Resolution Number 21-11-02-03RESOLUTION
WHEREAS, the City of San Juan Capistrano ("City") and Santa Margarita Water
District ("SMWD") entered into an Annexation Agreement, dated as of January 21, 2020,
to: (i) set forth certain key terms to be incorporated into the Orange County Local Agency
Formation Commission ("LAFCO") Application for annexation by, and transfer to, SMWD
of the City's water and wastewater utilities ("Utilities Systems," as defined in the
Annexation Agreement), and (ii) address how other matters pertaining to the annexation
' and transfer of the City's Utilities Systems to SMWD will be carried out by the City and
SMWD;
WHEREAS, on August 19, 2021, LAFCO adopted its Resolution No. DA 20-01
approving the annexation ("LAFCO Resolution"). The LAFCO Resolution incorporated
and adopted the provisions of the Annexation Agreement;
WHEREAS, the City has previously financed certain improvements to its water
system by incurring the following obligations payable from net revenues of the City's water
system (collectively, the "Bond Obligations"):
1) City of San Juan Capistrano Water Revenue Bonds, Series 2014A
(the "2014 Bonds");
2) City of San Juan Capistrano Refunding Revenue Installment
Agreement, Series 2017 (the "2017 Installment Agreement"); and
3) San Juan Basin Authority Lease Revenue Bonds (Ground Water
Recovery Project), Issue of 2014 (the "SJBA Bonds");
WHEREAS, pursuant to the Resolution SMWD will annex the water system of the
City, and will assume ownership of the water system effective November 15, 2021, or
' such other date as provided in the Annexation Agreement between the City and SMWD,
as amended (the "Annexation Effective Date');
11!2!2021
RESOLUTION NO. 21-11-02-03
'
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
JUAN CAPISTRANO, CALIFORNIA APPROVING ASSIGNMENT,
ASSUMPTION AND AMENDMENT AGREEMENTS IN
CONNECTION WITH CERTAIN BOND OBLIGATIONS RELATED
TO THE OPERATION OF CITY'S WATER UTILITY AND
AUTHORIZING AND DIRECTING CERTAIN RELATED ACTIONS
IN CONNECTION WITH THE TRANSFER OF THAT UTILITY
SYSTEM TO THE SANTA MARGARITA WATER DISTRICT,
DETERMINING THAT SUCH ACTION IS EXEMPT FROM THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT, AND
AUTHORIZING AND DIRECTING THE CITY MANAGER TO TAKE
CERTAIN ACTIONS TO EFFECTUATE THE PURPOSE OF THIS
RESOLUTION
WHEREAS, the City of San Juan Capistrano ("City") and Santa Margarita Water
District ("SMWD") entered into an Annexation Agreement, dated as of January 21, 2020,
to: (i) set forth certain key terms to be incorporated into the Orange County Local Agency
Formation Commission ("LAFCO") Application for annexation by, and transfer to, SMWD
of the City's water and wastewater utilities ("Utilities Systems," as defined in the
Annexation Agreement), and (ii) address how other matters pertaining to the annexation
' and transfer of the City's Utilities Systems to SMWD will be carried out by the City and
SMWD;
WHEREAS, on August 19, 2021, LAFCO adopted its Resolution No. DA 20-01
approving the annexation ("LAFCO Resolution"). The LAFCO Resolution incorporated
and adopted the provisions of the Annexation Agreement;
WHEREAS, the City has previously financed certain improvements to its water
system by incurring the following obligations payable from net revenues of the City's water
system (collectively, the "Bond Obligations"):
1) City of San Juan Capistrano Water Revenue Bonds, Series 2014A
(the "2014 Bonds");
2) City of San Juan Capistrano Refunding Revenue Installment
Agreement, Series 2017 (the "2017 Installment Agreement"); and
3) San Juan Basin Authority Lease Revenue Bonds (Ground Water
Recovery Project), Issue of 2014 (the "SJBA Bonds");
WHEREAS, pursuant to the Resolution SMWD will annex the water system of the
City, and will assume ownership of the water system effective November 15, 2021, or
' such other date as provided in the Annexation Agreement between the City and SMWD,
as amended (the "Annexation Effective Date');
11!2!2021
WHEREAS, pursuant to the Annexation Agreement and the LAFCO Resolution,
SMWD will assume all the Bond Obligations on the Annexation Effective Date, including I the obligation to pay debt service from net revenues of the water system;
WHEREAS, to carry out this transfer of obligations, the City and SMWD intend to
enter into an Assignment, Assumption and Amendment Agreement for each of the Bond
Obligations, each of which is intended to be accepted by the sole bondholder of each
Bond Obligation, pursuant to which the City assigns all its obligations relating to the Bond
Obligations to SMWD; and
WHEREAS, the Assignment, Assumption and Amendment Agreements, in their
substantial final form, are attached to this Resolution as Exhibits A-1, AA=2 and AA=3 and
incorporated as a material part of this Resolution by this reference.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SAN JUAN CAPISTRANO, as follows:
The above recitals are true and correct and are a substantive part of this
Resolution.
2. The Assignment, Assumption and Amendment Agreements have been
reviewed by City staff and the City Council with respect to the applicability of the California
Environmental Quality Act (Public Resources Code Section 21000 of seq.) ("CEQA). The
City Council hereby determines that approval of the Assignment, Assumption and '
Amendment Agreements is exempt from additional review under CEQA because the
activity to be undertaken by the Assignment, Assumption and Amendment Agreements
qualifies under various exemptions to CEQA. Those exemptions include the Class 19
Categorical Exemption (State CEQA Guidelines Section 15319(a)) because the
Assignment, Assumption and Amendment Agreements facilitate the annexation of
existing City -owned and operated Utility Systems infrastructure into the boundaries, and
operations, of SMWD and the Class 20 Categorical Exemption (State CEQA Guidelines
Section 15320) because the annexation constitutes a change in organization of the Utility
Systems rather than the development of new or additional utility systems. Furthermore,
it is exempt from CEQA under the common sense exemption set forth in State CEQA
Guidelines section 15061, subdivision (b)(3) as it can be seen with certainty that there is
no possibility that the agreements may have a significant effect on the environment.
Additionally, approval of the agreements is not a "project' as defined by CEQA Guidelines
Section 15378(b)(5) because it is merely an organizational or administrative activity of
governments that will not result in direct or indirect physical changes to the environment,
and thus approval of the agreement is not subject to CEQA. The City Council hereby
determines that no substantial evidence exists to find that the exceptions to these
exemptions apply. The City Council makes these determinations in the exercise of its
independent judgment.
3. City Staff is hereby directed to prepare and post a notice of exemption
pursuant to CEQA Guidelines Section 15062. '
2 11/2/2021
' 4. 2014 Bonds Assignment. The City Council hereby approves the form of the
Assignment, Assumption and Amendment Agreement for the 2014 Bonds, by and among
the City, SMWD, and The Bank of New York Mellon Trust Company, N.A., as trustee for
the 2014 Bonds, as attached hereto as Exhibit A-1, with such additions thereto and
changes therein as the City Manager, or his designee(s), deems necessary, desirable or
appropriate upon consultation with legal counsel, the execution by the City of which shall
be conclusive evidence of the approval of any such additions and changes.
5. 2017 Installment Agreement Assignment. The City Council hereby
approves the form of the Assignment, Assumption and Amendment Agreement for the
2017 Installment Agreement, by and among the City, SMWD, and Public Property
Financing Corporation of California, as attached hereto as Exhibit A-2, with such additions
thereto and changes therein as the City Manager, or his designee(s), deems necessary,
desirable or appropriate upon consultation with legal counsel, the execution by the City
of which shall be conclusive evidence of the approval of any such additions and changes.
6. SJBA Bonds Assignment. The City Council hereby approves the form of
the Assignment, Assumption and Amendment Agreement for the SJBA Bonds, by and
among the City, SMWD, San Juan Basin Authority, and The Bank of New York Mellon
Trust Company, N.A., as trustee, for the SJBA Bonds, as attached hereto as Exhibit A-3,
' with such additions thereto and changes therein as the City Manager, or his designee(s),
deems necessary, desirable or appropriate upon consultation with legal counsel, the
execution by the City of which shall be conclusive evidence of the approval of any such
additions and changes.
7. The City Manager, or his designee(s), is hereby authorized and directed to
execute, and the City Clerk is hereby authorized to attest, as appropriate, the Assignment,
Assumption and Amendment Agreements and such other agreements, documents and
certificates as may be necessary or desirable to effectuate the purposes of this resolution
and the annexation of the Water System and transfer of Bond Obligations, including,
without limitation, such other agreements, documents and certificates as may be required
to effectuate such purposes.
8. This Resolution shall take effect from and after its passage and adoption by
the City.
PASSED, APPROVED AND ADOPTED this 2nd day of November 2021.
JOHN TAYLOR, MAYOR
ATTEST: I
' MARI M ROS, CITY C
3 11/2/2021
STATE OF CALIFORNIA ) I COUNTY OF ORANGE ) ss.
CITY OF SAN JUAN CAPISTRANO )
I, Maria Morris, appointed City Clerk of the City of San Juan Capistrano, do hereby certify
that the foregoing Resolution No. 21-11-02-03 was duly adopted by the City Council of
the City of San Juan Capistrano at a Regular meeting thereof, held the 2nd day of
Nove er 2021, by the following vote:
AYES: CU CIL MEMBERS: Reeve, Hart, Bourne, Farias and Mayor Taylor
NOES: C U CIL MEMBERS: None
ABSENT: C U CIL MEMBERS: None
MART I CITY CL K
0
4 11/2/2021
EXHIBIT A-1
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
City of San Juan Capistrano
Water Revenue Refunding Bonds, Series 2014A
10306-000612582497v7.doc
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
by and among
SANTA MARGARITA WATER DISTRICT
as Assignee
and
CITY OF SAN JUAN CAPISTRANO
as Assignor
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
Dated as of November 1, 2021
relating to
CITY OF SAN JUAN CAPISTRANO
WATER REVENUE REFUNDING BONDS, SERIES 2014A
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
This Assignment, Assumption and Amendment Agreement, dated as of November 1, 2021 ,
(this "Agreement'), is entered into by and among SANTA MARGARITA WATER DISTRICT, a
California Water District duly organized and existing under Division 13 of the Water Code of the
State of California (the "Assignee"), the CITY OF SAN JUAN CAPISTRANO, a municipality duly
organized and existing under and by virtue of the laws of the State of California (the "Assignor"),
and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking
association duly organized and existing under and by virtue of the laws of the United States of
America, as trustee (the "Trustee").
RECITALS
A. Pursuant to Resolution No. DA 20-01 of the Orange County Local Agency
Formation Commission dated August 19, 2021 (the %AFCO Resolution'), the Assignee has
annexed the municipal water system of the Assignor as described in the LAFCO Resolution (such
water system, which will constitute the water system within the boundaries of a geographic area
within the boundaries of the Assignee which will be designated after the Annexation Effective Date
(defined below), called or to be called Improvement District No. 9, the "Water System") and will
assume ownership of the Water System effective November 15, 2021, or such later date as provided
in the Annexation Agreement, by and between the Assignor and the Assignee, dated as of January
21, 2020, as may be amended'(the "Annexation Effective Date").
B. The Assignor has entered into an Indenture, dated as of November 1, 2014 (the '
"Indenture"), by and between the Assignor and the Trustee, under which the Assignor issued its
Water Revenue Refunding Bonds, Series 2014A (the "Bonds").
C. The Bonds are payable from Net Revenues (as such term is defined in the
Indenture).
D. Pursuant to the LAFCO Resolution, the Assignee will assume all obligations under
the Indenture on the Annexation Effective Date, including the obligation to pay the Bonds from Net
Revenues of the Water System.
E. This Agreement constitutes a Supplemental Indenture within the meaning of the
Indenture.
AGREEMENT
SECTION 1. Assignment.
(a) Effective as of the Annexation Effective Date, the Assignor, for good and valuable
consideration in hand received, does hereby unconditionally assign and transfer to the Assignee
without recourse, for the benefit of the Trustee, all of its rights, title, interest, duties and obligations
in and to the Indenture, including the obligation to pay the Bonds. This assignment is absolute and
is presently effective. '
(b) In connection with the matters described in subsection (a), the Assignee agrees to
establish, on or before the Annexation Effective Date: (i) a "Revenue Fund" in which revenues of
' the Water System shall be deposited meeting the description thereof set forth in Section 1.01 of the
Indenture, which the Assignee agrees shall be separate from other funds and accounts of the
Assignee and pledged for the benefit of the owners of the Bonds pursuant to the terms of the
Indenture; and (ii) such other funds as may be contemplated pursuant to Article IV of the Indenture.
(c) In connection with the matters described in subsection (a), the Assignor agrees to
transfer, or cause to be transferred, the amounts held in the 2014 Bonds Rate Stabilization Reserve,
if any, to the Assignee upon the Annexation Effective Date, and the Assignee agrees to hold such
moneys separate from other funds of the Assignee for the benefit of the owners of the Bonds.
SECTION 2. Acceptance.
(a) The Assignee hereby accepts the foregoing assignment as of the Annexation
Effective Date for the benefit of the Trustee and the owners of the Bonds, and agrees thereafter to
pay the Bonds from Net Revenues of the Water System and assume and perform all of the other
obligations of the Assignor as provided in the Indenture. The Assignee agrees that the owners of the
Bonds shall be entitled to a lien on moneys in the Revenue Fund and other funds established under
the Indenture.
(b) From and after the Annexation Effective Date, the Assignee will assume the
responsibilities of the Assignor with respect to compliance with applicable federal requirements for
the tax-exempt status of the Bonds, in accordance with the Tax Certificate dated November 14, 2014
and executed by the Assignor in connection with the Bonds.
' (c) The Trustee affirms that all moneys from the Revenue Fund and other funds
established under the Indenture which are received by the Trustee shall be held for the benefit of the
owners of the Bonds pursuant to the Indenture. The Trustee further affirms that the Debt Service
Fund and the Redemption Fund are currently established and held by the Trustee and that such
funds will continue to be held by the Trustee for the benefit of the owners of the Bonds.
SECTION 3. Amendment.
(a) The definition of "Certificate of the City" in Section 1.01 of the Indenture is hereby
amended as follows:
""Certificate of the City" means an instrument in writing signed by
the General Manager or Assistant General Manager of Santa
Margarita Water District, or by any other officer of Santa Margarita
Water District duly authorized by the Board of Directors of Santa
Margarita Water District for that purpose."
(b) The definition of "City" in Section 1.01 of the Indenture is hereby amended as
follows:
""City" means Santa Margarita Water District, a California Water
District duly organized and existing under Division 13 of the Water
' Code of the State of California."
(c) The definition of "City Council' in Section 1.01 of the Indenture is hereby amended
as follows:
4
""City Council' means the Board of Directors of Santa Margarita
Water District." ,
(d) The definition of "City Manager" in Section 1.01 of the Indenture is hereby
amended as follows:
""City Manager" means the General Manager or Assistant General
Manager of Santa Margarita Water District."
(e) The definition of "Water System" in Section 1.01 of the Indenture is hereby
amended as follows:
""Water System" means the whole and each and every part of the
water system within the geographic boundaries of an improvement
district of Santa Margarita Water District which has been previously
established, or which shall be established as soon as possible
hereafter, called or to be called Improvement District No. 9
(consisting of the service area annexed to Santa Margarita Water
District pursuant to Resolution No. DA 20-01 dated August 19, 2021
of the Orange County Local Agency Formation Commission),
including all real property and buildings, including the portion thereof
existing on the date hereof, and including all additions, betterments,
extensions and improvements to such water system or any party
thereof hereafter acquired or constructed." '
(f) The notice address for the City set forth in Section 10.09 of the Indenture is hereby
amended as follows:
"Santa Margarita Water District
26111 Antonio Parkway
Rancho Santa Margarita, California 92688
Attention: General Manager"
SECTION 4. Filings.
The Assignee agrees, at its own expense, to make any filings required by The Depository
Trust Company, the Internal Revenue Service, the California Debt Investment Advisory
Commission and any other federal or state administrative and regulatory bodies in order to evidence
the matters set forth herein.
SECTION 5. Attomment.
The Trustee acknowledges and agrees to the assignment set forth in Section 1 and agrees to
attorn to the Assignee from and after the Annexation Effective Date with respect to all matters
related to the Indenture. This Agreement shall confer no rights and impose no obligations upon the
Trustee beyond those expressly provided in this Agreement and in the Indenture.
' SECTION 6. Representations and Warranties.
Each of the Assignee, the Assignor and the Trustee represents and warrants that: (i) the
execution, delivery and performance of this Agreement have been duly authorized by such party by
all necessary action; (ii) this Agreement, assuming due execution by the other parties thereto,
constitutes a valid, binding and enforceable obligation of such party, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
other laws relating to or affecting generally the enforcement of creditors' rights, by equitable
principles, by the exercise of judicial discretion in appropriate cases and by the limitations on
remedies against public agencies in the State of California; (iii) to the best of such party's
knowledge after due inquiry, this Agreement does not violate any law, regulation or order binding
on such party; (iv) no consent or authorization of any third party is required in connection with the
execution, delivery or performance by such party of this Agreement or, alternatively, all such
consents and authorizations have been given; (v) such party has the power to carry out the
obligations imposed on such party by this Agreement; and (vi) there is no claim, action or
proceeding pending and notice of which has been received by such party, or to the knowledge of
such party, threatened against such party before any court, arbitrator or governmental agency or
regulatory or administrative agency or commission challenging the validity, enforceability or
legality of this Agreement.
In addition, the Assignor and the Trustee represent and warrant that no Event of Default has
occurred and is continuing under the Indenture as of the date of execution and delivery of this
Agreement.
' SECTION 7. Partial Invalidity.
If any one or more of the agreements or covenants or portions thereof required hereby to be
performed by or on the part of the Assignee, the Assignor or the Trustee shall be contrary to law,
then such agreement or agreements, such covenant or covenants or such portions thereof shall be
null and void and shall be deemed separable from the remaining agreements and covenants or
portions thereof and shall in no way affect the validity hereof. The Assignee, the Assignor and the
Trustee hereby declare that they would have executed this Agreement, and each and every other
article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact
that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases
hereof or the application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
SECTION 8. California Law.
THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 9. Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which shall be deemed an
original, and all of which shall constitute but one and the same instrument.
I
[Remainder of Page Intentionally Left Blank]
4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their officers
thereunto duly authorized as of the day and year first written above. I
SANTA MARGARITA WATER DISTRICT
By:
Its: General Manager
CITY OF SAN JUAN CAPISTRANO
By:
Its: City Manager
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
Its: Authorized Officer
ACKNOWLEDGED AND AGREED:
WELLS FARGO EQUIPMENT FINANCE,
INC.
By:
Its: Authorized Officer
EXHIBIT A-2
' ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
City of San Juan Capistrano
Refunding Revenue Installment Agreement, Series 2017
10306-000612582497v7.doo
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
by and among
SANTA MARGARITA WATER DISTRICT
as Assignee
and
CITY OF SAN JUAN CAPISTRANO
as Assignor
and
PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA
as Corporation
Dated as of November 1; 2021
relating to
$8,410,000
CITY OF SAN JUAN CAPISTRANO
REFUNDING REVENUE INSTALLMENT AGREEMENT, SERIES 2017
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
This Assignment, Assumption and Amendment Agreement, dated as of November 1, 2021
(this "Agreement'), is entered into by and among SANTA MARGARITA WATER DISTRICT, a
California Water District duly organized and existing under Division 13 of the Water Code of the
State of California (the "Assignee"), the CITY OF SAN JUAN CAPISTRANO, a municipality duly
organized and existing under and by virtue of the laws of the State of California (the "Assignor"),
and PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public
benefit corporation duly organized and existing under the laws of the State of California (the
"Corporation").
RECITALS
A. Pursuant to Resolution No. DA 20-01 of the Orange County Local Agency
Formation Commission dated August 19, 2021 (the "LAFCO Resolution'), the Assignee has
annexed the municipal water system of the Assignor as described in the LAFCO Resolution (such
water system, which will constitute the water system within the boundaries of a geographic area
within the boundaries of the Assignee which will be designated after the Annexation Effective Date
(defined below), called or to be called Improvement District No. 9, the "Water System") and will
assume ownership of the Water System effective November 15, 2021, or such later date as provided
in the Annexation Agreement, by and between the Assignor and the Assignee, dated as of January
21, 2020, as may be amended (the "Annexation Effective Date").
B. The Assignor has entered into an Installment Purchase Agreement, dated as of '
December 1, 2017 (the "IPA"), by and between the Assignor and the Corporation, under which the
Assignor agreed to make Series 2017 Installment Payments (as such term is defined in the IPA) to
the Corporation.
C. The Series 2017 Installment Payments are payable from Net Revenues (as such term
is defined in the IPA).
D. Pursuant to the LAFCO Resolution, the Assignee will assume all obligations under
the IPA on the Annexation Effective Date, including the obligation to make the Series 2017
Installment Payments from Net Revenues of the Water System.
AGREEMENT
SECTION 1. Assignment.
(a) Effective as of the Annexation Effective Date, the Assignor, for good and valuable
consideration in hand received, does hereby unconditionally assign and transfer to the Assignee
without recourse, for the benefit of the Corporation, all of its rights, title, interest, duties and
obligations in and to the IPA, including the obligation to pay all Series 2017 Installment Payments
to the Corporation. This assignment is absolute and is presently effective.
(b) In connection with the matters described in subsection (a), the Assignee agrees to
establish a "Revenue Fund" and a "Payment Fund," in each case meeting the description thereof set I
forth in Section 5.2 of the IPA, on or before the Annexation Effective Date.
' (c) In connection with the matters described in subsection (a), the Assignor agrees to
transfer the amounts held in the 2017 Rate Stabilization Fund, if any, to the Assignee upon the
Annexation Effective Date, and the Assignee agrees to hold such moneys separate from other funds
of the Assignee for the benefit of the Corporation.
SECTION 2. Acceptance.
(a) The Assignee hereby accepts the foregoing assignment as of the Annexation
Effective Date for the benefit of the Corporation, and agrees thereafter to pay the Series 2017
Installment Payments to the Corporation and assume the other obligations of the Assignor as
provided in the IPA.
(b) From and after the Annexation Effective Date, the Assignee will assume the
responsibilities of the Assignor with respect to compliance with applicable federal requirements for
the tax-exempt status of the Series 2017 Installment Payments, in accordance with the Tax
Compliance Certificate and Agreement dated December 15, 2017 and executed by the Assignor in
connection with the IPA.
SECTION 3. Amendment.
(a) The definition of "City" in Section 1.1 of the IPA is hereby amended as follows:
"Cy. The term "City" means Santa Margarita Water District, a
' California Water District duly organized and existing under Division
13 of the Water Code of the State of California."
(b) The definition of "Manager" in Section 1.1 of the IPA is hereby amended as follows:
"Manager. The term "Manager" means the General Manager of Santa
Margarita Water District, or any person designated by the General
Manager of Santa Margarita Water District to act on behalf of the
General Manager of Santa Margarita Water District."
(c) The definition of "Water System" in Section 1.1 of the IPA is hereby amended as
follows:
"Water System. The term "Water System" means the whole and each
and every part of the water system within the geographic boundaries
of an improvement district of Santa Margarita Water District which
has been previously established, or which shall be established as soon
as possible hereafter, called or to be called Improvement District No.
9 (consisting of the service area annexed to Santa Margarita Water
District pursuant to Resolution No. DA 20-01 dated August 19, 2021
of the Orange County Local Agency Formation Commission),
including all real property and buildings, including the portion thereof
existing on the date hereof, and including all additions, betterments,
' extensions and improvements to such water system or any part thereof
hereafter acquired or constructed."
2
(d) The notice address for the City set forth in Section 10.10 of the IPA is hereby
amended as follows: '
"Santa Margarita Water District
26111 Antonio Parkway
Rancho Santa Margarita, California 92688
Attention: General Manager"
SECTION 4. Filings.
The Assignee agrees, at its own expense, to make any filings required by The Depository
Trust Company, the Internal Revenue Service, the California Debt Investment Advisory
Commission and any other federal or state administrative and regulatory bodies in order to evidence
the matters set forth herein.
SECTION 5. Attornment.
The Corporation acknowledges and agrees to the assignment set forth in Section 1 and
agrees to attorn to the Assignee from and after the Annexation Effective Date with respect to all
matters related to the IPA. This Agreement shall confer no rights and impose no obligations upon
the Corporation beyond those expressly provided in the IPA.
SECTION 6. Representations and Warranties.
Each of the Assignee, the Assignor and the Corporation represents and warrants that: (i) the ,
execution, delivery and performance of this Agreement have been duly authorized by such party by
all necessary action; (ii) this Agreement, assuming due execution by the other parties thereto,
constitutes a valid, binding and enforceable obligation of such party, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
other laws relating to or affecting generally the enforcement of creditors' rights, by equitable
principles, by the exercise of judicial discretion in appropriate cases and by the limitations on
remedies against public agencies in the State of California; (iii) to the best of such party's
knowledge after due inquiry, this Agreement does not violate any law, regulation or order binding
on such party; (iv) no consent or authorization of any third party is required in connection with the
execution, delivery or performance by such party of this Agreement or, alternatively, all such
consents and authorizations have been given; (v) such party has the power to carry out the
obligations imposed on such party by this Agreement; and (vi) there is no claim, action or
proceeding pending and notice of which has been received by such party, or to the knowledge of
such party, threatened against such party before any court, arbitrator or governmental agency or
regulatory or administrative agency or commission challenging the validity, enforceability or
legality of this Agreement.
In addition, the Assignor and the Corporation represent and warrant that no Event of Default
has occurred and is continuing under the IPA as of the date of execution and delivery of this
Agreement.
�i'
3
' SECTION 7. Partial Invalidity.
If any one or more of the agreements or covenants or portions thereof required hereby to be
performed by or on the part of the Assignee, the Assignor or the Corporation shall be contrary to
law, then such agreement or agreements, such covenant or covenants or such portions thereof shall
be null and void and shall be deemed separable from the remaining agreements and covenants or
portions thereof and shall in no way affect the validity hereof. The Assignee, the Assignor and the
Corporation hereby declare that they would have executed this Agreement, and each and every other
article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact
that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases
hereof or the application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
SECTION 8. California Law.
THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 9. Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which shall be deemed an
original, and all of which shall constitute but one and the same instrument.
I
[Remainder of Page Intentionally Left Blank]
i:l
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their officers
thereunto duly authorized as of the day and year first written above.
SANTA MARGARITA WATER DISTRICT
By:
Its: General Manager
CITY OF SAN JUAN CAPISTRANO
By:
Its: City Manager
PUBLIC PROPERTY FINANCING
CORPORATION OF CALIFORNIA
Its: Authorized Officer
ACKNOWLEDGED AND AGREED:
CITY NATIONAL BANK
By:
Its: Authorized Officer
is
' EXHIBIT A-3
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
San Juan Basin Authority
Lease Revenue Bonds (Groundwater Recovery Project)
Issue of 2014
10306-000612582497v7.d0c
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
by and among
SANTA MARGARITA WATER DISTRICT
as Assignee
and
CITY OF SAN JUAN CAPISTRANO
as Assignor
and
SAN JUAN BASIN AUTHORITY
as Authority
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
Dated as of November 1, 2021
relating to
$20,361,090
SAN JUAN BASIN AUTHORITY
LEASE REVENUE BONDS
(GROUND WATER RECOVERY PROJECT)
ISSUE OF 2014
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
This Assignment, Assumption and Amendment Agreement, dated as of November 1, 2021 1
(this "Agreement"), is entered into by and among SANTA MARGARITA WATER DISTRICT, a
California Water District duly organized and existing under Division 13 of the Water Code of the
State of California (the "Assignee"), the CITY OF SAN JUAN CAPISTRANO, a municipality duly
organized and existing under and by virtue of the laws of the State of California (the "Assignor"),
the SAN JUAN BASIN AUTHORITY, a joint powers authority duly organized and existing under
and by virtue of the laws of the State of California (the "Authority"), and THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized and
existing under and by virtue of the laws of the United States of America, as trustee (the "Trustee").
RECITALS
A. Pursuant to Resolution No. DA 20-01 of the Orange County Local Agency
Formation Commission dated August 19, 2021 (the "LAFCO Resolution"), the Assignee has
annexed the municipal water system of the Assignor as described in the LAFCO Resolution (such
water system, which will constitute the water system within the boundaries of a geographic area
within the boundaries of the Assignee which will be designated after the Annexation Effective Date
(defined below), called or to be called Improvement District No. 9, the "Water System") and will
assume ownership of the Water System effective November 15, 2021, or such later date as provided
in the Annexation Agreement, by and between the Assignor and the Assignee, dated as of January
21, 2020, as may be amended (the "Annexation Effective Date").
B. The Assignor has entered into a Property Lease, dated as of December 1, 2002 (the '
"Property Lease"), by and between the Assignor and the Authority, under which the Assignor
leased certain real property ("Property") related to the Water System to the Authority.
C. The Assignor has entered into an Amended and Restated Lease Agreement, dated as
of November 1, 2014 (the "Lease"), by and between the Assignor and the Authority, under which
the Authority leased the Property to the Assignor and the Assignor agreed to make Lease Payments
and Additional Payments (as such terms are defined in the Lease) to the Authority.
D. The Lease Payments and Additional Payments are payable from Revenues (as such
term is defined in the Lease).
E. The Lease Payments secure a portion of the Authority's Lease Revenue Bonds
(Ground Water Recovery Project) Issue of 2014 (the "Bonds").
F. The Bonds were issued pursuant to the Trust Agreement, dated as of November 1,
2014 (the "Trust Agreement"), by and among the City, the Authority and the Trustee.
G. The Assignor, as successor in interest to the Capistrano Valley Water District, and
the Authority entered into an Operating Lease Agreement, dated as of December 1, 2002, as
amended by the First Amendment to Operating Lease Agreement, each dated as of December 1,
2002 (collectively, the "Operating Lease").
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1 H. Pursuant to the LAFCO Resolution, the Assignee will assume all obligations under
the Property Lease, the Lease, the Operating Lease, and the Trust Agreement on the Annexation
Effective Date, including the obligation to make the Lease Payments and the Additional Payments
from Revenues of the Water System.
I. The Property will be conveyed by the Assignor to the Assignee in connection with
the transfer of the Water System from the Assignor to the Assignee, with the exception of the
following: (i) Lot 2 of Parcel A (Dance Hall) ("Lot 2 of Parcel A"), which will be retained by
Assignor since Lot 2 of Parcel A is not necessary for the operation of the Project, and (ii) Parcel F
(Kinoshita) ("Parcel F"), which will be retained by the City.
J. The parties hereto desire to amend the Property Lease, the Lease and the Trust
Agreement to reflect the Assignee's assumption of the Property Lease, the Lease, the Operating
Lease and the Trust Agreement as described herein, and this Agreement shall constitute a
Supplemental Trust Agreement as described in the Trust Agreement.
AGREEMENT
SECTION 1. Assi ng ment.
(a) Effective as of the Annexation Effective Date, the Assignor, for good and valuable
consideration in hand received, does hereby unconditionally assign and transfer to the Assignee
without recourse, for the benefit of the Authority, all of its rights, title, interest, duties and
' obligations in and to the Property Lease, the Lease, the Operating Lease and the Trust Agreement,
including the obligation to pay all Lease Payments and Additional Payments to the Authority. This
assignment is absolute and is presently effective.
(b) In connection with the matters described in subsection (a), the Assignee agrees to
establish a "Revenue Fund" meeting the description thereof set forth in Section 1.1 of the Lease, on
or before the Annexation Effective Date.
SECTION 2. Acceptance.
(a) The Assignee hereby accepts the foregoing assignment as of the Annexation
Effective Date for the benefit of the Authority, and agrees thereafter to pay the Lease Payments and
Additional Payments to the Authority and assume the other obligations of the Assignor as provided
in the Property Lease, the Lease, the Operating Lease and the Trust Agreement.
(b) From and after the Annexation Effective Date, the Assignee will assume the
responsibilities of the Assignor with respect to compliance with applicable federal requirements for
the tax-exempt status of the Bonds, in accordance with the Tax Certificate dated November 14, 2014
and executed by the Assignor in connection with the Bonds.
SECTION 3. Amendment.
(a) The definition of "City" in Section 1.1 of the Lease and Section 1.1 of the Trust
' Agreement is hereby amended as follows:
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""City" means Santa Margarita Water District, a California Water
District duly organized and existing under Division 13 of the Water '
Code of the State of California."
(b) The definition of "Authorized Representative of the City" in Section 1.1 of the
Lease and Section 1.1 of the Trust Agreement is hereby amended as follows:
""Authorized Representative of the City" means the General Manager
or Assistant General Manager of Santa Margarita Water District, or
any person designated by the General Manager or Assistant General
Manager of Santa Margarita Water District to act on behalf of the
General Manager or Assistant General Manager of Santa Margarita
Water District."
(b) The definition of "City Council" in Section 1.1 of the Lease is hereby amended as
follows:
""City Council' means the Board of Directors of Santa Margarita
Water District."
(c) The definition of "Water System" in Section 1.1 of the Lease is hereby amended as
follows:
""Water System" means the entire water system within the
geographic boundaries of an improvement district of Santa Margarita '
Water District which has been previously established, or which shall
be established as soon as possible hereafter, called or to be called
Improvement District No. 9 (consisting of the service area annexed to
Santa Margarita Water District pursuant to Resolution No. DA 20-01
dated August 19, 2021 of the Orange County Local Agency
Formation Commission), including, without limitation, all real
property and buildings, and including all improvements, works or
facilities assessed, controlled or operated by Santa Margarita Water
District on behalf of Improvement District No. 9 to provide water, as
such improvements, works or facilities now exist, together with all
improvements and extensions to said water system later acquired,
constructed or organized."
(d) The first sentence of Section 2.1(0 of the Lease is hereby amended and restated in its
entirety as follows:
"The City holds a valid subleasehold interest in the Property."
(e) The notice address for the City set forth in Section 11.3 of the Lease and Section 8.8
of the Trust Agreement is hereby amended as follows:
"Santa Margarita Water District
26111 Antonio Parkway ,
Rancho Santa Margarita, California 92688
' Attention: General Manager"
(f) The description of the Property in Exhibit A of the Lease is hereby amended to exclude
Lot 2 of Parcel A and Parcel F.
SECTION 4. Filings.
The Assignee agrees, at its own expense, to make any filings required by The Depository
Trust Company, the Internal Revenue Service, the California Debt Investment Advisory
Commission and any other federal or state administrative and regulatory bodies in order to evidence
the matters set forth herein.
SECTION 5. Attomment.
The Authority and the Trustee acknowledge and agree to the assignment set forth in Section
1 and agree to attom to the Assignee from and after the Annexation Effective Date with respect to
all matters related to the Property Lease, the Lease, the Operating Lease and the Trust Agreement.
This Agreement shall confer no rights and impose no obligations upon the Authority or the Trustee
beyond those expressly provided in the Property Lease, the Lease, the Operating Lease and the Trust
Agreement.
SECTION 6. Representations and Warranties.
' Each of the Assignee, the Assignor, the Authority and the Trustee represents and warrants
that: (i) the execution, delivery and performance of this Agreement have been duly authorized by
such party by all necessary action; (ii) this Agreement, assuming due execution by the other parties
thereto, constitutes a valid, binding and enforceable obligation of such party, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or other laws relating to or affecting generally the enforcement of creditors' rights, by
equitable principles, by the exercise of judicial discretion in appropriate cases and by the limitations
on remedies against public agencies in the State of California; (iii) to the best of such party's
knowledge after due inquiry, this Agreement does not violate any law, regulation or order binding
on such party; (iv) no consent or authorization of any third party is required in connection with the
execution, delivery or performance by such party of this Agreement or, alternatively, all such
consents and authorizations have been given; and (v) such party has the power to carry out the
obligations imposed on such party by this Agreement.
Each of the Assignee, the Assignor and the Authority represents and warrants that there is
no claim, action or proceeding pending and notice of which has been received by such party, or to
the knowledge of such party, threatened against such party before any court, arbitrator or
governmental agency or regulatory or administrative agency or commission challenging the validity,
enforceability or legality of this Agreement.
Each of the Assignor and the Authority represents and warrants that no Event of Default has
occurred and is continuing under the Trust Agreement, the Property Lease, the Lease or the
Operating Lease as of the date of execution and delivery of this Agreement.
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SECTION 7. Partial Invalidity.
If any one or more of the agreements or covenants or portions thereof required hereby to be
performed by or on the part of the Assignee, the Assignor, the Authority or the Trustee shall be
contrary to law, then such agreement or agreements, such covenant or covenants or such portions
thereof shall be null and void and shall be deemed separable from the remaining agreements and
covenants or portions thereof and shall in no way affect the validity hereof. The Assignee, the
Assignor, the Authority and the Trustee hereby declare that they would have executed this
Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and
phrase hereof irrespective of the fact that any one or more articles, sections, paragraphs,
subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or
circumstance may be held to be unconstitutional, unenforceable or invalid.
SECTION 8. California Law.
THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 9. Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which shall be deemed an
original, and all of which shall constitute but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their officers
thereunto duly authorized as of the day and year first written above.
SANTA MARGARITA WATER DISTRICT
By:
Its: General Manager
CITY OF SAN JUAN CAPISTRANO
By:
Its: City Manager
SAN JUAN BASIN AUTHORITY
' By:
Its: Authorized Officer
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
By:
Its: Authorized Officer
ACKNOWLEDGED AND AGREED:
WESTERN ALLIANCE BUSINESS TRUST,
a Delaware statutory trust, a wholly owned
affiliate of Western Alliance Bank, an Arizona
Corporation, and as successor -in -interest to
TPB Investments, Inc.
' By.
Its: Authorized Officer