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08-0318_FIELDMAN, ROLAPP & ASSOCIATES_Professional Services AgreementPROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR This agreement has been entered into this 18th day of March, 2008 by and between the City of San Juan Capistrano Community Redevelopment Agency, California (the "Agency") and Fieldman, Rolapp & Associates, (herein, the "Consultant"). WHEREAS, the Agency desires independent financial advisory services to be performed in connection with Funding of Redevelopment Projects (herein, the "Project"); and WHEREAS, the Agency desires to retain the professional and technical services of the Consultant for the purpose of debt issuance, (herein, the "Services"); WHEREAS, the Consultant is well qualified to provide professional financial advice to public entities such as the Agency; NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and conditions hereinafter set forth, it is agreed as follows: Section I Financial Advisory Services. As directed by the Agency, Consultant will provide services in connection with the Funding of Redevelopment Projects as such Services are fully described in Exhibit A attached to this Agreement. Consultant is engaged in an expert financial advisory capacity to the Agency only. It is expressly understood that the Services rendered hereunder are rendered solely to the City of San Juan Capistrano Community Redevelopment Agency. Consultant does not undertake any responsibility to review disclosure documents on behalf of owners or beneficial owners of bonds or debt which may arise from the Consultant's work hereunder. Section 2 Additional Services. Services performed for the Agency by Consultant that are not otherwise specifically identified in Exhibit A to this Agreement, shall be additional services. Additional services include, but are not limited to, the following: 2.01 Assisting the Agency in obtaining enabling legislation or conducting referendum elections. 2.02 Extraordinary services and extensive computer analysis in the structuring or planning of any debt issue or financing program. 2.03 The repeat of any element of a service described in Exhibit A to this Agreement which is made necessary through no fault of Consultant. 2.04 Financial management services, including development of financial policies, capital improvement plans, economic development planning, credit analysis or review and such other services that are not ordinarily considered within the scope of services described in Exhibit A to this Aereement. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page 1 Project No. 07181 FRA099280 v4_O.doc 2.05 Services rendered in connection with any undertaking of the Agency relating to a continuing disclosure agreement entered into in order to comply with Securities and Exchange Commission Rule 15c2-12 or other similar rules. 2.06 Services rendered to the Agency in connection with calculations or determination of any arbitrage rebate liability to the United States of America arising from investment activities associated with debt issued to fund the Project. Section 3 Compensation. 3.01 For Consultant's performance of Services as described in Section 1 of this Agreement the Consultant's compensation will be as provided in Part 1 of Exhibit B attached to this Agreement, plus Consultant's expenses incurred in rendering such Services. Consultant's expenses may include, but are not limited to travel, telephone/conference calls, postage, courier, database access services, and printing. 3.02 For Consultant's performance of additional services as described in Section 2 of this Agreement, the Consultant's compensation will be as provided in Part 2 of Exhibit B attached to this agreement, plus Consultant's expenses incurred in rendering such services. Consultant's expenses may include, but are not limited to travel, telephone/conference calls, postage, courier, database access services and printing. 3.03 Payment for Consultant's Services rendered pursuant to Section 1 of this Agreement shall be as provided for in Exhibit B to this Agreement, unless specified to the contrary elsewhere in this Agreement. The Consultant may submit monthly invoices for payment for services provided pursuant to Section 2 of this Agreement unless an alternate date or dates have been specifically agreed to in writing. Unless otherwise specified, payment of Consultant's compensation and expenses is due thirty (30) days after submission of Consultant's invoice for services. 3.04 In the event the Services of the Consultant are abandoned prior to completion of Consultant's work, Consultant shall be compensated for Services performed to the point of abandonment as if such Services were an additional service pursuant to Section 2 of this Agreement. An act of abandonment shall be deemed to have occurred when no action has been taken by the Agency relative to the services of the Consultant for a period of three (3) months from the date of the initial performance of a service, or there has been a written notification to the Consultant of an abandonment of the Project by the Agency. 3.05 Consultant fees set forth in this Agreement and Exhibits are guaranteed by Consultant for a period of twelve (12) months from the date of this Agreement. Section 4 Personnel. Consultant has, or will secure, all personnel required to perform the services under this Agreement. Consultant shall make available other qualified personnel of the firm as may be required to complete Consultant's services. The Agency City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page 2 Project No. 07181 FRA099280.doc has the right to approve or disapprove any proposed changes in Consultant's staff providing service to the Agency. The Agency and Consultant agree that such personnel are employees only of Consultant and shall not be considered to be employees of the Agency in any way whatsoever. Section 5 Term of Agreement. This Agreement shall continue in full force and effect for a period of thirty-six (36) months from the date hereof unless terminated by either party by not less than thirty (30) days written notice to the other parry except that the Agreement shall continue in full force and effect until completion of Consultant's services or until an abandonment shall have occurred as described in Section 3.04 hereof. This Agreement may be extended from time to time as agreed by the Agency and the Consultant. Section 6 Modification. This Agreement contains the entire agreement of the parties. It may be amended in whole or in part from time to time by mutual consent of the parties. This shall not prohibit the Agency and Consultant from entering into separate agreements for other services. Section 7 Assignment. The rights and obligations of the Agency under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Agency. This agreement may not be assigned by the Consultant without the consent of the Agency except for compensation due Consultant. Section 8 Disclosure. Consultant does not assume the responsibilities of the Agency, nor the responsibilities of the other professionals and vendors representing the Agency, in the provision of services and the preparation of the financing documents, including initial and secondary market disclosure, for financings undertaken by the Agency. Information obtained by Consultant and included in any disclosure documents is, by reason of experience, believed to be accurate; however, such information is not guaranteed by Consultant. Section 9 Confidentiality. The Consultant agrees that all financial, statistical, personal, technical and other data and information designated by the Agency as confidential shall be protected by the Consultant from unauthorized use or disclosure. Section 10 Indemnification. The Agency and Consultant shall each indemnify and hold harmless the other from and against any and all losses, claims, damages, expenses, including legal fees for defense, or liabilities, collectively, damages, to which either may be subjected by reason of the other's acts, errors or omissions, except however, City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page 3 Project No. 07181 FRA099280.doc neither will indemnify the other from events and conditions beyond the reasonably made. Section 11 Insurance. or against damages by reason of changed control of either or errors of judgment 11.01 Consultant shall maintain workers' compensation and employer's liability insurance during the term of this Agreement. 11.02 Consultant, at its own expense, shall obtain and maintain insurance at all times during the prosecution of this contract. Such insurance must be written with a Best Guide "A" -rated or higher insurance carrier admitted to write insurance in the state where the work is located. 11.03 Certificates of insurance naming the Agency as an additional insured shall be submitted to the Agency evidencing the required coverages, limits and locations of operations to which the insurance applies, and the policies of insurance shall contain a 30 day notice of cancellation or non -renewal. 11.04 Insurance coverages shall not be less than the following: A. Workers' Compensation 1. State worker's compensation statutory benefits 2. Employer's Liability -policy limits of not less than $1,000,000. B. Comprehensive General Liability coverage with policy limits of not less than $1,000,000 combined single limit for bodily injury and property damage and including coverage for the following: 1. Premises operations 2. Contractual liability 3. Products 4. Completed operation C. Errors and omissions with policy limits of $1,000,000. Section 12 Permits/Licenses. The Consultant shall obtain any permits or licenses, as may be required for it to complete the services required under this Agreement. Section 13 Binding Effect. 13.01 A waiver or indulgence by the Agency of a breach of any provision of this Agreement by the Consultant shall not operate or be construed as a waiver of any subsequent breach by the Consultant. 13.02 All agreements and covenants contained herein are severable and in the event any of them shall be held to be invalid by any competent court, this Agreement shall City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page 4 Project No. 07181 FRA099280.doc be interpreted as if such invalid agreements or covenants were not contained herein, and the remaining provisions of this Agreement shall not be affected by such determination and shall remain in full force and effect. This Agreement shall not fail because any part or any clause hereof shall be held indefinite or invalid. 13.03 Each parry hereto represents and warrants that this Agreement has been duly authorized and executed by it and constitutes its valid and binding agreement, and that any governmental approvals necessary for the performance of this Agreement have been obtained. 13.04 The validity, interpretation and construction of this Agreement and of each part hereof shall be governed by the laws of the State of California. Venue for any lawsuit concerning this agreement is Orange County, California. IN WITNESS Whereof, the parties have duly executed this Agreement as of the day and year first above set forth. CITY OF SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY By: Qv- — :: �lL1iJW`� Dave Adams Date: March 18, 2008 HELDMAN, ROLAPP & ASSOCIATES 19900 MacArthur Boulevard, Suite 1100 Irvine, CA 92612 J By: , Dat . r1-17-Ql i W'111rW 11 RM "F mit, , TO FORM Title: Executive Director Title: `i"C-1'.J Li Qh. Attest: Mar ar t R. Monahan, Qty 61erk 9=Ll City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page 5 Project No. 07181 FRA099280.doc EXHIBIT A TO PROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR BY AND BETWEEN THE CITY OF SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AND FIELDMAN, ROLAPP & ASSOCIATES Scope of Services A. General Services. The Consultant shall perforin all the duties and services specifically set forth herein and shall provide such other services as it deems necessary or advisable, or are reasonable and necessary to accomplish the intent of this Agreement in a manner consistent with the standards and practice of professional financial advisors prevailing at the time such services are rendered to the Agency. The Agency may, with the concurrence of Consultant, expand this Agreement to include any additional services not specifically identified within the terms of this Agreement. Any additional services may be described in an addendum to this Exhibit A and are subject to fees described in Exhibit B to this Agreement. B. Debt Issuance Services. The Consultant shall assume primary responsibility for assisting the Agency in coordinating the planning and execution of each debt issue relating to the Project. Insofar as the Consultant is providing Services which are rendered only to the Agency, the overall coordination of the financing shall be such as to minimize the costs of the transaction coincident with maximizing the Agency's financing flexibility and capital market access. The Consultant's proposed debt issuance Services may include, but shall not be limited to, the following: • Establish the Financing Objectives • Develop the Financing Schedule • Monitor the Transaction Process • Review the Official Statement, both preliminary and final • Procure and Coordinate Additional Service Providers • Provide Financial Advice to the Agency Relating to Financing Documents • Compute Sizing and Design Structure of the Debt Issue • Plan and Schedule Rating Agency Presentation and Investor Briefings • Conduct Credit Enhancement Procurement and Evaluation • Conduct Market Analysis and Evaluate Timing of Market Entry • Recommend Award of Debt Issuance • Provide Pre -Closing and Closing Assistance City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit A, Page 1 Project No. 07181 FRA099280.doc Specifically, Consultant will: 1. Establish the Financine Obiectives At the onset of the financing transaction process for the Project, the Consultant shall review the Agency's financing needs and in conjunction with the Agency's management, outline the objectives of the financing transaction to be undertaken and its proposed form. Unless previously determined, Consultant shall recommend the method of sale of debt and outline the steps required to achieve efficient market access. 2. Develop the Financing Timetable. The Consultant shall take the lead role in preparing a schedule and detailed description of the interconnected responsibilities of each team member and update this schedule, with refinements, as necessary, as the work progresses. 3. Monitor the Transaction Process. The Consultant shall have primary responsibility for the successful implementation of the financing strategy and timetable that is adopted for each debt issue relating to the Project. The Consultant shall coordinate (and assist, where appropriate) in the preparation of the legal and disclosure documents and shall monitor the progress of all activities leading to the sale of debt. The Consultant shall prepare the timetables and work schedules necessary to achieve this end in a timely, efficient and cost-effective manner and will coordinate and monitor the activities of all parties engaged in the financing transaction. 4. Review the Official Statement a. Generally, SEC, MSRB, and GFOA guidelines encourage full disclosure so that potential investors have sufficient data to analyze each proposed financing. Upon direction of the Agency, the Consultant shall take the lead in review of the official statement for each debt issue relating to the Project to insure that the Agency's official statement is compiled in a manner consistent with industry standards, typically including the following matters: • Legal Authority for the Financing • Security for the Financing • Restrictions on Additional Financings • Purpose and Funds for which the Financing is Being Issued • Governmental System • Financial Management System • Revenue Sources: Historic, Current and Projected • Outstanding Financings • Planned Future Financings • Labor Relations and Retirement Systems • Economic Base • Annual Financial Statements • Legal Opinions Regarding Tax Exemption • Such Other Matters as the Context May Require. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit A, Page 2 Project No. 07181 FRA099280.doc b. The Consultant shall maintain and update the official statement on its word processing system until such time as it is near final and suitable for transfer to the financial printer, in order to minimize the costs of revisions made by the printer. 5. Procure and Coordinate Additional Service Providers. Should the Agency desire, the Consultant may act as Agency's representative in procuring the services of financial printers for the official statement and related documents, and for the printing of any securities. In addition, the Consultant may act as the Agency's representative in procuring the services of trustees, paying agents, fiscal agents, feasibility consultants, redevelopment consultants, or escrow verification agents or other professionals, if the Agency directs. 6. Provide Financial Advice to the Agency Relating to Financing Documents. Simultaneous with assisting in the preparation of official statements for each debt issue relating to the Project, the Consultant shall assist the managing underwriters, bond counsel and/or other legal advisors in the drafting of the respective financing resolutions, notices and other legal documents. In this regard, the Consultant shall monitor document preparation for a consistent and accurate presentation of the recommended business terms and financing structure of each debt issue relating to the Project, it being specifically understood however that the Consultant's services shall in no manner be construed as the Consultant engaging in the practice of law. 7. Compute Sizing and Design Structure of Debt Issue. The Consultant shall work with the Agency's staff to design a financing structure for each debt issue relating to the Project that is consistent with the Agency's objectives, that coordinates each transaction with outstanding issues and that reflects current conditions in the capital markets. 8. Plan and Schedule Rating Aeency Presentation and Investor Briefings. The Consultant shall develop a plan for presenting the financing program to the rating agencies and the investor community. The Consultant shall schedule rating agency visits, if appropriate, to assure the appropriate and most knowledgeable rating agency personnel are available for the presentation and will develop presentation materials and assist the Agency officials in preparing for the presentations. 9. Conduct Credit Enhancement Evaluation and Procurement. Upon the Agency's direction, the Consultant will initiate discussions with bond insurers, letter of credit providers and vendors of other forms of credit enhancements to determine the availability of and cost benefit of securing financing credit support. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit A, Page 3 Project No. 07181 FRA099280.doc 10. Conduct Market Analysis and Evaluate Timing of Market Entry. The Consultant shall provide regular summaries of current municipal market conditions, trends in the market and how these may favorably or unfavorably affect the Agency's proposed financing. a. Competitive Sales. For all types of competitive sale of debt, the Consultant shall undertake such activities as are generally required for sale of securities by competitive bid including, but not limited to the following: • Review and comment on terms of Notice of Sale Inviting Bids • Provide advice on debt sale scheduling • Provide advice on the use of electronic bidding systems • Coordinate bid opening with the Agency officials • Verify bids received and make recommendations for acceptance • Provide confirmation of issue sizing, based upon actual bids received, where appropriate • Coordinate closing arrangements with the successful bidder(s) b. Negotiated Sales. In the case of a negotiated sale of debt, the Consultant shall perform a thorough evaluation of market conditions preceding the negotiation of the terms of the sale of debt and will assist the Agency with the negotiation of final issue structure, interest rates, interest cost, reoffering terms and gross underwriting spread and provide a recommendation on acceptance or rejection of the offer to purchase the debt. This assistance and evaluation will focus on the following areas as determinants of interest cost: • Size of financing • Sources and uses of funds • Terms and maturities of the debt issue • Review of the rating in pricing of the debt issue • Investment of debt issue proceeds • Distribution mix among institutional and retail purchasers • Interest rate, reoffering terms and underwriting discount with comparable issues • Redemption provisions 11. Recommend Award of Debt Issuance. Based upon activities outlined in Task 10(a) and 10(b) above, the Consultant will recommend accepting or rejecting offers to purchase the debt issue. If the Agency elects to award the debt issue, the Consultant will instruct all parties and help facilitate the actions required to formally consummate the award. City of San Juan Capistrano Community RedevelopmenUFieldman, Rolapp & Associates Exhibit A, Page 4 Project No. 07181 FRA099280.doc 12. Provide Pre-Closine and Closing Activities. The Consultant shall assist in arranging for the closing of each financing. The Consultant shall assist counsel in assuming responsibility for such arrangements as they are required, including arranging for or monitoring the progress of bond printing, qualification of issues for book -entry status, signing and final delivery of the securities and settlement of the costs of issuance. City of San Juan Capistrano Community RedevelopmentfFieldman, Rolapp & Associates Exhibit A, Page 5 Project No. 07181 FRA099280.doc EXHIBIT B TO FINANCIAL ADVISORY SERVICES AGREEMENT BY AND BETWEEN CITY OF SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AND FIELDMAN, ROLAPP & ASSOCIATES Fees and Expenses Part 1: Fee for Services Financial Advisory Services performed pursuant to Section 1 of this Agreement, and as more fully described in the Scope of Services set forth in Exhibit A, will be billed for at the amounts set forth below: Transaction Size Fees $1 to $25,000,000 $45,500 $25,000,001 to $50,000,000 $55,500 $50,000,001 and above to be negotiated Payment of fees earned by Consultant pursuant to this Part 1 shall be contingent on, and payable at the closing of the debt issue(s) undertaken to finance the Project. If the Agency elects to issue Taxable Bonds or to issue Housing Set Aside Bonds, an additional $9,500 will be added to the fee amounts listed above. Part 2: Other Services Unless agreed to otherwise, financial advisory services performed pursuant to Section 2 of this Agreement will be billed at the then current hourly rates. The table below reflects the rates in effect as of the date of execution of this Agreement. Personnel Hourly Rate Executive Officers............................................................ $300.00 Principals.......................................................................... $290.00 Senior Vice President....................................................... $275.00 Vice Presidents................................................................. $225.00 Assistant Vice President ................................................... $195.00 Senior Associate............................................................... $150.00 Associate........................................................................... $125.00 Analyst................................................................................ $85.00 Administrative Assistants ................................................... $65.00 Clerical............................................................................... $35.00 City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit B, Page 1 Project No. 07181 FRA099280.doc Expenses Expenses will be billed for separately and will cover, among other things, travel, lodging, subsistence, overnight courier, computer, internet posting and fax transmission charges. Advances made on behalf of the Agency for costs of preparing, printing or distributing disclosure materials or related matter whether by postal services or electronic means, may also be billed through to the Agency upon prior authorization. Additionally, a surcharge of 6% of the net fee amount is added to verifiable out-of-pocket costs for recovery of costs such as telephone, postage, document reproduction and the like. Limiting Terms and Conditions The above fee is based on completion of work orders within six months of the Agency's authorization to proceed, and assumes that the Agency will provide all necessary information in a timely manner. The fee shown above in Part 1 presumes attendance at up to 8 meetings in the Agency's offices or such other location within a 25 -mile radius of the Agency place of business as the Agency may designate. Preparation for, and attendance at Board of Directors meetings on any basis other than "by appointment" may be charged at our normal hourly rates as shown in Part 2, above. Abandonment If, once commenced, the services of the Consultant are terminated prior to completion of our final report for any reason, we are to be reimbursed for professional services and direct expenses incurred up to the time we receive notification of such termination at the standard hourly rates shown in Part 2. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit B, Page 2 Project No. 07181 FRA099280.doc 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1171 (949) 493-1053 FAX www.sanjuancapistrano.org TRANSMITTAL TO: Fieldman Rolapp & Associates 19900 MacArthur Blvd, Ste 1100 Irvine, CA 92612-2433 FROM: Meg Monahan, MMC — City Clerk (949) 443-6308 RE: Professional Services Agreement for Financial Advisor MEMBERS OF THE CITY COUNCIL SAM ALLEVATO THOMAS W. HRIBAR MARK NEILSON JOE SOTO DR. LONDRES USO Enclosed: (1) original executed agreement as noted. PLEASE BE AWARE THAT YOUR GENERAL LIABLITY CERTIFICATE OF INSURANCE EXPIRES ON APRIL 1, 2008. If insurance is not on file with the City Clerk's office, payments for work will be withheld until received. Please Contact Douglas Dumhart, Economic Development Manager (949) 443-6316 with questions related to the agreement. CC: Douglas Dumhart, Economic Development Manager San Juan Capistrano: Preserving the Past to Enhance the Future 0 P0nWd on 1W% moyd� oar, CRA AGENDA REPORT TO: Dave Adams, Executive Director � FROM: Douglas D. Dumhart, Economic Development Manager CRA 3/18/2008 D1 SUBJECT: Consideration of Draft Fiscal Consultant Report for a 2008 Tax Allocation Bond Issuance and Agreements for Legal and Financial Counsel (Stradling Yocca Carlson & Rauth/ Fieldman, Rolapp & Associates). By motion, 1.) Receive and approve the Draft Fiscal Consultant Report; and, 2.) Approve the Professional Services Agreement with Fieldman, Rolapp & Associates as municipal financial advisor for the proposed tax allocation bond issuance paid hourly for services plus costs as quoted and authorize the Executive Director to sign the agreement; and, 3.) Approve the Agreement for Bond Counsel Services with Stradling, Yocca, Carlson & Rauth in the amount of $84,000 plus out-of-pocket expenses and authorize the Executive Director to sign the agreement. SUMMARY: The California Community Redevelopment Law ("redevelopment law") provides for the creation of a redevelopment agency for the purpose of eliminating blight. To achieve this purpose, the redevelopment law authorizes redevelopment agencies to receive that portion of property tax revenue generated from the increase of the current year taxable values over the base year taxable values that existed at the time of adoption of a redevelopment project. This portion of the property tax revenue is referred to as tax increment revenue. The redevelopment law also provides that the tax increment revenue may be pledged by the Agency for the repayment of Agency indebtedness. During the preparation of the 2005-2009 Implementation Plan it was identified that the Agency had bonding capacity that should be evaluated for access during this planning period. Staff has requested Agency's Financial Consultant; Keyser Marston Associates ("KMA") prepare a projection of tax increment revenues for the Central Redevelopment Project Area. KMA has completed the Fiscal Consultant Report which identifies approximately $21 M in bonding capacity. To access a portion of this capital at this time staff is recommending the Board of Directors approve professional services agreement with Fieldman, Rolapp and Agenda Report Page 2 March 18, 2008 Associates as municipal financial advisor and Stradling, Yocca, Carlson and Rauth as bond and disclosure counsel. BACKGROUND: The City is experiencing a flattening of revenues in the sluggish economy. Development impact fees which typically finance the bulk of capital improvement projects are stagnant however; the projects themselves still need to be constructed. Tapping into the Agency's tax increment capacity is a way to keep capital projects moving forward. Below is a list of projects that could be funded with TAB proceeds financing project shortfalls or freeing up other funds for to aid other unfunded projects. Project Name Possible CRA TAB Eligible Projects Description Amount Lower Rosan Ranch: Stonehill Driveway approach $ 150,000. Boundary Adjustment/Annexation $ 40,000. OCFCD Land Swap $ 180,000. Access Road $1,200,000. CIP # 471 Calle Jardin Park Improvements $ 60,000. CIP # 407 RxR Quiet Zones $ 500,000. Downtown: Cam. Ca ./Forester St. crosswalk upgrade $ 150,000. RxR South Platform Reconstruction $ 125,000. CIP # 465 Los Rios Public Parkin Lot $1,250,000. CIP # 144 HTC Utility Undergrounding $ 268,000. CIP # 118 Downtown Lighting Final Phase $ 232,000. CIP # 108 ECR curb/ utter & sidewalk $ 245,000. CIP # 409 Bus Bench Shelters $ 175,000. CIP # R12 Verdu o St. Beautification $1,050,000. Downtown Parking Study Recommendations $4,300,000. Traffic Circulation: CIP # 111 Del Obispo/Camino Capistrano Intersection $1,076,000. CIP # 404 J.Serra/Rancho Viejo Road Intersection $2,600,000. CIP # 122 Del Obispo Bridge Widening $ 560,000. CIP # 406 SJ Creek Rd Widening — Valle to Cam. Cap. $5,620,000. CIP # 126 Trabuco Creek Bride @ Del Obispo $ 260,000. TCRP # 43 Cam. Ca ./La Zana Left Turn Phase $ 300,000. TCRP # 54 R.V. Road/Paseo Espada Traffic Signal $ 300,000. Affordable Housing: Land acquisition $8,000,000. A&E and Entitlements. $ 600,000. Total: $29,241,150. Agenda Report Page 3 March 18, 2008 A Draft Fiscal Consultant Report has been prepared to identify the Agency's bonding capacity. The report reflects the tax increment revenues that would be allocable in the current 2007-2008 fiscal year, based upon reported redevelopment project area assessed values by the Orange County Auditor -Controller. The projected taxable values and resulting tax increment revenues for the redevelopment project area are based on assumptions determined by a review of the taxable value history of the project area; Agency identified new developments proposed for the redevelopment project area; and the property tax assessment and property tax apportionment procedures of Orange County. The tax increment revenue projection for the Central Redevelopment Project Area is summarized on Table 7 of the Fiscal Consultant Report. This table identifies approximately $140M of tax increment available over the life of the Agency. The net present value of that future revenue stream is over $61 M. Staff in concert with the Financial Advisors is recommending accessing about a third of this capacity or an issuance around $21M which would result in approximately $18M in cash. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: Not applicable. FINANCIAL CONSIDERATIONS: The cost of the independent financial advisor is $45,000 plus an additional $9,500 if the agency elects to issue Taxable Bonds. The agreement also calls for an additional 6% of the net fee for verifiable out-of-pocket expenses. The fee and expenses are contingent upon the successful sale of the bonds. The cost of bond counsel services is based on a percentage of the bonds upon successful sale of the Bonds according to the rate schedule below: Principal Amount of Bonds Fee $1,000,000 or less. $15,000. $1,000,001 to $5,000,000. $15,000 plus 1/4 of 1% of the excess over $1M. $5,000,001 to $15,000,000. $25,000 plus 1/5 of 1 % of the excess over $5M. $15,000,000 or more. $45,000 plus 1/10 of 1% of the excess over $15M. The estimate fee based upon a par size of approximately $21.0 million is $51,000. The cost for disclosure counsel to prepare the Official Statement for the Bonds is a set fee of $33,000. Agenda Report Page 4 NOTIFICATION: Greg Soo -Hoo, Keyser Marston Associates James Fabian, Fieldman Rolapp and Associates Denise Herring, Stradling, Yocca, Carlson & Rauth David Sundstrom, County of Orange Auditor -Controller Department A. Woodrow Carter, Capistrano Unified School District Gary Poertner, South Orange County Community College District Carl F. Goodwin, Public Economies, Inc. RECOMMENDATION: By motion, 1.) Receive and approve the Draft Fiscal Consultant Report; and, March 18, 2008 2.) Approve the Professional Services Agreement with Fieldman, Rolapp & Associates as municipal financial advisor for the proposed tax allocation bond issuance paid hourly for services plus costs as quoted and authorize the Executive Director to sign the agreement; and, 3.) Approve the Agreement for Bond Counsel Services with Stradling, Yocca, Carlson & Rauth in the amount of $84,000 plus out-of-pocket expenses and authorize the Executive Director to sign the agreement. Respectfully submitted, e44vt�Vl_ Douglas . Dumhart Economic Development Manager Attachment(s): 1.) Keyser Marston Associates Draft Fiscal Consultant Report dated March 5, 2008. 2.) Professional Service Agreement for Financial Advisor with Fieldman, Rolapp & Associates. 3.) Agreement for Bond and Disclosure Counsel Services with Stradling, Yocca Carlson & Rauth. r� D KEYSER MARSTON ASSOCIATES FISCAL CONSULTANT REPORT CENTRAL REDEVELOPMENT PROJECT Prepared for: REDEVELOPMENT AGENCY OF THE CITY OF SAN JUAN CAPISTRANO March 5, 2008 ATTACHMENT 1 FISCAL CONSULTANT REPORT CENTRAL REDEVELOPMENT PROJECT Prepared for: REDEVELOPMENT AGENCY OF THE CITY OF SAN JUAN CAPISTRANO 32400 Paseo Adelanto San Juan Capistrano, California 92675 Prepared by: Keyser Marston Associates, Inc. 500 South Grand Avenue, Suite 1480 Los Angeles, California 90071 March 5, 2008 INTRODUCTION Keyser Marston Associates, Inc. (KMA) has been retained as Fiscal Consultant to the San Juan Capistrano Redevelopment Agency to prepare a projection of tax increment revenues for the Central Project Area, as amended (the Project Area). The Project Area is comprised of the Original Area, the 1984 Amendment, and the 1986 Amendment. The California Community Redevelopment Law (CRL) provides for the creation of a redevelopment agency for the purpose of eliminating blight. To achieve this purpose, the CRL, along with Article 16, Section 16 of the California Constitution, authorizes the Agency to receive that portion of property tax revenue generated from the increase of the current year taxable values over the base year taxable values that existed at the time of adoption of a redevelopment project. This portion of property tax revenue is referred to as tax increment revenue. The CRL provides that the tax increment revenue may be pledged by the Agency for the repayment of Agency indebtedness. This Fiscal Consultant Report has been prepared to reflect the tax increment revenues that would be allocable in the current 2007-08 fiscal year, based upon reported Project Area assessed values by the Orange County Auditor -Controller. The projected taxable values and resulting tax increment revenues for the Project Area are based on assumptions determined by a review of the taxable value history of the Project Area; Agency -identified new developments proposed for the Project Area; and the property tax assessment and property tax apportionment procedures of Orange County. 2. REVIEW OF THE PROJECT AREA 2.1 Redevelopment Plan Time Limits Existing redevelopment law requires the Agency to impose specific time limitations on the incurrence of debt, the redevelopment plan effectiveness and the collection of tax increment revenue to repay debt. The following time limitations are in effect for the respective subareas of the Project Area: Original 1984 Amendment 1986 Amendment Plan Effectiveness July 12, 2026 July 12, 2026 July 12, 2026 San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Debt Repayment July 12, 2036 July 12, 2036 July 12, 2036 Amendment Action SB1045/1096 SB1045/1096 SB1045/1096 Keyser Marston Associates, Inc. Page 1 0801027. SJC GSH:gOtl 19085 004 001/125/08 2.2 Redevelopment Plan Dollar Limit Under the terms of the amended Redevelopment Plan, the Project Area has a cumulative tax increment revenue cap of $342 million. Tax increment revenues in excess of this revenue cap are forfeited by the Agency as tax increment revenues and are allocated to the taxing agencies as property tax revenues. As of June 30, 2007, the Agency has been allocated approximately $63.2 million. The amended Redevelopment Plan also provides a limit on the amount of bonded indebtedness that may be outstanding at any time totaling $100 million. Based upon the new development valuation growth assumptions incorporated in the attached tax increment revenue projections shown on Table 7, plus the 2% real property value growth due to Proposition 13 and the amount of revenue allocated through FY 2006-07, the $342 million tax increment revenue limit is projected to be reached by FY 2033-34. 2.3 Review of Agency Obligations a. Low and Moderate Income Housing Set Aside Requirement The CRL requires redevelopment agencies to annually set aside 20% of all tax increment revenues into a Low and Moderate Income Housing Set Aside Fund. The set aside requirement could be reduced or eliminated if the redevelopment agency finds that: (1) no need exists in the community to improve or increase the supply of low and moderate income housing; (2) that some stated percentage less than 20% of the tax increment is sufficient to meet the housing need; or (3) that other substantial efforts, including the obligation of funds from certain local, state or federal sources for low and moderate income housing, of equivalent impact are being provided for in the community. It is assumed that the Agency will not make any such findings and will continue to set aside 20% of annual tax increment. The annual Housing Set Aside has been deducted from the attached tax increment revenue projections for purposes of this analysis and is factored against the $4.5 million annual revenue cap. b. Taxing Agency Pass Through Agreement Orange County Taxing Entities — Amended in September 1987 and encompassing the Original Area, 1984 Amendment and 1986 Amendment, the Agency agrees to make annual payments of tax increment revenue to the Orange County General Fund, the Orange County Flood Control District and the Orange County Harbors, Beaches and Parks District 17.1 % of the annual gross tax increment revenues generated by the Project Area and allocated to the Agency. Commencing after the Agency has received $315 million in tax increment revenue, the Agency will then make annual payments to the Orange County General Fund, the Orange County Structural Fire Fund, the Orange County Flood Control District, the Orange County Library Fund, and the Orange County Harbors, Beaches and Parks District Fund their full respective shares of the property tax increment. KMA has estimated that this will result in 36.4% of the annual gross tax increment being allocated to these five County Funds. San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 2 0801027 S J c GSH gb d 19085 009.001103103/08 Based on the assumptions incorporated in the attached projection shown on Table 7, this additional triggering of payments will commence in FY 2032-33 when the $315 million threshold is projected to be reached. South Orange County Community College District—Amended in August 2003 and involving only the Original Area, the Agency agrees to make payments to the Community College District equal to the District's share of tax increment revenue in excess of $3 million, but in no event shall the District be allocated more than $5 million for any consecutive five-year period. KMA has determined that the District share of property taxes is equal to 9.16%. Capistrano Unified School District—Amended in May 1997 and involving only the Original Area and 1984 Amendment, the Agency agrees to make payments to the School District from aggregated tax increment revenue in excess of $15 million (aggregated for consecutive five-year periods), but in no event shall the District be allocated more than $5 million in any consecutive five-year period. For purposes of this projection and in conversations with Agency staff, KMA has therefore assumed an annual $1 million payment to the School District. C. Statutory Pass Through Triggered by SB 211 A statutory pass through obligation was triggered when the Agency adopted a summary ordinance electing to eliminate the debt incurrence time limitation of the Project Area. This election was allowed under legislation enacted under SB 211 and triggered the statutory pass through obligations (set forth under Health and Safety Code Section 33607.5) commencing the first year following the fiscal year in which the repealed debt incurrence time limit would have taken effect for the Project Area, which in the Project Area's case is FY 2003- 04. Under Health and Safety Code Section 33607.7, any taxing entities that have existing pass through agreements with the Agency continue to receive their allocations set forth by the respective agreements. Taxing entities, including the City, that do not have existing pass through agreements are eligible to receive their allocation of the resulting statutory pass through generated from increment following the SB 211 enactment. Based upon KMA's determination of the weighted average tax rate for the Original Area, 1984 Amendment and 1986 Amendment vis41-vis the respective pass through obligations incurred by each subarea, the statutory pass through allocations have been projected on Table 7. d. County Administrative Fees Chapter 466, Statutes of 1990, (referred to as SB 2557) permits the County to withhold a portion of annual tax revenues for the recovery of County charges related to property tax administration services to cities in an amount equal to their property tax San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 3 0801027. SJCGSH gbd 19085 004 001/03/03108 administration costs proportionately attributable to cities. SB 2557, and subsequent legislation under SB 1559 (Statutes of 1992), permitted counties to charge all jurisdictions, including redevelopment agencies, on a year-to-year basis. Based upon the actual FY 2006-07 fee amount of $37,570 (representing 0.57% of the gross tax increment), KMA has assumed that subsequent year County administrative charges will continue to be based upon this factor. The Gross Tax Increment Revenue amount shown on Table 7 reflects the debit of this fee. 3. REVIEW OF PROJECT ASSESSED VALUES 3.1 Real and Personal Property Real Property, as referred to in this Report, is defined to represent land and improvement assessed values on both the Secured and Unsecured property tax rolls of the County Assessor. Annual increases in the assessed value of Real Property are limited to an annual inflationary increase of up to 2%, as governed by Article XIIIA of the State Constitution. Real Property values are also permitted to increase or decrease as a result of a property's change of ownership or new construction activity. As discussed below, the assessed value of taxable property is subject to reduction under certain conditions. For the 1995-96 and 1996-97 fiscal years, the County Assessor applied a state mandated factor of 1.19% and a 1.11 % inflationary factor to Real Property values in the respective fiscal years to reflect the change in the 1994 and 1995 State Consumer Price Indices. For the 1997-98 and 1998-99 fiscal years, the County Assessor applied the maximum 2% inflationary factor. For FY 1999-2000, the County Assessor applied a 1.8% inflationary factor and commencing with FY 2000-01, the maximum 2% inflationary factor was used. Based upon the Consumer Price Index, indices for 2003, Real Property values increased by a factor of 1.867% for FY 2004-05. A 2% inflationary factor was annually applied for FY 2005-06 to FY 2007-08. For purposes of this analysis, a 2% Real Property inflationary factor will be applied in subsequent fiscal years commencing FY 2008-09. The assessed value of Personal Property is not subject to the maximum 2% inflationary increase and is subject to annual appraisal, either upward or downward. State assessed Non -Unitary properties assessed by the State Board of Equalization (SBE) also may be revalued annually and such assessments are not subject to the annual 2% inflation limitation of Article XIIIA. The Project Area assessed values are prepared by the County Assessor and, until the 1996-97 fiscal year, have reflected the March 1 st lien date. Commencing with the 1997-98 fiscal year, the property tax lien date was changed to January 1. Each property assessment is assigned a unique Assessor Parcel Number (APN) which correlates to assessment maps prepared by the County. The corresponding assessed values for each parcel are then encoded to Tax Rate Areas (TRAs) which are geographic subareas with common distribution of taxes and which are contained within the Project Area boundaries. San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 4 0801027. SJCGSM:gb 19085.004.001103/03/08 The County Auditor -Controller is responsible for the aggregation of the assessed values assigned by the Assessor for properties within the boundaries of the Project Area. This results in the reported total current year assessed value and becomes the basis for determining tax increment revenues due to the Agency. Secured properties account for 90% of the total assessed value of the Project Area and unsecured properties account for nearly 10% of assessed value. Secured Property includes property on which any property tax levied by the County becomes a lien on that property. Unsecured Property typically includes the value of tenant improvements, trade fixtures, personal property and possessory interest. Unsecured Property values reflect depreciation factors on the useful life of the tenant improvements, trade fixtures and personal property of the assessee. Unsecured possessory interest values constitute a private right to the possession and use of publicly owned property for a period of time less than perpetuity. The taxes levied on Unsecured Property are levied at the previous year's Secured Property tax rate. The reported values of the Project Area for the 2007-08 fiscal year are as follows: The Orange County Auditor Controller may annually revise the reported Base Year assessed values to the extent that properties within the Project Area are acquired for public uses by tax-exempt public taxing agencies. The precedent for this action stems from the 1963 case of Redevelopment Agency of the City of Sacramento vs. Malaki, 216 Cal.App1.2d 480, and subsequent related cases. Therefore, the Base Year assessed values reported for the Project Area have, from time to time, been adjusted by the County Auditor Controller to reflect such changes. 3.2 Historic Assessed Values Aggregated historic values of the Project Area are summarized on Table 1 covering fiscal years 2002-03 to 2007-08. The historic taxable values reported by the County Auditor -Controller reflect an overall average annual increase of 8.5% for the period. The Secured values, comprising 90% of the total reported value, increased an average of 8.4% over the period. The Unsecured values comprise a significantly smaller share of the Project Area's total assessed value. By their nature, Unsecured values reflect declines in value as a result of depreciation factors or tenant relocations out of the Project Area, as well as increases in value San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 5 0801027 SJC GSH'gbd 19085 004.001/03/03/08 2007-08 Value % of Value Secured $751,597,772 90.2% Unsecured 81,404.634 9.8% Total Reported Value $833,002,406 100.0% Base Year Value (118,182.010) Incremental Value $714,820,396 The Orange County Auditor Controller may annually revise the reported Base Year assessed values to the extent that properties within the Project Area are acquired for public uses by tax-exempt public taxing agencies. The precedent for this action stems from the 1963 case of Redevelopment Agency of the City of Sacramento vs. Malaki, 216 Cal.App1.2d 480, and subsequent related cases. Therefore, the Base Year assessed values reported for the Project Area have, from time to time, been adjusted by the County Auditor Controller to reflect such changes. 3.2 Historic Assessed Values Aggregated historic values of the Project Area are summarized on Table 1 covering fiscal years 2002-03 to 2007-08. The historic taxable values reported by the County Auditor -Controller reflect an overall average annual increase of 8.5% for the period. The Secured values, comprising 90% of the total reported value, increased an average of 8.4% over the period. The Unsecured values comprise a significantly smaller share of the Project Area's total assessed value. By their nature, Unsecured values reflect declines in value as a result of depreciation factors or tenant relocations out of the Project Area, as well as increases in value San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 5 0801027 SJC GSH'gbd 19085 004.001/03/03/08 as new tenants move into the Project Area. Unsecured values increased an average of 9.5% over the period, as summarized on Table 1. Historic values for the Original Area, 1984 Amendment and 1986 Amendment are summarized on Tables 1.1 to 1.3. 3.3 Land Use Composition As shown on Table 2, KMA analyzed the composition of land uses within the Project Area in FY 2007-08 using the County Assessor's tax roll classification system. Commercial property values from the Secured tax roll constitute the largest land use category and represent 57% of the reported assessed value. Residential properties account for 17.8% of the assessed value and industrial properties comprise 11.7% of the assessed value. 3.4 Ten Largest Taxpayers The ten largest property owners in the Project Area were identified by KMA based upon a review of the 2007-08 locally assessed secured and unsecured valuations reported by the County Assessor. The aggregated secured assessed values of the identified ten largest tax payers are shown on Table 3 and include the assessee name, property use, parcel count, FY 2007-08 assessed value, percentage share of the Project Area value and percentage share of the incremental value. The ten identified assesses represent nearly 25%, or $206.4 million, of the total Project Area value for 2007-08. When compared against the incremental assessed value, the ten assesses represent 28.9% of the incremental value. 3.5 Assessment Appeals Property taxable values determined by the County Assessor may be subject to an appeal by the property owner. Assessment appeals are annually filed with the County Assessment Appeals Board for a hearing and resolution. The resolution of an appeal may result in a reduction to the Assessor's original taxable value and a tax refund to the property owner. The reduction in future Project taxable values and the refund of taxes affects all taxing entities, including the Agency. KMA researched the status of assessment appeals filed by property owners in the Project Area based upon the latest information available from the County Assessment Appeals Board (AAB) database as of March 3, 2008, reflecting assessment appeal applications for the 2007-08 fiscal year between July 2 and September 15. Of the open and pending appeals, KMA found seven secured and thirteen unsecured appeal filings from FY 2007-08 and four unsecured filings for previous years. As shown on Table 4, the listing of open appeals identifies the application number, secured parcel number, unsecured bill number, fiscal year, applicant name, contested value, applicant opinion San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 6 0801027. SJC GSH gbd 19085 004 001/03/03/08 of value, assumed resolved value, the projected value reduction and the resolution assumption incorporated by KMA. Estimated Value Reductions Unless a particular pattern from parcel -specific prior year filings is seen, it is difficult to project with any degree of certainty which appeal filings would ultimately be withdrawn, denied, invalidated or revoked due to non-appearance. Therefore, the projected tax refunds and valuation reductions shown on Table 4 assume that all outstanding appeals will be reduced based upon one of several methods listed below: If the parcel assessment was reduced by prior stipulation or Appeals Board action, the contested value was reduced to the reported resolved value. 2. If the applicant, in prior fiscal year appeal filings, withdrew an appeal or failed to appear for a scheduled hearing or was denied the appeal request by the Appeals Board, it was assumed that the same would occur with respect to the open appeals being filed by the applicant. For all other appeal records, the following assumptions listed below were incorporated in the analysis. 3. For contested Secured Property values greater than $5 million, a reduction to the greater of either the applicant's opinion of value or 81 % of the contested value was used (this 19% reduction was determined from the average percentage reduction experienced by a sampling of 6 stipulated commercial appeals in the City whose contested secured values were greater than $5 million). 4. For contested Secured Property values less than $5 million, a reduction to the greater of either the applicant's opinion of value or 89% of the contested value was used (this 11 % reduction was determined from the average percentage reduction experienced by a sampling of 5 stipulated commercial appeals in the City whose contested secured values were less than $5 million). For contested Unsecured Property values greater than $500,000, a reduction to the greater of either the applicant's opinion of value or 78% of the contested value was used (this 22% reduction was determined from the average percentage reduction experienced by a sampling of 12 stipulated appeals in the City whose contested unsecured values were greater than $500,000). 6. For contested Unsecured Property values less than $500,000, a reduction to the greater of either the applicant's opinion of value or 84% of the contested value was used (this 16% reduction was determined from the average percentage reduction experienced by a sampling of 38 stipulated appeals in the City whose contested unsecured values were less than $500,000). San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 7 0801027. SJCGSH-gCC 19085 004 001/03/03108 Estimated Fiscal Impact Tax refunds payable from resolved appeals (to the extent applicants are not delinquent in their property tax payments) are deducted by the County Auditor -Controller from current year tax increment allocations. As shown on Table 4, the projected tax refunds and projected future year reductions to value are as follows: Estimated Value Tax Refund Reduction' Projected Tax Refund in FY 2007-08 $12,300 Secured Value Reductions FY 2008-09 $910,000 Unsecured Value Reductions FY 2008-09 $323.000 Projected Totals $12,300 $1,233,000 The actual reductions to tax increment and Project Area taxable values may likely be higher or lower than what has been incorporated in the attached projection. Resolution of appeals are determined by a number of factors including vacancy and rental rates, circumstances of hardship and other real estate comparables, all of which are unique to the individual assessment. Therefore, actual reductions, if any, may be higher or lower than the reductions incorporated in the projection. An appeal may be withdrawn by the applicant, the Appeals Board may deny or modify the appeal at hearing or by stipulation, or the final value may be adjusted to an amount other than the stated opinion of value. Actual Appeal Filing Outcomes The database extraction of assessment appeal records for the Project Areas totaled to 134 records for the period from FY 2002-03 to FY 2006-07. Based upon the distribution of Project Area appeals shown on the table below, historic statistical patterns between FY 2002-03 and FY 2006-07 indicate that an average of 40% of all filed appeals were reduced or stipulated, while nearly 57% of all filed appeals subsequently were withdrawn, denied, deemed invalid or the applicant fails to appear (the remaining 3% are open and pending). The filing outcomes over the past 5 years are shown on the following table: ' Reflects only unique appeals. In cases where an applicant has filed an appeal on the same parcel for multiple years, only the most recent value impact is reflected in the estimated valuation reduction. San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 8 0801027 SJC-GSH. pod 19085 004 WI/03/03/08 Denied, Invalid, Stipulated or Withdrawn or Open Fiscal Year Total Filings Reduced Non-appearance Appeals2 2007-08 20 --- --- 20 100% 2006-07 15 2 12 1 2005-06 15 6 8 1 2004-05 40 23 16 1 2003-04 40 15 24 1 2002-03 24 8 16 --- Combined 134 54 76 4 2002-2006 7 40.3% 56.7% 3.0% Actual Overall Net Value Impact A secondary analysis was conducted from the Project Area parcel extraction to determine the average percentage reduction experienced from all prior year secured and unsecured resolved appeal filings (excluding appeals with an 'open" status designation which therefore would exclude FY 2007-08 filings). The average percentage reductions considered all secured and unsecured resolved appeals, including those withdrawn, denied, deemed invalid or not heard because of the non-appearance by the applicant. The corresponding contested and resolved values3 were then aggregated and the average percentage reductions were determined. The resulting historic percentage reductions experienced for the period analyzed are as follows: Total Number of Total Number of Aggregate Aggregate Fiscal Resolved Aggregate Contested Resolved % Year Records Records Value Value Reduction Secured 2006-07 0 10 $60,563,482 $60,563,482 0.0% 2005-06 1 6 50,738,484 47,938,394 5.5% 2004-05 2 12 69,102,548 65,024,984 5.9% 2003-04 2 18 79,946,633 78,686,130 1.6% 2002-03 2 11 18,249.738 17,684.325 3.1% Combined 7 57 $278,600,885 $269,897,315 3.1% Unsecured 2006-07 2 4 $2,910,682 $2,897,426 0.5% 2005-06 5 8 9,419,012 8,530,489 9.4% 2004-05 18 27 21,602,892 21,207,608 1.8% 2003-04 13 21 3,836,270 3,775,994 1.6% 2002-03 6 13 1,838.110 1,360,424 26.0% Total 44 73 $39,606,966 $37,771,941 4.6% 2 All categories of appeal applications, including appeals on Supplemental Roll and Assessor Roll Change values. 3 The resolved value of appeals withdrawn, denied, invalid or a no show is the same as the value contested since no reduction was approved by the Assessment Appeals Board. San Juan Capistrano Redevelopment Agency Keyser Marston Associates, Inc. Fiscal Consultant Report Page 9 0801027 SJC GSH gbd 19085.004.001 /03/03/08 For the period reviewed, properties that were the subject of assessment appeal filings in the Project Area only resulted in an overall average net secured value reduction of 3.1% and an overall average net unsecured value reduction of 4.6%. 4. TAX ALLOCATION AND DISBURSEMENT 4.1 Tax Rates The tax rates which are applied to incremental taxable values consist of two components: the General Tax Rate of $1.00 per $100 of taxable values and the Override Tax Rate which is levied to pay voter approved indebtedness. The basic levy tax rate may not exceed 1% ($1.00 of $100 taxable value) in accordance with Article XIIIA. An amendment to the Constitution prohibits redevelopment agencies from receiving taxes generated by new Override Tax Rates, which are reflective of debt approved after December 31, 1988. Based upon the County remittance of tax increment attributable to the override debt levy, the FY 2006- 07 override tax rate was 0.00323% for the Original Area, 0.00342% for the 1984 Amendment and 0.00373% for the 1986 Amendment, all of which are very low override tax rates. Therefore, for purposes of the tax increment revenue projection in future fiscal years, KMA has assumed that projected tax increment revenues will only reflect the basic 1 % tax rate. 4.2 Allocation of Taxes Secured taxes are due in two equal installments. Installments of taxes levied upon secured property become delinquent on December 10 and April 10. Taxes on unsecured property are due March 1 and become delinquent August 31. The County Auditor -Controller is responsible for the aggregation of the taxable values assigned by the Assessor as of the lien date for property within the boundaries of the Project Area. This results in the reported total current year Project Area taxable value and becomes the basis for determining tax increment revenues due to the Agency. Although adjustments to taxable values for property within the Project Area may occur throughout the fiscal year, such adjustments are not assumed in the tax increment projection prepared by KMA. Tax increment revenue is disbursed to the Agency based upon actual collections within the Project TRAs. Secured tax increment revenues are typically disbursed by the County in eight monthly payments beginning in November. Approximately 50% of the total tax increment revenues due to the Agency are allocated through January, reflecting the first installment of Secured property tax collections. By the end of April, approximately 80% of the total Tax Increment Revenues are allocated to the Agency, reflecting second installment collections of Secured property taxes. Final reconciliation payments related to the secured increment are made in July. Approximately 90% of the annual Unsecured tax increment revenue is disbursed in September. Two additional unsecured reconciliation payments are then made in January and June. San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 10 0801027. SJC. GSH gbC 19085 004 001/03/03108 4.3 Tax Receipts to Tax Levy Tax increment revenues are allocated to the Agency based upon actual tax collections received in the Project Area. Computed tax increment revenues are based on the actual historic tax rates applied by the County to determine the annual tax increment revenues to the Agency. These tax rates will include the basic 1 % tax levy plus any additional "override" levies reflecting voter -approved taxing agency indebtedness approved before January 1, 1989. The actual computed tax rates vary slightly from year-to-year because of the rates applicable to the overrides. To estimate the percentage of unpaid taxes, a comparison of computed tax levy to actual tax receipts was conducted by KMA. This comparison, summarized on Table 5, was reviewed for FY 2002-03 through FY 2006-07 based on the County's year end tax ledgers. The partial collections for the current FY 2007-08 (as of March 2008) are shown for memo purposes only. For purposes of this comparison, the Secured and Unsecured Tax Increment amounts shown under IV., do not include supplemental taxes, prior year redemption payments and tax refunds, and are before reductions for County administrative fees and pass through payments. The historic allocation ratio during this five-year period (FY 2002-03 to FY 2006- 07) averaged 96% of computed levy. If the reported redemption payments are included in the tax receipts, the average collections rate increases to 97.8% for the period analyzed. S. TAX INCREMENT REVENUE PROJECTION 5.1 Tax Increment Revenues Property tax revenues in excess of the amount resulting from the valuation shown on the assessment roll for the base year value of the Project Area are referred to as tax increment. The base year for a project area represents the fiscal year in which taxable property was last equalized prior to the effective date of the ordinance approving the redevelopment plans for the respective redevelopment projects. The projections of tax increment revenues shown on Table 7 are based upon the fiscal year 2007-08 assessed values and base year assessed values reported by the County Auditor -Controller. The application of the Proposition 13 inflationary increase to Real Property values, plus any anticipated values added from new developments identified by Agency staff and summarized on Table 6, results in the estimate of future project area values. 5.2 New Development Value Added New developments occurring in the Project Area have been identified by Agency staff for inclusion in the tax increment revenue projection. The projects included in the tax San Juan Capistrano Redevelopment Agency Keyser Marston Associates, Inc. Fiscal Consultant Report Page 11 0801027. S JC'. GSH'. gbd 19085.004 oo1f03103108 increment projection and their corresponding estimates of taxable value are presented on Tables 6.1 (Real Property) and 6.2 (Personal Property). The amount of new development values anticipated to be added to the future property tax rolls are assumed to be as of the January 1 st lien date of each year. The valuation estimates for each project are based on cost estimates provided by Agency staff and only reflect significant Agency -identified projects anticipated to be built. Additional new development value would be added for small scale projects and transfers of ownership that may occur throughout the Project Area but not assumed in the projection. The developments assumed by Agency staff are as follows: Agency Identified New Development Ventanas Industrial Park Centra Pointe Office Total Real Property Value 5.3 Unitary Tax Revenue Real Property Value Added 70,800,000 12,250.000 $83,050,000 Tax Year Value May Appear 2010-11 2011-12 Commencing in 1988-89, the reporting of public utility values assessed by the SBE was modified pursuant to legislation enacted in 1986 (Chapter 1457) and 1987 (Chapter 921). Previously, property assessed by the SBE was assessed State-wide and was allocated according to the location of individual components of a utility in a TRA. Hence, public utility values located within a project area were fully reflected in the Project Area's annual taxable value. Since the County no longer included the taxable value of unitary properties as part of the reported taxable values in a redevelopment project, base year reductions were made equal to the amount of unitary taxable value that existed originally in the base year. The values of most public utility properties are now assessed as a single unit on a Countywide basis (referred to as unitary values). Railroad properties and utility owned parcels not included by SBE in the unitary assessment are referred to as Non -Unitary assessments. Unitary tax revenues are distributed by the County in the following manner: (1) each taxing entity will receive the same amount as in the previous year plus an increase for inflation of up to 2%; (2) if utility tax revenues are insufficient to provide the same amount of revenue as in the previous year, allocation of the taxes would be reduced pro -rata Countywide; and (3) any increase in revenue above 2% would be allocated in the same proportion as the taxing entity's local secured taxable values are distributed to the local secured taxable values of the County. According to the County Auditor -Controller, the Agency will receive approximately $30,215 in Unitary tax revenues in FY 2007-08. For purposes of this projection, it is assumed that the Unitary tax revenues will stabilize at this amount thereafter and have been included in the Gross Tax Increment revenue amounts shown on Table 7. San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 12 0801027 sJC GSH:gbd 19085 009 001103/03/08 5.4 Supplemental Assessments Supplemental assessments are authorized under Chapter 498 of the Statutes of 1983, which provides that property may be reassessed upon the occurrence of a change of ownership or completion of new construction. The supplemental assessment reflects the difference between the new value and old value. Prior to the enactment of Chapter 498, property reassessments occurred only on the lien date next following the change in ownership or new construction. The supplemental tax (if there is a resulting increase in value) or the supplemental refund (if there is a resulting decrease in value) is determined by applying the current year tax rate to the amount of supplemental assessment and prorating the resulting tax based upon the number of months remaining in the current fiscal year and, in certain instances, in the forthcoming fiscal year .4 The tax revenues or refunds derived from supplemental assessments are allocated to redevelopment agencies on a monthly basis and incorporated in the tax payments prepared by the County Auditor -Controller. Future new developments or property transfers occurring in the Project Area could likely result in supplemental tax revenues being allocated to the Agency. However, due to their nature as one-time occurring revenues, supplemental taxes can be a relatively minimal revenue source to the Agency to the extent no new developments or transfers of ownership are occurring in the Project Area. In addition, pursuant to conversations with County Tax Collector staff, the receipt of supplemental taxes by the Agency can be delayed by as much as six to nine months after a property transfer or construction. Supplemental taxes are prorated by the number of months that remain in the fiscal year. However, the City's projection of future new developments occurring in the Project Area did not contain specific completion months, making an annual supplemental tax estimate difficult to project. Therefore, for purposes of the projection, KMA has not included any revenues in the tax increment projection resulting from future supplemental assessments. Supplemental tax revenues are subject to the annual tax increment revenue limits imposed by the Redevelopment Plan. 5.5 Tax Increment Revenue Projection The tax increment revenue projection for the Project Area is summarized on Table 7 commencing with the 2007-08 fiscal year. The projection is separated into Real Property and Personal Property values for purposes of increasing Real Property values allowed under Proposition 13. The trended percentage growth assumptions above the Proposition 13 2% inflationary increase are incorporated into the revenue projection to reflect anticipated Real Property increases resulting from future transfers of ownership and new development and renovation activities not identified by Agency staff on Tables 6.1 and 6.2. The impact of value 4 Two supplemental assessments would occur in instances where a change in ownership or a new construction occurs between the January 1 lien date and May 31st. San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 13 0801027. SJC: GSM gbd 19085.004 001/03/03/08 reductions resulting from identified assessment appeals has been incorporated into the projection based only upon current open appeals identified. The projected growth in Real Property taxable values has been limited to anticipated value added from the identified new developments discussed above, the maximum annual inflationary factor allowed under Proposition 13. This projection assumes that future inflationary growth commencing in 2008-09 will be at least 2% per year. Future Personal Property values are assumed to stabilize at the previous year level with the addition of value assumed from Table 6.2. Net tax increment revenue represents the gross tax increment revenue less the sum of the County's collection fee authorized under SB 2557, estimated tax refunds due to appeals, the 20% housing set aside, pass through payments to affected taxing agencies, and triggered statutory pass through payments set forth under Health and Safety Code Section 33607.7. A "no growth" projection of the tax increment revenues has been prepared as Appendix Table A to reflect how current tax increment revenues decline over time as the plan limitations for the respective project areas become effective. The "no growth" projection does not assume any valuation growth from new developments or inflationary increases after FY 2007-08. 6. CAVEATS The projection reflects KMA's understanding of the assessment and tax apportionment procedures employed by the County. The County procedures are subject to change as a reflection of policy revisions or legislative mandate. While we believe our estimates to be reasonable, taxable values resulting from actual appraisals may vary from the amounts assumed in the projections. Assumptions have also been made that Unitary tax revenues will continue to be allocated in the manner discussed herein and that legislatively -mandated payments to the State will not be required in future fiscal years. These assumptions reflect existing State policies and are subject to future legislative changes. No assurances are provided by KMA as to the certainty of the projected tax increment revenues shown on Table 7. Actual revenues may be higher or lower than what has been projected and are subject to valuation changes resulting from new developments or transfers of ownership not specifically identified herein, actual resolution of outstanding appeals, future filing of appeals, or the non-payment of taxes due. The accuracy or completeness of assessment appeals identified in the attached table are based solely upon information provided by the County Assessor's office as of the original review of said data. Attachments San Juan Capistrano Redevelopment Agency Fiscal Consultant Report Keyser Marston Associates, Inc. Page 14 0801021. SJCGSH' gbd 19085 009 001/03/03/08 m v d N 6 0 wL . v ` ` OU E mv w Ev a` o'oU d v 20E-ji aW 0 0 o o o i0 a= > o o as 0 K u�i a N.� Eav wF- �� Eam L' a..1pi Eawh oeeee °0000 oeeee voevo e e o o e e e e e o o e e e e e a e o 0 rn N rn N M O O O O O O U) O W M rn O Q' n e t � W OI W O O O O O O O W [V W rl a0 M N N rn Q rn r W � rn O M O O Q Ul O W M O O O r U) W N O O 0) 0) M n Q M Q O n N W N O Q LO M M O N O O W M Q In M O O 0) Q M W Q Q O M O) N Of M M M M N NM A 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o e o 0 0 N M O Q r O n O W DI r (p r N N CO M M O M O M O m W M O N N o U uJ W Q) O) l4 Ul l4 O W 14 g W M N r r O7 N m Q W 1p M N W Q rn 0 �- O Q1 Vl Q O N O n tD 01 O n n O O O O m r V1 1A N W W W M D) U) r W W O IM Q N M O M O O Q M N N N N O O p r 0 aC G b l0 01 rn N N N O r M O N Q r h M O W O O N " N O n N •- N N Nr Q r O W 1n Q Q W N O WW N O O W- M p roi co oci m w W Q�+ i rM iQQr 0 0 0 0 0 0 0 o e ev o o v o 0 0 0 0 0 o W Q o n W W O O O W M W MM o M o p1 M N W n m W O) O OI W M N W w W h N W In n o f M Q O O .- .- .- O N N N U OI N n C� O r W 0 0 M N r 0 W M W O a N N U) rn r Q r r In W M Q m m r rn N N W Q W N W W W M M I- M 4n W M Q W p W n M U) N QQ n r U7 N W O W M Q Q O O D7 Q W D) r Q Q m Q N N N W W O N W W U) UJ O W O U] M W O N n W W M O N N Q U) N Q U) N W Q U) W 0 0 0 0 0 0 o e o a a o 0 0 0 0 o e o 0 Q W N N O N N N O N Q W W Q Q W N n rn m e W M M Zvi vi vi Q W W W O is IT W O W M IT W M N N O n U YY y ° a N W Q W O N O V1 M M M M - M Q M p n O W M Q Q O- M W " N O n W W M O p n W N W n O N O W O N N O N N O n Q W Q W Q N N N N O Q r O O O r Q v M O M O rn O n n rn O v p W N l0 NM �) ` r (V C) O IV O N rn M hw W N Q n N W U) O 0 0 o a e o 0 0 0 o a a o 0 o e o 0 0 0 p1 O U) N W Q n M O) W W O O N N N O O) N N Q M N O O v N O N W W r O O On M o M M M O m M r OI ry O N W U) rW N Q n O h O n N W m 0 M W W r v n n m M WM W Q n ,Q W R o O Q m N - W M O O Q h " N M O M N O O v Q o O O O QO D) N r O n M N D Q O O M W � rn co MC; W W O W O M h M rn n M O W 6W N oM W Q W M N .- O U) M N W n N O Q N� a W inrnmQ N N ar Worn W r N rn hrnQ1nM N O O M n � ci W rn rn O Q W O Wn CO M n Q r O M rn W W M p r W O M N N N O N O r Q N O r T N M r M m n m O N h M N n M N m Q N U W n N Q ifJ M M M M Q W r O W O Q r O p In n Ul rn N Ul n v U) Q O 1n 1A 1n N N C� Q `N-' N m v d N 6 0 wL . v ` ` OU E mv w Ev a` o'oU d v 20E-ji aW 0 0 o o o i0 a= > o o as 0 K u�i a N.� Eav wF- �� Eam L' a..1pi Eawh O m M W m M N (O r O 0 O O O O O O O O O O O O O M W Q O O O r M O Q r N r I0 c0 IO r N Q e o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 a m M W W M W O O O O O tp W r N Q In Of (O Q � [p r O N W 0 O r O O O O O r N m W Q N r Ln N M m 01 W N O r N M r O 4 W ( 1 O W r O Q n rr Qmm n n O Q N r M m M mnlr�M W Q m � Q IO M Q r[ Om O rNr W W m n oomom oMm cy�qmm W 0 0 0 o e 0 0 0 0 0 0 0 0 0 0 e o o e o 0) N N Q Q Q O Q (D N O N l0 r f p1 M N O Q M M M O M � N � 1� (0 M O Lq 99TO19 YNNN� tONQ r U N r T Io Q N A A W O Q Q Q m W M O Q7 M M M W m M N M n W M Q W m N r O W N �- O r 4 N N O N N N Q Yl w m M r N N O" M Q N W OI W M W N n V> I[1 - O O M M m M •- M O W N N W M O N �- N O n r N m p N n Q (O Q co Q W (0 T Q) OJ 10 e e e o 0 0 0 0 0 0 0 0 0 0 0 0 0 o e o N Q h t0 t0 t0 O r O O M O a> O f0 M m M N m M N m m OI O N OI m In O N m N O M r OJ 01 0 U ai iri ao oco ���o� C �I? niN rices Q Q r m m m N r o M r Q W in Q o o N M p O W M W N W 0 w W LO O CO O m m r Ww Q Q r (0 O Q N W M r n W r r m I n (D O 0) Q M IO M N O M 0 M M N" O OJ O OJ N M M Q N Q Co M r O N N (D Q IO W (D N D7 Cl! 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O m N d d O N n d m n N N m N m d N n O N N m 0 0 a a O N Q O o n W o N n N O o m m O W N N r r n rn N d r O N 0000 r W m o O O N O N m r O W W N O m N d m o N O O N N N m O d m m m e e 0 0 O n m O O d N O N N 7 O N Q n m O N e r o N n m W m m O M N d n m O m rn N m N d n O m m N O ^ m a m a vv�ocE¢ �n n `w o4u `w E 0 a` I? m av nc ncN a- r:0E u E 0v Em m mn> >a > c > >nD o E ° w Ec w N n,`o -no� d 0. L ateauawd�- ° a n Table 2 Values by Use Central Redevelopment Project Area San Juan Capistrano Redevelopment Agency Use Count Total AV Percentage Residential 165 148, 578, 855 17.8% Commercial 240 476,217,964 57.2% Industrial 39 97,480,841 11.7% Miscellaneous 4 96,381 0.0% Rural 36 29,223,731 3.5% Exempt 86 - 0.0% Public Utility - 0.0% Unsecured 81,404,634 9.8% Total AV .570 833,002,406 100.0% Source: Orange County Assessor and CD Data Prepared by: Keyser Marston Associates, Inc. Filename: Top Ten & Use Values 2008-03-05.xls:T2 Use: 12/14/07: nym 9 d N E O Q G N O C d y (`a`v N N a E c U) o�+ N N N Q d a (D y U � � C (+1 (D J w 7 a c c c F F U fn ffi C O N F E `N-' d 0 0 o 0 rn x o o 0 O 0 m 0 (D x 0 M r m U C j V M C N N N N C N N N x x x Q x x x x Q x O O N V O O O O1 M r 1� Oi N N E O J U Q Q Q V Q Q Q Q V Q V M O N 00 M M OD ( (D M Q w (6 CL w 00 m N °'� W 00 000 00 °a 0N0 N N N N m m ffi C O N F E `N-' d 0 0 o 0 rn 0 M o o 0 O 0 m 0 (D 0 (D 0 M r m U C j V M M N N N N N N N N ca O U" F .O O N ❑ 0 M (O 0 N O) 0 (D (D 0 M V o O V o N M 0 O M o O N 0 M O 0 O O o O o a 10 > M N N N N N N N N N N E m z (D N d O LL) N r O m N N LL] M a0 O O N N V N O a0 O M aD U O O N V O O O O1 M r 1� Oi O j N E O J U O V M O N O M M OD ( (D M w (6 ON N N N N m O N N E m z (D N d E c e s N N U (9 U U ` E E O U E m 1 5 N z C N E O U N E O U C N E O U N E O U N E O J U O N d (6 U N Q U O m C E Q) m a o U LCE j n V c (n ❑ m 3: C a; EN � U L mN O J 9 (D a C w O jm; N d ) O� o 05 NUL 2 F (U C7 O i LL c 3 mE U N M V' m (D I- m 0) O E c e s P $ - N N N P N N - _ _ _ _ _ - _ _ _ `. `. " `. `. .- .- J d. P P Y 4 4 4 0 o g a g c a. Q w u Y_ Y u u u y q a y Y Y Y a s - q 3 3 n 3n q §€�a@ 98898933838838883 e e e s i e s s s s s s s s s s s s s s s s s s i`'saeia ... e e e e g e g R e e A. g e e 5 a a 7 8 7 a 8 8 B 8 g 8 8 8 8 8 8 E E 8 g o 0 0 N N '- =m> w� 60, m 0 f N V U N K Q a Z K � a U a n g i z z K K W 1 6 U J J J J J J J J J J W W_ F a W ¢ r 2 z r r z Z z Z z Z z Z 2 2 z 2 z Z Z Q Q Q O N W W W W W W W W W W J J U O ¢ u u u a c u u a n a w w w a r o ti ti ti 7 7 J 7 7 J J J 000 0 o a a coo a 0 Z O O O x Z Z Uw x U Y Y Y Y O O d' X X X X X X X X X X 4¢< O d 0 U U U U O O W O O O O O O O O O O W¢ K O O O OK¢¢¢¢ K K¢¢ K x x x r i¢ r O O z z w w w w w w w w w w Q In N N f7 U 2 N m m m G7 C� J X X X X X X X X X X R W R R p W W 9 W 9 9 W W 9 W o o v a 9 R 9 c EE m m m U V V U U V U U U U U U U U U U U U U U U U U U �d assssss "a�s�"sssNssssssess Z n o ry v_ .- ry ry ry n ry ry ry ry ry n ry z d d O 4 m A N q rr� 9 9 a 9 9 9 m m N ry n m -- e- - b 6 m g W n i0 m m p$ m j 0 Ori Omi Omi VI VI n m� Oi b� rv$ N m upi 9 9 9 9 9 9 4 N 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 W o 0 0 0 o a o z o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 w � nl uri DeD � J W W O M O M M N (O m r O m w (D m r O V O M r c + U Q O O � + c E o th r lm0 O (MO_ N Q c v m 0 a m m r mE N ^ n m n o CL O m r-rD W W W W V o O E J M N (O m r o m w a m t0+] M N N 7 0 r c + U Q O V O � + c E o th V M O a u m i n Q c v m Q a m m o r u'ni c n m o O o O co O m r-rD W n u�iW Nm W (O (n N O v r M m a O m M m O W o m r O r m N O D M W O m O M V N LL N N 9 O O O) N In m 1n rivo O � ovi N O r rr co (O LL N m co C m O m N (O O N O O CO W N N O U i m LL m O M (cO C V m W N m 0 o j ui O W v m m M r vi o W r OLri N U V V v m v N C T O E J H - E a o m w a m t0+] M a V allo c + U Q O C C aH E O + c E o E 7 LL O O a u m i n Q c v m Q a m m o r (n t7 0 o O N j m w n u�iW Nm W (O (n W r N r M N D O O N r o r a m m o 9 m O O) N In (O 1n 1n rivo n � ovi v O h m O N O o i LL (m0 O M (cO C V (N N N 7 NO - m ui O W v m m M V a0 OLri U N m o N N (O W M W O (O m n N O V (O N m O o m W (O (O N m O (nrm m m� N C T O E J H - E a o m w a a IL E d r c + U Q O C C aH E O + c E o E 7 LL O O a u m i n Q c o Q a m m o a Q F> o Q 0 > j Z N Table 6.1 Real Property Added Central Project San Juan Capistrano Redevelopment Agency Gross Sq Feet: Unit Value: Value Added: 84 Annx 236,000 300 70,800 84 Annx 35,000 350 12,250 Total Real Prop Value Added Cumulative Increased at 2% 2007-08 0 0 0 0 2008-09 0 0 0 0 2009-10 0 0 0 0 2010-11 70,800 0 70,800 70,800 2011-12 0 12,250 12,250 84,466 2012-13 0 0 0 86,155 2013-14 0 0 0 87,878 2014-15 0 0 0 89,636 2015-16 0 0 0 91,429 2016-17 0 0 0 93,257 2017-18 0 0 0 95,122 2018-19 0 0 0 97,025 2019-20 0 0 0 98,965 2020-21 0 0 0 100,945 2021-22 0 0 0 102,964 2022-23 0 0 0 105,023 2023-24 0 0 0 107,123 2024-25 0 0 0 109,266 2025-26 0 0 0 111,451 2026-27 0 0 0 113,680 2027-28 0 0 0 115,954 2028-29 0 0 0 118,273 2029-30 0 0 0 120,638 2030-31 0 0 0 123,051 2031-32 0 0 0 125,512 2032-33 0 0 0 128,022 2033-34 0 0 0 130,583 2034-35 0 0 0 133,194 2035-36 0 0 0 135,858 2036-37 0 0 0 138,575 Source: San Juan Capistrano Redevelopment Agency Prepared by Keyser Marston Associates, Inc. Filename: SanJuanCapislrano_2008-03-05.xls: Real: 3/5/2008: GSH: Page 1 of 1 Table 6.2 Personal Property Added Central Project San Juan Capistrano Redevelopment Agency Gross Sq Feet: Unit Value: Value Added: 84 Annx 236,000 15 3,540 84 Annx 35,000 20 700 Total Per Prop Value Added Cumulative Increased 0% 2007-08 0 0 0 0 2008-09 0 0 0 0 2009-10 0 0 0 0 2010-11 0 0 0 0 2011-12 3,540 0 3,540 3,540 2012-13 0 700 700 4,240 2013-14 0 0 0 4,240 2014-15 0 0 0 4,240 2015-16 0 0 0 4,240 2016-17 0 0 0 4,240 2017-18 0 0 0 4,240 2018-19 0 0 0 4,240 2019-20 0 0 0 4,240 2020-21 0 0 0 4,240 2021-22 0 0 0 4,240 2022-23 0 0 0 4,240 2023-24 0 0 0 4,240 2024-25 0 0 0 4,240 2025-26 0 0 0 4,240 2026-27 0 0 0 4,240 2027-28 0 0 0 4,240 2028-29 0 0 0 4,240 2029-30 0 0 0 4,240 2030-31 0 0 0 4,240 2031-32 0 0 0 4,240 2032-33 0 0 0 4,240 2033-34 0 0 0 4,240 2034-35 0 0 0 4,240 2035-36 0 0 0 4,240 2036-37 0 0 0 4,240 Source: San Juan Capistrano Redevelopment Agency Prepared by Keyser Marston Associates, Inc. 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CO Ol 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 co m o 0 0 M O e m rn Q M N O� I� O N V t0 Q7 N N T N N O iD m N O N N a0 In N 0 0 0 0 0 N M Q m O N M Q N m W O) O N M N m n O N Q N n W U W w m C n N N (D M O N n N W N n Q r Q aT N M n N f N W N C G O O N N Cq N m M M Q N N m r W O) 0 0 N v E@ 'y �- N N N N N N M M Mm N N m m M M M M M M M M M M M M Q Q Q Q Q Z U Q O C = m W O N Q N Q �'v vvVco�nrrrrr W W mroaommrnrnrnm00000 O J p N _ � 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (O 0 0 N i H p v U v 16 = K N � d w LL M N Q n m N Q N m n Q M N Q r N m r r N M m m m r O N Q o C n N n N Q N Q1 N M m m Q N O W n N 4 M N N N N M Q N N M N m m r W W m O N M M Q N m n W 0) O N M C N N t0 N X E N N N M M M M M M M M Q Q Q Q Q Q Q Q Q Q Q N N N N N N <n c N- Q N m n W (p @ �- N N N N N N N N N N 7 M M M M M M M M @ n W Cr O W N AV IA b r �� O � N M Q N N n MM O N M V N m IL O O O .3 •- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N 0 0 0 0 0 0 0 0 N N N N N N N N n W LL M N W N m F F awn ti oOD m m OOi O M N N M V V um'� cQ0 r m m OWi O O N m C N N N N N M M M M M M M M M M M M M Q V Q Q - y N m y x E W N O m Q M' m O) Q m m W N m N 0 O) O M n Q O r Q W �O M � W m Q M O m r r m W] m Q r m m OI 0 0 N N M Q i0 N m r m O) 0 0 N M E O W N N N N M M M M M M M M M M M M M Q Q Q Q Q W > d m U > c O N N W 0- '2 RF a C N d y m Q L Q O O m T @ 10 d 7 Q p d a N H 0 0` > CL a 3 ami � M a z o m a` > y o w a d J Q Q Q m � N } LL C a } Q N o m r ml Q m m N 07 m In In N m m r m r m O) O Q Q Q Q i0 N m M N M m m m M M r m W m M M 0 M M O N r m m m Q N O) m n N Q W M M O Q o m r C O m N M m Q N N M m O m Q M Q n N O) W O) W m m m w M Q O m CoO N Co m m Q N ad m r m m Q Q N Q �O m Qc7 7 O W N R m m r m 01 M M M M M M Q Q Q Q Q Q Q Q Q Q Q Q Q m m 10 to N m N N m m M M M M M M M M M M M M M M M M M M M M M M M M M M M M M LL'1 N N YS 1(7 1A N 1Il IA t(l lfl 1A N lfl N �O I!J 1A lA lf) IA h N N LLJ W N N 4J 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 Ili Lo W N 4J LA N YJ 4) N YJ 4J N YJ Lo N Y m l l v LLS N l m 1 N Yl O N Q m Q O m r m O M m Q N IQ M N m M M r M W Lf1 N W M N O) r Q m n IO M -I O) M m n m LO Q 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M M M M M M M M M M M M M Q Q Q Q Q Q Q Q Q 1( m r m rn O O '- �- •- �- r � N N N N N N N N N r w T O N th Q N m O— N A 4�0 , m O O O N N N N N N N N N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N M M M M M M M M M M Q Q Q M m m Q Q Q m m m m M N M co M Q Q LO m m m M Q Q N (NO N M Q m m n M M M M M M M O •- N M Q U1 m M M M M M M M 0 0 0 0 0 0 0 N N N N N N N y Q N m r m 01 O i IR O rn a F T V C d Q C N E CL 0 v O C y o E N G ° E LO LQ VI ... E°'�x A Q C 1.0 K e c H U m F W O M W T N il9 W O N N r O N W W Q r O M W m N W W r 0 0 0 —— �- '- �- �- •- — N N N N N N N N N W 0 N C Z Q L N --------------------------- Orn—-—mZ. j, LLD ~ v m OI 0 N O N a a O O O O O O O O O O O O O O O O O O O O O O O O O N O 0 0 0 x w .E r r 0 b U W x Q _ .—....— ------------ — — —-..-..-..-. ---- x x N t0 d J e F = d U W � R1 NE d Z U Q 0 -------mo-ivmmo:n-----n— --------------------------- and ----W W— CC --W W W ao Wrno�o�rn - Nj 'y o QN O J p N N � o w LL = tl! x E C - to W- W O N M Q N W r W W 0 •- N M Q W r � — — �- — N N N N N N N N N N ( �1 Q W t? I f`� "l M M M I? 7 ? O- N M Q NL r O— N M Q 6 N r W m O— N A Q LL) (O W Y 0— -- — •- N N N N N N N N N N ON ON ON M M M M M M M N N N N N N N N NO N N N N N N N N N N N N N NO N N N N F Appendix Table A No Growth Revenue Projection Central Redevelopment Project San Juan Capistrano Redevelopment Agency rn rn rn rn rn m rn rn rn rn rn m rn rn rn rn rn rn rn rn rn rn rn rn rn rn rn m rn rn co co <o m co co co co m �o co co co co <o co o m co co m co co co <o �o co co co �o n— QF a > m aD N ao c0 ao aD m aD a0 N ao ao N a0 m co ao co N ao c0 ao co N aD N aD a0 ca °P o� a m rn rn rn rn rn rn rn rn rn rn rn m rn rn m rn rn m rn rn rn rn rn rn m rn rn rn rn F p o > a 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 n z a t7 c7 tri M M M M M M M ih M th M M M th NI M M M M M th M M M M M N N N N N N N N N N N N N N N N N N N N N N N N N N N N N d J Q Q Q O O F C ! 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N vv v --v v— — — —vv— vv v vv.... m U) @ N m NaF�a 0 0 0 0 0 0 o O o 0 0 0 o O o 0 0 0 o O O o 0 0 0 0 0 0 0 0 0 0 0 00000000000000000000000000 0$ U) m W o vv vv ---v vv v ---v v v --v vv vv ---vv 0 0 o 0 Z N N N N N N N N N N N N N N N N N N N N N N N N N N N N O N N N ry- N N N N N N N N N N N N N N N N N N N N N N N N O Ernd ��. ---------------------.-.---- E d m 0 0 U U rn 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N E_ X.2 J o M v O W C M U Q E ----------------------------- .-,--..-..-..-.---...............—,.-..-..-..-..-.--,-.,-..-..-..-- �ommwwao-m-----m--moo----m- C N E o N N ClN N N N N ClN N N N N N ClN ClN N N N N N N N N N N N N N N X�mmo d J U `p h 0 O W � U m h h h h h h h h h h h h h h h h h h h h h h h h h h h h h O ar m rn rn rn rn rn rn rn rn rn rn rn rn rn m rn rn w rn rn rn rn rn rn o rn rn rn N � c c0 c0 c0 t0 (O CO c0 (O t0 c0 c0 c0 c0 c0 (D c0 c0 c0 c0 c0 cD c0 c0 c0 CO (O c0 (O cfl N E N 'y N N N N N N l0 � N uN LL") In N t0 N N N N N O N N LL'1 N N N N c0 c0 Z U Q O C x N N a N N N a O N N N N N N N N N N V N N V N V? V N N O d N N N N N N N N N N N N N N N N N N N N N N N N N N N N N v N o v av v_a-----------v v- o- v_V---- ovv v Q0 — v v... vvv vv.. vvv v vv... vv v v v vv v—v vvv J O N N xen o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 m n o o H m p m U K N M o W c � rno N N N_ N_ N N_ N_ N_ N_ N N_ N_ N N N_ N_ ` mo m ~ ~ CD U G O) O_ N M c0 c0 h a0 O) O N M a c0 h c0 O) O N M 7 N c0 h @ N N C0 O O N N N N N N M M M M M M ch M U 1� w 6 O '= N A V N cD 1� a0 m O N A Q N to I� m m O N M 7 m 6 i O O O O O O O O O O O O O N N N N N N N N N N O O O N N lL O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 0 N 0 0 66 0 0 N M E U) PROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR This agreement has been entered into this 18th day of March, 2008 by and between the City of San Juan Capistrano Community Redevelopment Agency, California (the "Agency") and Fieldman, Rolapp & Associates, (herein, the "Consultant"). WHEREAS, the Agency desires independent financial advisory services to be performed in connection with Funding of Redevelopment Projects (herein, the "Project"); and WHEREAS, the Agency desires to retain the professional and technical services of the Consultant for the purpose of debt issuance, (herein, the "Services"); WHEREAS, the Consultant is well qualified to provide professional financial advice to public entities such as the Agency; NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and conditions hereinafter set forth, it is agreed as follows: Section 1 Financial Advisory Services. As directed by the Agency, Consultant will provide services in connection with the Funding of Redevelopment Projects as such Services are fully described in Exhibit A attached to this Agreement. Consultant is engaged in an expert financial advisory capacity to the Agency only. It is expressly understood that the Services rendered hereunder are rendered solely to the City of San Juan Capistrano Community Redevelopment Agency. Consultant does not undertake any responsibility to review disclosure documents on behalf of owners or beneficial owners of bonds or debt which may arise from the Consultant's work hereunder. Section 2 Additional Services. Services performed for the Agency by Consultant that are not otherwise specifically identified in Exhibit A to this Agreement, shall be additional services. Additional services include, but are not limited to, the following: 2.01 Assisting the Agency in obtaining enabling legislation or conducting referendum elections. 2.02 Extraordinary services and extensive computer analysis in the structuring or planning of any debt issue or financing program. 2.03 The repeat of any element of a service described in Exhibit A to this Agreement which is made necessary through no fault of Consultant. 2.04 Financial management services, including development of financial policies, capital improvement plans, economic development planning, credit analysis or review and such other services that are not ordinarily considered within the scope of services described in Exhibit A to this Agreement. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page I Project No. 07181 FRA099280 v4_O.doc ATTACHMENT 2.05 Services rendered in connection with any undertaking of the Agency relating to a continuing disclosure agreement entered into in order to comply with Securities and Exchange Commission Rule 15c2-12 or other similar rules. 2.06 Services rendered to the Agency in connection with calculations or determination of any arbitrage rebate liability to the United States of America arising from investment activities associated with debt issued to fund the Project. Section 3 Compensation. 3.01 For Consultant's performance of Services as described in Section 1 of this Agreement the Consultant's compensation will be as provided in Part 1 of Exhibit B attached to this Agreement, plus Consultant's expenses incurred in rendering such Services. Consultant's expenses may include, but are not limited to travel, telephone/conference calls, postage, courier, database access services, and printing. 3.02 For Consultant's performance of additional services as described in Section 2 of this Agreement, the Consultant's compensation will be as provided in Part 2 of Exhibit B attached to this agreement, plus Consultant's expenses incurred in rendering such services. Consultant's expenses may include, but are not limited to travel, telephone/conference calls, postage, courier, database access services and printing. 3.03 Payment for Consultant's Services rendered pursuant to Section 1 of this Agreement shall be as provided for in Exhibit B to this Agreement, unless specified to the contrary elsewhere in this Agreement. The Consultant may submit monthly invoices for payment for services provided pursuant to Section 2 of this Agreement unless an alternate date or dates have been specifically agreed to in writing. Unless otherwise specified, payment of Consultant's compensation and expenses is due thirty (30) days after submission of Consultant's invoice for services. 3.04 In the event the Services of the Consultant are abandoned prior to completion of Consultant's work, Consultant shall be compensated for Services performed to the point of abandonment as if such Services were an additional service pursuant to Section 2 of this Agreement. An act of abandonment shall be deemed to have occurred when no action has been taken by the Agency relative to the services of the Consultant for a period of three (3) months from the date of the initial performance of a service, or there has been a written notification to the Consultant of an abandonment of the Project by the Agency. 3.05 Consultant fees set forth in this Agreement and Exhibits are guaranteed by Consultant for a period of twelve (12) months from the date of this Agreement. Section 4 Personnel. Consultant has, or will secure, all personnel required to perform the services under this Agreement. Consultant shall make available other qualified personnel of the firm as may be required to complete Consultant's services. The Agency City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page 2 Project No. 07181 FRA099280.doc has the right to approve or disapprove any proposed changes in Consultant's staff providing service to the Agency. The Agency and Consultant agree that such personnel are employees only of Consultant and shall not be considered to be employees of the Agency in any way whatsoever. Section 5 Term of Agreement. This Agreement shall continue in full force and effect for a period of thirty-six (36) months from the date hereof unless terminated by either party by not less than thirty (30) days written notice to the other party except that the Agreement shall continue in full force and effect until completion of Consultant's services or until an abandonment shall have occurred as described in Section 3.04 hereof. This Agreement may be extended from time to time as agreed by the Agency and the Consultant. Section 6 Modification. This Agreement contains the entire agreement of the parties. It may be amended in whole or in part from time to time by mutual consent of the parties. This shall not prohibit the Agency and Consultant from entering into separate agreements for other services. Section 7 Assignment. The rights and obligations of the Agency under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Agency. This agreement may not be assigned by the Consultant without the consent of the Agency except for compensation due Consultant. Section 8 Disclosure. Consultant does not assume the responsibilities of the Agency, nor the responsibilities of the other professionals and vendors representing the Agency, in the provision of services and the preparation of the financing documents, including initial and secondary market disclosure, for financings undertaken by the Agency. Information obtained by Consultant and included in any disclosure documents is, by reason of experience, believed to be accurate; however, such information is not guaranteed by Consultant. Section 9 Confidentiality. The Consultant agrees that all financial, statistical, personal, technical and other data and information designated by the Agency as confidential shall be protected by the Consultant from unauthorized use or disclosure. Section 10 Indemnification. The Agency and Consultant shall each indemnify and hold harmless the other from and against any and all losses, claims, damages, expenses, including legal fees for defense, or liabilities, collectively, damages, to which either may be subjected by reason of the other's acts, errors or omissions, except however, City of San Juan Capistrano Community RedevelopmentIFieldman, Rolapp & Associates Page 3 Project No. 07181 FRA099280.doc neither will indemnify the other from or against damages by reason of changed events and conditions beyond the control of either or errors of judgment reasonably made. Section 11 Insurance. 11.01 Consultant shall maintain workers' compensation and employer's liability insurance during the term of this Agreement. 11.02 Consultant, at its own expense, shall obtain and maintain insurance at all times during the prosecution of this contract. Such insurance must be written with a Best Guide "A" -rated or higher insurance carrier admitted to write insurance in the state where the work is located. 11.03 Certificates of insurance naming the Agency as an additional insured shall be submitted to the Agency evidencing the required coverages, limits and locations of operations to which the insurance applies, and the policies of insurance shall contain a 30 day notice of cancellation or non -renewal. 11.04 Insurance coverages shall not be less than the following A. Workers' Compensation 1. State worker's compensation statutory benefits 2. Employer's Liability -policy limits of not less than $1,000,000. B. Comprehensive General Liability coverage with policy limits of not less than $1,000,000 combined single limit for bodily injury and property damage and including coverage for the following: 1. Premises operations 2. Contractual liability 3. Products 4. Completed operation C. Errors and omissions with policy limits of $1,000,000. Section 12 Permits/Licenses. The Consultant shall obtain any permits or licenses, as may be required for it to complete the services required under this Agreement. Section 13 Binding Effect. 13.01 A waiver or indulgence by the Agency of a breach of any provision of this Agreement by the Consultant shall not operate or be construed as a waiver of any subsequent breach by the Consultant. 13.02 All agreements and covenants contained herein are severable and in the event any of them shall be held to be invalid by any competent court, this Agreement shall City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Page 4 Project No. 07181 FRA099280.doc be interpreted as if such invalid agreements or covenants were not contained herein, and the remaining provisions of this Agreement shall not be affected by such determination and shall remain in full force and effect. This Agreement shall not fail because any part or any clause hereof shall be held indefinite or invalid. 13.03 Each party hereto represents and warrants that this Agreement has been duly authorized and executed by it and constitutes its valid and binding agreement, and that any governmental approvals necessary for the performance of this Agreement have been obtained. 13.04 The validity, interpretation and construction of this Agreement and of each part hereof shall be governed by the laws of the State of California. Venue for any lawsuit concerning this agreement is Orange County, California. IN WITNESS Whereof, the parties have duly executed this Agreement as of the day and year first above set forth. CITY OF SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY Lo Dave Adams Da14arch 18, 2008 HELDMAN, ROLAPP & ASSOCIATES 19900 MacArthur Boulevard, Suite 1100 hvine, A 92612 'C By: 1 Dat : WON I TO 1R Title: Fxanrtive. niractor Title: �( )nJC 117�i e(owl -S-44 City of San Juan Capistrano Community RedevelopmenUFieldman, Rolapp & Associates Page 5 Project No. 07181 FRA099280.doc EXHIBIT A TO PROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR BY AND BETWEEN THE CITY OF SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AND FIELDMAN, ROLAPP & ASSOCIATES Scope of Services A. General Services. The Consultant shall perform all the duties and services specifically set forth herein and shall provide such other services as it deems necessary or advisable, or are reasonable and necessary to accomplish the intent of this Agreement in a manner consistent with the standards and practice of professional financial advisors prevailing at the time such services are rendered to the Agency. The Agency may, with the concurrence of Consultant, expand this Agreement to include any additional services not specifically identified within the terms of this Agreement. Any additional services may be described in an addendum to this Exhibit A and are subject to fees described in Exhibit B to this Agreement. B. Debt Issuance Services. The Consultant shall assume primary responsibility for assisting the Agency in coordinating the planning and execution of each debt issue relating to the Project. Insofar as the Consultant is providing Services which are rendered only to the Agency, the overall coordination of the financing shall be such as to minimize the costs of the transaction coincident with maximizing the Agency's financing flexibility and capital market access. The Consultant's proposed debt issuance Services may include, but shall not be limited to, the following: • Establish the Financing Objectives • Develop the Financing Schedule • Monitor the Transaction Process • Review the Official Statement, both preliminary and final • Procure and Coordinate Additional Service Providers • Provide Financial Advice to the Agency Relating to Financing Documents • Compute Sizing and Design Structure of the Debt Issue • Plan and Schedule Rating Agency Presentation and Investor Briefings • Conduct Credit Enhancement Procurement and Evaluation • Conduct Market Analysis and Evaluate Timing of Market Entry • Recommend Award of Debt Issuance • Provide Pre -Closing and Closing Assistance City of San Juan Capistrano Community RedevelopmentJFieldman, Rolapp & Associates Exhibit A, Page 1 Project No. 07181 FRA099280.doc Specifically, Consultant will: 1. Establish the Financine Obiectives At the onset of the financing transaction process for the Project, the Consultant shall review the Agency's financing needs and in conjunction with the Agency's management, outline the objectives of the financing transaction to be undertaken and its proposed form. Unless previously determined, Consultant shall recommend the method of sale of debt and outline the steps required to achieve efficient market access. 2. Develop the Financing Timetable. The Consultant shall take the lead role in preparing a schedule and detailed description of the interconnected responsibilities of each team member and update this schedule, with refinements, as necessary, as the work progresses. 3. Monitor the Transaction Process. The Consultant shall have primary responsibility for the successful implementation of the financing strategy and timetable that is adopted for each debt issue relating to the Project. The Consultant shall coordinate (and assist, where appropriate) in the preparation of the legal and disclosure documents and shall monitor the progress of all activities leading to the sale of debt. The Consultant shall prepare the timetables and work schedules necessary to achieve this end in a timely, efficient and cost-effective manner and will coordinate and monitor the activities of all parties engaged in the financing transaction. 4. Review the Official Statement a. Generally, SEC, MSRB, and GFOA guidelines encourage full disclosure so that potential investors have sufficient data to analyze each proposed financing. Upon direction of the Agency, the Consultant shall take the lead in review of the official statement for each debt issue relating to the Project to insure that the Agency's official statement is compiled in a manner consistent with industry standards, typically including the following matters: • Legal Authority for the Financing • Security for the Financing • Restrictions on Additional Financings • Purpose and Funds for which the Financing is Being Issued • Governmental System • Financial Management System • Revenue Sources: Historic, Current and Projected • Outstanding Financings • Planned Future Financings • Labor Relations and Retirement Systems • Economic Base • Annual Financial Statements • Legal Opinions Regarding Tax Exemption • Such Other Matters as the Context May Require. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit A, Page 2 Project No. 07181 FRA099280.doc b. The Consultant shall maintain and update the official statement on its word processing system until such time as it is near final and suitable for transfer to the financial printer, in order to minimize the costs of revisions made by the printer. 5. Procure and Coordinate Additional Service Providers. Should the Agency desire, the Consultant may act as Agency's representative in procuring the services of financial printers for the official statement and related documents, and for the printing of any securities. In addition, the Consultant may act as the Agency's representative in procuring the services of trustees, paying agents, fiscal agents, feasibility consultants, redevelopment consultants, or escrow verification agents or other professionals, if the Agency directs. 6. Provide Financial Advice to the Agency Relating to Financing Documents. Simultaneous with assisting in the preparation of official statements for each debt issue relating to the Project, the Consultant shall assist the managing underwriters, bond counsel and/or other legal advisors in the drafting of the respective financing resolutions, notices and other legal documents. In this regard, the Consultant shall monitor document preparation for a consistent and accurate presentation of the recommended business terms and financing structure of each debt issue relating to the Project, it being specifically understood however that the Consultant's services shall in no manner be construed as the Consultant engaging in the practice of law. 7. Compute Sizing and Design Structure of Debt Issue. The Consultant shall work with the Agency's staff to design a financing structure for each debt issue relating to the Project that is consistent with the Agency's objectives, that coordinates each transaction with outstanding issues and that reflects current conditions in the capital markets. 8. Plan and Schedule Rating Agency Presentation and Investor Briefings The Consultant shall develop a plan for presenting the financing program to the rating agencies and the investor community. The Consultant shall schedule rating agency visits, if appropriate, to assure the appropriate and most knowledgeable rating agency personnel are available for the presentation and will develop presentation materials and assist the Agency officials in preparing for the presentations. 9. Conduct Credit Enhancement Evaluation and Procurement. Upon the Agency's direction, the Consultant will initiate discussions with bond insurers, letter of credit providers and vendors of other forms of credit enhancements to determine the availability of and cost benefit of securing financing credit support. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit A, Page 3 Project No. 07181 FRA099280.doc 10. Conduct Market Analysis and Evaluate Timing of Market Entry. The Consultant shall provide regular summaries of current municipal market conditions, trends in the market and how these may favorably or unfavorably affect the Agency's proposed financing. a. Competitive Sales. For all types of competitive sale of debt, the Consultant shall undertake such activities as are generally required for sale of securities by competitive bid including, but not limited to the following: • Review and comment on terms of Notice of Sale Inviting Bids • Provide advice on debt sale scheduling • Provide advice on the use of electronic bidding systems • Coordinate bid opening with the Agency officials • Verify bids received and make recommendations for acceptance • Provide confirmation of issue sizing, based upon actual bids received, where appropriate • Coordinate closing arrangements with the successful bidder(s) b. Negotiated Sales. In the case of a negotiated sale of debt, the Consultant shall perform a thorough evaluation of market conditions preceding the negotiation of the terms of the sale of debt and will assist the Agency with the negotiation of final issue structure, interest rates, interest cost, reoffering terms and gross underwriting spread and provide a recommendation on acceptance or rejection of the offer to purchase the debt. This assistance and evaluation will focus on the following areas as determinants of interest cost: • Size of financing • Sources and uses of funds • Terms and maturities of the debt issue • Review of the rating in pricing of the debt issue • Investment of debt issue proceeds • Distribution mix among institutional and retail purchasers • Interest rate, reoffering terms and underwriting discount with comparable issues • Redemption provisions 11. Recommend Award of Debt Issuance. Based upon activities outlined in Task 10(a) and 10(b) above, the Consultant will recommend accepting or rejecting offers to purchase the debt issue. If the Agency elects to award the debt issue, the Consultant will instruct all parties and help facilitate the actions required to formally consummate the award. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit A, Page 4 Project No. 07181 FRA099280.doc 12. Provide Pre -Closing and Closing Activities. The Consultant shall assist in arranging for the closing of each financing. The Consultant shall assist counsel in assuming responsibility for such arrangements as they are required, including arranging for or monitoring the progress of bond printing, qualification of issues for book -entry status, signing and final delivery of the securities and settlement of the costs of issuance. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit A, Page 5 Project No. 07181 FRA099280.doc EXHIBIT B TO FINANCIAL ADVISORY SERVICES AGREEMENT BY AND BETWEEN CITY OF SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AND FIELDMAN, ROLAPP & ASSOCIATES Fees and Expenses Part l: Fee for Services Financial Advisory Services performed pursuant to Section 1 of this Agreement, and as more fully described in the Scope of Services set forth in Exhibit A, will be billed for at the amounts set forth below: Transaction Size Fees $1 to $25,000,000 $45,500 $25,000,001 to $50,000,000 $55,500 $50,000,001 and above to be negotiated Payment of fees earned by Consultant pursuant to this Part I shall be contingent on, and payable at the closing of the debt issue(s) undertaken to finance the Project. If the Agency elects to issue Taxable Bonds or to issue Housing Set Aside Bonds, an additional $9,500 will be added to the fee amounts listed above. Part 2: Other Services Unless agreed to otherwise, financial advisory services performed pursuant to Section 2 of this Agreement will be billed at the then current hourly rates. The table below reflects the rates in effect as of the date of execution of this Agreement. Personnel Hourly Rate Executive Officers............................................................ $300.00 Principals.......................................................................... $290.00 Senior Vice President....................................................... $275.00 Vice Presidents................................................................. $225.00 Assistant Vice President ................................................... $195.00 Senior Associate............................................................... $150.00 Associate........................................................................... $125.00 Analyst................................................................................ $85.00 Administrative Assistants ................................................... $65.00 Clerical............................................................................... $35.00 City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit B, Page 1 Project No. 07181 FRA099280.doc Expenses Expenses will be billed for separately and will cover, among other things, travel, lodging, subsistence, overnight courier, computer, internet posting and fax transmission charges. Advances made on behalf of the Agency for costs of preparing, printing or distributing disclosure materials or related matter whether by postal services or electronic means, may also be billed through to the Agency upon prior authorization. Additionally, a surcharge of 6% of the net fee amount is added to verifiable out-of-pocket costs for recovery of costs such as telephone, postage, document reproduction and the like. Limiting Terms and Conditions The above fee is based on completion of work orders within six months of the Agency's authorization to proceed, and assumes that the Agency will provide all necessary information in a timely manner. The fee shown above in Part 1 presumes attendance at up to 8 meetings in the Agency's offices or such other location within a 25 -mile radius of the Agency place of business as the Agency may designate. Preparation for, and attendance at Board of Directors meetings on any basis other than "by appointment" may be charged at our normal hourly rates as shown in Part 2, above. Abandonment If, once commenced, the services of the Consultant are terminated prior to completion of our final report for any reason, we are to be reimbursed for professional services and direct expenses incurred up to the time we receive notification of such termination at the standard hourly rates shown in Part 2. City of San Juan Capistrano Community Redevelopment/Fieldman, Rolapp & Associates Exhibit B, Page 2 Project No. 07181 FRA099280.doc AGREEMENTFOR BOND COUNSEL SERVICES March 18, 2008 The San Juan Capistrano Community Redevelopment Agency (hereinafter referred to as the "Agency") and Stradling Yocca Carlson & Rauth, a Professional Corporation, (hereinafter referred to as "Bond Counsel") hereby agree as follows: 1. SERVICES The Agency retains Bond Counsel to provide, and Bond Counsel agrees to provide, legal services in connection with the Agency's issuance of tax allocation bonds (hereinafter referred to as the "Bonds") to fund new housing and redevelopment activities, to refund its Series 1997 Tax Allocation Bonds and/or Series 1998 Tax Allocation Bonds, if deemed appropriate by the Agency, to fund a reserve fund and to pay related costs of issuance, including but not limited to premium for municipal bond insurance, if any is purchased with respect to the Bonds. Such services will be divided into two phases: (a) program planning and development of a financing plan; and (b) implementation of the financing plan. In the first phase -- the planning stage -- we would expect: (a) to research applicable laws and ordinances relating to the proposed program, including federal and state tax laws, securities laws and other laws that may be applicable; (b) to attend conferences and consult with the Agency/City staff (including the Agency Executive Director) and counsel regarding such laws, to participate with any financial advisors, underwriters, developers, lenders and other experts retained by the Agency in structuring the financing; and (c) to consult with other firms active in the bond practice when necessary to ensure that any novel approaches being considered would be generally accepted in the bond community. In the second phase -- the implementation stage -- we would expect: (d) to supervise and prepare documentation of all steps to be taken through the issuance of the Bonds including: (i) drafting all resolutions, rules and regulations of the Agency and all other basic documents relating to the security of the Bonds, in consultation with the Agency, its counsel and financial advisors, underwriters and other experts; (ii) preparing the record of proceedings for the authorization, sale and issuance of the Bonds by City and Agency as members of the joint powers authority; (iii) limitation the indenture; DOCSOC/ 1268618v 1/022299-0084 preparing documents relating to the financing, including without ATTACHMENT 3 (iv) assisting in the preparation or review of any description in the official statement or placement memorandum of California and federal law pertinent to the validity of the Bonds and tax treatment of interest paid thereon, the terms of the Bonds and our opinion; (v) reviewing the Bond purchase contracts or the bidding documents and participating in the related negotiations; (vi) attending information meetings and other conferences scheduled by the Agency, the financial advisors or the underwriters; (vii) consulting with counsel to the Agency concerning any legislation or litigation during the course of the financing; (viii) consulting with the trustee and counsel to the trustee; (ix) preparing the form of the Bonds, and supervising their production or printing, signing, authentication and delivery; and (x) rendering any necessary collateral. legal opinions as to the inapplicability of the registration requirements of federal securities laws and other matters related to the issuance of the Bonds, the joint powers authority and Agency authority with respect to the financing generally. (e) to render a final legal opinion pertaining to the issuance of the Bonds to the effect that: (i) the Bonds have been properly authorized and issued and are valid and binding obligations; (ii) the essential sources of security for the Bonds have been legally provided; and (iii) to the extent applicable to a series of Bonds, interest on the Bonds is excludable from gross income for federal income tax purposes and exempt from California personal income taxation. 2. INDIVIDUAL RESPONSIBLE FOR PROVIDING SERVICES The Agency agrees to accept and Bond Counsel agrees to provide the aforementioned services primarily through Denise E. Hering, Payam Khodadadi and Carol L. Lew. Should the above attorneys be unable to provide such services due to death, disability, or similar event, Bond Counsel reserves the right to substitute unilaterally another of its attorneys to provide such services, and such substitution shall not alter or affect in any way Bond Counsel's other obligations under this agreement. DOCSOC/ 1268618v 1 /022299-0084 (a) Bond Fee The Agency agrees to pay Bond Counsel a fee in accordance with the schedule attached hereto as Exhibit 1, provided that payment of such fee is entirely contingent upon the successful sale of the Bonds, and payment thereof is to be made from the proceeds of the Bonds. (b) Fee for Preparation of Official Statement The Agency agrees to pay Bond Counsel a fee of $33,000 for the preparation of the Official Statement for the Bonds, provided that payment of such fee is entirely contingent upon the successful sale of the Bonds, and payment thereof is to be made from the proceeds of the Bonds. (c) Out -of Pocket Expenses The Agency also agrees to reimburse Bond Counsel for the actual cost of out-of-pocket expenses reasonably incurred, excluding any indirect cost such as Bond Counsel's overhead, in connection with the provision of the aforementioned services, including (i) telephone, telex, and telegram charges, (ii) messenger and delivery charges, (iii) traveling expenses, for travel at the Agency's request, (iv) document production charges, and (v) similar out-of-pocket expenses. It is recognized by the parties that Bond Counsel may, from time to time, have clients with interest adverse to the Agency. Bond Counsel routinely represents other public entities and underwriter's in connection with public finance matters, and such representation may include the underwriter eventually selected by the Agency, if any. Bond Counsel reserves the right to represent said clients, except on matters relating to the issuance and sale of the Agency's Bonds. Any dispute based upon or arising out of this Agreement and/or the performance or failure to perform services (including, without limit, claims of professional negligence) shall be subject to binding arbitration to be held in Orange County, California before a retired Superior Court Judge. Judgment on the arbitrator's award shall be final and binding, and may be entered in any competent court. As a practical matter, by agreeing to arbitration, all parties are waiving jury trial. DOCSOC/ 12686 t 8v 1 /022299-0084 3. FOLLOW-UP SERVICES Bond counsel agrees to provide without additional cost normal follow-up consultation and related services following the sale of the Bonds. Should the Agency require Bond Counsel to provide extraordinary services after the sale of the Bonds, such services shall be provided at an additional fee to be agreed upon at a later date. ATTEST: LM Margaret R. Monahan, Agency Secretary DOC SOC/ 1268618v 1 /022299-0084 SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY M Dave Adams, Executive Director STRADLING YOCCA CARLSON & RAUTH, a Professional Corporation By ' Denise E. Hering 4 EXHIBIT 1 Tax Allocation Bond Fee Schedule Basic Fee: The fee for the services described in the Agreement to which this Schedule is attached shall be based upon the total principal amount of Bonds authorized and sold and will be computed in accordance with the following schedule: Principal Amount of Bonds $1,000,000 or less $1,000,001 to $5,000,000 $5,000,001 to $15,000,000 $15,000,001 or more Fee $15,000 $15,000 plus 1/4 of 1% of the excess over $1,000,000 $25,000 plus 1/5 of 1% of the excess over $5,000,000 $45,000 plus 1/10 of 1% of the excess over $15,000,000 Out -of -Pocket Expenses: In addition to the Basic Fee and the Current Fee, Bond Counsel shall be reimbursed for out-of-pocket expenses incurred pursuant to Section 3(b) of the Agreement. Exhibit I DOCSOC/ 1268618 v 1 /022299-0084 T CITY OF SAN JUAN CAPISTRANO n w 3 a .... .. .Sar . z ��.�Cev�arm„• � y.. Commw�ry Rv'dcvcluP�nrni Apcnry ! ... ......... ..... ..... ... m o� n 3 m � ,llffi,M[Mf11, tt� �AttltHlHHtM L n H CITY OF SAN JUAN CAPISTRANO f NOTIFICATION OF MEETING OF POTENTIAL INTEREST SAN JUAN CAPISTRANO REDEVELOPMENT AGENCY The Board of Directors of San Juan Capistrano Community Redevelopment Agency will meet at 6:30 p.m. on Tuesday, March 18, 2008, in the City Council Chamber in City Hall, to consider: "Consideration of Draft Fiscal Consultant Report for a 2008 Tax Allocation Bond Issuance and Agreements for Legal and Financial Counsel (Stradling Yocca Carlson & Rauth/Fieldman, Rolapp & Associates)" — Item No. D1. If you have specific thoughts or concerns regarding this item, you are encouraged to participate in this decision making process. You can communicate with the Board of Directors through correspondence addressed to the Board and/or by attending the meeting and speaking to the Board during the public meeting. Correspondence related to this item must be received at the City Clerk's office by 5:00 p.m. on Monday, March 17, 2008 to allow time for the Board to consider its content. If you would like to speak at the meeting, please complete a yellow "Request to Speak" form found inside the entrance to the Council Chamber. This form is turned in at the staff table, just in front of the Council dais. You will be called to speak by the Chairman when the item is considered. You have received this notice at the request of the City staff member Douglas Dumhart, Economic Development Manager. You may contact that staff member at (949) 443- 6316 with any questions. The agenda, including agenda reports, is available to you on our web site: www.sanivancapistrano.oro. If you would like to subscribe to receive a notice when agendas are posted to the web site, please make that request by sending an e-mail to: cityclerkasanivancapistrano.org. Meg Monahan, MMC City Clerk cc: Greg Soo -Hoo, Keyser Marston Associates; James Fabian, Fieldman Rolapp and Associates; Denise Herring, Stradling Yocca Carlson & Rauth; David Sundstrom, County of Orange Auditor -Controller Department; A. Woodrow Carter, Capistrano Unified School District; Gary Poertner, South Orange County Community College District; Carl F. Goodwin, Public Economies, Inc; Douglas Dumhart, Economic Development Manager Received staff report 32400 Paseo Adelanto • San Juan Capistrano • California 92675 (949) 493.1171 �� Pam.a a, ioox re.ya.a e•