges for the wastewater service
provided by the Wastewater Enterprise in a manner which would be inconsistent with the
contractual obligations of the City. However, there can be no assurance of the availability of
particular remedies adequate to protect the Beneficial Owners of the Bonds. Remedies available
to Beneficial Owners of the Bonds in the event of a default by the City are dependent upon judicial
actions which are often subject to discretion and delay and could prove both expensive and
time-consuming to obtain. So long as the Bonds are held in book-entry form, DTC (or its nominee)
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will be the sole registered owner of the Bonds and the rights and remedies of the Bond Owners
will be exercised through the procedures of DTC.
Future Initiatives
Articles XIIIB, XIIIC and XIIID were adopted as a measure that qualified for the ballot
pursuant to the States initiative process. From time to time other initiatives could be proposed
and adopted affecting the Citys revenues or ability to increase revenues.
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BOND OWNERS RISKS
The following describes certain special considerations and risk factors affecting the
payment of and security for the 2017 Bonds. The following discussion is not meant to be an
exhaustive list of the risks associated with the purchase of any Bonds and the order presented
does not necessarily reflect the relative importance of the various risks. Potential investors in the
2017 Bonds are advised to consider the following special factors along with all other information
in this Official Statement in evaluating the 2017 Bonds. There can be no assurance that other
considerations will not materialize in the future.
Limited Obligations
The obligation of the City to pay debt service on the Bonds is a limited obligation of the
City and is not secured by a legal or equitable pledge or charge or lien upon any property of the
City or any of its income or receipts, except the Net Revenues of the Enterprise. The obligation
of the City to pay debt services on the Bonds does not constitute an obligation of the City to levy
or pledge any form of taxation or for which the City has levied or pledged any form of taxation.
Accuracy of Assumptions
To estimate the revenues available to pay debt service on the Bonds, the City has made
certain assumptions with regard to the rates and charges to be imposed in future years, the
expenses associated with operating the Enterprise, and the interest rate at which funds will be
invested. The City believes these assumptions to be reasonable, but to the extent that any of
these assumptions fail to materialize, the Net Revenues available to pay debt service on the
Bonds will, in all likelihood, be less than those projected herein.
There can be no assurance that the demand for wastewater services will occur as
described in this Official Statement. Reduction in levels of demand could require an increase in
rates or charges in order to comply with the Citys rate covenant under the Indenture. See
SECURITY FOR THE 2017 BONDSRate Covenant. Demand for wastewater services could
be reduced as a result of reduced levels of development in the Enterprise service area or other
factors.
Enterprise Expenses
There can be no assurance that expenses of the City related to the Enterprise will be
consistent with the levels contemplated in this Official Statement. Changes in technology,
changes in quality standards, and increases in the cost of operation or other expenses could
require substantial increases in rates or charges in order to comply with the rate covenant in the
Indenture. Such rate increases could drive down demand for wastewater services or otherwise
increase the possibility of nonpayment of the Bonds.
The ability of the City to comply with its covenants under the Indenture and to generate
Net Revenues sufficient to pay principal of and interest on the Bonds may be adversely affected
by actions and events outside of the control of the City, and may be adversely affected by actions
taken (or not taken) by voters, property owners, taxpayers or payers of assessments, fees and
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charges. Furthermore, any remedies available to the owners of the Bonds upon the occurrence
of an event of default under the Indenture are in many respects dependent upon judicial actions,
which are often subject to discretion and delay and could prove both expensive and time
consuming to obtain.
In addition to the limitations on Bondholder remedies contained in the Indenture, the rights
and obligations under the Bonds and the Indenture may be subject to the following: the United
States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or affecting the enforcement of creditors rights generally, now or hereafter
in effect; usual equity principles which may limit the specific enforcement under State law of
certain remedies; the exercise by the United States of America of the powers delegated to it by
the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional
situations, of the police power inherent in the sovereignty of the State of California and its
governmental bodies in the interest of serving a significant and legitimate public purpose.
Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated,
could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in
bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of
their rights.
The kind and degree of wastewater treatment is regulated, to a large extent, by the federal
government and the State of California. Treatment standards set forth in federal and state law
control the operations of the Enterprise and mandate its use of technology. If the State or federal
government should impose stricter wastewater quality standards upon the Enterprise, the Citys
expenses could increase accordingly and rates and charges would have to be increased to offset
those expenses.
It is not possible to predict the direction which federal or state regulation will take with
respect to wastewater treatment and discharge standards, although it is likely that both will impose
more stringent standards with attendant higher costs.
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Seismic and Environmental Considerations
Loss of Tax-Exemption
As discussed under the caption TAX MATTERS, interest on the 2017 Bonds could
become includable in gross income for purposes of federal income taxation retroactive to the date
the 2017 Bonds were issued, as a result of future acts or omissions of the City in violation of its
covenants in the Indenture. Should such an event of taxability occur, the 2017 Bonds are not
subject to special redemption and will remain Outstanding until maturity or until redeemed under
other provisions set forth in the Indenture.
Proposition 218
General. On November 5, 1996, California voters approved Proposition 218, the so-called
Right to Vote on Taxes Act. Proposition 218 added Articles XIIIC and XIIID to the State
Constitution, which affect the ability of local governments to levy and collect both existing and
future taxes, assessments, and property-related fees and charges. Proposition 218, which
generally became effective on November 6, 1996, limited local governments authority to impose
or increase property-related fee or charge, which is defined as any levy other than an ad
valorem tax, a special tax or an assessment, imposed by a [local government] upon a parcel or
upon a person as an incident of property ownership, including user fees or charges for a property
related service (and referred to in this section as a property-related fee or charge).
Specifically, under Article XIIID, before a municipality may impose or increase any
property-related fee or charge, the entity must give written notice to the record owner of each
parcel of land affected by that fee or charge. The municipality must then hold a hearing upon the
proposed imposition or increase at least 45 days after the written notice is mailed, and, if a majority
of the property owners of the identified parcels present written protests against the proposal, the
municipality may not impose or increase the property-related fee or charge.
Further, under Article XIIID, revenues derived from a property-related fee or charge may
not exceed the funds required to provide the property-related service and the entity may not use
such fee or charge for any purpose other than that for which it imposed the fee or charge. The
amount of a property-related fee or charge may not exceed the proportional cost of the service
attributable to the parcel, and no property-related fee or charge may be imposed for a service
unless that service is actually used by, or is immediately available to, the owner of the property in
question.
In addition, Article XIIIC 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 power
of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local
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governments and neither the Legislature nor any local government charter shall impose a
signature requirement higher than that applicable to statewide statutory initiatives.
Judicial Interpretation of Proposition 218. After Proposition 218 was enacted in 1996,
appellate court cases and an Attorney Generals opinion initially indicated that fees and charges
for water and wastewater services, which are based on the amount of services consumed, would
not be considered property-related fees and charges, and thus not subject to the requirements of
Article XIIID. However, numerous subsequent court cases have held that certain types of water
and wastewater charges could be subject to the requirements of Proposition 218. These cases
include, for example, Capistrano Taxpayers Assoc., Inc. v. City of San Juan Capistrano (186 Cal.
Rptr. 3d 362 (Cal. App. 4th Distr. 2015)), Bighorn-Desert View Water Agency v. Verjil (46 Cal.
Rptr. 3d 73 (Cal. 2006)), and Howard Jarvis Taxpayers Assoc. v. City of Fresno (26 Cal. Rptr. 3d
153 (Cal. App. 5th Distr. 2005)).
Citys Current Practice Regarding Rates and Charges. The Citys practice in
implementing increases in wastewater rates and charges has been to comply with the
requirements of Article XIIID, including the practice of providing property owners with a 45-day
mailed notice and public hearing before the City Council approves rate increases.
Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and
Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be
enacted. Under the Bighorn case, local voters could adopt an initiative measure that reduces or
repeals the Citys rates and charges, though it is not clear whether (and California courts have
not decided whether) any such reduction or repeal by initiative would be enforceable in a situation
in which such rates and charges are pledged to the repayment of bonds or other indebtedness,
as is the case with respect to the 2017 Bonds. There can be no assurance that the courts will
not further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the
ability of local agencies to impose, levy, charge and collect increased fees and charges for
wastewater, or to call into question previously adopted wastewater rate increases.
There can be no guarantee that there will be a secondary market for the 2017 Bonds or,
if a secondary market exists, that any 2017 Bonds can be sold for any particular price.
Occasionally, because of general market conditions or because of adverse history or economic
prospects connected with a particular issue, secondary marketing practices in connection with a
particular issue are suspended or terminated. Additionally, prices of issues for which a market is
being made will depend upon then-prevailing circumstances. Such prices could be substantially
different from the original purchase price.
As described in SECURITY FOR THE 2017 BONDS Parity Debt above, the Indenture
permits the City to issue Parity Debt payable on a parity with the payment of debt service of the
2017 Bonds. In the event of a decline in Net Revenues available to pay debt service on the 2017
Bonds, the existence of Parity Debt could adversely affect the Citys ability to pay debt service on
the 2017 Bonds.
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TAX MATTERS
At closing, Aleshire & Wynder, LLP, Irvine, California, Bond Counsel, expects to render
an opinion to the City that based on existing statutes, regulations, rulings and court decisions,
interest on the 2017 Bonds is excluded from gross income for federal income tax purposes and
is exempt from State personal income taxes. Bond Counsel expects to deliver an opinion at the
time of issuance of the Bonds substantially in the form set forth in APPENDIX E.
The Internal Revenue Code of 1986 (the Code) imposes various restrictions, conditions
and requirements relating to the exclusion from gross income for federal income tax purposes of
interest on obligations such as the 2017 Bonds. The City has covenanted to comply with certain
restrictions designed to assure that interest on the 2017 Bonds will not be included in federal
gross income. Failure to comply with these covenants may result in interest on the 2017 Bonds
being included in federal gross income, possibly from the date of issuance of the 2017 Bonds.
The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not
undertaken to determine (or to inform any person) whether any actions taken (or not taken) or
events occurring (or not occurring) after the date of issuance of the 2017 Bonds may affect the
value of, or the tax status of interest, on the 2017 Bonds. Further, no assurance can be given
that pending or future legislation or amendments to the Code will not adversely affect the value
of, or the tax status of interest on, the 2017 Bonds. Prospective owners are urged to consult their
own tax advisors with respect to proposals to restructure the federal income tax.
Bond Counsel is further of the opinion that interest on the 2017 Bonds is not a specific
preference item for purposes of the federal individual or corporate alternative minimum taxes.
Bond Counsel observes, however, that interest on the 2017 Bonds is included in adjusted current
earnings in calculating corporate alternative minimum taxable income.
If the initial offering price to the public (excluding bond houses and brokers) at which any
maturity of the 2017 Bonds is sold is less than the amount payable at maturity thereof, then such
difference constitutes original issue discount for purposes of federal income taxes and State of
California personal income taxes. If the initial offering price to the public (excluding bond houses
and brokers) at which any maturity of the 2017 Bonds is sold is greater than the amount payable
at maturity thereof, then the excess of the tax basis of a purchaser of such 2017 Bond (other than
a purchaser who holds such 2017 Bond as inventory, stock in trade or for sale to customers in
the ordinary course of business) over the principal amount of such 2017 Bond constitutes original
issue premium for purposes of federal income taxes and State of California personal income
taxes.
Under the Code, original issue discount is excludable from gross income for federal
income tax purposes to the same extent as the interest on the 2017 Bonds. Further, such original
issue discount accrues actuarially on a constant interest rate basis over the term of each such
2017 Bond and the basis of such 2017 Bond acquired at such initial offering price by an initial
purchaser of each such 2017 Bond will be increased by the amount of such accrued discount.
The Code contains certain provisions relating to the accrual of original issue discount in the case
of purchasers of the 2017 Bonds who purchase such 2017 Bonds after the initial offering of a
substantial amount thereof. Owners who do not purchase such 2017 Bonds in the initial offering
at the initial offering prices should consult their own tax advisors with respect to the tax
consequences of ownership of such 2017 Bonds. All holders of such 2017 Bonds should consult
their own tax advisors with respect to the allowance of a deduction for any loss on a sale or other
disposition to the extent that calculation of such loss is based on accrued original issue discount.
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Under the Code, original issue premium is amortized for federal income tax purposes over
the term of such 2017 Bond based on the purchasers yield to maturity in such 2017 Bond, except
that in the case of such 2017 Bond callable prior to its stated maturity, the amortization period
and the yield may be required to be determined on the basis of an earlier call date that results in
the lowest yield on such 2017 Bond. A purchaser of such 2017 Bond is required to decrease his
or her adjusted basis in such 2017 Bond by the amount of bond premium attributable to each
taxable year in which such purchaser holds such 2017 Bond. The amount of bond premium
attributable to a taxable year is not deductible for federal income tax purposes. Purchasers of
such 2017 Bonds should consult their tax advisors with respect to the precise determination for
federal income tax purposes of the amount of bond premium attributable to each taxable year and
the effect of bond premium on the sale or other disposition of such 2017 Bond and with respect
to the state and local tax consequences of owning and disposing of such 2017 Bonds.
Although Bond Counsel has rendered an opinion that interest on the 2017 Bonds is
excluded from federal gross income, and is exempt from current State of California personal
income taxes, the ownership or disposition of the 2017 Bonds, and the accrual or receipt of
interest on the 2017 Bonds may otherwise affect an Owners State or federal tax liability. The
nature and extent of these other tax consequences will depend upon each Owners particular tax
status and the Owners other items of income or deduction. Bond Counsel expresses no opinion
regarding any such other tax consequences. Bond Counsels opinion is rendered as of its date
and it assumes no obligation to update its opinion.
Future rulings, court decisions, legislative proposals, if enacted into law, or clarification of
the Code may cause interest on the 2017 Bonds to be subject, directly or indirectly, to federal
income taxation, or otherwise prevent Owners from realizing the full current benefit of the tax
status of such interest. There can be no assurance that such future rulings, court decisions,
legislative proposals, if enacted into law, or clarification of the Code enacted or proposed after
the date of issuance of the 2017 Bonds will not have an adverse effect on the tax-exempt status
or market price of the 2017 Bonds.
The opinion of Bond Counsel is based on current legal authority, covers certain matters
not directly addressed by such authorities, and represents Bond Counsels judgment as to the
proper treatment of the 2017 Bonds for federal income tax purposes. It is not binding on the
Internal Revenue Service (IRS) or the courts. Furthermore, Bond Counsel cannot give and has
not given any opinion or assurance about the future activities of the City or about the effect of
future changes in the Code, the applicable regulations, the interpretation thereof or the
enforcement thereof by the IRS. The City has covenanted, however, to comply with the
requirements of the Code. Unless separately engaged, Bond Counsel is not obligated to defend
the City or the Beneficial Owners regarding the tax-exempt status of the 2017 Bonds in the event
of an audit examination by the IRS. Under current procedures, parties other than the City and
their appointed counsel, including the Beneficial Owners, would have little, if any, right to
participate in the audit examination process. Moreover, because achieving judicial review in
connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent
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review of IRS positions with which the City legitimately disagrees may not be practicable. Any
action of the IRS, including but not limited to selection of the 2017 Bonds for audit, or the course
or result of such audit, or an audit of bonds presenting similar tax issues, may affect the market
price for, or the marketability of, the 2017 Bonds, and may cause the City or the Beneficial Owners
to incur significant expense.
If an owner purchasing a 2017 Bond through a brokerage account has executed a Form
W-9 in connection with the establishment of such account, as generally can be expected, no
backup withholding should occur. In any event, backup withholding does not affect the
excludability of the interest on the 2017 Bonds from gross income for federal income tax purposes.
Any amounts withheld pursuant to backup withholding would be allowed as a refund or a credit
against the owners federal income tax once the required information is furnished to the Internal
Revenue Service.
The legal opinion of Aleshire & Wynder, LLP, Irvine, California, Bond Counsel, approving
the validity of the 2017 Bonds, will be made available to purchasers at the time of original delivery
and is attached in substantially final form as APPENDIX E.
Jones Hall, A Professional Law Corporation, San Francisco, California, will pass upon
certain legal matters for the City as disclosure counsel. Aleshire & Wynder, LLP, Irvine, California,
will pass upon certain legal matters for the City as City Attorney.
LITIGATION
No litigation is pending or threatened concerning the validity of the 2017 Bonds. The City
is not aware of any litigation pending or threatened questioning the political existence of the City
or contesting the Citys power to fix wastewater rates and charges, or the power of the City Council
or in any way questioning or affecting:
(i) the proceedings under which the 2017 Bonds are to be issued;
(ii) the validity of any provision of the 2017 Bonds or the Indenture;
(iii) the pledge of Net Revenues by the City under the Indenture; or
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(iv) the titles to office of the present members of the City Council.
There are a number of suits and claims pending against the City, which may include
personal injury, wrongful death and other suits and claims against which the City may self-insure.
The aggregate amount of the self-insured liabilities of the City which may result from such suits
and claims will not, in the opinion of the City, materially impair the ability of the City to pay principal
of or interest on the 2017 Bonds as the same become due.
There is no litigation pending, with service of process having been accomplished, against
the City which if determined adversely to the City would, in the opinion of the City, materially
impair the ability of the City to pay principal of and interest on the 2017 Bonds as they become
due.
RATINGS
S&P Global Ratings (S&P), has assigned its municipal bond rating of ___ to the Insured
Bonds, and Moody's Investors Service (Moodys) has assigned its municipal bond rating of
___ to the Insured Bonds, in each cased based on the issuance of the Bond Insurance Policy
by the Bond Insurer on the Closing Date.
In addition, S&P has assigned its underlying municipal bond rating of ___ to the 2017
Bonds, and Moody's has assigned its underlying municipal bond rating of ___ to the 2017 Bonds.
These ratings reflect only the views of S&P and Moodys, and an explanation of the
significance of these ratings, and any outlook assigned to or associated with these ratings, should
be obtained from the respective rating agency.
Generally, a rating agency bases its rating on the information and materials furnished to it
and on investigations, studies and assumptions of its own. The City has provided certain
additional information and materials to S&P and Moodys (some of which does not appear in this
Official Statement).
There is no assurance that these ratings will continue for any given period of time or that
these ratings will not be revised downward or withdrawn entirely by S&P or Moodys, if in their
judgment, circumstances so warrant. Any such downward revision or withdrawal of any rating on
the 2017 Bonds may have an adverse effect on the market price or marketability of the 2017
Bonds.
CONTINUING DISCLOSURE
The City will covenant for the benefit of owners of the 2017 Bonds to provide certain
financial information and operating data relating to the City and the Enterprise by not later than
six months after the end of the Citys fiscal year, or December 31, of each year (based on the
Citys current fiscal year-end of June 30), commencing December 31, 2017, with the report for
the 2016-17 fiscal year (the Annual Report) and to provide notices of the occurrence of certain
listed events.
These covenants have been made in order to assist the Underwriter in complying with
Securities Exchange Commission Rule 15c2-12(b)(5) (the Rule). The specific nature of the
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information to be contained in the Annual Report or the notices of listed events by the City is set
forth in APPENDIX C Form of Continuing Disclosure Certificate.
The City and certain related entities previously entered into certain disclosure
undertakings under the Rule in connection with the issuance of long-term obligations, and have
provided annual financial information and event notices in accordance with their respective
undertakings. During the past five years, the City and such related entities have, in some
instances, failed to comply in certain material respects with their undertakings. The City is aware
of the following instances of non-compliance by its community facilities districts, the Fillmore
Public Financing Authority and the Fillmore Redevelopment Agency with the requirements of their
respective continuing disclosure undertakings during the past five years:
The City, on behalf of its community facilities districts, the Fillmore Public Financing
Authority and the Fillmore Redevelopment Agency has
The City and its related entities have made filings to correct all known instances of non-
compliance during the last five years. The City believes it has established processes to ensure
that continuing disclosure filings will be made in the future as required.
UNDERWRITING
The 2017 Bonds are being purchased by Merrill Lynch, Pierce, Fenner & Smith
Incorporated, at a purchase price of $____________ (which represents the original principal
amount of the 2017 Bonds ($________________), plus a net original issue premium of
$_____________, less an underwriter's discount of $______________).
The purchase agreement relating to the 2017 Bonds provides that the Underwriter will
purchase all of the 2017 Bonds, if any are purchased, the obligation to make such purchase being
subject to certain terms and conditions set forth in such purchase agreement.
The Underwriter may offer and sell 2017 Bonds to certain dealers and others at prices
lower than the offering price stated on the inside cover page hereof. The offering prices may be
changed from time to time by the Underwriter.
The Underwriter and its respective affiliates are full service financial institutions engaged
in various activities, which may include sales and trading, commercial and investment banking,
advisory, investment management, investment research, principal investment, hedging, market
making, brokerage and other financial and non-financial activities and services. Under certain
circumstances, the Underwriter and its affiliates may have certain creditor and/or other rights
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against the City and its affiliates in connection with such activities. In the various course of their
various business activities, the underwriter and its respective affiliates, officers, directors and
employees may purchase, sell or hold a broad array of investments and actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps and other financial instruments
for their own account and for the accounts of their customers, and such investment and trading
activities may involve or relate to assets, securities and/or instruments of the City (directly, as
collateral securing other obligations or otherwise) and/or persons and entities with relationships
with the City. The underwriter and its respective affiliates may also communicate independent
investment recommendations, market color or trading ideas and/or publish or express
independent research views in respect of such assets, securities or instruments and may at any
time hold, or recommend to clients that they should acquire, long and/or short positions in such
assets, securities and instruments.
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MUNICIPAL ADVISOR
The City has entered into an agreement with FirstSouthwest, a Division of Hilltop
Securities Inc., as municipal advisor (the Municipal Advisor), whereunder the Municipal
Advisor provides municipal advisory services to the City with respect to preparation and sale of
the 2017 Bonds. The Municipal Advisor has read and participated in the drafting of certain
portions of this Official Statement. The Municipal Advisor has not audited, authenticated or
otherwise verified the information set forth in the Official Statement, or any other related
information available to the City, with respect to accuracy and completeness of disclosure of such
information, and the Municipal Advisor makes no guaranty, warranty or other representation
respecting accuracy and completeness of the Official Statement or any other matter related to the
Official Statement.
PROFESSIONAL FEES
In connection with the issuance of the 2017 Bonds, fees payable to the following
professionals involved in the offering are contingent upon the issuance and delivery of the 2017
Bonds: Aleshire & Wynder, LLP, as Bond Counsel; Jones Hall, A Professional Law Corporation,
as Disclosure Counsel; FirstSouthwest, a Division of Hilltop Securities Inc., as Municipal Advisor
to the City; and MUFG Union Bank, N.A., as Trustee.
EXECUTION
The execution of this Official Statement and its delivery have been authorized by the City
Council of the City.
CITY OF FILLMORE
___________,
___________
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APPENDIX A
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A-1
APPENDIX B
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B-1
APPENDIX C
$____________
City of Fillmore
Wastewater Refunding Revenue Bonds, Series 2017
Section 2. Definitions. In addition to the definitions set forth in the Indenture, 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 Report means any Annual Report provided by the City pursuant to, and as
described in, Sections 3 and 4.
Annual Report Date means the date that is six months after the end of the Citys fiscal
year (currently December 31 based on the Citys fiscal year end of June 30).
Dissemination Agent means initially Urban Futures, Inc., or any successor Dissemination
Agent designated in writing by the City and which has filed with the City a written acceptance of
such designation.
MSRB means the Municipal Securities Rulemaking Board, which has been designated
by the Securities and Exchange Commission as the sole repository of disclosure information for
purposes of the Rule, or any other repository of disclosure information that may be designated by
the Securities and Exchange Commission as such for purposes of the Rule in the future.
Official Statement means the final official statement dated ______, 2017, executed by
the City in connection with the issuance of the 2017 Bonds.
Participating Underwriter means Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
the original underwriter of the 2017 Bonds required to comply with the Rule in connection with
offering of the 2017 Bonds.
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Rule means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as it may be amended from time to time.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual
Report Date, commencing December 31, 2017, with the report for the 2016-17 fiscal year, provide
to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is
consistent with the requirements of Section 4. Not later than 15 Business Days prior to the Annual
Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than
the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if
other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall
contact the City to determine if the City is in compliance with the previous sentence. The Annual
Report may be submitted as a single document or as separate documents comprising a package,
and may include by reference other information as provided in Section 4; provided that the audited
financial statements of the City may be submitted separately from the balance of the Annual
Report, and later than the Annual Report Date, if not available by that date. If the Citys fiscal
year changes, it shall give notice of such change in the same manner as for a Listed Event under
Section 5(c). The City shall provide a written certification with each Annual Report furnished to
the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report
required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual
Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to
provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially
the form attached as Exhibit A.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable
rules and electronic format prescribed by the MSRB for the filing of annual
continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City
certifying that the Annual Report has been provided pursuant to this Disclosure
Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The Citys Annual Report shall contain or
incorporate by reference the following:
(a) Audited Financial Statements of the City prepared in accordance with generally
accepted accounting principles as promulgated to apply to governmental entities from time to time
by the Governmental Accounting Standards Board. If the Citys audited financial statements are
not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the
Annual Report shall contain unaudited financial statements in a format similar to the financial
statements contained in the final Official Statement, and the audited financial statements shall be
filed in the same manner as the Annual Report when they become available.
(b) To the extent not contained in the audited financial statements filed under the
preceding clause (a), the Annual Report shall contain information showing the following
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information for the most recently completed fiscal year substantially similar to that provided in the
corresponding tables and charts in the Official Statement:
(iii) Historical Rates and Charges (including sewer rates and development impact
fee data); and
(iv) Historical Revenues, Expenditures and Debt Service Coverage for such fiscal
year (in substantially the format of the table entitled "Projection of Revenues, Expenditures
and Debt Service Coverage (with the debt service coverage ratio calculated in accordance
with the Indenture).
(c) In addition to any of the information expressly required to be provided under this
Disclosure Certificate, the City shall provide such further material information, if any, as may be
necessary to make the specifically required statements, in the light of the circumstances under
which they are made, not misleading.
(d) 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 City or related public entities, which
are available to the public on the MSRBs Internet web site or filed with the Securities and
Exchange Commission. The City shall clearly identify each such other document so included by
reference.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the
following Listed Events with respect to the 2017 Bonds:
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(10) Release, substitution, or sale of property securing repayment of the
securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the
obligated person.
(13) 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, if material.
(14) Appointment of a successor or additional trustee or the change of name of
a trustee, if material.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, and, if
the Listed Event is described in subsections (a)(2), (a)(6), (a)(7), (a)(8) (if the event is a bond call),
(a)(10), (a)(13) or (a)(14) above, the City determines that knowledge of the occurrence of that
Listed Event would be material under applicable Federal securities law, the City shall, or shall
cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB,
in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10
business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of
Listed Events described in subsections (a)(8) and (9) above need not be given under this
subsection any earlier than the notice (if any) of the underlying event is given to holders of affected
2017 Bonds under the Indenture.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to
the MSRB under the Disclosure Certificate shall be accompanied by identifying information as
prescribed by the MSRB.
Section 8. Dissemination Agent. The City 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 Dissemination Agent, with or without appointing a successor
Dissemination Agent. Any Dissemination Agent may resign by providing 30 days written notice
to the City. The initial Dissemination Agent is Urban Futures, Inc.
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it
may only be made in connection with a change in circumstances that arises from a change
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in legal requirements, change in law, or change in the identity, nature, or status of an
obligated person with respect to the 2017 Bonds, or type of business conducted;
(c) the proposed amendment or waiver either (i) is approved by holders of the 2017
Bonds in the manner provided in the Indenture for amendments to the Indenture with the
consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel,
materially impair the interests of the holders or beneficial owners of the 2017 Bonds.
If the annual financial information or operating data to be provided in the Annual Report is
amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto
containing the amended operating data or financial information shall explain, in narrative form,
the reasons for the amendment and the impact of the change in the type of operating data or
financial information being provided.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same
manner as for a Listed Event under Section 5(c).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed
to prevent the City 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 Report or notice of occurrence of a Listed Event, in addition to that
which is required by this Disclosure Certificate. If the City chooses to include any information in
any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically
required by this Disclosure Certificate, the City shall have no obligation under this Disclosure
Certificate to update such information or include it in any future Annual Report or notice of
occurrence of a Listed Event.
Section 11. Default. If the City fails to comply with any provision of this Disclosure
Certificate, the Participating Underwriter or any holder or beneficial owner of the 2017 Bonds may
take such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the City to comply with its obligations under this Disclosure
Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default
under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any
failure of the City to comply with this Disclosure Certificate shall be an action to compel
performance.
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Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, the Dissemination Agent (if other than the City), the Participating Underwriter and the
holders and beneficial owners from time to time of the 2017 Bonds, and shall create no rights in
any other person or entity.
CITY OF FILLMORE
By
_____________
By:
Name:
Title:
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EXHIBIT A
NOTICE IS HEREBY GIVEN that the City of Fillmore has not provided an Annual Report
with respect to the above-named bonds as required by the Continuing Disclosure Certificate dated
as of _______, 2017, executed by the City of Fillmore. The City anticipates that the Annual Report
will be filed by _____________.
Dated:
DISSEMINATION AGENT:
Urban Futures, Inc.
By
Name:
Title:
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APPENDIX D
The following information is included only for the purpose of supplying general information
regarding the City of Fillmore and Ventura County. This information is provided only for general
informational purposes, and provides prospective investors limited information about the area in
and around the Community Facilities District and its economic base. It should not be inferred
from the inclusion of this information in this Official Statement that the principal of or interest on
the Bonds is payable from any sources other than Special Tax Revenues received by the
Community Facilities District. See "SECURITY FOR THE BONDS."
General Information
The City. Fillmore is a city in Ventura County, California in the Santa Clara River Valley
below the San Cayetano Mountain peak in the Los Padres National Forest. Fillmore is within a
historic Ventura County agricultural and tree-farming belt. In an agriculture area with rich, fertile
soil, Fillmore has a historic downtown that was established when Southern Pacific built the
railroad through the valley in 1887. They also provided a name for the town; J. A. Fillmore was a
general superintendent for the company's Pacific system. According to the United States Census
Bureau, the city has a total area of 3.4 square miles (8.8 km2), 99.97% of it land and 0.03% of it
water.
The City, located in Ventura County, California, is located off of Highway 126, some 60
miles northwest of the Metropolitan Los Angeles Area. The City was incorporated in 1914.
Fillmore has a present population of approximately 15,150 according to the California Department
of Finance. The City encompasses a total of 2.5 square miles within its corporate limits.
The City is a general law city and operates under the Council-Manager form of
government. The five City Council members are elected to four-year terms in alternate slates of
three and two every two years. The Mayor presides over meetings of the Council and has one
vote. The City employs a City Manager, appointed by the full City Council.
The City provides fire protection, water and sewer utilities, library, police protection, animal
control, building safety regulation and inspection, street lighting, beautification, land use planning
and zoning, housing and community services, maintenance and improvement of streets and
related structures, traffic safety maintenance and improvement and a full range of recreational
and cultural programs for citizen participation.
The County. Ventura County is a county in the southern part of the U.S. state of
California. Ventura County comprises the Oxnard-Thousand Oaks-Ventura, CA Metropolitan
Statistical Area, which is also included in the Los Angeles-Long Beach, CA Combined Statistical
Area. It is also considered as the southernmost county along the California Central Coast.
According to the U.S. Census Bureau, the county has a total area of 2,208 square miles
(5,720 km2), of which 1,843 square miles (4,770 km2) is land and 365 square miles (950 km2)
(16.5%) is water. Anacapa Island of Channel Islands National Park and San Nicolas Island are
located in the county and Begg Rock is 8 miles (13 km) north west of the western tip of San
Nicolas Island.
315
D-1
Population
Population figures for the City, the County and the State for the past five years are shown
in the following table, as of January 1.
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D-2
Employment and Industry
The unemployment rate in the Ventura County was 4.7 percent in February 2017, down
from a revised 5.1 percent in January 2017, and below the year-ago estimate of 5.3 percent. This
compares with an unadjusted unemployment rate of 5.2 percent for California and 4.9 percent for
the nation during the same period.
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household
domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household
domestic workers, and workers on strike.
Source: State of California Employment Development Department.
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D-3
Major Employers
The following table lists the major employers in the County, listed alphabetically.
VENTURA COUNTY
Major Employers
(As of April 2017)
Source: State of California Employment Development Department, extracted from The America's Labor Market
Information System (ALMIS) Employer Database, 2107 2nd Edition.
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D-4
Effective Buying Income
"Effective Buying Income" is defined as personal income less personal tax and nontax
payments, a number often referred to as "disposable" or "after-tax" income. Personal income is
the aggregate of wages and salaries, other labor-related income (such as employer contributions
to private pension funds), proprietor's income, rental income (which includes imputed rental
income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest
income from all sources, and transfer payments (such as pensions and welfare assistance).
Deducted from this total are personal taxes (federal, state and local), nontax payments (fines,
fees, penalties, etc.) and personal contributions to social insurance. According to U.S.
government definitions, the resultant figure is commonly known as "disposable personal income."
The following table summarizes the total effective buying income for the City, the County, the
State and the United States for the period 2012 through 2016.
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D-5
Commercial Activity
Total taxable sales during the first three quarters of calendar year 2015 in the City were
reported to be $666,906,745, a 14.66% increase from the total taxable sales of $581,635,000
reported during the first three quarters of calendar year 2014. Annual figures are not yet available
for calendar years 2015 or 2016.
CITY OF FILLMORE
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
For Calendar Years 2010 through 2014
(Dollars in Thousands)
(1) Sales not available because their publication would result in the disclosure of confidential
information.
Source: State Board of Equalization.
Total taxable sales during the first three quarters of calendar year 2015 in the County were
reported to be $10,194,773,923, a 3.91% increase from the total taxable sales of $9,811,480,000
reported during the first three quarters of calendar year 2014. Annual figures are not yet available
for calendar years 2015 or 2016.
VENTURA COUNTY
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
For Calendar Years 2010 through 2014
(Dollars in Thousands)
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D-6
Construction Activity
Provided below are the building permits and valuations for the City and the County for
calendar years 2011 through 2015. Annual figures are not yet available for 2016.
CITY OF FILLMORE
Building Permit Valuation
(Valuation in Thousands of Dollars)
VENTURA COUNTY
Building Permit Valuation
(Valuation in Thousands of Dollars)
D-7
Transportation
Ventura County is located at the approximate midpoint between Los Angeles and Santa
Barbara and is linked to these areas by several highways. The largest and most heavily traveled
highways are: U.S. 101 (Ventura Freeway), Highway 118 (Simi Valley Freeway), Highway 1
(Pacific Coast Highway), Highway 23, which connects Moorpark to Thousand Oaks and Simi
Valley via U.S. 101 and Highway 118, Highway 33, which connects Ventura and Ojai, and
Highway 126, which runs through the Fillmore and Santa Paula areas. Highways 118 and 126
connect to Interstate 5 in Los Angeles County.
The Southern Pacific Railroad serves the Countys industrial areas, running 30 trains daily,
with piggyback service and available industrial sidings. Ventura County Railway, a privately
owned shortline railroad serves the industrial areas of south Oxnard, the Port of Hueneme and
the U.S. Navy Construction Battalion Center.
AMTRAK operates passenger trains daily through the County and has its major hub at the
Oxnard Transportation Center. Connection stations are located in Ventura, Moorpark and Simi
Valley. The trains run between San Francisco, Santa Barbara, Los Angeles, San Diego and other
destinations.
Commuter air service to Los Angeles, Las Vegas, San Francisco, Monterey, Sacramento,
Oakland, San Diego, Santa Barbara, San Jose and Bakersfield is available from the Oxnard
Airport. Other airports serving the County are Camarillo Airport and the Santa Paula Airport, both
general aviation facilities. Ventura County is approximately 62 miles from the Los Angeles
International Airport and 55 miles from the Burbank Airport.
Bildung
The Fillmore Unified School District, which includes students from the City and the cities
of Barsdale and Piru, reports 3,757 students on a year round school system. Students are divided
among one high school, one junior high school, three elementary schools and one continuation
school. There is one private school located at the Fillmore Bible Church, and there are numerous
private junior colleges, colleges, and universities, all within a 45-minute commute.
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D-8
APPENDIX E
323
E-1
APPENDIX F
Neither the issuer of the Bonds (the Issuer) nor the trustee, fiscal agent or paying agent
appointed with respect to the Bonds (the Agent) take any responsibility for the information
contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will
distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with
respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or
ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co.,
its nominee, as the registered owner of the 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.
1. The Depository Trust Company (DTC), New York, NY, will act as securities depository
for the securities (the Securities). The Securities will be issued as fully-registered securities
registered in the name of Cede & Co. (DTCs 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 each issue of the Securities, each in the aggregate principal amount of such issue,
and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds
$500 million, one certificate will be issued with respect to each $500 million of principal amount,
and an additional certificate will be issued with respect to any remaining principal amount of such
issue.
F-1
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. DTCC is owned by the 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 & Poors 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. The information contained on this Internet
site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Securities on DTCs records. The ownership
interest of each actual purchaser of each Security (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 Securities 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
Securities, except in the event that use of the book-entry system for the Securities is discontinued.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an
issue are being redeemed, DTCs practice is to determine by lot the amount of the interest of each
Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Securities unless authorized by a Direct Participant in accordance with DTCs MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as
325
F-2
possible after the record date. The Omnibus Proxy assigns Cede & Co.s consenting or voting
rights to those Direct Participants to whose accounts Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
9. DTC may discontinue providing its services as depository with respect to the Securities
at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the
event that a successor depository is not obtained, Security certificates are required to be printed
and delivered.
10. Issuer may decide to discontinue use of the system of book-entry-only transfers
through DTC (or a successor securities depository). In that event, Security certificates will be
printed and delivered to DTC.
11. The information in this section concerning DTC and DTCs book-entry system has
been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility
for the accuracy thereof.
326
F-3
APPENDIX G
327
G-1
CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
REQUEST:
Request to approve the FY 2017-18 Recommended Budgets as the Adopted Budgets and
the Budget Management Guidelines for the City of Fillmore and the Successor Agency to
the City of Fillmore Redevelopment Agency.
DISCUSSION:
The City Council received the first draft of the FY 2017-18 Proposed Budget on April 13,
2017 and a detailed updated Proposed Budget on May 4, 2017. One on one meetings
with the City Council and staff were conducted to review, answer questions, and ensure
understanding of the budget. Feedback from those meetings was reviewed by staff and
incorporated as appropriate into the updated proposed budget being formally presented
today. If necessary, a further revised budget can be presented at the June 13, 2017 City
Council meeting.
The proposed budget has been available on the Citys website for the public to review
since May 15, 2017. The recommended budget maintains current service levels. It
incorporates anticipated growth in development activity and represents improvement in the
fiscal health of the City. Population grew in 2016 by .4%, from 15,444 to 15,510, and is
expected to continue a positive trend in 2017, estimating growth at 1.1% or 15,683 in total
population.
01148.0001/377212.1
Fiscal Year 2017-18 Recommended Budget
May 23, 2017
Page 2 of 8
Sales Tax Added 6% growth from current fiscal year estimate due to trend.
o Less a reduction due to the BOE decision made on the SW Jet Fuel case in
FY 16-17, of which a portion of this amount will be repaid by the consultant
used to acquire the sales tax.
Franchises Maintain current budget
Building Permits 40 residential and 67,000 SF commercial (Rotorcraft)
Water and Sewer Rates Maintain the sewer rate and propose to increase the
water rates at mid-year by 5% as allowed in the approved Proposition 218 process
completed in 2017.
Increase the Sewer Reserve Fund by $550,000 and the Water Reserve Fund by
$162,278.
Other Maintain based on trends
Expenditures
Salaries and Benefits Added one part-time clerical support position and anticipate
cost of living adjustments
Public Employees Retirement System Plan Added $382,000 to cover the required
annual payment towards the $3.6 million unfunded liability determined by a
CalPERS actuarial valuation study. This includes both Miscellaneous and Safety
employees.
Liability Insurance and Workers Compensation Increased to $685,000 from
$642,000, a $43,000 or 7.5% increase. This new amount comprises $485,000 due
for the FY 2017-18 annual contribution and $200,000 owed from prior fiscal years,
considered a retrospective adjustment. The City owes over $379,000 in
retrospective adjustments and is paying this balance owed under a repayment plan.
The repayment plan covers a six-year time frame and will end in FY 2018/19. The
next fiscal year the retrospective balance owed should drop to just over $179,000.
Utilities Average 1 3% increase
Supplies and Services Maintained and/or increased based on contractual
agreements
o Police Services contract with Ventura County increased 3.5%
o Wastewater Reclamation Plant contract with American Water increased 2%
Used $312,536 of the Sewer Development Impact Fee Fund to cover debt service
in the Sewer Fund, an authorized use of these funds.
Other Maintained based on trends
BACKGROUND:
General Fund
The General Fund FY 2017-18 revenue budget is $7,811,331 and expense budget is the
same at $7,811,311, a balanced budget.
The revenue budget incorporates permit revenue based on 40 new residential permits and
67,000 SF of non-residential development coming from Rotorcraft. This level of permit
activity is estimated to generate $226,200 in permit revenue. Further property taxes have
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Fiscal Year 2017-18 Recommended Budget
May 23, 2017
Page 3 of 8
been increased by 26%, changing from $786,730 to $996,972, with most of this
increase due to the increase in the Successor Agency residual property tax. The
Vehicle License Fee increased from $1.38M to $1.46M, a 5.45% increase or by
$75,000. This considers the anticipated growth in new home and existing home sales
and consequent increase in taxes that will come from the purchase of these new and
higher priced homes. Retail sales tax will experience an increase from last fiscal year
due to receiving a smaller reduction in Year 2 (FY 2017/18 is the second year) of the
two-year repayment of sales tax as a result of the BOE decision made on the SW Jet
Fuel case (discussed above).
The expense budget incorporates a carry-over project to update the North Fillmore
Specific Plan of $86,000. Other additions include a General Fund transfer of $305,000 to
cover expenses in the Recreation, Street, Storm Water, and Bike Path funds not covered
by ongoing revenue. Police services are provided by a contract with Ventura County and
accounts for 49% of the total General Fund expense budget and increased by 3.5% to
3.29 million.
Sewer Fund
The Sewer Fund revenue budget for FY 2017-18 is almost $7.0 million with the plan to use
$312,536 from the Sewer Development Impact Fee fund to help cover the cost for debt
service, an allowable use of these funds. Debt services comprises 49% of the total
operating fund budget. The 2017-18 Budget does not anticipate an increase to the
monthly sewer rate as the monthly rate was previously increased in February 2017 from
$92.29 to $103.36 per equivalent dwelling unit, a 12% increase, and this rate is expected
to be sufficient to cover the operating expenses and the required debt service coverage
ratio for FY 2017/18.
Expenditures in FY 2017-18 are budgeted at the same level as revenue and almost $7.0
million. The budget incorporates an increase of 2% in the Wastewater Reclamation Plant
contract with American Water to $1.5 million. The expenditure budget also includes a
$550,000 transfer to the Sewer Capital Reserve Fund to cover future major equipment
repairs and replacement projects, such as the replacement of the membrane structure
and replace and/or repair sewer lines. The budget also includes increases in the cost
for utilities and personnel.
Water Fund
The Water Fund revenue budget for FY 2017-18 is just over $3.1 million, maintaining the
same level as the current fiscal year budget. Water conservation has caused the Water
Fund to experience a major drop in revenue in past fiscal years, however, revenue is not
expected to decrease in FY 2017-18. Though conservation measures are required and
needed to conserve water, this causes the meter base revenues to drop and the Water
Fund has experienced this reduction. The meter-based revenue incorporates a 5%
increase in the rates for the second half of the year as allowed in the approved Proposition
218 process that was completed in 2017. This will help to maintain current revenues. The
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Fiscal Year 2017-18 Recommended Budget
May 23, 2017
Page 4 of 8
proposed monthly minimum bill per equivalent dwelling unit is expected to change from the
current rate of $38.75 to $40.69.
Expenditures for FY 2017-18 are also budgeted at close to $3.1 million. The proposed
budget maintains current expenditures. Other cost increases include the cost to replace
fire hydrants and update the water master plan. Further, additional cost increases include
the cost for water delivery, utilities and personnel.
Special Districts
The FY 2017-18 Special District budgets total $2.5 million in revenues to support the total
expense budget of almost the same amount of $2.56 million. Revenues for the Landscape
& Lighting and Storm Drain Districts are generated by levying assessments on property
owners that reside within and receive a benefit from a district. On an annual basis, the
assessments imposed on a district are evaluated and updated based on the estimated
expenditures needed to operate and maintain the district. The updated assessments are
limited to a maximum amount that can be charged and a comparison is made to ensure
the limits are maintained.
Capital Projects/Improvements
Capital projects in FY 2017-18 were incorporated into the budget if funding was available
to support the project. Total projects with funding equal $1,259,300. The largest projects
are street capital improvement projects and include $254,000 for the rehabilitation of
arterial and major collector roadways and $250,000 for the design and construction of the
Mountain View sidewalks. Other major projects included in the budget are associated with
the Water CapitaI Fund. These projects pertain to Well # 8 rehabilitation for $75,000 and
Well # 9 feasibility and design for $100,000, plus $235,000 has been allocated to replace
old and worn out water lines, and $173,800 for capital equipment and/or system upgrades.
Also included are Public Building upgrades for $55,000 and $41,500 to complete the dog
park at Two Rivers Park. Below is a table of the capital projects and how they will be
funded.
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Fiscal Year 2017-18 Recommended Budget
May 23, 2017
Page 5 of 8
Water Capital
SCADA System Repair/Upgrade $ 25,000
Replacement
Water Capital
Water Atlas System $ 60,000
Replacement
Water Capital
Water Valve Exerciser $ 38,800
Replacement
New and/or Replace Fire Water Capital
$ 50,000
Hydrants Replacement
Water Capital
Replace Central Ave Water Line $ 75,000
Replacement
Water Capital
Replace Fifth Street Water Line $ 75,000
Replacement
Replace Ventura Street Water Water Capital
$ 85,000 $ 583,800
Line Replacement
332
$ 1,259,300
Total Capital Projects Included in Budget
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Fiscal Year 2017-18 Recommended Budget
May 23, 2017
Page 6 of 8
Summary of Funds
The following table is a summary of the Proposed FY 2017-18 Budget by Fund Type.
The total revenue budget for City funds combined is $25.4 million with expenditures less at
$24.8 million.
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Fiscal Year 2017-18 Recommended Budget
May 23, 2017
Page 7 of 8
The total Proposed FY 2017-18 Budget for all funds combined is $29.2 million for revenue
and $28.8 million for expenditures.
Another area of concern is the rate charged for sewer services. The current proposed rate
is $103.36 per month per household which is much higher than the rates charged by most
other comparable cities. The need to increase rates to meet inflationary cost and debt
coverage continues to be a challenge. However, to help reduce the cost of debt service,
the City is in the process of refinancing the Water Recycling Bonds. The estimated
savings for the Citys customers will average $425,000 per fiscal year. This will help to
maintain current rates over the next several years.
FISCAL IMPACT:
The overall budget for the City and Successor Agency combined is a budget where
revenues are sufficient to cover the proposed expenditures. The total expenditure budget
for all funds combined is $28,769,683 and the total revenue budget for all funds combined
is $29,196,994.
RECOMMENDATION:
1. Adopt the attached resolutions to: (A) approve the City of Fillmore FY 2017-18
Recommended Budget as the Adopted Budget and the Budget Management
Guidelines and (B) approve the Successor Agency for the City of Fillmore
Redevelopment Agency FY 2017-18 Recommended Budget.
Alternatives
2. Adopt the attached resolutions for the City of Fillmore and Successor Agency for
the City of Fillmore approving the FY 2017-18 Recommended Budgets as the
Adopted Budgets and Budget Management Guidelines with changes.
3. Do not adopt the attached resolutions for the City of Fillmore and Successor
Agency for the City of Fillmore approving the FY 2017-18 Recommended Budgets
as the Adopted Budgets and Budget Management Guidelines.
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Fiscal Year 2017-18 Recommended Budget
May 23, 2017
Page 8 of 8
ATTACHMENTS
Attachment 1: Budget Summary for the Recommended FY 2017-18 Budget
Attachment 2: City Resolution No. 17-3601
Attachment 3: Successor Agency Resolution No. 17-01
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01148.0001/377212.1
CITY COUNCIL
RESOLUTION NO. 17-3601
________________________________
Carrie Broggie, Mayor
336
01148.0001/377208.3
ATTEST:
APPROVED AS TO FORM:
______________________________________
Tiffany Israel, City Attorney
CITY OF FILLMORE )
COUNTY OF VENTURA )
STATE OF CALIFORNIA )
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Oliva Carrera Lopez, City Clerk
337
01148.0001/377208.3
EXHIBIT 1
SECTION 1. SCOPE
These guidelines define the authority and responsibilities of the City Council and
City Manager in implementing the Current Fiscal Year Approved Budget of the
City of Fillmore
SECTION 2. DEFINTIONS
2.2 Approved Budget is defined as the budget adopted by the City Council in
May or June of the fiscal year, including the changes made by the City
Council to the Recommended Budget.
2.8 City Manager is defined as the chief operating officer responsible for
managing and directing the affairs of the City within the established goals,
objectives, and general policies established by the City Council. The City
Manager is solely responsible to the City Council for the effectiveness,
efficiency and success in fulfilling the Citys goals, objective, and policy
priorities. The City Manager exercises direct supervision and provides
general administrative and financial direction to each department head
and other city employees.
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01148.0001/377208.3
SECTION 3. ADJUSTMENTS TO THE RECOMMENDED BUDGET
3.1 The City Manager is authorized to make any revenue, expenditure, and
staffing adjustments to the Recommended Budget based on the Approved
Budget.
4.2 The City Manager is authorized, upon completion of the audited financial
statements for the fiscal year, to adjust the following fiscal year fund
appropriations by the amount of net savings or overruns as determined by
the City Council. The carryover amounts will be included and addressed in
the Mid-year Financial Report.
5.1 Any increases, by fund and/or department in Full Time Equivalent (FTE)
staffing levels as authorized in the Approved or Amended Budget must be
approved by the City Council.
5.2 Any reassignment of authorized FTEs and funding associated with these
FTEs within a department and within the same fund may be made with
the approval of the City Manager as long as there is no net change to
authorized FTE and funding levels.
5.3 All new positions, job reclassifications or title changes are subject to
approval by the City Council.
6.1 The City has a policy of maintaining a General Fund reserve for
emergencies and economic uncertainty equivalent to 40 percent of the
General Fund annual expenditure budget. Due to unusual economic
conditions, this policy has been suspended. As soon as is practicable, the
General Fund reserve will be re-established for the purpose of funding the
cost of unforeseen emergencies and catastrophic events.
339
01148.0001/377208.3
6.3 Transfers of appropriations within the same fund may be approved by the
City Manager so long as there is no impact to fund balance and so long as
no projects or programs previously approved by the City Council are
impacted.
8.2 All purchase order commitments outstanding on June 30 of the fiscal year
hereby continued.
9.2 All new capital improvement projects shall be approved by the City
Council. Cancellation or funding modification of any existing project must
also be approved by the City Council.
9.3 Upon completion and closure of a capital project, the City Manager is
authorized to transfer any remaining project balance to the appropriate
fund balance.
10.3 All multi-year grant budgets in existence at June 30 of the fiscal year shall
be continued into the following fiscal year.
11.1 No fund expenditures at the department level shall exceed the Approved
or Amended Budget.
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01148.0001/377208.3
11.2 Excess expenditures above the approved or amended budget in any
department by fund must be corrected by:
(1) Reducing expenditures in said or
(2) An intra-fund transfer within that same department,
(3) An inter-departmental appropriation transfer.
12.1 The City Council shall be provided a Mid-Year Financial Report that
includes financial activity as of December 31st of the fiscal year. The Mid-
Year Financial Report will include an estimate of the financial condition of
all funds, including prior year actual fund balances, re-estimated revenues
and expenditures, projected ending fund balances or deficits, and
recommendations for eliminating any projected fund deficits.
12.2 The City Council shall review and act on any projected fund deficits prior
to the close of the Fiscal Year.
341
01148.0001/377208.3
Exhibit 2
CITY OF FILLMORE
RECOMMENDED FY 2017-18 BUDGET
Budget Summary
Net
Estimated Increase Estimated
Beginning Revenue Expense (Decrease) Ending Fund
Fund Fund Description Fund Balance Budget Budget in Budget Balance
Operating Funds
101 General $ 4,815,049 $ 7,811,331 $ 7,811,331 $ - $ 4,815,049
202 Public Education 61,317 6,900 6,900 - 61,317
203 Streets & Drains 49,350 429,500 474,443 (44,943) 4,407
211 Bike Path 20,206 35,095 35,095 - 20,206
212 Solid Waste 158,600 113,684 113,684 - 158,600
301 Sewer 4,375,757 6,980,186 6,979,686 500 4,376,257
302 Water 3,425,535 3,104,645 3,104,645 - 3,425,535
303 Town Theatre (44,984) 12,526 (12,526) (57,510)
304 Recreation (137,556) 389,170 374,966 14,204 (123,352)
305 Community Pool (350,510) 157,635 234,935 (77,300) (427,810)
701 Veterans Memorial Dist 125,351 187,513 227,519 (40,006) 85,345
702 Storm Water NPDES (15,992) 50,035 44,686 5,349 (10,643)
Total $ 12,482,123 $ 19,265,694 $ 19,420,416 $ (154,722) $ 12,327,401
Special Districts
206 Landscape & Lighting Districts 531,486 538,806 610,459 (71,653) 459,833
207 Storm Drain Districts 367,534 382,278 366,879 15,399 382,933
803 Community Facilitie Districts 1,580,562 1,582,715 1,582,715 - 1,580,562
Total $ 2,479,582 $ 2,503,799 $ 2,560,053 $ (56,254) $ 2,423,328
Development Impact Fees
401 Fire Statiion 113,955 33,600 - 33,600 147,555
402 Public Facilities 365,961 150 5,000 (4,850) 361,111
403 Transportation (110,660) 48,350 5,000 43,350 (67,310)
404 Parkland 356,013 600 5,000 (4,400) 351,613
405 Water 102,990 289,600 105,000 184,600 287,590
406 Sewer 437,702 297,000 317,536 (20,536) 417,166
407 Storm Drain 835,394 149,300 5,000 144,300 979,694
408 Facility - City 96,188 32,100 10,000 22,100 118,288
409 Facility - Fire 90,815 28,800 - 28,800 119,615
410 Facility - Police 63,061 12,500 - 12,500 75,561
411 Facility - Library 87,518 27,250 - 27,250 114,768
412 Facility - Public Works 85,723 25,400 - 25,400 111,123
Total $ 2,524,660 $ 944,650 $ 452,536 $ 492,114 $ 3,016,774
342
Exhibit 2
CITY OF FILLMORE
RECOMMENDED FY 2017-18 BUDGET
Budget Summary
Net
Estimated Increase Estimated
Beginning Revenue Expense (Decrease) Ending Fund
Fund Fund Description Fund Balance Budget Budget in Budget Balance
Capital Projects/Purchases
453 Water Well Improvements 459,865 583,800 583,800 - 459,865
464 Two Rivers Park 1,401,382 - 41,500 (41,500) 1,359,882
467 Street Capital Improvements 86,338 579,000 579,000 - 86,338
474 BTA Bike Path Capital 25,369 - - - 25,369
490 Fire Station/PW Yard 176,513 10,000 55,000 (45,000) 131,513
Total $ 2,149,467 $ 1,172,800 $ 1,259,300 $ (86,500) $ 2,062,967
Grants/Other
204 Local Transportation 420,719 110,500 379,000 (268,500) 152,219
208 Grants - CDBG 64,772 57,400 57,400 - 64,772
210 Public Transit - 420,000 420,000 - -
231 Housing Asset 219,557 18,500 56,850 (38,350) 181,207
808 Capital Leases 3 57,400 57,400 - 3
Total $ 705,051 $ 663,800 $ 970,650 $ (306,850) $ 398,201
Replacement/Reserves
503 Sewer Capital Replacement 717,602 550,000 - 550,000 1,267,602
504 Water Capital Replacement 1,652,488 162,278 185,000 (22,722) 1,629,766
506 General Fund Reserve 1,652,858 - - - 1,652,858
508 Sewer Rate Stabilization 1,538,872 5,000 - 5,000 1,543,872
509-514 Storm District Levee Reserves 1,407,536 138,865 - 138,865 1,546,401
Total $ 6,969,356 $ 856,143 $ 185,000 $ 671,143 $ 7,640,499
Total City Funds $ 27,310,239 $ 25,406,886 $ 24,847,955 $ 558,931 $ 27,869,170
343
SUCCESSOR AGENCY
RESOLUTION NO. 17-01
________________________________
Carrie Broggie, Chair
344
ATTEST:
APPROVED AS TO FORM:
______________________________________
Tiffany Israel, Successor Agency Counsel
CITY OF FILLMORE )
COUNTY OF VENTURA )
STATE OF CALIFORNIA )
I, Oliva Carrera Lopez, Secretary of the Successor Agency of the City of Fillmore
Redevelopment Agency, do hereby certify that the foregoing Resolution No. 17-1 was
duly passed and adopted by the Successor Agency of the City of Fillmore Redevelopment
Agency at the regular meeting thereof, held on the 23rd day of May, 2017, and was
signed by the Chair of the said Successor Agency, and that the same was passed and
adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Oliva Carrera Lopez, Secretary
345
CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
REQUEST
City staff recommends that the City Council adopt Resolution Number 17-3595 to set
the appropriations Limit for Fiscal Year 2017-18.
DISCUSSION
Each year the City must authorize both inflation and population factors to calculate its
spending limitation amount. The inflation factors for FY 2017-18 are the California per
capita cost of living ratio of 1.0369 and the population factor using the City of Fillmore
population and growth percentage change converted to a ratio is 1.0112. Resolution 17-
3595 establishes the Appropriation Limit for FY 2017-18 and, based on the calculation,
the City will be approximately $ 6.4 million under the limit.
Article XIIIB of the California Constitution as enacted by Proposition 4, the Gann Initiative
of 1979, mandates a limit on the amount of proceeds from taxes that cities and other
government agencies within California can receive and spend each fiscal year. The intent
of this law is to limit government spending by putting a cap on the total tax proceeds that
can be appropriated each year. State legislation requires the City to annually adopt a
spending limit for each fiscal year. This limit can be re-established by a recorded vote of
the Council throughout the fiscal year if deemed necessary. The calculation factors can
only be revised annually. Any challenge to the declared amount must be brought within
45 days of its adoption.
The original legislation, Article XIIIB was further modified by Proposition 111 and SB 88
as approved by California voters in June of 1990. Proposition 111 allows cities more
flexibility in selecting certain inflation and population factors to calculate the Gann limit.
The limit varies for each agency and can change each year. When a citys proceeds of
taxes (less statutory exclusions) exceed the legal limit, excess tax revenue must be
returned to the State or citizens via a process of refunds, rebates, or other means that
may be determined at that time. The City is currently at 53% of its limit. As a result, the
346
Appropriations Limit for Fiscal Year 2017-18
May 23, 2017
Page 2 of 3
The basis for the calculation is the amount of tax proceeds that were authorized to be
spent in FY 1978/79 including modifications for inflationary and population changes in
each subsequent year. The attached schedules provide detailed information on the Citys
expenditure limit calculation. The calculation indicates the City will again be significantly
below its spending limit by approximately $ 6.4 million based upon the recommended FY
2017-18 budget.
The Citys appropriations Proposition 4 spending limit of $ 13.69 million for FY 17-18 is
approximately $633,000 higher than the FY 16-17 limit of $13.05 million. Any future
amendments to the adopted appropriations from proceeds of taxes will be subject to the
limit and will be calculated accordingly.
As required in Article XIIIB, the City Council must authorize both inflation and population
factors for calculating the spending limitation amount. The available options are:
Staff recommends the combination of factors that result in the Citys ability to retain the
greatest flexibility under the spending limitation. The two factors that accomplish this
objective for the FY 17-18 limit are the California per capita income and the City of
Fillmore population growth. By selecting the recommended combination of factors, the
City reserves the highest level of management discretion for future appropriations. This
helps to ensure that in years with major street improvements or other needed capital
improvements, it would be highly unlikely for the City to approach or reach its Gann limit.
FISCAL IMPACT
There is no specific fiscal impact as a result of this action. Upon acceptance of this years
spending limitation, the City will be approximately $ 6.4 million below its limit for FY 17-
18.
347
Appropriations Limit for Fiscal Year 2017-18
May 23, 2017
Page 3 of 3
RECOMMENDATION
ATTACHMENTS
348
349
350
351
352
RESOLUTION NO. 17-3595
WHEREAS, the Gann Initiative or Proposition 4, also known as Article XIIIB of the
Constitution of the State of California, was approved by the people; and
WHEREAS, that limit has been calculated by the Finance Department of the City of
Fillmore as required by State law and using guidelines provided by the League of California Cities;
and
WHEREAS, the City Council of the City of Fillmore desires to formally adopt that
appropriations limit for Fiscal Year 2017-18 for the City.
Section 1. That, in accordance with Article XIIIB of the Constitution of the State of
California, the appropriations limit for the City of Fillmore for Fiscal Year 2017-18 is declared to
be $ 13,686,028 as described in Exhibit "A attached hereto and incorporated herein, and the
appropriation subject to the limit is $ 8,774,873
____________________________________
Carrie Broggie, Mayor
___
____________________________
Olivia Carrera Lopez, City Clerk
APPROVED AS TO FORM:
______________________________
Tiffany J. Israel, City Attorney
353
1
CITY OF FILLMORE
APPROPRIATIONS LIMIT
Exhibit A
I. Appropriation Limit:
Growth/Change Factor:
(a) Change in population and per capita income change is provided by the State of California
Department of Finance.
354
1
CITY OF FILLMORE
CENTRAL PARK PLAZA
250 Central Avenue
Fillmore, California 93015-1907
(805) 524-3701 FAX (805) 524-5707
TO: Mayor and Council Members
REQUEST
City staff is requesting the City Council to conduct a public hearing to receive public
comments on this action and approve Resolution No. 17-3596 to place the unpaid water
and sewer utility accounts on the property tax roll.
DISCUSSION
Pursuant to California Health and Safety Code Section 5473 et seq., and City codes
(City Potable Water Fees Ordinance 10-821 and Sanitary Sewer Fees Ordinance 10-
822) the City Council has the ability to collect on unpaid and past due water and sewer
utility charges by adding these charges to the property Tax Roll.
The Cities of Thousand Oaks and Santa Paula use the property tax roll process to
collect on unpaid utility accounts. Fillmore has previously sought to utilize a collection
agency to collect on delinquent accounts. Unfortunately, this option did not yield much
success. As a result, staff now recommends the tax roll process.
Staff has been in contact with the Ventura County Auditor-Controllers office to confirm
the timeline to place the unpaid utility charges on the FY 2017/18 property Tax Roll.
Ventura County confirmed that all documents must be received by July 3, 2017.
Prior to adding delinquent amounts to the Tax Roll, the City must provide proper
notification to the property owner of the unpaid utility account and allow them the
opportunity to pay on the unpaid amount and avoid having it added to the Tax Roll. The
City Council must also hold a duly noticed public hearing on the report listing delinquent
properties. Assuming there is not a majority protest of the affected property owners, the
City may then consider voting to approve the report. At least two-thirds of the City
Council must vote to approve placing the delinquent properties on the tax roll. The City
Council may also vote to revise the report after the public hearing.
355
Public Hearing on the Delinquent Water and Sewer Accounts and Placement on the
Property Tax Roll
May 23, 2017
Page 2 of 4
Date Activity
March 27, 2017 A report was generated out of the utility billing system that
identified the delinquent accounts within the past 24 months.
March 28, 2017 The list was verified and 94 accounts were identified as
delinquent and collectible under the property tax roll process.
Staff used information from the Ventura County Assessors
Office, to look up and verify the APN and property ownership,
to ensure the property was under the same ownership as
when the past due account incurred.
May 4 & May 11, Publication of the Public Notice in the Fillmore Gazette.
2017
May 23, 2017 Public Hearing date at which time property owners may
present their case. Council adoption of Resolution and
approval of list/report of delinquent accounts.
June 13, 2017 Staff will submit certified copies of documents to the County
including the Resolution ordering the Collection of
Assessments and list of unpaid accounts.
The Finance Department plans to recommend that the City Council conduct the above
process on an annual basis and continues to implement improved procedures and
356
Public Hearing on the Delinquent Water and Sewer Accounts and Placement on the
Property Tax Roll
May 23, 2017
Page 3 of 4
processes to minimize the list of unpaid accounts that could end up on the property Tax
Roll. These processes and procedures include:
FISCAL IMPACT
The proposed action would benefit all utility services (Water and Sewer). The estimated
amount of delinquent accounts proposed for the Tax Rolls is approximately $41,792 as
of this writing. The total amount is expected to change as payments against the past
due amounts are received.
The City plans to work with Willdan Financial Services to interface with Ventura County
Auditor/Controllers office to place the unpaid amount on the Tax Roll. Their fee is
estimated at $200.00. Plus, the City will pay the County fees of: first, a set fee of $0.20
per parcel. If 60 parcels are submitted, this will equal $12.00; and, second, of 1% of
the value collected or $0.25 per $100.00 levied. This equates to $30.00 if $12,000 is
levied and placed on the Tax Roll. These amounts will change as property owners pay
on their delinquent account.
RECOMMENDATION
City staff recommends the City Council take the following actions:
357
Public Hearing on the Delinquent Water and Sewer Accounts and Placement on the
Property Tax Roll
May 23, 2017
Page 4 of 4
1. Open the Public Hearing to receive public testimony regarding the City
Councils intent to approve the unpaid utility account report for placement on
the Ventura County Property Tax Roll.
Actions to approve the unpaid utility report for placement on the Tax Roll:
2. Approve list of unpaid utility accounts, service addresses, parcel numbers, and
assessment amount to be submitted to the Ventura County Tax Collector.
ATTACHMENTS
1) Resolution No. 17-3596 Approving Collection of Delinquent Water and Sewer
Service Charges
2) Report of Unpaid Water and Sewer Accounts as of this writing
358
CITY OF FILLMORE
RESOLUTION NO. 17-3596
WHEREAS, the City Council of the City of Fillmore, did by its ordinance No. 10-822 and
10-821 duly adopted on September 14, 2010, and did by series of superseding, duly adopted,
ordinances and resolutions adopt schedules of service charges, connection fees and other charges
related to collection of water and sewer, all pursuant to applicable portions if California Health
and Safety Code; and
WHEREAS, California Health and Safety Code Sections 5473, et seq. outlines the
procedures required to notify and move to collect such charges from those who have failed to
pay; and
WHEREAS, the City Clerk has mailed a Notice of Public Hearing to the owner of each
parcel described in the report of the Finance Director, which lists the parcels with delinquent water
accounts (the Report); and
WHEREAS, to that end, the City Council, after notice duly given as required by law, on
May 23, 2017, at 6:30 p.m., in the City Hall Council Chamber, a full and fair public hearing was
held in which all interested persons were afforded the opportunity to comment in protest or support
of property owners affected by this Report.
Section 1 The preceding recitals are true and correct and incorporated herein by reference.
Section 2 The City Council elects, pursuant to the provisions of California Health and Safety code,
Sections 5473, 5473a, 5473.1 through 5473.11, and other such authority as is vested in it
by law, that water and sewer fees, interest charges, and late charges due to the City which
have become delinquent because of nonpayment be collected by addition to the annual
property tax roll for collection by the Tax Collector of County of Ventura.
Section 3 The City Council finds a majority of the owners of separate parcels described in the Report
did not protest, and hereby determines each described charge is appropriate and accepts
the Report of the Finance Department of the City heretofore prepared and filed with City
Clerk, and attached to this Resolution as Exhibit A, setting forth amounts owing by
each billing account number, service address, assessors parcel number, and delinquent
amounts, except as said Report may be revised or modified after the public hearing by the
City Council pursuant to Health and Safety Code section 5473.3.
The Finance Director is directed on or before July 5, 2017 to transmit said report, as
certified by Oliva Carrera Lopez, City Clerk, to have been duly adopted by City Council,
and of this Resolution to the appropriate County Officials so as to carry out the
intended purposes of this Resolution. 359
Page 1
CITY OF FILLMORE
RESOLUTION NO. 17-3596
Section 4 The City Council verifies that the City Clerk has complied with all provisions imposed by
law relative to publication of a Notice of Public Hearing in a newspaper of general
circulation within Citys utility service area; that Notice of Delinquency has been mailed
to each and every property owner as prescribed by law; and that said mailing informs
each owner/addressee of filing of the Report of the Finance Department and of the time
and place of the hearing in connection herewith.
Section 5 The County Auditor/Controller of Ventura shall enter on the County Tax Roll each
identified parcel of land the amount of the delinquency, and such delinquency shall be
collected at the same time and in the same manner as the County taxes are collected.
After collection by the County, the net amount of the levy shall be paid to the City
Treasurer.
Section 6 The adoption of this Resolution constitutes the collection of delinquent utility accounts
on annual property tax roll.
ATTEST:
APPROVED AS TO FORM:
360
Page 2
City of Fillmore
List of Delinquent Utility Accounts Subject to Placement on the Property Tax Roll
Billing Cust No Owner Cust No Property Tax Roll Service Address APN #
014748-000 719 711.75 905 3rd St 0520023115
018178-000 9842 681.95 400 -F Santa Clara Ave 0530102060
017262-000 14223 575.56 845 Blaine Ave 0520032460
017205-000 9275 552.19 231 Orange Grove 0530091030
014867-000 18787 355.85 263 Los Serenos Dr 0520101175
017736-000 4601 279.71 400 -A Santa Clara Ave 0530102060
015089-000 13233 301.73 940 1/2 4th St 0520022335
016390-000 16484 297.27 726 -B 5th St 0520012550
017159-000 14386 280.22 950 Catalano Ct 0430130405
013745-000 13746 270.87 330 Del Valle Dr 0520136015
016210-000 16130 121.21 319 Condor Ct 0460300165
017207-000 12929 229.50 245 C St 0520111155
018468-000 18468 220.86 725 4th St 0520013170
017193-000 12607 209.90 400 -H Santa Clara Ave 0530102060
018210-000 18840 208.00 331 River St 0540020405
001605-000 17768 205.00 984 Meadowlark Dr 0520062195
009010-000 17341 206.59 740 Tighe Ln 0500143665
016992-000 16484 187.73 726 -A 5th St 0520012550
008387-000 8387 142.68 955 B St 0430120825
017450-000 3930 158.17 1224 Sespe Ave 0520101345
017028-000 16885 140.11 825 4th St 0520013235
018426-000 18871 141.33 251 Rhodes Ct 0520113295
015968-000 17644 119.47 136 -E. Telegraph Rd 0410330025
015991-000 3930 133.86 1224 Sespe Ave 0520101345
016509-000 13980 129.94 902 Blaine Ave 0520023095
014500-001 17983 128.35 1166 Los Serenos Dr 0520102395
016625-000 14223 120.36 845 Blaine Ave 0520032460
017135-000 430 110.59 434 Clay St 0530054210
018743-000 18667 97.98 117 Bridlewood Ln 0530131045
013599-000 013599 1,282.92 472 Foothill 0500071040
006143-000 006143 664.67 329 Fillmore 0530071250
014387-000 18468 431.51 725 4Th St 0520013170
016582-000 13739 364.52 162 Surrey Way 0520250195
017987-000 4601 333.86 400 -A Santa Clara Ave 0530102060
016268-000 4601 302.31 400 -C Santa Clara Avenue 0530102060
018206-000 16980 258.59 142 Cherrywood St 0540050215
016577-001 430 241.14 434 Clay St 0530054210
013863-000 13863 178.05 824 Blaine Ave 0520033495
008468-000 18277 148.49 635 Yucca Dr 0520051095
008679-000 18425 64.17 545 -1/2 Saratoga St 0530021190
012780-000 18840 59.82 331 River St 0540020405
361
11,648.78 As of 5/18
MANAGERS REPORT
Tuesday, May 23
UPCOMING MEETINGS/EVENTS
DEPARTMENT INFORMATION
ADMINSTRATION/ECONOMIC DEVELOPMENT
Please be at the corner of Central Avenue and 2nd Street between 9:30 am and 9:45 am for the parade. We
will have the fire truck for city council.
This years four person scramble will take place Saturday, June 3 with a noon start at Elkins Ranch Golf
Course. Tournament fees are $120 per player and includes, golf, cart, drinks, lunch, gift bag, awards dinner
and raffle. Proceeds benefit the Fillmore Volunteer Firefighter Foundation in their efforts to provide
important funding for personal protective equipment, safety and rescue gear, emergency medical supplies
and continuing education and training for the membership.
If anyone would like to sponsor the event there are seven categories:
362
1
MEDICAL MARIJUANA PUBLIC MEETING
Sunday, June 25 at the Memorial Building the city will conduct a public workshop on medical marijuana
cultivation and distribution. The event will take place from 3:30 PM 6:00 PM. Erik Sternad, Sternad
Consulting will be facilitating the meeting and there will be translation services available.
A joint meeting has been tentatively scheduled for Tuesday, May 30 at 6:00 pm at the School Farm.
The pool opens Monday, May 29 with lap swim at 6:30 am.
FINANCE
Utilities - Collections
363
2
A public hearing is planned for the May 23rd City
Council meeting to request approval to place an
assessment on the property tax roll for unpaid utility
bills. Staff implemented a lien process, as allowed
by ordinance, to collect on unpaid utility bills.
Unpaid utility bills can be collected by the owner of
a rental property. Two notifications letters were
mailed out and two public notices were provided
as required by ordinance. The City collected on
approximately 60% of the 100 notices originally
mailed out. The remainder 40% will be added to a
property owners property tax roll if they remain
unpaid by the Public Hearing date.
Billed Cycle 1
No. of Bills Mailed: 963
Billed Cycle 4
No. of Bills Mailed: 1,019
364
3
Shut Offs - Cycle 1 3
Shut Offs - Cycle 4 6
PUBLIC WORKS
Wells The SCATA System continues to get much needed upgrades to the PLC and communication
network. We have been able to save on costs as opposed to a complete refurbish of an antiquated system of
20-year-old electronics. Well 5 is receiving needed repairs to get ready for the summer pumping season.
Distribution Service line upgrades of our decaying infrastructure continues along with radio read
upgrades. Revenues will increase with the number of old meters being replaced with newer and more
accurate reads.
AQUATIC CENTER
Staff and programs are being put into place along with a barrage of maintenance while it is closed.
PARKS
Staff continues to maintain and make repairs with larger project in the future to some of our building at
Shiells Park and Deloris Park.
With all the late rain, weed abatement is continuing into late spring.
Graffiti is ongoing, and making every effort possible with limited staff time to remove as soon as possible.
Dead and diseased tree are still being remove from city property and some replanting is already taking
place. Most replanting will be in the fall to ensure a healthy tree for a long life.
Continued efforts are made to replace our buckled sidewalks in town. Public Works is tackling the areas
that have the most potential of injury and liability issues until funding is made available for a larger sidewalk
projects.
365
4
FACILITIES
The community services department has been working closely with public works to update rental policies
and procedures to benefit the city and our customers alike.
We have the Honey Harvest Festival and the Fourth of July Festival upcoming.
ENGINEERING
Awaiting Caltrans to close out the Caltrans Encroachment Permit for this project. Notice of Complete will
be brought before City Council once the Encroachment Permit close out letter has been received from
Caltrans. Staff also working with Caltrans regarding amending the Agreement for Sharing Cost of Utilities
between the City and Fillmore for State operation and maintenance work performed on highway electrical
facilities including flashing beacons, traffic signals, traffic-signal systems, safety lighting and sign lighting.
STP-L FUNDS
Authorization to Proceed with Construction has been received from Caltrans and Caltrans issued the
funding agreement (E-76 CON). Finalizing contract documents and Caltrans Encroachment permit. Time
delay related to identifying a transition plan for retrofitting curb ramps on a city-wide master plan approach
as opposed to needing to update them with each overlay. In many cases, retrofit will require obtaining
pedestrian easements at the back corner of the sidewalks and modification of existing private improvements
like fences and landscaping. Staff working to resolve the ADA compliance in order to bid the overlay
project.
LANDSCAPING RFP
City Engineer needs to meet with the existing landscape service provider to gain understanding of specific
line items in the existing contract before finalizing the new contract for advertisement.
HVP FOUNTAINS
New landscape assessment fee provides funding to repair the fountains through the assessment district,
the project can be advertised for construction bids. Staff finalizing contract documents.
FIRE
EMS Incidents 47 36
Public Service 2 9
366
5
Traffic Collisions 3 6
Hazard Investigation 1 2
Structure Fires 2 0
Grass/Brush Fire 0 0
Flooding 0 0
Misc Fire 1 0
Vehicle Fire 0 1
Fire Alarms 0 0
Total Calls 58 55
POLICE
367
6
FILLMORE POLICE STATION
CRIME CONTROL
April 2017 STATISTICS
DAVE WAREHAM, CHIEF OF POLICE
368
April 2017
CITY OF FILLMORE - PART I / PART II CRIME
CITY PART I CRIME MONTHLY: (11 to 11) 0% YTD: Down (54-41) -24%
PERSONS # NOTES (A= Arrest, NL = No Leads, SI = Suspect Identified) YTD
Homicide 0 0%
Rape 1 A-Fred Ponce had intercourse with V, against her will, while 0%
visiting his little brother.
Sexual Assault 0 -100 %
Robbery 0 300 %
GBI Assaults 1 A Sylvia Perez (5150) assaulted husband w/frying pan -50 %
And burned their house down w/grease fire.
CITY PART II CRIME MONTHLY: UP 37% (19 to 26) YTD: 0% 106 to 106
Part II # NOTES (A= Arrest, NL = No Leads, SI = Suspect Identified) YTD
Assault Felony 4 3-domestics and corporal injury to child 7%
Assault Misd. 5 S-threw a soda on V / family disputes; 4-A resisting arrests. 28%
Sex Offense 0 0%
Felony Vandalism 2 Graffiti 117%
Misd. Vandalism 6 S1-grafitti Local High school student -33%
Other 9 -7%
369
Page 1 of 3
CITY TRAFFIC COLLISIONS & CITATIONS - 2017
140
120
BY NUMBER
100
80
60
40
20
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
TCs 12 8 6 2
Cites 90 80 115 73
TCs Cites
10%
0%
-10%
-20%
-30%
-40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Part I -11% -18% -12% -24%
Part II 26% 21% 8% 0%
Arrests 8% 1% 13% 29%
Calls -8% -9% -4% -5%
TCs -14% -11% -28% -21%
370
Page 2 of 3
STATION CRIME CONTROL STRATEGIES
371
Page 3 of 3
CLOSED SESSION May 23, 2017
372