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16-0315_CAPISTRANO UNIFIED SCHOOL DISTRICT_E1a_Agenda ReportCity of San Juan Capistrano Agenda Report TO : Honorable Mayor and Members of the City Council FROM: fo Siegel, City Manager SUBMITTED BY: ~Ken Al-lmam, Interim Chief Financial Officer DATE : March 15, 2016 3/15/2016 E1a SUBJECT: Informational Report Regarding Intention of Capistrano Unified School District to Issue Mello-Roos Bonds for Community Facilities District No. 98-1 (Pacifica San Juan) RECOMMENDATION : ·By motion, 1) Receive and file the informational report regarding Community Facilities District No. 98-1 (Pacifica San Juan); and, 2) Direct staff to return to the City Council in April 2016 with the Second Amended and Restated Joint Community Facilities Agreement. EXECUTIVE SUMMARY: The developer for the Pacifica San Juan housing development (Taylor Morrison) has been working with homeowners and the Capistrano Unified School District to modify the Community Facilities District Special Tax rate. Recently, a tentative agreement has been reached that would result in a reduction to the Special Tax that is currently being paid by existing homeowners in Pacifica San Juan. The purpose of this report is to make the City Council aware of the tentative agreement and outline the necessary steps to amend the CFD. DISCUSSION/ANALYSIS : The Pacifica San Juan housing development was entitled for 416 homes. To date, only 98 homes have been built and sold to homeowners. A summary of significant events associated with this development project is set forth below: City Council Agenda Report March 15, 2016 Page 2 of 4 1999 The Capistrano Unified School District formed Community Facilities District No. 98-1 ("the CFD") of the Capistrano Unified School District. The School District formed the CFD pursuant to the Mello-Roos Community Facilities Act of 1982. 2004 The School District and the City of San Juan Capistrano entered into an Amended and Restated Joint Community Facilities Agreement. The purpose of this agreement was to set forth the intent to use the CFD to finance developer fees and capital facilities ("Project Costs") of the School District and the City that are related to the Pacifica San Juan residential housing project. 2004-The original developer (SunCal) and homebuilder John Laing Homes 2008 constructed and sold to private homeowners 98 of the 416 homes intended to be built. The developer constructed public infrastructure and paid certain fees to the City. 2008 Subsequent to the sale of the initial 98 homes and prior to construction of the remaining 318 homes, the developer defaulted on its debt obligations causing its creditor to foreclose on the remaining undeveloped property. 2015 On May 19, 2015, Pacific Point Development Partners LLC led by Taylor Morrison Homes ("Taylor Morrison") purchased the remaining undeveloped property. As a part of that purchase, Taylor Morrison acquired the right to receive reimbursement for any public facility costs and development fees previously paid by the original developer. Under the provisions of the Mello-Roos Community Facilities Act of 1982, community facilities districts are authorized to issue bonds to finance public improvements and related development fees. The bonds are repaid by Special Taxes levied on the homeowners. Neither the School District nor the City have any obligation to pay the debt service associated with these bonds. To facilitate the issuance of the bonds, a Second Amended and Restated Joint Community Facilities Agreement has been developed to address the changed circumstances associated with this project. For purposes of assessing the Special Tax that will fund the debt service on the bonds, CFD 98-1 is proposed to be reformed into two community facilities districts, CFD 98-1A and CFD 98-1 B. CFD 98-1A will apply an across-the-board tax rate of 39.67% of the maximum tax to all homes within the project (including both the 98 existing homes and the 318 new homes). This is a reduction from the rate of 57.73% of the maximum that was approved in 2009 (which reflected an adjustment that was made at that time). CFD 98-1 B will add an additional component to the Special Tax to be paid by the 318 new homeowners for a portion of the total development cost that is attributable solely to the new homes. The City Council Agenda Report March 15, 2016 Page 3 of 4 amount to be paid by each of the new homeowners depends upon which zone of the remaining development the home will be located. The existing homeowners are supportive of the proposed changes. On March 23, 2016, the School District is scheduled to consider a resolution of intent to amend CFD 98-1 so that the CFD bonds can be issued. After District action, staff intends to bring to City Council in April 2016 a recommendation to approve the Second Amended and Restated Joint Community Facilities Agreement. The draft Second Amended and Restated Joint Community Facilities Agreement is currently under review by the City's bond counsel. FISCAL IMPACT : Most of the bond proceeds identified as City Facilities represent prior construction costs and development fees previously paid by the original developer of the project. Consequently, bond proceeds will be paid to Taylor Morrison, who is the successor to all previous owners and is entitled to reimbursements associated with costs paid by prior owners. A total of $27.6 million of the CFD bond proceeds will be available to provide reimbursement for School Facilities ($13.8 million) and City Facilities ($13.8 million). The $13.8 million of the CFD bond proceeds that is restricted for reimbursement for City Facilities will be applied as follows: $12,950,000 850.000 $13,800,000 Reimbursement to developer for infrastructure construction and private development fees City mitigation fee to be paid to and retained by the City ENVIRONMENTAL IMPACT: Not applicable. PRIOR CITY COUNCIL REVIEW: • On September 13, 1999, the City Council approved a Joint Community Facilities Agreement with the Capistrano Unified School District. • On June 1, 2004, the City Council approved an Amended and Restated Joint Community Facilities Agreement with the Capistrano Unified School District. City Council Agenda Report March 15, 2016 Page 4 of 4 • On October 20, 2009, the City Council approved an adjustment to the Special Tax associated with CFD 98-1. CITY COUNCIL REVIEW AND RECOMMENDATIONS : Receive informational report regarding Community Facilities District No. 98-1 and direct staff to return in April 2016 with the Second Amended and Restated Joint Community Facilities Agreement. NOTIFICATION: Capistrano Unified School District Pacific Point Development Partners LLC (Taylor Morrison) PaulL. Jenkinson, Pacifica San Juan Residents for Fair Taxation ATTACHMENTS : Attachment 1 -Joint Community Facilities Agreement Attachment 2 -Amended and Restated Joint Community Facilities Agreement Attachment 3 -DRAFT Second Amended and Restated Joint Community Facilities Agreement JOINT COMMUNITY FACILITIES AGREEMENT among CAPISTRANO UNIFIED SCHOOL DISTRICT and CITY OF SAN JUAN CAPISTRANO relating to COMMUNITY FACILITIES DISTRICT NO. 98-1 OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFIC POINT) DOCSOC\655160v2122508.0025 ATTACHMENT 1 JOINT COMMUNITY FA CILITIES AGREEMENT THIS JOINT COMMUNITY FACILITIES AGREEMENT (the "Agreement") is entered into effect ive as of the ~ day of~ , 1999 , by an d among the C APIST RAN O UNIF IED SCHOOL DISTRICT, a publ i(irrtf >(tile 'Schoo l Di str ict"), and the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City"), and SID PARTNERS, LTD., a California Limited Partnership (the "Company"), and relates to the proposed formation of COMMUNITY FACILITIES DISTRICT NO. 98-1 OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFIC POINT) (the "District"). A. The Company is the owner of all of the land within Assessor's Parcel Numbers listed on Exhibit "A" hereto in the incorporated territory of the City of San Juan Capistrano, State of California (the "Property") and which is proposed to constitute the land within the boundaries of the District. Such boundaries are shown on the map included in Exhibit "A" attached hereto, which is incorporated by reference herein. B. The Company is the developer of the Property and has obtained the necessary development approvals to construct approximately 325~425 residential units, as well as approximately 23 acres of commercial improvements, on the Property and to provide the required infrastructure for such units and improvements, including schools to be owned and operated by the School District (the "School Facilities") and certain roadway and storm drain improvements to be owned and operated by the City which are described in Exhibit B hereto and incorporated by reference herein (the "City Facilities"). The City Facilities and the School Facilities are sometimes collectively referred to herein as the "Facilities". Additionally, the Company has requested that the School District enter into a joint community facilities agreement with the Water District with respect to certain water facilities (collectively, the "Water District Facilities") to be financed by the District. C. It is expected that the cost of the School Facilities will exceed the cost of the City Facilities and Water District Facilities, therefore, the School District is permitted to have primary responsibility for the formation and administration of the District. D. The Company has requested the Board of Trustees ofthe School District (the "Board of Trustees") to form and establish the District pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 (commencing with Section 53311) of Part I of Division 2 of Title 5 ofthe California Government Code (the "Act"). E. The provision of the School Facilities and the City Facilities is necessitated by the development of the land within the District and the parties hereto find and detennine that the residents of the City, the School District and the District will be benefited by the construction and/or acquisition of the City Facilities and the School Facilities and that this Agreement is beneficial to the interests of such residents. F. The parties hereto intend to have the District assist in financing the City Facilities by disbursing District bond construction proceeds in an amount which is estimated at, and shall not 2 DOCSOC\655160v2\22508.0025 exceed, $2,200,000 (the "City Facilities Amount") at the written request to the District of the City to finance the construction and/or acquisition of the City Facilities. G. The City is authorized by Section 53313.5 of the Act to assist in the financing of the acquisition and/or construction of the City Facilities and the School District is authorized to assist in the financing of the School Facilities. This Agreement constitutes a joint community facilities agreement, within the meaning of Section 53316.2 of the Act, by and among the City, the Company and the School District, pursuant to which the District when formed will be authorized to finance the construction and/or acquisition of the City Facilities in the not to exceed amount of $2,200,000 and to finance the School Facilities in the approximate amount of $7,000,000. As authorized by Section 53316.6 of the Act, responsibility for constructing, providing and operating the School Facilities is delegated to the School District and responsibility for constructing, providing for and operating the City Facilities is delegated to the City to the extent set forth herein. H. Pursuant to Government Code Section 53314.9, the Board of Trustees of the School District is authorized to accept advances of funds from any source, including, but not limited to, private persons or private entities, and may provide, by resolution, for the use of those funds for any authorized purposes, including, but not limited to, paying any costs incurred by the local agency in creating a district. The legislative body may also enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced provided that certain conditions are met. The conditions to be satisfied require that (I) the proposal to repay the funds must be included in the resolution of intention for the proposed district and in the resolution of formation for the proposed district and (2) that any proposed special tax is approved by the qualified electors of the district pursuant to the Act and that if not approved any funds which have not been committed for any authorized purpose by the time of the election must be returned to the person or entity advancing funds. I. The parties hereto intend to have the District assist in financing the City Facilities by transferring to the City a portion of District Bond construction proceeds, in accordance with the terms of this Agreement and pursuant to the Act. Under the terms set forth herein, the District will transfer to the City up to $2,200,000 in District Bond proceeds (the "District Contribution"). NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows: 1. Recitals. Each of the above recitals is incorporated herein and is true and correct. 2. Proposed Formation of District. At the request of the Company, the School District will undertake to analyze the appropriateness offorming a community facilities district to finance the Facilities. The School District will retain, at the Company's expense, the necessary consultants to analyze the proposed formation of the District, including an engineer, special tax consultant, bond counsel, appraiser and other consultants deemed necessary by the School District. 3. Sale of Bonds and Use of Proceed~. In the event the District is formed, the Board of Trustees of the School District acting as the legislative body of the District may, in its sole discretion, finance the design, construction and acquisition of the School Facilities and the City Facilities by issuing bonds (the "Bonds"). If any Bond proceeds are escrowed, after payment of the costs of 3 DOCSOC\655160v2\22508.0025 issuing the Bonds, there shall first be reserved from the Bond construction proceeds $7,000,000 to finance the School Facilities. The District anticipates that proceeds from the sale of District Bonds shall be available for the City Facilities substantially in accordance with this Section 3, however, release of Bond proceeds to the City for City Facilities may be subject to escrow release tests to be established in the bond documents which the District will hereafter enter into with respect to the Bonds (the "Bond Documents"), and the terms of such escrow release test shall be as the District shall determine, in its sole discretion, to be reasonably appropriate in order to comply with the School District's Statement of Local Goals and Policies and municipal bond industry standards for land-secured financings. The District shall maintain records relating to the disbursements of proceeds of the sale ofthe District Bonds. The Company acknowledges that the acquisition of the City Facilities, including the amount and timing for the delivery of all funding, including the District Contribution, required for the City Facilities shall be in all respects subject to the sole discretion and approval of the City and the School District, as applicable. In no event will an act, or an omission or failure to act, by the City or the District with respect to the disbursement or nondisbursement of the District Contribution or by the District with respect to the provision of any other funding for the School Facilities or the City Facilities subject the District, the School District or the City to pecuniary liability hereunder. The Bonds shall be issued only if in its sole discretion the Board of Trustees determines that all requirements of state and federal law and all School District policies and any applicable City policies have been satisfied or in the case of the policies waived by the School District or the City, as applicable. In no event shall the Company have a right to compel the issuance of the Bonds. 4. Disbursements. (a) District Bond proceeds designated for the City Facilities shall be held, together with all District Bond proceeds designated for the acquisition and/or construction of School Facilities, by the fiscal agent for the District (the "Fiscal Agent") in a special fund (the "Acquisition and Construction Fund") which shall be invested by the Fiscal Agent and earn and accumulate its own interest. The District shall designate in the Acquisition and Construction Fund an amount equal to the District Contribution as funds available solely for City Facilities, and all moneys in the Acquisition and Construction Fund designated for the City Facilities shall at all times be available for the City Facilities except to the extent the School District determines interest earnings must be rebated to the United States in accordance with the Internal Revenue Code of 1986, as amended. (b) The Fiscal Agent shall make disbursements from the Acquisition and Construction Fund in accordance with the terms of this Agreement and neither the School District nor the District shall be responsible to the City for costs incurred by the City as a result of withheld or delayed payments. (c) The City agrees that prior to requesting payment from the District it shall review and approve all costs included in its request and (a) will have already paid such costs of City Facilities from its own funds or shall have prepared a check for disbursement which will be mailed or hand delivered within 48 hours of receipt of District funds or (b) will have already encumbered the funds requested and will trace and remit to the District all earnings, if any, by the City in excess of the yield on the applicable District Bonds accruing from the investment of the District Bond proceeds requested, from the date of receipt of such District Bond proceeds by the City to the date of 4 DOCSOC\655160v2\22508 .0025 expenditure by the City of such District Bond proceeds for actual legitimate capital costs of the City Facilities. Such remittance, if any, shaH occur on the earlier of the date of expenditure of such District Bond proceeds or each anniversary date of the transfer of such District Bond proceeds from the District to the City. The City agrees that in processing the above disbursements it will comply with all legal requirements for the expenditure of bond proceeds under the Act, as amended, and the Internal Revenue Code of 1986 and any amendments thereto. (d) The City agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures. The City will, upon request, provide to the District its annual financial report certified by an independent Certified Public Accountant for purposes of calculating the District's arbitrage rebate obligations. The District shall have the right to conduct its own audit of the City's records at reasonable times and during normal business hours. (e) The City shall submit a request for payment to the Fiscal Agent which shall be in the form attached hereto as Exhibit "C", which shall be signed by its City Manager or written designee and which shaH be for the exact amount paid or encumbered or to be disbursed as provided in paragraph (d) above by the City for City Facilities costs under paragraph (c) above, which costs shall in no event exceed the District Contribution of $2,200,000. Upon receipt of an approved payment request completed in accordance with the tenns of this Agreement, the Fiscal Agent shall wire transfer such portion of requested funds as are then available for release pursuant to the Bond Documents to the City's bank account, as directed by the City. 5. Construction. The City will complete the plans and specifications for construction of the City Facilities (hereinafter the "Plans and Specifications") in a form and substance which is satisfactory to the City. The Company will design and construct the City Facilities in confonnance with the City's Plans and Specifications. The Company acknowledges that none of the City, the School District nor the District has any obligation to pay any amount in excess of the District Contribution for the City Facilities, regardless of the cost to construct the City Facilities. The Company agrees hereby that it will be solely responsible to pay any and all City Facilities costs in excess ofthe District Contribution. 6. Ownership of Facilities. Notwithstanding the fact that some or all of the City Facilities may be constructed in dedicated street rights-of-way or on property which has been or will be dedicated to the City of San Juan Capistrano or any other entity, the City Facilities shall be and remain the property ofthe City. 7. Indemnification. The School District shall assume the defense of, indemnify and save hannless, the City, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, this Agreement, and the design, engineering and construction of the School Facilities. No provision of this Agreement shall in any way limit the extent of the School District's responsibility for payment of damages resulting from the operations of the School District and its contractors; provided, however, that the School District shall · not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their agents or employees. The City shall assume the defense of, indemnify and save harmless, the School District, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, this 5 DOCSOC\655l60v2\2250&.002S Agreement, and the design, engineering and construction of the City Facilities. No provision of this Agreement shall in any way limit the extent of the City's responsibility for payment of damages resulting from the operations of the City and its contractors; provided, however, that the City shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their agents or employees. 8. Disclosure. The Company shall cooperate with the District and the School District in complying with the requirements of Rule 15cl2-12 of the Securities and Exchange Commission in connection with the issuance and sale of the Bonds. The Company shall provide information to the District and the School District regarding its operations and financial condition, including, if available, an audited financial statement for its most recently completed fiscal year, for inclusion in the preliminary official statement and the final official statement for the Bonds. The Company acknowledges that, due to the extent of its initial property ownership in the District, it will be an "obligated person" for purposes of compliance with Rule 1 5c 12-12(b )(5) of the Securities and Exchange Commission and that it will therefore be necessary that Company enter into a continuing disclosure undertaking that so long as it remains an obligated person it will annually, at the time specified in such undertaking, provide information to the District and the School District regarding the Company's financial condition, including, if available, audited financial statements, to be included in the annual reports which the District will file with the Nationally Recognized Municipal Securities Repositories which are identified by the Securities and Exchange Commission and any state information depository that may be designated for the State of California, as required by that rule. The Company further acknowledges that it will be an obligated person pursuant to such rule as long as it owns property within the District that is responsible for the payment of annual special tax installments which represent I 0 percent or more of the annual debt service on the outstanding Bonds. 9. Allocation of Special Taxes. Upon sale and delivery of the Bonds, or such earlier date as the District, in its sole discretion, detennines appropriate, the Board of Trustees, as the legislative body of the District, shall annually levy a special tax as provided for in the formation proceedings of the District. The entire amount of any special tax levied by the District to repay the Bonds, or to fund other obligations, shall be a11ocated to the District. 10. Amendment. This Agreement may be amended at any time but only in writing signed by each party hereto. 11. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the parties with respect to the subject matter ofthis Agreement. 12. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either party shall be deemed to have been received when personally delivered or seventy-two hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid, addressed as follows: 6 oocsoa655J60v2122508.0025 School District/District: City of San Juan Capistrano Company : Capistrano Unified School District 32972 Calle Perfecto San Juan Capistrano, California 92675 Attn: Assistant Superintendent, Facilities Planning City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn: City Manager SID Partners, Ltd. 51 09 E. La Palma, Suite D Anaheim, California 92807 Each party may change its address for delivery of notice by delivering written notice of such change of address to the other parties hereto. 13. Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference. 14. Severability . If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. 15. Governing Law . This Agreement and any dispute ammg hereunder shall be governed by and interpreted in accordance with the laws of the State of California. 16. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other parties hereto, or the failure by a party to exercise its rights upon the default of another party, shall not constitute a waiver of such party's right to insist and demand strict compliance by such other parties with the terms of this Agreement thereafter. 17. No T hird Party Benefic iar ies . No person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the City, the School District, the District and the Company (and their respective successors and assigns), any rights, remedies, obligations or liabilities under or by reason of this Agreement. · 18. S ing u lar and P lural; Gender. As used herein, the singular of any word includes the plural, and tenns in the masculine gender shall include the feminine. 19. Countemarts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument. 7 DOCSOC\655160v2\22S08.0025 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. Date: September 13 , 1999 ATTEST: By: lerk of the Board of Trustees of the Capistrano Unified School District ATTEST: By: DOCSOC\65 5160v2112508.0025 CAPISTRANO UNIFIED SCHOOL DISTRICT S-1 DOCSOC\6SS164v3\22S0&.002S SID PARTNERS, LTD., a California Limited Partnership By: SJD Development Corp., a California S-2 ::~ornti~ Todd Kurtin, Chief Financial Officer & Secretary EXHIBIT A DESCRIPTION OF PROPERTY The real property to be included within Community Facilities District No. 98-1 of the Capistrano Unified School District (Pacific Point): DOCSOC\65 5!60v2\22508.0025 666-301-01 666-301-09 675-081-04 675-081-10 675-081-14 675-361-01 675-361-04 675-361-05 A-1 EXHIBIT B DESCRIPTION OF CITY FACILITIES The following improvements are eligible for acquisition as City Facilities: DESCRJPTION Roadway Improvements Signalization@ Camino Las Ramblas & Via California Valle Road Between 1-15 Ramps & Existing Terminus Widening Valle Road Between San Juan Creek & 1-5 Terminus Intersection & Signals@ San Juan Creek Road & Valle Road Intersection & Signals@ I-5 & Valle Road Intersection Imps. @ San Juan Creek & Camino Capistrano Rechannelization & Signal Modi f.@ Camino Capistrano & 1-5 Ramps Reimbursement for La Novia Avenue Improvements Widening La Novia for Secondary Standards From Valle Rd. to 2,500 LF East New Channel Inlet R~R Undercrossing Extend 78" RCP DOCSOC\655160v2\22508.0025 Stann Drain Improvements B-1 EXHIBITC DISBURSEMENT REQUEST FORM CITY OF SAN JUAN CAPISTRANO PACIFIC POINT PLANNED COMMUNITY Community Facilities D1str1ct No. 98-1 of the Capistrano Unified School District (Pacific Point) ("CFD No. 98~ 1 ") is hereby requested to pay from the Acquisition and Construction Fund established by Bond Indenture (the "Bond Indenture") of the Board of Trustees of the Capistrano Unified School District in connection with its CFD No. 98-1 Series __ Special Tax Bonds (the "Bonds"), to the City of San Juan Capistrano (the "City"), as Payee, the sum set forth below in payment of project costs described below. The undersigned certifies that the amount requested has been expended or encumbered for the purposes of constructing and completing City Facilities. The amount requested is due and payable under, or is encumbered for the purpose of funding, a purchase order, contract or other authorization with respect to the project costs described below and has not formed the basis of prior request or payment. The City agrees to trace and remit to CFD No. 98-1 all earnings, if any, in excess of the yield on the Bonds accruing from the investment of the amounts requested herein, from the date of receipt by the City of such amounts to the date of expenditure of such amounts by payment thereof to a third party for the costs set forth below. Such remittance, if any, sha11 be made each year on the earlier of the expenditure of such amounts or the anniversary date of the transfer of the requested amounts by CFD No. 98-1 to the City. Total payments to the City from the Acquisition and Construction Fund have not exceeded $2,200,000. Description o f City Facilities Costs: Amount requested: $ _____ _ The amount of $ is authorized and payable pursuant to the terms of the Resolution and the Joint Community Facilities Agreement among CFD No. 98-1 , SID Partners Ltd ., and the City of San Juan Capistrano dated as of , 1999. Executed by an authorized representative of the City of San Juan Capistrano. By : _____________ _ Name:, _____________ _ Title :, ______________ _ Date:, ______________ _ Request No., ___________ _ Attest:, _____________ _ C-1 DOCSOC\655160v2\225 08.0025 .. AMENDED AND RESTATED JOINT COMMUNITY FACILITIES AGREEMENT among CAPISTRANO UNIFIED SCHOOL DISTRICT and CITY OF SAN WAN CAPISTRANO and SID PARTNERS, LTD. relating to COMMUNITY FACILITIES DISTRICT NO. 98-lA OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN) DOCSOC/1 032540v5/22508-0049 ATTACHMENT 2 AMENDED AND RESTATED JOINT COMMUNITY FACILITIES AGREEMENT THIS AMENDED AND RESTATED JOINT COMMUNITY FACILITIES AGREEMENT (the "Agreement") is entered into effective as of the 14th day of June, 2004, by and among the CAPISTRANO UNIFIED SCHOOL DISTRICT, a public entity, (the "School District"), and the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City''), and SID PARTNERS, LTD., a California limited partnership (the "Company''), and relates to COMMUNITY FACILITIES DISTRICT NO. 98-lA OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN), as amended on June 14, 2004, COMMUNITY FACILITIES DISTRICT NO. 98-IA OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN) (the "District"). R~C!IA1~: A. The Company is the owner of all of the land within Assessor's Parcel Numbers listed on Exhibit A hereto in the incorporated territory of the City of San Juan Capistrano, State of California (the "Property") and which is proposed to constitute the land within the boundaries of the District as amended pursuant to the 2004 Amendment Proceedings (defined below). Such boundaries are shown on the map included in Exhibit A attached hereto, which is incorporated by reference herein. B. The Company is the developer of the Property and has obtained the necessary legislative approvals to construct 416 residential units on the Property and to provide the required infrastructure for such units. C . The Company has heretofore requested the Board of Trustees of the School District (the "Board of Trustees") to form and establish the District, and, pursuant to Company's Petition to the School District dated February 26, 2004 (the "Petition"), to amend, the District pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 (commencing with Section 5 3311) of Part 1 of Division 2 ofT itle 5 oft he C a1ifornia Government Code (the "Act"). The School District and the District are currently undertaking proceedings to amend the District pursuant to the Petition, which proceedings shall be collectively referred to herein as the "2004 Amendment Proceedings." D . The District, as amended, is expected to be authorized to finance schools to be owned and operated by the School District (the "School Facilities") and certain improvements to be owned and operated by the City which are described in Exhibit B hereto and incorporated by reference herein (the "City Facilities"). The City Facilities and the School Facilities are sometimes collectively referred to herein, collectively, as the "Facilities". E. It is expected that the cost of the School Facilities will exceed the cost of the City Facilities, therefore. the School District is permitted to have primary responsibility for the formation and administration of the District. F. The provision of the School Facilities and the City Faci1ities is necessitated by the development of the land within the District and the parties hereto find and determine that the residents of the City, the School District and the District will be benefited by the construction and/or DOCSOC/1 032540v5/22508-0049 acquisition of the City Facilities and the School Facilities and that this Agreement is beneficial to the interests of such residents. G. The parties hereto (the "Parties") have previously entered into that certain Joint Community Facilities Agreement dated September 13, 1999 (the "Prior City JCFA"), and the Capistrano Valley Water District ("Capistrano Valley Water District"), the District and the Company have also entered into that certain Joint Community Facilities Agreement dated September 13, 1999 (the "Prior Water District JCFA" and, together with the Prior City JCFA, the "Prior JCFA") with respect to the District. H. In 2002, the Capistrano Va1ley Water District became a subsidiary of the City. This Agreement supercedes the Prior JCF A. I. The Parties intend that the District, as amended, will assist in financing the City Facilities by disbursing District bond construction proceeds pursuant to this Agreement in an amount which is estimated at, and shaH not exceed $13,800,000, plus investment earnings, if any, thereon (collectively, the "City Facilities Amount") at the written request to the District of the City to finance the construction and/or acquisition of the City Facilities. J. The City is authorized by Section 53313.5 ofthe Act to assist in the financing ofthe acquisition and/or construction of the City Facilities and the School District is authorized to assist in the financing of the School Facilities. This Agreement constitutes a joint community facilities agreement, within the meaning of Section 53316.2 of the Act, by and among the City, the Company and the School District, pursuant to which the District, when amended, will be authorized to finance from District bond proceeds the construction and/or acquisition of the City Facilities in the City Facilities Amount and School Facilities as provided in the 2004 Amendment Proceedings. As authorized by Section 53316.6 of the Act, responsibility for constructing, providing and operating the School Facilities is delegated to the School District and responsibility for constructing, providing for and operating the City Facilities is delegated to the City to the extent set forth herein. K. The Company has requested that, upon the deposit of proceeds of District bonds in an amount equal to $13,800,000 into the City Facilities Account (defined below), the Company shall receive credit against those certain fees and charges authorized to be levied by the City in connection with the development of the Property as set forth in Section 9 below. NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows: ] . Recitals. Each of the above recitals is incorporated herein and is true and correct. 2. Proposed Amendment of District. At the request ofthe Company, the School District has undertaken to amend the District, pursuant to the Petition, to finance the Facilities. The School District will retain, at the Company's expense, the necessary consultants to process the proposed amendments to the District and the issuance o fb onds oft he District (the "Bonds"), including an engineer, special tax consultant, bond counsel, appraiser and other consultants deemed necessary by the School District. 2 DOC SOC/I 032540v 5/22508-0049 3. Sale of Bonds and Use of Proceeds. In the event the District is amended pursuant to the Petition, the Board ofTrustees of the School District acting as the legislative body of the District may, in its sole discretion, finance the design, construction and acquisition of School Facilities and the City Facilities by issuing Bonds. If any Bond proceeds are escrowed, after payment of the costs of issuing the Bonds, there shall first be reserved from the Bond construction proceeds $13,818,000 to finance the School Facilities, which amount shall adjust according to the Impact Mitigation Agreement related to Community Facilities District No. 98-lA by and between the School District and the Company (the "Mitigation Agreement"). The District anticipates that proceeds from the sale of District Bonds shall be available for the City Facilities substantially in accordance with this Section 3, however, release of Bond proceeds to the City for City Facilities may be subject to an escrow release test to be established in the bond documents which the District will hereafter enter into with respect to the Bonds (the "Bond Documents"), and the terms of such escrow release test shall be as the District shall determine, in its sole discretion, to be reasonably appropriate in order to comply with the School District's Statement of Local Goals and Po1icies and municipal bond industry standards for land-secured financings. The District shall maintain records relating to the disbursements of proceeds of the sale of the Bonds. The Company acknowledges that the acquisition of the City Facilities and the amount and timing for the funding of the City Facilities Amount shaH be in all respects subject to this Agreement. In no event will an act, or an omission or failure to act, by the City or the District with respect to the disbursement or nondisbursement of funds for School Facilities or the City Facilities subject the District, the School District or the City to pecuniary liability hereunder. The Bonds shall be issued only if in its sole discretion the Board of Trustees determines that all requirements of state and federal law and all School District policies have been satisfied or waived by the School District or the City, as applicable. In no event shall the Company have a right to compel the issuance of the Bonds. 4. Disbursements . (a) Bond proceeds designated for the City Facilities and School Facilities shall be held by the fiscal agent for the District (the ''Fiscal Agent'') in separate subaccounts of the Project Account of a special fund (the "Acquisition and Construction Fund") to be established in connection with the issuance of the Bonds. After funding costs of issuance of the Bonds, a reserve fund, and capitalized interest for a period of twelve ( 12) months, or a lesser or greater period requested by the Company and approved by the School District, the remaining proceeds of the Bonds shall be deposited in subaccounts of the Project Account of the Acquisition and Construction Fund designated the "School Facilities Account" and "City Facilities Account" in the following order of priority: (i) $13,8 I 8,000 shall deposited in the School Facilities Account, (ii) $13,800,000 shall be deposited in the City Facilities Account and (iii) any remaining net proceeds shall be deposited in the School Facilities Account. The amount to be deposited in the School Facilities Account shall adjust according to the Impact Mitigation Agreement. Investment earnings on amounts in each subaccount oft he Acquisition and Construction Fund shall remain in such subaccount until expended for the respective Facilities, except as provided in the following sentence. The amount in the Acquisition and Construction Fund shall at all times be available for the Faci1ities except to the extent the School District determines interest earnings must be rebated to the United States in accordance with the Internal Revenue Code of 1986, as amended. 3 DOCSOC/1 032540v5/22508-0049 (b) The Fiscal Agent shall make disbursements from the Acquisition and Construction Fund in accordance with the terms of this Agreement and neither the School District nor the District shall be responsible to the City for costs incurred by the City as a result of withheld or delayed payments. (c) The City agrees that prior to requesting payment from the District it shall review and approve all costs included in its request and (a) will have already paid such costs of City Facilities from its own funds or shall have prepared a check for disbursement which will be mailed or hand delivered within 48 hours of receipt of District funds or (b) will have already encumbered the funds requested and wil1 trace and remit to the District all earnings, if any, by the City in excess of the yield on the applicable Bonds accruing from the investment of the Bond proceeds requested, from the date of receipt of such Bond proceeds by the City to the date of expenditure by the City of such Bond proceeds for actual legitimate capital costs of the City Facilities. Such remittance, if any, shall occur on the earlier of the date of expenditure of such Bond proceeds or each anniversary date of the transfer of such Bond proceeds from the District to the City. The City agrees that in processing the above disbursements it will comply with all legal requirements for the expenditure of bond proceeds under the Act, as amended, and the Internal Revenue Code of 1986 and any amendments thereto. (d) The City agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures. The City will, upon request, provide to the District its annual financial report certified by an independent certified public accountant for purposes of calculating the District's arbitrage rebate obligations. The District shall have the right to conduct its own audit of the City's records at reasonable times and during normal business hours. (e) The City shall submit a request for payment to the Fiscal Agent which shall be in the form attached hereto as Exhibit C, which shall be signed by its City Manager or written designee and which shall be for the exact amount paid or encumbered or to be disbursed as provided in paragraph (d) above by the City for City Facilities costs under paragraph (c) above, which costs shall in no event exceed the City Facilities Amount. Upon receipt of an approved payment request completed in accordance with the terms of this Agreement, the Fiscal Agent shall wire transfer such portion of requested funds as are then available for release pursuant to the Bond Documents to the City's bank account, as directed by the City. 5. Acquisition of City Facilities. (a) Plans and Specifications. The Company acknowledges that none of the City, the School District nor the District has any obligation to pay any amount in excess of the City Facilities Amount, regardless of the cost of City Facilities, and further that the City shall have no obligation to pay any costs of the Acquisition Facility unless and until an amount at least equal to $13,800,000 has been deposited into the City Facilities Account. Company shall be responsible for the preparation of the plans and specifications (the "Plans and Specifications") for the grading of a portion of "A" Street as provided in Exhibit B hereto to be acquired with the proceeds of the Bonds (the "Acquisition Facility"). The Plans and Specifications shall conform to the requirements of the City for the Acquisition Facihty and shall be subject to the review and approval by the City. (b) Construction and Inspection of the Acquisition Facility. The Acquisition Facility must be constructed in accordance with the Plans and Specifications as approved by the City. The Company shall be solely responsible for the bidding, contracting and construction of the 4 DOCSOC/1 032540v5/22508-0049 Acquisition Facility to be acquired with the proceeds of the Bonds in accordance with the requirements set forth in this Section 5. The District shall have no responsibility whatsoever for the bidding, contracting and/or the construction of the Acquisition Facility. The construction of the Acquisition Facility shaH be subject to inspection by the City. Upon the request of the Company, the City shall notify the District and the Company in writing when the Acquisition Facility has been substantially completed in accordance with the Plans and Specifications and when the Acquisition Facility has been finally completed and is ready for acceptance by the City Engineer. The Company represents that ( i) prior to approval oft his Agreement at I east two ( 2) bids were obtained fort he grading of the "A" Street right-of-way, (ii) the contract for such grading (the "Grading Contract") was awarded to the lowest bidder, (iii) the Grading Contract substantially complies with the terms of this Agreement, and (iv) the Company will pay prevailing wages for all work performed pursuant to the Grading Contract. The Grading Contract, bid forms and winning bid (collectively, the "Bid Documents") are subject to review and approval or rejection by the City. The City acknowledges that, subject to prior satisfaction of the following conditions precedent: (i) City approval of the Bid Documents, (ii) the contractor to whom the Acquisition Facility contract is awarded shall have paid not less than the prevailing rates of wages for aU Acquisition Facility work pursuant to Labor Code Sections 1770, 1773 and 1773.1, and (iii) Final Completion of the Acquisition Facility, expenditures with respect to such Grading Contract shall be e11gib1e for funding from the City Facilities Account. City hereby affirms that Company's compliance with all provisions of this Section 5(b) ensures that the Acquisition Facility to be acquired with the proceeds ofthe Bonds shaH be constructed as if it had been constructed under the direction and supervision, or under the authority of, the City. For purposes of this Agreement, the Acquisition Facility shall be deemed "substantially completed" when the Company has notified the City that the Acquisition Facility has been completed in accordance with its Plans and Specifications, the City's inspector has inspected the facility, prepared a final "punch list" and has determined that the punch list items required to be completed are items not required for the safe operation of the Acquisition FaciJity and can therefore be completed after the Acquisition Facility has been accepted by the City. For purposes of this Agreement, Final Completion of the Acquisition Facility shall be deemed to have occurred, notwithstanding the fact that the construction of"A" Street is not then complete, upon acceptance by the City Engineer of the "A" Street grading improvements provided aU punch list items have been completed to the satisfaction of the City and all contractors and subcontractors constructing the grading improvements shall have provided lien and material releases. (c) Acquisition and Ownership of the Acquisition Facility. Upon receipt by the District of notification by the City that the Acquisition FaciJity has been finally completed in accordance with the Plans and Specifications, the Acquisition Facility shall be deemed eligible for acquisition by the District. Simultaneously upon acquisition of the Acquisition Facility by the District, title to the land or, if acceptable to the City, an irrevocable offer of dedication of the land, underlying the Acquisition Facility shall be conveyed to the City. Neither the School District nor the City is not directly or indirectly obligated, indebted or otherwise liable for the payment of the acquisition price, or any portion thereof, of the Acquisition Facility. Upon acceptance of the Acquisition Facility by the City, the City shall incorporate the Acquisition Facility in the City's street system. Following the expiration of any warranty period applicable to the construction of the Acquisition Facility during which time the Company shall be responsible for the maintenance of the Acquisition Facility, the City shall thereafter be responsible 5 DOC SOC/ I 032540v5/22508-0049 for the maintenance of the Acquisition Facility in accordance with al1 applicable City maintenance procedures and practices. (d) Payment Requests . The form of payment request to be submitted to City by the Company in requesting payment by the District of the acquisition price or funding with respect to the Acquisition Facility, shaH be substantially in the form of Exhibit C-1 hereto. Within ten (10) business days of Company's submission to City of a payment request, City shaH determine if the Acquisition Facility has been finally completed and shall either deny or approve the payment request, which approval shall not be unreasonably withheld. If City denies any payment request it shal1 provide the Company a detailed written explanation describing the reasons or rational for such denial. All denied payment requests may be resubmitted for approval. The Company shall reimburse City for its actual costs incurred in connection with the processing of such payment requests, including the inspection of the Acquisition Facility and such amounts shalt be included in the acquisition price paid by the District. The sole source of funds for payment of the acquisition price or funding with respect to the approved Acquisition Facility shall be the Bond proceeds on deposit in the City Facilities Account, and investment earnings, if any, thereon. 6. Ownership of Facilities . Notwithstanding the fact that some or all of the City Facilities may be constructed in dedicated street rights-of-way or on property which has been or will be dedicated to the City of San Juan Capistrano or any other entity, the City Facilities shall be and remain the property of the City. 7. Indemnification. The School District shall assume the defense of, indemnify and save harmless, the City, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, this Agreement, and the design, engineering and construction of the School Facilities. No provision of this Agreement shall in any way limit the extent of the School District's responsibility for payment of damages resulting from the operations of the School District and its contractors; provided, however, that the School District shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their agents or employees. The City shall assume the defense of, indemnify and save harmless, the School District, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they maybe subjected or put, by reason of, or resulting from, this Agreement, and the design, engineering and construction of the City Facilities. No provision ofthis Agreement shall in any way limit the extent of the City's responsibility for payment of damages resulting from the operations of the City and its contractors; provided, however, that the City shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their agents or employees. The Company shall assume the defense of, indemnifY and save harmless, School District, the District and the City, their respective officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of Company with respect to this Agreement; provided, however, that the Company shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees. 6 DOCSOC/l 032540v5/22508-0049 8. ALloc at ion of Special Taxes . Upon sale and delivery of the Bonds, or such earlier date as the District, in its sole discretion, determines appropriate, the Board of Trustees, as the legislative body of the District, shall annually levy a special tax as provided for in the 2004 Amendment Proceedings. The entire amount of any special tax levied by the District to repay the Bonds, or to fund other obligations, shaH be allocated to the District. 9. Fee Credits . The deposit of the following amounts in the City Facilities Account wilJ be made in lieu of, and in full satisfaction of the payment of the following fees and charges due to the City in connection with the development of the Property with up to 416 residential units (collectively, the "Fee Credit Amounts"): Park Fees Affordable Housing Fees Systems Development Fees (211 and 364) Agricultural Preservation Fees Soils Subsidence Remediation Fees Catchment Area Fees Water Capacity Fees Non-Domestic Water Fees La Novia Fees Sewer Connection Fees Fair Share of Southbound Ortega Hwy. Offramp Fair Share ofNorthbound Ortega Hwy. Offramp Total Fee Credit Amounts $2,661,384 1,800,000 1,182,668 242,700 500,000 150,000 1,000,000 700,000 364,050 1,580,390 76,979 2,604 $10,260,775 The City shall grant a credit against the foregoing fees owed by the Company, its successors and assigns for the development of up to 416 residential units within the Property when Bond proceeds in the amount of $10,260,775 are deposited in the City Facilities Account. If any of the foregoing fees and charges have been advanced by the Company prior to the deposit of the corresponding amount in the City Facilities Account, such amounts shall be reimbursed to the Company at the time funds of an equal amount are deposited in the City Facilities Account. Once the amount of $10,260,775 has been deposited in the City Facilities Account, the Company, its successors and assigns shall not be required to make any payment for the cotresponding fees and charges at the time such fees and charges are otherwise due unless more than 416 residential units are developed within the Property. The Company agrees that in addition to the Fee Credit Amounts, $850,000 (the "Government Facility Amount") shall be reserved in the City Facilities Account for use by the City to fmance other City Facilities, as determined by the City in its sole discretion. The portion of the City Facilities Amount not including the Fee Credit Amounts and the Government Facility Amount shall be available to fund the Acquisition Facility and no fee or charge credit shall be given for such remaining portion of the City Facilities Amount or for the Government Facility Amount. 10. Amendment. This Agreement may be amended at any time but only in writing signed by each party hereto. 7 DOCSOC/1 032540v5/22508-0049 11. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the parties with respect to the subject matter of this Agreement. 12. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either party shall be deemed to have been received when persona11y delivered or seventy-two hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid, addressed as follows: School District/District: City of San Juan Capistrano Company: Capistrano Unified Schoo] District 32972 CalJe Perfecto San Juan Capistrano, California 92675 Attn: Associate Superintendent, Facilities Planning City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn: City Manager SID Partners, Ltd. 2392 Morse Avenue Irvine, California 92614 Attn: Ron Freeman and Bruce EJieff Each party may change its address for delivery of notice by delivering written notice of such change of address to the other parties hereto. 13. Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference. 14. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fu11est extent reasonably possible. 15. Governing Law. This Agreement and any dispute ansmg hereunder shaU be governed by and interpreted in accordance with the laws of the State of California. 16. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other parties hereto, or the failure by a party to exercise its rights upon the default of another party, shall not constitute a waiver of such party's right to insist and demand strict compliance by such other parties with the terms of this Agreement thereafter. 1 7. No Third Party Beneficiaries. No person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this AgTeement (either express or implied) is intended to confer upon any person or entity, other than the City, the School District, the District and the Company (and their respective successors and assigns), any rights, remedies, obligations or liabilities under or by reason of this Agreement. 8 DOCSOC/1 032540v5/22508..()049 18. Successors and Assi211s. All of the covenants, stipulations, promises, and agreements contained in this Agreement by or on behalf of, or for the benefit of, any of the parties hereto, shall bind or inure to the benefit of any of the successors and assigns of the respective parties; provided, however, that purchasers of completed residential units sha11 not be deemed to be successors and assigns of the Company for purposes of this Agreement, and shall have no right to enforce any provisions of this Agreement. 19. Singular and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine. 20. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument. 9 DOCSOC/l 032540v5/22508-0049 ·' IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. Date: -~J~u!..!!ne=---..:!1:...!4 __ ...--J, 2004 ATTEST: By: Ju~~·~ Clerk of the BOTdOf'TlUSteeSO Capistrano Unified School District ATIEST: By: DOCSOC/1 032540v5/22508-0049 President of the Board ofTrustees CITY OF SAN JUAN CAPISTRANO Its: _-.:=C.-..!..~..!...\--M!...,_..:.:c-.-...:....=.c!.\._:!::;V=C~----­City~ager S-1 DOCSOC/1 032540v5/22508-0049 SJD PARTNERS, LTD., a California Limited Partnership By: SJD Development Corp., a California Corporation, General Partner Bruce ~eff Title:. __ ~~~~----------------------- S-2 EXHIBIT A DESCRIPTION OF PROPERTY The real property to be included within Community Facilities District No. 98-1A of the Capistrano Unified School District (Pacifica San Juan): IJOCSOC/1 032540v5122508-0049 666-301-01 675-081-04 675-081-10 675-081-14 675-361-01 675-361-08 675-361-09 A-1 EXHffiiTB DESCRIPTION OF CITY FACILITIES The following improvements are eligible City Facilities: DESCRIPTION A. Constructed by City (fees and charges) Park Improvements Affordable Housing Improvements Systems Development Improvements (211 and 364) Agricultural Preservation Improvements Soils Subsidence Remediation Improvements Catchment Area Improvements Water Capacity Improvements Non-Domestic Water Improvements La Novia Improvements Sewer Connection Improvements Fair Share of Southbound Ortega Hwy. Offramp Fair Share of Northbound Ortega Hwy. Offramp City Wide Development Improvements B. Acquisition Facility(2) "A" Street Grading Total $2,661,384 1 ,800,000(!) 1,182,668 242,700 500,000 150,000 1,000,000 700,000 364,050(1) 1,580,390 76,979 2,604 850,000 2,689 ,225{3) $13,800,000 (I) Represent amounts previously advanced by Company to City as of May 1, 2004 to be reimbursed to Company when City Facilities Account funded. <2> "A" Street grading costs shall be funded upon completion of grading, prior to completion of roadway construction and separate from funding for construction and soft costs for "A" Street. Individual Facilities, if any, may be specified in a written supplement executed by Company and City Engineer. (3) "A" Street grading costs in excess of$2,689,225, but not to exceed $4 ,716,648 in aggregate grading costs, may be funded from the City Facilities Account to the extent of investment earnings, if any, therein. B-1 DOCSOC/1 032540v5/22508 -0049 EXHIBITC DISBURSEMENT REQUEST FORM CITY OF SAN JUAN CAPISTRANO PACIFICA SAN JUAN PLANNED COMMUNITY Community Facilities District No. 98-lA of the Capistrano Unified School District (Pacifica San Juan) ("CFD No. 98-lA") is hereby requested to pay from the City Facilities Subaccount of the Project Account of the Acquisition and Construction Fund established by that certain Bond Indenture (the "Bond Indenture") entered into by CFD No. 98-lA in connection with its CFD No. 98-JA Series 2004 Special Tax Bonds (the "Bonds.,), to the City of San Juan Capistrano (the "City"), as Payee, the sum set forth below in payment of project costs described below. The undersigned certifies that the amount requested has been expended or encumbered for the purposes of acquiring, constructing or completing City Facilities. The amount requested is due and payable under, or is encumbered for the purpose of funding, a purchase order, contract or other authorization with respect to the project costs described below and has not fonned the basis of prior request or payment. The City agrees to trace and remit to CFD No. 98-lA all earnings, if any, in excess ofthe yield on the Bonds accruing from the investment of the amounts requested herein, from the date of receipt by the City of such amounts to the date of expenditure of such amounts by payment thereof to a third party for the costs set forth below. Such remittance, if any, shall be made each year on the earlier of the expenditure of such amounts or the anniversary date of the transfer of the requested amounts by CFD No. 98-lA to the City. Totll payments to the City from the Acquisition and Construction Fund have not exceeded $13,800,000 plus investment earnings, if any, on such amount. Description of City Facilities Costs : Amount requested: $, _____ _ The amount of$ is authorized and payable pursuant to the terms of the Joint Community Facilities Agreement among CFD No. 98-lA, SID Partners Ltd., and the City of San Juan Capistrano dated as of June 14,2004. Executed by an authorized representative of each of SID Partners, Ltd. and the City of San Juan Capistrano. SID PARTNERS. LTD . CITY OF SAN JUAN CAPISTRANO: By: __________ __ By: ________________ _ Its:------------------Its: --------------------- Date:----------------------Date:---------------------- C-1 DOCSOC/ I 032540v5/22508-0049 EXHIBITC-1 FORM OF ACQUISITION FACILITY PAYMENT REQUEST The undersigned, hereby requests payment in the total amount of $ for the Acquisition Facility (as defined in the Joint Community Facilities Agreement by and among Capistrano Unified School District (the "School District"), City of San Juan Capistrano (the "City'') and S JD Partners, Ltd. (the "Owner"), dated June 14, 2 004 (the "Agreement")), a 11 as more fu11y described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City as follows: 1. He(she) is a duly authorized officer of the undersigned, qualified to execute this Payment Request for payment on behalf of the undersigned and is knowledgeable as to the matters set forth herein . . 2. All costs of the Acquisition Facility for which payment is requested hereby are actual costs and have not been inflated in any respect. The actual costs for which payment is requested have not been the subject of any prior disbursement request submitted to Community Facilities District No. 98-1 (Pacifica San Juan) ofthe Capistrano Unified Schoo] District (the "CFD"). 3. Supporting documentation (such as third party invoices, lien releases and cancelled checks or other evidence of payment) is attached with respect to each cost for which payment is requested. 4. The Acquisition Facility for which payment is requested was constructed m accordance with the requirements of the Agreement. 5. The undersigned is in compliance with the terms and provisions of the Agreement and no portion of the amount being requested to be paid was previously paid. 6. The acquisition price for the Acquisition Facility has been calculated in conformance with the tenns of the Agreement. 7. Please authorize payment of the acqms1tton price by the CFD to the following entity(ies), if other than the undersigned, in the amounts or percentages indicated: [Insert names of payees and amounts or percentages J C-1-1 DOCSOC/1 032540v5/22508-0049 I declare under penalty ofpeijury that the above representations and warranties are true and correct. SID PARTNERS, LLC: By: __________________ __ Its: ----------------------- Date:------------ DOCSOC/1 032540v5/22508-0049 CITY OF SAN JUAN CAPISTRANO: Payment Request Approved for Submission to CFD By: ___________ __ Its: ----------------------- Date: ----------------------- C-1-2 ATTACHMENT 1 SUMMARY OF ACQT,JISITION FACILITY(IES) TO BE ACQUIRED AS PART OF PAYMENT REQUEST A cquisition Faci lity Actual Costs [List here all Acquisition Facilities Disbursement R eq uested which payment is requested, and attach support documentation] C-1-3 DOCSOC/1 032540v5/22508-0049 DRAFT SECOND AMENDED AND REST A TED JOINT COMMUNITY FACILITIES AGREEMENT by and among CAPISTRANO UNIFIED SCHOOL DISTRICT and COMMUNITY FACILITIES DISTRICT NO. 98-1 OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN) and CITY OF SAN JUAN CAPISTRANO and PACIFIC POINT DEVELOPMENT PARTNERS LLC relating to COMMUNITY FACILITIES DISTRICT NO. 98-lA OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN) and COMMUNITY FACILITIES DISTRICT NO. 98-lB OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN WAN) ATTACHMENT 3 DRAFT SECOND AMENDED AND RESTATED JOINT COMMUNITY FACILITIES AGREEMENT THIS SECOND AMENDED AND RESTATED JOINT COMMUNITY FACILITIES AGREEMENT (the "Agreement") dated as ofFebruary 1, 2016, by and among the CAPISTRANO UNIFIED SCHOOL DISTRICT, a public entity (the "CUSD"), ), COMMUNITY FACILITIES DISTRICT NO. 98-1 OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN) ("CFD No. 98-lA"), the CITY OF SAN JUAN CAPISTRANO, a municipal corporation (the "City"), and PACIFIC POINT DEVELOPMENT PARTNERS LLC, a Delaware limited liability company (the "Developer"), and relates to both COMMUNITY FACILITIES DISTRICT NO. 98-lA OF TilE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN) and COMMUNITY FACILITIES DISTRICT NO. 98-lB OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN WAN). The City, CUSD, and the Developer may be referred to herein individually as a "Party" and collectively as the "Parties." RECITALS: A. In 1999, CUSD formed Community Facilities District No. 98-1 of the Capistrano Unified School District, which was, in 2004, amended pursuant to the Mello-Roos Community Facilities Act of 1982 being California Government Code Sections 53311 et seq. (the "Act"), and renamed Community Facilities District No. 98-1A of the Capistrano Unified School District (Pacifica San Juan") ("CFD No. 98-lA"). B. In connection with CFD No. 98-1A, CUSD recorded Amendment No. 1 to Notice of Special Tax for Community Facilities District No. 98-1A on June 25, 2004, in the Official Records of Orange County as Document No. 2004000580583 (the "98-lA Notice of Special Tax Lien"), which has attached as Appendix A thereto the document entitled "Amended and Restated Rate and Method of Apportionment of Special Tax Lien for Capistrano Unified School District Community Facilities District No. 98-1A (Pacifica San Juan)" (herein, the "98-lA RMA"). CFD No. 98-1A was created to levy special taxes pursuant to the 98-1A RMA (the "98-lA Special Taxes") and to issue bonds secured by such 98-lA Special Taxes (the "98-lA Bonds") to finance, among other things, certain facilities to be owned and operated by CUSD (the "School Facilities"). C. The original boundaries of CFD No. 98-lA include lots for the development of 416 single-family detached residential units (the "Overall Project"). In 2004, all of the property in CFD No. 98-1A was owned by SJD Partners, LTD, a California limited partnership ("SJD"). D. On January 31, 2004, SJD, First American Title Insurance Company, and Lehman ALI Inc., a Delaware corporation ("Lehman ALI"), entered into the Amended and Restated Deed of Trust, Security Agreement and Fixture Filing Statement with Assignment of Rents (the "Deed of Trust"). The Deed of Trust secured a loan (the "Loan") made by Lehman ALI to SJD. 1 DR AFT E. In addition, on January 31, 2004, SJD executed the Amended and Restated Memorandum of Assignment of Contracts to and for the benefit of Lehman ALI (the "Assignment"). The Assignment was recorded on January 30, 2004 as instrument number 2004000075051. F. Under the Act, CUSD, the City, and SJD entered into the Amended and Restated Joint Community Facilities Agreement, dated as of June 14, 2004 (the "Original JCFA") in order for CFD No. 98-1A to finance certain capital facilities and fees. G. Subsequent to the foregoing, the Overall Project was partially developed by the construction and sale of 98 of the lots to homeowners (the "98 Lots"). The residual 318 lots (out of the original 416) remain undeveloped (the "Undeveloped Property"). H. In 2007, SJD defaulted under the terms of the Loan, and on June 18, 2008, Lehman ALI assigned the Deed of Trust and its security interest in the "Loan Documents" (which included the Assignment) to LV Pacific Point LLC, a Delaware limited liability company ("L VPP"), pursuant to the Assignment of Deed of Trust and Subordination Agreements recorded as instrument number 2008000292518 (the "L VPP Assignment"). Under the L VPP Assignment, the term "Loan Documents" is defined to mean, among other documents, the Deed of Trust and the Assignment. I. L VPP, as successor-in-interest to Lehman ALI, foreclosed on the Deed of Trust and the assigned security interest in the Loan Documents in a unified sale pursuant to California Commercial Code Section 9604(a)(l)(B), and was the buyer at the foreclosure sale conducted on August 28, 2008. On September 9, 2008, the Trustee's Deed Upon Sale was recorded as instrument number 2008000425460 (the "Trustee's Deed"), making L VPP the owner of the Undeveloped Property and successor to SJD on all contracts, agreements, and documents executed or held by SJD in relation to the Overall Project, including all contracts with governmental agencies entitling SJD to receive CFD No. 98-lA monies, including the Original JCFA. J. On May 19, 2015, the Developer purchased the Undeveloped Property from LVPP, and became the successor to L VPP and SJD under the Original JCF A. K. Since acquiring the Undeveloped Property, the Developer has been in discussions with CUSD and the City to make changes to the Impact Mitigation Agreement Related to Community Facilities District No. 98-lA, dated as of June 14, 2004 (the "Original Mitigation Agreement"), and the Original JCF A, to reflect changed circumstances resulting from the delay in developing the Overall Project. CUSD, the City, and the Developer have met and agreed upon a series of changes to the Original Mitigation Agreement and the Original JCF A that equitably address the concerns of the Parties. L. To implement the agreed-upon changes, CUSD is in the process of forming a new community facilities district over the Undeveloped Property (herein, the "98-lB Property") named Community Facilities District No. 98-1 B of the Capistrano Unified School District (Pacifica San Juan" ("CFD No. 98-lB," and together with CFD No. 98-lA, the "Districts") and will record a Notice of Special Tax Lien over the Undeveloped Property with the Rate and Method of Apportionment of Special Tax (the "98-lB RMA") attached as an exhibit thereto. CFD No. 98-lB is being created to levy special taxes pursuant to the 98-1B RMA (the "98-lB Special Taxes," and 2 DRAFT together with the 98-lA Special Taxes, the "Special Taxes") and to issue bonds secured by such 98- lB Special Taxes (the "98-lB Bonds" and together with the 98-lA Bonds, the "Bonds") to finance School Facilities and City Facilities (as defined below). M. As part of the changes described above, CUSD and the Developer entered into the "Amended and Restated Impact Mitigation Agreement Related to Community Facilities District No. 98-lA and Community Facilities District No. 98-lB" dated February 1, 2016 (the "Amended and Restated Mitigation Agreement"). N. Also, as part of the changes described above, CUSD, the City, and the Developer entered into this Agreement. This Agreement authorizes both CFD No. 98-lA and CFD No. 98-lB to finance the facilities and amounts equal to the capital fees described in Exhibit A attached hereto (the "City Facilities") up to the amount of $13,800,000 (the "City Facilities Amount"). All of the City Facilities are authorized, or will be authorized, to be financed pursuant to their respective formation resolutions of the Districts. 0. In conjunction with the formation of CFD No. 98-lB and exercising its powers under the Act to levy special taxes at amounts less than the maximum amount, CUSD will record as soon as practicable following the Statute of Limitations Expiration Date (as defined in the Amended and Restated Mitigation Agreement, the "Statute of Limitations Expiration Date") an amendment to the 98-lA Notice of Special Tax Lien (in the form of Exhibit D to the Amended and Restated Mitigation Agreement) that will permanently reduce the special tax rates under the 98-lA RMA in CFD No. 98-lA so as to achieve the 60.3% Reduction (the "60.3% Reduction"). P. Upon completion of the formation of CFD No. 98-lB, both CFD No. 98-lA and CFD No. 98-1 B will be authorized to finance both School Facilities and City Facilities through all of the following sources (the "CFD Funding Sources"): (i) the previous and future levy of 98-lA Special Taxes on the property in CFD No. 98-lA and the issuance of one or more series of 98-lA Bonds secured by the levy of 98-lA Special Taxes on the property in CFD No. 98-lA; and (ii) the future levy of 98-lB Special Taxes on the property in CFD No. 98-lB and the issuance of one or more series of 98-1 B Bonds secured by the levy of 98-1 B Special Taxes on the property in CFD No. 98-lB, all as described in the Amended and Restated Mitigation Agreement and in this Agreement. Q. The provision of the School Facilities and the City Facilities is necessitated by the development of the Overall Project and the Parties find and determine that the residents of the City, CUSD, and the Districts will be benefited by the construction and/or acquisition of the City Facilities and the School Facilities and that this Agreement is beneficial to the interests of such residents. R. The City is authorized by Section 53313.5 ofthe Act to assist in the financing of the acquisition and/or construction of the City Facilities, and CUSD is authorized to assist in the financing of the School Facilities. This Agreement constitutes a joint community facilities agreement, within the meaning of Section 53316.2 of the Act, by and among the City, the Developer, and CUSD, pursuant to which the Districts are authorized to finance from the CFD Funding Sources the City Facilities up to the City Facilities Amount and School Facilities as provided in the Amended and Restated Mitigation Agreement. As authorized by Section 3 DRAFT 53316.6 of the Act, responsibility for constructing, providing, and operating the School Facilities is delegated to CUSD, and responsibility for constructing, providing for, and operating the City Facilities is delegated to the City to the extent set forth herein. S. Other than the A Street Facilities as described in Recital U, all of the City Facilities are authorized to be financed by either or both of CFD No. 98-lA and/or CFD No. 98-lB. The amount of CFD Proceeds to be allocated to the financing of City Facilities is set forth in the Amended and Restated Mitigation Agreement. T. Predecessors to the Developer have deposited Authorized Fees (as defined herein) with the City, as shown under the caption "City Impact Fees -Previously Paid Deposits" in Exhibit A attached hereto. The Developer is the successor to all previous owners, and is entitled to the return of such deposits once an amount equal to the corresponding Authorized Fee is paid from the CFD Proceeds. The Parties acknowledge that none of the Previously Paid Deposits include any fees paid by merchant home builders. U. In the list of City Facilities set forth in Exhibit A attached hereto, the "A" Street improvements in the amount of $6,998,148 (the "A Street Facilities") will be financed by CFD No. 98-lB, and such A Street Facilities were constructed as a facility completed prior to the formation of CFD No. 98-1B. Although the Developer's predecessor was obligated to construct facilities in accordance with the Original JCF A, the Developer and the City do not have access to the records of the Developer's predecessor to confirm compliance with the Original JCFA. Accordingly, the A Street Facilities are authorized to be acquired from the Developer from the CFD No. 98-lB CFD Funding Sources. V. This Agreement is effective on the Effective Date (as defined in Section 2 below). AGREEMENT NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties agree as follows: 1. Recitals. Each ofthe above recitals is incorporated herein and is true and correct. 2. Effective Date. This Agreement is effective on the Effective Date, and shall be effective automatically and without any further action on the part of any Party. The term "Effective Date" means the date that the Formation Conditions have been satisfied in full. The term "Formation Conditions" means all of the following: (i) the qualified electors of the 98-lB Property approve of the levy of special taxes in CFD No. 98-1B, the issuance of bonds, and the appropriations limit by 2/3 or more of the votes cast on the ballot measures at the special election; (ii) CUSD adopts a resolution certifying the results of the special election; (iii) a notice of special tax lien is recorded after the Statute of Limitations Expiration Date against the 98-lB Property which contains the 98-lB RMA; (iv) an amendment to the 98-lA Notice of Special Tax Lien is recorded after the Statute of Limitations Expiration Date to permanently lower the special tax rates that may be levied in CFD No. 98-lA so as to achieve the 60.3% Reduction; (v) the Statute of 4 DRAFT Limitations Expiration Date has occurred; (vi) the approval by CUSD and the execution by CUSD and the Developer of the Purchase and Sale Agreement (as defined in the Amended and Restated Mitigation Agreement); (vii) the approval by the City Council of the City and the Board of Trustees of CUSD, and the execution by the City, CUSD, and the Developer, of this Agreement; and (viii) the approval by the Board of Trustees of CUSD, and the execution by CUSD and the Developer, of the Amended and Restated Mitigation Agreement. This Agreement shall be null and void if the Effective Date has not occurred by December 31 , 2016 , or such later date as is mutually agreed to by the Parties in writing. 3 . Sale of Bonds and Use of Proceeds. CUSD, acting as the legislative body of the Districts, shall, in accordance with the Amended and Restated Mitigation Agreement, finance the design, construction, and acquisition of School Facilities and the City Facilities with the CFD Funding Sources. The Developer acknowledges that the acquisition of the City Facilities and the amount and timing for the funding of the City Facilities Amount shall be in all respects subject to the Amended and Restated Mitigation Agreement and this Agreement. In no event will an act, or an omission or failure to act, by the City or the Districts with respect to the disbursement or nondisbursement of funds for School Facilities or the City Facilities subject the Districts, CUSD, or the City to pecuniary liability hereunder. The Bonds shall be issued only if CUSD determines that all requirements of state and federal law, and all CUSD policies, including CUSD's Statement of Local Goals and Policies Concerning the Use ofthe Mello-Roos Community Facilities Act of 1982, As Amended, revised as of May 12, 2008, have been satisfied or waived by CUSD or the City, as applicable. In no event shall the Developer have a right to compel the issuance of any Series of Bonds. 4. City Facil ities Accounts. a. The CFD Funding Sources for CFD No. 98-1A allocated pursuant to the Amended and Restated Mitigation Agreement for City Facilities will initially be held by CFD No. 98-1A or by CUSD acting on behalf of CFD No. 98-1A, in a City Facilities account (the "98-lA City Facilities Account") until the issuance of the first series of 98-1 A Bonds. Upon the issuance ofthe first series of98-1A Bonds, the CFD Funding Sources for CFD No. 98-1A held in the 98-1A City Facilities Account will be transferred to and held by the fiscal agent for CFD No. 98-lA (the "Fiscal Agent"). The CFD Funding Sources for CFD No. 98-lB will initially be held by CFD No. 98-lB or by CUSD acting on behalf of CFD No. 98-lB, in a City Facilities account (the "98-lB City Facilities Account" and together with the 98-lA City Facilities Account, the "City Facilities Accounts") until the issuance of the first series of 98-lB Bonds. Upon the issuance of the first series of 98-lB Bonds, the CFD Funding Sources for CFD No. 98-lB held in the 98-lB City Facilities Account will be transferred to and held by the Fiscal Agent for CFD No. 98-1 B. b. CUSD and the Fiscal Agent shall make disbursements from both the 98-lA City Facilities Account and the 98-lB City Facilities Account in accordance with Article 6 of the Amended and Restated Mitigation Agreement. CUSD, the Districts and the Fiscal Agent(s) shall not be responsible to the City for costs incurred by the City as a result of withheld or delayed 5 DRAFT payments. c. The City agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures. The City, upon request, will provide to the Districts its annual financial report certified by an independent certified public accountant for purposes of calculating the Districts' arbitrage rebate obligations. The District shall have the right to conduct its own audit of the City's records at reasonable times and during normal business hours. d. The Developer acknowledges that neither the City, CUSD, nor the Districts has any obligation to pay any amount in excess of the City Facilities Amount, regardless of the actual cost of the City Facilities. 5. (a) Acquisition Facilities. Portions of the City Facilities described in Exhibit A are categorized as "Acquisition Facilities." Other than the A Street Facilities (which are discussed below in Section 5(h)), these facilities shall be referred to herein, individually, as an "Acquisition Facility" or, collectively, as the "Acquisition Facilities." The Acquisition Facilities shall be acquired by the City as set forth in this Section 5. The City's obligation hereunder to pay the purchase prices of the Acquisition Facilities is limited to the CFD Funding Sources on deposit in the City Facilities Accounts of the Districts. (b) Plans and · pecifications. Developer shall be responsible for the preparation of the plans and specifications (the "Plans and Specifications") for the Acquisition Facilities. The Plans and Specifications shall be subject to the review and approval by the City and shall conform to the requirements of the City for the Acquisition Facilities at the time of such approval. (c) Construction and lnspection of the Acquisition Facilities. The Acquisition Facilities must be constructed in accordance with the Plans and Specifications as approved by the City. The Developer shall be solely responsible for the bidding, contracting, and construction of the Acquisition Facilities to be acquired with the CFD Funding Sources in accordance with the requirements set forth in this Section 5. The Districts shall have no responsibility whatsoever for the bidding, contracting, and/or the construction of the Acquisition Facilities. The construction of the Acquisition Facilities shall be subject to inspection by the City. Upon the request of the Developer, the City shall notify the Districts and the Developer in writing when each of the Acquisition Facilities has been Substantially Completed (as defined below) in accordance with the Plans and Specifications, and when each of the Acquisition Facilities has been Substantially Completed and is ready for payment of the purchase price. The bid forms and winning bid (collectively, the "Bid Documents") are subject to review and approval or rejection by the City. The City acknowledges that expenditures with respect to such Acquisition Facility shall be eligible for funding from the City Facilities Accounts, subject to prior satisfaction of the following conditions precedent: (i) City approval of the Bid Documents; (ii) the contractor to whom the Acquisition Facility contract is awarded shall have paid not less than the prevailing rates of wages for all Acquisition Facility work pursuant to California Labor Code Sections 1770, 1773, and 1773.1; and (iii) Substantial Completion (as defined below) of the Acquisition Facility shall have occurred. Under current law as of the date of this Agreement, the City hereby affirms that Developer's compliance with all 6 DRAFT provisions of this Section 5(c) ensures that an Acquisition Facility to be acquired with the CFD Funding Sources shall be constructed as if it had been constructed under the direction and supervision, or under the authority of, the City. For purposes of this Agreement, the terms "Substantially Complete" and "Substantial Completion" when referring to an Acquisition Facility mean that: the Developer has notified the City that the Acquisition Facility has been completed in accordance with its Plans and Specifications; the City's inspector has inspected the facility, prepared a final "punch list," and has determined that the punch list items required to be completed are items not required for the safe operation of the Acquisition Facility and can therefore be completed after the purchase price of the Acquisition Facility has been paid by the City; and all contractors and subcontractors constructing the Acquisition Facility shall have provided lien and material releases. Subject to compliance with the City Facilities Amount, the purchase price of an Acquisition Facility shall be the actual cost of the Acquisition Facility. The costs shown in Exhibit A are estimates only and shall not limit the purchase price of an Acquisition Facility. (d) Acquisition and Ownership of the Acquis .ition Facilities. Upon receipt by the Districts of notification by the City that an Acquisition Facility has been Substantially Completed in accordance with the Plans and Specifications, that Acquisition Facility shall be deemed eligible for acquisition by the City from the CFD Funding Sources. Simultaneously upon acquisition of such Acquisition Facility by the City, title to the land or, if acceptable to the City, an irrevocable offer of dedication of the land, underlying the Acquisition Facility shall be conveyed to the City. Upon acceptance of an Acquisition Facility by the City, the City shall incorporate the Acquisition Facility into the City's maintained system (it being acknowledged by the Parties that formal acceptance of an Acquisition Facility is not required for the payment of the purchase price of such Acquisition Facility under this Agreement) [Confirm with the City that there is no issue with formal acceptance being delayed or not occurring]. Following the expiration of any warranty period applicable to the construction of an Acquisition Facility during which time the Developer shall be responsible for the maintenance of such Acquisition Facility, the City shall thereafter be responsible for the maintenance of the Acquisition Facility in accordance with all applicable City maintenance procedures and practices. (e) Payment Requests. The form of payment request to be submitted to the Districts by the Developer and the City in requesting payment by the Districts of the purchase price of an Acquisition Facility shall be substantially in the fonn of Exhibit C hereto. Within ten business days of Developer's submission to City of a payment request, City shall determine if the Acquisition Facility has been Substantially Completed and shall either deny or approve the payment request, which approval shall not be unreasonably withheld. If the City approves the payment requisition, the City shall promptly counter-sign the payment request and submit it to CFD No. 98-lA or CFD No. 98-1 B, as applicable. If City denies any payment request, then it shall provide the Developer with a detailed written explanation describing the reasons or rationale for such denial. All denied payment requests may be resubmitted for approval. The Developer shall reimburse City for its actual costs incurred in connection with the processing of such payment requests, including the inspection of the Acquisition Facility, and such amounts shall be included in the purchase price paid by the Districts. The sole source of funds for payment of the purchase price of an Acquisition 7 DRA FT Facility shall be the CFD Funding Sources on deposit in the City Facilities Accounts, and investment earnings, if any, thereon. The payment requisition for the purchase price of an Acquisition Facility may be split between the Districts through submissions of separate payment requisitions, so long as the aggregate of all payment requisitions for an Acquisition Facility does not exceed the actual cost of such Acquisition Facility . (f) Expectations of the Pa1ties. The Parties understand and agree that: (i) the Developer may be constructing Acquisition Facilities prior to the availability of CFD Funding Sources that will be available to pay for such Acquisition Facilities; (ii) the City may inspect such Acquisition Facilities in accordance with this Agreement and process and complete payment requests for the payment of such Acquisition Facilities with knowledge that there may be insufficient CFD Funding Sources available at such time; (iii) the Acquisition Facilities may be conveyed to and accepted by the City when there are insufficient CFD Funding Sources to pay the purchase prices of such Acquisition Facilities; and (iv) in any such case, the payment of any approved payment requests for the purchase prices of such Acquisition Facilities will be deferred until there are sufficient CFD Funding Sources available to pay the purchase prices of such Acquisition Facilities, at which time the Districts will make such payments in accordance with the Amended and Restated Mitigation Agreement and this Agreement. At all times, the Developer will be constructing such Acquisition Facilities with the expectation that the purchase prices for such Acquisition Facilities will be paid from the CFD Funding Sources if and when they become available. The conveyance of Acquisition Facilities to the City prior to receipt of the full purchase prices for such Acquisition Facilities shall not be construed as a gift or a waiver of the payment of the purchase prices, or any part thereof, for such Acquisition Facilities. The sole source of funds for payment of the purchase price of an Acquisition Facility shall be the CFD Funding Sources on deposit in the City Facilities Accounts, and investment earnings, if any, thereon. (g) Ownership of Facilities. Notwithstanding the fact that some or all of the Acquisition Facilities may be constructed in dedicated street rights-of-way or on property which has been or will be dedicated to the City, the Acquisition Facilities shall be and remain the property of the Developer until acquired by the City as set forth in this Agreement. The acquisition of the Facilities may occur in advance of the payment of the purchase price of such Acquisition Facilities and shall occur regardless of the adequacy of the CFD Funding Sources. (h) A Street ·acilitie_s. Notwithstanding anything herein to the contrary, the A Street Facilities are deemed Substantially Complete and have satisfied all conditions precedent to the payment of the purchase price of such A Street Facilities [Confirm with the City]. In clarification of the foregoing, Section 5(a) through Section 5(e) shall not apply to the A Street Facilities. A payment requisition for the purchase price of the A Street Facilities submitted to the City by the Developer shall be approved and counter-signed by the City, and promptly submitted to CFD No. 98-lB. As specified in Section [5(f)], payment may be delayed pending deposit of funds in the City Facilities Account to pay such payment requisition, and the full amount of such payment requisition will not be paid if there are insufficient funds in the City Facilities Account to make such payment. 6. Capital Fees. 8 DRAFT (a) Aulhorizalion. The Act allows for the financing of capital improvement fees, and the City Facilities described in Exhibit A as "City Impact Fees" are capital improvement fees that may be financed under the Act ("Authorized Fees"). (b) Request for Payments "'qual to Authorized Fees. The Developer may request payment of an amount equal to Authorized Fees from the CFD Funding Sources on deposit in the City Facilities Accounts to the City by executing and submitting to the Districts a payment request in the form attached hereto as Exhibit B. Upon receipt of such payment request, the applicable District shall pay, or cause to be paid to the City, such amount equal to the Authorized Fees requested in such payment request to the extent of such CFD Funding Sources on deposit in the City Facilities Accounts. Upon receipt of an approved payment request completed in accordance with the terms of this Agreement, the Fiscal Agent shall wire transfer such portion of requested funds as are then available for release to the City's bank account, as directed by the City. As provided in Section 3(c), the City agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures of its expenditures of such amounts for capital facilities of the City. The City, upon request, will provide to the Districts its annual financial report certified by an independent certified public accountant for purposes of calculating the Districts' arbitrage rebate obligations. The Districts shall have the right to conduct their own audit of the City's records at reasonable times and during normal business hours. (c) Deposit of Authorized F ees in Advance of Availability of CFD Funding Sources. The Parties acknowledge and agree that; (i) pursuant to the Original JCF A, some of the Authorized Fees have been deposited with the City (the "Previously Paid Deposits"); (ii) the Developer may be required pursuant to the Conditions of Approval or the fee ordinance to deposit with the City the Authorized Fees prior to the availability of the CFD Funding Sources to deposit such Authorized Fees (the "Future Deposits," and together with the Previously Paid Deposits, the "Deposits"); and (iii) both the Previously Paid Deposits (regardless of the entity that originally paid the Previously Paid Deposits) and any Future Deposits paid by the Developer shall be refunded by the City to the Developer in the manner set forth in subsection (d) of this Section 6. The City shall place each Deposit in a capital facilities account(s). (d) Return of Deposits. Following the payment from the Districts to the City from CFD Funding Sources for an amount equal to the corresponding Authorized Fees, the City shall return to the Developer (and to the Developer only, regardless of the entity that paid the Previously Paid Deposit) from the capital account in which the corresponding Deposits were deposited the corresponding Deposits not previously returned, without interest or other earnings thereon. The City shall be so obligated to return such Deposits only to the extent that an amount equivalent to the Deposits to be returned is deposited with the City from the CFD Funding Sources. The Deposits may be returned from time to time as additional CFD Funding Sources become available. (e) Deposits Allocated irst. CFD Funding Sources used to pay an amount equal to Authorized Fees shall be allocated first to enable [?payment of the Citywide Development Fee?] and then to enable return of all Deposits prior to being allocated to the payment of City Facilities in amounts for which Authorized Fees have not previously been 9 DRAFT deposited by the Developer. [? See Section 6(h) below; which is paid first amounts to allow return of Deposits or the Citywide Development Fee?] For example, [?where does Citywide Development Fee fit in the example? if the Developer has paid $10,000 in Deposits, and CFD Funding Sources become available in the amount of $15,000, the City shall apply the first $10,000 of the CFD Funding Sources to the payment of an amount equal to the Authorized Fees that were paid by the Deposits (and, thereafter, return the Deposits to the Developer) and use the remaining $5,000 of the CFD Funding Sources for the funding of City Facilities in lieu of the Developer's deposit of amount equal to the Authorized Fees identified in the payment requisition. (f) Application of Deposits. If it is determined that there will be no further CFD Funding Sources available (now or in the future), or if the City Facilities Amount is reached, any Deposits that have not been returned to the Developer at the time shall be retained by the City and may be used for the purposes for which the Authorized Fee was required, and the unreturned Deposits shall constitute full and final payment for such Authorized Fees, without any increase of any kind. To the extent that deposits or CFD Funding Sources are not available for credit against Authorized Fees, the Developer, or its successor shall be obligated to pay the Authorized Fee with respect to applicable parcels. (g) Expectations. The Parties acknowledge and agree that: (i) the Previously Paid Deposits have been made, and that the Developer may pay Future Deposits prior to the availability of CFD Funding Sources in an amount equal to such Authorized Fees; and (ii) any Authorized Fees paid as Deposits were made with the agreement under the Original JCFA that such Deposits would be returned to the Developer as the successor to previous owners once payments to the City from the CFD Funding Sources are made, if, and when, such CFD Funding Sources become available. The payment of Deposits prior to the availability of the CFD Funding Sources shall not be construed as a dedication or gift of the Authorized Fees, or a waiver of the return of the CFD Deposits, it being the intention that an amount equal to the Authorized Fees be paid by the CFD Funding Sources to the extent of the CFD Funding Sources. (h) Citywide Development Fee. Notwithstanding the other provisions of this Section 6, the Citywide Development Fee described in Exhibit A in the amount of $850,000 is not required to be paid by the Developer in connection with the development of the Overall Project. However, an amount equal to said Citywide Development Fee is to be financed by the CFD Funding Sources on deposit in the City Facilities Accounts. The Parties agree that the City may requisition CFD No. 98-1A for the payment of an amount equal to the Citywide Development Fee, which amount equal to the Citywide Development Fee shall be the first Authorized Fees that are paid to the City and credited to the Developer from the CFD Funding Sources. [?Does funding happen before or after return of Deposits previously made?] 7. Indemnification. Except for damages caused by the negligence or willful misconduct of any other person or entity, CUSD acting on behalf of the Districts, shall assume the defense of, indemnify and save harmless, the City, its officers, employees, and agents, and each and every one of them, from and against all actions, damages, claims, losses, or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, CUSD's 10 DRAFT performance on behalf of the Districts under this Agreement, or the design, engineering, and construction of the School Facilities. No provision of this Agreement, though, shall in any way limit the extent of CUSD's or the Districts responsibility for payment of damages resulting from the operations of CUSD acting on behalf of the Districts and its contractors; provided, however, that CUSD shall not be required to defend or indemnify any person or entity as to actions, damages, claims, losses, or expenses resulting from the negligence or willful misconduct of such person or entity, or their agents or employees. Except for damages caused by the negligence or willful misconduct of any other person or entity, the City shall assume the defense of, indemnify and save harmless, CUSD, its officers, employees and agents, and the Districts and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, the City's performance under this Agreement, or the design, engineering and construction of the City Facilities. No provision of this Agreement, though, shall in any way limit the extent of the City's responsibility for payment of damages resulting from the operations of the City and its contractors; provided, however, that the City shall not be required to defend or indemnify any person or entity as to actions, damages, claims, losses, or expenses resulting from the negligence or willful misconduct of such person or entity, or their agents or employees. Except for damages caused by the negligence or willful misconduct of any other person or entity, the Developer shall assume the defense of, indemnify and save harmless, CUSD, the Districts and the City, their respective officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of Developer with respect to this Agreement; provided, however, that the Developer shall not be required defend or indemnify any person or entity as to actions, damages, claims, losses, or expenses resulting from the negligence or willful misconduct of such person or entity, or their officers, agents, or employees. 8. Amendment. This Agreement may be amended at any time but only in writing signed by each Party. 9. Entire Agreement. This Agreement amends and restates the Original JCFA and, as of the date hereof, the terms of this Agreement shall control over the terms of the Original JCF A. Each Party acknowledges that no representation by any Party which is not embodied herein or in any other agreement, statement, or promise not contained in this Agreement shall be valid and binding. The Parties agree to act in a manner which will not frustrate the purposes of this Agreement. 10. Notices. Any notice, payment, or instrument required or permitted by this Agreement to be given or delivered to either Party shall be deemed to have been received when personally delivered or seventy-two hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid, addressed as follows: CUSD: Capistrano Unified School District 11 DRAFT City: Developer: 33122 Valle Road San Juan Capistrano, California 92675 Attn: Deputy Superintendent, Business and Support Services City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn: City Manager Pacific Point Development Partners LLC 8105 Irvine Center Drive, Suite 1450 Irvine, California 92618 Attention: Phil Bodem Each Party may change its address for delivery of notice by delivering written notice of such change of address to the other Parties. 11. Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference. 12. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. 13. Governing Law. This Agreement and any dispute ansmg hereunder shall be governed by and interpreted in accordance with the laws of the State of California. Any dispute arising hereunder shall be adjudicated in Orange County, California. 14. Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Parties, or the failure by a Party to exercise its rights upon the default of another Party, shall not constitute a waiver of such Party's right to insist and demand strict compliance by such other Parties with the terms ofthis Agreement thereafter. 15. No Third Party Beneficjaries. No person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the City, CUSD, the Districts, and the Developer (and their respective successors and assigns), any rights, remedies, obligations, or liabilities under or by reason of this Agreement. 16. Successors and Assigns. All of the covenants, stipulations, promises, and agreements contained in this Agreement by or on behalf of, or for the benefit of, any of the Parties, shall bind or inure to the benefit of any of the successors and assigns of the respective Parties; provided, however, that purchasers of completed residential units shall not be deemed to be successors and assigns of the Developer for purposes of this Agreement, and shall have no right to enforce any provisions of this Agreement. 12 DRAFT 17. Singular and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine. 18. Counterparts. This Agreement may be executed in counterparts, each ofwhich shall be deemed an original, but all of which shall constitute but one instrument. 13 DRAFT IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year written below. ATTEST: By: __________________ __ ATTEST: By: __________________ __ ATTEST: By: __________________ _ CAPISTRANO UNIFIED SCHOOL DISTRICT By: ____________________ __ COMMUNITY FACILITIES DISTRICT NO 98- lA OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT (PACIFICA SAN JUAN) By : ____________________ __ CITY OF SAN JUAN CAPISTRANO By: ____________________ __ PACIFIC POINT DEVELOPMENT PARTNERS LLC, A Delaware limited liability company By: Taylor Morrison Pacific Point Holdings, LLC, A Delaware limited liability company, Its Managing Member 14 DRAFT By:-------- Name: ------- Title: ______ _ 15 EXHIBIT A DESCRIPTION OF CITY FACILITIES Description * City Impact Fees -Previously Paid Deposits Park Improvements Affordable Housing Improvements Water Capacity Improvements Water Capital Improvement Fee Water Storage Fee Non-Domestic Water Improvements La Novia Fair Share Fair Share of Southbound Ortega Hwy. Off-ramp Fair Share of Northbound Ortega Hwy. Off-ramp La Novia Widening Subtotal -Previously Paid Deposits City Impact Fees -Future Deposits Systems Development Improvements (211) Systems Development Improvements (364) Agricultural Preservation Improvements Sewer Connection Improvements Citywide Development Fee Signalization-San Juan Creek@ Valle Road (Fair Share) Subtotal -Future Deposits Acquisition Facilities * A Street -Storm Drain A Street -Sewer A Street -Water A Street-Street Improvements A Street -Landscape A Street -Monument Subtotal - A Street Facilities La Novia Ave Improvements Confirm anticipated timing of improvements.] Valle Road North Improvements Camino Capistrano@ San Juan Creek Road Improvements Subtotal-Acquisition Facilities Total City Authorized Fees and Facilities Notes: Amount* $2,239,146 $1,800,000 $998,550 $778,464 $943,497 $700,000 $364,050 $76,979 $2,604 $225,000 $8,128,290 $15,900 $760,653 $159,000 $1,412,457 $850,000 $106,400 $3,304,410 $1,751,385 $562,027 $1,781,691 $1,961,019 $923,526 $18,500 $6,998,148 $1,682,000 $692,000 $197,000 $2,571,000 $21,001,848 * The facilities descriptions and associated costs are estimates. Detailed scope and limits of specific facilities will be determined as appropriate, consistent with the standards of the City. The Authorized Fees and Facilities listed above may be modified in a written supplement executed by Developer and City Engineer. A-1 The City Facilities financed by the Districts will not exceed $13,800,000. A-1 EXHIBIT B DISBURSEMENT REQUEST FOR AMOUNTS EQUAL TO AUTHORIZED FEES [Choose one: Community Facilities District No. 98-lA of the Capistrano Unified School District (Pacifica San Juan) ("CFD No. 98-lA"); or Community Facilities District No. 98-lB of the Capistrano Unified School District (Pacifica San Juan) ("CFD No. 98-lA")] is hereby requested to pay from the City Facilities Account, to the City of San Juan Capistrano (the "City"), as Payee, the sum set forth below: $ __________ (the "Requested Amount") 1. The Requested Amount represents the payment of an amount equal to Authorized Fees for property within the boundaries of CFD (the "Property") described as follows: 2. The Requested Amount is due and payable, has not formed the basis of any prior request or disbursement. 3. The Requested Amount shall be payable to the City pursuant to the wmng instructions attached hereto. 4. The Requested Amount is authorized and payable pursuant to the terms of the certain Second Amended and Restated Joint Community Facilities Agreement among the Capistrano Unified School District, Pacific Point Development Partners LLC (the "Developer"), and the City dated as ofFebruary 1,2016 (the "Agreement"). 5. Capitalized undefined terms used herein shall have the meaning ascribed to them in the Agreement. Executed by an authorized representative of each of the Developer and the City. CITY OF SAN JUAN CAPISTRANO By: _______________ __ ATTEST: By: _________________ _ B-1 PACIFIC POINT DEVELOPMENT PARTNERS LLC, A Delaware limited liability company By: Taylor Morrison Pacific Point Holdings, LLC, A Delaware limited liability company, Its Managing Member By: __________________ _ Name: ________________ _ Title: ________________ _ B-2 EXHIBIT C FORM OF ACQIDSITION FACILITY PAYMENT REQUEST The undersigned, hereby requests payment in the total amount of $ for the below-described Acquisition Facility from [Choose one: Community Facilities District No. 98-1A of the Capistrano Unified School District (Pacifica San Juan) ("CFD No. 98-1 A"); or Community Facilities District No. 98-1B of the Capistrano Unified School District (Pacifica San Juan) ("CFD No. 98-1 A")], all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City as follows : 1. He(she) is a duly authorized officer of the undersigned, qualified to execute this Payment Request for payment on behalf of the undersigned and is knowledgeable as to the matters set forth herein . 2. The Developer requests the payment of the purchase price in the amount set forth above for the following Acquisition Facility: _______ _ 3 . All costs of the Acquisition Facility for which payment is requested hereby are actual costs and have not been inflated in any respect. The actual costs for which payment is requested have not been the subject of any prior disbursement request submitted. 4. Supporting documentation (such as third party invoices, lien releases and cancelled checks or other evidence of payment) is attached with respect to each cost for which payment is requested. 5. The Acquisition Facility for which payment IS requested was constructed m accordance with the requirements oftheAgreement. 6. The undersigned is in compliance with the terms and provisions of the Agreement and no portion of the amount being requested to be paid was previously paid. 7. The purchase price for the Acquisition Facility, when combined with amounts paid under all previous payment requisitions under the Agreement does not exceed the City Facilities Amount. 8. Please authorize payment of the purchase price by the CFD No. to the undersigned pursuant to the following wiring instructions: 9. Capitalized terms not defined herein shall have the meanings given such terms in the Second Amended and Restated Joint Community Facilities Agreement by and among Capistrano Unified School District (the "CUSD"), City of San Juan Capistrano (the "City") and Pacific Point Development Partners LLC ( the "Developer"), dated as of February 1, 2016 (the "Agreement"). C-1 I declare under penalty of perjury that the above representations and warranties are true and correct. PACIFIC POINT DEVELOPMENT PARTNERS LLC, A Delaware limited liability company By: Taylor Morrison Pacific Point Holdings, LLC, A Delaware limited liability company, Its Managing Member By: __________________ __ Name: ------------------ Title: Agreed and Approved: CITY OF SAN JUAN CAPISTRANO By: ____________________ __ ATTEST: By : ____________________ _ C-2 ATTACHMENT I SUMMARY OF ACQUISITION FACILITY(IES) TO BE ACQUIRED AS PART OF PAYMENT REQUEST [List here all Acquisition Facilities which payment is requested, and attach support documentation]