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Home My WebLink About2006/12/20 - Agenda Packet THE CITY OF RANCHO CUCAMONGA 10500 Civic Center Drive ~ Rancho Cucamonga, CA 91730-3801 AGENDAS REDEVELOPMENT AGENCY FIRE PROTECTION DISTRICT BOARD CITY COUNCIL REGULAR MEETINGS 1st and 3rd Wednesdays ~ 7:00 P.M. DECEMBER 20, 2006 MEMBERS MAYOR MAYOR PRO TEM COUNCIL MEMBERS CITY MANAGER CITY ATTORNEY CITY CLERK Donald J. Kurth, M.D. Diane Williams Rex Gutierrez L. Dennis Michael Sam Spagnolo Jack Lam, AICP James L. Markman Debra J. Adams, CMC ORDER OF BUSINESS CLOSED SESSION Tapia Conference Room............ 5:30 P.M. REGULAR MEETING Council Chambers......................... 7:00 P.M. INFORMATION FOR THE PUBLIC . RANCHO CUCAMONGA ~~ TO ADDRESS THE REDEVELOPMENT AGENCY. FIRE BOARD AND CITY COUNCIL The Agency, Fire Board and City Council encourage free expression of all points of view. To allow all persons to speak, given the length of the Agenda, please keep your remarks brief. If others have already expressed your position, you may simply indicate that you agree with a previous speaker. If appropriate, a spokesperson may present the views of your entire group. To encourage all views and promote courtesy to others, the audience should refrain from clapping, booing or shouts of approval or disagreement from the audience. The public may address the Agency, Fire Board or City Council by filling out a speaker card and submitting it to the City Clerk. The speaker cards are located on the wall at the back of the Chambers, at the front desk behind the staff table and at the City Clerk's desk. During "Public Communications," your name will be called to speak on any item listed or not listed on the agenda in the order in which it was received. If you are present to speak on an "Advertised Public Hearing" item, your name will be called when that item is being discussed. Comments are to be limited to five minutes per individual. Any handouts for the Agency, Fire Board or City Council should be given to the City Clerk for distribution. " AGENDA BACK-UP MATERIALS Staff reports and back-up materials for agenda items are available for review at the City Clerk's counter, Public Library and on the City's website. A complete copy of the agenda is also available at the desk located behind the staff table during the Council meeting. LIVE BROADCAST Agency, Fire Board and Council meetings are broadcast live on Channel 3 for those with cable television access. Meetings are rebroadcast on the second and fourth Wednesdays of each month at 11 :00 a.m. and 7:00 p.m. The City has added the option for customers without cable access to view the meetings "on-demand" from their computers. The added feature of "Streaming Video On Demand" is available on the City's website at www.ci.rancho-cucamonga.ca.us/whatsnew.htm for those with Hi-bandwidth (DSUCable Modem) or Low- bandwidth (Dial-up) Internet service. The Agency, Fire Board and City Council meets regularly on the first and third Wednesday of the month at 7:00 p.m. in the Council Chambers located at 10500 Civic Center Drive. Members of the City Council also sit as the Redevelopment Agency and the Fire District Board. Copies of the agendas and minutes can be found at http://www.ci.rancho-cucamonga.ca.us I] If you need special assistance or accommodations to participate in this meeting, please contact the City Clerk's office at (90g) 477-2700. Notification of 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility. Listening devices are available for the hearing impaired. Please turn off all cellular phones and pagers while the meeting is in session. REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 1 MEETING HELD AT 10500 CIVIC CENTER DRIVE RANCHO ;A' A. 5:30 P.M. - CLOSED SESSION CALL TO ORDER - TAPIA ROOM 1. Roll Cali: Mayor Kurth Mayor Pro Tem Williams Councilmembers Gutierrez, Michael and Spagnolo CLOSED SESSION CALLED TO ORDER AS THE REDEVELOPMENT AGENCY AND CITY COUNCIL. I B. ANNOUNCEMENT OF CLOSED SESSION ITEM(S) I I C. PUBLIC COMMUNICATIONS ON CLOSED SESSION ITEM(S) I II D. CONDUCT OF CLOSED SESSION II 1. CONFERENCE WITH PROPERTY NEGOTIATORS PER GOVERNMENT CODE SECTION 54956.8 FOR PROPERTY lOCATED AT 9055 FOOTHill BOULEVARD; LINDA D. DANIELS, RDA DIRECTOR, AND L1NC-PEPPERWOOD HOUSING, NEGOTIATING PARTIES, REGARDING TERMS OF AGREEMENT - RDA 2. CONFERENCE PER GOVERNMENT CODE SECTION 54956.9 REGARDING CONDEMNATION ACTION, RELATIVE TO THE HAVEN GRADE SEPARATION PROJECT FOR SUBJECT PROPERTY INTERESTS ON PROPERTY OWNED BY ROCK/JERSEY CORPORATION AND IDENTIFIED AS ASSESSOR'S PARCEL NUMBER 209-143-02; NEGOTIATING PARTIES, WilLIAM J. O'NEil, CITY ENGINEER, AND ASSISTANT CITY ATTORNEY KIRSTEN BOWMAN REGARDING SETTLEMENT NEGOTIATIONS AND INSTRUCTIONS TO NEGOTIATORS CONCERNING APPROVAL OF SETTLEMENT AGREEMENT - CITY [ E. CITY MANAGER ANNOUNCEMENTS II F. RECESS II CLOSED SESSION TO RECESS TO THE REGULAR REDEVELOPMENT AGENCY AND CITY COUNCIL MEETINGS AT 7:00 P.M. IN THE COUNCIL CHAMBERS AT CITY HALL, LOCATED AT 10500 CIVIC CENTER DRIVE, RANCHO CUCAMONGA, CALIFORNIA. REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 2 MEETING HELD AT 10500 CIVIC CENTER DRIVE .a G. REGULAR MEETING CALL TO ORDER -7:00 P.M. COUNCIL CHAMBERS THE REGULAR MEETINGS OF THE REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL WILL BE CALLED TO ORDER. IT IS THE INTENT TO CONCLUDE THE MEETINGS BY 10:00 P.M. UNLESS EXTENDED BY CONCURRENCE OF THE AGENCY, FIRE BOARD AND COUNCIL. 1. Pledge of Allegiance 2. RollCall: Mayor Kurth Mayor Pro Tem Williams Council members Gutierrez, Michael and Spagnolo II H. ANNOUNCEMENTS/PRESENTATIONS ~I 1. Introduction of new Animal Services Director, Joe Pulcinella, and update on holiday activities at the Animal Care and Adoption Center. II I. PUBLIC COMMUNICATIONS II This is the time and place for the general public to address the Redevelopment Agency, Fire Protection District and City Council on any item listed or not listed on the agenda. State law prohibits the Agency, Fire Board, or City Council from addressing any issue not previously included on the Agenda. The Agency, Fire Board, or City Council may receive testimony and set the matter for a subsequent meeting. Comments are to be limited to five minutes per individual. Please fill out a Speaker Card and submit it to the City Clerk. Speaker cards are located on the wall in the back of the Chambers, at the front desk behind the staff table and at the City Clerk's desk. J. AGENCy/FIRE BOARD/COUNCIL RESPONSES TO PUBLIC COMMENTS This is the time and place for the Agency, Fire Board or City Council to respond to comments made by the general public. REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 3 MEETING HELD AT 10500 CIVIC CENTER DRIVE K. CONSENT CALENDAR - REDEVELOPMENT AGENCY I The following Consent Calendar items are expected to be routine and non-controversial. They will be acted upon by the Agency at one time without discussion. Any item may be removed by an Agencymember for discussion. 1. Approval of Check Register dated November 29 through December 12, 2006. 1 2. Approve to receive and file current Investment Schedule as of November 30, 2006. 15 3. Approval to adopt Annual Statement of Investment Policy. 15 4. Approval to accept the improvements constructed by various contractors at the Victoria 33 Gardens Cultural Center as complete and authorization to file a Notice of Completion for the improvements. RESOLUTION NO. RA 06-027 35 A RESOLUTION OF THE RANCHO CUCAMONGA REDEVELOPMENT AGENCY, RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS COMPLETED BY HUNTINGTON GLAZING, INC. FOR THE VICTORIA GARDENS CULTURAL CENTER PROJECT, AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK RESOLUTION NO. RA 06-028 36 A RESOLUTION OF THE RANCHO CUCAMONGA REDEVELOPMENT AGENCY, RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS COMPLETED BY LAM BARD ENTERPRISES, INC. FOR THE VICTORIA GARDENS CULTURAL CENTER PROJECT, AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK RESOLUTION NO. RA 06-029 37 A RESOLUTION OF THE RANCHO CUCAMONGA REDEVELOPMENT AGENCY, RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS COMPLETED BY MNZ JANITORIAL SERVICE FOR THE VICTORIA GARDENS CULTURAL CENTER PROJECT, AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 MEETING HELD AT 10500 CIVIC CENTER DRIVE K. CONSENT CALENDAR- FIRE PROTECTION DISTRICT ~ The following Consent Calendar items are expected to be routine and non-controversial. They will be acted upon by the Fire Board at one time without discussion. Any item may be removed by a Boardmember for discussion. 5. Approval of Minutes: October 18, 2006 November 1, 2006 November 15, 2006 6. Approval of Check Register dated November 29 through December 12, 2006. 38 7. Approval to receive and file current Investment Schedule as of November 30, 2006. 41 8. Approval to adopt Annual Statement of Investment Policy. 45 9. Approval of a request to extend the Fire Captain Employment Eligibility List set to expire On 63 December 19, 2006, for one additional year. 10. Approval for appropriation of funds in the amount of $57,623.00 plus 10% contingency from Fire District Reserve funds for an automated fuel management system. 11. Approval to appropriate funding from the Computer EquipmentlTechnical Replacement FUnd (1714001) in the amount of $21,134.00 and $49,970.00 from the Fire District Reserve Fund to purchase a fleet maintenance software upgrade, implementation support, and hardware from various vendors and authorize the related appropriations into the appropriate account numbers to be determined by staff. 12. Approval to adopt a boundary map showing property within SUBTT12332-2 (Toll Brothers), located On the east side of Haven Avenue, north of Ringstem Dr., to be annexed into CFD No. 88-1. RESOLUTION NO. FD 06-054 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 88-1, ADOPTING A . BOUNDARY MAP SHOWING PROPERTY TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 88-1 13. Approval to adopt a boundary map showing property within SUBTT16788 (Bahman Sepehrnia), located on the southeast corner of Arrow Route and Madrone Avenue, to be 71 annexed into CFD No. 85-1. 4 64 .1 65 67 69 REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 5 MEETING HELD AT 10500 CIVIC CENTER DRIVE (;~ANCHO .. RESOLUTION NO. FD 06-055 73 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT 85-1, ADOPTING A BOUNDARY MAP (ANNEXATION NO. 06-12) SHOWING PROPERTY TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 85-1 14. Approval to adopt a Resolution of Intention to Annex Territory referred to as Annexation No. 06-01 (SUBTT12332-2; Toll Brothers) into Community Facilities District No. 88-1, 75 specifying facilities and services provided, to set and specify the special taxes to be levied within the annexation and set a time and place for a public hearing related to the annexation. RESOLUTION NO. FD 06-056 77 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 88-1, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 88-1 15. Approval to adopt a Resolution of Intention to Annex Territory referred to as Annexation No. 06-12 (SUBTT16788; Bahman Sepehrnia) into Community Facilities District No. 85-1, 84 specifying facilities and services provided, to set and specify the special taxes to be levied within the annexation and set a time and place for a public hearing related to the annexation. RESOLUTION NO. FD 06-057 86 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85-1, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-12) TO COMMUNITY FACILITIES DISTRICT NQ~~ . 16. Approval to adopt a boundary map showing property within SUBTT18139 (Huntec 95 Development, Inc.), located on the east side of Madrone Avenue, south of Arrow Route, to be annexed into CFD No. 85-1. RESOLUTION NO. FD 06-058 97 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85- 1, ADOPTING A BOUNDARY MAP (ANNEXATION NO. 06-6) SHOWING PROPERTY TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 85-1 REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 MEETING HELD AT 10500 CIVIC CENTER DRIVE RANCHO 6 17. Approval to adopt a Resolution of Intention to Annex Territory referred to as Annexation No. 99 06-6 (SUBTT18139; Huntec Development, Inc.), into Community Facilities District No. 85-1, specifying facilities and services provided, to set and specify the special taxes to be levied within the annexation and set a time and place for a public hearing related to the annexation. RESOLUTION NO. FD 06-059 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85- 1, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-6) TO COMMUNITY FACILITIES DISTRICT NO. 85-1 101 18. Approval of a Resolution of the (Federal) National Incident Management System (NIMS) to 110 be used in conjunction with the current (State) Standardized Emergency Management System (SEMS) for Disaster Management. RESOLUTION NO. FD 06-060 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, ADOPTING THE (FEDERAL) NATIONAL INCIDENT MANAGEMENT SYSTEM (NIMS) TO BE USED IN CONJUNCTION WITH THE CURRENT (STATE) STANDARDIZED EMERGENCY MANAGEMENT SYSTEM (SEMS) FOR DISASTER MANAGEMENT II K. CONSENT CALENDAR - CITY COUNCIL The following Consent Calendar items are expected to be routine and non-controversial. They will be acted upon by the Council at one time without discussion. Any item may be removed by a Councilmember for discussion. 111 I] 19. Approval of Check Register dated November 29 through December 12, 2006 and payroll 113 ending December 12, 2006 for the total amount of $4,149,259.08. 20. Approval to receive and file current Investment Schedule as of November 30, 2006. 139 21. Approval to adopt Annual Statement of Investment Policy. 146 22. Approval to authorize the advertising of the "Notice Inviting Bids" for the Rancho Crossing 164 12 KV Electrical Distribution System, Cabling, Connections and Equipment Project, to be funded from Municipal Utility Funds, Acct. No. 1705-303-5650/1397705-0. REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 MEETING HELD AT 10500 CIVIC CENTER DRIVE RANCHO ON RESOLUTION NO. 06-384 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING THE PLANS AND SPECIFICATIONS FOR THE "RANCHO CROSSING 12 KV ELECTRICAL DISTRIBUTION SYSTEM, CABLING, CONNECTIONS AND EQUIPMENT PROJECT" AND AUTHORIZING AND DIRECTING THE CITY CLERK TO ADVERTISE TO RECEIVE BIDS 7 166 23. Approval of a Resolution of the (Federal) National Incident Management System (NIMS) to 170 be used in conjunction with the current (State) Standardized Emergency Management System (SEMS for Disaster Management RESOLUTION NO. 06-385 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ADOPTING THE (FEDERAL) NATIONAL INCIDENT MANAGEMENT SYSTEM (NIMS) TO BE USED IN CONJUNCTION WITH THE CURRENT (STATE) STANDARDIZED EMERGENCY MANAGEMENT SYSTEM (SEMS) FOR DISASTER MANAGEMENT 24. Approval of Parks, Recreation Facilities and Community Services Update. 25. Approval of a request from the Christian Okoye Foundation for a Waiver of Rental Fees of a 5K110K Community RunlWalk starting and ending at the Rancho Cucamonga Epicenter and Adult Sports Complex (Parking Lot A) on February 24, 2007. 26. Approval to appropriate $18,995.00 into Accl. No 1714001-5605 for the purchase of a large format document scanner and $1,995.00 into Accl. No. 1714001-5300 for maintenance costs for a total of $20,990.00 to be funded from the Computer EquipmenUTechnical Replacement Fund. 27. Approval to appropriate $15,000.00 received from Lewis Investment Company into Accl. Nos. 1680000-4802 (Revenue) and 1680303-5300 (Expenditure - Contract Services) to pay for consultants costs in the formation of Community Facilities District No. 2006-01 (Vintner's Grove); the developer will be reimbursed from bond proceeds after the District is formed. 28. Approval to appropriate $15,000.00 received from Lewis Investment Company into Accl. Nos. 1681000-4802 (Revenue) and 1681303-5300 (Expenditure - Contract Services) to pay for consultants costs in the formation of Community Facilities District No. 2006-02 (Amador on Route 66); the developer will be reimbursed from bond proceeds after the District is formed. 29. Approval to appropriate funding from the Computer EquipmenUTechnical Replacement Fund (1714001) in the amount of $21,134.00 and $49,970.00 from the Fire District Reserve Fund to purchase a fleet maintenance software upgrade, implementation support, and hardware from various vendors and authorize the related appropriations into the appropriate account numbers to be determined by staff. 171 173 183 186 187 189 191 REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 8 MEETING HELD AT 10500 CIVIC CENTER DRIVE C~ANCHO 30. Approval of a change order in the amount of $289,980.00 for locating buried pull boxes, 193 excavating dirt from existing pull boxes, replacing existing damaged wires, and installing new cables and wires through existing conduits at fourteen signalized intersections on the Citywide Installation of Emergency Vehicle Preemption, Contract No. 06-049, and approval to increase the award to Steiny and Company, Inc., by an amount of $289,980.00. 31. Approval of the annexation to Street Lighting Maintenance District NO.2 for DRC2005- 195 00743 located north of Almond Street, east of Carnelian Avenue, submitted by Hamid R. Mansouri and Elizabeth K. Mansouri. RESOLUTION NO. 06-386 197 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ORDERING THE ANNEXATION OF CERTAIN TERRITORY TO STREET LIGHTING MAINTENANCE DISTRICT NO.2 FOR DRC2005-00743 (APN: 1061-791-13) 32. Approval and authorization to execute a Professional Services Agreement (CO 06-227) in 204 the amount of $150,000.00 to Richard Heath & Associates, Inc., for Energy Efficiency and Resource Conservation Program Development within the Rancho Cucamonga Municipal Utility Service Area, to be funded from 17063035300 Municipal Utility Fund. 33. Approval to award and authorize the execution of a Professional Services Agreement in the amount of $67,000.00 with Advantec Consulting Engineers (CO 06-231), and authorize the 205 expenditure of a 10% contingency in the amount of $6,700.00 for "Engineering Design Plans for 3 New Signals and Modification of 5 Signals at Various Locations" in the City of Rancho Cucamonga, to be funded from Transportation Funds, Accl. No. 11243035650/1573 (Vario.us). 34. Approval of a Subordination Agreement (CO 06-233) from Community Baptist Church of 207 Alta Loma, located at 9090 19'h Street - APN: 201-221,08. RESOLUTION NO. 06-387 209 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING A SUBORDINATION AGREEMENT FROM COMMUNITY BAPTIST CHURCH OF ALTA LOMA AND AUTHORIZE THE MAYOR AND CITY CLERK TO SIGN SAME (APN: 201-221-08) 35. Approval of an Acquisition Agreement (CO 06-234) for the City to acquire off-site property, 210 security and deposits for Tract 16072, located on the north side of Wilson Avenue between Etiwanda Avenue and East Avenue, submitted by Richland Pinehurst, Inc. RESOLUTION NO. 06-388 217 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING AN ACQUISITION AGREEMENT FOR OFFSITE PROPERTY, SECURITY AND DEPOSIT FOR TRACT 16072, FROM RICHLAND PINEHURST, INC., AND AUTHORIZING THE MAYOR AND CITY CLERK TO SIGN SAME REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 9 MEETING HELD AT 10500 CIVIC CENTER DRIVE 36. Approval of Improvement Agreement Extension for Parcel Map 15550, located on the west 218 side of Wardman Bullock, north of Wilson Avenue, submitted by Etiwanda Creek Partners, L.P. RESOLUTION NO. 06-389 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING IMPROVEMENT AGREEMENT EXTENSION AND IMPROVEMENT SECURITY FOR PARCEL MAP 15550 220 37. Approval of Vacation of Pecan Avenue Excess Right-of-Way (V-209) - Toll Brothers - a 221 request to vacate a 66-foot wide excess portion of Pecan Avenue, located north of Vista Street and south of Tract 16279. RESOLUTION NO. 06-390 226 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ORDERING THE VACATION (V-209) OF A PORTION OF PECAN AVENUE LOCATED NORTH OF VISTA STREET AND SOUTH OF TRACT 16279 38. Approval of Improvement Agreement Extension for Parcel Map 16455, located on the 227 northeast corner of Hermosa and Wilson Avenues, submitted by Iyad Haifa and Humberto Zarate RESOLUTION NO. 06-391 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING IMPROVEMENT AGREEMENT EXTENSION AND IMPROVEMENT SECURITY FOR PARCEL MAP 16455 230 39. Approval of Improvement Agreement Extension for Tract 16716, located on the east side of 231 Etiwanda Avenue between Etiwanda Intermediate School and Etiwanda Railway Station, submitted by Monte San Savino, LLC. RESOLUTION NO. 06-392 234 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING IMPROVEMENT AGREEMENT EXTENSION AND IMPROVEMENT SECURITY FOR TRACT 16716 40. Approval of Map, Improvement Agreement, Improvement Securities, Monumentation Cash 235 Deposit, Interim Basin Maintenance Agreement (CO 06-235) and Ordering the Annexation to Landscape Maintenance District NO.7 and Street Light Maintenance District Nos. 1 and 7 for Tract Map 16114, located on the west side of East Avenue, south of Wilson Avenue, submitted by Trimark Pacific-Rancho Cucamonga, LLC, a California Limited Liability Company. REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 MEETING HELD AT 10500 CIVIC CENTER DRIVE RANCHO _ UCAMONGA RESOLUTION NO. 06-393 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING TRACT MAP NUMBER 16114, IMPROVEMENT AGREEMENT, IMPROVEMENT SECURITIES, MONUMENTATION CASH DEPOSIT AND INTERIM BASIN MAINTENANCE AGREEMENT RESOLUTION NO. 06-394 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ORDERING THE ANNEXATION OF CERTAIN TERRITORY TO LANDSCAPE MAINTENANCE DISTRICT NO. 7 AND STREET LIGHTING MAINTENANCE DISTRICT NOS. 1 AND 7 FOR TRACT MAP 16114 10 238 239 41. Approval to release Drainage Acceptance Agreement (CO 01-031) for Lots 3 and 4 of 248 Parcel Map 15692, located on loamosa Court, west of Hellman Avenue, submitted by Pat Prutting. RESOLUTION NO. 06-395 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, RELEASING .A DRAINAGE ACCEPTANCE AGREEMENT FROM PAT PRUTTING 250 i 42. Approval and execution of a Joint Construction Agreement (CO 06-236) between the San 251 Bernardino County Flood Control District and the City of Rancho Cucamonga for the San Sevaine Storm Channel and the East Avenue Master Plan Storm Drain connection at Foothill Boulevard. 43. Approval of Map for Tract 17923, located at 9356 191h Street, e.ast of Hellman Avenue, 254 submitted by Dekel, LLC, a California Limited Liability Company. RESOLUTION NO. 06-396 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING TRACT MAP 17923 256 44. Approval to accept improvements, release the Faithful Performance Cash Deposit, accept a Maintenance Cash Deposit and file a Notice of Completion for improvements for 257 DRC2003-00213, located on the east side of Milliken Avenue, north of 41h Street, submitted by Fairmont Hospitality, Inc. RESOLUTION NO. 06-397 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR DRC2003-00213 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK 259 REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 11 MEETING HELD AT 10500 CIVIC CENTER DRIVE ~RANCHO ( .. 45. Approval to accept improvements, retain $1,240.00 of the Faithful Performance Cash 260 Deposit in lieu of a Maintenance Bond and file a Notice of Completion for improvements for DRC2002-01023, located on the southwest corner of Arrow Route and White Oak Avenue, submitted by Stor-N-Lock Partners #18, LLC. RESOLUTiON NO. 06-398 262 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR DRC2002-01023 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK 46. Approval to accept improvements, release the Faithful Performance Bond, accept a 263 Maintenance Bond and file a Notice of Completion for improvements for Tract 14496-1, located on the northwest corner of Wilson Avenue and Day Creek Boulevard, submitted by Granite Homes. RESOLUTION NO. 06-399 265 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR TRACT 14496-1 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK 47. Approval to release Maintenance Guarantee Bond for DRC2002-00511, located at 8657 266 and 8661 Pecan Avenue (APN: 229-181-09 and 229-181-12) submitted by Samuel V. DiCarlo and Barbara J. DiCarlo. 48. Approval to release Maintenance Guarantee Cash Deposit for DRC2002-00499, located at 268 the southwest corner of 6th Street and Fairway View Place, submitted by KSL Rancho Cucamonga, L. P. 49. Approval to release Maintenance Guarantee Letter of Credit for DRC2001-00638, located 270 on the west side of Day Creek Boulevard at Highland Avenue, submitted by Day Creek Investors, LLC. 50. Approval to release Maintenance Guarantee Cash Deposit for Parcel Map 16271, located on the west side of Utica Avenue, north of Jersey Boulevard, submitted by Bakken 272 Industrial Properties, Inc. 51. Approval to release Maintenance Guarantee Cash Deposit for Parcel Map 16297, located 274 at the southeast corner of White Oak Avenue and Eucalyptus Street, submitted by Lot Number One Partnership, LLC. 52. Approval to release Maintenance Guarantee Bond for Tract 16432, located at the 276 southwest corner of 19th Street and Amethyst Street, submitted by Cucamonga Ventures, LLC. 53. Approval to release Maintenance Guarantee Bond for the Landscape Infrastructure Phase I, II & III Improvements for Rancho Etiwanda, located on both sides of Day Creek 278 Boulevard north of the 210 Freeway, submitted by Rancho Etiwanda 685, LLC. REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 MEETING HELD AT 10500 CIVIC CENTER DRIVE 12 54. Approval to accept improvements, release the Faithful Performance Bond, accept a 280 Maintenance Bond, and file a Notice of Completion for improvements for Parcel Map 15923, located at the southwest corner of Church Street and May ten Avenue, submitted by LDC Cou9ar, LLC. RESOLUTION NO. 06-400 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR PARCEL MAP 15923 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK II L. CONSENT ORDINANCES The fOllowing Ordinances have had public hearings at the time of first reading. Second readings are expected to be routine and non-controversial. The Agency, Fire Board, or Council will act upon them at one time without discussion. The City Clerk will read the title. Any item can be removed for discussion by an Agencymember, Boardmember, or Councilmember. No Items Submitted. M. ADVERTISED PUBLIC HEARINGS FIRE PROTECTION DISTRICT The following items have been advertised and/or posted as public hearings as required by law. The Chair will open the meeting to receive public testimony. 282 ~I 1. CONSIDERATION OF ADOPTION OF A RESOLUTION DECLARING ANNEXATION OF 283 TERRITORY (RANCHO PLAZA PARTNERSHIP - APN: 0201-811-56 - ANNEXATION NO. 06-11) TO AN EXISTING COMMUNITY FACILITIES DISTRICT. CALLING A SPECIAL ELECTION AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS. RESOLUTION NO. FD 06-061 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, DECLARING THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-11) TO AN EXISTING COMMUNITY FACILITIES DISTRICT (CFD 85-1), CALLING A'SPECIAL ELECTION AND AUTHORIZING THE SUBMITTAL OF THE LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS 285 REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 13 MEETING HELD AT 10500 CIVIC CENTER DRIVE N. PUBLIC HEARINGS The fOllowing items have no legal publication or posting requirements. No Items Submitted. O. CITY MANAGER'S STAFF REPORTS - FIRE PROTECTION DISTRICT 1. APPROVAL FOR THE DISTRICT TO PROCEED WITH THE CURRENT CONCEPT 292 PLANS FOR STATION 177 AND APPROVAL TO PROCEED WITH DISCUSSIONS WITH SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT. AND PROCEED WITH THE COMPLETION OF AN EIR TO LOCATE STATION 177 ON THE ALTERNATIVE SURPLUS FLOOD CONTROL PROPERTY LOCATED ON THE WEST SIDE OF HELLMAN AVENUE. SOUTH OF HILLSIDE ROAD. P. CITY MANAGER'S STAFF REPORTS - CITY COUNCIL I The fOllowing items have no legal publication or posting requirements. 2. CONSIDERATION OF THE ISSUANCE OF THE CITY OF RANCHO CUCAMONGA 294 COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) 2006 SPECIAL TAX BONDS AND APPROVAL OF THE FORMS OF THE FISCAL AGENT AGREEMENT. BOND PURCHASE AGREEMENT. PRELIMINARY OFFICIAL STATEMENT AND OTHER TRANSACTIONAL DOCUMENTS. RESOLUTION NO. 06-401 299 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE), AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF SPECIAL TAX BONDS OF THE DISTRICT, APPROVING THE FORM OF FISCAL AGENT AGREEMENT, BOND PURCHASE AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND OTHER DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS 3. CONSIDERATION OF THE ISSUANCE OF THE CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) 2006 502 SPECIAL TAX BONDS AND APPROVAL OF THE FORMS OF THE FISCAL AGENT AGREEMENT. BOND PURCHASE AGREEMENT. PRELIMINARY OFFICIAL STATEMENT AND OTHER TRANSACTIONAL DOCUMENTS. REDEVELOPMENT AGENCY, FIRE PROTECTION DISTRICT AND CITY COUNCIL AGENDA DECEMBER 20, 2006 14 MEETING HELD AT 10500 CIVIC CENTER DRIVE RANCHO r<; RESOLUTION NO. 06-402 507 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACTING IN ITS CAPACITY AS THE. LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66), AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF SPECIAL TAX BONDS OF THE DISTRICT, APPROVING THE FORM OF FISCAL AGENT AGREEMENT, BOND PURCHASE AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND OTHER DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS II Q. COUNCIL BUSINESS ~I The following items have been requested by the City Council for discussion. 1 COUNCIL ANNOUNCEMENTS (Comments to be limited to th ree minutes per Councilmember.) 2. CONSIDERATION OF SELECTING A MAYOR PRO TEM (Oral) 3. DISCUSSION OF APPOINTMENTS TO CITY COUNCIL SUBCOMMITTEES AND 709 LOCAL/REGIONAL AGENCY BOARDS AND AFFILIATIONS 4. DISCUSSION OF MUNICIPAL CODES REGULATING POLITICAL SIGNS (CONTINUED FROM DECEMBER 6, 2006) I R. IDENTIFICATION OF ITEMS FOR NEXT MEETING I II s. ADJOURNMENT II I, Debra J. Adams, City Clerk of the City of Rancho Cucamonga, or my designee, hereby certify that a true, accurate copy of the foregoing agenda was posted on December 14, 2006, seventy-two (72) hours prior to the meeting per Government Code 54954.2 at 10500 Civic Center Drive. RANCHO CUCAMONGA REDEVELOPMENT AGENCY Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P1 Check No. Check Date Vendor Name Amount AP - 00244946 11/29/2006 AGILINE INe. AP - 00244962 11/29/2006 AUFBAU CORPORATION AP - 06244967 11/29/2006 BERN MARIES PROMOTIONAL PRODUCTS AP - 00244970 11/29/2006 BRODART BOOKS AP - 00244970 11/29/2006 BRODART BOOKS AP - 00244970 11/29/2006 BRODAR T BOOKS AP - 00244970 11/29/2006 BRODART BOOKS AP - 00244971 11/29/2006 BURCH FORD AP - 00245003 11/29/2006 DISPLA YS2GO AP - 00245003 11/29/2006 DISPLA YS2GO AP - 00245008 11/29/2006 DYNIX INC AP - 00245011 11/29/2006 ELITE SIGNS AND GRAPHICS AP - 00245022 11/29/2006 FEDERAL EXPRESS CORP AP - 00245022 11/29/2006 FEDERAL EXPRESS CORP AP - 00245028 11/29/2006 FOREMOST AP - 00245057 11/29/2006 INLAND EMPIRE UTILITIES AGENCY AP - 00245057 11/29/2006 INLAND EMPIRE UTILITIES AGENCY AP - 00245059 11/29/2006 INTERNATIONAL PARKING DESIGN INC AP - 00245068 11/29/2006 KIPLINGER LETTER, THE AP - 00245070 11/29/2006 KONICA MINOLTA BUSINESS SOLUTIONS AP - 00245091 11/29/2006 MENDOZA, JOSE AND GREGORIA AP - 00245092 11/29/2006 MENDOZA, JOSE AND GREGORIA AP - 00245093 11/29/2006 MENDOZA, JOSE AND GREGORIA AP - 00245104 11/29/2006 NELSON AND SIXTA AP - 00245108 11/29/2006 NORTHTOWN HOUSING DEVELOPMENT CORP. AP - 00245111 11/29/2006 OFFICE DEPOT AP - 00245139 11/29/2006 RELIABLE GRAPHICS AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 . 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245141 11/29/2006 RICHARDS WATSON AND GERSHON AP - 00245152 11/29/2006 SAN BERNARDINO COUNTY AP - 00245183 11/29/2006 TEMECULA MECHANICAL INC AP - 00245183 11/29/2006 TEMECULA MECHANICAL INC AP - 00245196 11/29/2006 URS CORPORATION AP - 00245196 11/29/2006 URS CORPORATION AP - 00245196 11/29/2006 URS CORPORATION AP - 00245196 11/29/2006 URS CORPORATION AP - 00245196 11/29/2006 URS CORPORATION AP - 00245237 12/6/2006 AUERBACH-POLLOCK-FRIEDLANDER AP - 00245237 12/6/2006 AUERBACH-POLLOCK-FRIEDLANDER AP - 00245243 12/6/2006 BANK OF AMERICA AP - 00245254 12/6/2006 CAREY SIGN GRAPHICS AP - 00245254 12/6/2006 CAREY SIGN GRAPHICS AP - 00245282 12/6/2006 DEKRA-LITE INDUSTRIES INC AP - 00245283 12/6/2006 DEMCO INC AP - 00245290 12/6/2006 ELEUTERIO CORRAL C/O KRING & CHUNG LLP User: VLOPEZ - Veronica Lopez Page: 1 Report:CK_AGENDA_REG_PORTRAIT_RC - CK: Agenda Check Register Portrait Layout 800.00 24,140.00 1,285.90 10,641.39 12,366.36 12,770.28 17,740.02 23,391.58 179.15 36.73 6,104.00 3,232.97 21.63 15.28 719.94 440,557.25 -5,000.00 107.69 73.00 305.00 350.00 30,240.00 4,520.00 2,500.00 13,048.51 157.53 305.39 375.00 2,129.50 364.00 3,627.12 250.86 8,390.50 5,304.21 9,788.59 1,835.25 11.22 4,510.40 77.00 950.15 -95.02 5,980.00 1,644.52 21,913.80 26,049.28 1,430.92 90.28 4,711.44 780.00 9,017.11 -901.71 9,671.18 16.65 200,000.00 Current Date: 12/13/200 . Time: 17:01:2 Check No. AP - 00245353 AP - 00245353 AP - 00245357 AP - 00245377 AP - 00245385 AP - 00245432 AP - 00245432 RANCHO CUCAMONGA REDEVELOPMENT AGENCY Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 Check Date Vendor Name P2 Amount -21.40 214.00 9,500.00 6,000.00 24.30 6,225.02 86.66 940,560.43 940,560.43 12/612006 KITCOR CORPORATION 12/6/2006 KITCOR CORPORATION 12/6/2006 LANCE SOLL AND LUNGHARD 12/6/2006 NAIOP INLAND EMPIRE 12/6/2006 OFFICE DEPOT 12/6/2006 SOUND IMAGE INC 12/6/2006 SOUND IMAGE INC Total for Check ID AP: Total for Entity: User: VLOPEZ - Veronica Lopez Page: 2 Report:CK _AGENDA_REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout Current Date: 12/13/200 Time: 17:01:2 '" 0> '" o E l'l " u o '" o '" '" '" '0 '" G .... C CIl E C- .2.... CIl c > CIl CIl E "C CIl CIl "g' Cll C ~ ClClllll c:E 0 oE 0 '-0 .- CllO'E g'E 0 UOll.. Oil.. .r:. CJ c Cll " i::'lD Cllo E~ E - o CO') ... 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" > .E <0 <0 " .. <0 .; :2 '4 <0 <0 " .. <0 .; :2 .. .. jj ~ . VI P14 .... <DO ;! .Q ~ o .. ~ 8 ~ Iii ;. ~ ii '" . E '" > "' " ~ ~I '" ~ ~ 0. <0 <0 ~ .; '" N .; N '" .. .; ~ ~ '" ..' .. <0 <0 o <0 <0 o <0 '" <0 .. c:i c:i ;1; ~ g ~ N '" oi' ..; N .. jj ~ . VI ~ I- J!l r: " E " l!? '" .. - r: " S .. " > .E ~ N i ~ .s . o c o '" P15 r;~','h .,;,.!>:,~~~.:-~,,';_'" - "!_ '-"'.;;,~,,:"'-.":i.;',1F ',,V '."',:/_:';';':i:<-~"',""'~",',~:,.'",-",::}:C;' ,';,.,,,,":J:,,',' ".. ',' '~:,-".. ';'" .r ('c;.r 1"""-'-"" ,,;'1'~;"; ., ;.:,.-;''f;'; I RANCHO CUCAMONGA REDEVELOPMENT AGENCY Staff Report DATE: December 20, 2006 TO: Mayor and Members of the Redevelopment Agency Jack Lam, AICP, City Manager FROM: . Linda D. Daniels, Acting Administrative Services Director BY: Sandra G. Ramirez, Management Analyst 1I1~ APPROVAL TO ADOPT ANNUAL STATEMENT OF INVESTMENT POLICY SUBJECT: RECOMMENDATION Annually the Redevelopment Agency Board Members review the Statement of Investment Policy. It is recommended that the Agency Board Members approve and adopt the attached Statement of Investment Policy for the Rancho Cucamonga Redevelopment Agency. BACKGROUND The Agency Board Members adopted a Statement of Investment Policy in July 1987. California Government Code, Section 53646, requires the Treasurer or Chief Fiscal Officer shall annually render to the Agency Board Members a Statement of Investment Policy, which shall be considered at a public meeting. Further, the Agency shall also consider any modifications to the investment policy at a public meeting. Staff has made certain modifications to the policy in order to clarify how bond proceeds may be invested in accordance with the requirements and restrictions outlined in bond documents. Additionally, staff amended the percentage of authorized investments that may be held in investment agreements, per California Government Code, Section 53601.7. The Agency's investment policy and practices are based upon Federal, State and local law and prudent money management. The primary goals of the Agency's policy are to assure compliance with all Federal, State and local law governing the investment of monies under the control of the Treasurer, enhance the economic standards of the Agency and to protect its pooled assets and to P16 invest public funds prudently. The Treasurer is authorized to invest the Agency's Funds in accordance with the California Government .Code Section 53600 et seq. ("State Code"), and the investment policy adopted by the Agency. These funds are accounted for in the Rancho Cucamonga Comprehensive Annual Financial Report and the Agency receives it monthly Portfolio Summary of investment earnings provided at scheduled Agency meetings. The Agency continues to maintain an investment strategy more conservative than required under State law. The Treasurer and staff continue to monitor legislation, government code amendments, and professional practices pertaining to investing of public funds, ensuring amendments are reflected in the Agency's Statement of Investment Policy as required by local policy and state law and maintaining the most prudent investment policy as prescribed by the Mayor and Members of the Redevelopment Agency. Respectfully submitted, ~;).~ Linda D. Daniels Treasurer/Acting Administrative Services Director LIT/sgr Attachments RDA Staff Report 06.doc -2- P17 Rancho Cucamonga Redevelopment Agency Statement of Investment Policy " RANCHO CUCAMONGA REDEVELOPMENT AGENCY STATEMENT OF INVESTMENT POLICY 2006 RANCHO CUCAMONGA CALIFORNIA Prepared by the Administrative Services Department Linda D. Daniels, Acting Treasurer P18 STATEMENT OF INVESTMENT POLICY RANCHO CUCAMONGA REDEVELOPMENT AGENCY INTRODUCTION The investment policy and practices of the Rancho Cucamonga Redevelopment Agency are based upon state law, prudent money management and the "prudent person" standards. This statement is intended to provide guidelines for the prudent investment of the Agency's temporary idle cash, and outline the policies for maximizing the efficiency of the Agency's cash management system. The primary goal of this policy is to enhance the economic status of the Agency by protecting its pooled cash and to invest public funds to: 1. Meet the daily cash flow needs of the Agency. 2. Comply with all laws of the State of California regarding investment of public funds. 3. Achieve a reasonable rate of return while ~nimizing the potential for capital losses arising from market changes or issuer default. SCOPE The investment policy applies to all investment activities of the Rancho Cucamonga Redevelopment Agency. These funds are accounted for in the Rancho Cucamonga Comprehensive Annual Financial Report and include: General Fund, Special Revenue Funds, Capital Project Funds, Enterprise Funds, Trust and Agency Funds. Any new fund established by the City Council shall automatically be reflected in the Investment Policy. Bond proceeds shall be invested in accordance with the requirements and restrictions outlined in bond documents as approved by the Mayor and Members of the Redevelopment Agency. Guidelines presented herein are not intended to apply to bond proceeds held by the Agency or by fiscal agents or trustees for bond holders of Agency debt. PRUDENCEIEV ALUATlON OF INVESTMENT OFFICER ACTIONS The actions of the Treasurer and/or his appointed designee in the performance of their duties as managers of public funds shall be evaluated using the following "prudent person" standard applied in the context of managing the overall portfolio: Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the professional management of their business affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived Rev: 12/2006 P19 The Treasurer and/or his appointed designee acting in accordance with the investment policy and the "prudent person" standard and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided that substantial deviations from expectations are reported in a timely marmer and appropriate action is taken to control adverse developments whenever possible. OBJECTIVE The Rancho Cucamonga Redevelopment Agency operates its temporary pooled idle cash investment under the "Prudent Person" standard. This affords the Agency a broad spectrum of investment opportunities as long as the investment is deemed prudent and is allowable under current legislation of the State of California (Government Code Section 53600, et. seq.) and other legal restrictions as the Agency may impose from time to time. The objective of the investment portfolio is to meet the short and long term cash flow demands of the Agency. To achieve this objective, the portfolio will be structured to provide Safety of Principal and Liquidity, while then providing a reasonable return on investments. The Agency may direct its fiscal agents to invest funds associated with bonds or debt issues pending disbursement or reinvestment in "money market mutual funds" that are shares of beneficial interest issued by diversified management companies. The criteria for "money market mutual funds" are more specifically described in California Government Code S 53601(1). INVESTMENT OBJECTIVES Security purchases and holdings will be maintained within statutory limits imposed by Government Code. Agency policy has been to limit investments more stringently than required under state law. Criteria for selecting investments and the order of priority are: 1. Safety - The safety and risk associated with an investment refers to the potential loss of principal, interest, or combination thereof. The Agency only operates in those investments that are considered safe. Investments shall be undertaken in a marmer that seeks to ensure that capital losses resulting from institution default, broker/dealer default, or the erosion of market value are avoided. The Agency shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk. . Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be mitigated by investing in only high quality securities and by diversifying the investment portfolio so "that the failure of anyone issuer would not unduly harm Agency cash flow. Rev: 12/2006 2 P20 . Market risk, defined as the risk of market value fluctuations due to overall changes in the general level of interest rates, shall be mitigated by structuring the portfolio. It is explicitly recognized, however, that in a diversified portfolio, occasional measured losses may occur, and must be considered within the context of overall investment return. 2. Liquidity - This refers to the ability to sell these securities and terminate the agreement in order to receive cash at any moment in time with minimal chance of losing some portion of principal or interest. Liquidity is an important investment quality especially when the need for unexpected funds occasionally occurs. The Agency's investment portfolio will remain sufficiently liquid to enable the Agency to meet operating requirements that might be reasonably anticipated. Invested bond proceeds will be structured so as to meet anticipated drawdown requirements. 3. Yield - The Agency's investment portfolio shall be designed with the objective of attaining a reasonable market rate of return throughout economic cycles, as long as it does not diminish the objectives of Safety and Liquidity. ETHICS AND CONFLICTS OF INTEREST The Treasurer/Deputy Treasurer and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officers shall disclose any material fmancial interest in financial institutions that conduct business within this jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance ofthe Agency's portfolio, particularly with regard to the time of purchases and sales. The Treasurer/Deputy Treasurer or investment employees are required to file armual disclosure statements as required by the Fair Political Practices Commission (FPPC). AUTHORIZED BROKER/DEALERS The Agency will transact business only with approved investment securities broker/dealers that are approved as an authorized broker/dealer in compliance with the Agency selection process. The Treasurer shall request all broker/dealers that wish to do business with the Agency to provide proof of capitalization to meet the Agency's needs, and agree to abide by the conditions set forth in this Investment Policy. All broker/dealers who want to become qualified bidders for investment transactions must have offices in the State of California and provide a current audited financial statement and complete the appropriate City Broker Dealer Questionnaire andfCertification. . The Treasurer will maintain a list of approved security broker/dealers selected by credit worthiness who are authorized to provide investment services to the Agency. Rev: 12/2006 3 P21 The Agency shall at least annually send a copy of the current investment policy to authorized broker/dealers approved to do business with the Agency. Confirmation of receipt of this policy shall be considered evidence that the broker/dealer has read and understands the Agency's investment policy and will recommend and execute only transactions suitable for and in compliance with the Agency's investment policy. AUTHORIZED INVESTMENTS The Agency is authorized by California Government Code Section 53600, et. seq. to invest in specific types of securities. The Agency has further limited the types of securities in which it may invest. Any security not listed is not a valid investment for the Agency. The concise list of approved securities is as follows: INVESTMENTS/DEPOSITS (See Government Code Section 53601) PERCENTAGES MAXIMUM MATURITY* Securities of the U.S. Government, or its agencies Unlimited 5 years * Certificates of Deposit (or Time Deposits) Unlimited (placed with commercial banks and/or savings and loan companies) 5 years * Negotiable Certificates of Deposit 30% 5 years* Banker's Acceptances 40% 180 days Commercial Paper 30% 270 days (Investments in Commercial Paper must be only with corporations with at least $500 million in assets. Must be of "prime" quality of the highest rating or of the highest letter and numerical rating as provided for by Moody's Investor's Service Inc. or Standard & Poor's Corporation. Short term rating of at least 'A' or 'A liP I' and a long-term rating of 'A' is required.) Local Agency Investment Fund (State Pool) Demand Deposits 40 MM** n/a Deposit of Funds (See Government Code Section 53630 - Ref. C) n/a Repurchase Agreements (Repos) 20% 1 year The market value of the securities that underlay the repurchase agreement must be valued at I02% or greater of the funds borrowed against the securities and the value must be atijusted no less than quarterly. An executed Master Repurchase Agreement must be on file Investment Agreements*** 5% 397 days Investment agreements. guaranteed investment contracts, funding agreements, or any other form of corporate note which represents the unconditional obligation of one or more banks, insurance companies or other financial institutions, or are guaranteed by a financial institution, which has an unsecured rating, or which agreement is itseif rated, as of the date of execution thereof, in one of the two highest rating categories by two or more rating agencies; or, which are collateralized at least 100% with US. Government securities. Rev: I2/2006 4 P22 * Maximum term unless expressly authorized by Governing Body and within the prescribed time frame for said approval. **Limit set by L.A.I.F Governing Board, not Government Code ***Percentage limits for Investment Agreements are not intended to apply to bondfimds held by the Agency, or by Fiscal Agents or Trustees, in which investment of such funds is under the Agency's control or direction. The term and percentage provisions set forth herein are effective January I, 2007 and do not apply to investments of Agency funds made prior to that date. INVESTMENT POOLS The Local Agency Investment Fund (LAIF) is a voluntary investment alternative for California's local governments and special districts authorized by the California Government Code. LAIF is managed by the State Treasurer's Office with oversight by the Local Agency Investment Advisory Board. The Agency's participation in LAIF was approved by the Mayor and Members of the Redevelopment Agency with other authorized investments on July 1987. It is a permitted investment with the knowledge that the fund may invest in some vehicles allowed by statute but not otherwise authorized under the Agency's authorized investments. All securities in LAIF are purchased under the authority of Government Code Sections 16430 and 16480. All investments are purchased at market, and market valuation is conducted monthly. SAFEKEEPING OF SECURITIES Securities purchased from broker/dealers shall be held by third party bank or other designated third party trust department acting as agent for the Agency under the terms of a custody agreement executed by the bank and Agency. All securities will be received and delivered using standard delivery-versus-payment (DVP) procedures. Certificate of Deposit securities are held in the City's vault. No outside broker/dealer or advisor may have access to Agency funds, accounts or investments, and any transfer of funds to or through an outside broker/dealer must be approved by the Treasurer/Deputy Treasurer. The Agency strives to maintain the level of investment of all funds as near 100% as possible, through daily and projected cash flow determinations. Idle cash management arid investment transactions are the responsibility of the Treasurer. DIVERSIFICATION The Agency will diversify its investments by security type, issuers, and maturities. The purpose of diversifying is to reduce overall portfolio risks while attaining an average market rate of . return; therefore, it needs to be conceptualized in terms of maturity, instrument types and issuer. Rev: 12/2006 5 P23 INDEPENDENT REVIEW Outside, independent auditors are required to perform an annual review of the Agency's Investment Policy, process, and internal controls. The review process is performed as part of the Agency's annual external audit. REPORTING Pursuant to Section 53464 (b) of the California Government Code, the Treasurer shall render a quarterly report to the Mayor and Members of the Redevelopment Agency, containing detailed information on all securities, investments, and moneys of the Agency. The report must be submitted within 30 days following the end of the quarter covered by the report. The Treasurer has elected to provide this report monthly. . This report shall include the following: . The type of investment, name of the issuer, date of maturity, par and dollar amount invested in all securities. . The weighted average maturity of the investments. . Any funds, investments, or programs including loans that are under the 'management of contracted parties. . The current market value and source of the valuation. . A description of the compliance with the Statement of Investment Policy. . A statement of the Agency's ability to meet its pooled expenditure requirements for the next six months or provide an explanation as to why sufficient money shall, or may not be available. . The Treasurer shall report whatever additional information or data may be required by the Mayor and Members of the Redevelopment Agency. The Mayor and Members of the Redevelopment Agency may elect to require the report to be made monthly instead of quarterly. Rev: 12/2006 6 P24 In addition to the reporting requirements of Section 53646 of the Government Code, the Treasurer will continue to meet the requirements per AB 943 for cities and counties to submit their investment reports and policies to the California Debt and Investment Advisory Commission (CDIAC). This bill requires each city to submit copies of its second and fourth quarter calendar year investment portfolio reports and copies of annual investment polices. Although the CDIAC mandate continues to be suspended the Budget Act did not repeal or suspend the requirement for cities and counties to submit their investment reports and policies to the California Debt and Investment Advisory Commission (CDIAC). The Treasurer shall be responsible for reviewing and modifying investment guidelines as conditions warrant and is required to submit same for re-approval to the Mayor and Members of the Redevelopment Agency annually. However, the Treasurer may, at any time, further restrict the items approved for purchase as deemed appropriate. The basic premise underlying the Agency's investment philosophy is, and will continue to be, to ensure that money is always safe and available when needed. ~~.~ Linda D. Daniels Acting Treasurer Rancho Cucamonga Redevelopment Agency ~ It.f, ,:;){)Q(" Date Rev: ]2/2006 7 P25 . Rancho Cucamonga Redevelopment Agency Statement of Investment Policy GLOSSARY ACCRUED INTEREST: The accrued interest accumulated on a security since the issue date or the last coupon payment. The buyer of the security pays the market price plus accrued interest. AGENCIES: Federal agency securities. ASK/OFFER: The price at which an owner offers to sell. BANKERS' ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as, the issuer. BASIS POINT: 1/100 of 1%. BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid). See Offer. BEAR MARKET: A period of generally pessimistic attitudes and declining market prices. BOOK VALUE: The amount at which a security is carried on the books of the holder or issuer. BOND EQUIVALENT YIELD: The basis on which yields on notes and bonds are quoted. BROKER: A broker brings buyers and sellers together for a commission. BULL MARKET: A period of generally optimistic attitudes and increasing market prices. BUYER'S MARKET: A market where supply is greater than demand, giving buyers an advantage in purchase price and terms. CALLABLES-N/C: Securities that the issuer has the right to redeem prior to maturity. CASH SETTLEMENTS: Today. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large denomination CD's are typically negotiable. CMT: Constant Maturity Treasury.- COLLATERAL: Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. 1 P26 . Rancho Cucamonga Redevelopment Agency Statement of Investment Policy COMMERCIAL PAPER: Short-term, unsecured, negotiable promissol)' notes issued by businesses. . COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the City. It includes five combined statements for each individual fund and account group prepared in conformity with Government Accounting Accepted Practices (GAAP). It also includes supporting schedules necessal)' to demonstrate compliance with finance related legal and contractual provisions, extensive introductol)' material, and a detailed Statistical Section. COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the. bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date. COVER: Spread between the winning bid (or offer) and the next highest bid (or offer). CREDIT RISK: Credit of the underlying security. CUSIP: Committee of Uniform Securities Identification Procedures. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account or inventol)'. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivel)' of securities: delivel)' versus payment and delivel)' versus receipt. Delivel)' versus payment is delivel)' of securities with an exchange of money for the securities. Delivel)' versus receipt is delivel)' of securities with an exchange of signed receipt for the securities. DERIVATIVES: Financial products that are dependent for their value on (or "derived" from) an underlying financial instrument, a commodity, or an index representing values of groups of such instruments or assets. DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at discount and redeemed at maturity for full face value, .e.g. U.S. TreasUl)' Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. DURATION: A measure of the timing of the cash flows to be received from a given fixed income security. The duration of a security is a useful indicator of its price volatility for given changes in interest rates. 2 P27 . Rancho Cucamonga Redevelopment Agency Statement of Investment Policy EASE: To assist the economy in growing faster, Fed supplies more credit, lowering reserve requirements or discount rates. EXTENSION TRADES: Selling short term, buying further out in the yield curve. (Usually affected in a bull market). FACE VALUE: The principal amount owed on a debt instrument. It is the amount on which interest is computed and represents the amount that the issuer promises to pay at maturity. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S & L's small business firms, students, farmers, farm cooperatives, and exports. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLB is to liquefy the housing related assets of its members who must purchase stock in their district Bank. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA or Fannie Mae): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate . mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money. FRN: .Floating Rate Note. 3 P28 . Rancho Cucamonga Redevelopment Agency Statement of Investment Policy FULL FAITH AND CREDIT: The unconditional guarantee of the United States Government backing a debt for repayment. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHM mortgages. The term "passthroughs" is often used to describe Ginnie Maes. INTEREST RATE RISK: The risk that rising interest rates will cause bond prices to fall. INVESTMENT PORTFOLIO: A collection of securities held by a bank, individual, institution or government agency for investment purposes. INVESTOR: A person who purchases securities with the intention of holding them to make a profit. ISSUE: A group of identical securities or the marketing and selling of such securities. ISSUE PRICE: The price at which a new issue of securities is put on the market. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. LOCAL: Refers to the ability to sell securities one owns. LffiID: London Interbank bid rate. LffiOR: London Interbank offered rate. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MARK TO MARKET: Current value of securities at today's market price. MARKET RISK: The risk that the security will be difficult to sell. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase reverse repurchase agreements that establishes each party's rights in the transactions. A master agreement will often specifY, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller- borrower. . 4 P29 .. Rancho Cucamonga Redevelopment Agency Statement of Investment Policy MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET INSTRUMENTS: Private and government obligations of one year or less (flexible in some arenas; under five years would still be considered a money market). MTN: Medium Term Note. NEW ISSUE: The first offering of a security. NONCALLABLE: Security that does not contain a call provision. OFFER: The price asked by a seller of securities. (When you are buying securities you ask for an offer). See Asked and Bid. OPEN MARKET OPERATIONS: Fed~ral Reserve activity, Fed entering the market place to initiate repos, reverses, bill or coupon pass. Under the Federal Reserve Act., Fed uses purchases and sales of Gov!. & Fed Agency securities to add to or subtract from commercial bank reserves. Goals are to sustain economic growth, high employment and reasonable price stability. OPTION: The right to trade a security during a certain period of time. ORIGINAL ISSUE DISCOUNT/OlD: Security priced at a discount at time of issuance. OVERBOUGHT: Refers to the price level of a security or market, which has undergone a sharp rise due to vigorous buying. OVERSOLD: Refers to the price level of a security or market, which has undergone a sharp fall due to selling. These conditions indicate that buying/selling may have left prices temporarily too high/low, given all other market conditions. PAPER GAIN OR LOSS: Term used for unrealized gain or loss on securities being held in a portfolio based on comparison of current market quotes and their original cost. This situation exists as long as the security is held while there is a difference between market value and the purchase price. P AR VALUE: The stated or face value of a security expressed as a specific dollar amount marked on the face of the security; the amount of money due at maturity not to be confused with market value. PAYDOWN: A net reduction in debt that occurs when the amount of a new issue is less than the maturing issue. PREMIUM: The amount by which the price paid for a security exceeds the par value. Also, the amount that must be paid over the par value to call an issue before maturity, PRICE RISK: Volatility. 5 P30 . Rancho Cucamonga Redevelopment Agency Statement of Investment Policy PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly fmancial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms. PRIMARY MARKET: The demand for first issues of securities. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state--the so-called legal list. In other states the trustee may invest in a security if it is one, which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. QUALIFIED PUBLIC DEPOSITORIES: A fmancial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. RALLY: A brisk rise or recovery in the price of a security or the market. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond; the current income return. RATING: The designation used by investor's services to rate the quality of a security's creditworthiness. REGULAR: Next business day. REPURCHASE AGREEMENT: Repo - a holder of securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms are structured to compensate him for this. When the FED does R.P., it is lending money, thus increasing bank reserves. RICH/EXPENSIVE TO THE YIELD CURVE: An expression applied to a security price when current market quotes appear to be in comparison with past price records of securities or current prices of comparable securities. ROLL OVER: Reinvesting funds received from a mature security in a new issue of the same or similar security. SAFEKEEPING: A service banks offer to customers for a fee, where securities are held in the bank's vaults for protection. 6 P31 . Rancho Cucamonga Redevelopment Agency Statement of Investment Policy SALLIE MAE: Trade name for the Student Loan Marketing Association. SECONDARY MARKET: 1) A market for the repurchase and resale of outstanding issues following the initial distribution. 2) The purchase or sale of securities in a special offering or through a means other than the regular channel of trading. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 153C-l: See Uniform Net Capital Rule. SHORT/SELL SHORT: Sale of securities without ownership. SKIP DAY: Next business day after tomorrow. SPREAD: Difference between the bid and the ask, or offer. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (Flll.,B, FNMA, SLMA, etc.) and Corporations that have imbedded options (e.g., call features, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve. SUPPORT: A price level at which a security tends to stop falling because there is more demand than supply. TIGHTEN: If the economy is growing too fast, and inflation is increasing, FED withdraws money from the banking system, by raising reserves or the discount rate. Ultiroately, putting the brakes on economic growth. TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to fmance the national debt. Most bills are issued to mature in three months, six months, or one year. TREASURY BOND: Long-term coupon bearing U.S. Treasury securities issued as direct obligation of the U.S. Government having initial maturities of more than 10 years. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. VALUE OF 1/32 PER MILLION: $312.50 7 P32 . Rancho Cucamonga Redevelopment Agency Statement of Investment Policy WHEN ISSUED BASIS-WIB-WI: A term applied to securities that are traded before they are actually issued, with the stipulation that transactions are null and void if securities are not issued. YIELD: The annual rate of return on an investment expressed as a percentage of the investment. Income yie\d is obtained by dividing the current dollar income by the current market price for the security . YIELD CURVE: Yield calculations of various maturities at a given time to observe spread differences. YIELD TO MATURlTYINET YIELD: The current income yield minus any premium above par, or plus any discount from par in the purchase price with the adjustment spread over the period from date of purchase to maturity. Ann Investment Policies 06/GLOSSARY 06RDAdoc 8 P33 RANCHO CUCAMONGA lIii\''''''''''='''<'''i:!l!i~,'hi-^l%ilW.",;;j;.;~'!><''.'.'!i1;h.(.:;';;r'';'.",;",'i'''o';;3,(;!)}&>l&!.."~I,,~:(\t<!r1ii;'"'-,."') ,; {.?;>.',' -.< 'j.' .,,!'.:'A.~ L";'" "", _".',.;;,,:..,:,h,,-_~;'; ..".~: ,.'6',..>,.'...;.",' I REDEVELOPMENT AGENCY Staff Report DATE: TO: FROM: BY: SUBJECT:' December 20, 2006 Chairman and Redevelopment Agency Members Jack Lam, AICP, Executive Director Kevin McArdle, Community Services Director Karen McGuire-Emery, Senior Park Planner APPROVAL TO ACCEPT THE IMPROVEMENTS CONSTRUCTED BY VARIOUS CONTRACTORS AT THE VICTORIA GARDENS CULTURAL CENTER AS COMPLETE; AUTHORIZATION TO FILE NOTICES OF COMPLETION FOR THE IMPROVEMENTS; AND AUTHORIZE THE CITY CLERK TO RELEASE THE FAITHFUL PERFORMANCE BOND FOR EACH CONTRACT RECOMMENDATION That the Redevelopment Agency accept improvements constructed by various contractors at the Victoria Gardens Cultural Center located at 12505 Cultural Center Drive, as complete; authorize the filing of Notices of Completion for the improvements; and, authorize the City Clerk to release the Faithful Performance Bond for each contract. BACKGROUND On August 18, 2004, construction contracts for various trades for the City of Rancho Cucamonga's first multi-prime construction project, the Victoria Gardens Cultural Center, were awarded by the Redevelopment Agency. The project is now complete and a Certificate of Occupancy was issued on August 14, 2006. Being a multi-prime project, the trade contracts will be closed out individually, and a Notice of Completion will be filed for each contract. The following is a list of those contracts that are now completed, as well as the final contract amounts: Huntington Glazing Inc. Lambard Enterprises Inc. MNZ Janitorial Service $ 500,993.00 $ 393,721.00 $ 141,777.00 P34 CUL TURAL CENTER NOTICES OF COMPLETION DECEMBER 20, 2006 PAGE 2 Staff will process additional Notices of Completion for the remaining sub-contractors once the outstanding punch list corrections are made. As a part of the close out of the trade contracts and purchase orders, unused contingency funds are being disencumbered and re-appropriated to those contracts whose change orders exceeded the original 5%. 'tted, P35 RESOLUTION NO. f?/J () 6 - ()J.1 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF RANCHO CUCAMONGA. CALIFORNIA. ACCEPTING THE PUBLIC IMPROVEMENTS COMPLETED BY HUNTINGTON GLAZING INC. FOR THE VICTORIA GARDENS CULTURAL CENTER PROJECT, AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK WHEREAS, the construction ofpubJic improvements by Huntington Glazing Inc. for the Victoria Gardens Cultural Center Project, have been completed to the satisfaction of the City; and WHEREAS, a Notice of Completion is required to be filed, certifying the work complete. NOW, THEREFORE, the Redevelopment Agency of the City of Rancho Cucamonga hereby resolves, that the work is hereby accepted and the City Clerk is authorized to sign and file a Notice of Completion with the County Recorder of San Bernardino. P36 RESOLUTION NO. ~A- tJlrtJ2 g A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS COMPLETED BY LAM BARD ENTERPRISES INC. FOR THE VICTORIA GARDENS CULTURAL CENTER PROJECT, AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK WHEREAS, the construction of public improvements by Lambard Enterprises Inc. for the Victoria Gardens Cultural Center Project, have been completed to the satisfaction of the City; and WHEREAS, a Notice of Completion is required to be filed, certifying the work complete. NOW, THEREFORE, the Redevelopment Agency of the City of Rancho Cucamonga hereby resolves, that the work is hereby accepted and the City Clerk is authorized to sign and file a Notice of Completion with the County Recorder of San Bernardino. P37 RESOLUTION NO. A II- cio- ().! 1 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS COMPLETED BY MNZ JANITORIAL SERVICE FOR THE VICTORIA GARDENS CULTURAL CENTER PROJECT, AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK . WHEREAS, the construction of public improvements by MNZ Janitorial Service for the Victoria Gardens Cultural Center Project, have been completed to the satisfaction of the City; and WHEREAS, a Notice of Completion is required to be filed, certifying the work complete. NOW, THEREFORE, the Redevelopment Agency of the City of Rancho Cucamonga hereby resolves, that the work is hereby accepted and the City Clerk is authorized to sign and file a Notice of Completion with the County Recorder of San Bernardino. October 18, 2006 CITY OF RANCHO CUCAMONGA FIRE PROTECTION DISTRICT CLOSED SESSION MINUTES II A. CALL TO ORDER II The Rancho Cucamonga Fire Protection District held a closed session on Wednesday, October 18, 2006, in the Tapia Room of the Civic Center located at 10500 Civic Center Drive, Rancho Cucamonga, California. The meeting was called to order at 5:30 p.m. by President William J. Alexander. Present were Boardmembers: Rex Gutierrez, L. Dennis Michael, Sam Spagnolo, Diane Williams and President William J. Alexander. Also present were: Jack lam, City Manager; Pamela Easter, Assistant City Manager; James Markman, City Attorney; and George Rivera, Administrative Services Manager. 1< 1< 1< 1< 1< * II B. ANNOUNCEMENT OF CLOSED SESSION ITEM(S) II B1. lABOR NEGOTIATIONS PER GOVERNMENT CODE SECTION 54957.6 TO GIVE GEORGE RIVERA, ADMINISTRATIVE SERVICES MANAGER, PAMELA EASTER, DEPUTY CITY MANAGER, AND LINDA. D. DANIELS, ACTING ADMINISTRATIVE SERVICES DIRECTOR, DIRECTION IN REGARDS TO THE MEET AND CONFER PROCESS - CITY & FIRE 1< * * * 1< * II C. PUBLIC COMMUNICATIONS ON CLOSED SESSION ITEM(S) II No one was present to comment on the closed session item. * * * * * * II D. CONDUCT OF CLOSED SESSION 11 Closed session began at 5:30 p.m. ****** II E. CITY MANAGER ANNQUNCEMENTS AND REpORTS II ****** II F. RECESS ~I The closed session recessed at 6:15 p.m. with no action taken. ****** Fire Protection District Minutes October 18, 2006 Page 2 CITY OF RANCHO CUCAMONGA FIRE PROTECTION DISTRICT MINUTES Reqular Meetinq II A. CALL TO ORDER II A regular meeting of the Rancho Cucamonga Fire Protection District was heid on Wednesday, October 18, 2006, in the Council Chambers of the Civic Center located at 10500 Civic Center Drive. Rancho Cucamonga. California. President William J. Aiexander called the meeting to order at 7:02 p.m. Present were Boardmembers: Rex Gutierrez. L. Dennis Michael. Sam Spagnolo, Diane Williams and President William J. Alexander. Also present were: Jack Lam. City Manager; James Markman, City Attorney; Linda D. Daniels, Redevelopment Director; James C. Frost. City Treasurer; George Rivera. Administrative Services Manager; Tamara Layne, Finance Officer; Helen Leeds, Sr. Accountant; Dawn Haddon, Purchasing Manager; Lorraine Phong, Sr. Information Systems Analyst; Shelly Munson, Information Systems Specialist; Jon Gillespie, Traffic Engineer; James Troyer, Planning Director; Dave Moore, Community Services Superintendent; Chief Peter Bryan, Mike Bell, Deputy Fire Chief, Rancho Cucamonga Fire Protection District; Pamela Easter, Assistant City Manager; Marcia Godwin, Assistant to the City Manager; Fabian Villenas, Management Analyst Iii; Shirr'l Griffin, Office Specialist iI - City Clerk's Office; and Kathryn L. Scott. Assistant City Clerk. * '* * '* '* * B. ANNOUNCEMENTS/PRESENTA nONS No announcements/presentations were made ****** II C. PUBLIC COMMUNICATIONS II C1. Jerie Lee re reconciliation of funds solicited by the Professional Firefighters Association showing community funds are not co-mingled with the political action funds; campaign issues and compliance of sign ordinance. C2. Bernadette Quercio re campaign issues. C3. Jim Townsend re charitabie activities/donations by firefighters; fire prevention week/month; signage not available at a fire station or any city facility; charitable organizations; the Firefighters Association is fully tax-exempt w/accurate and timely reports, no co-mingling. C4. Unknown speaker re campaigning and a charitable donation to the VIP Club, Meals on Wheels, senior shut-ins by the Firefighters Association. Fire Protection District Minutes October 18, 2006 Page 3 C5. Micheiie McNeiii re Woodhaven Manor taken over by So CA Housing; quality & quantity of service by the council members. C6. Unknown speaker (police officer of nearby city) re crime/public safety and lack of commitment to public safety (staffing levels). C7. Lesiie Grimes re politics/campaigning, freedom of speech and deveioper campaign contributions. C8. Jennetta Harris re serving the people and the closure of Highland Avenue; praised public safety and the professionalism of city council. C9. Carol Douglas, Alla Loma Riding Club, re potential site for fire station at Heritage Park. C10. Linda Yount re potential site for fire station at Heritage Park and environmental impact. C11. Colin McKenzie (deputy sheriff and Treasurer of San Bdno. Co. Sheriff Safety Employees Assoc.) refuted previous comments re Victoria Gardens; re candidate support by SEBA. C12. Bill McCliman re campaign, honesty to the public and his candidate support and political campaignslissues. C13. Candice Fowler re campaign issues and statements made in publication by Mr. Gutierrez. C14. Terry Malady re pride in city accomplishments; campaign and concerns re potential site for fire station. C15. Sheiiy McCliman, student, regarding the campaign. C16. Jim Frost, City Treasurer, provided background regarding public safety, the safety contract with San Bernardino County, and the City budget and campaign issues. C 17. Jane Bradshaw stated concern re politics at its worst and setting a good example; discussed the campaign and public safety. C18. Melanie Ingram re campaign, campaign reporting forms by firefighters and the SEBA (Safety Employees Benefits Association), and potential site for fire station. C19. John Lyons re campaign and endorsements and the overtime issue with respect to firefighters. C20. Jim Moffatt re campaign and the firefighters association. C21. Nicole Myerchin re donations for homebound shut-in senior citizens, publication by Rex Gutierrez, and campaign issues. * * * * * * D. BOARD RESPONSES TO PUBLIC COMMENTS Dennis Michael stated it is deplorable to him personaiiy to hear people get up and berate or demean projects like Victoria Gardens and refer to it as the ghetto. He said it is a beautifui city and $1.9 million has just been spent on annual operations for an animal and adoption center, which he said was Fire Protection District Minutes October 18, 2006 Page 4 approved unanimously. He assured the public that the Council sets priorities and has an aggressive plan to increase service levels in the Fire District. He said nobody else up here has ever gained a more rapid, aggressive approach to spend $12 million in capital improvements over the next five years, add two fire stations and relocate another one. He stated he was disturbed about "electioneering," as there was a group of boy scouts in the audience who wanted to hear what was going on in city government. He said when people talk about crime, he's concerned that the young boy scouts would leave with some false sense of security when there is no reason for them to be concerned. He taiked about response times and said that citizens can feel safe at Victoria Gardens. He said we have a wonderful Police Department, along with the security forces that are hired by the mall to make sure it is a destination for people to shop. He said 34 police officers have been hired within the last five years and eight more this year. He asked that City Manager, Jack Lam, respond to the issue of crime in this city. He said Money Magazine doesn't rate Rancho Cucamonga in the top 50 cities to live in out of 700 cities in the United States without seriously looking at fire protection, police protection and quality of life in our city. Jack Lam, City Manager, discussed the uniqueness of Rancho Cucamonga as it is a metropolitan policing modei-one of the largest such agencies in the area. He said this city does not have the overhead that other police departments have due to this particular contractual model. He said many services are available to us with this model when we need it, and, as a result, you don't have to maintain it on a constant basis. He cited as an example, use of a helicopter, which is here when necessary but the City doesn't have to spend millions of dollars each year for a helicopter fleet. He said the City Council's commitment to public safety service has been high, and there have been' dramatic increases in both services over the last four years. He said in the last fours year, the Police Department budget has been increased by 56%; the Fire Department budget has been increased by 63%, and there has been a pre- commitment of funding for two new fire stations and the relocation of another one. He said the Chief is undertaking that effort now to get these stations constructed, and the City Council has unanimously approved the concept of a partnership with the County in locating and building a north end substation in addition to the substation in Victoria Gardens. He said the City will match County dollars on the new substation on the north end to even beller distribute the resources that we have. Mr. Lam talked about statistics stating it is what you make of it and what you want to show. He said in this community the numbers are so low that any time there is an increase, it will reflect technically a higher number. He said it is more constructive to focus on now-2006. He said a couple months ago Money Magazine looked at 744 cities in the U.S., and Rancho Cucamonga is among six communities selected from California as part of the 10 best places to live. He said they looked at things like parks and shopping centers to cultural activities and schools and the FBI crime statistics. He said the numbers show that crime rates (personal and property) are over 30% less than the rest of the average of the 100 best places to live. He said property crime is greater than 10% less and in the first half of the status for 2006, we are moving toward 33% reduction form the year before. He said the Police Department does not brag them their statistics, nor do they use it for any hype. He said they use it for an analysis where to deploy their resources. He said they look at trends throughout the City in any given week and they look at deployment of resources in a way to be the most effective. He said when we talk about these other crimes, we are talking about a 91 % clearance rate on those crimes. He said that is a testament to the excellent police work that we have and he thinks that is the standard by which we judge our Police Department. He said they do an outstanding job. He said as far as the response times in the Police Department, they can show you the first eight months in 2006, which are at sub four minutes response time on emergency calls. He said the Police Department is very proud of the job they do for Rancho Cucamonga, as they are about the community and they look after the community as if t was their own family. He said the same is with the Fire Department. He said they are all dedicated to the welfare of this community. Council member Williams reminded everyone to get their flu shots early. She said women in any kind of position tend to be invisible, and, obviously, she has been very invisible at the Senior Center. She said she is there frequently but when someone infers that she is never there for anything, it is a little annoying. She said during avocado season, she never sees anyone reject truckloads of avocados and grapefruits Fire Protection District Minutes October 18, 2006 Page 5 from her trees. She said she is there and she is not invisible. She commented that the Alta Loma Riding Ciub did a great job of having a very fair and orderly forum, and it was well done. She said she heard there were two council members committed to the Heritage Park fire station; she wanted to make it clear that it is not set in stone by any means. She said Mr. Gutierrez and herself both committed that they would continue to look for other sites and at least try to see what they could do. She agrees with the precedent setting issue and think's it's a huge issue that we have parkland. She said if we set the precedent now, future councils may see that as an opportunity to eventually gobble up all the parkland. She said to the residents to help us find a site; she said to talk to people who may have property; she challenged the people who oppose it to get out there and give us a hand. Council member Gutierrez said he has never heard more information in his entire life in one meeting. He said that's really depressing for a City this is suppose to be, on average, a very educated, enlightened populous. He said he has never tried to mislead the public in the things that he writes. He tries very hard to say it like it is, or at least say it as he sees it. He said that's the right of any editor, any writer. He said he is not against anyone and not against our police. He said the police who know our city best are supporting him and Diane, and they happen to be supporting Don Kurth for Mayor. He said he couldn't be happier and he appreciates their support. He said it's true that the firefighters don't interview them like they use to, to at least get their endorsement, but that is gone now. He understands that the first choice is an ex-fireman for someone to run for council; next choice they think is a relative; next choice is an employee or a close friend of the fire union. He said that's what appears to him and it is happening to cities all over; it's a design strategy to dominate city governments all over. He said he happens to think that is wrong. He said it is bad policy to have a majority of a city council all favored by and in favor of one particular special interest group. He said he told people at the Alta Loma Riding Club Forum that if you want a Council that is dominated by one group, please don't vote for him. He said his belief is that we need balance. He commented about the audacity of some people who get up and turn this chamber into a circus. He said you have this woman with the long white hair, and then the other woman in red, the wife of the fireman, who does the character assassination, to remind us this man (mayoral candidate) @ 20 was addicted to drugs. He questioned how many of us have not been affected in our families by someone who had a problem with addition. He said he's done all he can to make up for those mistakes, but he can't go back and change the mistakes. He said this is amazing for a Christian community. He asked when in someone's life do you decide to forgive. He also asked how many of us live in glass houses. He said people get up and berate us, people who have relatives in jail, who have driven our city's crime statistics up themselves; he said that is hypocritical to him. He said he is concerned about our city and about this election process. He said it's very depressing. He said people say that we do it for the money. He commented that he gets $21 ,OOO/year as a stipend for being on the City Council. He said he loves public service. He said he does not do it for the money, as it takes him away from his family and his work. He said he is dedicated and loves this city. He promised that he has always had the public's best interests at heart. He said he will champion your rights as long as your intentions are not infringing on the rights of someone else. He said he promises you that we are not a dangerous city and he is surprised that our Mayor and Councilman Spagnolo would put their name and their picture onto this campaign saying .that we are in such dire straits and we need more public safety votes on the City Council. He reminded the public that this Council does try very hard to do a good job. He said they don't do everything right; mistakes are made and mistakes will continue to be made, but he is proud of this city and so proud of this mall. He said he hears people all over the State talking about this awesome mall in Rancho Cucamonga. He said regarding the compensation, he's not stupid and he does not mislead people and lie about what people make. He said he signs the budget every year and he's not ignorant of the facts. Councilman Gutierrez said he met a fireman who commented that he did not like the firemen telling him about the brotherhood and who should be supported and what signs to put in the yards just because the brothers say that this guy is the best candidate. He said this fireman said he doesn't vote for whom they tell him to vote for, as he does not believe in their political philosophy and he doesn't like paying dues every month. This fireman said he is proud to be a young man making six figures who has no formal education. Mr. Gutierrez said most of our firemen are making $120,OOO/yr., not including benefits. He said he heard three times tonight about the firemen's overtime. He said you won't see the Union coming Fire Protection District Minutes October 18, 2006 Page 6 up and asking us to take away the overtime, as that's their bread and butter. He said he doesn't believe it's right that public servants live high on the hog at the public's expense. He said he believes that is truly wrong. He said that people say he is going to go on and fun for other things and that he is not interested in the City. He asked if the public really thought he would succeed moving up in office with the State fire unions and the Nations' fire union fighting him tooth and nails for what he has said tonight. He said he doesn't care, that he'll do the best in the time he has; and if he's voted out, he will be able to sleep at night, as he thinks he's done a pretty good job. He said if he's voted in for four years, he'll consider it an honor. He said to seek for truth and fairness. Council member Spagnolo stated that he promised himself two years ago that he would never us this forum to support or oppose a candidate. He said it's difficult to listen to Mr. Gutiterrez destroy the career of which he spent 35 years. He said he would like to get back to the facts of what is important to this city. He said that the strategic plan that Chief Bryan has put together is not new to this city. He said the placement of Stations 7, 8 and 2 hasn't changed. He said it's been there for years and the problem is that the Council in the past has never acted on it. He said that is why we're in the predicament that we are today. He said with respect to the Police Department, they do an excellent job; they are just understaffed. He said the strategic plan put together isn't just for this City; other cities use it, as it is what you use to judge how many stations you need, the placement of stations and the engines that you need; the study that they use for police protection is the same everywhere. He said people are people and crime is crime and we are not exempt; this is a nice place to live but we are behind and we're trying to play catch up. He said public safety is the main job of government. He said we were faced with the animal shelter when it became an issue that had to be dealt with, and we were forced to make decisions that should have been made a long time ago. He said there is a lot of blame to go around and Mr. Gutierrez needs to take a lot of it. Mayor Alexander stated that for the last five years, being in the minority, the Fire District wage has been set primarily by the majority of the Council. He said if the wages are going to be complained about, then perhaps certain council members should have voted against it. He said they never did and always voted for it. He said that a public safety committee was addressed but it was shot down by three members of this particular board, as it would have provided public input, and they didn't want that. He said two years ago what the other council members wanted was to have community and neighborhood meetings, but we haven't had one single meeting. * * * * * * E. CONSENT CALENDAR E1. Approval of Minutes: September 20, 2006 E2. Approval of Check Register dated 9/27/06 through 10/10/06, for the total amount of $74,507.96. E3. Approval to receive and file current Investment Schedule as of September 30, 2006. E4. Approval of a Resolution declaring results of a Special Election in Community Facilities District No. 85-1, Annexation No. 06-9 (Hellman RV Storage -APN: 0209-012-07) RESOLUTION NO. FD 06-046 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, DECLARING THE RESULTS OF A SPECIAL ELECTION IN COMMUNITY FACILITIES DISTRICT NO. 85-1, ANNEXATION NO. 06-9 Fire Protection District Minutes October 18, 2006 Page 7 E5. Approval of a Resoiution to adopt a new Memorandum of Understanding (FD 06-032) between the Rancho Cucamonga Fire Protection District and the Fire Management Employees Group for Fiscal Years 2006-2007,2007-2008 and 2008-2009. RESOLUTION NO. FD 06-049 A RESOLUTIN OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, AMENDING THE EXISTING COMPENSATION PLAN FOR DISTRICT EMPLOYEES AND APPROVING THE CERTAIN MEMORANDUM OF UNDERSTANDING BETWEEN THE DISTRICT AND FIRE MANAGEMENT EMPLOYEES BARGAINING GROUP FOR WAGES, BENEFITS AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT FOR FISCAL YEARS 2006- 2007,2007-2008 AND 2008-2009 MOTION: Moved by Michael, seconded by Williams to approve the staff recommendations in the staff reports contained within the Consent Calendar. Motion carried unanimously, 5-0. ... A recess was taken at 9:13 p.m. The meeting reconvened at 9:24 p.m. with all Councilmembers present. ... * * * * * * II F. ADVERTISED PUBLIC HEARINGS II F1. CONSIDERATION OF ADOPTION OF A RESOLUTION DECLARING ANNEXATION OF TERRITORY (CREATIVE INVESTMENTS GROUP LP - SUBTT17823 - ANNEXATION NO. 06-7) TO AN EXISTING COMMUNITY FACILITIES DISTRICT. CALLING A SPECIAL ELECTION AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS Staff report presented by Peter Bryan, Fire Chief. He stated the two annexation items are required public hearings to annex property to existing CFD's in order to mitigate the development's impacts on emergency and specifically fire protection services. He said the first item, Resolution No. FD 06-047, is a proposed development to construct eight single-family residences on approximately 2.39 acres and it is the proposed annexation to CFD 85-1; the second item, Resolution No. FD 06-048, is a proposed development by International Restaurant Village, and it includes 7.74 acres divided into ten lots to be proposed to annex to CFD 85-1. He stated the Council, upon approval, will be setting a public hearing and calling for a special election to be conducted on October 25 for both items. Mayor Alexander opened the meeting for public hearing. There being no response, the public hearing was closed. RESOLUTION NO. FD 06-047 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, DECLARING THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-7) TO AN EXISTING COMMUNITY FACILITIES DISTRICT (CFD 85-1), CALLING A SPECIAL ELECTION Fire Protection District Minutes October 18, 2006 Page 8 AND AUTHORIZING SUBMITIAL OF LEW OF SPECIAL TAXES TO THE QUALIFIED ELECTORS F2. CONSIDERATION OF ADOPTION OF A RESOLUTION DECLARING ANNEXATION OF TERRITORY (INTERNATIONAL RESTAURANT VILLAGE - SUBTPM16767 - ANNEXATION NO. 06-10) TO AN EXISTING COMMUNITY FACILITIES DISTRICT. CALLING A SPECIAL ELECTION AND AUTHORIZING SUBMITIAL OF LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS RESOLUTION NO. FD 06-048 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, DECLARING THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-10) TO AN EXISTING COMMUNITY FACILITIES DISTRICT (CFD 85-1), CALLING A SPECIAL ELECTION AND AUTHORIZING SUBMITIAL OF LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS MOTION: Moved by Williams, seconded by Michael to approve Resolution Nos. FD 06-048 and FD 06- 049. Motion carried unanimously, 5-0. .. .. '* .. .. .. II G. ADJOURNMENT I MOTION: Moved by Williams, seconded by Michael to adjourn. Motion carried unanimously, 5-0. The meeting adjourned at 9:27 p.m. Respectfully submitted, Kathryn L. Scott, CMC Assistant City Clerk Approved: ****** November 1, 2006 CITY OF RANCHO CUCAMONGA FIRE PROTECTION DISTRICT MINUTES Reqular Meetinq A. CALL TO ORDER A regular meeting of the Rancho Cucamonga Fire Protection District was held on Wednesday, November 1. 2006, in the Council Chambers of the Civic Center located at 10500 Civic Center Drive. Rancho Cucamonga. California. President William J. Alexander called the meeting to order at 10:34 p.m. Present were Boardmembers: Rex Gutierrez, L. Dennis Michael. Sam Spagnolo, Diane Williams and President William J. Alexander. Also present were: Jack Lam, City Manager; Pamela Easter, Assistant City Manager; Craig Fox, Deputy City Attorney; Linda D. Daniels, Redevelopment Director and Acting Administrative Services Director; James C. Frost, City Treasurer: George Rivera, Administrative Services Manager; Dawn Haddon, Purchasing Manager; Charles Scott, Sr. Information Systems Specialist; Sunil Powaku, Information Systems Analyst, Joe O'Neil, City Engineer; James Troyer, Planning Director; John Thomas, Plan Check Manager; Kurt Keating. Code Enforcement Supervisor; Dave Moore, Community Services Superintendent; Paula Pachon, Management Analyst III, Chief Peter Bryan, Deputy Chief Mike Bell, Rancho Cucamonga Fire Protection District; Captain Pete Ortiz and Lieutenant Scott Mesa. Rancho Cucamonga Police Department; Marcia Godwin. Assistant to the City Manager; Kimberly Thomas, Management Analyst III; Fabian Villenas, Management Analyst III; Shirr'l Griffin, Office Specialist II - City Clerk's Office; and Debra J. Adams, Secretary. '* '" '* '" '" '" B. ANNOUNCEMENTS/PRESENT A TIONS This item was taken care of at 9:25 p.m. when the Agency recessed. B1. Presentation of a Letter of Recognition to 6-yr. old Kaitlynn Kelleher, Darryl Polk, Ontario Communications Fire Supervisor, and Maria Castro, San Bernardino County Sheriff Dispatcher, in special recognition of their handling of a 9-1-1 call. Chief Peter Bryan and Captain Peter Ortiz assisted with the presentation. Mr. Kelleher thanked the fire department for always helping him. The Agency's recess continued at 9:30 p.m. "'''''''*'''''' C. PUBLIC COMMUNICATIONS C1. Danae Delaney stated Councilmember Gutierrez had mentioned establishing fire response teams and fell this was important and should be done. She felt this might eliminate some of the safety concerns. C2. Leslie Grimes stated she doesn't have an issue with the location of the fire stations as some people do, but noticed some vacant property near Hillside and Carnelian near Maloofs, and felt this would be a good location. Fire Protection District Minutes November 1, 2006 ' Page 2 Councilmember Williams stated this property is not for sale. Ms. Grimes stated it bothers her that the Fire Department keeps getting brought up as the bad guy. She stated people should be looking at SEBA and their involvement in the election. She commented on a recent flyer that talked about the Mayor moving out of the City to go to Arizona. She felt the Mayor should stay and is needed to work on traffic. She talked about an officer that does not agree with SEBA. C3. John Lyons stated our hearts and prayers go out to the families of the fire fighters that lost their loved ones. He talked about SEBA and that they are putting half of their PAC money in Rancho Cucamonga, and stated that is because of the Colonies Project. He stated Council members Gutierrez and Williams couldn't get support from their normal people so they went to CEBA. He asked people not to vote for Rex Gutierrez, Diane Williams and Don Kurth so we can save our money. He felt it was suspicious why SEBA was putting so much money into Rancho Cucamonga's election. He asked people to vote for him. He told people to go to his website to find out about him. C4. Nicole'Myerchin stated she would love to send a prayer to Jane Penney for having surgery tomorrow. She thanked Mayor Alexander and Council member Spagnolo for caring about the mobile home park the other day, and stated that shows their good character. She talked about a raise just given to the City Manager, with Mayor Alexander and Councilmember Spagnolo voting no. She stated the City Manager was given a $36,000 raise since 2005. She felt no wonder we can't afford to do things in the City because of the amount of money we pay the City Manager. She hopes people will pay attention to the candidates and stated it wasn't Mayor Alexander's reckiess spending, but the other Council members. C5. Bill McCliman felt people that come to the podium have the right to say anything they want, but didn't understand why anyone from Temecula will come to our meeting to speak. He stated he also pulled the City Manager's contract and wanted to know why the employees only got a 3% raise, but the City Manager got such a large raise. He stated he wasn't sure what the City Manager should make. He stated Council member Gutierrez has said in the past about public servants making the amount of money they do and then he gives the City Manager this big raise. He pointed out that Rex Gutierrez and Don Kurth have signs in Ontario. He showed a picture of one of Rex Gutierrez's signs on 19th near the Upland Home Depot. He felt this was a violation of the Sign Ordinance. He asked the Council not to be hypocrites and do the right thing. He mentioned the firemen that got killed in the recent fire and added that being a fireman is a dangerous job. ' * * * * * * II D. BOARD RESPONSES TO PUBLIC COMMENTS II D1. Councilmember Gutierrez stated he wished people wouldn't leave after they make their comments. He stated he does not control the placement of his signs, that other people do this for him. He mentioned the Casa Volante Park that lost their water. He stated he has been in this park many times, but didn't feel it was right to show up when there is a crisis, pandering for a vote. He didn't feel people should use a tragedy to get sympathy. He didn't feel people should blame government leaders for tragedies. He talked about things that have been said in previous meetings and that he has apologized. He stated it is all about everyone's agenda. He stated he is proud of the job they have done. ****** Fire Protection District Minutes November 1 , 2006 Page 3 E. CONSENT CALENDAR E1. Approval of Minutes: October 4, 2006 E2. Approval of Check Register dated 10/11/06 through 10/24/06 for the total amount of $59,419.03. E3. Approval to appropriate funds from Fire District Reserves in the amount of $59,000.00; $6,440.00 into Accl. No. 3281514-5200 (Operations & Maintenance), and $52,560.00 into Accl. No. 3281514-5602 (Capital Outlay-Bidg. & Improvements) for the single source purchase of a Swede Survival Systems Phase 1 Flashover Training System Building and Equipment from Emergency Equipment Management, Inc., of Petaluma, CA, in an amount not to exceed $42,000.00 from Accl. No. 3281514-5602, and for single source repairs to the current Swede Survival System Building in an amount not to exceed $4,850.00, and authorize the expenditure of a contingency for the repairs in the amount of $590.00 (for a total of $6,440.00) from Accl. No. 3281514-5200, and $10,000.00 for site work for the existing Swede Survival System and new system to be installed at Station 174 that will be bid out by Public Works Project from Accl. No. 3281514-5602. MOTION: Moved by Williams, seconded by Alexander to approve the staff recommendations in the staff reports contained within the Consent Calendar. Motion carried unanimously, 5-0. :It :It :It:lt :It :It II F. ADJOURNMENT II MOTION: Moved by Williams, seconded by Alexander to adjourn. Motion carried unanimously, 5-0. The meeting adjourned at 11 :08 p.m. Respectfully submitted, Debra J. Adams, CMC Secretary Approved: 1r***** November 15, 2006 CITY OF RANCHO CUCAMONGA FIRE PROTECTION DISTRICT MINUTES Reqular Meetinq II A. CALL TO ORDER II A regular meeting of the Rancho Cucamonga Fire Protection District was held on Wednesday, November 15, 2006, in the Council Chambers of the Civic Center iocated at 10500 Civic Center Drive, Rancho Cucamonga, California. President William J. Alexander called the meeting to order at 7:01 p.m. Present were Boardmembers: Rex Gutierrez, L. Dennis Michael, Sam Spagnolo, Diane Williams and President William J. Alexander. Also present were: Jack Lam, City Manager; James Markman, City Attorney; Linda D. Daniels, Redevelopment Director and Acting Administrative Services Director; Manuel Pilonieta, I.S. Manager; Joe Kamrani, Sr. Information Systems Analyst; Jose Ramirez, Information Systems Specialist; Laura Bliese, Information Systems Specialist; Dawn Haddon, Purchasing Manager; Jon Gillespie, Traffic Engineer; Mike Ten Eyck, Administrative Resources Manager; James Troyer, Planning Director; Kevin McArdle, Community Services Director; Dave Moore, Community Services Superintendent; Nettie Nielsen, Community Services Superintendent; Francie Palmer, Marketing Manager; Deborah Clark, Library Director; Robert Karatsu, Library Services Manager; Chief Peter Bryan, Fire Prevention Specialist Kelley Donaldson, Rancho Cucamonga Fire Protection District; Captain Pete Ortiz, Rancho Cucamonga Police Department; Marcia Godwin, Assistant to the City Manager; Fabian Villenas, Management Analyst III; Donna Kendrena, Executive Assistant; Kathryn L. Scott, Assistant City Clerk; and Debra J. Adams, Secretary. '* * ... * * * B, ANNOUNCEMENTS/PRESENT A TIONS No announcements/presentations were made. * ... * * ... * II C. PUBLIC COMMUNICA nONS I] C1. Jeri Lee asked that it be put on the agenda a reconciliation of community funds solicited by the Rancho Cucamonga Professional Fire Fighters Association and their politicai action funds. She requested this be placed on the next agenda for a detailed report. She felt the community needs to know that their solicited funds did not finance this last election for the fire union candidates. She talked about the fire fighters and felt they have gone over the line for this election. She felt she was treated rude. She felt their behavior should not have gone on and felt this was outrageous. She felt Mayor Alexander shouldn't have iet this happen, which she felt has tarnished their reputation and ruined the public trust in them. She hoped the fire union would put professionalism back into the fire department and stay out of politics. She felt respect needs to come back into the Chamber. James Markman, City Attorney, stated the City has no authority or capacity to require them to give a report about their campaign funds. He said she could contact the FPPC if she feels there is a problem. with their reporting. Jeri Lee said it is not their campaign funds, but the money they collect for their charity work. Fire Protection District Minutes November 15, 2006 Page 2 James Markman, City Attorney, said if she feels there is a problem with this they should contact the Attorney General's office for an accounting of their charity funds. C2. Kelly Larson, Fire Prevention Specialist, stated she wanted to kick off the Fire District's holiday toy drive called the Spark of Love Toy Drive. She stated this toy drive is designed to collect new toys for underpriviieged kids, and asked the community to come out and support this program. She stated they can donate their toys at any fire station. She also talked about the Metrolink Toy Drive to be held on November 25 at the Rancho Cucamonga Metrolink Station. C3. Melanie Ingram felt Miss Lee needs to do her homework where she can obtain the information she wants. She commented on another union that did much more damage than our fire fighters union did. She stated it is very easy to get the information. She wanted to thank the City of Rancho Cucamonga for their participation in an emergency exercise for disaster preparedness and terrorism related situation. She stated this was held at the Hyundai Pavilion and that Rancho Cucamonga was represented very well. She feitthe City should be proud of our participation. ." * ." '* '* * D. BOARD RESPONSES TO PUBLIC COMMENTS No response was made by the Boardmembers. ****** E. CONSENT CALENDAR II II E1. Approval of Minutes: October 4, 2006 E2. Approval of Check Register dated 10/26/06 through 11/6/06, for the total amount of $52,153.68. E3. Approval to receive and file current Investment Scheduie as of October 31,2006. E4. Approval to appropriate funds from Fire District Reserve Reserves in the amount of $9,003.00 into Accl. No. 3281511-5602 (Capital Outlay-Bldg. & Improvements) for the repiacement of the heating and air conditioning unit for Fire Station 171 by Jackson Heating and Air Conditioning. E5. Approval to adopt a Boundary Map showing Parcel Number 0201-811-56 (Rancho Plaza), located at 8678 19th SI., to be annexed into CFD No. 85-1. RESOLUTION NO. FD 06-050 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRiCT, RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNiTY FACILITIES DISTRICT NO. 85-1, ADOPTING A BOUNDARY MAP (ANNEXATION NO. 06-11) SHOWING PROPERTY TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 85-1 Fire Protection District Minutes November 15, 2006 Page 3 E6. Approval of a Resolution by City Council, Redevelopment Agency and Fire District amending the appropriate resolution establishing those authority and policy limits pertaining to the purchasing procedures of Chapter 3.08 of the Rancho Cucamonga Municipal Code, and City Council approval of Resolution No. 06-206A to revise authority limits for transfers of funds between and/or within Council budgetary appropriations. RESOLUTION NO. FD 98-005A . A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, ESTABLISHING THOSE AUTHORITY AND POLICY LIMITS PERTAINING TO THE PURCHASING PROCEDURES OF CHAPTER 3.08 OF THE RANCHO CUCAMONGA MUNICIPAL CODE E7. Approval to adopt a Resolution of Intention to annex territory referred to as Annexation No. 06-11 (APN: 0201-811-56, Rancho Plaza), into Community Facilities District No. 85-1, specifying facilities and services provided, to set and specify the special taxes to be levied within the annexation and set a time and place for a public hearing related to the annexation. RESOLUTION NO. FD 06-051 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85- 1, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-11) TO COMMUNITY FACILITIES DISTRICT NO. 85-1 E8. Approval of a Resolution declaring results of a Special Election in Community Facilities District No. 85-1, Annexation No. 06-7 (Rancho Tierra - SUBTT 17823). RESOLUTION NO. FD 06-052 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, DECLARING THE RESULTS OF A SPECIAL ELECTION IN COMMUITY FACILlLTIES DISTRICT NO. 85-1, ANNEXATION NO. 06-7 E9. Approval of a Resolution declaring results of a Special Election in Community Facilities District No. 85-1, Annexation No. 06-10 (International Restaurant Village - SUBTPM 16767). RESOLUTION NO. FD 06-053 A.RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, DECLARING THE RESULTS OF A SPECIAL ELECTION IN COMMUNITY FACILITIES DISTRICT NO. 85-1, ANNEXATION NO. 06-10 MOTION: Moved by Williams, seconded by Michael to approve the staff recommendations in the staff reports contained within the Consent Calendar. Motion carried unanimously, 5-0. '* '* * * '* * Fire Protection District Minutes November 15, 2006 Page 4 II F. ADJOURNMENT MOTION: Moved by Gutierrez, seconded by Williams to adjourn. Motion carried unanimously, 5-0. The meeting adjourned at 7:13 p.m. Respectfully submitted, Debra J. Adams, CMC Secretary Approved: ****** II .1 RANCHO CUCAMONGA FIRE PROTECTION DISTRICT Al!enda Check Rel!ister 11129/2006 through 12/12/2006 P38 Check No. Check Date Vendor Name Amount AP - 00244944 11/29/2006 AFSS AP - 00244947 11129/2006 AIRGAS WEST AP - 00244947 11129/2006 AIRGAS WEST AP - 00244948 11129/2006 ALL CITIES TOOLS AP - 00244976 11129/2006 CALIFORNIA PUBLIC EMPLOYEES AP - 00244982 11/29/2006 CHEMSEARCH AP - 00244992 11/29/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00244994 11/29/2006 CUTTERS EDGE AP - 00244997 11129/2006 DAPPER TIRE CO AP - 00245005 11/29/2006 DONALDSON, KELLEY AP - 00245014 11/29/2006 EMS PERSONNEL FUND AP - 00245024 11/29/2006 FINESSE PERSONNEL ASSOCIATES AP - 00245024 11/29/2006 FINESSE PERSONNEL ASSOCIATES AP - 00245031 11/29/2006 FRANKLIN TRUCK PARTS AP - 00245031 11129/2006 FRANKLIN TRUCK PARTS AP - 00245031. 11/29/2006 FRANKLIN TRUCK PARTS AP - 00245033 11/29/2006 GALLS INC AP - 00245034 11129/2006 GENERAL SERVICES ADMIN. AP - 00245034 11/29/2006 GENERAL SERVICES ADMIN. AP - 00245040 11/29/2006 GRAVES AUTOMOTIVE SUPPLY AP - 00245040 I 1/29/2006 GRAVES AUTOMOTIVE SUPPLY AP - 00245047 11129/2006 HOLLOWAY, DAN AP - 00245048 11/29/2006 HOME DEPOT CREDIT SERVICES AP - 00245048 11/29/2006 HOME DEPOT CREDIT SERVICES AP - 00245050 11/29/2006 HOYT LUMBER CO., SM AP - 00245050 11/29/2006 HOYT LUMBER CO., SM AP - 00245050 11/29/2006 HOYT LUMBER CO., SM AP - 00245069 11129/2006 KME FIRE APPARATUS AP - 00245069 11/29/2006 KME FIRE APPARATUS AP - 00245069 11/29/2006 KME FIRE APPARATUS AP - 00245069 11129/2006 KME FIRE APPARATUS AP - 00245069 11/29/2006 KME FIRE APPARATUS AP - 00245069 11/29/2006 KME FIRE APPARATUS AP - 00245069 11/29/2006 KME FIRE APPARATUS AP - 00245075 11/29/2006 L S A ASSOCIATES INC AP - 00245080 11/29/2006 LIFE ASSIST INC AP - 00245082 11/29/2006 LN CURTIS AND SONS AP - 00245089 11/29/2006 MCI AP - 00245090 11/29/2006 MEDTRONIC EMERGENCY RESPONSE SYSTEM AP - 00245095 11/29/2006 MICROSENSOR SYSTEMS INC AP - 00245097 11/29/2006 MOBILE SATELLITE VENTURES LP AP - 00245101 11/29/2006 NAPA AUTO PARTS AP - 00245101 11129/2006 NAPA AUTO PARTS AP - 00245111 11129/2006 OFFICE DEPOT AP - 00245111 11/29/2006 OFFICE DEPOT AP - 00245111 11/29/2006 OFFICE DEPOT AP - 00245111 11129/2006 OFFICE DEPOT AP - 00245117 11129/2006 OWEN ELECTRIC INC AP - 00245124 11/29/2006 POLLOCK, LARRY AP - 00245157 11129/2006 SIGN CRAFTERS AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245184 11/29/2006 TERMINIX PROCESSING CENTER AP - 00245192 11/29/2006 UNIFIRST UNIFORM SERVICE User: VLOPEZ - Veronica Lopez Page: I Report:CK_AGENDA_REG_PORTRAIT_RC - CK: Agenda Check Register Portrait Layout 75.00 35.40 156.30 185.27 45,930.23 98.21 127.48 63.52 884.49 100.11 130.00 252.60 1,089.38 590.95 199.59 256.49 67.07 417.30 964.66 197.27 64.35 1,580.00 203.65 53.61 0.96 8.15 8.60 400.83 56.50 2,167.93 332.09 95.88 107.35 238.92 21,105.30 127.63 97.67 8.00 608.03 1,000.00 144.50 81.06 149.80 19.14 18.38 189.63 35.00 75.64 210.00 124.99 1,497.76 586.04 48.75 54.07 Current Date: 12/13/200 Time: 17:04:1 RANCHO CUCAMONGA FIRE PROTECTION DISTRICT Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 Check No. Check Date Vendor Name AP - 00245192 11/29/2006 UNIFIRST UNIFORM SERVICE AP - 00245197 11/29/2006 VERIZON WIRELESS - LA AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 . 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245200 11/29/2006 VERIZON AP - 00245211 11/29/2006 WEST END UNIFORMS AP - 00245211 11/29/2006 WEST END UNIFORMS AP - 00245211 11/29/2006 WEST END UNIFORMS AP - 00245231 12/6/2006 ALLSTAR FIRE EQUIPMENT INC AP - 00245245 12/6/2006 BERCH, DAVID M. AP - 00245264 12/6/2006 CFCA-EMS SECTION-SOUTHRN DIVISION AP - 00245269 12/6/2006 CONNECT WIRELESS SOLUTIONS AP - 00245269 12/6/2006 CONNECT WIRELESS SOLUTIONS AP - 00245269 12/6/2006 CONNECT WIRELESS SOLUTIONS AP - 00245269 12/6/2006 CONNECT WIRELESS SOLUTIONS AP - 00245271 12/6/2006 COSTELLO, DENNIS M AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245299 12/6/2006 FINESSE PERSONNEL ASSOCIATES AP - 00245299 12/6/2006 FINESSE PERSONNEL ASSOCIATES AP - 00245306 12/6/2006 FRANKLIN TRUCK PARTS AP - 00245306 12/6/2006 FRANKLIN TRUCK PARTS AP - 00245316 I 2/6/2006 GRAVES AUTOMOTIVE SUPPLY AP - 00245340 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245363 12/6/2006 LIFE ASSIST INC AP - 00245363 12/6/2006 LIFE ASSIST INC AP - 00245363 12/6/2006 LIFE ASSIST INC AP - 00245365 12/6/2006 LN CURTIS AND SONS AP - 00245368 12/6/2006 MARIPOSA HORTICULTURAL ENT INC AP - 00245368 12/6/2006 MARIPOSA HORTICULTURAL ENT INC AP - 00245385 12/6/2006 OFFICE DEPOT AP - 00245385 12/6/2006 OFFICE DEPOT AP - 00245385 12/6/2006 OFFICE DEPOT AP - 00245385 12/6/2006 OFFICE DEPOT AP - 00245385 12/6/2006 OFFICE DEPOT AP - 00245385 12/6/2006 OFFICE DEPOT AP - 00245401 12/6/2006 PRESS ENTERPRISE AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM User: VLOPEZ - Veronica Lopez Page: 2 Report:CK_AGENDA_REG_PORTRAIT_RC - CK: Agenda Check Register Portrait Layout P39 Amount 54.07 71.38 464.40 464.40 464.40 464.40 464.40 29.79 61.69 34.98 28.87 28.87 134.81 171.64 536.98 119.78 31.32 119.78 11 ,072.39 210.00 150.00 1,362.00 1,362.00 47.35 1,362.00 250.00 357.68 55.20 252.60 1,050.00 204.85 243.10 22.67 438.00 2,647.57 240.51 203.78 505.35 2,358.00 1,850.00 3.88 7.64 58.19 48.49 453.28 43.18 91.00 59,184.05 60,276.74 36,873.20 10,892.56 28,200.39 11,019.70 68,571.58 Current Date: 12/13/200 Time: 17:04:1 RANCHO CUCAMONGA FIRE PROTECTION DISTRICT P40 A2enda Check Re2ister 11/29/2006 through 12/12/2006 Check No. Check Date Vendor Name Amount AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 61,524.06 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 59,376.47 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 36,502.10 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 5,167.95 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 18,902.20 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 3,123.45 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 1,852.08 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 39,604.92 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 59,830.05 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 185.55 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 8,040.56 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 60,500.09 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 64,956.76 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 23,771.20 AP - 00245402 12/6/2006 PUBLIC AGENCY SELF INSURANCE SYSTEM 2,181.94 AP - 00245407 12/6/2006 RASMUSSEN, STEPHAN]E 22.50 AP - 00245408 12/6/2006 RAYNE WATER COND]T]ONING INC 22.95 AP - 002454]2 ] 2/6/2006 RESCUE RESPONSE GEAR LLC ]74.20 AP - 00245416 12/6/2006 ROEDER, JEFF 720.00 AP - 00245420 12/6/2006 SAN BERNARDINO COUNTY 30.00 AP - 00245431 12/6/2006 SO CALIF GAS COMPANY 100.98 AP - 00245436 12/6/2006 SOUTHERN CALlFORN]A EDISON 475.25 AP - 00245445 12/6/2006 TEAM THOMPSON 100.00 AP - 00245446 12/6/2006 TERMIN]X PROCESSING CENTER 73.00 AP - 00245459 12/6/2006 VERlZON W]RELESS - LA 620.78 AP - 00245459 12/6/2006 VERlZON W]RELESS - LA 124.50 AP - 00245459 12/6/2006 VERlZON W]RELESS - LA 2]2.91 AP - 00245459 12/6/2006 VERlZON W]RELESS - LA 659.98 AP - 00245459 12/6/2006 VERlZON WIRELESS - LA 84.32 AP - 00245459 12/6/2006 VERlZON W]RELESS - LA 41.50 AP - 00245461 12/6/2006 VERlZON 21.45 AP - 00245461 12/6/2006 VERlZON 21.44 AP - 00245461 12/6/2006 VERlZON 86.61 AP - 00245461 12/6/2006 VERlZON 86.61 AP - 00245461 12/6/2006 VERlZON 29.29 Total for Check ill AP: 838,264.07 Total for Entity: 838,264.07 User: VLOPEZ - Veronica Lopez Page: 3 Report:CK _ AGENDA _REG _PORTRAIT _ RC - CK: Agenda Check Register Portrait Layout Current Date: 12/13/200 Time: 17:04:1 m e> e o E rl ~ II o ~ o e m '" '0 ~ ti .. u .;: .. 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J!l ~ ~ o u u < '" ~ :i2 u ~ J:: () :i! o o .0 . . .. a. o 0 o 0 c:i ci N N i i 10- .,; .. .. o o ~ o N o o o N o o o U) >- U) .. oo o .. o .; - - i ~ U) o o o o o o oo oo N .. ~ .; .. .. oo ., ;;; oo .,; ~ .; ~ .. .. .. ~ .,; .. .. .,; .. B ~ , U) Jii o .... ~ o 0. ~ o () . ~ ~ . !!! >. u ~ ~ '" < 1i ~ "0 ~ LL M ~ ~ ~ o N ~ ~ . ~ o c , " P44 State of California Pooled Money Investment Account Market Valuation 1 0/31/2006 . ,Carrying Co~~ PIUs;: ':",' ,:,;"',' -, <,;,;.:,,;~_. " --_, , Descripti6ri."" Accrued lilterestPUrch." .,,' _," fairValue;' ",' Accn-!~d rnterest United States Treasurv. Bills $ 1,860,990,322.32 $ 1,879,612,000.00 NA Notes $ 199,955,437.32 $ 199,618,000.00 $ 2,419,398.00 Federal Aaencv. SBA $ 693,243,470.77 $ .687,224,313.84 $ 6,452,625.65 MBS $ 1,005,297,528.69 $ 981,017,643.46 $ 4,628,042.69 Bonds $ 8,953,533,182.76 $ 8,930,988,169.29 $ 132,820,505.29 Floaters $ - $ - $ - Discount Notes $ 4,307,369,765.25 $ 4,353,074,000.00 NA FHLMC PC $ . 894,952.91 $ 924,804.54 $ 14,474.42 GNMA $ 229,984.96 $ 254,951.71 $ 2,287.87. Bankers Acceotances $ - $ - NA Bank Notes $ 1,200,000,000.00 $ 1,200,066,995.00 $ 16,669,472.22 CDs $ 11,903,275,952.97 $ 11,899,456,201.25 $ 124,746,274.37 Commercial PaDer $ 8,508,929,971.75 $ 8,575,025,864.17 NA Como rate . Floaters $ 200,064,842.53 $ 200,131,250.00 $ 1,367,599.49 Bonds $ 410,833,40111 $ 408,508,387.74 $ 5,770,570.11 Reourchase Aareements $ - NA Reverse Reourchase $ (198,520,000.00 $ 1198,520,000.00 $ 1713,183.10 Time Denosits $ 8,303,495,000.00 $ 8,303,495,000.00 NA AB 55 & GF Loans $ 9,517,492,074.70 $ 9,517,492,074.70 NA TOTAL $ 56,867,085,888.04 $ 56,938,369,655.70 $ 294,178,067.01 Fair Value Including Accrued Interest $ 57,232,547,722.71 Repurchase Agreements, Time Deposits, AB 55 & General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value (carrying cost). P45 RANCHO CUCAMONGA r".",'u..~"~;-~""',:"":<~l<.".{"",,/,"'.,ii>>'~,.:;iifi.'\'"";,:,Z,\"";:S',";I;.I~'~':'.~W~"1<~'!i:c;('f:.:/,,.<:;-it':i';:..',,-:'~-; -;:~_,.!.,:,,'.i(, ;"'.'0S,,,=,,,,;!',",,';''ii<Pt/';-;i!'1J,,,f,\\';.1tl,-,":{.:~'.-:i<''.1 FIR[ PROT[CTION DIIITRICT StaffRefmt DAlE: December 20, 2006 TO: President and Members of the Fire Board Jack Lam, AICP, City Manager FROM: Linda D. Daniels, Acting Administrative Services Director BY: Sandra G. Ramirez, ManagementAnalystlll~ SUBJECT: APPROVAL TO ADOPT ANNUAL STATEMENT OF INVESTMENT POLICY RECOMMENDATION Annually the Fire Board Members. review the Statement of Investment Policy. It is recommended that the Fire Protection District approve and adopt the attached Statement of Investment Policy for the Rancho Cucamonga Fire Protection District. BACKGROUND The Fire Board Members adopted a Statement of Investment Policy in July 1990. California Government Code, Section 53646, requires the Treasurer or Chief Fiscal Officer shall annually render to the Fire Board Members a Statement of Investment Policy, which shall be considered at a public meeting. Further, the Fire Board Members shall also consider any modifications to the investment policy at a public meeting. Staff has made certain modifications to the policy in order to clarify how bond proceeds may be invested in accordance with the requirements and restrictions outlined in bond documents. Additionally, staff amended the percentage of authorized investments that may be held in investment agreements, per California Government Code, Section 53601.7. The Fire Protection District's investment policy and practices are based upon Federal, State and local law and prudent money management. The primary goals of the District's policy are to assure compliance with all Federal, State and local law governing the investment of monies under the control of the Treasurer, enhance the economic standards of the District and to protect its pooled assets and to invest public funds prudently. The Treasurer is authorized to invest the P46 Fire District's Funds in accordance with the California Government Code Section 53600 et seq. ("State Code"), and the investment policy adopted by the Fire Board Members. These funds are accounted for in the Rancho Cucamonga Comprehensive Annual Financial Report and the Fire Board Members receive a monthly' Portfolio Summary of investment earnings provided at scheduled Fire Board meetings. The District continues to maintain an investment strategy more conservative than required under State law. The Treasurer and staff continue to monitor legislation, government code amendments, and professional practices pertaining to investing of public funds, ensuring amendments are reflected in the District's Statement of Investment Policy as required by local policy and state law and maintaining the most prudent investment policy as prescribed by the President and Members of the Fire Board. Respectfully submitted, ~IJ.~ Linda D. Daniels Treasurer/Acting Administrative Services Director LIT/sgr Attachments' Fire Staff Report .06 doc -2- P47 Rancho Cucamonga Fire Protection District Statement of Investment Policy RANCHO CUCAMONGA FIRE PROTECTION DISTRICT STATEMENT OF INVESTMENT POLICY 2006 RANCHO CUCAMONGA CALIFORNIA Prepared by the Administrative Services Department Linda D. Daniels, Acting Treasurer P48 STATEMENT OF INVESTMENT POLICY RANCHO CUCAMONGA FIRE PROTECTION DISTRICT INTRODUCTION The investment policy and practices of the Rancho Cucarnonga Fire Protection District are based upon state law, prudent money management and the "prudent person" standards. This statement is intended to provide guidelines for the prudent investment of the District's temporary idle cash, and outline the policies for maximizing the efficiency of the District's cash management system. The primary goal of this policy is to enhance the economic status of the District by protecting its pooled cash and to invest public funds to: 1. Meet the daily cash flow needs of the District. 2. Comply with all laws of the State of California regarding investment of public funds. 3. Achieve a reasonable rate of return while minimizing the potential for capital losses arising from market changes or issuer default. SCOPE The investment policy applies to all investment activities of the Rancho Cucarnonga Fire Protection District. These funds are accounted for in the Rancho Cucarnonga Comprehensive Annual Financial Report and include: General Fund, Special Revenue Funds, Capital Project Funds, Enterprise Funds, Trust and Agency Funds. Any new fund established by the City Council shall automatically be reflected in the Investment Policy. Bond proceeds shall be invested in accordance with the requirements and restrictions outlined in bond documents as approved by the President and Members of the fire Board. Guidelines presented herein are not intended to apply to bond proceeds held by the District or by fiscal agents or trustees for bond holders of Fire debt. PRUDENCEIEV ALUATION OF INVESTMENT OFFICER ACTIONS The actions of the Treasurer and/or his appointed designee in the performance of their duties as managers of public funds shall be evaluated using the following "prudent person" standard applied in the context of managing the overall portfolio: Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the professional management of their business affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. RIN: ]2/2006 P49 The Treasurer and/or his appointed designee acting in accordance with the investment policy and the "prudent person" standard and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided that substantial deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments whenever possible. OBJECTIVE The Rancho Cucamonga Fire Protection District operates its temporary pooled idle cash investment under the "Prudent Person" standard. This affords the District a broad spectrum of investment opportunities as long as the investment is deemed prudent and is allowable under current legislation of the State of California (Government Code Section 53600, et. seq.) and other legal restrictions as the District may impose from time to time. The objective of the investment portfolio is to meet the short and long term cash flow demands of the District. To achieve this objective, the portfolio will be structured to provide Safety of Principal and Liquidity, while then providing a reasonable return on investments. The District may direct its fiscal agents to invest funds associated with bonds or debt issues pending disbursement or reinvestment in "money market mutual funds" that are shares of beneficial interest issued by diversified management companies. The criteria for "money market mutual funds" are more specifically described in California Government Code S 53601(1). INVESTMENT OBJECTIVES Security purchases and holdings will be maintained within statutory limits imposed by Government Code. District policy has been to limit investments more stringently than required under state law. Criteria for selecting investments and the order of priority are: 1. Safety - The safety and risk associated with an investment refers to the potential loss of principal, interest, or combination thereof. The District only operates in those investments that are considered safe. Investments shall be undertaken in a manner that seeks to ensure that capital losses resulting from institution default, broker/dealer default, or the erosion of market value are avoided. The District shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk. . Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be mitigated by investing in only high quality securities and by diversifying the investment portfolio so that the failure of anyone issuer would not unduly harm District cash flow. Rev: 12/2006 2 P50 . Market risk, defined as the risk of market value fluctuations due to overall changes in the general level of interest rates, shall be mitigated by structuring the portfolio. It is explicitly recognized, however, that in a diversified portfolio, occasional measured losses may occur, and must be considered within the context of overall investment return. 2. Liquidity - This refers to the ability to sell these securities and terminate the agreement in order to receive cash at any moment in time with minimal chance of losing some portion of principal or interest. Liquidity is an important investment quality especially when the need for unexpected funds occasionally occurs. The District's investment portfolio will remain sufficiently liquid to enable the District to-meet operating requirements that might be reasonably anticipated. Invested bond proceeds will be structured so as to meet anticipated drawdown requirements. 3. Yield - The District's investment portfolio shall be designed with the objective of attaining a reasonable market rate of return throughout economic cycles, as long as it does not diminish the objectives of Safety and Liquidity. ETHICS AND CONFLICTS OF INTEREST The Treasurer/Deputy Treasurer and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officers shall disclose any material fmancial interest in fmancial institutions that conduct business within this jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the District's portfolio, particularly with regard to the time of purchases and sales. The Treasurer/Deputy Treasurer or investment employees are required to file annual disclosure statements as required by the Fair Political Practices Commission (FPPC). AUTHORIZED BROKER/DEALERS The District will transact business only with approved investment securities broker/dealers that are approved as an authorized broker/dealer in compliance with the District selection process. The Treasurer shall request all broker/dealers that wish to do business with the District to provide proof of capitalization to meet the District's needs, and agree to abide by the conditions set forth in this Investment Policy. All broker/dealers who want to become qualified bidders for investment transactions must have offices in the State of California and provide a current audited financial statement and complete the appropriate City Broker Dealer Questionnaire and Certification. The Treasurer will maintain a list of approved security broker/dealers selected by credit worthiness who are authorized to provide investment services to the District. Rev: 12/2006 3 P51 The District shall at least annually send a copy of the current investment policy to authorized broker/dealers approved to do business with the District. Confirmation of receipt of this policy shall be considered evidence that the broker/dealer has read and understands. the District's investment policy and will reconunend and execute only transactions suitable for and in compliance with the District's investment policy. AUTHORIZED INVESTMENTS The District is authorized by California Government Code Section 53600, et. seq. to invest in specific types of securities. The District has further limited the types of securities in which it may invest. Any security not listed is not a valid investment for the District. The concise list of approved securities is as follows: INVESTMENTS/DEPOSITS (See Government Code Section 53601) PERCENTAGES MAXIMUM MA TURITY* Securities of the U.S. Government, or its agencies Unlimited 5 years * Certificates of Deposit (or Time Deposits) Unlimited (placed with commercial banks and/or savings and loan companies) 5 years* Negotiable Certificates of Deposit 30% 5 years* Banker's Acceptances 40% 180 days Cominercial Paper 30% 270 days (Investments in Commercial Paper must be only with corporations with at least $500 million in assets. Must be of ''prime'' quality of the highest rating or of the highest letter and numerical rating as provided for by Moody's Investor's Service Inc. or Standard & Poor's Corporation. Short term rating of at least 'A' or 'AI/P]' and a long-term rating of 'A' is required.) Local Agency Investment Fund (State Pool) Demand Deposits 40 MM** n/a Deposit of Funds (See Government Code Section 53630 - Ref. C) n/a Repurchase Agreements (Repos) 20% 1 year The market value of the securities that underlay the repurchase agreement must be valued at 102% or greater of the funds borrowed against the securities and the value must be aqjusted no less than quarterly. An executed Master Repurchase Agreement must be on file Investment Agreements*** 5% 397 days Investment agreements, guaranteed investment contracts, funding agreements. or any other form of corporate note which represents the unconditional obligation of one or more banks, insurance companies or other financial institutions, or are guaranteed by a financial institution, which has an unsecured rating, or which agreement is itself rated, as of the date of execution thereof, in one of the two highest rating categories by two or more rating agencies; or, which are collateralized at least 100% with Us. Government securities. Rev: 12/2006 4 P52 * Maximum term unless expressly authorized by Governing Body and within the prescribed time frame for said approval. **Limit set by L.A.IF Governing Board, not Government Code ***Percentage limits for Investment Agreements are not intended to apply to bondfunds held by the District or by Fiscal Agents or Trustees, in which investment of such funds is under the District's control or direction. The term and percentage provisions set forth herein are effictive January I, 2007 and do not apply to investments of District funds made prior to that date. INVESTMENT POOLS The Local Agency Investment Fund (LAIF) is a voluntary investment alternative for California's local governments and special districts authorized by the California Government Code. LAIF is managed by the State Treasurer's Office with oversight by the Local Agency Investment Advisory Board. The District's participation in LAIF was approved by the President and Members of the Fire Board with other authorized investments on July 1987. It is a permitted investment with the knowledge that the fund may invest in some vehicles allowed by statute but not otherwise authorized under the City's authorized investments. All securities in LAIF are purchased under the authority of Government Code Sections 16430 and 16480. All investments are purchased at market, and market valuation is conducted monthly. SAFEKEEPING OF SECURITIES Securities purchased from broker/dealers shall be held by third party bank or other designated third party trust department acting as agent for the District under the terms of a custody agreement executed by the bank and District. All securities will be received and delivered using standard delivery-versus-payment (DVP) procedures. Certificate of Deposit securities are held in the City's vault. No outside broker/dealer or advisor may have access to District funds, accounts or investments, and any transfer of funds to or through an outside bwker/dealer must be approved by the TreasurerlDeputy Treasurer. The District strives to maintain the level of investment of all funds as near 100% as possible, through daily and projected cash flow determinations. Idle cash management and investment transactions are the responsibility of the Treasurer. DIVERSIFICATION The District will diversify its investments by security type, issuers, and maturities. The purpose of diversifying is to reduce overall portfolio risks while attaining an average market rate of return; therefore, it needs to be conceptualized in terms of maturity, instrument types and issuer. Rev: 12/2006 5 P53 INDEPENDENT REVIEW Outside, independent auditors are required to perform an annual review of the District's Investment Policy, process, and internal controls. The review process is performed as part of the District's annual external audit. REPORTING Pursuant to Section 53464 (b) of the California Government Code, the Treasurer shall render a quarterly report to the President and Members of the Fire Board, containing detailed information on all securities, investments, and moneys of the District. The report must be subrnitted within 30 days following the end of the quarter covered by the report. The Treasurer has elected to provide this report monthly. This report shall include the following: . The type of investment, name of the issuer, date of maturity, par and dollar amount invested in all securities. . The weighted average maturity of the investments. . Any funds, investments, or programs including loans that are under the management of contracted parties. . The current market value and source ofthe valuation. . A description of the compliance with the Statement of Investment Policy. . A statement of the District's ability to meet its pooled expenditure requirements for the next six months or provide an explanation as to. why sufficient money shall, or may not be available. . The Treasurer shall report whatever additional information or data may be required by the President and Members of the Fire Board.. The President and Members of the Fire Board may elect to require the report to be made monthly instead of quarterly. In addition to the reporting requirements of Section 53646 of the Government Code, the Treasurer will continue to meet the requirements per AB 943 for cities and counties to submit their investment reports and policies to the California Debt and Investment Advisory Commission (CD lAC). This bill requires each city to submit copies of its second and fourth quarter calendar year investment portfolio reports and copies of annual investment polices. Although the CDIAC mandate continues to be suspended the Budget Act did not repeal or suspend the requirement for cities and counties to submit their investment reports and policies to the California Debt and Investment Advisory Commission (CDlAC). Rev: 12/2006 6 P54 The Treasurer shall be responsible for reviewing and modifying investment guidelines as conditions warrant and is required to submit same for re-approval to the President and Members of the Fire Board annually. However, the Treasurer may, at any time, further restrict the items approved for purchase as deemed appropriate. The basic premise underlying the District's investment philosophy is, and will continue to be, to ensure that money is always safe and available when needed. ~DD.~ Linda D. Daniels Acting Treasurer Rancho Cucamonga Fire Protection District ~ /4, CJ-OOCo Date Rev: 12/2006 7 P55 . Rancho Cucamonga Fire Protection District Statement of Investment Policy GLOSSARY ACCRUED INTEREST: The accrued interest accumulated on a security since the issue date or the last coupon payment. The buyer of the security pays the market price plus accrued interest. AGENCIES: Federal agency securities. ASK/OFFER: The price at which an owner offers to sell. BANKERS' ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as, the issuer. BASIS POINT: III 00 of 1%. BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid). See Offer. BEAR MARKET: A period of generally pessimistic attitudes and declining market prices. BOOK VALUE: The amount at which a security is carried on the books of the holder or issuer. BOND EQUIVALENT YIELD: The basis on which yields on notes and bonds are quoted. BROKER: A broker brings buyers and sellers together for a commission. BULL MARKET: A period of generally optimistic attitudes and increasing market prices. BUYER'S MARKET: A market where supply is greater than demand, giving buyers an advantage in purchase price and terms. CALLABLES-N/C: Securities that the issuer has the right to redeem prior to maturity. CASH SETTLEMENTS: Today. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large denomination CD's are typically negotiable. CMT: Constant Maturity Treasury. COLLATERAL: Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. 1 P56 Irs Rancho Cucamonga Fire Protection District Statement of Investment Policy COMMERCIAL PAPER: Short-term, unsecured, negotiable promissory notes issued by businesses. COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the City. It includes five combined statements for each individual fund and account group prepared in conformity with Government Accounting Accepted Practices (GAAP). It also includes supporting schedules necessary to demonstrate compliance with fmance related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section. COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date. COVER: Spread between the winning bid (or offer) and the next highest bid (or offer). CREDIT RISK: Credit of the underlying security. CUSIP: Committee of Uniform Securities Identification Procedures. DEALER: A dealer, as opposed to a broker, acts as a principal in aII transactions, buying and selIing for his own account or inventory. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of signed receipt for the securities. DERIVATIVES: Financial products that are dependent for their value on (or "derived" from) an underlying financial instrument, a commodity, or an index representing values of groups of such instruments or assets. DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at discount and redeemed at maturity for fuII face value, e.g. U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns. DURATION: A measure of the timing of the cash flows to be received from a given fixed income security. The duration of a security is a useful indicator of its price volatility for given changes in interest rates. 2 P57 . Rancho Cucamonga Fire Protection District Statement of Investment Policy EASE: To assist the economy in growing faster, Fed supplies more credit, lowering reserve requirements or discount rates. EXTENSION TRADES: Selling short term, buying further out in the yield curve. (Usually affected in a bull market). FACE VALUE: The principal amount owed on a debt instrument. It is the amount on which interest is computed and represents the amount that the issuer promises to pay at maturity. FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S & L's small business firms, students, farmers, farm cooperatives, and exports. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLB is to liquefy the housing related assets of its members who must purchase stock in their district Bank. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA or Fannie Mae): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HOD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money. FRN: Floating Rate Note. 3 P58 .. Rancho Cucamonga Fire Protection District Statement of Investment Policy FULL FAITH AND CREDIT: The unconditional guarantee of the United States Government backing a debt for repayment. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA, or FMHM mortgages. The term "passthroughs" is often used to describe Ginnie Maes. INTEREST RATE RISK: The risk that rising interest rates will cause bond prices to fall. INVESTMENT PORTFOLIO: A collection of securities held by a bank, individual, institution or government agency for investment purposes. INVESTOR: A person who purchases securities with the intention of holding them to make a profit. ISSUE: A group of identical securities or the marketing and selling of such securities. ISSUE PRICE: The price at which a new issue of securities is put on the market. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. LOCAL: Refers to the ability to sell securities one owns. LffiID: London Interbank bid rate. LffiOR: London Interbank offered rate. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MARK TO MARKET: Current value of securities at today's market price. MARKET RISK: The risk that the security will be difficult to sell. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase reverse repurchase agreements that establishes each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller- borrower. 4 P59 . Rancho Cucamonga Fire Protection District Statement of Investment Policy MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET INSTRUMENTS: Private and government obligations of one year or less (flexible in some arenas; under five years would still be considered a money market). MTN: Medium Term Note. NEW ISSUE: The fust offering of a security. NONCALLABLE: Security that does not contain a call provision. OFFER: The price asked by a seller of securities. (When you are buying securities you ask for an offer). See Asked and Bid. OPEN MARKET OPERATIONS: Federal Reserve activity, Fed entering the market place to initiate repos, reverses, bill or coupon pass. Under the Federal Reserve Act., Fed uses purchases and sales of Govt. & Fed Agency securities to add to or subtract from commercial bank reserves. Goals are to sustain economic growth, high employment and reasonable price stability. OPTION: The right to trade a security during a certain period of time. ORIGINAL ISSUE DISCOUNT/OlD: Security priced at a discount at time of issuance. OVERBOUGHT: Refers to the price level of a security or market, which has undergone a sharp rise due to vigorous buying. OVERSOLD: Refers to the price level of a security or market, which has undergone a sharp fall due to selling. These conditions indicate that buying/selling may have left prices temporarily too high/low, given all other market conditions. PAPER GAIN OR LOSS: Term used for unrealized gain or loss on securities being held in a portfolio based on comparison of current market quotes and their original cost. This situation exists as long as the security is held while there is a difference between market value and the purchase price. PAR VALUE: The stated or face value of a security expressed as a specific dollar amount marked on the face of the security; the amount of money due at maturity not to be confused with market value. PAYDOWN: A net reduction in debt that occurs when the amount of a new issue is less than the maturing issue. PREMIUM: The amount by which the price paid for a security exceeds the par value. Also, the amount that must be paid over the par value to call an issue before maturity. PRICE RISK: Volatility. 5 P60 . Rancho Cucamonga Fire Protection District Statement of Investment Policy PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly fmancial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms. PRIMARY MARKET: The demand for first issues of securities. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state--the so-called legal list. In other states the trustee may invest in a security if it is one, which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. QUALIFIED PUBLIC DEPOSITORIES: A fmancial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. RALLY: A brisk rise or recovery in the price of a security or the market. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond; the current income return. RATING: The designation used by investor's services to rate the quality of a security's creditworthiness. REGULAR: Next business day. REPURCHASE AGREEMENT: Repo - a holder of securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms are structured to compensate him for this. When the FED does R.P., it is lending money, thus increasing bank reserves. RICH/EXPENSIVE TO THE YIELD CURVE: An expression applied to a security price when current market quotes appear to be in comparison with past price records of securities or current prices of comparable securities. ROLL OVER: Reinvesting funds received from a mature security in a new issue of the same or similar security. SAFEKEEPING: A service banks offer to customers for a fee, where securities are held in the bank's vaults for protection. 6 P61 . Rancho Cucamonga Fire Protection District Statement of Investment Policy SALLIE MAE: Trade name for the Student Loan Marketing Association. SECONDARY MARKET: 1) A market for the repurchase and resale of outstanding issues following the initial distribution. 2) The purchase or sale of securities in a special offering or through a means other than the regular channel of trading. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. SEC RULE 153C-l: See Uniform Net Capital Rule. SHORT/SELL SHORT: Sale of securities without ownership. SKIP DAY: Next business day after tomorrow. SPREAD: Difference between the bid and the ask, or offer. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, SLMA, etc.) and Corporations that have imbedded options (e.g., call features, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve. SUPPORT: A price level at which a security tends to stop falling because there is more demand than supply. TIGHTEN: If the economy is growing too fast, and inflation is increasing, FED withdraws money from the banking system, by raising reserves or the discount rate. Ultimately, putting the brakes on economic growth. TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. TREASURY BOND: Long-term coupon bearing U.S. Treasury securities issued as direct obligation of the U.S. Government having initial maturities of more than 10 years. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. VALUE OF 1/32 PER MILLION: $312.50 7 P62 . Rancho Cucamonga Fire Protection District Statement of Investment Policy WHEN ISSUED BASIS-WIB-WI: A tenn applied to securities that are traded before they are actually issued, with the stipulation that transactions are null and void if securities are not issued. YIELD: The annual rate of return on an investment expressed as a percentage of the investment. Income yield is obtained by dividing the current dollar income by the current market price for the security. YIELD CURVE: Yield calculations of various maturities at a given time to observe spread differences. YIELD TO MATURlTYINET YIELD: The current income yield minus any premium above par, or plus any discount from par in the purchase price with the adjustment spread over the period from date of purchase to maturity. Ann Investment Policies 06/GLOSSARY 06 Fire.doc 8 P63 STAFF REpORT RANrno CUCAMONGA FIRE PROTECTION DISTRICf Date: December 4, 2006 RANCHO CUCAMONGA To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: REQUEST TO EXTEND FIRECAPTAlNELlGIBIUTYUST RECOMMENDATION Approval to extend the existing Fire Captain Employment Eligibility List set to expire on December 19, 2006 to December 19, 2007. BACKGROUND On December 14 and 15, 2005, the District conducted an assessment testing for Fire Captain. Thereafter, an eligibility list of successful candidates was established and certified on December 19, 2005. The duration of employment and/or promotional eligibility lists is one year, effective from the date of establishment. In accordance with the District Rules and Regulations, Rule VII, Section 2.a, with the recommendation of the Fire Chief, the Board may extend a list's duration for a maximum of one (1) year from the date it would have expired. Since there are qualified Fire Captain candidates remaining on the list, it is prudent to extend the eligibility list for one (1) year. Thereafter, the list will automatically expire. Respectfully submitted, ~~ Fire Chief P64 STAFF REpORT RANCHO CUCAMONGA FIRE PROTECTION DISTRICT Date: December 20, 2006 RANCHO CUCAMONGA To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Robin Brock, Fire Information Systems Technician Subject: APPROVAL FOR APPROPRIATION OF FUNDS IN THE AMOUNT OF $57,623 PLUS 10% CONTINGENCY FROM FIRE DISTRICT RESERVE FUNDS FOR AN AUTOMATED FUEL MANAGEMENT SYSTEM RECOMMENDATION It is recommended that the Fire Board approve appropriation of funds from Fire District Reserve funds in the amount of $57,623, plus 10% contingency for an automated fuel management system. BACKGROUND/ANALYSIS The Fuel Management system is a key component of the Fire Maintenance Facility's Automation Project, along with the proposed iMaint software implementation. This will allow the Fire District to track vehicle mileage, fuel consumption and other fueling information, as well as provide authorized access through vehicle/employee identification. The project will require 6 fuel island terminals (one at each fire station) that will connect to a central controller computer and provide integration to the iMaint software program. The City has successfully used the Sentry 5 system by Trak Engineering at both the Corporate Yard and the Adult Sports Complex for over seven years. To build upon the partnership between Public Works and the Fire District for the fleet maintenance software, the Information Systems Division recommended the Trak fuel management product and assisted the Fire District with scheduling a demonstration. Staff has concluded that it met the requirements specified in the Maintenance Facility's needs assessment. This project was reviewed and approved through the City's information technoiogy project approval and review (IT-PAR) process. Respectfully submitted, ~~~ Fire Chief ~~ y' P65 STAFF REpORT R..,NCHO CUc."rONG., FIRE PROTECTION DISTRICT ENGINEERlNG DEP.,RnIENT RANCHO CUCAMONGA Date: December 20, 2006 To: Mayor and Members of the City Council President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief William J. O'Neil, City Engineer By: Robin Brock, Fire. Information Systems Technician Julie Ungashick, Management Analyst II Subject: APPROVAL TO APPROPRIATE FUNDING FROM THE COMPUTER EQUIPMENTITECHNICAL REPLACEMENT FUND (1714001) IN THE AMOUNT OF $21,134, AND $49,970 FROM THE FIRE DISTRICT RESERVE FUND TO PURCHASE A FLEET MAINTENANCE SOFTWARE UPGRADE, IMPLEMENTATION SUPPORT,' AND HARDWARE FROM VARIOUS VENDORS AND AUTHORIZE THE RELATED APPROPRIATIONS INTO THE APPROPRIATE ACCOUNT NUMBERS TO BE DETERMINED BY STAFF. RECOMMENDATION Recommend approval to appropriate funding from the computer equipment/technical replacement fund (1714001) in the amount of $21,134, and $49,970 from the Fire District reserve fund to purchase a fleet maintenance software upgrade, implementation support, and hardware from various vendors and authorize the related appropriations into the appropriate account numbers to be determined by staff. BACKGROUND/ANALYSIS For over seven years the Public 'Works has successfully used a fleet management computer application (FleetMaint) from DPSI and they are upgrading to a current version (iMaint). As part of this upgrade the Fire District will implement iMaint under Public Works' software license. In addition to the software upgrade the project entails implementation support and the purchase of computer hardware. Staff will coordinate with the Purchasing Division regarding final vendor selections. The cooperative use will save the Fire District the initial software investment, and allow both the Fire District and Public Works to enhance the program through new interfaces, and to share implementation and associated project costs to provide an enterprise and cost-effective solution. This project was reviewed and approved through the City's information technology project approval and review (IT-PAR) process. . P66 Respectfully submitted, . 1 . Yt(/ (tC( , ! VVilliam J. O'Neil City Engineer ~~'J " Peter M. Bryan Fire Chief P67 STAFF REpORT RANmo CUCAMONGA FIRE PROrrCTION DISTRICT Date: December 20, 2006 RANCHO CUCAMONGA To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: ADOPTION OF ANNEXATION BOUNDARY MAP NO 88-06-1 RECOMMENDATION Adoption of a resolution adopting a boundary map showing property (located on the east side of Haven Ave., north of Ringstem Dr.) proposed to be annexed into Community Facilities District (CFD) No. 88-1. BACKGROUND Toll Brothers (Tract 12332-2) is conditioned to annex into Community Facilities District (CFD) No. 88-1. In order to initiate formal proceedings to annex the referenced parcel into CFD No. 88-1, a Resolution adopting an annexation boundary map is presented for Board consideration and approval. The boundary map (Exhibit "A") illustrates the territory proposed to be annexed. The territory is inclusive of the entire project. z CQ ~~~f1....,.,.j~~G~ ~~ ! i i=~ II! ,I ~~ If I:~ l~ b """""'_ ~f-- '50'<>: 00<>::- lL..CO'-~ o ~o .0..... -1Oz~ 'IZQu .3 f-- <:::011- u ..... 'IU::' 0 (XlI D:: ~ ::' 0011- D- <>: U1wti .~<>:: 0........- - .....0 z(/)<>:~ W'-"O o...-ze::: <(1-0<>: ~-.J::;:~ -<>:w uu[]) Z<(Gz OLL.. <>: - au) I-__I <(..--u..... xl-zo wz~>- z::) f-- z""",w z """I:::> <( ~f-- 0 O.....u Uo '. ~ ...~ 11< n .t '! fi, ..:!~ 11 '! t_ U ';'l'l :-11 all,!! ~,~~ .:! "! I, ::5: &-1 ~ 3~~ l, E:'~ It:! ;i,j il ;/ 7i~ "'11$ !!:i3.~~i~~ l ~t l~ 'l-~ i;~ h ~'.~~"h~"" \.. < "~I ~!~g lrll;~~ ",., I!<"'~' l1!.~ 'li.l! at...... 'I. ,g,; hI ~~"ll d~l~~it~ I 1'~~l!1fJ~ I~ 'i'l. "1-' ~o.l: ~~ ~~.,;~ t~,t t~~':~;;~ .j....,.. 'I.. - s ... ~-lil 'l>! I~ '.I~!i I" 'f! ~llt""i ~Ji 1"'- ~.!!j~ ~ Iji1! Ii':; ...1: ll~ j-"" :s~ iU~t1i~ i8~ 1',i II~J ;Jh ~ , ih; i ! llr ; .J h! I H, .II I ~lll'I!llm ~g' .;;! I '1" ,"", .'. ~ 3 :.~ .."1; i~~ j~~tl ..., VI :\ u ..;_. d l! L ~ ! i B It ~ Ji S 'I ; h ~ - '* . ~! ~~ ~ ;H, u ~ 'l'; n~i ~ , ~ ~ ~ J! :!'i!:b h~ :..-.~ ';" B S:i I- (j ~ ~ . . i "- . ~- P68 EXHIBIT 'A' , 1 ~ . u . -, I ~lll ~'. I "\., ~.ll =1, ~. e P69 RESOLUTION NO. FD 06- 0 54 RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES . DISTRICT NO. 88-1, ADOPTING A BOUNDARY MAP SHOWING PROPERTY TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 88-1 WHEREAS, the BOARD OF DIRECTORS of the RANCHO CUCAMONGA FIRE PROTECTION DISTRICT (the "Board of Directors"), desires to initiate proceedings to annex territory to an existing Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, and specifically Article 3.5 thereof. The existing Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 88-1 (the "District"); and, WHEREAS, there has been submitted a map entitled "Boundary Map No. 88-06-1 to Comrnunity Facilities District No. 88-1, Rancho Cucarnonga Fire Protection District, County Of San Bernardino, State Of California" (the "Boundary Map") showing the territory proposed to be annexed to the District (the "Territory"). NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection District does hereby resolve as follows: SECTION 1: The above recitals are all true and correct. SECTION 2: The Boundary Map showing the Territory proposed to be annexed to the District and to be subject to the levy of a special tax is hereby approved and adopted. SECTION 3: A certificate shall be endorsed on the original and on at least one (1) copy of Boundary Map, evidencing the date and adoption of this Resolution, and within fifteen (15) days after the adoption of the Resolution fixing the time and place of the hearing on the intention to annex or extent of the annexation to the District, a copy of such map shall be filed with the correct and proper endorsements thereon with the County Recorder, all in the manner and form provided for in Section 3111 of the Streets and Highways Code of the State of California. P70 Resolution No. FD 6 Page 2 PASSED, APPROVED and ADOPTED this _ day of ,2006. AYES: NOES: ABSENT: ABSTAINED: Donald J. Kurth, M.D., President ATTEST: Debra J. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga Fire Protection District, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the Board of Directors of the Rancho Cucamonga Fire Protection District, at a regular meeting of said Board held on the _ day of 2006. Executed this _ day of 2006 at Rancho Cucamonga, California. Debra J. Adams, Secretary P71 STAFF REpORT RANrno CUCAMONGA FIRE PROTECTION DISTRICT Date: December 20, 2006 RANCHO CUCAMONGA . To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: ADOPTION OF ANNEXATION BOUNDARY MAP NO. 06-12 RECOMMENDATION Adoption of a resolution adopting a boundary map showing property (located at the southeast corner of Arrow Rte. and Madrone Ave.) proposed to be annexed into Community Facilities District (CFD) No. 85-1. BACKGROUND Bahman Sepehrnia (SUBTT16788) is conditioned toannex into Community Facilities District (CFD) No. 85-1. In order to initiate formal proceedings to annex the referenced parcel into CFD No. 85-1, a Resolution adopting an annexation boundary map is presented for Board consideration and approval. The boundary map (Exhibit UAU) illustrates the territory proposed to be annexed. The territory is inciusive of the entire project. Respectfully submitted, Attachments ...,. .~ T\'K.7 -: "I - : ~ I -J, = I ~ f 1 ~ I - ~ I . I ~ I I I I . I . S 1 ~ I . I ~ I :;: V I t H NINTH ~TREE>) lMAf__ Of UIlI' Stt1KlN.. _, $llUlIt, _1 WUT, SM __0 -.....'"~lNCIS,..1IlEan'tyRN<<:MO~COUMlTrlSAtI -.$U,ltOf'COl.IWlN....lo(:C(lllllItC:lOlHI:OIl'1ClAII.Pl.Af~.~ ~~ IIt-..oArA f'aNl'2M.41 P'EtTWUTOI'_SlUlMUSTlXIIIl'OOI'SoOIDLOl; lMDfC( HOIt1HJI5m:T, lICIl'l[CIIllLSS,fllKSOU1Iv.:JTCOfICIIlrtflliAT,ARa:lIJfv.ND CPI\tt1U)1tl0CllUrUlW.!MlMAND-.n.IYIlUIlDAlmlilAllOl21.11M1. .tMD1IEtlDfll)[D ~Y7.'''''' MS NO. HI 1HDIQ: WUT14ClRn'lOlHESIU'1HWESTCOIlIlPIOI'K P....::aOf'L..-CCfl\lE'l'ED 100CllUUl" SWllIMD wt: 'lHO<<:I:_lMIOOfUTAlOIIII lHE'/IE:5TLM:I71HATPAlla;LOI'l.AII)~mSAICIDDllAUl":IIIlI1_WE ftlR lHE'llllLPCafTOI'II(QMIMCI; lHDU:C$fNlO'NtAU.fL _ HSOIilHUNE CI' SAll LOT'll TU A Pl>>CTlil lHEC(NlDI"-OI'_HIQftJ,l,f. 01 A alRIIEClOHt./lYE 10 HSiCIlItl€ASTHA_ A"~ OF 2SUS fttT 10 A l'CIffT .o!.M/'UT t:JF 111: ~lXlRtlEl'IorSAlOUT:~u.sTM.DllCllHEr::fJmRLM:OT1(NlH5lI'EET: ~CIrtUD_IICtlWo\Y,4,'41'EE1l1l<<MlX$CIlI1ti1l7.!laftETro1H!:lIllLl'ONT llF_ " 1llGEIHEJII.ntll1AfI'ORllCl'lOFIIlAI)ACIHE"''oDIWYACA'ltDIYRE:Sl;1l.II1IOf~II-251 I\ECtIADOlSP"TDol!lOt2l,t_AS'H$lIIUIIlEMTHO.D'I:>>t.~IlElXlRD5. vaJ"TMO.TP'OIInoNS__ntI!IIII:Kl'CIf""''l$OI'_ROUlERJlIlIlEIIlt.T_AS ~_T_~"'-.rr. CONTAIlSN'f'II(QU,lD..yo.72/QIEJ ANNEXATION MAP NO. ....UOF COMMUNITY F AOUTlES DISTRICT NO. 85-1 OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA iF- .."...... ARROW --2m1 ROUTE , " ~ ;i [:' .., O'llll(U()ART t ~~,.... & "l,~".,i:'- . , ~..,'\. . .' ,,,,,. ._ NIl9'S6'09"'E ii, ~ ~ ~ ~ ~ ~ i ~ ,~ j ~ .8~ . ~ f I ...~ :!;~~ ~ 7 ~ <:' ~ ~,l ." 1'189'55.!J"t ~~. ~::,~It y- ."'r;; ~ftJ TRACT .NO 16788 APN: 0207-262-05 . ~ t I nU1 "'-" ...."" s'l.YlJlE~LOTll~ sa.. ns. R7W. -- NOTE: LEGAL DESCRIPTION: ____9W.l_"""AU.lltTAUASlOElOD<lDr 1M;1OWfllIl'(NtIIO:E!llD1lE_REfDlDlCEDlXMUlIlYr.r,eulDlllSlNef. RANCHO CUCAMONGA FIRE PROTECTION DISTRICT CERTIFICA nON: fI..EJ;IlNlHtllFFlCtllf"11IESOJlElAAYDtlHl'IWDlOCI.IC-.o.FlM: ~1llSlMlC'T.CAI.JfORN,O,.lltIS_D"''I'_ZOO_ .~- lWlCIIO cue-... AM ~_ IllSlllICf STATtCF(:.IUlINA 'HDlDT(:(II'IF(lKo\,T1tI['IlI1HN~N'SHOlIIIMO llOl.fIlN!Qor_ltlItT ~lOIIIENlIIOE:llro~1YF~DISllIleTIlO.U-lor1tE lW<<)fO~fRl.:l'ftOlt~lllSTIltCT.COUrm'0f'5Nl1DtWIlNo.5l''''1[CIF CMRlRNlA.WASJlI'PiIlO'o(llIlY1tIE_orlllREC1'lJ!$OFSUCHfIlEPRO'lEC1lON DIS1NCTATAIlECt.lNtWEElllQ1llEllEor.HEllIllN1It:---D/ITDf~ 2OO_lIYrTJlIESllUI1IllNllO._1M$lIHt[XI,lICNWlPAllENDSlHE -..vWl'fOII tcIlAlIN1'TFAClJ1IE$0I$l1ICf1lO. 115-1 Of 1lEllNIQHO ~fIlEPllammONDl'S'TIlIe1.ClltMYTor$AH_AllIDlMO,Sl"'1[or Co\IXllIlNIA, PlIOlIIlECCflllUl Ctt__ATIIOOK_orlllAPS OfASSESSWDITNfJOOIIIILI<tl'I'FAClIJ'lIa;llIS1lIeT....r'MIt._..1It:1IFI'lCI: (flHECOIMTYIIECalOOIFOIl1HE:alUNTraFSMI_AIlDIfO,CAISOfltIA:. q~~ltf'(" oIU'IlIED'J1l1D..1QJ.. L.S-Im lIAlt EXI'lJIl: .5EFTEJolItRXl.ZOlJ7 SAN BERNARDINO COUNTY RECORDER'S CERT~FlCA TE: P72 EXHtBtT',l\--- ; [; ~ ~ . ~- lWIOtOQJCAlIOMC:AFflEPllOItCllOtllS1MCt Sl'AlEllf"~ fllSlU#'HMllEEHfUDtI<<lblooc:uwENTllO._MS _CAYllf"_200_AT_ JI.INIIOOK_Oft,l..n OFASSaSllI:Of1#M1C01A1l1NTTrACl.I1lU~"'TP-"Gl_ _ATlHEl'ltQUE$Tor INll€AMOuHl'llf"' -~ ~ ...-...- CI:lUICTYDrSM_AA:DlIfO nA1trlCAl..Fl:lRlU ~ O<MY"""'" EGL ASSCIA TES, INC. 11819G<<.DRINGROAll,UNITA ARCAIllA,C,l,9tOO6 .(626) 26J-3588F.a.x: (626)263-3599 "OLE SHUT 1.=30' ,or, P73 RESOLUTION NO. FD 06- 05"5 RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85-1, ADOPTING A BOUNDARY MAP (ANNEXATION NO. 06-12) SHOWING PROPERTY TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 85-1 WHEREAS, the BOARD OF DIRECTORS of the RANCHO CUCAMONGA FIRE PROTECTION DISTRICT (the "Board of Directors"), desires to initiate proceedings to annex territory to an existing Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, and specifically Article 3.5 thereof. The existing Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 85-1 (the "District"); and, WHEREAS, there has been submitted a map entitled "Boundary Map No. 06-12 to Community Facilities District No. 85-1, Rancho Cucamonga Fire Protection District, County of San Bernardino, State Of California" (the "Boundary Map") showing the territory proposed to be annexed to the District (the "Territory"). NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection District does hereby resolve as follows: SECTION 1: The above recitals are all true and correct. SECTION 2: The Boundary Map showing the Territory proposed to be annexed to the District and to be subject to the levy of a special t(lX is hereby approved and adopted. SECTION 3: . A certificate shall be endorsed on the original and on at least one (1) copy of Boundary Map, evidencing the date and adoption of this Resolution, and within fifteen (15) days after the adoption of the Resolution fixing the time and place of the hearing on the intention to annex or extent of the annexation to the District, a copy of such map shall be filed with the correct and proper endorsements thereon with the County Recorder, all in the manner and form provided for in Section 3111 of the Streets and Highways Code of the State of California. P74 Resolution No. FD 06- Page 2 PASSED, APPROVED and ADOPTED this _ day of ,2006. AYES: NOES: ABSENT: ABSTAINED: Donald J. Kurth, M.D., President ATTEST: Debra J. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga Fire Protection District, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the Board of Directors of the Rancho Cucamonga Fire Protection District, at a regular meeting of said Board held on the _ day of 2006. Executed this _ day of 2006 at Rancho Cucamonga, California. Debra J. Adams, Secretary P75 Date: December 20, 2006 To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: RESOLUTION OF INTENTION TO ANNEX TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 88-1 STAFF REpORT RANCHO CUCAMONGA FIRE PROTECTION DISTIUCT RECOMMENDATION Adoption of a Resolution of Intention to Annex Territory referred to as Annexation No. 88-06-1 into Community Facilities District No. 88-1, to specify facilities and services to be financed, to set and specify the special taxes to be levied within the territory proposed to be annexed and to set a time and place for a public hearing regarding the annexation. BACKGROUND Toll Brothers (Tract No. 12332-2) is conditioned by the City and Fire District to annex to the existing Community Facilities District (CFD) No. 88-1 to satisfy fire protection service mitigation impacts. In order to initiate formal annexation proceedings, the Fire Board is being asked to adopt a resolution approving a boundary map of the territory proposed to be annexed and a Resolution of Intention to Annex. The Resolution of Intention generally sets forth: (a) the District's intention to annex; (b) the facilities and services which the annexed property will, in part, finance (Exhibit "A" of said Resolution) through the levy of the special tax on the annexed property; (d) the rate and method of apportionment of the proposed special tax (Exhibit "B" of said Resolution); (e) the date, time and location of the public hearing set for January 17,2007; and (f) election requirements. Warren Diven, Special Counsel for the District, has worked with staff to establish the annexation process, timelines and draft resolutions. . The resolution is considered to be P76 RESOUTION OF INIENTIONTO ANNEX DECEMBER 20, 2006 PAGE 2 routine and non-controversial, as the property owner is in support of the annexation procedure. On January 17, 2007, there will be a public hearing for public input/concerns on this matter. Respectfully submitted, Attachment P77 RESOLUTION NO. FD o6.o5~ RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 88-1, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 88-1 WHEREAS, the BOARD OF DIRECTORS of the RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, CALIFORNIA, ("Board of Directors"), formed a Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of Califomia (the "Act"). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 88-1 (the "District"); and, WHEREAS, the Board of Directors desires to initiate proceedings to consider the annexation of certain real property to the District (the "Territory"); and WHEREAS, a map entitled "Annexation Map No. 88-06-1 to Community Facilities District No. 88-1 Rancho Cucamonga Fire Protection District, County of San Bernardino, State of California" (the "Boundary Map") showing the Territory proposed to be annexed to the District has been submitted, which map has been previously approved and a copy of the map shall be kept on file with the transcript of these proceedings; and WHEREAS, this Board of Directors now desires to proceed to adopt its Resolution of Intention to annex the Territory to District, to describe the territory included within District and the Territory proposed to be annexed thereto, to specify the seNices to be financed from the proceeds of the levy of special taxes within the Territory, to set and specify the special taxes that would be levied within the Territory to finance such seNices, and to set a time and place for a public hearing relating to the annexation of the Territory to the District. NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection District does hereby resolve as follows: RECITALS SECTION 1: The above recitals are all true and correct. LEGAL AUTHORITY SECTION 2: These proceedings for annexation are initiated by this Board of Directors pursuant to the authorization of the Act. P78 INTENTION TO ANNEX: DESCRIPTION OF TERRITORY AND THE DISTRICT SECTION 3. This legislative body hereby determines that the public convenience and necessity requires thatthe Territory be added to the District and this Board of Directors declares its intention to annex the Territory to the District. A description of the Territory is as follows: All that property within the Territory proposed to be annexed to the District, as such property is shown on the Boundary Map as previously approved by this legislative body, a copy of which is on file in the Office of the Secretary and shall remain open for public inspection. A general description of the territory included in the District is hereinafter described as follows: All that property and territory as originally included within the District and as subsequently annexed to the District, as such properties were shown on maps of the original District and the territories subsequently annexed to the District, all as approved by this Board of Directors and designated by the name of the original District. Copies of such maps are on file in the Office of the Secretary and have also been filed in the Office of the County Recorder. SERVICES AUTHORIZED TO BE FINANCED BY THE DISTRICT SECTION 4: The services that are authorized to be financed by the District from the proceeds of special taxes levied within the District (the "Services") are generally described in Exhibit A attached hereto and incorporated herein by this reference. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide the Services. The Services authorized to be financed by the District from the proceeds of special taxes levied within District are the types of services to be provided in the Territory. If and to the extent possible the Services shall be provided in common within the District and the Territory. . SPECIAL TAXES SECTION 5: It is the further intention of this Board of Directors body that, except where funds are otherwise available, a special tax sufficient to pay for the Services and related incidental expenses authorized by the Act, secured by recordation of a continuing lien against all non-exempt real property in the Territory, will be levied annually within the boundaries of such Territory. For further particulars as to the rate and method of apportionment of the P79 proposed special tax, reference is made to Exhibit B (the "Special Tax Formula"), which is attached hereto and incorporated herein by this reference and which sets forth in sufficient detail the method of apportionment of such special tax to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. The special tax proposed to be levied within the Territory shall be equal to the special tax levied to pay for the Services in the District, except that a higher or lower special tax may be levied within the Territory to the extentthat the actual cost of providing the Services in the Territory is higher or lower than the cost of providing those Services in the original District. Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher than the maximum special tax authorized to be levied pursuant to the Special Tax Formula. The special taxes herein authorized shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency, as applicable for ad valorem taxes; however, as applicabie, this legislative body may, by resolution, establish and adopt an alternate or supplemental procedure as necessary. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer of the Rancho Cucamonga Fire Protection District, acting for and on behalf of the District. . Upon recordation of a Notice of Special Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California, a continuing lien. to secure each levy of the special tax shall attach to all non-exempt real property in the Territory and this iien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the legislative body ceases. The maximum special tax rate authorized to be levied within the District shall not be increased as a result of the annexation of the Territory to the District. PUBLIC HEARING SECTION 6: NOTICE IS GIVEN THAT ON THE 17th DAY OF JANUARY 2007, AT THE HOUR OF 7:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE LEGISLATIVE BODY, BEING THE COUNCIL CHAMBERS, 10500 CIVIC CENTER DRIVE, RANCHO CUCAMONGA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD WHERE THIS LEGISLATIVE BODY WILL CONSIDER THE AUTHORIZATION FOR THE ANNEXATION OF THE TERRITORY TO THE DISTRICT, THE PROPOSED METHOD AND APPORTIONMENT OF THE SPECIAL TAX TO BE LEVIED WITHIN THE TERRITORY AND ALL OTHER MATTERS AS SET FORTH IN THIS RESOLUTION OF INTENTION. P8D AT SUCH PUBLIC HEARING, THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE ANNEXATION OF THE TERRITORY OR THE LEVYING OF SPECIAL TAXES WITHIN THE TERRITORY WILL BE HEARD. AT SUCH PUBLIC HEARING, PROTESTS AGAINST THE PROPOSED ANNEXATION OF THE TERRITORY, THE LEVY OF SPECIAL TAXES WITHIN THE TERRITORY OR ANY OTHER PROPOSALS CONTAINED IN THIS RESOLUTION MAY BE MADE ORALLY BY ANY INTERESTED PERSON. ANY PROTESTS PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL BE IN WRITING AND SHALL CLEARLY SET FORTH THE IRREGULARITIES OR DEFECTS TO WHICH OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH THE SECRETARY PRIOR TO THE TIME FIXED FOR THE PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN AT ANY TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING. MAJORITY PROTEST SECTION 7: If (a) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the District, (b) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the Territory, (c) owners of one-half or more of the area of land in the territory included in the District, or (d) owners of one-half or more of the area of land in the territory included in the Territory, file written protests againstthe proposed annexation of the Territory to the District and such protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the Board of Directors on the issues discussed at the public hearing. ELECTION SECTION 8: Upon the conclusion of the public hearing, if the legislative body determines to proceed with the annexation, a proposition shall be submitted to the qualified electors of the Territory. The vote shall be by registered voters within the Territory; however, if there are less than 12 registered voters, the vote shall be by landowners, with each landowner having one vote per acre or portion thereof within the Territory. NOTICE SECTION 9: Notice of the time and place of the publiC hearing shall be given by the Secretary by publication in a legally designated newspaper of general circulation, said publication pursuant to Section 6061 of the Government Code, with said publication to be completed at least seven (7) days prior to the date set for the public hearing. A copy of this Resolution shall be transmitted to the City Council of the City of Rancho Cucamonga as required by the Act. . P81 PASSED, APPROVED and ADOPTED this _ day of ,2006. AYES: NOES: ABSENT: ABSTAINED: Donald J. Kurth, MD., President ATTEST: Debra H. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga Fire Protection District, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the Board of Directors of the Rancho Cucamonga Fire Protection District, at a regular meeting of said Board held on the _ day of 2006. Executed this day of 2006, at Rancho Cucamonga, California Debra J. Adams, Secretary P82 EXHIBIT A COMMUNITY FACILITIES DISTRICT NO. 88-1 DESCRIPTION OF THE SERVICES The performance by employees of functions, operations, maintenance and repair activities in order to provide fire protection and suppression services. P83 EXHIBIT B COMMUNITY FACILITIES DISTRICT NO. 88-1 ANNEXATION NO. 88-06-1 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FISCAL YEAR 2006/07 TAXING CLASSIFICATION 1. DEVELOPED PROPERTY A. Residential Class I (more than 3590 SF) B. Residential Class 11 (3077 to 3589 SF) C. Residential Class 111 (2564 to 3076 SF) D. Residential Class IV (2308 to 2563 SF) E. Residential Class V (2051 to 2307 SF) F. Residential Class VI (1795 to 2050 SF) G. Residential Class VII (less than 1795 SF) Commercialllndustrial Properly SPECIAL TAX LEVY FISCAL YEAR 2006/07 $417.33 $321.65 $255.93 $223.66 $193.67 $176.40 $159.08 $642.14 per acre or $0.057 per square foot or building area, whichever is greater. 2. APPROVED PROPERTY $200.00 per lot or parcel 3. VACANT PROPERTY $1.00 per acre SF = Square Feet P84 STAFF REpORT RANrno OJCAMONGA FIRE PROTECTION DISlRICf Date: December 20, 2006 RANCHO CUCAMONGA To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: RESOLUTION OF INTENTION TO ANNEXTERRfTORYTO COMMUNITY FACILfTlES DISlRICf NO. 85-1 RECOMMENDATION Adoption of a Resolution of Intention to Annex Territory referred to as Annexation No. 06-12 into Community Facilities District No. 85-1, to specify facilities and services to be financed, to set and specify the special taxes to be levied within the territory proposed to be annexed and to set a time and place for a public hearing regarding the annexation. BACKGROUND Bahman Sepehrnia (SUBTT16788) is conditioned by the City and Fire District to annex to the existing Community Facilities District (CFD) No. 85-1 to satisfy fire protection service mitigation impacts. In order to initiate formal annexation proceedings, the Fire Board is being asked to adopt a resolution approving a boundary map of the territory proposed to be annexed and a Resolution of Intention to Annex. The Resolution of Intention generally sets forth: (a) the District's intention to annex; (b) the facilities and services which the annexed property will, in part, finance (Exhibit "A" of said Resolution) through the levy of the special tax on the annexed property; (d) the rate and method of apportionment of the proposed special tax (Exhibit "8" of said Resolution); (e) the date, time and location of the public hearing set for January 17, 2007; and (f) election requirements. Warren Diven, Special Counsel for the District, has worked with staff to establish the annexation process, timelines and draft resolutions. The resolution is considered to be P85 RESOLUTION OF INTENTION TO ANNEx DECEMBER 20, 2006 PAGE 2 routine and non-controversial, as the developer is in support of the annexation procedure. On January 17, 2007, there will be a public hearing for public input/concerns on this matter. Attachment P86 RESOLUTION NO. FD 06- D57 RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85-1, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-12) TO COMMUNITY FACILITIES DISTRICT NO. 85-1 WHEREAS, the BOARD OF DIRECTORS of the RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, CALIFORNIA, ("Board of Directors"), formed a Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act"). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 85-1 (the "District"); and, WHEREAS, the Board of Directors desires to initiate proceedings to consider the annexation of certain real property to the District (the "Territory"); and WHEREAS, a map entitled "Annexation Map No. 06-12 to Community Facilities District No. 85-1 Rancho Cucamonga Fire Protection District, County of San Bernardino, State of California" (the "Boundary Map") showing the Territory proposed to be annexed to the District has been submitted, which map has been previously approved and a copy of the map shall be kept on file with the transcript of these proceedings; and WHEREAS, this Board of Directors now desires to proceed to adopt its Resolution of Intention to annex the Territory to District, to describe the territory included within District and the Territory proposed to be annexed thereto, to specify the services to be financed from the proceeds of the levy of special taxes within the Territory, to set and specify the special taxes that would be levied within the Territory to finance such services, and to set a time and place for a public hearing relating to the annexation of the Territory to the District. NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection District does hereby resolve as follows: RECITALS SECTION 1: The above recitals are all true and correct. LEGAL AUTHORITY SECTION 2: These proceedings for annexation are initiated by this Board of Directors pursuant to the authorization of the Act. INTENTION TO ANNEX: DESCRIPTION OF TERRITORY AND THE DISTRICT SECTION 3. This legislative body hereby determines that the public convenience and necessity requires that the Territory be added to the District and this Board of Directors declares its intention to annex the Territory to the District. A description of the Territory is as follows: P8l Resolution No. 06- Page -2- All that property within the Territory proposed to be annexed to the District, as such property is shown on the Boundary Map as previously approved by this legislative body, a copy of which is on file in the Office of the Secretary and shall remain open for public inspection. A general description of the territory included in the District is hereinafter described as follows: All that property and territory as originally included within the District and as subsequently annexed to the District, as such properties were shown on maps of the original District and the territories subsequently annexed to the District, all as approved by this Board of Directors and designated by the name of the original District. Copies of such maps are on file in the Office of the Secretary and have also been filed in the Office of the County Recorder. SERVICES AUTHORIZED TO BE FINANCED BY THE DISTRICT SECTION 4: The services that are authorized to be financed by the District from the proceeds of special taxes levied within the District (the "Services") are generally described in Exhibit A attached hereto and incorporated herein by this reference. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide the Services. The Services authorized to be financed by the District from the proceeds of special taxes levied within District are the types of services to be provided in the Territory. If and to the extent possible the Services shall be provided in common within the District and the Territory. P88 Resolution No. 06- Page -3- SPECIAL TAXES SECTION 5: It is the further intention of this Board of Directors body that, except where funds are otherwise available, a special tax sufficient to pay for the Services and related incidental expenses authorized by the Act, secured by recordation of a continuing lien against all non-exempt real property in the Territory, will be levied annually within the boundaries of such Territory. For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to Exhibit B (the "Special Tax Formula"), which is attached hereto and incorporated herein by this reference and which sets forth in sufficient detail the method of apportionment of such special tax to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. The special tax proposed to be levied within the Territory shall be equal to the special tax levied to pay for the Services in the District, except that a higher or lower special tax may be levied within the Territory to the extent that the actual cost of providing the Services in the Territory is higher or lower than the. cost of providing those Services in the original District. Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher than the maximum special tax authorized to be levied pursuant to the Special Tax Formula. The special taxes herein authorized shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency, as applicable for ad valorem taxes; however, as applicable, this legislative body may, by resolution, establish and adopt an alternate or supplemental procedure as necessary. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer of the Rancho Cucamonga Fire Protection District, acting for and on behalf of the District. Upon recordation of a Notice of Special Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California, a continuing lien to secure each levy of the special tax shall attach to all non-exempt real property in the Territory and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the legislative body ceases. The maximum special tax rate authorized to be levied within the District shall not be increased as a result of the annexation of the Territory to the District. P89 Resolution No. 06- Page -4- PUBLIC HEARING SECTION 6: NOTICE IS GIVEN THAT ON THE 17th DAY OF JANUARY 2007, AT THE HOUR OF 7:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE LEGISLATIVE BODY, BEING THE COUNCIL CHAMBERS, 10500 CIVIC CENTER DRIVE, RANCHO CUCAMONGA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD WHERE THIS LEGISLATIVE BODY WILL CONSIDER THE AUTHORIZATION FOR THE ANNEXATION OF THE TERRITORY TO THE DISTRICT, THE PROPOSED METHOD AND APPORTIONMENT OF THE SPECIAL TAX TO BE LEVIED WITHIN THE TERRITORY AND ALL OTHER MATTERS AS SET FORTH IN THIS RESOLUTION OF INTENTION. AT SUCH PUBLIC HEARING, THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE ANNEXATION OF THE TERRITORY OR THE LEVYING OF SPECIAL TAXES WITHIN THE TERRITORY WILL BE HEARD. AT SUCH PUBLIC HEARING, PROTESTS AGAINST THE PROPOSED ANNEXATION OF THE TERRITORY, THE LEVY OF SPECIAL TAXES WITHIN THE TERRITORY OR ANY OTHER PROPOSALS CONTAINED IN THIS RESOLUTION MAY BE MADE ORALLY BY ANY INTERESTED PERSON. ANY PROTESTS PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL BE IN WRITING AND SHALL CLEARLY SET FORTH THE IRREGULARITIES OR DEFECTS TO WHICH OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH THE SECRETARY PRIOR TO THE TIME FIXED FOR THE PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN AT ANY TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING. P90 Resolution No. 06- Page -5- MAJORITY PROTEST SECTION 7: If (a) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the District, (b) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the Territory, (c) owners of one-half or more of the area of land in the territory included in the District, or (d) owners of one-half or more of the area of land in the territory included in the Territory, file written protests against the proposed annexation of the Territory to the District and such protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the Board of Directors on the issues discussed at the public hearing. ELECTION SECTION 8: Upon the conclusion of the public hearing, if the legislative body determines to proceed with the annexation, a proposition shall be submitted to the qualified electors of the Territory. The vote shall be by registered voters within the Territory; however, if there are less than 12 registered voters, the vote shall be by landowners, with each landowner having one vote per acre or portion thereof within the Territory. NOTICE SECTION 9: Notice of the time and place of the public hearing shall be given by the Secretary by publication in a legally designated newspaper of general circulation, said publication pursuant to Section 6061 of the Government Code, with said publication to be completed at least seven (7) days prior to the date set for the public hearing. A copy of this Resolution shall be transmitted to the City Council of the City of Rancho Cucamonga as required by the Act. Resolution No. 06- Page -6- PASSED, APPROVED and ADOPTED this _ day of AYES: NOES: ABSENT: ABSTAINED: P91 ,2006. ATTEST: Debra H. Adams, Secretary Donald J. Kurth, M.D., President I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga Fire Protection District, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the Board of Directors of the Rancho Cucamonga Fire Protection District, at a regular meeting of said Board heid on the _ day of 2006. Executed this day of 2006, at Rancho Cucamonga, California Debra J. Adams, Secretary P92 Resolution No. 06- Page -7- EXHIBIT 'A' COMMUNITY FACILITIES DISTRICT NO. 85-1 DESCRIPTION OF THE SERVICES The performance by employees of functions, operations, maintenance and repair activities in order to provide fire protection and suppression services. P93 Resolution No. 06- Page -8- EXHIBIT 'B' COMMUNITY FACILITIES DISTRICT NO. 85-1 ANNEXATION NO. 06-12 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES The rate and method of apportionment, limitations on and adjustment to the Special Tax shall be as follows: To pay for fire suppression services and to finance fire suppression facilities, the Maximum Special Tax in Community Facilities District No. 85-1, Annexation No. 06-12 for Fiscal Year 2006-2007 shall be: Stru ctu res Maximum Annual Special Tax Multi-Family 2DU: 3 DU: 4 DU: 5-14 DU: 15-30 DU: 31-80 DU: 81 - up DU: 1.75 2.25 2.65 2.65 6.15 10.65 23.15 = ($138.06) = ($138.06) = ($138.06) = ($138.06) = ($138.06) + {.35 (TU-4) = ($138.06) + {.30 (TU-14} = ($138.06) + {.25 (TU-30) = ($138.06) + {.20 (TU-80) ($138.06)) ($138.06)} ($138.06)} ($138.06)) Residential 1 DU Industrial ($138.06) per acre + $.075 per SF ($138.06) per acre + $.092 per SF Commercial Note: DU = Dwelling Unit TU = Total Units SF = Square Foot ANNUAL ADJUSTMENT The maximum Special Tax shall be annually adjusted commencing on July 1, 2006 and each July 151 thereafter for (a) changes in the cost of living or (b) changes in cost of living and changes in population as defined in Section 7901 of the Government Code, as amended, whichever is lesser. P94 Resolution No. 06- Page -9- REDUCTION IN SPECIAL TAX Commercial and industrial structures shall be granted a .01 cent reduction in the Special Tax for the installation of complete sprinkler systems. In addition, multi-floor commercial and industrial structures shall also be granted a .01 cent reduction (not cumulative) in Special Tax for each separate floor above or below the main ground floor of the structure. LIMITATION ON SPECIAL TAX LEVY The Special Tax shall only be levied on Developed Property. Developed Property is defined to be property: which is not owned by a public or governmental agency; which is not vacant; where a "certificate of occupancy" or "utility release" from the City of Rancho Cucamonga has been issued; which has an existing buiiding or structure onsite; which does not have as its sole use power transmission towers, railroad tracks, and flood control facilities. Areas granted as easements for such purposes shall be subtracted from the total acreage of the underlying lot. The annual levy of the Special Tax shall be based upon an annual determination by the Board of Directors of the Rancho Cucamonga Fire Protection District of the amount of other revenues available to meet budget requirements. As used in this formula, "available revenue" shall include ad valorem taxes, State of California augmentation, tax increment revenues received from the Redevelopment Agency of the City of Rancho Cucamonga and any other source of revenue except the Special Tax. The Board of Directors shall take all responsible steps to retain maximum Redevelopment Agency funding to which, by agreement, they may lawfully receive. To the extent available revenues are insufficient to meet budget requirements, the Board of Directors may levy the Special Tax. For further particulars regarding the rate and method of apportionment of the Special Tax, reference is made to the Final Report Mello-Roos Community Facilities District No. 85-1 for Fire Suppression Facilities/Services - Foothill Fire Protection District; a copy of which is on file in the office of the Fire Chief of the Rancho Cucamonga Fire Protection District. P95 STAFF REpORT RANrno CUCAMONGA FIRE PROTECTION DISTRICT Date: December 20, 2006 RANCHO CUCAMONGA To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: ADOPTION OF ANNEXATION BOUNDARY MAP NO. 06-6 RECOMMENDATION Adoption of a resolution adopting a boundary map showing property (located on the east side of Madrone Ave. south of Arrow Route) proposed to be annexed into Community Facilities District (CFD) No. 85-1. BACKGROUND Huntec Development Inc., (SUBTT18139) is conditioned to annex into Community Facilities District (CFD) No. 85-1. In order to initiate formal proceedings to annex the referenced parcel into CFD No. 85-1, a Resolution adopting an annexation boundary map is presented for Board consideration and approval. The boundary map (Exhibit "A") illustrates the territory proposed to be annexed. The territory is inclusive of the entire project. Respectfully submitted, f Peter M. Brya Fire Chief Attachments <t: f- CD I >< u.J ~ u, ~~ "" ~5 Z 0"- o ~~ i= ' ... ~~ ..... [;1"'- (( ~~ o E~ (f) .< W ~ffi o w_ ...J ~! (5 ~l!i~ W "'/:0 ...J O:Z'" ~5~ E~~ u'C i~~ HU jg[3 <uc r-~ffiw ~ "'<"':I: 0 ~~~~~ ~:iiwg ~ [~~~~ ~ Oz\!'O", w ~~~~~ III ~!S~,,'" 0 ~ <.> ~ :('-g ~ g~~~~ >-- ;;-~~g ~ o<<Ow:> ;::5"'00 i&~i:~ ;-~ ~~ ~ >-,,~go 3 li! 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FD 06- 055 RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85-1, ADOPTING A BOUNDARY MAP (ANNEXATION NO. 06-6) SHOWING PROPERTY TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 85-1 WHEREAS, the BOARD OF DIRECTORS of the RANCHO CUCAMONGA FIRE PROTECTION DISTRICT (the "Board of Directors"), desires to initiate proceedings to annex territory to an existing Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, and specifically Article 3.5 thereof. The existing Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 85-1 (the "District"); and, WHEREAS, there has been submitted a map entitled "Boundary Map No. 06-6 to Community Facilities District No. 85-1, Rancho Cucamonga Fire Protection District, County of San Bernardino, State Of California" (the "Boundary Map") showing the territory proposed to be annexed to the District (the "Territory"). NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection District does hereby resolve as follows: SECTION 1: The above recitals are all true and correct. SECTION 2: The Boundary Map showing the Territory proposed to be annexed to the District and to be subject to the levy of a special tax is hereby approved and adopted. SECTION 3: A certificate shall be endorsed on the original and on at least one (1) copy of Boundary Map, evidencing the date and adoption of ,this Resolution, and within fifteen (15) days after the adoption of the Resolution fixing the time and place of the hearing on the intention to annex or extent of the annexation to the District, a copy of such map shall be filed with the correct and proper endorsements thereon with the County Recorder, all in the manner and form provided for in Section 3111 of the Streets and Highways Code of the State of California. P98 Resolution No. FD 06- Page 2 PASSED, APPROVED and ADOPTED this _ day of ,2006. AYES: NOES: ABSENT: ABSTAINED: Donald J. Kurth, M.D., President ATTEST: Debra J. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga Fire Protection District, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the Board of DireCtors of the Rancho Cucamonga Fire Protection District, at a regular meeting of said Board held on the _ day of 2006. Executed this _ day of 2006, at Rancho Cucamonga, California. Debra J. Adams, Secretary pgg STAFF REpORT RANCHO CUCAMONGA FIRE PROTECTION DISTRICT Date: December 20, 2006 RANCHO CUCAMONGA To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: RESOLUTION OF INTENTION TO ANNEXTERRfTORYTO COMMUNITY FACILITIES DISTRICT NO. 85-1 RECOMMENDATION Adoption of a Resolution of Intention to Annex Territory referred to as Annexation No. 06-6 into Community Facilities District No. 85-1, to specify facilities and services to be financed, to set and specify the special taxes to be levied within the territory proposed to be annexed and to set a time and place for a public hearing regarding the annexation. BACKGROUND Huntec Development Inc., (SUBTT18139) is conditioned by the City and Fire District to annex to the existing Community Facilities District (CFD) No. 85-1 to satisfy fire protection service mitigation impacts. In order to initiate formal annexation proceedings, the Fire Board is being asked to adopt a resolution approving a boundary map of the territory proposed to be annexed and a Resolution of Intention to Annex. The Resolution of Intention generally sets forth: (a) the District's intention to annex; (b) the facilities and services which the annexed property will, in part, finance (Exhibit "A" of said Resolution) through the levy of the special tax on the annexed property; (d) the rate and method of apportionment of the proposed special tax (Exhibit "B" of said Resolution); (e) the date, time and location of the public hearing set for January 17, 2007; and (f) election requirements. Warren Diven, Special Counsel for the District, has worked with staff to establish the annexation process, timelines and draft resolutions. The resolution is considered to be P100 RESOLUTION OF INIENTION TO ANNEx DECEMBER 20,2006 PAGE 2 routine and non-controversial, as the developer is in support of the annexation procedure. On January 17, 2007, there will be a public hearing for public inpuUconcerns on this matter. . Attachment P101 RESOLUTION NO. FD 06-059 RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 85-1, DECLARING ITS INTENTION TO AUTHORIZE THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-6) TO COMMUNITY FACILITIES DISTRICT NO. 85-1 WHEREAS, the BOARD OF DIRECTORS of the RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, CALIFORNIA, ("Board of Directors"), formed a Community Facilities District pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of Califomia (the "Act"). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 85-1 (the "District"); and, WHEREAS, the Board of Directors desires to initiate proceedings to consider the annexation of certain real property to the District (the "T erritory"); and WHEREAS, a map entitled "Annexation Map No. 06-6 to Community Facilities District No. 85-1 Rancho Cucamonga Fire Protection District, County of San Bernardino, State of California" (the "Boundary Map") showing the Territory proposed to be annexed to the District has been submitted, which map has been previously approved and a copy of the map shall be kept on file with the transcript of these proceedings; and WHEREAS, this Board of Directors now desires to proceed to adopt its Resolution of Intention to annex the Territory to District, to describe the territory included within District and the Territory proposed to be annexed thereto, to specify the services to be financed from the proceeds of the levy of special taxes within the Territory, to set and specify the speciai taxes that would be levied within the Territory to finance such services, and to set a time and place for a public hearing relating to the annexation of the Territory to the District. NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection District does hereby resolve as follows: RECITALS SECTION 1: The above recitals are all true and correct. LEGAL AUTHORITY SECTION 2: These proceedings for annexation are initiated by this Board of Directors pursuant to the authorization of the Act. INTENTION TO ANNEX: DESCRIPTION OF TERRITORY AND THE DISTRICT SECTION 3. This legislative body hereby determines that the public convenience and . necessity requires that the Territory be added to the District and this Board of Directors declares its intention to annex the Territory to the District. A description of the Territory is as follows: P102 Resolution No. 06- Page -2- All that property within the Territory proposed to be annexed to the District, as such property is shown on the Boundary Map as previously approved by this legislative body, a copy of which is on file in the Office of the Secretary and shall remain open for public inspection. A general description of the territory included in the District is hereinafter described as follows: All that property and territory as originally included within the District and as subsequently annexed to the District, as such properties were shown on maps of the original District and the territories subsequently annexed to the District, all as approved by this Board of Directors and designated by the name of the original District. Copies of such maps are on file in the Office of the Secretary and have also been filed in the Office of the County Recorder. SERVICES AUTHORIZED TO BE FINANCED BY THE DISTRICT SECTION 4: The services that are authorized to be financed by the District from the proceeds of special taxes levied within the District (the "Services") are generally described in Exhibit A attached hereto and incorporated herein by this reference. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide the Services. The Services authorized to be financed by the District from the proceeds of special taxes levied within District are the types of services to be provided in the Territory. If and to the extent possible the Services shall be provided in common within the District and the Territory. P103 Resolution No. 06- Page ~3- SPECIAL TAXES SECTION 5: It is the further intention of this Board of Directors body that, except where funds are otherwise available, a special tax sufficient to pay for the Services and related incidental expenses authorized by the Act, secured by recordation of a continuing lien against all non-exempt real property in the Territory, will be levied annually within the boundaries of such Territory. For further particulars as to the rate and method of apportionment of the. proposed special tax, reference is made to Exhibit B (the "Special Tax Formula"), which is attached hereto and incorporated herein by this reference and which sets forth in sufficient detail the method of apportionment of such special tax to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. The special tax proposed to be levied within the Territory shall be equal to the special tax levied to pay for the Services in the District, except that a higher or lower special tax may be levied within the Territory to the extentthat the actual cost of providing the Services in the Territory is higher or lower than the cost of providing those Services in the original District. Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher than the maximum special tax authorized to be levied pursuant to the Special Tax Formula. The special taxes herein authorized shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency, as applicable for ad valorem taxes; however, as applicable, this legislative body may, by resolution, establish and adopt an alternate or supplemental procedure as necessary. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer of the Rancho Cucamonga Fire Protection District, acting for and on behalf of the District. Upon recordation of a Notice of Speciai Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California, a continuing lien to secure each levy of the special tax shall attach to all non-exempt real property in the Territory and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the legislative body ceases. The maximum special tax rate authorized to be levied within the District shall not be increased as a result of the annexation of the Territory to the District. P104 Resolution No. 06- Page -4- PUBLIC HEARING SECTION 6: NOTICE IS GIVEN THAT ON THE 17th DAY OF JANUARY 2007 , AT THE HOUR OF 7:00 O'CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE LEGISLATIVE BODY, BEING THE COUNCIL CHAMBERS, 10500 CIVIC CENTER DRIVE, RANCHO CUCAMONGA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD WHERE THIS LEGISLATIVE BODY WILL CONSIDER THE AUTHORIZATION FOR THE ANNEXATION OF THE TERRITORY TO THE DISTRICT, THE PROPOSED METHOD AND APPORTIONMENT OF THE SPECIAL TAX TO BE LEVIED WITHIN THE TERRITORY AND ALL OTHER MATTERS AS SET FORTH IN THIS RESOLUTION OF INTENTION. AT SUCH PUBLIC HEARING, THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE ANNEXATION OF THE TERRITORY. . OR THE LEVYING OF SPECIAL TAXES WITHIN THE TERRITORY WILL BE HEARD. AT SUCH PUBLIC HEARING, PROTESTS AGAINST THE PROPOSED ANNEXATION OF THE TERRITORY, THE LEVY OF SPECIAL TAXES WITHIN THE TERRITORY OR ANY OTHER PROPOSALS CONTAINED IN THIS RESOLUTION MAY BE MADE ORALLY BY ANY INTERESTED PERSON. ANY PROTESTS PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL BE IN WRITING AND SHALL CLEARLY SET FORTH THE IRREGULARITIES OR DEFECTS TO WHICH OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH THE SECRETARY PRIOR TO THE TIME FIXED FOR THE PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN AT ANY TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING. P105 Resolution No. 06- Page -5- MAJORITY PROTEST SECTION 7: If (a) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the District, (b) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the Territory, (c) owners of one-haif or more of the area of land in the territory included in the District, or (d) owners of one-half or more of the area of land in the territory included in the Territory, file written protests against the proposed annexation of the Territory to the District and such protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the Board of Directors on the issues discussed at the public hearing. ELECTION SECTION 8: Upon the conclusion of the public hearing, if the legislative body determines to proceed with the annexation, a proposition shall be submitted to the qualified electors of the Territory. The vote shall be by registered voters within the Territory; however, if there are less than 12 registered voters, the vote shall be by landowners, with each landowner having one vote per acre or portion thereof within the Territory. NOTICE SECTION 9: Notice of the time and place of the public hearing shall be given by the Secretary by publication in a legally designated newspaper of general circulation, said publication pursuant to Section 6061 of the Government Code, with said publication to be completed at least seven (7) days prior to the date set for the public hearing. A copy of this Resolution shall be transmitted to the City Council of the City of Rancho Cucamonga as required by the Act. Resolution No. 06- Page -6- PASSED, APPROVED and ADOPTED this _ day of ,2006. AYES: NOES: ABSENT: ABSTAINED: P106 Donald J. Kurth. M.D., President ATTEST: Debra H. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga Fire Protection District, do hereby certify that the foregoing Resolution was duly passed. approved, and adopted by the Board of Directors of the Rancho Cucamonga Fire Protection District, at a regular meeting of said Board held on the _ day of 2006. Executed this day of 2006, at Rancho Cucamonga. California Debra J. Adams. Secretary P107 Resolution No. 06- Page -7- EXHIBIT 'A' COMMUNITY FACILITIES DISTRICT NO. 85-1 DESCRIPTION OF THE SERVICES The performance by employees of functions, operations, maintenance and repair activities in order to provide fire protection and suppression services. P108 Resolution No. 06- Page -8- EXHIBIT 'B' COMMUNITY FACILITIES DISTRICT NO. 85-1 ANNEXATION NO. 06-6 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES The rate and method of apportionment, limitations on and adjustment to the Special Tax shall be as follows: To pay for fire suppression services and to finance fire suppression facilities, the Maximum Special Tax in Community Facilities District No. 85-1, Annexation No. 06-6 for Fiscal Year 2006-2007 shall be: Stru ctu res Maximum Annual Special Tax Residential 1 DU 2 DU: 3 DU: 4DU: 5-14 DU: 15-30 DU: 31-80 DU: 81 - up DU: 1.75 2.25 2.65 2.65 6.15 10.65 23.15 = ($138.06) " ($138.06) = ($138.06) = ($138.06) = ($138.06) + {.35 (TU-4) = ($138.06) + {.30 (TU-14) = ($138.06) + {.25 (TU-30) = ($138.06) + {.20 (TU-80) ($138.06)} ($138.06)} ($138.06)} ($138.06)} Multi-Family Industrial ($138.06) per acre + $.075 per SF ($138.06) per acre + $.092 per SF Commercial Note: DU = Dwelling Unit TU = Total Units SF = Square Foot ANNUAL ADJUSTMENT The maximum Special Tax shall be annually adjusted commencing on July 1, 2006 and each July 1st thereafter for (a) changes in the cost of living or (b) changes in cost of living and changes in population as defined in Section 7901 of the Government Code, as amended, whichever is lesser. P109 Resolution No. 06- Page -9- REDUCTION IN SPECIAL TAX Commercial and industrial structures shall be granted a .01 cent reduction in the Special Tax for the installation of complete sprinkler systems. In addition, multi-floor commercial and industrial structures shall also be granted a .01 cent reduction (not cumulative) in Special Tax for each separate floor above or below the main ground floor of the structure. LIMITATION ON SPECIAL TAX LEVY The Special Tax shall only be levied on Developed Property. Developed Property is defined to be property: which is not owned by a public or governmental agency; which is not vacant; where a "certificate of occupancy" or "utility release" from the City of Rancho Cucamonga has been issued; which has an existing building or structure onsite; which does not have as its sole use power transmission towers, railroad tracks, and flood control facilities. Areas grailted as easements for such purposes shall be subtracted from the total acreage of the underlying lot. The annual levy of the Special Tax shall be based upon an annual determination by the Board of Directors of the Rancho Cucamonga Fire Protection District of the amount of other revenues available to meet budget requirements. As used in this formula, "available revenue" shall include ad valorem taxes, State of California augmentation, tax increment revenues received from the Redevelopment Agency of the City of Rancho Cucamonga and any other source of revenue except the Special Tax. The Board of Directors shall take all responsible steps to retain maximum Redevelopment Agency funding to which, by agreement, they may lawfully receive. To the extent available revenues are insufficient to meet budget requirements, the Board of Directors may levy the Special Tax. For further particulars regarding the rate and method of apportionment of the Special Tax, reference is made to the Final Report Mello-Roos Community Facilities District No. 85-1 for Fire Suppression Facilities/Services - Foothill Fire Protection District, a copy of which is on file in the office of the Fire Chief of the Rancho Cucamonga Fire Protection District. P110 1'f'T ,.:>,,' is- k">"'<; :~.:":!.,,. , RANCHO CUCAMONGA " ',,"';; A fIR~ PROT~CTION DISTRICT Staff Report DATE: December 20,2006 TO: Mayor and Members of the City Council President and Members of the Board of Directors Jack Lam, AICP, City Manager FROM: Peter M. Bryan, Fire Chief BY: Breanna Medina, Management Analyst II SUBJECT: ADOPT RESOLUTION OF THE (FEDERAL) NATIONAL INCIDENT MANAGEMENT SYSTEM (NIMS) TO BE USED IN CONJUCTION WITH THE CURRENT (STATE) STANDARDIZED EMERGENCY MANAGEMENT SYSTEM (SEMS) FOR DISASTER MANAGEMENT RECOMMENDATION Adopt the National Incident Management System (NIMS), in conjunction with the Standardized Emergency Management System (SEMS) currently in use, to mitigate, prepare for, respond to, and recover from a natural or human-caused disaster. BACKGROUND In 1993, California created and adopted the Standardized Emergency Management System (SEMS) for the management of all disasters. Every emergency response organization in California is required to utilize SEMS in order to receive reimbursement for personnel costs incurred after a disaster. Building on the SEMS model, on February 28, 2003 the President directed the Secretary of the Department of Horneiand Security via Homeland Security Directive-5 to develop and administer a National Incident Management System. The NIMS provides a consistent nationwide template to enable all government, private-sector, and nongovernmental organizations to work together during domestic incidents. Adoption of the NIMS will enable the City of Rancho Cucamonga to maintain eligibility for future Federal grant opportunities and instruct staff to fulfill the training and prograrn implementation components currently under development by the State of California Office of Emergency Services. ~ P'teeM. B~ Fire Chief P111 RESOLUTION NO. FD 06-060 A RESOLUTION OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, ADOPTING THE (FEDERAL) NATIONAL INCIDENT MANAGEMENT SYSTEM (NIMS) TO BE USED IN CONJUCTION WITH THE CURRENT (STATE) STANDARDIZED EMERGENCY MANAGEMENT SYSTEM (SEMS) FOR DISASTER MANAGEMENT WHEREAS, the President in Homeland Security Directive-5, directed the Secretary of the Department of Homeland Security to develop and administer a National Incident Management System, which would provide a consistent nationwide approach for federal, State, local and tribal governments to work together more effectively and efficiently to prevent, prepare for, respond to and recover from disasters, regardless of cause, size, or complexity; and WHEREAS, California local and state government pioneered the development of standardized incident management systems to respond to a variety cif catastrophic disasters, including fires, earthquakes, fioods and landslide; and Whereas, in the early 1970's, the California fire service, in partnership with the federal government, developed the seminal emergency incident command system that has become the model for incident management nationwide, and WHEREAS, in 1993, California was the first state to adopt a statewide Standardized Emergency Management System for use by every emergency response organization, and implemented a system involving local and state agencies to ensure the continual improvement of the Standardized Emergency Management System, and WHEREAS, California local and state emergency management professionals have contributed their expertise to the development of the new National Incident Management System; and WHEREAS, it is essential for responding to disasters and securing the homeland that federal, state, local, and tribal organizations utilize standardized terminology, standardized organizational structures, interoperable communications, consoli.dated action plans, unified command structures, uniform personnel qualification standards, uniform standards for planning, training, and exercising, comprehensive resource management, and designated incident facilities during emergencies or disasters, and WHEREAS, the California Standardized Emergency Management System substantially meets the objectives of the National Incident Management System, and WHEREAS, the National Commission on Terrorist Attacks recommended adoption of a standardized Incident Command System nationwide, NOW, THEREFORE, BE IT RESOLVED, that the Rancho Cucamonga Fire Protection District hereby adopts the National Incident Management System (NIMS) as enhanced by the Standardized Emergency Management System (SEMS) as the official regulatory guidance for emergency response, preparedness, mitigation, prevention and recovery, within the Rancho Cucamonga Fire Protection District. We further direct the Rancho Cucamonga Fire Protection District to: 1. Develop a program to integrate the National Incident Management System (NIMS), to the extent appropriate, into the Fire Protection District's existing emergency management system. 2. Provide training on the NIMS as required by Presidential Directive to all applicable personnel. 3. Identify any regulations or City Codes that need to eliminated or amended to facilitate implementation of the National Incident Management System. P112 Resolution No. FD 06-060 Page 2 PASSED, APPROVED and ADOPTED this _day of ,2006. AYES: NOES: ABSENT: ABSTAINED: Donald J. Kurth, Mayor ATTEST: Debra J. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga City Council, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council at a regular meeting of said Council held on the day of 2006. Executed this _day of 2006 in Rancho Cucamonga, California. Debra J. Adams, Secretary Check No. AP - 00244933 AP - 00244934 AP - 00244934 AP - 00244935 AP - 00244935 AP - 00244935 AP - 00244935 AP - 00244935 AP - 00244936 AP - 00244937 AP - 00244937 AP - 00244937 AP - 00244938 AP - 00244939 AP - 00244940 AP - 00244941 AP - 00244942 AP - 00244943 AP - 00244945 AP - 00244946 AP - 00244946 AP - 00244946 AP - 00244946 AP - 00244946 AP - 00244948 AP - 00244948 AP - 00244948 AP - 00244948 AP - 00244948 AP - 00244949 AP - 00244949 AP - 00244950 AP - 00244951 AP - 00244952 AP - 00244952 AP - 00244952 AP - 00244953 AP - 00244953 AP - 00244954 AP - 00244955 AP - 00244955 AP - 00244955 AP - 00244955 AP - 00244956 AP - 00244957 AP - 00244958 AP - 00244959 AP - 00244959 AP - 00244960 AP - 00244960 AP - 00244960 AP - 00244961 AP - 00244962 AP - 00244962 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P113 Check Date Vendor Name Amount 11/29/2006 A AND A AUTOMOTIVE 11/29/2006 A&V SOFTBALL 11/29/2006 A&V SOFTBALL 11/29/2006 AA EQUIPMENT RENTALS CO INC 11/29/2006 AA EQUIPMENT RENTALS CO INC 11/29/2006 AA EQUIPMENT RENTALS CO INC 11/29/2006 AA EQUIPMENT RENTALS CO INC 11/29/2006 AA EQUIPMENT RENTALS CO INC 11/29/2006 AA VCO 11/29/2006 ABC LOCKSMITHS 11/29/2006 ABC LOCKSMITHS 11/29/2006 ABC LOCKSMITHS 11/29/2006 ABLETRONICS 11/29/2006 ACCELA INC 11/29/2006 ADGRAPH 11/29/2006 ADOBE ANIMAL HOSPITAL 11/29/2006 ADRIAN ERWIN PHOTOGRAPHY 11/29/2006 AED INSTITUTE OF AMERICA INe. 11/29/2006 AG ENGINEERING INC 11/29/2006 AGILINE INe. 11/29/2006 AGILINE INe. 11/29/2006 AGILINE INC. 11/29/2006 AGILINE INC. 11/29/2006 AGILINE INe. 11/29/2006 ALL CITIES TOOLS 11/29/2006 ALL CITIES TOOLS 11/29/2006 ALL CITIES TOOLS 11/29/2006 ALL CITIES TOOLS 11/29/2006 ALL CITIES TOOLS 11/29/2006 ALL WEATHER ROOFING 11/29/2006 ALL WEATHER ROOFING 11/29/2006 ALL WELDING 11/29/2006 ALPHAGRAPHICS 11/29/2006 ALTA LOMA ANIMAL HOSPITAL 11/29/2006 ALTA LOMA ANIMAL HOSPITAL 11/29/2006 ALTA LOMA ANIMAL HOSPITAL 11/29/2006 AMTECH ELEVATOR SERVICES 11/29/2006 AMTECH ELEVATOR SERVICES 11/29/2006 ANDRADE, LAINI 11/29/2006 ANTECH DIAGNOSTICS 11/29/2006 ANTECH DIAGNOSTICS 11/29/2006 ANTECH DIAGNOSTICS 11/29/2006 ANTECH DIAGNOSTICS 11/29/2006 APPLIED METERING TECHNOLOGIES INC 11/29/2006 ARAMARK UNIFORM SERVICES 11/29/2006 ARCHIDALD PET HOSPITAL 11/29/2006 ARCHITERRA DESIGN GROUP 11/29/2006 ARCHITERRA DESIGN GROUP 11/29/2006 ARROWHEAD CREDIT UNION 11/29/2006 ARROWHEAD CREDIT UNION 11/29/2006 ARROWHEAD CREDIT UNION 11/29/2006 ASSI SECURITY 11/29/2006 AUFBAU CORPORATION 11/29/2006 AUFBAU CORPORATION 559.38 3,450.00 3,450.00 428.63 91.75 30.04 112.39 37.09 7,513.00 160.00 36.64 140.38 562.46 962.50 50.55 650.00 258.60 10.00 1,315.58 2,280.00 800.00 800.00 800.00 400.00 124.99 170.18 511.81 185.00 831.42 6,260.00 5,190.00 110.00 287.29 200.00 325.00 525.00 146.31 977.50 74.83 273.00 123.00 677.00 1,846.25 11,183.85 6.70 225.00 6,141.25 7.12 8.04 26.31 35.00 525.00 15,708.00 7,584.00 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 1 Report:CK _AGENDA_REG _PORTRAIT _RC - CK: Agenda Check Register Portrait Layout CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P114 Check Date Vendor Name Amonnt Check No. AP - 00244963 11/29/2006 AUTO SPECIALISTS AP - 00244963 11/29/2006 AUTO SPECIALISTS AP - 00244963 11/29/2006 AUTO SPECIALISTS AP - 00244964 11/29/2006 BAND K ELECTRIC WHOLESALE AP - 00244964 11/29/2006 BAND K ELECTRIC WHOLESALE AP - 00244964 11/29/2006 B AND K ELECTRIC WHOLESALE AP - 00244964 11/29/2006 BAND K ELECTRIC WHOLESALE AP - 00244965 11/29/2006 BALDONADO. 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AP - 00244986 11/29/2006 CLOUD, DON AP - 00244987 11/29/2006 CMS INC AP - 00244988 11/29/2006 COLTON TRUCK SUPPLY AP - 00244988 11I29/2006 COLTON TRUCK SUPPLY AP - 00244989 11/29/2006 COOPER, CHERYL AP - 00244989 11/29/2006 COOPER, CHERYL AP - 00244989 11/29/2006 COOPER, CHERYL AP - 00244989 11/29/2006 COOPER, CHERYL AP - 00244989 11/29/2006 COOPER, CHERYL AP - 00244989 11/29/2006 COOPER, CHERYL AP - 00244990 11/29/2006 COPIES & INK PRINTING INe. AP - 00244991 11I29/2006 COPP CRUSHING CORP, DAN AP - 00244991 11/29/2006 COPP CRUSHING CORP, DAN AP - 00244991 11/29/2006 COPP CRUSHING CORP, DAN AP - 00244991 11/29/2006 COPP CRUSHING CORP, DAN . AP - 00244992 11I29/2006 CUCAMONGA VALLEY WATER DISTRICT User: VLOPEZ - Veronica Lopez Page: 2 Report:CK_ AGENDA_ REG_PORTRAIT _RC - CK: Agenda Check Register Portrait Layout 59.89 29.95 29.95 11.97 215.50 64.51 265.22 204.00 93.00 98.09 93.00 724.29 2,093.88 3,029.76 2,391.65 2,392.68 428.58 139.97 378.67 10,000.00 803,000.00 231.92 86,562.47 158.44 116.00 49.75 1,102.08 380.17 49.38 16.16 342.53 92.00 1,740.74 1,044.39 11,765.25 1,687.50 11,869.00 130.20 1,200.00 1,231.92 39.57 102.66 135.00 57.60 240.00 172.80 120.00 28.80 256.32 104.00 57.00 57.00 57.00 759.68 Cnrrent Date: 12/13/200 Time: 16:56:2 Check No. AP - 00244992 AP - 00244992 AP - 00244992 AP - 00244992 AP - 00244993 AP - 00244995 AP - 00244996 AP - 00244997 AP - 00244997 AP - 00244998 AP - 00244999 AP - 00245000 AP - 0024500 I AP - 00245002 AP - 00245004 AP - 00245006 AP - 00245006 AP - 00245006 AP - 00245006 AP - 00245007 AP - 00245007 AP - 00245009 AP - 00245009 AP - 00245009 AP - 00245009 AP - 00245010 AP - 00245012 AP - 00245013 AP - 00245013 AP - 00245013 AP - 00245013 AP - 00245013 AP - 00245013 AP - 00245013 AP - 00245015 AP - 00245015 AP - 00245016 AP - 00245016 AP - 00245016 AP - 00245016 AP - 00245016 AP - 00245017 AP - 00245017 AP - 00245018 AP - 00245019 AP - 00245020 AP - 00245021 AP - 00245021 AP -00245021 AP - 00245022 AP - 00245022 AP - 00245023 AP - 00245023 AP - 00245023 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P115 Check Date Vendor Name Amount 11/29/2006 CUCAMONGA VALLEY WATER DISTRICT 11/29/2006 CUCAMONGA VALLEY WATER DISTRICT 11/29/2006 CUCAMONGA VALLEY WATER DISTRICT 11/29/2006 CUCAMONGA VALLEY WATER DISTRICT 11/29/2006 CURIOSITY QUEST 11/29/2006 DAISY WHEEL RIBBON CO INC 11/29/2006 DAN GUERRA AND ASSOCIATES 1l/29/2006 DAPPER TIRE CO 11/29/2006 DAPPER TIRE CO 11/29/2006 DEALERS AUTO TRIM 11/29/2006 DEKRA-LITE INDUSTRIES INC 11/29/2006 DENTAL HEALTH SERVICES 11/29/2006 DEPARTMENT OF TRANSPORTATION 11/29/2006 DGO AUTO DETAILING 11/29/2006 DODSON & ASSOCIATES, TOM 11/29/2006 DTC COMPUTER SUPPLIES CORPORATION 11/29/2006 DTC COMPUTER SUPPLIES CORPORATION 11/29/2006 DTC COMPUTER SUPPLIES CORPORATION 11/29/2006 DTC COMPUTER SUPPLIES CORPORATION 11/29/2006 DYNASTY SCREEN PRINTING 11/29/2006 DYNASTY SCREEN PRINTING 11/29/2006 EASTER, PAMELA 11/29/2006 EASTER, PAMELA 11/29/2006 EASTER, PAMELA 11/29/2006 EASTER, PAMELA 11/29/2006 ECHO FIRE PROTECTION CO, 11/29/2006 ELLISON-SCHNEIDER & HARRIS L.L.P. 11/29/2006 EMCOR SERVICE 11/29/2006 EMCOR SERVICE 11/29/2006 EMCOR SERVICE 11/29/2006 EMCOR SERVICE 11/29/2006 EMCOR SERVICE 11/29/2006 EMCOR SERVICE 11/29/2006 EMCOR SERVICE 11/29/2006 ENVIROTEK 11/29/2006 ENVIROTEK 11/29/2006 EWING IRRIGATION PRODUCTS 11/29/2006 EWING IRRIGATION PRODUCTS 11/29/2006 EWING IRRIGATION PRODUCTS 11/29/2006 EWING IRRIGATION PRODUCTS 11/29/2006 EWING IRRIGATION PRODUCTS 11/29/2006 EXCLUSIVE EMAGES 11/29/2006 EXCLUSIVE EMAGES 11/29/2006 EXPRESS BRAKE SUPPLY 11/29/2006 EXPREX GENERAL CONTRA TORS INC 11/29/2006 FAIRVIEW FORD 11/29/2006 FAIRWAY FORD 11/29/2006 FAIRWAY FORD 11/29/2006 FAIRWAY FORD 11/29/2006 FEDERAL EXPRESS CORP 11/29/2006 FEDERAL EXPRESS CORP 11/29/2006 FIELD DATA SERVICES 11/29/2006 FIELD DATA SERVICES 11/29/2006 FIELD DATA SERVICES 175.00 177.50 449.72 62.66 59.85 1,887.24 2,850.00 493.63 36.54 225.00 193.32 133.20 2,730.85 200.00 5,909.86 428.31 428.31 428.31 428.30 2,921.43 181.56 43.19. 28.69 4.42 225.00 . 153.72 7,449.50 10,920.42 10,920.42 19,850.00 14,393.75 6,376.73 5,142.32 16,452.09 76.77 548.23 225.53 25.41 308.94 278.15 507.43 9.70 38.79 95.90 500.00 22,629.79 34,735.77 26,404.54 26,404.54 14.89 21.55 185.00 105.00 490.00 Current Date: 12/131200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 3 Report: CK _AGENDA_REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11129/2006 through 12/12/2006 P116 Check No. Check Date Vendor Name Amount AP - 00245025 11/29/2006 FISHER SCIENTIFIC AP - 00245025 11/29/2006 FISHER SCIENTIFIC AP - 00245025 11129/2006 FISHER SCIENTIFIC AP - 00245026 11/29/2006 FLEET STAR INC. AP - 00245027 11/29/2006 FORD OF UPLAND INC AP - 00245028 11/29/2006 FOREMOST AP - 00245029 11129/2006 FRAME ART AP - 00245030 11/29/2006 FRANKLIN COVEY CO AP - 00245030 11/29/2006 FRANKLIN COVEY CO AP - 00245032 11/29/2006 FRONT BRIDGE TECHNOLOGIES INC AP - 00245035 11/29/2006 GENTRY BROS INC AP - 00245035 11/29/2006 GENTRY BROS INC AP - 00245036 11/29/2006 GOLDSTAR ASPHALT PRODUCTS AP - 00245037 11/29/2006 GOODMAN AUDIO SERVICES AP - 00245038 11129/2006 GOVERNING AP - 00245039 11/29/2006 GRAINGER AP - 00245039 11/29/2006 GRAINGER AP - 00245039 11/29/2006 GRAINGER AP - 00245041 11129/2006 GUTIERREZ, BIANCA AP - 00245042 11/29/2006 HAAKER EQUIPMENT CO AP - 00245042 11/29/2006 HAAKER EQUIPMENT CO AP - 00245042 11/29/2006 HAAKER EQUIPMENT CO AP - 00245043 11/29/2006 HANSON, BARRYE AP - 00245044 11/29/2006 HIGHLAND GARDEN CENTER INC AP - 00245045 11/29/2006 HIRSCH AND ASSOCIATES AP - 00245046 11129/2006 HOLLIDAY ROCK CO INC AP - 00245046 11129/2006 HOLLIDAY ROCK CO INC AP - 00245046 11129/2006 HOLLIDAY ROCK CO INC AP - 00245046 11/29/2006 HOLLIDAY ROCK CO INC AP - 00245046 11129/2006 HOLLIDAY ROCK CO INC AP - 00245046 11129/2006 HOLLIDAY ROCK CO INC AP - 00245046 11/29/2006 HOLLIDAY ROCK CO INC AP - 00245046 11/29/2006 HOLLIDAY ROCK CO INC AP - 00245046 11129/2006 HOLLIDAY ROCK CO INC AP - 00245046 11/29/2006 HOLLIDAY ROCK CO INC AP - 00245048 11/29/2006 HOME DEPOT CREDIT SERVICES AP - 00245049 11129/2006 HOSE MAN INC AP - 00245051 11/29/2006 HUANG, PRUDENCE AP - 00245052 11/29/2006 HYDRO TEK SYSTEMS INC AP - 00245053 11129/2006 ICON INC AP - 00245054 11/29/2006 IDEAL COMFORT INC AP - 00245055 11/29/2006 INDUSTRIAL SUPPLY COMPANY AP - 00245056 11129/2006 INLAND EMPIRE TOURS AND TRANSPORTATlC AP - 00245058 11/29/2006 INTERNATIONAL CODE COUNCIL AP - 00245060 11/29/2006 INTERSTATE BATTERIES AP - 00245061 11/29/2006 JACKSON, CHRASHAWN AP - 00245061 11129/2006 JACKSON, CHRASHA WN AP - 00245062 11/29/2006 JOBS AVAILABLE INC AP - 00245063 11/29/2006 JOHNSON, DENISE AP - 00245064 11129/2006 JOHNSTON CONSULTING, CHRIS AP - 00245065 11/29/2006 JONES AND MAYER, LAW OFFICES OF AP - 00245066 11/29/2006 KAISER FOUNDATION HEALTH PLAN INC AP - 00245066 11/29/2006 KAISER FOUNDATION HEALTH PLAN INC AP - 00245067 11/29/2006 KING ENVIRONMENTAL PRODUCTS User: VLOPEZ - Veronica Lopez Page: 4 Report:CK_AGENDA _REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 641.98 412.75 39.10 818.94 8.04 483.80 647.18 44.58 36.43 850.00 3,950.00 -395.00 519.36 3,962.25 16.00 66.68 90.32 26.82 220.00 446.41 568.00 308.62 1,620.00 11.20 10,800.00 1,136.77 3,800.11 4,592.31 92.83 72.68 2,535.89 60.23 889.48 182.91 4,856.83 118.34 311.06 975.00 651.89 80.93 136.30 67.24 7,043.00 36.17 202.46 40.00 4.00 153.00 100.00 375.00 3,195.52 89,618.49 524.16 662.28 Current Date: 12/13/200 Time: 16:56:2 Check No. AP - 00245070 AP - 00245071 AP - 00245072 AP - 00245072 AP - 00245072 AP - 00245072 AP - 00245073 . AP - 00245074 AP - 00245076 AP - 00245076 AP - 00245076 AP - 00245077 AP - 00245078 AP - 00245079 AP - 00245079 AP - 00245079 AP - 00245079 AP - 00245079 AP - 00245079 AP - 00245079 AP - 00245081 AP - 00245083 AP - 00245083 AP - 00245084 AP - 00245085 AP - 00245085 AP - 00245085 AP - 00245085 AP - 00245085 AP - 00245085 AP - 00245085 AP - 00245085 AP - 00245086 AP - 00245087 AP - 00245087 AP - 00245088 AP - 00245088 AP - 00245088 AP - 00245088 AP - 00245088 AP - 00245088 AP - 00245088 AP - 00245088 AP - 00245094 AP - 00245094 AP - 00245096 AP - 00245098 AP - 00245098 AP - 00245099 AP - 00245099 AP - 00245100 AP - 00245101 AP - 00245101 AP - 00245101 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12112/2006 P117 Check Date Vendor Name Amount 11/29/2006 KONICA MINOLTA BUSINESS SOLUTIONS 11/29/2006 KORANDA CONSTRUCTION 11/29/2006 KOTZIN AND ASSOCIATES INC, R 11/29/2006 KOTZIN AND ASSOCIATES INC, R 11/29/2006 KOTZIN AND ASSOCIATES INC, R 11/29/2006 KOTZIN AND ASSOCIATES INC, R 11/29/2006 KRAMERS MASONRY 11/29/2006 KRAMERS MASONRY 11/29/2006 LAIRD CONSTRUCTION CO 11/29/2006 LAIRD CONSTRUCTION CO 11/29/2006 LAIRD CONSTRUCTION CO 11/29/2006 LAWSON PRODUCTS INC 11/29/2006 LBIW INC 11/29/2006 LEAGUE OF CALIFORNIA CITIES 11/29/2006 LEAGUE OF CALIFORNIA CITIES 11/29/2006 LEAGUE OF CALIFORNIA CITIES 11/29/2006 LEAGUE OF CALIFORNIA CITIES 11/29/2006 LEAGUE OF CALIFORNIA CITIES 11/29/2006 LEAGUE OF CALIFORNIA CITIES 11/29/2006 LEAGUE OF CALIFORNIA CITIES 11/29/2006 LITTLE BEAR PRODUCTIONS 11/29/2006 MAIN STREET SIGNS 11/29/2006 MAIN STREET SIGNS 11/29/2006 MANSOURI, lRAI 11/29/2006 MARIPOSA HORTICULTURAL ENT INC 11/29/2006 MARIPOSA HORTICULTURAL ENT INC 11/29/2006 MARIPOSA HORTICULTURAL ENT INC 11/29/2006 MARIPOSA HORTICULTURAL ENT INC 11/29/2006 MARIPOSA HORTICULTURAL ENT INC 11/29/2006 MARIPOSA HORTICULTURAL ENT INC 11/29/2006 MARIPOSA HORTICULTURAL ENT INC 11/29/2006 MARlFOSA HORTICULTURAL ENT INC 11/29/2006 MARK CHRISTOPHER INC 11/29/2006 MARKETPLACE PROPERTIES 11/29/2006 MARKETPLACE PROPERTIES 11/29/2006 MARSHALL PLUMBING 11/29/2006 MARSHALL PLUMBING 11/29/2006 MARSHALL PLUMBING 11/29/2006 MARSHALL PLUMBING 11/29/2006 MARSHALL PLUMBING 11/29/2006 MARSHALL PLUMBING 11/29/2006 MARSHALL PLUMBING 11/29/2006 MARSHALL PLUMBING 11/29/2006 MICHAEL, L. DENNIS 11/29/2006 MICHAEL, L. DENNIS 11/29/2006 MISSION REPROGRAPHICS 11/29/2006 MOUNTAIN VIEW GLASS AND MIRROR INC 11/29/2006 MOUNTAIN VIEW GLASS AND MIRROR INC 11/29/2006 MOUNTAIN VIEW SMALL ENG REPAIR 11/29/2006 MOUNTAIN VIEW SMALL ENG REPAIR 11/29/2006 MULTER ELECTRIC 11/29/2006 NAPA AUTO PARTS 11/29/2006 NAP A AUTO PARTS 11/29/2006 NAPA AUTO PARTS 852.07 1,850.06 15,944.35 7,529.80 6,965.80 6,978.45 850.00 19,983.00 13,824.15 105,941.00 -10,594.10 148.44 15.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00 100.00 942.81 404.06 4,200.00 19,805.53 136.74 9,388.48 3,854.59 5,317.37 1,846.77 10,306.11 3,626.98 58.71 15.59 17.46 199.00 -49.75 327.07 -81.77 306.67 -76.67 464.00 -116.00 111.25 61.86 53.34 31.36 41.48 29.30 99.35 500.00 6.37 125.66 23.69 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 5 Report:CK_AGENDA_REG_PORTRAIT_RC - CK: Agenda Check Register Portrait Layout Check No. AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245101 AP - 00245102 AP - 00245103 AP - 00245105 AP - 00245106 AP - 00245107 AP - 00245109 AP - 00245109 AP - 00245110 AP - 00245110 AP - 00245110 AP - 00245110 AP - 00245110 AP - 00245110 AP - 00245110 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245111 AP - 00245112 AP - 00245112 AP - 00245112 AP - 00245113 AP - 00245114 AP - 00245114 AP - 00245114 AP - 00245115 AP - 00245115 AP - 00245115 AP - 00245116 AP - 00245117 AP - 00245117 AP - 00245117 AP - 00245118 AP - 00245118 AP - 00245119 AP - 00245120 AP - 00245121 AP - 00245122 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P118 Check Date Vendor Name Amount 11129/2006 NAPAAUTOPARTS 11/29/2006 NAPA AUTO PARTS 11129/2006 NAPA AUTO PARTS 11/29/2006 NAPA AUTO PARTS 11129/2006 NAP A AUTO PARTS 11129/2006 NAPA AUTO PARTS 11/29/2006 NAPA AUTO PARTS 11/29/2006 NAPAAUTOPARTS 11/29/2006 NAP A AUTO PARTS 11/29/2006 NAPAAUTOPARTS 11/29/2006 NATIONAL CONSTRUCTION RENTALS 11/29/2006 NATIONAL DEFERRED 11/29/2006 NGOZI, ONUMONU 11129/2006 NIKPOUR, MOHAMMED 11129/2006 NIXON EGLI EQUIPMENT CO 11129/2006 0 C B REPROGRAPHICS INC 11/29/2006 0 C B REPROGRAPHICS INC 11/29/2006 OCCUPATIONAL HEALTH CENTERS OF CALIFO 11129/2006 OCCUPATIONAL HEALTH CENTERS OF CALIFO 11/29/2006 OCCUPATIONAL HEALTH CENTERS OF CALIFO 11/29/2006 OCCUPATIONAL HEALTH CENTERS OF CALIFO 11129/2006 OCCUPATIONAL HEALTH CENTERS OF CALIFO 11/29/2006 OCCUPATIONAL HEALTH CENTERS OF CALIFO 11/29/2006 OCCUPATIONAL HEALTH CENTERS OF CALIFO 11129/2006 OFFICE DEPOT 11/29/2006 OFFICE DEPOT 11129/2006 OFFICE DEPOT 11/29/2006 OFFICE DEPOT 11/29/2006 OFFICE DEPOT 11/29/2006 OFFICE DEPOT 11129/2006 OFFICE DEPOT 11129/2006 OFFICE DEPOT 11/29/2006 OFFICE DEPOT 11/29/2006 OFFICE DEPOT 11129/2006 ONESOURCE DISTRIBUTORS INC. 11/29/2006 ONESOURCE DISTRIBUTORS INe. 11129/2006 ONESOURCE DISTRIBUTORS INC. 11/29/2006 ORANGE PRODUCTS CORP 11/29/2006 ORKIN PEST CONTROL 11/29/2006 ORKIN PEST CONTROL 11129/2006 ORKIN PEST CONTROL 11/29/2006 OTT, LAURA 11/29/2006 OTT, LAURA 11/29/2006 OTT, LAURA 11129/2006 OTT, SHARON 11/29/2006 OWEN ELECTRIC INC 11129/2006 OWEN ELECTRIC INC 11/29/2006 OWEN ELECTRIC INC 11/29/2006 PACIFICARE OF CALIFORNIA 11129/2006 P ACIFICARE OF CALIFORNIA 11129/2006 PAL CAMPAIGN 11/29/2006 PANTAGES THEATRE 11/29/2006 PARS 11/29/2006 PETES ROAD SERVICE INC 16.99 32.63 12.15 10.44 16.42 44.53 23.75 21.70 -107.75 31.28 143.52 29,207.49 176.15 168.00 249.75 70.04 350.00 1,238.00 197.00 636.00 682.00 60.00 12,750.00 81.00 215.53 183.01 88.86 18.51 187.19 97.37 56.31 8.24 115.81 117.71 1,311.63 92.37 13.47 1,478.35 285.00 841.75 1,102.35 162.00 486.00 175.50 207.00 91.51 85.00 994.00 47,832.27 1,317.45 157.39 1,073.26 3,500.00 60.00 Current Date: 12/13/200 . Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 6 Report:CK _AGENDA_REG ]ORTRAIT _RC - CK: Agenda Check Register Portrait Layout CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P119 Check No. Check Date Vendor Name Amount AP - 00245122 11/29/2006 PETES ROAD SERVICE INC AP _ 00245122 11/29/2006 PETES ROAD SERVICE INC AP - 00245123 11/29/2006 PIONEER MANUFACTURING AP - 00245125 11/29/2006 POMA DISTRIBUTING CO AP - 00245125 11/29/2006 POMA DISTRIBUTING CO AP - 00245125 11/29/2006 POMA DISTRIBUTING CO AP _ 00245126 11/29/2006 POUKAND STEINLE INC. AP - 00245127 11/29/2006 PRE-PAID LEGAL SERVICES INC AP - 00245128 11/29/2006 PRESTIGE HOMES AP - 00245129 11/29/2006 PRINCIPAL LIFE AP - 00245130 11/29/2006 PULCINELLA, JOSEPH AP - 00245131 11/29/2006 RAND RAUTOMOTIVE AP - 00245132 11/29/2006 R H F INC AP _ 00215133 11/29/2006 RANCHO CUCAMONGA CHAMBER OF COMMEl AP _ 00245133 11/29/2006 RANCHO CUCAMONGA CHAMBER OF COMMEI AP - 00245133 11/29/2006 RANCHO CUCAMONGA CHAMBER OF COMMEI AP _ 00245133 11/29/2006 RANCHO CUCAMONGA CHAMBER OF COMMEI AP - 00245133 11/29/2006 RANCHO CUCAMONGA CHAMBER OF COMMEI AP - 00245134 11/29/2006 RANCHO SMOG CENTER AP - 00245134 11/29/2006 RANCHO SMOG CENTER AP - 00245134 11/29/2006 RANCHO SMOG CENTER AP - 00245134 11/29/2006 RANCHO SMOG CENTER AP - 00245134 11/29/2006 RANCHO SMOG CENTER AP - 00245135 11/29/2006 REM LOCK AND KEY SERVICE AP - 00245136 11/29/2006 RDO EQUIPMENT COMPANY AP - 00245136 11/29/2006 RDO EQUIPMENT COMPANY AP - 00245136 11/29/2006 RDO EQUIPMENT COMPANY AP - 00245137 11/29/2006 RDO EQUIPMENT COMPANY AP - 00245138 11/29/2006 RDO EQUIPMENT CO AP - 00245139 11/29/2006 RELIABLE GRAPHICS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP.- 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245140 11/29/2006 REPUBLIC ITS AP - 00245142 11/29/2006 RILEY, BREEANA AP - 00245142 11/29/2006 RILEY, BREEANA AP - 00245143 11/29/2006 ROBERTS COMPANY, 0 A AP - 00245144 11/29/2006 ROBLES SR, RAUL P AP - 00245144 11/29/2006 .ROBLES SR, RAUL P AP - 00245145 11/29/2006 ROBLES, RAMON AP - 00245146 11/29/2006 ROMO CONCRETE CONSTRUCTION AP - 00245147 11/29/2006 ROYAL STREET COMMUNICATIONS AP - 00245148 11/29/2006 ROYAL STREET COMMUNICATIONS AP - 00245149 11/29/2006 RUSH, RICK E AP - 00245150 11/29/2006 SAND K ENGINEERS INC AP - 00245151 11/29/2006 SAFETY TALKS AP - 00245153 11/29/2006 SAN BERNARDINO COUNTY User: VLOPEZ - Veronica Lopez Page: 7 Report: CK _AGENDA_REG _PORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 36.00 30.00 1,981.98 11 ,416.06 2,376.02 6,236.10 679.52 318.90 5,000.00 1,955.00 6.34 193.92 339.36 30.00 30.00 30.00 30.00 30.00 27.00 27.00 27.00 27.00 27.00 103.44 151.14 -83.67 61.15 46.12 30.98 56.55 867.90 3,011.88 1,367.60 6,597.84 6,597 .84 9,496.29 4,490.00 2,088.Q2 8,205.60 4,117.22 14,163.32 257.38 350.00 1,000.00 92.50 119.50 72.00 500.00 4,945.00 1,825.00 218.00 1,320.00 316.95 18,415.00 Current Date: 12/13/200 Time: 16:56:2 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11129/2006 through 1211212006 P120 Check Date Vendor Name Amount Check No. AP _ 00245154 11/2912006 SAN BERNARDINO CTY DEPT OF PUBLIC WORl AP - 00245154 11129/2006 SAN BERNARDINO CTY DEPT OF PUBLIC WORl AP _ 00245154 1112912006 SAN BERNARDINO CTY DEPT OF PUBLIC WORl AP - 00245155 11/2912006 SANTOS, MANNY AP - 00245156 11/2912006 SEMMATERlALS L P AP - 00245158 11129/2006 SIMPLOT PARTNERS AP - 00245159 11129/2006 SMITH PIPE AND SUPPLY INC AP - 00245159 11/2912006 SMITH PIPE AND SUPPLY INC AP - 00245159 11129/2006 SMITH PIPE AND SUPPLY INC AP - 00245160 1112912006 SMITH, ROSEMARY AP - 00245161 11129/2006 SO CALIF GAS COMPANY AP - 00245161 1112912006 SO CALIF GAS COMPANY AP - 00245161 1112912006 SO CALIF GAS COMPANY AP - 00245162 1112912006 SOCIAL VOCATIONAL SERVICES AP - 00245162 11129/2006 SOCIAL VOCATIONAL SERVICES AP - 00245162 1112912006 SOCIAL VOCATIONAL SERVICES AP - 00245162 1112912006 SOCIAL VOCATIONAL SERVICES AP - 00245163 11/2912006 SOURCE GRAPHICS AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/2912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006. SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/2912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 1112912006 SOUTHERN CALIFORNIA EDISON User: VLOPEZ - Veronica Lopez Page: 8 Report:CK _AGENDA_REG _PORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 400.86 97.97 371.21 48.00 215.40 2,437.31 496.77 113.14 569.42 500.00 46.07 1,117:61 809.50 113.85 449.58 1,439.55 1,909.26 700.38 3,850.87 12.81 14.91 12.81 13.81 12.81 9.61 13635 12.98 13.31 12.98 14.09 CITY OF RANCHO CUCAMONGA Agenda Check Register 11/29/2006 through 12/12/2006 P121 Check No. Check Date Vendor Name Amount AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON . AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 . SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON User: VLOPEZ - Veronica Lopez Page: 9 Report:CK_ AGENDA_REG ]OR TRAIT _ RC - CK: Agenda Check Register Portrait Layout 13.63 20.69 15.73 13.13 15.59 12.81 19.50 21.69 59.72 27.04 13.81 19.18 17.84 13.63 12.81 13.09 12.81 12.98 12.98 14.91 14.26 13.31 134.19 52.15 23.29 12.81 12.81 12.81 19.50 677.21 12.81 13.63 680.49 103.52 72.24 107.99 90.08 101.56 93.17 12.55 13.05 70.18 12.81 12.98 14.16 47.13 18.01 12.81 12.98 14.09 14.48 12.81 104.90 14.76 Current Date: 12/13/200 Time: 16:56:2 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12112/2006 P122 Check No. Check Date Vendor Name Amount AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 0024'5169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/2912006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON User: VLOPEZ - Veronica Lopez Page: 10 Report:CK _AGENDA_REG ]OR TRAIT _ RC - CK: Agenda Check Register Portrait Layout 12.81 14.80 12.81 34.09 58.45 14.09 12.81 14.09. 13.13 116.18 13.63 14.41 51.54 47.01 14.09 13.48 64.16 122.30 12.81 13.24 14.09 12.81 7.00 81.15 37.87 295.44 13.48 13.81 13.48 37.74 12.81 12.81 144.75 14.91 14.91 19.18 150.54 1,427.18 57.96 99.00 12.81 13.81 12.81 13.13 94.55 14.09 14.09 174.51 12.98 12.81 14.65 607.46 28.89 31.88 Current Date: 12113/200 Time: 16:56:2 CITY OF RANCHO CUCAMONGA Al!:enda Check Rel!:ister 11129/2006 through 12/12/2006 P123 Check No. Check Date Vendor Name Amount AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11129/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245169 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245170 11/29/2006 SOUTHERN CALIFORNIA EDISON AP - 00245171 11/29/2006 SOUTHWEST MOBILE STORAGE INC AP - 00245171 11/29/2006 SOUTHWEST MOBILE STORAGE INC AP - 00245172 11/29/2006 SPAGNOLO, SAM AP - 00245173 11/29/2006 SP ARKLETTS AP - 00245173 11/29/2006 SP ARKLETTS AP - 00245174 11/29/2006 STANDARD INSURANCE COMPANY AP - 00245175 11/29/2006 STEELWORKERS OLDTIMERS FOUNDATION AP - 00245176 1l/29/2006 STERlCYCLE INC AP - 00245176 11/29/2006 STERlCYCLE INC AP ~ 00245176 11/29/2006 STERlCYCLE INC AP - 0024517711/29/2006 STERLING COFFEE SERVICE AP - 00245177 11/29/2006 STERLING COFFEE SERVICE AP - 00245177 11/29/2006 STERLING COFFEE SERVICE AP - 00245177 11/29/2006 STERLING COFFEE SERVICE AP - 00245178 11/29/2006 STEVES TOWING AND TRANSPORT User: VLOPEZ - Veronica Lopez Page: 11 Report:CK _AGENDA _ REG_PORTRAIT _RC - CK: Agenda Check Register Portrait Layout 14.09 12.81 93.19 12.38 12.81 164.82 12.98 14.65 64.71 22.68 14.09 13.05 78.87 12.81 14.09 12.81 12.81 16.91 29.00 87.27 13.48 12.81 64.75 865.51 57.16 5,362.90 54.47 12.98 134.69 12.38 12.81 13.81 14.09 14.09 14.59 37.76 12.81 12.38 1,622.49 172.40 3.20 40.05 109.55 145.80 456.30 708.33 193.01 193.01 193.01 480.03 148.25 68.55 241.40 180.00 Current Date: 12/13/200 Time: 16:56:2 Check No. AP - 00245179 AP - 00245180 AP - 00245180 AP - 00245180 AP - 00245181 AP - 00245181 AP - 00245182 Ap - 00245183 AP - 00245183 AP - 00245185 AP - 00245186 AP - 00245187 AP - 00245188 AP - 00245188 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245189 AP - 00245190 AP - 00245191 AP - 00245191 AP - 00245191 AP - 00245191 AP -.00245192 AP - 00245192 AP - 00245192 AP - 00245192 AP - 00245192 AP - 00245192 AP - 00245192 AP - 00245192 AP - 00245193 AP - 00245193 AP - 00245194 AP - 00245194 AP - 00245195 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 CITY OF RANCHO CUCAMONGA A!!enda Check Re!!ister 11/29/2006 through 12/12/2006 P124 Check Date. Vendor Name Amount 11/29/2006 SUN BADGE CO 11/29/2006 SUNRISE FORD 11/29/2006 SUNRISE FORD .11/29/2006 SUNRISE FORD 11/29/2006 T AND D INSTALLATIONS 11/29/2006 T AND D INSTALLATIONS 11/29/2006 TANGO PARTNERS LLC 11/29/2006 TEMECULA MECHANICAL INC 11/29/2006 TEMECULA MECHANICAL INC 11/29/2006 TOBIN CONSTRUCTION 11/29/2006 TOLL BROS INC 11/29/2006 TRAFFIC OPERATIONS INC 11/29/2006 TRANS WEST TRUCK CENTER 11/29/2006 TRANS WEST TRUCK CENTER 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LAND CARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 TRUGREEN LANDCARE 11/29/2006 UNDERGROUND SVC ALERT OF SO CAL 11/29/2006 UNDERGROUND TECHNOLOGY INC 11/29/2006 UNDERGROUND TECHNOLOGY INC 11/29/2006 UNDERGROUND TECHNOLOGY INC 11/29/2006 UNDERGROUND TECHNOLOGY INC 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNIFIRST UNIFORM SERVICE 11/29/2006 UNION BANK OF CALIFORNIA TRUSTEE FOR p, 11/29/2006 UNION BANK OF CALIFORNIA TRUSTEE FOR p, 11/29/2006 UNITED SITE SERVICES OF CA INC 11/29/2006 UNITED SITE SERVICES OF CA INC 11/29/2006 UPS 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERIZON 424.38 133.89 59.15 37.63 348.51 286.74 15,000.00 7,942.86 -794.29 500.00 114.72 16,001.35 55.23 48.96 75.84 678.63 265.43 2,375.30 3,186.20 309.44 2,057.24 960.00 960.00 960.00 14,071.61 960.00 960.00 156.80 749.28 426.78 789.42 575.34 131.57 55.42 131.57 774.49 28.94 51.42 28.94 776.74 3,396.87 39,911.39 182.34 217.78 25.56 82.75 44.33 77.49 205.52 570.85 464.40 129.69 97.54 89.85 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 12 Report:CK_AGENDA_REG]ORTRAIT_RC - CK: Agenda Check Register Portrait Layout Check No. AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AI> - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 'AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 AP - 00245200 . AP - 00245200 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P125 Check Date Vendor Name Amount 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERIZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERIZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11129/2006 VERlZON 11129/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERIZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERIZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERIZON 11/29/2006 VERIZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERIZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERIZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 11/29/2006 VERlZON 0.74 19.69 29.79 19.69 57.31 29.82 27.94 28.37 89.36 59.56 28.87 162.36 28.87 89.85 20.26 30.73 89.85 19.69 87.32 19.69 89.85 89.60 89.60 89.60 28.87 89.60 28.87 29.79 108.79 114.75 29.79 29.79 61.34 29.79 8.77 19.69 19.69 19.69 28.87 19.69 324.61 28.87 29.79 19.81 29.27 89.60 89.60 89.60 30.39 393.94 43.95 29.96 57.72 29.79 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 13 Report:CK ~ AGENDA_REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout Check No. AP - 00245201 AP - 00245202 AP - 00245203 AP - 00245204 AP - 00245205 AP - 00245205 AP - 00245205 AP - 00245205 AP - 00245205 AP - 00245205 AP - 00245206 AP - 00245206 AP - 00245207 AP - 00245207 AP - 00245207 AP - 00245207 AP - 00245207 AP - 00245208 AP - 00245208 AP - 00245208 AP - 00245208 AP - 00245208 AP - 00245208 AP - 00245209 AP - 00245210 AP - 00245212 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245213 AP - 00245214 AP - 00245214 AP - 00245214 AP - 00245215 AP - 00245216 AP - 00245216 AP - 00245217 AP - 00245218 AP - 00245218 AP - 00245219 AP - 00245219 AP - 00245219 AP - 00245219 AP - 00245219 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P126 Check Date Vendor Name Amount 11/29/2006 VERIZON 11/29/2006 VILLAGE NURSERIES WHOLESALE LLC 11/29/2006 VIRTUAL PROJECT MANAGER INC 11/29/2006 VISION SERVICE PLAN CA 11/29/2006 VISTA PAINT 11/29/2006 VISTA PAINT 11/29/2006 VISTA PAINT 11/29/2006 VISTA PAINT 11/29/2006 VISTA PAINT 11/29/2006 VISTA PAINT 11/29/2006 VULCAN MATERIALS COMPANY 11/29/2006 VULCAN MATERIALS COMPANY 11/29/2006 WALTERS WHOLESALE ELECTRIC CO 11/29/2006 W ALTERS WHOLESALE ELECTRIC CO 11/29/2006 WALTERS WHOLESALE ELECTRIC CO 11/29/2006 WALTERS WHOLESALE ELECTRIC CO 11/29/2006 WALTERS WHOLESALE ELECTRIC CO 11/29/2006 WAXIE SANITARY SUPPLY 11/29/2006 WAXIE SANITARY SUPPLY 11/29/2006 WAXIE SANITARY SUPPLY 11/29/2006 WAXIE SANITARY SUPPLY 11/29/2006 WAXIE SANITARY SUPPLY 11/29/2006 WAXIE SANITARY SUPPLY 11/29/2006 WEST COAST SAND AND GRAVEL INC 11/29/2006 WEST COAST TURF 11/29/2006 WEST PAYMENT CENTER 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WEST VALLEY MRF LLC 11/29/2006 WESTRUX INTERNATIONAL INC 11/29/2006 WESTRUX INTERNATIONAL INC 11/29/2006 WESTRUX INTERNATIONAL INC 11/29/2006 WHITTIER FERTILIZER 11/29/2006 WILLIAMS PHOTOGRAPHY, CHRIS 11/29/2006 WILLIAMS PHOTOGRAPHY, CHRIS 11/29/2006 WILSON AND BELL 11/29/2006 WORD MILL PUBLISHING 11/29/2006 WORD MILL PUBLISHING 11/29/2006 WSA US GUARDS CO INC 11/29/2006 WSA US GUARDS CO INC 11/29/2006 WSA US GUARDS CO INC 11/29/2006 WSA US GUARDS CO INC 11/29/2006 WSA US GUARDS CO INC 1,148.86 306.11 500.00 9,328.32 230.59 165.05 176.13 120.24 230.58 350.19 242.44 302.18 134.17 20.70 880.89 -69.48 264.81 500.71 -162.70 196.61 60.12 208.44 272.15 1,204.55 568.92 268.27 184.30 90.40 180.42 195.55 173.44 125.50 73.75 103.75 127.00 60.75 85.00 197.10 207.97 . 119.12 257.42 1,048.22 303.00 280.15 175.00 200.00 139.40 700.00 700.00 3,114.80 7,541.41 1,705.59 4,518.18 1,794.16 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 14 Report:CK _AGENDA_REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/1212006 P127 Check Date Vendor Name Amount Check No. AP - 00245219 11/2912006 WSA US GUARDS CO INC AP - 00245220 11/29/2006 YEE, LARRY AP - 00245221 11/29/2006 ZlRGES, ARLENE AP - 00245222 .12/412006 OFFICE DEPOT . AP - 00245223 12/6/2006 A G ELECTRIC CAR SPECIALISTS AP - 00245223 12/6/2006 A G ELECTRIC CAR SPECIALISTS AP - 00245224 12/612006 AA EQUIPMENT RENTALS CO INC AP - 00245224 12/6/2006 AA EQUIPMENT RENTALS CO INC AP - 00245224 12/6/2006 AA EQUIPMENT RENTALS CO INC AP - 00245225 12/612006 ABC LOCKSMITHS AP - 00245226 12/6/2006 ABLAC AP - 00245227 12/6/2006 ABLETRONICS AP - 00245228 12/612006 ABRAHANTE, PEDRO E. AP - 00245229 12/6/2006 ADEYEMO, ANNAH AP - 00245230 12/6/2006 ALLIANCE BUS LINES INC AP - 00245230 12/6/2006 ALLIANCE BUS LINES INC AP - 00245230 12/612006 ALLIANCE BUS LINES INC AP - 00245230 12/6/2006 ALLIANCE BUS LINES INC AP - 00245232 12/6/2006 AMERICAN ROTARY BROOM CO. INC. AP - 00245232 12/6/2006 AMERICAN ROTARY BROOM CO. INe. AP - 00245232 12/612006 AMERICAN ROTARY BROOM CO. INe. AP - 00245232 12/6/2006 AMERICAN ROTARY BROOM CO. INC. AP - 00245232 12/6/2006 AMERICAN ROTARY BROOM CO. INC. AP - 00245233 12/612006 AMTECH ELEVATOR SERVICES AP - 00245234 12/612006 ARELLANO, SHIRLEY AP - 00245235 12/6/2006 ASSI SECURITY AP - 00245236 12/6/2006 ASSOCIATED ENGINEERS INC AP - 00245238 12/6/2006 AUFBAU CORPORATION AP - 00245238 12/612006 AUFBAU CORPORATION AP - 00245239 12/6/2006 AURORA PICTURES INe. AP - 00245240 12/6/2006 AUTO SPECIALISTS AP - 00245240 12/6/2006 AUTO SPECIALISTS AP - 00245241 12/6/2006 AVANTS, MARGE AP - 00245242 12/612006 B&S GRAPHICS INe. AP - 00245244 12/6/2006. BEl BETTER ENERGY IDEAS AP - 00245246 12/6/2006 BERNELL HYDRAULICS INC AP - 00245247 12/6/2006 BOLTON, HEATHER AP - 00245247 12/6/2006 BOLTON, HEATHER AP - 00245248 12/6/2006 BRUNSMA, KELLY AP - 00245249 12/612006 BURLINGTON NORTHERN AND SANTA FE RAIl AP - 00245250 12/6/2006 BUTSKO UTILITY DESIGN INC. AP - 00245250 12/6/2006 BUTSKO UTILITY DESIGN INe. AP - 00245251 12/6/2006 CAL POLY POMONA AP - 00245252 12/612006 CAL-WEST CONSTRUCTION & METAL FABRICi AP - 00245253 12/6/2006 CALSENSE AP - 00245253 12/612006 CALSENSE AP - 00245253 12/612006 CALSENSE AP - 00245254 12/612006 CAREY SIGN GRAPHICS AP - 00245254 12/6/2006 CAREY SIGN GRAPHICS AP - 00245255 12/612006 CARTER, NADINE AP - 00245256 12/6/2006 CARTWRIGHT, PEGGY AP - 00245257 12/6/2006 CATALINA PASSENGER SERVICE INe. AP - 00245258 12/612006 CATALINA PASSENGER SERVICE INe. AP - 00245259 12/612006 CATALINA PASSENGER SERVICE INe. User: VLOPEZ - Veronica Lopez Page: 15 Report:CK _AGENDA_REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 8,925.14 24.00 171.00 1.00 296.33 675.07 103.83 34.58 38.42 367.76 16.39 20.36 86.25 250.00 573.43 573.43 573.43 573.43 249.28 914.57 166.18 1,005.39 180.56 191.99 500.00 3,877.50 20,144.00 6,596.50 11 ,020.00 782.00 73.89 95.95 75.00 317.03 150.00 98.09 20.47 16.47 100.00 1,997.00 .14,647.00 15,080.74 972.00 35.60 829.66 870.00 181.42 9,385.16 -938.52 58.00 366.50 550.00 900.00 550.00 Current Date: 12/131200 Time: 16:56:2 CITY OF RANCHO CUCAMONGA A2enda Check Re2ister 11/29/2006 through 12/12/2006 P128 Check No. Check Date Vendor Name Amount AP - 00245260 12/6/2006 CBIZ ACCOUNTING TAX & ADVISORY OF ORAl AP - 00245261 12/6/2006 CENTERSTAGING MUSICAL PROD. INC. AP - 00245262 12/6/2006 CENTRAL CITIES SIGNS INC AP - 00245262 12/6/2006 CENTRAL CITIES SIGNS INC AP - 00245262 12/6/2006 CENTRAL CITIES SIGNS INC AP - 00245263 12/6/2006 CENTRAL ELEMENTARY SCHOOL AP - 00245265 12/6/2006 CHAN, ESTHER L. AP - 00245266 12/6/2006 CITY RENTALS AP - 00245266 12/6/2006 CITY RENTALS AP - 00245266 12/6/2006 CITY RENTALS AP - 00245267 12/6/2006 CLAAR, KAREN AP - 00245268 12/6/2006 CLABBY, SANDRA AP - 00245270 12/6/2006 COPP CRUSHING CORP, DAN AP - 00245272 12/6/2006 CROWN TROPHY AP - 00245273 12/6/2006 CS LEGACY CONSTRUCTION INC. AP - 00245274 12/6/2006 CTN PRODUCTS AP - 00245276 12/6/2006 CUCAMONGA V ALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA V ALLEY WATER DISTRICT AP-00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA V ALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY W ~ TER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP-00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT AP - 00245276 12/6/2006 CUCAMONGA VALLEY WATER DISTRICT User: VLOPEZ - Veronica Lopez . Page: 16 Report:CK _ AGENDA_ REG]ORTRAIT_RC - CK: Agenda Check Register Portrait Layout 5,100.00 909.30 77.58 128.76 255.58 48.00 250.00 1,781.28 108.90 1,623.00 330.00 1,000.00 332.00 532.29 17.81 30.00 167.42 101.26 583.22 1,015.46 109.28 84.08 333.43 73.60 73.60 105.68 636.20 39.08 39.98 55.20 282.08 472.87 1,298.49 83.38 76.52 142.22 266.96 109.46 335.06 284.60 1,448.84 73.60 630.92 26.48 197.48 1,101.08 394.28 160.42 643.70 73.60 55.20 198.64 182.60 87.86 Current Date: 12/13/200 Time: 16:56:2 Check No. AP - 00245276 AP - 00245276 AP - 00245277 AP - 00245277 AP - 00245277 AP - 00245277 AP - 00245277 AP - 00245278 AP - 00245279 AP - 00245280 AP - 00245281 AP - 00245284 AP - 00245284 AP - 00245285 AP - 00245286 AP - 00245286 AP - 00245286 AP - 00245286 AP - 00245286 AP - 00245286 AP - 00245287 AP - 00245287 AP - 00245287 AP - 00245287 AP - 00245288 AP - 00245289 AP - 00245291 AP - 00245292 AP - 00245292 AP - 00245292 AP - 00245293 AP - 00245294 AP - 00245294 AP - 00245294 AP - 00245295 AP - 00245296 AP - 00245296 AP - 00245296 AP - 00245296 AP - 00245297 AP - 00245298 AP - 00245298 AP - 00245299 AP - 00245299 AP - 00245300 AP - 00245301 AP - 00245302 AP - 00245303 AP - 00245304 AP - 00245305 AP - 00245307 AP - 00245308 AP - 00245309 AP - 00245310 CITY OF RANCHO CUCAMONGA Al!:enda Check Rel!:ister 11/29/2006 through 12112/2006 P129 Check Date Vendor Name Amount 12/612006 CUCAMONGA VALLEY WATER DISTRICT 12/612006 CUCAMONGA VALLEY WATER DISTRICT 12/6/2006 D & D DISPOSAL INC. 12/612006 D & D DISPOSAL INe. 12/612006 D & D DISPOSAL INC. 12/6/2006 D & D DISPOSAL INe. 12/6/2006 D & D DISPOSAL INC. 12/6/2006 DAN GUERRA AND ASSOCIATES 12/612006 DANIELS, LINDA 12/612006 DAPPER TIRE CO 12/612006 DAVIES INC, ALBERT W 12/6/2006 DEPARTMENT OF JUSTICE 12/612006 DEPARTMENT OF JUSTICE 12/6/2006 DRAGON KNIGHTS 12/6/2006 DUNN EDWARDS CORPORATION 12/6/2006 DUNN EDWARDS CORPORATION 12/612006 DUNN EDWARDS CORPORATION 12/6/2006 DUNN EDWARDS CORPORATION 12/6/2006 DUNN EDWARDS CORPORATION 12/6/2006 DUNN EDWARDS CORPORATION 12/6/2006 EASTERLING, RAY 12/612006 EASTERLING, RAY 12/6/2006 EASTERLING, RAY 12/6/2006 EASTERLING, RAY 12/612006 ECS IMAGING INC 12/612006 ELEPHANT SET 12/612006 ERIKSEN, ANNE 12/6/2006 EWING IRRlGA TION PRODUCTS 12/6/2006 EWING IRRIGATION PRODUCTS 12/6/2006 EWING IRRIGATION PRODUCTS 12/6/2006 EXCLUSIVE EMAGES 12/6/2006 EXPRESS BRAKE SUPPLY 12/6/2006. EXPRESS BRAKE SUPPLY 12/6/2006 EXPRESS BRAKE SUPPLY 12/6/2006 FARLEY'S & SATHERS CANDY COMPANY 12/612006 FEDERAL EXPRESS CORP 12/6/2006 FEDERAL EXPRESS CORP 12/6/2006 FEDERAL EXPRESS CORP 12/6/2006 FEDERAL EXPRESS CORP 12/6/2006 FELTS, SHARON 12/612006 FERMON, TAMBLA 12/6/2006 FERMON, TAMBLA 12/612006 FINESSE PERSONNEL ASSOCIATES 12/6/2006 FINESSE PERSONNEL ASSOCIATES 12/6/2006 FINLAY FINE JEWELRY CORP 12/6/2006 FIVE CROWNS RESTAURANT 12/6/2006 FIVE CROWNS RESTAURANT 12/6/2006 FIVE CROWNS RESTAURANT 12/6/2006 FOREMOST 12/612006 FOREST CITY MANAGEMENT INe. COMMERCl1 12/6/2006 FREEDOM'S FLAME 12/6/2006 FUKUSHIMA, JUDITH 12/612006 G AND M BUSINESS INTERIORS 12/6/2006 GALLI, TIMOTHY 63.55 63.55 400.00 400.00 400.00 400.00 400.00 41,677.17 67.61 575.90 500.00 672.00 2,850.00 1,300.00 150.58 9.83 20.28 165.73 88.19 209.42 42.00 66.00 134.00 183.00 18,185.88 15,066.85 26.00 264.59 172.13 144.92 19.40 260.50 25.27 54.54 600.60 19.17 16.63 20.52 16.63 40.00 500.00 85.00 930.00 840.00 11.41 1,325.00 1,250.00 1,075.00 4,791.97 19.00 1,194.00 2,326.50 1,076.04 250.00 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 17 Report:CK _AGENDA _ REG_PORTRAIT _ RC - CK: Agenda Check Register Portrait Layout CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P130 ChecK Date Vendor Name Amount Check No. AP - 00245311 121612006 GARCIA, KAREN AP - 00245312 1216/2006 GENTRY BROS INC AP - 00245313 121612006 GIORDANO, MARIANNA AP - 00245314 121612006 GOLF VENTIJRES WEST AP - 00245315 1216/2006 GONZALEZ, LAURI AP - 00245317 1216/2006 GREEN ROCK POWER EQUIPMENT AP - 00245318 1216/2006 GTSI CORP AP - 00245319 1216/2006 GUZMAN, MARCELINO AP - 00245320 1216/2006 H & L INDUSTRIES AP - 00245321 121612006 H2 ENVIRONMENTAL AP - 00245322 121612006 HADIPOUR, ELAHEH AP - 00245323 121612006 HAMILTON, MONIQUE AP - 00245324 1216/2006 HANSON, BARRYE AP - 00245325 121612006 HARALAMBOS BEVERAGE COMPANY AP - 00245326 121612006 HARRIS, ROBYN AP - 00245327 121612006 HERTZ EQUIP RENTAL AP - 00245328 1216/2006 HICKNER, MARK AP - 00245329 121612006 HILLS PET NUTRITION SALES INC AP - 00245329 121612006 HILLS PET NUTRITION SALES INC AP - 00245329 121612006 HILLS PET NUTRITION SALES INC AP - 00245330 121612006 HINDERLITER DE LLAMAS AND ASSOCIATES AP - 00245330 121612006 HINDERLITER DE LLAMAS AND ASSOCIATES AP - 00245331 1216/2006 HIRED GUN EXTERMINATING INC AP - 00245331 1216/2006 HIRED GUN EXTERMINATING INC AP - 00245331 1216/2006 HIRED GUN EXTERMINATING INC AP - 00245332 121612006 HOLT'S AUTO ELECTRIC INC AP - 00245333 121612006 HOSE MAN INC AP - 00245333 12/612006 HOSE MAN INC AP - 00245333 1216/2006 HOSE MAN INC AP - 00245333 12/6/2006 HOSE MAN INC AP - 00245333 12/612006 HOSE MAN INC AP - 00245334 12/612006 HOT SHOTS ATHLETIC APPAREL INC AP - 00245335 121612006 HYDROSCAPE PRODUCTS INC AP - 00245335 121612006 HYDROSCAPE PRODUCTS INC AP - 00245335 1216/2006 HYDROSCAPE PRODUCTS INC AP - 00245335 12/6/2006 HYDROSCAPE PRODUCTS INC AP - 00245335 12/612006 HYDROSCAPE PRODUCTS INC AP - 00245335 121612006 HYDROSCAPE PRODUCTS INC AP - 00245335 121612006 HYDROSCAPE PRODUCTS INC AP - 00245335 1216/2006 HYDROSCAPE PRODUCTS INC AP - 00245336 12/612006 IBM CORPORATION AP - 00245337 12/6/2006 IMPRESSIONS GOURMET CATERING AP - 00245338 12/6/2006 INLAND EMPIRE MAGAZINE AP - 00245339 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245340 12/612006 INLAND V ALLEY DAILY BULLETIN AP - 00245340 12/612006 INLAND VALLEY DAILY BULLETIN AP - 00245340 121612006 INLAND VALLEY DAILY BULLETIN AP - 00245340 121612006 INLAND VALLEY DAILY BULLETIN AP - 00245340 1216/2006 INLAND VALLEY DAILY BULLETIN AP - 00245340 12/612006 INLAND VALLEY DAILY BULLETIN AP - 00245340 121612006 INLAND VALLEY DAILY BULLETIN AP - 00245340 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245340 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245340 121612006 INLAND VALLEY DAILY BULLETIN User: VLOPEZ - Veronica Lopez Page: 18 Report:CK _AGENDA_REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 36.00 . 27,647.39 225.00 56.74 200.00 684.74 165.44 1,931.00 500.00 485.00 250.00 200.00 2,100.00 325.74 80.00 1,652.34 250.00 356.17 43.23 261.89 1,200.00 5,632.98 995.00 1,685.00 2,800.00 237.05 29.62 127.79 16.58 -24.51 15.42 12,123.30 120.93 165.43 29.08 159.98 18.37 64.65 28.97 131.00 948.64 630.34 995.00 184.80 166.02 175.92 164.34 175.92 166.02 87.60 87.60 87.60 87.60 415.05 Current Date: 12/13/200 Time: 16:56:2 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P131 Check No. Check Date Vendor Name Amount AP - 00245340 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245340 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245340 12/6/2006 INLAND V ALLEY DAILY BULLETIN AP - 00245340 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245341 12/6/2006 INLAND VALLEY DAILY BULLETIN AP - 00245342 12/6/2006 INSTITUTE FOR LOCAL GOVERNMENT AP - 00245343 12/6/2006 INTERACTIVE DATA CORPORATION AP - 00245343 12/6/2006 INTERACTIVE DATA CORPORATION AP - 00245344 12/6/2006 INTERNATIONAL CREATIVE MANAGEMENT IN AP - 00245345 12/6/2006 INTERSTATE BATTERIES AP - 00245345 12/6/2006 INTERSTATE BATTERIES AP - 00245345 12/6/2006 INTERSTATE BATTERIES AP - 00245346 12/6/2006 IRON MOUNTAIN OSDP AP - 00245347 12/6/2006 JACOBO JR., SAM AP - 00245348 12/6/2006 JOHNSTON CONSULTING, CHRIS AP - 00245349 12/6/2006 JONES, CHRISTINA HAATAINEN AP - 00245350 12/6/2006 JONES, LEON AP - 00245350 12/6/2006 JONES, LEON AP - 00245350 12/6/2006 JONES, LEON AP - 00245351 12/6/2006 JONES, ROBERT AP - 00245352 12/6/2006 JORDAN, EDWARD AP - 00245354 12/6/2006 KONICA MINOLTA BUSINESS SOLUTIONS AP - 00245355 12/6/2006 L E H AND ASSOCIATES AP - 00245356 12/6/2006 LAIRD CONSTRUCTION CO AP - 00245357 12/6/2006 LANCE SOLL AND LUNGHARD AP - 00245357 12/6/2006 LANCE SOLL AND LUNGHARD AP - 00245358 12/6/2006 LAWRY'S THE PRIME RIB AP - 00245359 12/6/2006 LEE, MICHAEL AP - 00245360 12/612006 LENNAR COMMUNITIES-INLAND AP - 00245361 12/6/2006 LEWIS INVESTMENT COMPANY LLC AP - 00245362 12/6/2006 LIEBERT CASSIDY WHITMORE AP - 00245362 12/612006 LIEBERT CASSIDY WHITMORE AP - 00245364 12/6/2006 LITTLE BEAR PRODUCTIONS AP - 00245364 12/612006 LITTLE BEAR PRODUCTIONS AP - 00245366 12/6/2006 LY, SANDY HA AP - 00245367 12/612006 MALDIA, GRAELAND AP - 00245369 12/6/2006 MARK CHRISTOPHER INC AP - 00245370 12/6/2006 MARTINEZ UNION SERVICE AP - 00245370 12/6/2006 MARTINEZ UNION SERVICE AP - 00245370 12/612006 MARTINEZ UNION SERVICE AP - 00245371 12/6/2006 MCCULLOUGH, STEVONI AP - 00245372 12/6/2006 MCKINNEY, MIKE AP - 00245373 12/6/2006 MIGLIACCI, THERESA AP - 00245374 12/6/2006 MILAKOV1CH, LYNETTE AP - 00245375 12/6/2006 MORALES, LAUREN AP - 00245376 12/6/2006 MORRALL, NORMA AP - 00245378 12/612006 NAPA AUTO PARTS AP - 00245378 12/612006 NAPA AUTO PARTS AP - 00245378 12/612006 NAPA AUTO PARTS AP - 00245378 12/6/2006 NAPA AUTO PARTS AP - 00245378 12/6/2006 NAPA AUTO PARTS AP - 00245378 12/612006 NAPA AUTO PARTS AP - 00245378 12/6/2006 NAPA AUTO PARTS AP - 00245379 12/612006 NATHANSON, KRISTIN User: VLOPEZ - Veronica Lopez Page: 19 Report:CK_ AGENDA_REG _PORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 410.85 410.85 -1,194.00 164.34 432.00 50.00 85.00 85.00 5,000.00 478.09 131.21 159.90 408.50 2,300.00 625.00 2,654.60 100.00 20.00 62.00 2,100.00 250.00 5,795.00 7,650.00 10,594.10 21,450.00 2,100.00 1,038.42 250.00 4,295.68 1,000.00 3,500.00 598.00 160.00 3,735.00 8,541.60 250.00 40,976.90 45.00 150.00 -37.50 250.00 3,061.20 120.00 60.00 88.00 40.00 2.42 197.19 27.73 4.84 10.58 45.86 4.08 23.00 Current Date: 12/13/200 Time: 16:56:2 Check No. AP - 00245380 AP - 00245381 AP - 00245382 AP - 00245383 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385 AP - 00245385- AP - 00245385 AP - 00245386 AP - 00245386 AP - 00245387 AP - 00245387 AP - 00245387 AP - 00245387 AP - 00245388 AP - 00245389 AP - 00245390 AP - 00245390 AP - 00245391 AP - 00245392 AP - 00245393 AP - 00245394 AP - 00245395 AP - 00245396 AP - 00245396 AP - 00245396 CITY OF RANCHO CUCAMONGA A2enda Check Re2ister 11129/2006 through 12/12/2006 P132 Check Date Vendor Name Amount 12/6/2006 NATIONAL DEFERRED 12/6/2006 NEWPORT PRINTING SOLUTIONS 12/6/2006 NIKPOUR, MOHAMMED 12/6/2006 NOBLE, EMA 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE DEPOT 12/6/2006 OFFICE MAX CONTRACT INC 12/6/2006 OFFICE MAX CONTRACT INC 12/6/2006 OFFICE TEAM 12/6/2006 OFFICE TEAM 12/6/2006 OFFICE TEAM 12/6/2006 OFFICE TEAM 12/6/2006 ONESOURCE DISTRIBUTORS INe. 12/6/2006 ONTARIO WINNELSON CO 12/6/2006 ORONA, PATRICIA 12/6/2006 ORONA, PATRICIA 12/6/2006 PACIFIC PRODUCTS AND SERVICES 12/6/2006 PEPES TOWING SERVICE 12/6/2006 PETES ROAD SERVICE INC 12/6/2006 PHILLIPS, CAROL 12/6/2006 PITNEY BOWES 12/6/2006 POMA DISTRIBUTING CO 12/6/2006 POMA DISTRIBUTING CO 12/6/2006 POMA DISTRIBUTING CO 21,530.57 30.00 96.00 250.00 2,606.69 2,640.06 271.05 23.67 6.85 -5.09 35.36 35.50 22.47 114.57 39.95 127.46 22.70 22.60 79.63 207.75 16.52 9.64 64.09 1.30 77.94 504.93 4.82 758.60 543.92 50.52 66.16 251.17 52.87 94.93 35.49 10.87 1,254.86 139.43 504.90 504.90 631.13 673.20 4.29 4.36 50.00 50.00 679.22 308.50 409.29 500.00 266.52 8,838.27 11,715.84 18,680.97 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 20 Report:CK _AGENDA _REG_PORTRAIT _ RC - CK: Agenda Check Register Portrait Layout CITY OF RANCHO CUCAMONGA Al!:enda Check Rel!:ister 11/29/2006 through 12/12/2006 P133 Check No. Check Date Vendor Name Amount AP - 00245397 12/6/2006 POUK AND STEINLE INe. AP - 00245397 12/6/2006 POUK AND STEINLE INe. AP - 00245398 12/6/2006 PRAXAIR DISTRIBUTION INC AP - 00245399 12/612006 PRE-PAID LEGAL SERVICES INC AP - 00245400 12/612006 PRECISION WHOLESALE INC AP - 00245403 12/612006 QIDWAI,MUSHIR AP - 00245404 12/6/2006 QWEST AP - 00245405 12/6/2006 RANNIS, KIRSTINA AP - 00245406 12/6/2006 RASMUSSEN, MILT AP - 00245409 12/6/2006 RBF CONSULTING AP - 00245410 12/612006 RCPFA AP - 00245411 12/6/2006 REHNSTROM, CORY AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/612006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/6/2006 RICHARDS WATSON AND GERSHON AP - 00245413 12/612006 RICHARDS WATSON AND GERSHON AP - 00245413 12/612006 RICHARDS WATSON AND GERSHON AP - 00245414 12/6/2006 RODRIGUEZ INC, R Y AP - 00245415 12/6/2006 RODRIGUEZ, NORMA LINDA AP - 00245417 12/612006 ROWLEN, ALISON AP - 00245418 12/6/2006 RUSSELL, JAMES AP - 00245419 12/6/2006 SAFELITE GLASS CORP .AP - 00245421 12/612006 SAN BERNARDINO COUNTY AP - 00245422 12/6/2006 SAN BERNARDINO CTY SHERIFFS DEPT AP - 00245423 12/612006 SAN JOSE ELEMENTARY AP - 00245424 12/612006 SANTOS, MANNY AP - 00245425 12/6/2006 SCHRADER, ALLISON AP - 00245426 12/6/2006 SENECHAL, CALVIN AP - 00245426 12/612006 SENECHAL, CALVIN AP - 00245426 12/6/2006 SENECHAL, CALVIN AP - 00245426 12/6/2006 SENECHAL, CALVIN AP - 00245426 12/612006 SENECHAL, CALVIN AP - 00245427 12/6/2006 SIGN SHOP, THE AP - 00245428 12/6/2006 SIMPLOT PARTNERS AP - 00245428 . 12/612006 SIMPLOT PARTNERS AP - 00245428 12/612006 SIMPLOT PARTNERS AP - 00245429 12/6/2006 SMIDERLY, FRANY AP - 00245430 12/612006 SMITH PIPE AND SUPPLY INC AP - 00245433 12/612006 SOUNDZSKILZ ENTERTAINMENT AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/612006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/612006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/612006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/612006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON User: VLOPEZ - Veronica Lopez Page: 21 Report:CK_ AGENDA_ REG]ORTRAIT_RC - CK: Agenda Check Register Portrait Layout 2,047.09 -204.71 100.09 34.20 15.00 1,000.00 1.37 250.00 400.00 5,400.53 7,108.85 40.00 5,962.34 5,992.91 1,686.57 2,576.50 2,277.12 8,693.96 31,265.15 2,765.45 5,767.25 2,664.57 26,810.71 636.50 290.95 718.61 40.00 1,000.00 482.81 322.67 256.00 30.00 96.00 225.00 164.50 84.00 108.50 70.00 122.00 469.79 557.07 1,510.00 1,350.82 400.00 221.19 300.00 34,462.13 13.56 12.55 12.81 575.10 13.46 12.81 12.81 Current Date: 12/13/200 Time: 16:56:2 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P134 Check No. Check Date Vendor Name Amount AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 . 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/612006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/612006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/612006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON AP - 00245436 12/6/2006 SOUTHERN CALIFORNIA EDISON User: VLOPEZ - Veronic. Lopez Page: 22 Report:CK _AGENDA_REG ]ORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 13.24 17.66 12.81 72.76 105.20 85.33 12.81. 12.81 13.81 12.38 285.77 12.55 112.95 15.59 55.14 125.62 83.39 16.50 14.06 14.48 13.24 13.20 14.33 14.09 13.66 13.83 13.41 31.30 108.06 95.86 13.63 128.69 20,154.44 12.81 13.83 138.74 118.13 132.35 227.49 150.91 9.09 194.03 76.67 271.48 14.09 58.85 13.98 14.48 12.81 14.09 20.50 20.49 158.57 13.24 Current Date: 12/13/200 Time: 16:56:2 Check No. AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245436 AP - 00245437 AP - 00245437 AP - 0024543.7 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245437 AP - 00245438 AP - 00245438 AP - 00245439 AP - 00245439 AP - 00245440 AP - 00245441 AP - 00245441 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P135 Check Date Vendor Name Amount 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 . SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/612006 SOUTHERN CALIFORNIA EDISON 12/6/2006 SOUTHLAND SPORTS OFFICIALS 12/612006 SOUTHLAND SPORTS OFFICIALS 12/6/2006 STEINY AND COMPANY INC 12/612006 STEINY AND COMPANY INC 12/6/2006 STREET TREE SEMINAR 12/6/2006 SUNRISE FORD 12/612006 SUNRISE FORD 60.63 154.98 121.56 7.00 27.60 142.29 131.86 111.D9 157.13 13.05 214.15 28.56 14.09 15.23 11.96 326.06 14.09 3.02 319.91 100.97 65.23 106.13 146.96 42.08 55.76 84.14 12.81 12.81 48.42 19,429.89 8.71 8,025.95 749.86 99.50 9,065.52 29.38 3,080.83 3,892.12 50,286.91 7.20 4,212.90 2,868.67 2,727.75 181.47 44.24 12,120.96 14,992.80 506.00 435.75 80,800.00 -8,080.00 220.00 89.02 140m Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 23 Report:CK _AGENDA_REG _ PORTRAIT _RC - CK: Agenda Check Register Portrait Layout Check No. AP - 00245442 AP - 00245442 AP - 00245442 AP - 00245442 AP - 00245442 AP - 00245443 AP - 00245444 AP - 00245447 AP - 00245448 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245449 AP - 00245450 AP - 00245451 AP - 00245452 AP - 00245452 AP - 00245452 AP - 00245452 AP - 00245452 AP - 00245452 . AP - 00245452 AP - 00245452 AP - 00245453 AP - 00245454 AP - 00245455 AP - 00245456 AP - 00245457 AP - 00245458 AP - 00245461 AP " 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 AP - 00245461 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P136 Check Date Vendor Name Amount 12/6/2006 T AND D INSTALLATIONS 12/6/2006 T AND D INST ALLA TIONS 12/6/2006 T AND D INSTALLATIONS 12/6/2006 T AND D INSTALLATIONS 12/6/2006 T AND D INSTALLATIONS 12/6/2006 T K X LOGISTIC 12/6/2006 T MOBILE 12/6/2006 TIME WARNER TELECOM 12/6/2006 TREJO, RACHEL 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LAND CARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TRUGREEN LANDCARE 12/6/2006 TURNER PLAZA 12/6/2006 U C REGENTS 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNIFIRST UNIFORM SERVICE 12/6/2006 UNION BANK OF CALIFORNIA TRUSTEE FOR p, 12/6/2006 UNITED TRAFFIC 12/6/2006 UNITED WAY 12/6/2006 UPS 12/6/2006 USATORRES, TRUDY 12/6/2006 VARELA, ELSA 12/6/2006 VERIZON 12/6/2006 VERIZON' 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 12/6/2006 VERIZON 113.70 217.09 326.53 259.86 70.40 232.30 577.05 2,591.09 60.00 26,046.56 74,911.61 480.73 20,820.94 55.32 17,490.29 16,446.87 2,910.91 816.81 1,615.63 3,171.00 399.97 89.00 170.00 28.94 51.42 28.94 131.5 7 926.52 770.69 131.57 51.42 1,688.93 1,008.54 31.00 34.75 44.00 250.00 59.60 21.89 29.79 1,499.34 179.77 27.94 159.65 45.19 147.10 90.99 29.79 29.79 29.79 31.47 28.54 282.42 29.79 Current Date: 12/13/200 Time: 16:56:2 User: VLOPEZ - Veronica Lopez Page: 24 Report:CK_AGENDA_REG]ORTRAIT_RC - CK: Agenda Check Register Portrait Layout CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/12/2006 P137 Check No. Check Date Vendor Name Amount AP - 00245461 12/612006 VERlZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERlZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERlZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERlZON AP - 00245461 12/612006 VERlZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/612006 VERIZON AP -00245461 12/612006 VERIZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/6/2006 VERlZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/6/2006 VERIZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/612006 VERIZON AP - 00245461 12/612006 VERlZON AP - 00245462 12/612006 VISTA PAINT AP - 00245462 12/612006 VISTA PAINT AP - 00245463 12/6/2006 VULCAN MATERIALS COMPANY AP - 00245464 12/6/2006 WALTERS WHOLESALE ELECTRIC CO AP - 00245464 12/6/2006 W ALTERS WHOLESALE ELECTRIC CO AP - 00245464 12/612006 WALTERS WHOLESALE ELECTRIC CO AP - 00245464 12/6/2006 WALTERS WHOLESALE ELECTRIC CO AP - 00245465 12/612006 WARD, DESIREE AP - 00245466 12/6/2006 WARREN & CO INC, CARL AP - 00245466 12/612006 WARREN & CO INC, CARL AP - 00245466 12/612006 WARREN & CO INC, CARL AP - 00245466 12/6/2006 WARREN & CO INC, CARL AP - 00245466 12/612006 WARREN & CO INC, CARL AP- 00245467 12/6/2006 WAXIE SANITARY SUPPLY AP - 00245467 12/6/2006 WAXIE SANITARY SUPPLY AP - 00245467 12/6/2006 WAXIE SANITARY SUPPLY AP - 00245467 12/612006 W AXlE SANITARY SUPPLY User: VLOPEZ - Veronica Lopez Page: 25 Report:CK _AGENDA_REG _PORTRAIT _ RC - CK: Agenda Check Register Portrait Layout 21.81 82.38 89.85 86.61 89.60 89.85 28.87 89.60 89.60 90.99 30.23 131.70 28.87 90.99 89.60 28.87 29.79 89.60 92.40 90.99 90.99 29.79 89.85 89.60 89.60 89.60 89.60 89.60 89.60 60.82 90.99 28.87 402.07 570.85 356.04 564.25 89.85 140.08 210.11 62.95 264.81 134.17 20.70 15.09 64.00 30.25 432.25 206.15 181.80 43.75 171.07 375.70 758.90 880.89 Current Date: 12/13/200 Time: 16:56:2 Check No. AP - 00245467 AP - 00245467 AP - 00245467 AP - 00245468 AP - 00245469 AP - 00245470 AP - 00245470 AP - 00245471 AP - 00245472 AP - 00245473 AP - 00245474 CITY OF RANCHO CUCAMONGA Al!enda Check Rel!ister 11/29/2006 through 12/1212006 P138 Check Date Vendor Name Amount 12/6/2006 WAXIE SANITARY SUPPLY 12/6/2006 WAXIE SANITARY SUPPLY 12/6/2006 WAXIE SANITARY SUPPLY 12/612006 WEAVER, GARRETT 12/6/2006 WEEKS, REBECCA 12/6/2006 WESTRUX INTERNATIONAL INC 12/6/2006 WESTRUX INTERNATIONAL INC 12/6/2006 WILLDAN ASSOCIATES 12/6/2006 WONG, TINA 12/612006 YEE, LARRY 12/7/2006 PRESTIGE HOMES -69.48 159.90 269.98 40.00 100.00 664.25 149.05 29,957.50 20.00 16.00 5,000.00 Total for Check ID AP: 3,187,003.25 Total for Entity: 3,187,003.25 Current Date: 12/131200 Time: 16:56:2 User: VLOPEZ - 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I: .z-g"O"O~~~ )( :::::I C c: :::::I U Vol ~u..~~~<cQ) r-G,lu..u.._ ~ ~C=~13'5~c Ual....l1>...........- ~:fi ~ 'e:g ~ g. (/)O:::WQ..U.=U o m :. u.. !!! ~ . " ;;; 1;; w ~ "D C ~ .~ LU o fi C ~ 0: ;; .. '" '" N o Z Cl u.. U P145 [' <0 '" " l': " ~ ~ '" f- Z w l.'l <C -' <C o '" Ii: :I: f- ji; '" f- Z w ::i! f- '" W > ~ o Z <C :I: ~ o -' <C f- o f- ,; C ~ E " " C o ~ ~ "D " ;;; "D .5 g " '" ~ ~ E ~ " :; o ~ .!! ~ " 1> .C ~ ;;; E "D " ;; 1;; o C " > ~ ~ .c U j . C ~ 8 u ~ a; ~ :. E ~ " C o E ~ ~ . c " E 1;; ~ > .E " o " .c f- '" , .'d 5; ~ ;;. u ." U. .0 .~ . ~ . Sl 8 o ~ '5 .s o Z P146 THE CITY OF <.''''; ,',.:',.-,.;'..l ,'C'.,_ ".. c, ,,'l-;.~ - '~.~'-:'-!,i .,il,.>.'-"...-" 'l,-:.>I,,';,_-~) -";,,:-"._,'1 ..'.;:;';-'!':', -'il>otl':::t "'.- ... ~,' J,~.,.h' ~",'!:',:_dl RANClIO CUCAMONGA Staff ReJXJrt DATE: December 20, 2006 TO: Mayor and Members of the City Council Jack Lam, AICP, City Manager . A.."':- FROM: James C. Frost, City Treasurer~ BY: Linda D. Daniels, Acting Administrative Services Director SUBJECT: APPROVAL TO ADOPT ANNUAL STATEMENT OF INVESTMENT POLICY RECOMMENDATION Annually the City Council reviews the Statement of Investment Policy. It is recommended that the City Council approve and adopt the attached Statement of Investment Policy for the City of Rancho Cucamonga. BACKGROUND The City Council adopted a Statement of Investment Policy in July 1987. California Government Code, Section 53646, requires that the City Treasurer or Chief Fiscal Officer shall annually render to the City Council a Statement ofInvestment Policy, which shall be considered at a public meeting. Further, the City Council shall also consider any modifications to the investment policy at a public meeting. Staff has made certain modifications to the policy in order to clarify how bond proceeds may be invested in accordance with the requirements and restrictions outlined in bond documents. Additionally, staff amended the percentage of authorized investments that may be held in investment agreements, per California Government Code, Section 53601.7. The City's investment policy and practices are based upon Federal, State and local law and prudent money management. The primary goals of the City's policy are to assure compliance with all Federal, State and local law governing the investment of monies under the control of the P147 City Treasurer, enhance the economic standards of the City and to protect its pooled assets and to invest public funds prudently. The City Treasurer is authorized to invest the City's Funds in accordance with the California Government Code Section 53600 et seq. ("State Code"), and the investment policy adopted by the City Council. These funds are accounted for in the Rancho Cucamonga Comprehensive Annual Financial Report and Council receives a monthly Portfolio Summary of investment earnings provided at scheduled Council meetings. The City continues to maintain an investment strategy more conservative than required under State law. The City Treasurer and staff continue to monitor legislation, government code amendments, and professional practices pertaining to investing of public funds, ensuring amendments are reflected in the City's Statement of Investment Policy as required by local policy and state law and maintaining the most prudent investment policy as prescribed by the City Council. Respectfully submitted, Attachments City Staff Report 06.doc -2- P148 City of Rancho Cucamonga Statement of Investment Policy CITY OF RANCHO CUCAMONGA STATEMENT OF INVESTMENT POLICY 2006 RANCHO CUCAMONGA CALIFORNIA Prepared by the Administrative Services Department James C. Frost, Treasurer Linda D. Daniels, Acting Administrative Services Director/Deputy Treasurer P149 STATEMENT OF INVESTMENT POLICY CITY OF RANCHO CUCAMONGA INTRODUCTION The investment policy and practices of the City of Rancho Cucamonga are based upon state law, prudent money management and the "prudent person" standards. This statement is intended to provide guidelines for the prudent investment of the City's temporary idle cash, and outline the policies for maximizing the efficiency of the City's cash management system. The primary goal of this policy is to enhance the economic status of the City by protecting its pooled cash and to invest public funds to: I. Meet the daily cash flow needs of the City. 2. Comply with all laws of the State of California regarding investment of public funds. 3. Achieve a reasonable rate of return while minimizing the potential for capital losses arising from market changes or issuer default. SCOPE The investment policy applies to all investment activities of the City of Rancho Cucamonga. These funds are accounted for in the Rancho Cucamonga Comprehensive Annual Financial Report and include: General Fund, Special Revenue Funds, Capital Project Funds, Enterprise Funds, Trust and Agency Funds. Any new fund established by the City Council shall. automatically be reflected in the Investment Policy. Bond proceeds shall be invested in accordance with the requirements and restrictions outlined in bond documents as approved by the City Council. Guidelines presented herein are not intended to apply to bond proceeds held by the City or by fiscal agents or trustees for bond holders of City debt. PRUDENCEIEV ALUATION OF INVESTMENT OFFICER ACTIONS The actions of the City Treasurer and/or his appointed designee in the performance of their duties as managers of public funds shall be evaluated using the following "prudent person" standard applied in the context of managing the overall portfolio: Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the professional management of their business affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Rev: 12/2006 1 P150 The City Treasurer and/or his appointed designee acting in accordance with the investment policy and the "prudent person" standard and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided that substantial deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments whenever possible. OBJECTIVE The City of Rancho Cucamonga operates its temporary pooled idle cash investment under the "Prudent Person" standard. This affords the City a broad spectrum of investment opportunities as long as the investment is deemed prudent and is allowable under current legislation of the State of California (Government Code Section 53600, et. seq.) and other legal restrictions as the City may impose from time to time. The objective of the investment portfolio is to meet the short and long term cash flow demands of the City. To achieve this objective, the portfolio will be structured to provide Safety of Principal and Liquidity, while then providing a reasonable return on investments. The City may direct its fiscal agents to invest funds associated with bonds or debt issues pending disbursement or reinvestment in "money market mutual funds" that are shares of beneficial interest issued by diversified management companies. The criteria for "money market mutual funds" are more specifically described in California Government Code S 53601(1). INVESTMENT OBJECTIVES Security purchases and holdings will be maintained within statutory limits imposed by Government Code. City policy has been to limit investments more stringently than required under state law. Criteria for selecting investments and the order of priority are: 1. Safety - The safety and risk associated with an investment refers to the potential loss of principal, interest, or combination thereof. The City only operates in those investments that are considered safe. Investments shall be undertaken in a manner that seeks to ensure that capital losses resulting from institution default, broker/dealer default, or the erosion of market value are avoided. The City shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk. . Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be mitigated by investing in only high quality securities and by diversifying the investment portfolio so that the failure of anyone issuer would not unduly harm City cash flow. Rev: 12/2006 2 P151 . Market risk, defined as the risk of market value fluctuations due to overall changes in the general level of interest rates, shall be mitigated by structuring the portfolio. It is explicitly recognized, however, that in a diversified portfolio, occasional measured losses may occur, and must be considered within the context of overall investment return. 2. Liquidity - This refers to the ability to sell these securities and terminate the agreement in order to receive cash at any moment in time with minimal chance of losing some portion of principal or interest. Liquidity is an important investment quality especially when the need for unexpected funds occasionally occurs. The City's investment portfolio will remain sufficiently liquid to enable the City to meet operating requirements that rnight be reasonably anticipated. Invested bond proceeds will be structured so as to meet anticipated drawdown requirements. 3. Yield - The City's investment portfolio shall be designed with the objective of attaining a reasonable market rate of return throughout economic cycles, as long as it does not diminish the objectives of Safety and Liquidity. ETHICS AND CONFLICTS OF INTEREST The Treasurer/Deputy Treasurer and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officers shall disclose any material financial interest in financial institutions that conduct business within this jurisdiction, and they shall further disclose any large personal fmanciallinvestment positions that could be related to the performance of the City's portfolio, particularly with regard to the time of purchases and sales. The Treasurer/Deputy Treasurer or investment employees are required to file armual disclosure statements as required by the Fair Political Practices Commission (FPPC). AUTHORIZED BROKER/DEALERS The City will transact business only with approved investment securities broker/dealers that are approved as an authorized broker/dealer in compliance with the City selection process. The Treasurer shall request all broker/dealers that wish to do business with the City to provide proof of capitalization to meet the City's needs, and agree to abide by the conditions set forth in this Investment Policy. All broker/dealers who want to become qualified bidders for investment transactions must have offices in the State of California and provide a current audited financial statement and complete the appropriate City Broker Dealer Questionnaire and Certification. The Treasurer will maintain a list of approved security broker/dealers selected by credit worthiness who are authorized to provide investment services to the City. Rev: 12/2006 3 P152 The City shall at least annually send a copy of the current investment policy to authorized broker/dealers approved to do business with the City. Confirmation of receipt of this policy shall be considered evidence that the broker/dealer has read and understands the City's investment policy and will recommend and execute only transactions suitable for and in compliance with the City's investment policy. AUTHORIZED INVESTMENTS The City is authorized by California Government Code Section 53600, et. seq. to invest in specific types of securities. The City has further limited the types of securities in which it may invest. Any security not listed is not a valid investment for the City. The concise list of approved securities is as follows: INVESTMENTS/DEPOSITS (See Government Code Section 53601) PERCENTAGES MAXIMUM MA TURITY* Securities of the U.S. Government, or its agencies Unlimited 5 years' Certificates of Deposit (or Time Deposits) Unlimited (placed with commercial banks and/or savings and loan companies) 5 years' Negotiable Certificates of Deposit 30% 5 years' Banker's Acceptances 40% 180 days Commercial Paper 30% 270 days (lrTVestments in Commercial Paper must be only with corporations with at least $500 million in assets. Must be of "prime" quality of the highest rating or of the highest letter and numerical rating as provided for by Moody's Investor's Service Inc. or Standard & Poor's Corporation. Short term rating of at least' 'A' or 'AlIP l' and a long-term rating of 'A' is required.) Local Agency Investment Fund (State Pool) Demand Deposits 40 MM*' nla Deposit of Funds (See Government Code Section 53630 - Ref. C) nla Repurchase Agreements (Repos) 20% 1 year The market value of the securities that underlay the repurchase agreement must be valued at 102% or greater of the funds borrowed against the securities and the value must be acijusted no less than quarterly. An executed Master Repurchase Agreement must be on file Investment Agreements'" 5% 397 days lnvestment agreements, guaranteed investment contracts, funding agreements, or any other form of corporate note which represents the unconditional obligation of one or more banks, insurance companies or other financial institutions, or are guaranteed by a financial institution, which has an unsecured rating, or which agreement is itself rated, as of the date of execution thereof, in one of the two highest rating categories by two or more rating agencies; or, which are collateralized at least 100% with Us. Government securities. Rev: 12/2006 4 P153 * Maximum term unless expressly authorized by Governing Body and within the prescribed time frame for said approval. **Limit set by L.A.lF. Governing Board, not Government Code ***Percentage limits for Investment Agreements are not intended to apply to bondfunds held by the City or by Fiscal Agents or Trustees, in which investment of such funds is under the City's control or direction. The term and percentage provisions set forth herein are effective January I, 2007 and do not apply to investments of City funds made prior to that date. INVESTMENT POOLS The Local Agency Investment Fund (LAIF) is a voluntary investment alternative for California's local governments and special districts authorized by the California Government Code. LAIF is managed by the State Treasurer's Office with oversight by the Local Agency Investment Advisory Board. The City's participation in LAIF was approved by City Council with other authorized investments on July 1987. It is a permitted investment with the knowledge that the fund may invest in some vehicles allowed by statute but not otherwise authorized under the City's authorized investments. All securities in LAIF are purchased under the authority of Government Code Sections 16430 and 16480. All investments are purchased at market, and market valuation is conducted monthly. SAFEKEEPING OF SECURITIES Securities purchased from broker/dealers shall be held by third party bank or other designated third party trust department acting as agent for the City under the terms of a custody agreement executed by the bank and City. All securities will be received and delivered using standard delivery-versus-payment (DVP) procedures. Certificate of Deposit securities are held in the City's vault. No outside broker/dealer or advisor may have access to City funds, accounts or investments, and any transfer of funds to or through an outside broker/dealer must be approved by the City Treasurer/Deputy Treasurer. The City strives to maintain the level of investment of all funds as near 100% as possible, through daily and projected cash flow determinations. Idle cash management and investment transactions are the responsibility ofthe City Treasurer. DIVERSIFICATION The City will diversify its investments by security type, issuers, and maturities. The purpose of diversifying is to reduce overall portfolio risks while attaining an average market rate of return; therefore, it needs to be conceptualized in terms of maturity, instrument types and issuer. Rev: J 2/2006 5 P154 INDEPENDENT REVIEW Outside, independent auditors are required to perform an annual review of the City's Investment Policy, process, and internal controls. The review process is performed as part of the City's annual external audit. REPORTING Pursuant to Section 53464 (b) of the California Government Code, the Treasurer shall render a quarterly report to the City Council and City Manager, containing detailed information on all securities, investments, and moneys of the City. The report must be submitted within 30 days following the end of the quarter covered by the report. The City Treasurer has elected to provide this report monthly. This report shall include the following: . The type of investment, name of the issuer, date of maturity, par and dollar amount invested in all securities. . The weighted average maturity of the investments. . Any funds, investments, or programs including loans that are under the management of contracted parties. . The current market value and source of the valuation. . A description of the compliance with the Statement of Investment Policy. . A statement of the City's ability to meet its pooled expenditure requirements for the next six months or provide an explanation as to why sufficient money shall, or may not be available. . The City Treasurer shall report whatever additional information or data may be required by the City Council. The City Council may elect to require the report to be made monthly instead of quarterly. In addition to the reporting requirements of Section 53646 of the Government Code, the City Treasurer will continue to meet the requirements per AB 943 for cities and counties to submit their investment reports and policies to the California Debt and Investment Advisory Commission (CDIAC). This bill requires each city to submit copies of its second and fourth quarter calendar year investment portfolio reports and copies of annual investment polices. Although the CDIAC mandate continues to be suspended the Budget Act did not repeal or suspend the requirement for cities and counties to submit their investment reports and policies to the California Debt and Investment Advisory Commission (CDIAC). Rev: 12/2006 6 P155 The City Treasurer shall be responsible for reviewing and modifying investment guidelines as conditions warrant and is required to submit same for re-approval to the City Council annually. However, the City Treasurer may, at any time, further restrict the items approved for purchase as deemed appropriate. The basic premise underlying the City's investment philosophy is, and will continue to be, to ensure that money is always safe and available when needed. I L-k~ es . City Treasurer City of Rancho Cucamonga Date Rev: ]2/2006 7 P156 ~ ~ City of Rancho Cucamonga Statement of Investment Policy GLOSSARY ACCRUED INTEREST: The accrued interest accumulated on a security since the issue date or the last coupon payment. The buyer of the security pays the market price plus accrued interest. AGENCIES: Federal agency securities. ASK/OFFER: The price at which an owner offers to sell. BANKERS' ACCEPTANCE (BA): A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as, the issuer. BASIS POINT: 1/100 of 1%. BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid). See Offer. BEAR MARKET: A period of generally pessimistic attitudes and declining market prices. BOOK VALUE: The amount at which a security is carried on the books of the holder or issuer. BOND EQUIVALENT YIELD: The basis on which yields on notes and bonds are quoted. BROKER: A broker brings buyers and sellers together for a commission. BULL MARKET: A period of generally optimistic attitudes and increasing market prices. BUYER'S MARKET: A market where supply is greater than demand, giving buyers an advantage in purchase price and terms. CALLABLES-N/C: Securities that the issuer has the right to redeem prior to maturity. CASH SETTLEMENTS: Today. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a certificate. Large denomination CD's are typically negotiable. CMT: Constant Maturity Treasury. COLLATERAL: Securities, evidence of deposit or other properly which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies. 1 P157 8& ~ City of Rancho Cucamonga Statement of Investment Policy COMMERCIAL PAPER: Short-term, unsecured, negotiable promissory. notes issued by businesses. COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the City. It includes five combined statements for each individual fund and account group prepared in conformity with Government Accounting Accepted Practices (GAAP). It also includes supporting schedules necessary to demonstrate compliance with finance related legal and contractual provisions, extensive introductory material, and a detailed Statistical Section. COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date. COVER: Spread between the winning bid (or offer) and the next highest bid (or offer). CREDIT RISK: Credit of the underlying security. CUSIP: Committee of Uniform Securities Identification Procedures. DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account or inventory. DEBENTURE: A bond secured only by the general credit of the issuer. DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of signed receipt for the securities. DERIvATIVES: Financial products that are dependent for their value on (or "derived" from) an underlying financial instrument, a commodity, or an index representing values of groups of such instruments or assets. I DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price shortly after sale is considered to be at a discount. DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued at discount and redeemed at maturity for full face value, e.g. U.S. Treasury Bills. DIVERSIFICATION: Dividing investment funds among It variety of securities offering independent returns. DURATION: A measure of the timing of the cash flows to be received from a given fixed income security. The duration of a security is a useful indicator of its price volatility for given changes in interest rates. 2 P158 . City of Rancho Cucamonga Statement of Investment Policy EASE: To assist the economy in growing faster, Fed supplies more credit, lowering reserve requirements or discount rates. EXTENSION TRADES: Selling short term, buying further out in the yield curve. (Usually affected in a bull market). FACE VALUE: The principal amount owed on a debt instrument. It is the amount on which interest is computed and represents the amount that the issuer promises to pay at maturity. FEDERAL CREDIT AGENCIES: Agencies of the Federal govermnent set up to supply credit to various classes of institutions and individuals, e.g., S & L's small bu'siness firms, students, farmers, farm cooperatives, and exports. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that insures bank deposits, currently up to $100,000 per deposit. FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations. FEDERAL HOME LOAN BANKS (FHLB): Govermnent sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLB is to liquefY the housing related assets of its members who must purchase stock in their district Bank. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA or Fannie Mae): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (BUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system. FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven 'members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Govermnent Securities in the open market as a means of influencing the volume of bank credit and money. ' FRN: Floating Rate Note. 3 P159 . City of Rancho Cucamonga Statement of Investment Policy FULL FAITH AND CREDIT: The unconditional guarantee of the United States Government backing a debt for repayment. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA arid issued by savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, V A, or FMHM mortgages. The term "passthroughs" is often used to describe Ginnie Maes. INTEREST RATE RISK: The risk that rising interest rates will cause bond prices to fall. INVESTMENT PORTFOLIO: A collection of securities held by a bank, individual, institution or government agency for investment purposes. INVESTOR: A person who purchases securities with the intention of holding them to make a profit. ISSUE: A group of identical securities or the marketing and selling of such securities. ISSUE PRICE: The price at which a new issue of securities is put on the market. LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment. LOCAL: Refers to the ability to sell securities one owns. LffiID: London Interbank bid rate. LffiOR: London Interbank offered rate. MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold. MARK TO MARKET: Current value of securities at today' s market price. MARKET RISK: The risk that the security will be difficult to sell. MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase reverse repurchase agreements that establishes each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller- borrower. 4 P160 . City of Rancho Cucamonga Statement of Investment Policy MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. MONEY MARKET INSTRUMENTS: Private and government obligations of one year or less (flexible in some arenas; under five years would still be considered a money market). MTN: Medium Term Note. NEW ISSUE: The first offering of a security. NONCALLABLE: Security that does not contain a call provision. OFFER: The price asked by a seller of securities. (When you are buying securities you ask for an offer). See Asked and Bid. OPEN MARKET OPERATIONS: Federal Reserve activity, Fed entering the market place to initiate repos, reverses, bill or coupon pass. Under the Federal Reserve Act., Fed uses purchases and sales of Govt. & Fed Agency securities to add to or subtract from commercial bank reserves. Goals are to sustain economic growth, high employment and reasonable price stability. OPTION: The right to trade a security during a certain period of time. ORIGINAL ISSUE DISCOUNT/OlD: Security priced at a discount at time of issuance. OVERBOUGHT: Refers to the price level of a security or market, which has undergone a sharp rise due to vigorous buying. OVERSOLD: Refers to the price level of a security or market, which has undergone a sharp fall due to selling. These conditions indicate that buying/selling may have left prices temporarily too high/low, given all other market conditions. PAPER GAIN OR LOSS: Term used for unrealized gain or loss on securities being held in a portfolio based on comparison of current market quotes and their original cost. This situation exists as long as the security is held while there is a difference between market value and the purchase price. P AR VALUE: The stated or face value of a security expressed as a specific dollar amount marked on the face of the security; the amount of money due at maturity not to be confused with market value. PAYDOWN: A net reduction in debt that occurs when the amount of a new issue is less than the . maturing issue. PREMIUM: The amount by which the price paid for a security exceeds the par value. Also, the amount that must be paid over the par value to call an issue before maturity. PRICE RISK: Volatility. 5 P161 . City of Rancho Cucamonga Statement of Investment Policy PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly [mancial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker~dealers, banks, and a few unregulated firms. PRIMARY MARKET: The demand for first issues of securities. PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state--the so-called legal list. In other states the trustee may invest in a security if it is one, which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital. QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. RALLY: A brisk rise or recovery in the price of a security or the market. RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond; the current income return. RATlNG: The designation used by investor's services to rate the quality of a security's creditworthiness. REGULAR: Next business day. REPURCHASE AGREEMENT: Repo - a holder of securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms are structured to compensate him for this. When the FED does R.P., it is lending money, thus increasing bank reserves. RICH/EXPENSIVE TO THE YIELD CURVE: An expression applied to a security price when current market quotes appear to be in comparison with past price records of securities or current prices of comparable securities. ROLL OVER: Reinvesting funds received from a mature security in a new issue of the same or similar security. SAFEKEEPlNG: A service banks offer to customers for a fee, where securities are held in the bank's vaults for protection. 6 P162 . City of Rancho Cucamonga Statement of Investment Policy SALLIE MAE: Trade name for the Student Loan Marketing Association. SECONDARY MARKET: I) A market for the repurchase and resale of outstanding issues following the initial distribution. 2) The purchase or sale of securities in a special offering or through a means other than the regular channel of trading. SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation. . SEC RULE 153C-l: See Uniform Net Capital Rule. SHORT/SELL SHORT: Sale of securities without ownership. SKIP DAY: Next business day. after tomorrow. SPREAD: Difference between the bid and the ask, or offer. STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLB, FNMA, SLMA, etc.) and Corporations that have imbedded options (e.g., call features, derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve. SUPPORT: A price level at which a security tends to stop falling because there is more demand than supply. TIGHTEN: If the economy is growing too fast, and inflation is increasing, FED withdraws money from the banking system, by raising reserves or the discount rate. Ultimately, putting the brakes on economic growth. TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. TREASURY BOND: Long-term coupon bearing U.S. Treasury securities issued as direct obligation of the U.S. Government having initial maturities of more than 10 years. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years. UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of IS to I; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash. VALUE OF 1/32 PER MILLION: $312.50 7 P163 . City of Rancho Cucamonga Statement of Investment Policy WHEN ISSUED BASIS-Wffi-WI: A term applied to securities that are traded before they are actually issued, with the stipulation that transactions are null and void if securities are not issued. YIELD: The annual rate of return on an investment expressed as a percentage of the investment. Income yield is obtained by dividing the current dollar income by the current market price for the security. YIELD CURVE: Yi~ld calculations of various maturities at a given time to observe spread differences. YIELD TO MATURITYINET YIELD: The current income yield minus any premium above par, or plus any discount from par in the purchase price with the adjustment spread over the period from date of purchase to maturity. I:\ADMIN\SANDY\Treasury\Annual Investment Policies 06\ GLOSSARY 06 City. doc 8 P164 STAFF REpORT ENGINEERING DEP.\RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager. From: William J. O'Neil, City Engineer By: Michael TenEyck, Administrative Resources Manager Subject: APPROVAL TO AUTHORIZE THE ADVERTISING OF THE "NOTICE INVITING BIDS" FOR THE RANCHO CROSSING 12 KV ELECTRICAL DISTRIBUTION SYSTEM, CABLING, CONNECTIONS AND EQUIPMENT PROJECT, TO BE FUNDED FROM MUNICIPAL UTILITY FUNDS ACCOUNT NO. 17053035650/1397705-0 RECOMMENDATION Staff recommends that the City Council approve the plans and specifications for the Rancho Crossing 12 KV Electrical Distribution System, Cabling, Connections and Equipment Project, and approve the attached resolution authorizing and directing the City Clerk to advertise the "Notice Inviting Bids" and receive bids. BACKGROUND/ANALYSIS The Rancho Crossing 12 KV Electrical Distribution System, Cabling, Connections and Equipment Project scope of work located on the Southside of Foothill Blvd. east of Day Creek Blvd, consists of constructing a complete electrical distribution system including trenching, installing conduit, cable and equipment, and surface restoration. The contract documents call for thirty (30) working days to complete this construction. The project will be funded from Municipal Utility Funds. Staff has determined that the project is Categorically Exempt per CEQA guidelines. The project plans and specifications were completed by staff and approved by the City Engineer. The Engineer's estimate is $75,000. Legal advertising is scheduled for December 26, 2006 and January 2,2007, with a bid opening at 2:00 p.m. on Tuesday, January 16, 2007, unless extended by Addenda. Respectfully submitted, CJftl letl William J. O'Neil City Engineer WJO:MT/JAD:ls Attachment P165 FO cu > <{ cu > :2 '" I 4TH 5T ONTARIO CITY IMIT PROJECT LOCATION CiTY OF RANCHO CUCAMONGA VICINITY MAP RANCHO CROSSING 12 KV ELECTRICAL DISTRIBUTION SYSTEM SOUTH SIDE OF FOOTHILL BLVD EAST OF DAY CREEK BLVD P166 RESOLUTION NO. 0 &r 3 g '-/ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA APPROVING THE PLANS AND SPECIFICATIONS FOR THE "RANCHO CROSSING 12 KV ELECTRICAL DISTRIBUTION SYSTEM, CABLING, CONNECTIONS AND EQUIPMENT PROJECT" AND AUTHORIZING AND DIRECTING THE CITY CLERK TO ADVERTISE TO RECEIVE BIDS WHEREAS, it is the intention ofthe City of Rancho Cucamonga City Council to construct certain improvements in the City of Rancho Cucamonga. WHEREAS,. the City of Rancho Cucamonga City Council has prepared specifications for the construction of certain improvements. NOW, THEREFORE, BE IT RESOLVED that the specifications presented by the City of Rancho Cucamonga City Council be and are hereby approved as the plans and specifications for the "RANCHO CROSSING 12 KV ELECTRICAL DISTRIBUTION SYSTEM, CABLING, CONNECTIONS AND EQUIPMENT PROJECT". BE IT FURTHER RESOLVED that the City Clerk is hereby authorized and directed to advertise as required by law for the receipt of sealed bids or proposals for doing the work specified in the aforesaid plans and specifications, which said advertisement shall be substantially in the following words.and figures, to wit: "NOTICE INVITING SEALED BIDS OR PROPOSALS" Pursuant to a Resolution of the City Council of the City of Rancho Cucamonga, San Bernardino County, California, directing this notice, NOTICE IS HEREBY GIVEN that said City of Rancho Cucamonga City Council will receive at the OFFICE OF THE CITY CLERK IN THE OFFICES OF THE CITY OF RANCHO CUCAMONGA, ON OR BEFORE THE HOUR OF 2:00 P.M. ON TUESDAY, JANUARY 16, 2007 sealed bids or proposals for "RANCHO CROSSING 12 KV ELECTRICAL DISTRIBUTION SYSTEM, CABLING, CONNECTIONS AND EQUIPMENT PROJECT" in said City. Bids will be publicly opened and read in the office of the City Clerk, 10500 Civic Center Drive, Rancho Cucamonga, California, 91730. Bids must be made on a form provided for the purpose, addressed to the City of Rancho Cucamonga City Council, California, marked, "RANCHO CROSSING 12 KV ELECTRICAL ,DISTRIBUTION SYSTEM, CABLING, CONNECTIONS AND EQUIPMENT PROJECT". PREVAILING WAGE: Notice is hereby given that in accordance with the provisions of California Labor Code, Division 2, Part 7, Chapter 1, Articles 1 and 2, the Contractor is required to pay not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed, and not less than the genera1 prevailing rate of per diern wages for holiday and overtirne work. In that regard, the Director of the Department of P167 Resolution No. December"20, 2006 Page 2 Industrial Relations of the State of California is required to and has determined such general prevailing rates of per diem wages. Copies of such prevailing rates of per diem wages are on file in the Office of the City Clerk of the City of Rancho Cucamonga, 10500 Civic Center Drive, Rancho Cucamonga, California, and are available to any interested party on request. The Contracting Agency also shall cause a copy of such determinations to be posted at the job site. Pursuant to provisions of Labor Code Section 1775, the Contractor shall forfeit, as penalty to the City of Rancho Cucamonga, not more than fifty dollars ($50.00) for each laborer, workman, or mechanic employed for each calendar day or portion thereof, if such laborer, workman or mechanic is paid less than the general prevailing rate of wages hereinbefore stipulated for any work done under the attached contract, by him or by any subcontractor under him, in violation of the provision of said Labor Code. Attention is directed to the provisions in Sections 1777.5 and 1777.6 of the Labor Code concerning the employment of apprentices by the Contractor or any subcontractor under him. Section 1777.5, as amended, requires the Contractor or subcontractor employing tradesmen in any apprenticable occupation to apply to the joint apprenticeship committee nearest the site of the public works project and which administers the apprenticeship program in that trade for a certificate of approval. The certificate will also fix the ratio of apprentices to journeymen that will be used in the performance of the contract. The ratio of apprentices to journeymen in such cases shall not be less than one to five except: 1. When unemployment in the area of coverage by the joint apprenticeship committee has exceeded an average of 15 percent in the 90 days prior to the request of certificate, or 2. When the number of apprentices in training in the area exceeds a ratio of one to five, or . 3. When the trade can show that it is replacing at least 1/30 of its membership through apprenticeship training on an annual basis statewide or locally, or 4. When the Contractor provides evidence that he employs registered apprentices on all of his contracts on an annual average of not less than one apprentice to eight journeymen. The Contractor is required to make contributions to funds established for the administration of apprenticeship programs if he employs registered apprentices or journeymen in any apprenticable trade on such contracts and if other Contractors on the public works site are making such contributions. The Contractor and subcontractor under him shall comply with the requirements of Sections 1777.5 and 1777.6 in the employment of apprentices. Information relative to apprenticeship standards, wage schedules, and other requirements may be obtained from the Director of Industrial Relations, ex-officio the Administrator of Apprenticeship, San Francisco, California, or from the Division of Apprenticeship Standards and its branch offices. Eight (8) hours of labor shall constitute a legal day's work for all workmen employed in the execution of this contract and the Contractor and any subcontractor under him shall comply with and be governed by the laws of the State of California having to do with working hours as set forth in Division 2, Part 7, Chapter 1, Article 3 of the Labor Code of the State of California as amended. P168 Resolution No. December 20, 2006 Page 3 The Contractor shall forfeit, as a penalty to the City of Rancho Cucamonga, twenty-five dollars ($25.00) for each laborer, workman, or mechanic employed in the execution of the contract, by him or any subcontractor under him, upon any of the work hereinbefore mentioned, for each calendar day during which said laborer, workman, or mechanic is required or permitted to labor more than eight (8) hours in violation of said Labor Code. Contractor agrees to pay travel and subsistence pay to each workman needed to execute the work required by this contract as such travel and subsistence payments are defined in the applicable collective bargaining agreement filed in accordance with Labor Code Section 17773.8. The bidder must submit with his proposal, cash, cashier's check, certified check, or bidder's bond, payable to the City of Rancho Cucamonga for an amount equal to at ieast ten percent (10%) of the amount of said bid as a guarantee that the bidder will enter into the proposed contract if the same is awarded to him, and in event of failure to enter into such contract said cash, cashier's check,certified check, or bond shall become the property of the City of Rancho Cucamonga. If the City of Rancho Cucamonga City Council awards the contract to the next lowest bidder, the amount of the lowest bidder's security shall be applied by the City of Rancho Cucamonga to the difference between the low bid and the second lowest bid, and the surplus, if any shall be returned to the lowest bidder. The amount of the bond to be given to secure a faithful performance of the contract for said work shall be one hundred percent (100%) of the contract price thereof, and an additional bond in an amount equal to one hundred percent (100%) of the contract price for said work shall be given to secure the payment of claims for any materials or supplies furnished for the performance of the work contracted to be done by the Contractor, or any work or labor of any kind done thereon, and the Contractor will also be required to furnish a certificate that he carries compensation insurance covering his employees upon work to be done under contract which may be entered into between him and the said City of Rancho Cucamonga for the construction of said work. No proposal will be considered from a Contractor to whom a proposal form has not been issued by the City of Rancho Cucamonga. Contractor shall possess any and all contractors licenses, in form and class as required by any and all applicable laws with respect to any and all of the work to be performed under this contract; including but not limited to a Class "A" (General Engineering Contractor) in accordance with the provisions of the Contractor's License Law (California Business and Professions Code, Section 7000 et. seq.) and rules and regulation adopted pursuant thereto. The Contractor, pursuant to the California Business and Professions Code, Section 7028.15, shall indicate his or her State License Number on the bid, together with the expiration date, and be signed by the Contractor declaring, under penalty of perjury, that the information being provided is true and correct. The work is to be done in accordance with the profiles, plans, and specifications of the City of Rancho Cucamonga City Council on file in the Office of the City Clerk at 10500 Civic Center Drive, Rancho Cucamonga, California. Copies of the plans and specifications, available at the office of the City Engineer, will be furnished upon application to the City of Rancho Cucamonga and payment of $35.00 (THIRTY-FIVE DOLLARS), said $35.00 (THIRTY-FIVE DOLLARS) is non-refundable. P169 Resolution No. December 20,2006 Page 4 Upon written request by the bidder, copies of the plans and specifications will be mailed when said request is accompanied by payment stipulated above, together with an additional non- reimbursable payment of $15.00 (FIFTEEN DOLLARS) to cover the cost of mailing charges and overhead. The successful bidder will be required to enter into a contract satisfactory to the City of Rancho Cucamonga. In accordance with the requirements of Section 9-3.2 of the General Provisions, as set forth in the Plans and Specifications regarding the work contracted to be done by the Contractor, the Contractor may, upon the Contractor's request and at the Contractor's sole cost and expense, substitute authorized securities in lieu of monies withheld (performance retention). The City of Rancho Cucamonga, California, reserves the right to reject any and all bids. Questions regarding this Notice Inviting aids for the "RANCHO CROSSING 12 KV ELECTRICAL DISTRIBUTION SYSTEM, CAaUNG, CONNECTIONS AND EQUIPMENT PROJECT" may be directed to: Michael TenEyck, Administrative Resource Manager Rancho Cucamonga, CA 91730 (909) 477-2740, ext. 4035 ay order of the City Council of the City of Rancho. Cucamonga, California. Dated this 20th day of December, 2006. ADVERTISE ON: December 26, 2006 and January 2, 2007 P170 t'", ....',....,'..T....;[. ~:.lh.i>i.;'; .%..~.:.."",i.. 'J!1i1k. ~'.:'TJ;P';:",':L~ '''.~:\~.1 " ~ ~ ','..: -1):", RANCHO CUCAMONGA ,'ff r -'''~;':.il.r,~4'.;r ;{I FIRE PROTECTION DISTRICT Staff RefXJrt DATE: December 20, 2006 TO: Mayor and Members of the City Council President and Members of the Board of Directors Jack Lam, AICP, City Manager FROM: Peter M. Bryan, Fire Chief BY: Breanna Medina, Management Analyst II SUBJECT: ADOPT RESOLUTION OF THE (FEDERAL) NATIONAL INCIDENT MANAGEMENT SYSTEM (NIMS) TO BE USED IN CONJUCTION WITH THE CURRENT (STATE) STANDARDIZED EMERGENCY MANAGEMENT SYSTEM (SEMS) FOR DISASTER MANAGEMENT RECOMMENDATION Adopt the National Incident Management System (NIMS), in' conjunction with the Standardized Emergency Management System (SEMS) currently in use, to mitigate, prepare for, respond to, and recover from a natural or human-caused disaster. BACKGROUND In 1993, California created and adopted the Standardized Emergency Management. System (SEMS) for the management of all disasters. Every emergency response organization in California is required to utilize SEMS in order to receive reimbursement for personnel costs incurred after a disaster. Building on the SEMS model, on February 28, 2003 the President directed the Secretary of the Department of Homeland Security via Homeland Security Directive-5 to develop and administer a National Incident Management System. The NIMS provides a consistent nationwide template to enable all government, private-sector, and nongovernmental organizations to work together during domestic incidents. Adoption of the NIMS will enable the City of Rancho Cucamonga to maintain eligibility for future Federal grant opportunities and instruct staff to fulfill the training and program implementation components currently under development by the State of California Office of Emergency Services. ilJi Peter M. Brya Fire Chief P171 RESOLUTION NO. ot - 385 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA ADOPTING THE (FEDERAL) NATIONAL INCIDENT MANAGEMENT SYSTEM (NIMS) TO BE USED IN CONJUCTION WITH THE CURRENT (STATE) STANDARDIZED EMERGENCY MANAGEMENT SYSTEM (SEMS) FOR DISASTER MANAGEMENT WHEREAS, the President in Homeland Security Directive-5, directed the Secretary of the Department of Homeland Security to develop and administer a National Incident Management System, which would provide a consistent nationwide approach for federal, State, local and tribal governments to work together more effectively and efficiently to prevent, prepare for, respond to and recover from disasters, regardless of cause, size, or complexity; and WHEREAS, California local and state government pioneered the development of standardized incident management systems to respond to a variety of catastrophic disasters, including fires, earthquakes, floods and landslide; and Whereas, in the early 1970's, the California'fire service, in partnership with the federal government, developed the seminal emergency incident command system that has become the model for incident management nationwide, and WHEREAS, in 1993, California was the first state to adopt a statewide Standardized Emergency Management System for use by every emergency response organization, and,implemented a system involving local and state agencies to ensure the continual improvement of the Standardized Emergency Management System, and WHEREAS, California local and state emergency management professionals have contributed their expertise to the development of the new National Incident Management System; and WHEREAS, it is essential for responding to disasters and securing the homeland that federal, state, local, and tribal organizations utilize standardized terminology, standardized organizational structures, interoperable communications, consolidated action plans, unified command structures, uniform personnel qualification standards, u'niform standards for planning, training, and exercising, comprehensive resource management, and designated incident facilities during emergencies or disasters, and WHEREAS, the California Standardized Emergency Management System substantially meets the objectives of the National Incident Management System, and WHEREAS, the National Commission on Terrorist Attacks recommended adoption of a standardized Incident Command System nationwide, NOW, THEREFORE, BE IT RESOLVED, that the City of Rancho Cucamonga hereby adopts the National Incident Management System (NIMS) as enhanced by the Standardized Emergency Management System (SEMS) as the official regulatory guidance for emergency response, preparedness, mitigation, prevention and recovery within the City of Rancho Cucamonga. We further direct the City of Rancho Cucamonga to: 1. Develop a program to integrate the National Incident Management System (NIMS), to the extent appropriate, into the City's existing emergency management system. 2. Provide training on the NIMS as required by Presidential Directive to all applicable City personnel. 3. Identify any regulations or City Codes that need to eliminated or amended to facilitate implementation of the National Incident Management System. P172 Resolution No. XXX)( Page 2 PASSED, APPROVED and ADOPTED this _day of ,2006. AYES: NOES: ABSENT: ABSTAINED: Donald J. Kurth, Mayor ATTEST: Debra J. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga City Council, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council at a regular meeting of said Council held on the day of 2006. Executed this _day of 2006 in Rancho Cucamonga, California. Debra J. Adams, Secretary P173 if:~~:.-h_lI-~,;li=~:o:m''''ir'Ui:_,\f'!''i',:f''''~'t~'''''''''<'.:.E,~!~~-wX~ ;:;:-:l~p..\.-;;.~"-.~7:'-_Jf.:):-';"-~"-"",'; 'i;,;;;~;"..~)" .\"t".;"t<-"?,*"":J.'j-':(~"I;'" ~-:.,.--, '~'. ,-I COMMUNITY SERVICES RANCHO CUCAMONGA Staff Report FROM: December 20, 2006 Mayor and Members of the City Council Jack Lam, AICP, City Manager Kevin McArdle, Community Services Director Joe O'Neil, City Engineer Paula Pachon, Management Analyst III Karen McGuire-Emery, Senior Park Planner PARKS, RECREATION FACILITIES AND COMMUNITY SERVICES UPDATE DATE: TO: BY: SUBJECT: RECOMMENDATION: In accordance with the City Council's request to become more informed of recreation facility issues, programs, projects and events, this report is provided to highlight pertinent issues, projects and programs occurring in the Community Services Department. This report is provided to the City Council for informational purposes only. No action need be taken on this item. A. PARKS AND FACILITIES UPDATE Rancho Summit Park: . Work is progressing on the park. Construction of the storm drain and sewer line is almost complete. Contractor is working on establishing finish grade and starting hardscape installation. Red Hill Park: . The new pedestrian access walkways throughout the park are now complete. Pacific Electric Trail: . Phase 1 (Haven to east of Etiwanda) was awarded on December 6th, to Sully Miller and should be under construction in early January 2007. It is anticipated that Phase 1 will be completed by the end of July 2007. . Phases 2 and 3 (Amethyst to Haven) will have a bid opening on December 28th. It is anticipated that bids will be awarded on January 17, 2007. P174 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 B. COMMUNITY SERVICES UPDATE Seniors: . The Senior Advisorv Committee will not meet during the month of December. The Committee will hold its next regular meeting on Monday, January 22, 2007, at 9:00 a.m. at the James L. Brulte Senior Center. The Senior Advisory Special Events Sub-Committee will continue planning for the next Dinner and Auction that is scheduled to be held on March 18, 2007. . The Center is now accepting appointments for a 1-hour private session with our personal trainer in Wellness Pass. Participants can customize a workout to meet their particular goals. Each 1-hour session is $25.00. Appointments are required. . On Sunday, December 31st from 11 :00 a.m. until 3:00 p.m. seniors will ring in the New Year with good friends at the James L. Brulte Senior Center first annual New Years Brunch and Dance. Brunch will be served from 11 :00 a.m. until 12-noon and will be catered by' Spaggi's. Dancing and good cheer will follow. Tickets for this fun-filled event are on sale now for $15.00/person. . On Tuesday, January 16th from 1 :00 p.m. until 2:30 p.m. the Senior Center will be hosting a Coffee and Pie Social. This event is free for all Rancho Cucamonga senior citizens. . On Tuesday, December 12th at 9:00 a.m. the Department held our annual Holidav Partv for seniors. The event included entertainment and refreshments and free pictures with Santa. . On Sunday, November 19th the Center held its annual Thanksqivinq Dinner. The Girl Scouts, Victoria Gardens Management Staff, the Community Baptist Church and the Teen Connection program volunteered their time to help with this event. Over 50 volunteers served up 300 traditional turkey dinners. Tech Junction: . The Tech Junction computers at the Goldy S. Lewis Community Center at Central Park have a wide variety of software programs. Community members may come in and use the computers to do homework, check e-mail, conduct research, complete business documents or spend time searching the web. A variety of computer technology courses are available at the Tech Junction to enable users to improve their computer skills. Classes are offered Monday through Thursday evenings for the general public for a fee of $25 for a three-week session. Additional classes are offered for senior citizens free of charge Monday through Thursday from 1 :00 p.m. until 2:00 p.m. Trips and Tours: . Hearst Castle Holidav - December 17-19, 2006. Spend two nights at the Cambria Pines Lodge that is conveniently located in downtown Cambria. During the trip participants will enjoy an evening tour of Hearst Castle, take in an IMAX movie, and visit Solvang, Morro Bay and San Simeon. Cost: $299/person double occupancy; $400/per person single. P175 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 . Tournament of Roses Parade - January 1, 2007. Enjoy the world famous Rose Parade from premium grandstand seats. The parade theme this year is "Our Good Nature" and the grand marshal will be George Lucas. Cost: $112/person. . Palm Sorinqs Follies - January 12, 2007. The fabulous Palm Springs Follies will open its new season with the theme "Gotta Dance'" Participants in this trip will see headliner Gloria Loring who is most remembered as Liz Chandler on NBC's Days of Our Lives. Cost: $76/person. . Fiddler on the Roof - January 24, 2007. Participants will travel to Lawrence Welk Resort and enjoy a buffet and see a performance of the Tony Award winner for Best Musical, Fiddler on the Roof. Cost: $75/person. . Ronald Reaqan Presidential Library and Museum - February 20, 2007. Participants on this trip will enjoy the museum's permanent collection of films, videos, objects, and artifacts that now includes the Presidential aircraft, Air Force One. The Library is also the resting place of President Reagan. Cost: $37/person. Human Services and Volunteer Services: . "The Doctor is In" series, presented by Harvey D. Cohen, M.D., will present the following lectures at the James L. Brulte Senior Center in December and January: >- 3rd Tuesdav of each month from 12:00 om until 1 :30 om: December 19'h - Thyroid Disease and Your Health January 16th - Chronic Cough >- 3rd Wednesda~ of each month from 7:00 om until 8:30 om: December 20' - End of Life Issues January 17'h - High Blood Pressure - Are you taking the right medicine? . Senior Health and Wellness Proqram - Although the Administration on Aging Wellness Grant funding ended on August 31, 2006, the Resource Library continues to be popular. The library features reference materials with a wide range of topics, including not only senior health and wellness topics, but cooking, craft, and hobby books as well. The library continues lo"feature an assortment of equipment including a Braille printer, a Braille labeler, Braille games, a magnifier, and a computer with special needs capability. Visitors to the library are able to check their blood pressure, use the scale and magnifier. Seniors are continuing to track their blood pressure with cards donated by the Visiting Nurses Association. They are also utilizing the computer with the adaptive features it provides. . USDA Food Commodities - The San Bernardino County Food Bank and the City of Rancho Cucamonga, continue to distribute surplus food on the first Monday of every month to eligible residents at the James L. Brulte Senior Center. Staff distributed commodities to 528 residents in December. Pet food continues to be distributed every month to residents for their pets. It is extremely popular with the recipients. Residents meeting the criteria for commodity eligibility receive free food for their pets. In December, Petco donated approximately $1,500.00 in pet food P176 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20,2006 and supplies. Target continues to donate the plastic shopping bags to help with distribution and delivery of commodities and the pet food. . The Bereavement Support Group continues to meet on the first and third Tuesday of each month from 3:30 until 5:00 p.m. at the Brulte Senior Center. This is an interactive group that encourages active participation. The support group is offered free of charge and is available for adults 18 and older. The group is conducted by Inland Hospice. . Wellness Workshop - A Balance and Mobility class is being offered at the Brulte Senior Center on the first and third Friday each month from 10:00 until 11 :00 a.m. This class focuses on improving balance as well as strengthening all major muscle groups of the body. . A Flu Shot Clinic was held on November 14th and shots were administered to 575 seniors and high risk individuals. Volunteers: . Volunteer opportunities within the City continue to grow. The table below summarizes the Community Services Department volunteer usage for the month of October 2006 and fiscal year to date: October 2006 JUL Y- OCTOBER 2006 #of # of # of #of Division Volunteers Hours * $ Value Volunteers Hours *$ Value Administration 5 15 $296 20 60 $1,184 Senior Services 229 1,164 $32,847 642 6,316 $124,672 Human Services 37 90 $1,777 138 457 $7,127 Sports 116 1,243 $25,537 406 3,684 $ 72, 722 Soecial Events 0 0 $0 286 416 $8,202 Performina Arts 94 839 $16,562 322 2,523 $49,794 Teens 73 439 $8,666 224 3,182 $62,808 Youth Proorams 10 52 $1,026 34 542 $10,699 Totals 564 4,342 $85,711 2,072 17,180 $337,208 *Based on $19. 7.4/hour - State average as determined the California Independent Sector. Special Needs Programs: . The Special Olympians Club is our newest edition to our Special Needs Program. This exciting sport program offers a variety of sport opportunities including basketball, bowling, volleyball, soccer and cheer. All sports offered will coincide with the Southern California Special Olympics tournaments and events. Our winter session starts out with volleyball and floor hockey. . Friday Niqht Fun Club is a special monthly activity where participants will be able to meet new friends and increase their self-esteem. Every other month participants enjoy fun themed activities that include a special activity craft, games, food and much more. Upcoming fun nights includes: "Movie Night Madness" on Friday, January 12th from 5:30 p.m. until 7:30 P177 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 p.m. Activities for 2007 will include: a "Sweethearts Dance" and a "St. Paddy's Bingo Night" These events take place at the Goldy S. Lewis Community Center at Central Park. . Star Performers is a special performing arts class where participants have the chance to learn songs, practice dancing and acting skills. The "Stars" will perform at special events throughout the Inland Empire. Winter classes begin January 10th and are held weekly on Wednesdays from 5:30 p.m. until 7:00 p.m. at the Goldy S. Lewis Community Center. . The Friend of a Friend program is designed to match parents of special need children with parents with similar needs. This program enables parents to share experiences, advice and information with one another. To date, twenty-seven (27) 'Friends' are participating in this program. Youth: . The table below summaries vouth proaram attendance for the month of November: Program Classes/Sites Registrants/Attendance Plavschool 63/4 1,013/20,134 Lewis Partnership Kids Club @ Evergreen, Del Mar, Terra Vista 4 sites 333 & Carmel Apartments . Plavschool participants during the month of November recreated the Thanksgiving feast in their classrooms, made holiday cards for seniors and continued working on numbers, shapes and letters. . Mobile Recreation "Fun on the Run" program offers a variety of active games and sport activities for participants including "themed activities". During the month of November 189 youngsters participated in the Mobile Recreation program enjoying a variety of activities that explored Thanksgiving and Turkeys. In addition, staff continues to encourage youngsters to stay active by implementing the "Get Fit" hour of physical activity that includes fun relays, games and sports. The table below outlines our fall schedule: Park Location Bear Gulch Hermosa Old Town Ellena Windrows Time Frame 2:30 until 5:00 .m. 2:30 until 5:00 .m. 2:30 until 5:00 .m. 2:30 until 5:00 .m. 2:30 until 5:00 .m. . Youth Special Events - Breakfast with Santa that took place on December 2nd at the Goldy S. Lewis Community Center was a huge success with 378 participants. The event included a pancake breakfast provided by TRAC and entertainment featuring the /ncredABLES' performers singing holiday heart warming songs. After breakfast the youngsters made a craft and enjoyed a Children's entertainment act by the illustrious Dream Shaper's who drew the youngsters into the magical merry world of imagination through songs and a specialty act created just for them. The highlight of the event, of course, was a visit with Santa Claus where each child could share their Christmas list. P178 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 Teens: . The table below summarizes teen proqram attendance for the month of November 2006: Pro ram/Activit Teen Center S ruce Skate Facilit TRAC - Special Projects/Snack Bars/Meetin s TRAC - Bab sittin Teen Connection . The Teen Center continues to provide a variety of quality activities for our teens. The Center will have extended hours during winter break to provide teens with a safe environment to have fun with their friends. In the spirit of giving to those less fortunate the teens are bringing in unwrapped gifts to be donated to one of the City's holiday giving programs. . Teen Recreation Activity Club (TRAG) teens participated big time in the City's annual Founders Day Parade during the month of November. This was their second year entering a float into the parade. This year's parade theme was all about Dr. Seuss so their float was on the book "Happy Birthday to You'. During the month TRAC youngsters also continued collecting food for Thanksgiving baskets, visiting the elderly at the Sunrise Senior Living facility, assisting with preparations for the Rose Parade and babysitting all day for those parents who dared to holiday shop on the day after Thanksgiving. In December TRAC teens operated a snack bar at the Jingle Jam dance. In addition they will be preparing dinner for families of critically ill children at the Ronald McDonald House in Loma Linda and will bring smiles to the faces of seniors at the Sunrise Senior Assisted Living facility. . Teen Connection - Our 'volunteens' kept busy during November by volunteering with the Special Needs Olympians Club and Karaoke Night, the Spark of Love Toy Drive, Founders Day Parade, the senior citizen Thanksgiving dinner, preparing Thanksgiving Baskets for the needy, assisting at the Annual Open House event sponsored by the Etiwanda Historical Society and volunteering for the Pee Wee Basketball program. During December our teens volunteered at the City's Breakfast with Santa event, the Special Needs dance, "Jungle Jamboree" and the Teens dance, "Jingle Jam". Youth Sports: . The table below summarizes youth sports activities for the reporting period: Activity # Particinants Aae/Gender # Teams Pee Wee Basketball 240 3-5/boys & qirls 24 Youth Flaq Football 270 6-13/boys & girls 24 Cucamonga Middle School - 140 8-14/boys & girls 4 Youth Volleyball Practice Cucamonga Middle School - 80 8-adult N/A Judo Northtown 3-on-3 Basketball 46 6c 13/boys & girls 14 Northtown Pee Wee Soccer 12 3-5/boys & girls N/A Northtown Open Play 46 6-13/boys & girls N/A P179 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 RC Family Sports Center: . The table below provides drop-in/open plav participation at the Center for the reporting period: Activitv # Participants Adult Basketball 328 Youth Basketball 725 Adult Racauetball 287 Youth Racauetball 41 Adult Vollevball 4 Youth Volleyball 41 Jazzercise 1,100 Adult Sports: . The table below summarizes adult sport activities for the reporting period: Activitv # Participants # Teams Gender Softball 2,720 170 Males/Females Tennis 36 N/A Males/Females Racauetball 18 N/A N/A Basketball (Full Court) 120 12 Males Basketball (3-on-3) 50 10 Males Football 50 5 Males Soccer 320 20 Males/Females . There are three (3) adult softball tournaments scheduled for the month of December at the Epicenter and Adult Sports Park. . The Sports Advisory Committee will next meet on January 10, 2007 at 7:00 p.m. at the Civic Center. Special Events: . Staff is currently working on the schedule of events for the 2007 calendar year. Cultural and Performing Arts: . The Spotliaht on the RC Talent Showcase process continued with twenty (20) semi-finalists performing for the judges to see who will be the final ten acts to be showcased live on the Lewis Family Playhouse stage on Saturday, January 20th at 7:30 pm. All those who participated in the December 1 st semi-finalist audition round received a professional three- camera video taped DVD of their performance (provided by Charter Communication) and many of the acts will appear live at the Library Telethon this spring. . We are pleased to have Frank and Donna Marie Minano as Director and Musical Director of our next Community Theatre production, Side bv Side bv Sondheim. The Minoans' P180 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 previously operated their own local theatre company, the Inland Valley Repertory Theatre, here in the Inland Empire. Side by Side by Stephen Sondheim is considered the most influential musical theatre composer of the day and is responsible for music andlor lyrics to such shows as West Side Story, Gypsy, Into the Woods, Sunday in the Park with George, Company, A Little Night Music, and a Funny Thing Happened on the Way to the Forum. Our production of this popular show will run February 8-11, 2007 at the Victoria Gardens Cultural Center. . On December 14th, the Adult Chorale Troupe dazzled audiences with a Holiday Concert in Celebration Hall. The Adult Chorale Troup, also known as ACT, continues to thrive as the City's most popular adult performing arts program at the Cultural Center. Lewis Family Playhouse: . The Cat in the Hat and Horton the Elephant charmed audiences of all ages, as the MainStreet Theatre Company presented "Seussical" which opened Thanksgiving weekend (November 24th) and continued through December 17th at the Lewis Family Playhouse. This charming musical was the perfect family fare for young and old alike. Based on the books of Dr. Seuss, the show performed 31 performances, with 16 of them for school audiences. All school audience performances sold out which brought approximately 7,000 elementary grade students to the Playhouse. "Seussical" marked the MainStreet Theatre Company's second show on the Playhouse stage. The MainStreet Theatre Company is the City's professional theatre company for young audiences which previously presented their first production, "Miss Nelson is Missing!" this past October. . The Cultural Center was filled with finery on Saturday, December 2nd when the Rancho Cucamonga Community Foundation hosted its 2006 Gala for the Arts that honored 300+ generous Promoting Arts and Literacy (PAL) Spotlight donors at an elegant evening of fine food, wine, appreciation. A highlight of the evening was guest headline performer, Melissa Manchester. The event concluded the Phase One of the PAL Campaign. Opera star and local resident Rod Gilfry who served as MC for the event also treated the exclusive audience to three numbers during the recognition portion of the event. The evening was topped off with the distinctive vocals of pop artist Melissa Manchester, who provided the first public performance on the Cultural Center's 1903 Steinway Grand, which was generously donated by Diamond Donors Harry and Judy Gibson. . The Inland Empire Academy of the Arts will present the famed holiday ballet, "The Nutcracker" at the Lewis Family Playhouse on December 22nd and 23'd. Morning performances will also be presented earlier that week for school groups. Perfomnances by the Inland Empire Academy of the Arts will mark the first public performance on the Playhouse stage for an outside rental group. . On Saturday, January 6th local classical guitarist Michael Ryan (known to many as the resident opener for Candlelight Pavilion) will perform a full concert entitled "Gypsy Passion". For both the Inland Empire Academy of the Arts and Michael Ryan performances, tickets are available through the Playhouse website of box office. The City is pleased to welcome community and professional groups to share the wonderful benefits the Playhouse offers. P181 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 Recreation Contract Classes: . Classes in our winter session will begin on January 6th and continue through March 23ro. During the fall session 289 classes were offered with 6,112 community members currently enrolled. Attendance in our fall classes toped 140,600. Facilities: . The table below illustrates the number of rentalslbookinqs and attendance fiqures for our community facilities during the month of Novembert: Facility Rentals # Rentals/Bookings Rental Building Attendance Attendance Lions Center East 93 2,812 6,406 Lions Center West 175 1,199 2,511 James L. Brulte Senior Center 79/183 11,467 20,071 Goldv S. Lewis Communitv Center 87/183 . 17,745 3,983 . Staff continues to meet quarterly with users of the Equestrian Center to address maintenance needs and programming. Our local riding groups include: Alta Loma Riding Club, Rancho Rebels 4-H, Rising Stars of Equestrian Therapy and Rancho Cucamonga Citizen Mounted Patrol. Our local groups are very cooperative and supportive of the City's efforts. . Park monitors keep daily reports of activities in our parks, often helping out residents in need of assistance. Parks and Facilities: . The table on the following page provides usage information for park picnic shelters and special use facilities for the month of November 2006: Park/Shelter Attendance # Rentals Red Hill 1,175 21 Heritaae 485 .13 Milliken 205 8 Hermosa 145 6 Coyote Canyon 75 3 Civic Center 0 0 Courtyard Amphitheatre 50 3 TOTAL 2,135 54 Equestrian" Participants:335 10 Spectators: 90 "'Equestrian participants include drop-in use. P182 Mayor and Members of the City Council Parks, Recreation Facilities and Community Services Update December 20, 2006 Epicenter Rentals/Activities: . The following rental activities took place during the reporting period: ~ Active Ride - Bling Fest 2006 Skate Demonstration and Concert - November 18 & 19, 2006 - Special Event Area. . Staff is working with the following applicants for upcominq rentals and activities: ~ Okoye Foundation - 5K/10K Walk/Run - Local streets surrounding the Epicenter - February 24, 2007. ~ Okoye Foundation - Youth Sport Clinic - Epicenter Soccer and Baseball Fields - April 1, 2007. ~ Rancho Cucamonga Quakes - Scouts Sleep-Over - Epicenter Soccer Fields - April 21, 2007. ~ Community Services DepartmentlTeen Recreation Activity Club (TRAC) - Battle of the Bands - Epicenter Special Event Area - May 12, 2007. ~ Rancho Cucamonga Quakes - Scouts Sleep Over - Epicenter Soccer Fields - May 19, 2007. ~ Daily Bulletin - Inland Valley High School All Star Practice & Game - Epicenter Stadium - June 4-7, 2007. ~ Rancho Cucamonga High School - Graduation Ceremony - June 13, 2007. ~ Community Services Department - 4th of July Celebration - Epicenter Stadium and Baseball Fields - July 4,2007. ~ Pony Baseball- Palomino World Series - Epicenter Stadium - August 2-5, 2007. ~ Pacific Coast Baseball League - Championship Games - Epicenter Stadium - August 26, 2007. ~ Preferred Businesses of America - Home & Garden Show - Epicenter Special Event Area - October 1-8, 1007. Park and Recreation Commission: . The next meeting of the Park and Recreation Commission is scheduled for January 18, 2007. The December Commission meeting was cancelled due to its proximity to the holiday season. Rancho Cucamonga Community Foundation: . The Community Foundation continues to work with the Library Foundation on the Promotinq Arts and Literacy (PAL) Campaiqn to secure significant donors for the Victoria Gardens Cultural Center. {, Kevin cArdle Community Services Director 1:\COMMSERVlCouncl/&Boards\CityCouncIftSlaffReporls\2006\updale12. 20. 06. doc P183 RANCHO CUCAMONGA 1'.;',i"~~(,i~~S;h;::-;~\'iI.I,,,,"I.;;;l"'.Si'~l'S~\m"a...1:t~*l\\iP'JI'.wo;Sro'~JcJ"~"r1<.,!~r,;;,.~",~;;:,"<tt'_:\ ",.,<to,...,?_"",_, !o'::<;;,"'~ ',- -).;{."t'_';;"Y~;OJ':.;;:',,",:,~;<;;".i""';;':1 COMMUNITY SERVICES Staff Report DATE: TO: FROM: BY: SUBJECT: December 20, 2006 Mayor and Members of the City Council Jack Lam, AICP, City Manager Kevin McArdle, Community Services Director Paula Pachon, Management Analyst III APPROVAL OF A REQUEST FROM THE CHRISTIAN OKOYE FOUNDATION FOR A WAIVER OF RENTAL FEES FOR A 5K/10K COMMUNITY RUN/WALK STARTING AND ENDING AT THE RANCHO CUCAMONGA EPICENTER AND ADULT SPORTS COMPLEX (PARKING LOT A) ON FEBRUARY 24, 2007. RECOMMENDATION: It is recommended that the City Council approve a request from the Christian Okoye Foundation for a waiver of rental fees for a 5K/10K Community Run/Walk starting and ending at the Rancho Cucamonga Epicenter and Adult Sports Complex on February 24,2007. BACKGROUND/ANALYSIS: As the Council may be aware, the Christian Okoye Foundation is dedicated to renewing hope for kids through education and participation in sports and physical activities. To this end, the Okoye Foundation is proposing to host their third annual 5K110K Community Run/Walk that would start and end at the Rancho Cucamonga Epicenter and Adult Sports Complex (Parking Lot A) on Saturday, February 24, 2007. The actual run/walk would take place on City streets as approved by the City's Traffic Engineer and the Police Department's Traffic Sergeant. In addition, the City's Epicenter Event Team has developed a course of action that needs to be addressed by the Okoye Foundation for final approval of this year's 5K/1 OK Walk/Run. The Run/Walk would take place between 7:00 a.m. to 9:30 a.m. on Saturday, February 24, 2007, and would start from Parking Lot A at the Rancho Cucamonga Epicenter and Adult Sports Complex. The run would continue through a route of surrounding local streets that has been designed by the City's Traffic Engineer. Following the Run/Walk, participants would return to Parking Lot Aat the Epicenter and would be invited to enjoy a Taste of Cucamonga provided free of charge by local restaurants in the area, live entertainment and a brief awards ceremony. This portion of the event is anticipated to take place between 9:00 a.m. and 11 :00 a.m. P184 Mayor and Members of the City Council CHRISTIAN OKOYE FOUNDATION FEE WAIVER REQUEST December 20, 2006 Page 2 Based upon previous positive experience in working with the Okoye Foundation through their youth sports clinics, youth holiday events and their run/walk that took place the past two years at the Epicenter and the belief that their activities directly supports the City's intent to host activities at the Epicenter that have a positive impact on the youngsters of our community, City staff recommends that the City Council waive the base rent associated with this event. FISCAL IMPACT: The fiscal impact to the City for waiving rental fees for the Christian Okoye Foundation Community Run/Walk would be approximately $670.00. Staff does recommend that the Okoye Foundation provide a refundable damage, security and performance deposit of $500.00 and that they supply insurance coverage for the event including an additional endorsement naming the City of Rancho Cucamonga as additionally insured for this event. In addition, the Okoye Foundation would be responsible for payment for police security/traffic control along the run/walk route. Kevin cAr . Community Services Director Attachment 1:ICOMMSERV\Counci/&BoardsICityCounciftStaffReports\2006\WaiverFees. OkoyeFoundationWalk.Run. 12.20. 06.doc - 2- P185 '-'ww. .. . '. Of 11 CkSYefJur,cat,l'JfI City Of Rancho Cucamonga C/O Paula Pachon Management Analyst City of Rancho Cucamonga Community Services Department 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Rancho Sk/l0k. Run/Walk & Okove Soorts Clinic Hosted by: The Christian Okoye Foundation, Inc At: Epicenter Practice Fields and Parking Lots. The Christian Okoye Foundation, Inc. iSTequesting the use of the above mentioned Epicenter facilities for its Run/Walk on Saturday, February 24th 2007. As we have done in the past years, we are asking that the City of Rancho Cucamonga wave its user fees to the Christian Okoye Foundation during these events. These events are hosted by the Foundation to help raise funds for its efforts in helping young children of our community realize their goals through sports clinics and mentorship programs. Thanks for your continued support. hristian Okoye President P186 By: Subject: December 20, 2006 Mayor and Members of the City Council Jack Lam, ACIP, City Manager Linda Daniels, Acting Administrative Services Director Manuel Pilonieta, Information Systems Manage;;+::> . APPROVAL TO APPROPRIATE $18.995 INTO ACCOUNT NO. 1714001-5605 FOR THE PURCHASE OF A LARGE FORMAT DOCUMENT SCANNER AND $1.995 INTO ACCOUNT NO. 1714001-5300 FOR MAINTENANCE COSTS FOR A TOTAL OF $20.990 TO BE FUNDED FROM THE COMPUTER EQUIPMENT/TECHNICAL REPLACEMENT FUND STAFF REpORT ADMINISTRATIVE SERVICES DEPARTMENT Date: To: From: RECOMMENDATION It is recommended that the City Council approve an appropriation of $18,995 into Account No. 1714001-5605 for a large format document scanner and $1,995 into Account No. 1714001-5300 for maintenance costs for a total of $20,990 to be funded from the Computer EquipmentlTechnical Replacement Fund. BACKGROUND/ANALYSIS The City is required to maintain a records retention procedure for all permanent documents and utilizes scanners to electronically archive to LaserFiche, the City's document ima9ing system. Funding was approved by Council as part of the Fiscal Year 2006/07 Adopted Budget to replace this equipment and add one additional high volume scanner for the City Clerk's office. To accommodate the large and increasing volume of documents, an additional high volume scanner is necessary. In addition, the current scanner needs replacement based on an age of over 5 years old, repair history and cost of maintenance of discontinued equipment. Following approval of this requested appropriation, staff will work with the Purchasing Division to acquire the needed equipment in accordance with City purchasing procedures. Respectfully submitted, ~A\o&uJ Linda Daniels, Acting Administrative Services Director P18? THE CITY OF "i,~"",,_,-,'c<,:.'.r;K.;": ;'",""';,'-"'::)~~'-J-,.;::::"i'.:,YCj..~.,..c,:;,,:: :",;'::". ,,_,x. :,:ri:.<{_tr';iiU~::.'';';_'',,;;;":f':.', I"", :;,,-,0',. i_I",.,,;' '-:"i:.~'-.' .'ill'."'.....:..., -"'1'.. L RANClIO CUCAMONGA StaffReport DATE: TO: FROM: SUBJECf: December 20, 2006 Mayor and Members of City Council JackLam, AICP, City Manager Pamela S. Easter, Assistant City Manager Ingrid Y. Bruce, GIS/Special Districts Manager AUTHORIZATION TO APPROPRIATE $15,000.00 RECEIVED FROM LEWIS INVESTMENT COMPANY INTO ACCOUNT NUMBERS 1680000-4802 (REVENUE) AND 1680303-5300 (EXPENDITURE- CONTRACT SERVICES) TO PAY FOR CONSULTANTS COSTS IN THE FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE). THE DEVELOPER WILL BE REIMBURSED FROM BOND PROCEEDS AFTER THE DISTRICT IS FORMED. RECOMMENDATION It is recommended that the City Council authorize an appropriation in the amount of $15,000.00 into account numbers 1680000-4802 (Revenue) and 1680303-5300 (Expenditure Contract Services) to pay consultants costs in the formation of Community Facilities District No. 2006-01 (Vintner's Grove). BACKGROUND On September 15,2004, City Council adopted Ordinance No. 735 and approved Resolution No. 04-298 relating to the formation of Community Facilities District No. 2006-01. The Developer, Lewis Investment Company had originally deposited $60,000 to cover consultants' costs during the formation of the proposed district. However, due to the formation process extending into 2007, additional funds are needed. The above recommendation would provide the necessary funding which will be fully paid for by the developer. P188 Page 2 December 20, 2006 Respectfully submitted, ~~~. \?'~. Bruce ., GIS/Special Districts Manager .~Sf~ r;~ela S. Easter Assistant City Manager THE P189 C I T Y o F ,......... "':.,;.t;~.> .~( "... CO .1....<;.;..,,'-;jJ."':,.1 ,",?~..:I r.7."~;;J;I;t'1!I!t4:}t:,.'o.i,,,:,r,:,,:,',-M" ,:_~}!,'{;-";c.J)ii.;~.",:,;~)j*,,,;;,,,,,'.,.<,_ >~;;'..-;.-- RANCIIO CUCAMONGA ", ... ", staffReport DATE: TO: FROM: SUBJECf: December 20, 2006 Mayor and Members of City Council Jack Lam, AICP, City Manager Pamela S. Easter, Assistant City Manager Ingrid Y. Bruce, GIS/Special Districts Manager AUTHORIZATION TO APPROPRIATE $15,000.00 RECEIVED FROM LEWIS INVESTMENT COMPANY INTO ACCOUNT NUMBERS 1681000-4802 (REVENUE) AND 1681303-5300 (EXPENDITURE- CONTRACT SERVICES) TO PAY FOR CONSULTANTS COSTS IN THE FORMATION OF COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66). THE DEVELOPER WILL BE REIMBURSED FROM BOND PROCEEDS AFTER THE DISTRICT IS FORMED. RECOMMENDATION It is recommended that the City Council authorize an appropriation in the amount of $15,000.00 into account numbers 1681000-4802 (Revenue) and 1681303-5300 (Expenditure Contract Services) to pay consultants costs in the formation of Community Facilities District No. 2006-02 (Amador on Route 66). BACKGROUND On October 18, 2006, City Council adopted Ordinance No. 770 and approved Resolution No. 06-327 relating to the formation of Community Facilities District No. 2006-02. The Developer, Lewis Investment Company had originally deposited $60,000 to cover consultants' costs during the formation of the proposed district. However, due to the formation process extending into 2007, additional funds are needed. The above. recommendation would provide the necessary funding which will be fully paid for by the developer. P190 Page 2 December 20, 2006 R'p;J:SV Pamela S. Easter Assistant City Manager ~~~'~ /J" ~~. I 'd . Bruce . GIS/Special Districts Manager P191 STAFF REpORT R.\NCHO CUC.\MONG.\ FIRE PROTECTION DISTRICT ENGINEERlNG DEP.WTMENT RANCHO CUCAMONGA Date: December 20, 2006 To: Mayor and Members of the City Council President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief William J. O'Neil, City Engineer By: Robin Brock, Fire Information Systems Technician Julie Ungashick, Management Analyst II Subject: APPROVAL TO APPROPRIATE FUNDING FROM THE COMPUTER EQUIPMENTITECHNICAL REPLACEMENT FUND (1714001) IN THE AMOUNT OF $21,134, AND $49,970 FROM THE FIRE DISTRICT RESERVE FUND TO PURCHASE A FLEET MAINTENANCE SOFTWARE UPGRADE, IMPLEMENTATION SUPPORT, AND HARDWARE FROM VARIOUS VENDORS AND AUTHORIZE THE RELATED APPROPRIATIONS INTO THE APPROPRIATE ACCOUNT NUMBERS TO BE DETERMINED BY STAFF. RECOMMENDATION Recommend approval to appropriate funding from the computer equipment/technical replacement fund (1714001) in the amount of $21,134, and $49,970 from the Fire District reserve fund to purchase a fleet maintenance software upgrade, implementation support, and hardware from various vendors and authorize the related appropriations into the appropriate account numbers to be determined by staff. BACKGROUND/ANALYSIS For over seven years the Public 'Works has successfully used a fleet management computer application (FleetMaint) from DPSI and they are upgrading to a current version (iMaint). As part of this upgrade the Fire District will implement iMaint under Public Works' software license. In addition to the software upgrade the project entails implementation support and the purchase of computer hardware. Staff will coordinate with the Purchasing Division regarding final vendor selections. The cooperative use will save the Fire District the initial software investment, and allow both the Fire District and Public Works to enhance the program through new interfaces, and to share implementation and associated project costs to provide an enterprise and cost-effective solution. This project was reviewed and approved through the City's information technology project approval and review (IT-PAR) process. P192 Respectfully submitted, -") \- Yr(( clcf ~~~ItJ , I , William J" O'Neil City Engineer Peter M. Bryan Fire Chief P193 STAFF REpORT E:--:GI:--:EERI:--:G DEP~\RDIENT Date: To: From: By: Subject: December 20, 2006 Mayor and Members of the City Council Jack Lam, AICP, City Manager William J. O'Neil, City Engineer James T. Harris, Associate Engineer ~ Richard Oaxaca, Engineering TechrOOian~ RANCHO CUCAMONGA APPROVAL OF A CHANGE ORDER IN THE AMOUNT OF $289,980.00 FOR LOCATING BURIED PULL BOXES, EXCAVATING DIRT FROM EXISTING PULL BOXES, REPLACING EXISTING DAMAGED WIRES, AND INSTALLING NEW CABLES AND WIRES THROUGH EXISTING CONDUITS AT FOURTEEN SIGNALIZED INTERSECTIONS ON THE CITY WIDE INSTALLATION OF EMERGENCY VEHICLE PREEMPTION, CONTRACT NO. 06-049 AND APPROVAL TO INCREASE THE AWARD TO STEINY AND COMPANY, INC. BY AN AMOUNT OF $289,980.00 RECOMMENDATION It is recommended that the City Council approve the change order with Steiny and Company, Inc., in the amount of $289,980.00 for locating buried pull boxes, excavating dirt from existing pull boxes, replacing existing damaged wires, and installing new cables and wires through existing conduits at fourteen signalized intersections on the City Wide Installation of Emergency Vehicle Preemption, Contract No. 06-049 and approval to increase the award to Steiny and Company, Inc. by an amount of $289,980.00 from funds already budgeted to Account NO.1 0250015650/1507025-0 from Capital Reserve fund balance, and authorize the City Engineer to sign the contract change order. BACKGROUND/ANALYSIS Per previous Council action, Contract No. 06-049 was awarded to Steiny and Company, Inc. for the City Wide Installation of Emergency Vehicle Preemption. Construction began and it became apparent that numerous intersections were plagued with deteriorated existing wiring and conduits that made it impossible to proceed with emergency vehicle preemption installations at those locations. In addition to installing new emergency vehicle preemption cables, the work will include replacing deteriorated conductors with modern multi-conductor cables that will minimize maintenance and damage in the future. Respectfully submitted, (.~tt/ ~/ C/ William J. O'Neil City Engineer WJO:JTH/RO:ls Attachment P194 \~ "f\;. i -'-- ",- ,~ I ...... '\: .,,11 , ---~-~' ""~ !.. ~.:....: I'W' 3lC------- _-;; ~ 1.-,..~N'tS-/,'-~'" '-:.~~' '" _, ./~ ''f',\'\\ ':,ll['~ ~l ~~~ I ;_.. ~~::' J "'~,x\<lE-'-~:' ,~" ~i!i__,-{LL. 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I . --:"'l7~- < '" 11 "__.D\>o< . ' ~-- ~' !_",jC.~_j.l.. ,...- '"", "'C.. .-! ~. ..... -_J c: o ~~ oc. CE o CU ._ CU ....~ .!!D. - ns CU .... - U).~ C.c Q;~ iJ ~.~ ~5i ._ C) O~ CU E w 1 '" .. c o ~ o .. '" a o .. ]; c ~ Q P19S STAFF REpORT ENGINEERING DEP"~RnIENT Date: December 20, 2006 To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Shelley Hayes, Engineering Technician Subject: APPROVAL OF THE ANNEXATION TO STREET LIGHTING MAINTENANCE DISTRICT NO.2 FOR DRC2005-00743, LOCATED NORTH OF ALMOND STREET, EAST OF CARNELIAN AVENUE, SUBMITTED BY HAMID R. MANSOURI AND ELIZABETH K. MANSOURI. RECOMMENDATION: It is recommended that the City Council adopt the attached resolution, ordering the annexation to Street Lighting Maintenance District No.2. BACKGROUND/ANALYSIS: DRC2005-00743, located north of Almond Street, east of Carnelian Avenue in the Very Low Residential District (1-2 dwelling units per acre), has applied for a building permit for a single- family residence. The developer is required to fulfill certain conditions along with the normal processing. As part of those conditions, the Developer is required to have the project annexed into the appropriate lighting and landscape maintenance district. The Consent and Waiver to Annexation forms signed by the Developer are on file in the City Clerk's Office. Respectfully submitted, 9:J10J City Engineer WJO:SH:tv Attachment(s) P196 Vicinity Map DRC2005-00743 ~ ~ ~~ ~~OO----\_~ .-;;:- f- - /' I = ;;: . .,..,~ IJ I ~ f---- t> .1-_ I H ~ ~~ =Ii ~ /\l111Ti ~- - i=ITTTITTTITTTl - \..< / ....; I = IItI1I1Tll - / ~ ~\I II _=1 ~t= =n c-- nTTTIJ t= 7j , 0---0----f----I._ f--- / k- U I L0J I .---,~ \ 'r-TT I "- I (/-f:::)-...LLI IT~ jn-f-- Jim ~ -= I ~ Ei(FJ c--- 1---/ I -= ITI I - - -- , I I' \ ffiTI ,\ I' I \ - V--?Y \ == T~ {( \mTTl1~~v L \mml~~/1 N W.E S P197 RESOLUTION NO. DC -.J <86 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ORDERING THE ANNEXATION OF CERTAIN TERRITORY TO STREET LIGHTING MAINTENANCE DISTRICT NO. 2 FOR DRC2005-00743 (APN: 1061-791-13) WHEREAS, the City Council of the City of Rancho Cucamonga, California, has previously fonned a special maintenance district pursuant to the tenns of the "Landscaping and Lighting Act of 1972", being Division 15, Part 2 of the Streets and Highways Code of the State of California (the "1972 Act"), said special maintenance district known and designated as Street Lighting Maintenance District NO.2 (referred to collectively as the "Maintenance Districts"); and WHEREAS, the provisions of Article 2 of Chapter 2 of the 1972 Act authorize the annexation of additional territory to the Maintenance Districts; and WHEREAS, such provisions also provide that the requirement for the preparation of resolutions, an assessment engineer's report, notices of public hearing and the right of majority protest may be waived in writing with the written consent of all of the owner of property within the territory to be annexed; and WHEREAS, notwithstanding the such provisions of the 1972 Act related to the annexation of territory to the Maintenance District, Article XIIm of the Constitution of the State of California ("Article XIIID") establishes certain procedural requirements for the authorization to levy assessments which apply to the levy of annual assessments for the maintenance Districts on the territory proposed to be annexed to such districts; and WHEREAS, the owners of certain property described in Exhibit A attached hereto and incorporated herein by this reference have requested that such property (collectively, the "Territory") be annexed to the Maintenance Districts in order to provide for the levy of annual assessments to finance the maintenance of certain improvements described in Exhibit B hereto (the "Improvements"); and WHEREAS, all of the owners of the Territory have filed with the City Clerk duly executed fonns entitled "Consent And Waiver To Annexation Of Certain Real Property To A Maintenance District And Approval Of The Levy Of Assessments On Such Real Property" (the "Consent and Waiver"); and P198 WHEREAS, by such Consent and Waiver, all of the owners of the Territory have expressly waived any and all of the procedural requirements as prescribed in the 1972 Act to the annexation of the Territory to the Maintenance Districts and have expressly consented to the annexation of the Territory to the Maintenance Districts; and WHEREAS, by such Consent and Waiver, all of the owners of the Territory have also expressly waived any and all of the procedural requirements as prescribed in the 1972 Act and/or Article XIIID applicable to the authorization to levy the proposed annual assessment against the Territory set forth in Exhibit B attached hereto and incorporated herein by this reference and have declared support for, consent to and approval of the authorization to levy such proposed annual assessment set forth in Exhibit C attached hereto; and WHEREAS, at this time the City Council desires to order the annexation of the Territory to the Maintenance Districts and to authorize the levy of annual assessments against the Territory in amounts not to exceed the amounts set forth in Exhibit B hereto. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA HEREBY RESOLVE AS FOLLOWS: SECTION 1: The above recitals are all true and correct SECTION 2: This City Council hereby finds and determines that: a. The annual assessments proposed to be levied on each parcel in the Territory do not exceed the reasonable cost of the proportional special benefit conferred on each such parcel from the Improvements. b. The proportional special benefit derived by each parcel in the Territory from the Improvements has been determined in relationship to the. entirety of the cost of the maintenance of the Improvements. c. Only special benefits will be assessed on the Territory by the levy of the proposed annual assessments. SECTION 3: This legislative body hereby orders the annexation of the Territory to the Maintenance Districts, approves the financing of the maintenance of the Improvements from the proceeds of annual assessments to be levied against the Territory and approves and orders the levy of annual assessments against the Territory in amounts not to exceed the amounts set forth in Exhibit B. SECTION 4: All future proceedings of the Maintenance Districts, including levy of all assessments, shall be applicable to the Territory. 2 DRC2005-00743 P199 Exhibit A Identification of the Owner and Description of the Property To Be Annexed The Owners of the Property are: Hamid R. Mansouri and Elizabeth K. Mansouri, husband and wife The legal description of the Property is: PARCEL NO.1: LOT 21, TRACT NO. 10277, IN THE CITY OF RANCHO CUCAMONGA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 181 OF MAPS, PAGES 34 THROUGH 36, INCLUSIVE, RECORDS OF SAID COUNTY. PARCEL NO.2: A NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS, USE AND ENJOYMENT OVER AND THROUGH THE PRIVATE STREETS AND LOT "A" OF TRACT NO. 10277, AS PER PLAT RECORDED IN BOOK 181 OF MAPS, PAGES 34 TO 36, INCLUSIVE, RECORDS OF SAID COUNTY; AND OF TRACT NO. 10277-1, AS PER PLAT RECORDED IN BOOK 162 OF MAPS, PAGES 55 TO 56, RECORDS OF SAID COUNTY; AND TRACT NO. 10277-2, AS PER PLAT RECORDED IN BOOK 181 OF MAPS, PAGES 37 TO 39, INCLUSIVE, RECORDS OF SAID COUNTY; AS PROVIDED BY THE DECLARATION OF RESTRICTIONS RECORDED JANUARY 20, 1983, INSTRUMENT NO. 83-13556, OFFICIAL RECORDS AND ANY AMENDMENTS RECORDED THEREON ON SAID ABOVE TRACTS. APN: 1061-791-13-0-000 The above described parcels are shown on sheet A-2 attached herewith and by this reference made a part hereo f. A-l DRC200S-00743 P200 EXHIBIT "A2" ASSESSMENT DIAGRAM LANDSCAPE MAINTENANCE DISTRICT NO.1 STREET LIGHTING MAINTENANCE DISTRICT NOS. 1 AND 2 ~ ~~ 7 If I L--~ lIT '" ---- I~ ./ 7mr '-- ~ r-=-', ~ - v1f == ~L - - II - In - _____ H V - - - - t:-/ IT l )IT I. u"" , i"'I " IJ I - 1-,- "\ lLf-- IJ ,~ I I ~ II ffiffiffi[till - -,--'T1 ~ I /1'01 m'i f--- H I - - ~ ~ \ s;- "'1 I I I - ,\ IT I - I- I 0- 1 l r I 7 '\ - I.C.]: I \ I - I f-- I-- - - I-- I-- == ~7~ - - I-- ,\ ~- - -~~~ ~,- - I I ),- OT[()J \ l- n__1 \ CITY OF RANCHO CUCAMONGA COUNTY OF SAN BERNARDINO STATE OF CALIFORNIA N W-+E s P201 Exhibit B To Description of the District Improvements Fiscal Year 2006/2007 STREET LIGHT MAINTENANCE DISTRICT NO.2 (LOCAL STREETS): Street Light Maintenance District No. 2 (SLD #2) is used to fund the maintenance and/or installation of street lights and traffic signals located on local streets throughout the City but excluding those areas already in a local rriaintenance district. Generally, this area encompasses the residential area of the City west of Haven Avenue. It has been determined that the facilities in this district benefit this area of the City. This sites maintained by the district consist of street lights on local streets and traffic signals (or a portion thereof) on local streets generally west of Haven Avenue. B-1 DRC200S-00743 Proposed additions to Work Program (Fiscal Year 2006/2007) For Project: DRC2005-00743 Street Lights SLD # 2 5800L Landscaping LMD -- Community Trail DGSF *Existing items installed with original project Assessment Units by District Parcel DU or Acres I DU Number of Lamps 9500L 16,OOOL 22,OOOL Turf SF Non-Turf SF 52 I B-2 P202 27,500L Trees EA DRC200S-00743 P203 Exhibit C Proposed Annual Assessment Fiscal Year 2006/2007 STREET LIGHT MAINTENANCE DISTRICT NO.2 (LOCAL STREETS): The rate per assessment unit (A.o.) is $39.97 for the fiscal year 2006/07. The following table summarizes the assessment rate for Street Light Maintenance District No.2 (Local Streets): # of # of Rate Per Physical Physical Assessment Assessment Assessment Land Use Unit Type Units Units Factor Units Unit Revenue Single Parcel 6337 1.00 6337 $39.97 $253,289.89 Family Multi Unit 1087 1.00 1087 $39.97 $43,447.39 Family Commercial Acre 34 2.00 68 $39.97 $2,717.96 Total $299,455.24 The Proposed Annual Assessment against the Property (DRC2005-00743) is: I SFR x I A.U. Factor x $39.97 Rate Per A.o. = $39.97 Annual Assessment C-! DRC2005-00743 P204 STAFF REPORT ENGINEERING DEP_"RThlENT FROM: BY: December 20, 2006 Mayor and members of the City Council Jack Lam, AICP, City Manager William J. O'Neil, City Engineer Michael TenEyck, Administrative Resource Manager Inge Tunggaldjaja, Management Aide SUBJECT: APPROVE AND AUTHORIZE THE EXECUTION OF A PROFESSIONAL SERVICES AGREEMENT IN THE AMOUNT OF $150,000 TO RICHARD HEATH & ASSOCIATES, INC., FOR ENERGY EFFICIENCY AND RESOURCE CONSERVATION PROGRAM DEVELOPMENT WITHIN THE RANCHO CUCAMONGA MUNICIPAL UTILITY SERVICE AREA TO BE FUNDED FROM 17063035300 MUNICIPAL UTILITY FUND. RANCHO CUCAMONGA DATE: TO: RECOMMENDATION: It is recommended the City Council authorize the execution of a Professional Services Agreement in the amount of $150,000 to Richard Heath & Associates, Inc., for Energy Efficiency and Resource Conservation Program Development within the Rancho Cucamonga Municipal Utility service area to be funded from 17063035300 Municipal Utility Fund. BACKGROUND/ANALYSIS: On August 31, 2001, the Rancho Cucamonga City Council authorized the creation and operation of a municipally owned utility for the purpose of providing various utility services to the Victoria Arbors Master Plan Area. California law requires all California electric utilities to commit a portion of their revenue to Public Benefits Programs, including: 1) Cost effective energy efficiency programs, 2) Renewable energy, 3) Research, Development and Demonstration (RD&D), 4) Low-income customer assistance. There are no required funding allocations between each of the four categories. However, Low-income customer assistance program does not apply as Rancho Cucamonga Municipal Utility does not have any residential accounts. RCMU will utilize 2.85% of revenue to provide incentives for commercial accounts to convert to energy efficient methods. Staff identified specialized preliminary conservation services that will be required to provide service to City customers and solicited a proposal from three different companies, including Richard Heath & Associates, Inc. Unlike other companies, Richard Heath and Associates, Inc responded to the needs of the Rancho Cucamonga Municipal Utility. Richard Heath & Associates, Inc. is the developer and implementer energy conservation and retrofit programs for several Southern California municipal utilities. It is recommended the City Council authorize the execution of a Professional Services Agreement in the amount of $150,000 to Richard Heath & Associates, Inc., for Energy Efficiency and Resource Conservation Program Development within the Rancho Cucamonga Municipal Utiiity service area to be funded from 17063035300 Municipal Utility Fund. Respectfully Submitted, qr tl (fl~{l William J. O'Neil City Engineer WJO:MT:IT P205 STAFF REpORT E';GJ0EERJ0G DEP",RDJENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Jon A. Gillespie, Traffic Engineer Subject: APPROVAL FOR AWARD AND AUTHORIZE THE EXECUTION OF A PROFESSIONAL SERVICES AGREEMENT IN THE AMOUNT OF $67,000 WITH ADVANTEC CONSULTING ENGINEERS, AND AUTHORIZE THE EXPENDITURE OF A 10% CONTINGENCY IN THE AMOUNT OF $6,700 FOR ENGINEERING DESIGN PLANS FOR 3 NEW SIGNALS AND MODIFICATION OF 5 SIGNALS AT VARIOUS LOCATIONS IN THE CITY OF RANCHO CUCAMONGA, TO BE FUNDED FROM TRANSPORTATION FUNDS, ACCOUNT NO. 11243035650/1573 (VARIOUS) RECOMMENDATION It is recommended that the City Council approve the Professional Services Agreement with Advantec Consulting Engineers to provide professional services for Signal Design Services for 3 new signals and modification to 5 existing signals and authorize the Mayor to sign said agreement and the City Clerk to attest thereto. BACKGROUND/ANALYSIS The City requested and received proposals from eleven responsible and reliable signal design firms. After a thorough analysis, the firm of Warren C. Siecke was selected to provide design services. However, this firm was unable to comply with the City's insurance requirements. Therefore, the City has chosen one of the other top firms whose proposal meets all of the City's requirements in an amount of $67,000 to be funded from several Transportation Accounts No. 11243035650/1573124,1577124,1580124,1581124, 1582124, 1583124, 1578124 and 1579124. Advantec has provided signal design services to the City in the past and has proven a reliable source for future services. This firm is uniquely aware of the problems inherent to each site and has information already generated in their records that will be used for this project. Respectfully submitted, /, " (jtz: ( ( (eLl William J. O'Neil City Engineer WJO:JAG t- ~ . ~~ ~~ . =~ oC\1 8~ ~~ ~ == u rc. "J ~ Q.l C .- -= o' ~ .... =~ ~- ~ S ~ .. . o .~ ....~ lfJ. ... ~ r' t3 ~~~ 011 ETIWAWbA ~. DAY CREEK ; \ ,1 ROo HESTE "n , ~/ ---........... I - "- :/. 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CD ....--<::- ~ -, --.mt KEN ----+,.!iEN --...., Q "'AR'CHl A~ .-~ ~,v ~ VINEYARD I <::EDI'l"9 , 3AO~9 " :;) ~ -< '" z*~ '" P207 STAFF REpORT ENGINEERlNG DEP"\RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Joe Stofa Jr., Associate Engineer Subject: APPROVAL OF A SUBORDINATION AGREEMENT FROM COMMUNITY BAPTIST CHURCH OF ALTA LOMA LOCATED AT 9090 19TH STREET- APNS: 201-221-08 RECOMMENDATION It is recommended that City Council adopt the attached resolution approvmg a Subordination Agreement requested by Community Baptist Church of Alta Lorna. BACKGROUND/ANALYSIS A Real Property Improvement Contract and Lien Agreement for the future undergrounding of overhead utilities was approved by the City Council on February 3, 1988 and recorded on May 2, 1988 as Document No. 88-137822. The Church is currently attempting to secure refinancing for the property. The Lender requires the City lien be subordinated in favor of the new loan. Copies of the agreement are available in the City Clerk's Office Respectfully submitted, 9(&( {((~/J William J. O'Neil City Engineer WJO:.JS:tv Attachment(s) P208 VICINITY MAP I ,J , \ Hilla;oe \ \ ,B_'" \ .: \ ! '00' \.1 ~ .... b_ ,.\! rtf! / \ 0 >< ~,r' ~ ~ "-~ 7 -.- /~, Fr::FY.:::.~:.:?::::':~:?'?:~:~:?:~:~:?~. .r:::t:~~. j :?~:~:~?:~~?:FrY:~.1 F::7;:':.'.:.:.:..'.'.'~"" ,....... ".~;,~:~'ffIThr.f~ ...................... .................... .............. .......... .' ........... .J"" "I'U< .........><......< ... .............................................. .....::,:. ."8~~*bdJ.4.> H.:j . ..,....... F::NV~;::~::L,; t:::;:;:; . 1~~~>~<~i~~~::2::2:S:S:~\~~~>~:.~.~ _~_..... :: i:A .: -.' tl .:. ....1lT'Clnd I ::. 1, :::::::.:::.1 II.)..~ ................., /' ~~ s~c7:::'; / lomon ,: ... I ~v ~, ~ ~ ~ .ll xf'- Foocl'lill Ft..way Highland -" _ 'VClona PM; UM l.-----. v-.a i .~ ; ""'..... 8 .:! v.- ,.tV' ~l ~ IC2f d J~r ,-'1 s~ '!~ ~ ~ *0 .....T.6 S.F. FIR ... ",,\, ,7lh 'A~ 1 ~ _ ' ~~I . i -~~ 3 ~ 11 ~ - I } I ! I ! v * CITY HALL @ CITY OF RANCHO CUCAMONGA . . P209 RESOLUTION NO. ~-3g1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING A SUBORDINATION AGREEMENT FROM COMMUNITY BAPTIST CHURCH OF ALTA LOMA AND AUTHORIZE THE MAYOR AND CITY CLERK TO SIGN SAME (APN: 201-221-08) WHEREAS, a Real Property Improvement Contract and Lien Agreement for the installation of overhead utilities was approved by City Council ofthe City of Rancho Cucamonga on February 3, 1988 and recorded on May 2, 1988 as Document No. 88-137822. WHEREAS, for the developer to secure refinancing for the property, the lender requires that the above-mentioned lien agreement be subordinated to the lien in favor of the lender; and WHEREAS, the developer has submitted a Subordination Agreement to that effect for the City's approval and execution. NOW, THEREFORE, the City Council of the City of Rancho Cucamonga does hereby resolve that said Subordination Agreement be and the same are hereby approved and the Mayor is hereby authorized to sign said Subordination Agreement on behalf of the City of Rancho Cucamonga, and the City Clerk attest thereto. THE I'. P210 C I T Y , o F ,.. ,." > . RANCtlO CUCAMONGA Staff Report DATE: TO: FROM: BY: SUBJECT: December 20, 2006 Mayor and Members of the City Council Jack Lam, AICP, City Manager William J. O'Neil, City Engineer Betty Miller, Associate Engineer APPROVAL AN ACQUISITION AGREEMENT FOR THE CITY TO ACQUIRE OFF-SITE PROPERTY, SECURITY AND DEPOSITS FOR TRACT 16072, LOCATED ON THE NORTH SIDE OF WILSON AVENUE BETWEEN ETIWANDA AVENUE AND EAST AVENUE, SUBMITTED BY RICHLAND PINEHURST, INC. RECOMMENDATION: It is recommended that the City Council adopt the attached Resolution approving an Acquisition Agreement, Security and Deposit, and authorizing the Mayor and the City Clerk to sign said agreement. BACKGROUND/ANALYSIS: The Developer, Richland Pinehurst, Inc., is processing final maps and improvement plans for Tract 16072, located on the north side of Wilson Avenue between Etiwanda Avenue and East Avenue. As a condition of approval of the tentative map, the Developer is required to construct Wilson and East Avenues as frontage improvements. However, portions of these two streets, including their intersection, are located off site on property owned by neither the Developer nor the City. The Developer has made a good faith effort to acquire the off-site property necessary to install the required improvements, but has been unable to do so. The City is authorized by state law to acquire, by eminent domain, that property necessary for installation or construction of required improvements on property owned by neither the Developer nor the City, when there is an acquisition agreement that allocates costs and responsibilities towards obtaining said property. The Developer has signed the proposed agreement and submitted the appropriate deposit and security for the acquisition. P211 TRACT 16072 DECEMBER 20,2006 PAGE 2 The agreement has been reviewed and approved by the City Attorney and is available in the City Clerk's office. Respectfully Submitted, CJt tvUd William J. O'Neil City Engineer WJO:BAM:dlw ~ P212 ~ k . )~Fffi ~ '" I-+- T xl iSh ~ 1t! r~ ~I'~'~'\ 4~~~ ~ 'I A~ ;V ;:'s2 11\\ ~\\~ 1 \TIIIIIIIIIIII ~ c--- ~\\lll ~t&'fSI 'S=~ ~~~/ 1111~/.(\\I~/Y~C0 ,- TITII rr=! i 'w;$7 A<O:c ^" -III 11111 hb /\'7-< m -j IIIII1 I] f::j t:.::' f-l=H= I rHr1111.l1\ 111111 \ ~ If+>/ 1II11111 lJLl 1111/1 ~ oS ED D::J 1= nY ,'V-<,\ U I '" - '\ I TI"i--- r , I(::Y y\ ,1/- IITTTllllllll1 I:::::i \--~- ~ II 11'111 II I IIII II II--:: 'c\~~ c ~ IrTTTI\lLII- I IlflY>'<-< II = I- 111I1JIIIi- /TI II IT I' ['-- m'l'l'" =j\ ':::::1 1./-): (a':o LJ L ~I LX:- '-:Li:- I \ " "I~ -~2 I-~ I f-- Y L" c:: ~ h = ::: n / ~t:I~ft, -, G I I ~ >-ilEfIL1JIB'11 ~Ef?tJ=1l = m EEEBB i ) /1~ f-" I J ~ I ~ Eff->-- m tB = = I I I V ~r- '\ \ t:' ~ f::; \ r=r" \ y\ I \1- H HI _ Jf--\. 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I ( ..... 7'" - " .101:1 NAP. t:l ,;/,\ ~(..(). r , --I YJ/II ~ = - - o I ~I <l t I I. ~- - , I ] ~ NORTH II NTS ITEM: Tract 16072 CITY OF RANCHO CUCAMONGA ENGINEERING DIVISION TITLE: Acquisition Agreement EXHIBIT: Vicinity Map P213 EXHIBIT "A" (PROPOSED EASEMENT FOR STREETS, HIGHWAYS AND RELATED PURPOSES) APN 0225-083-14 THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 21, TOWNSHIP 1 NORTH, RANGE 6 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF RANCHO CUCAMONGA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTH QUARTER CORNER OF SAID SECTION; THENCE ALONG THE SOUTHERLY LINE OF THE SOUTHWEST QUARTER OF SAID SECTION, SOUTH 89'12'58" WEST, A DISTANCE OF 662.40 FEET TO THE SOUTHWEST CORNER OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION; THENCE ALONG THE WESTERLY LINE OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION, NORTH 00'01'15" EAST, A DISTANCE OF 40.00 FEET TO THE NORTHERLY LINE OF THE SOUTHERLY 40.00 FEET, MEASURED AT RIGHT ANGLES, OF SAID SECTION; THENCE ALONG SAID NORTHERLY LINE, NORTH 89'12'58" EAST, A DISTANCE OF 605.72 FEET TO A LINE WHICH BEARS NORTH 0'47'02" WEST FROM A POINT IN SAID SOUTHERLY LINE WHICH IS DISTANT THEREON, SOUTH 89'12'58" WEST, A DISTANCE OF 56,12 FEET FROM THE SOUTH QUARTER CORNER OF SAID SECTION; THENCE NORTH 45'51'25" EAST, A DISTANCE OF 33.01 FEET TO A POINT WHICH IS DISTANT NORTH 0'01'31" EAST, A DISTANCE OF 62.20 FEET AND NORTH 89'58'29" WEST, A DISTANCE OF 33.00 FEET FROM THE SOUTH QUARTER CORNER OF SAID SECTION; THENCE ALONG A LINE PARALLEL WITH AND DISTANT WESTERLY 33.00 FEET, MEASURED AT RIGHT ANGLES, FROM THE EASTERLY LINE OF THE SOUTHWEST QUARTER OF SAID SECTION, NORTH 00'01'31" EAST, A DISTANCE OF 596.82 FEET TO THE NORTHERLY LINE OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION; THENCE ALONG SAID LAST MENTIONED NORTHERLY LINE, NORTH 89'13'39" EAST, A DISTANCE OF 33.00 FEET TO THE EASTERLY LINE OF THE SOUTHWEST QUARTER OF SAID SECTION; THENCE ALONG SAID EASTERLY LINE, SOUTH 00'01 '31" WEST, A DISTANCE OF 659.48 FEET TO THE POINT OF BEGINNING. CONTAINING 47,207 SQUARE FEET OR 1.084 ACRES, MORE OR LESS. AS SHOWN ON EXHIBIT "B" ATTACHED HERETO AND MADE A PART HEREOF. GARY W. DOKI , P.L.S. 4693 LICENSE EX ES 9-30-2007 G:\405\40\LEGALS\STREET ESMT.DOC P214 EXHIBIT "B" SHEET 1 OF 1 SHEETS (PROPOSED EASEMENT FOR STREETS, HIGHWAYS, AND RELATED PURPOSES) ~ ~ ~ ~~~~~~~_~ 89'13'39" E 33.00' I r-. '- <,g; 1\ N'LY LINE SE 1/4. SE 1/4, SW 1/4 ~ I SEC. 21, T 1 N, R 6 W . ~\~ c;;;;>f;i W I ~~ ~. ~I ~ ~ w~ "\~} ft;~~' ~I: I ~ ~rp;' ~.@B~ 13' ~ ~ \: ~ \....... -~ ~<O I ..;CJ:. ~z UJ~ I <no- !;?!...: ~N I ~u 3::~ ""' ;\ ~\ ~I ~I ~I \~. ~\~ ~~'!g ~~. ~ ~4. ~~ ~~.~~ ~~~. ~ ~ <%>~ ~ '\s, t9~ O. <5', <9. '" ,. ~. <"" ~ o v. ? ~ <V ~ <V ''b. ~ '0 'Q /'. 1/. 33' '0 ~ N 89'12'58" E 605.72' N 89'12'58" E 642.40' N 89'12'58" E 662.40' Cf. WILSON AVENUE EXIST R/W PER --------j I ~ BK. 2316, PG. 285 O.R. II ~ N ~OO 00 "" UJ " , , " INDICATES SUBJECT EASEMENT AREA N I I ~ <n INDICATES SUBJECT EASEMENT BOUNDARY LINE \)",~I. LAND I V) -- INDICATES EXISTING R/W LINES ",r:;. <v -l.. . I I SKET 0 ;ACCOMPANY CRIPTlON 2i Q: , . "" " PREP ED UNDER THE CL co -0 '" SCALE: 1"= 100' 50 0 I I GRAPHIC SCALE 1:\40540\MAPPING\EXHIBITS\EX-5-01.DWG 12/7/2006 100 1 100 I P215 EXHIBIT "An (PROPOSED TEMPORARY CONSTRUCTION EASEMENT) APN 0225-083-14 THE NORTHERLY 50.00 FEET OF THE SOUTHERLY 80.00 FEET AND THE WESTERLY 53.00 FEET OF THE EASTERLY 73.00 FEET, SAID OIST ANCES BEING MEASURED AT RIGHT ANGLES, OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 21, TOWNSHIP 1 NORTH, RANGE 6 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF RANCHOCUCAMONGA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT OF SAID LAND. AS SHOWN ON EXHIBIT "B" ATTACHED HERETO AND MADE A pART HEREOF. 12/12/06 DATE GARYW.DOKI ,P.L.S. 4693 LICENSE EXR ES 9-30-2007 G:\405\40\LEGALS\TEMP caNST ESMT.2.DOC P216 1 OF 1 SHEETS EXHIBIT "B" SHEET (TEMPORARY CONSTRUCTION EASEMENT) ~~<<;. ~~, If' ~ INI, [F!l ~ o/J!J i-'--N'LY LINE SE 1/4, SE 1/4, SW 1/4 -- I SEC. 21, T 1 N, R 6 W ~ )31f1::> ~'rw ~\ I ~ ~~. I~ ..., I....... -3: ~<.o I ...,0:: :::-;;i ~ ~ u.J- =w I tilt- ~ ~......: :::;N I ::; cJ - u.J 3:tIl I I I I r?~ ~\~ ~. ~ rf$;~' fl ~~ ~. ~. ~~ ~~~ ~f$3' ~ ~4, ~~ ~f$3'IfI::>c",. ~~~. b '" b .0 <.0 '" 1 I W ~13: w'" '~IO:: 1-- ~; ~ ilEcl 1 I~~ -...... Ii'" ~~ I I~W I 12 KI~~ 1 '" 3: . a:::1r ~t- - tIl'" 0'120' 8 ~ 40' 16 "--ll WILSON AVENUE -------~ EXIST R/W PER - I I ~ BK. 2316, PG. 285 O.R. I II ~ ~ N II~tIl I. I I ., " " 1 12/2006 (EXPIRES 9/30/2007) SCALE: 1'= 100' 100 50 0 100 I I I I GRAPHIC SCALE 1:\40540\MAPPING\EXHIBITS\EX-3-01.DWG 12/7/2006 P217 RESOLUTION NO. 6&-3 g- 8' A RESOLUTION OF THE CITY COUNCil OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING AN ACQUISTION AGREEMENT FOR OFF SITE PROPERTY, SECURITY AND DEPOSIT, FOR TRACT 16072, FROM RICHlAND PINEHURST, INC., AND AUTHORIZING THE MAYOR AND CITY CLERK TO SIGN SAME WHEREAS, the Developer, Richland Pinehurst, Inc., has submitted to the City of Rancho Cucamonga Tract 16072 final map and improvement plans for review as conditioned by Planning Commission Resolution No. 04-56, located on the north side of Wilson Avenue between Etiwanda Avenue and East Avenue; and WHEREAS, for the Developer to meet the requirements established as prerequisite to recording the final map of said development, said Developer has offered the Acquisition Agreement submitted herewith for approval and execution by said City, together with good and sufficient security and deposit. NOW THEREFORE, THE CITY COUNCil OF THE CITY OF RANCHO CUCAMONGA DOES HEREBY RESOLVE AS FOllOWS: 1. That said Acquisition Agreement be and the same is hereby approved and the Mayor is hereby authorized to sign said agreement on behalf of the City of Rancho Cucamonga, and the City Clerk is authorized to attest thereto; and 2. That said Acquisition Agreement is accepted as good and sufficient, subject to approval as to form and content thereof by the City Attorney. P218 STAFF REpORT ENGINEERING DEP.\RTMENT Date: December 20, 2006 To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: APPROVAL OF IMPROVEMENT AGREEMENT EXTENSION FOR PARCEL MAP 15550, LOCATED ON THE WESTSIDE OF WARDMAN BULLOCK, NORTH OF WILSON AVENUE, SUBMITTED BY ETIWANDA CREEK PARTNERS, L.P. RECOMMENDATION It is recommended that City Council adopt the attached resolution accepting the subject agreement extension and security and authorizing the Mayor and City Clerk to sign said agreement. BACKGROUND/ANALYSIS Improvement Agreement and Improvement Security to guarantee the construction of the public improvements for Parcel Map 15550 were approved by the County of San Bernardino on May 14, 2005, in the following amounts: Faithful Performance Bond: Labor and Material Bond: $ $ 102,000.00 51,000.00 Bond # BE2621055 Bond # BE2621055 Improvement Agreement, Street Improvement Plans and Securities have all been transferred and annexed to the City of Rancho Cucamonga. The developer, Etiwanda. Creek Partners, L.P., is requesting approval of a 12-month extension on said improvement agreement. Copies of the Improvement Agreement Extension are available in the City Clerk's office. Respectfully submitted, (Jce(((itk j William 1. O'Neil City Engineer WJO:TCH:tv Attachment(s) Vicinity Map P219 -:pm \55~O N W*E S P220 RESOLUTION NO. rJ t.. .3 g1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING IMPROVEMENT AGREEMENT EXTENSION AND IMPROVEMENT SECURITY FOR PARCEL MAP 15550 WHEREAS, the City Council of the City of Rancho Cucamonga, California, has for its consideration an Improvement Agreement Extension executed on December 20, 2006, by Etiwanda Creek Partners, L.P., as developer, for the improvement of public right- of-way adjacent to the real property specifically described therein, and generally located at the northeast comer of Etiwanda and Wilson Avenues; and WHEREAS, the installation of such improvements, described in said Improvement Agreement and subject to the terms thereof, is to be done in conjunction with the development of said Parcel Map 15550; and WHEREAS, said Improvement Agreement Extension is secured and accompanied by good and sufficient Improvement Security, which is identified in said Improvement Agreement Extension. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CDCAMONGA, HEREBY RESOL YES, that said Improvement Agreement Extension and said Improvement Security be and the same are hereby approved and the Mayor is hereby authorized to sign said Improvement Agreement Extension on behalf of the City of Rancho Cucamonga, and the City Clerk to attest thereto. P221 STAFF REpORT ENGINEERlNG DEP.\RTMENT Date: December 20, 2006 To: Mayor and Members ofthe City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Joe Stofa Jr., Associate Engineer Subject: VACATION OF PECAN AVENUE EXCESS RIGHT-OF-WAY (V-209) - TOLL BROTHERS - A REQUEST TO VACATE A 66 FOOT WIDE EXCESS PORTION OF PECAN AVENUE LOCATED NORTH OF VISTA STREET AND SOUTH OF TRACT 16279. RECOMMENDATION It is recommended that the City Council adopt the attached resolution ordering the vacation of excess portion of Pecan Avenue. BACKGROUND/ANALYSIS: On June 12, 2002, Tract 16279 located on the north and south of Highland Avenue between Etiwanda and East Avenue was approved by the Planning Commission. The Developer, Toll Brothers Land Development, is currently completing the final items of Tract ]6279. One of the remaining items is to vacate Pecan Avenue and revert it back to the two adjacent properties with their concurrence. The two property owners have agreed to receive the property in question. The Public Utilities Companies have been notified of the proposed vacation and had no objections to the vacation. ]f the excess right-of-way is vacated, half the width (33 feet) will revert to the two adjoining lots. On November 8, 2006, the Planning Commission found that said vacation conforms to the General Plan and recommended that the vacation occur. Respectfully submitted, I~Jtt {' Ce/~f ,j William J. O'Neil City Engineer WJO:JS:tv Attachments: Exhibit "A" Vicinity Map Minutes of Planning Commission, dated November 8,2006 P222 ~ .... TRACT TOLL 79 LOT NO. 16279-1 BROTHERS SUBDIVISION 1-210 " /" D ;;.. U U "lR- -. ;~9~f;~~~#~~W I /, _ '////////V/ '~/:.'//;>lll .. ," "//"//'0"/'/ "j'l // /,// I .. /~--;..',,/'/./,,/ '\ /%1'/'///./ I /. ?;::...-- H_-GR!'It--~~'//':;/;;~~ ,,":;;/';;:;;//'1 I , , ~ ;/'';','l/'" <;//, '//J I v~ I "/X/.;/:" .. /~";: / / .' '. M'" U U U . . I~ . ~3a?i~~.;;: 5~f~I' I , t -'Wg~X;.a/;;i! 1 ,,:%,,~ "....!. '5/,o .,~.j~'f .:i.ffi"'~,' 1 '~~ n M Y/5l'"1'L'/{:'7YW/?iX31 I ~a;::, /' ~,4/1fm0.J: 1 . \....~'-' . ,m.~~.fV,B 1" " ,,~ . I ~0',{ . ,r~lf%~1::::~ I .. ~" " ". ' " ?J, ~~t.@~~~ 'I ",~ I ,w.x&:r~:0 0 : 0'. 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PECti N I VItCAT!~N (,'c.'-"o\. CITY or RANCHO CUCAJ\IONGA tit Ip.; o --.-....~.,.., ^ ~;"" ....:;., ~~n 17< (&'d-.. 7 '7~ 1 ~I "'. ',/ 0: '.J ~'a_ r- "I lJ?'i>'- J DIVISION ~I ~~ ;; ENGINEERING N ~~ ~ VICINITY 1\1.-\ P UI .=.... D;)l!e J P223 CITY OF RANCHO CUCAMONGA PLANNING COMMISSION MINUTES Regular Meeting November 8, 2006 Chairman Stewart called the Regular Meeting of the City of Rancho Cucamonga Planning Commission to order at 7 p.m. The meeting was held in the Council Chambers at Rancho Cucamonga Civic Center, 10500 Civic Center Drive, Rancho Cucamonga, California. Chairman Stewart then led in the pledge of allegiance. ROLL CALL COMMISSIONERS: PRESENT: Richard Fletcher, Lou Munoz, Cristine McPhail, Pam Stewart ABSENT: Rich Macias STAFF PRESENT: Rebecca Coleman, Office Specialist II; Kevin Ennis, Assistant City Attorney; Dan James, Senior Civil Engineer; Louis LeBlanc, Assistant Planner; Lois Schrader, Planning Commission Secretary; James Troyer, Planning Director ***** ANNOUNCEMENTS None * * * * * APPROVAL OF MINUTES Motion: Moved by McPhail, seconded by Munoz, carried 4-0-1 (Macias absent), to approve the amended minutes of October 11, 2006. Motion: Moved by Fletcher, seconded by Munoz, carried 4-0-1 (Macias absent), to approve the minutes of October 25, 2006. ***** CONSENT CALENDAR A. VACATION OF PECAN AVENUE EXCESS RIGHT-OF-WAY (V-209) - TOLL BROTHERS - A request to vacate a 66-foot wide excess portion of Pecan Avenue located north of Vista Street and South of Tract 16279. Motion: Moved by McPhail, seconded by Fletcher, to adopt the Consent Calendar as presented. Motion carried by the following vote: AYES: FLETCHER, MUNOZ, McPHAIL, STEWART NOES: NONE ABSENT: MACIAS - carried ***** P224 PUBLIC HEARINGS B. MODIFICATION OF CONDITIONAL USE PERMIT DRC2005-00068 - RED HILL COUNTRY CLUB, INC. - A request to modify the conditions of approval for utility undergrounding for a new clubhouse totaling 35,176 square feet on 120 acres of land in the Open Space District,located at 8358 Red Hill Country Club Drive - APN: 0207-101-03, 23, and 35. Related Files: Variance DRC2005-00527, Lot Line Adjustment LLA #601 and Tree Removal Permit DRC2005-00486. Dan James, Senior Civil Engineer, presented the item and referred to the exhibit shown on page B-10 of the agenda packet. He said the current conditions require the removal of one pole and undergrounding of 315 feet of utilities regardless of the Commission action this evening. He said with that requirement, a powerpole near the midpoint of the 315 foot stretch would still remain along with an offsite powerpole located to the east of the site. He reported that the applicant is asking the Commission to reconsider the condition because the surrounding neighborhood is fully developed and therefore they would have to absorb the entire cost of the undergrounding with no opportunity for the costs to be shared, which was the original intent of the policy of fees paid towards a "fair- share." He added that the request is for Engineering Condition 1-f be deleted from their requirements, or the Commission could deny the request and the original conditions would stand as is. He said the leaning poles slated to remain would be relocated during the street widening project and would be placed in a more erect position. Commissioner Munoz asked for clarification as to what would happen if the Commission does or does not move forward on the request. Kevin Ennis, Assistant City Attorney, clarified and stated that if the Commission does not accept the deletion then the Commission should direct staff to prepare a resolution of denial that could be brought back on the next agenda. Chairman Stewart clarified that the net result is that only one pole will be removed and the applicants have already paid fees towards the undergrounding improvements. Mr. James confirmed that Red Hill Country Club already paid for a share in the removal of poles to the south east of the club and they were ok with that (near the Sycamore Inn property). He remarked that the requirement as it is shown now:-vould be at their sole cost. Chairman Stewart opened the public hearing. Chuck Buquet, Charles Joseph Associates, 10681 Foothill Boulevard, Suite 395, stated that when the item originally came to the Planning Commission, they determined that they wanted to see all of the poles underground. He said that in working with Edison and the utility consultant they realized that many years ago undergrounding was never considered. He remarked that there was no contest with providing the undergrounding on the lower section of the project. He noted that the golf course does not have the rights to the easement to put the poles underground in the upper section of the project. He said one pole would still remain and they plan to take the service underground from that pole up to the club house. He said because of logistics, costs, and feasibility, the applicant has made the request. He added that the leaning pole that cannot be permanently removed would be uprighted when it is relocated. Edward McKuen, 8396 Red Hill Country Club Drive, stated he lives across from the country club and he has looked at the wires for 31 years. He said he was told these poles would be taken down and he is disappointed and that he wants to see themundergrounded. Planning Commission Minutes -2- November 8, 2006 P225 Chairman Stewart closed the public hearing and commented that this problem was created in part by Edison. She noted that Edison.would not be allowed to remove one of the poles. She asked if the leaning poles will be moved and if the landscaping will be cleaned up. Mr. Buquet remarked that Edison has no legal authority to take these lines underground (that are located to the north in the neighborhood) but that everything they do have control over would be undergrounded. He confirmed the remaining pole would be relocated, straightened, and the rest will go underground. Chairman Stewart closed the public hearing. Vice Chairman Fletcher commented that when there is an opportunity to underground utilities, it is a good idea. He remarked that the visual clutter of poles and power lines is noticeable and that he would like to see them all go underground. He commented that this particular situation is unique because the rest of the area is fully developed and they may never have the opportunity to underground the poles there. He added that the full burden of the expense would be on the applicant. He said he believes the request is justified. Commissioner Munoz concurred and said that this appears to be the best we can do for this situation and for the lack of easements. He agreed we should underground whenever possible, but in this case there does not seem to be an alternative. Commission McPhail agreed with her colleagues. Motion: Moved by McPhail, seconded by Fletcher, to approve the request to adopt Resolution 06-100, modifying the undergrounding requirements as presented (4-0-1 Macias absent). Motion carried by the following vote: AYES: FLETCHER, MUNOZ, McPHAIL, STEWART NOES: NONE ABSENT: MACIAS - carried * * * * * C. ENVIRONMENTAL ASSESSMENT AND TENTATIVE TRACT MAP SUBTT18033 - WEINBERGER - A request to subdivide 9.9 acres of land into 13 lots in the Very Low Residential District (1-2 dwelling units per acre), located south of Banyan Street and east of East Avenue - APN: 0225-191-09 and 17. Related file: Tree Removal Permit DRC2006- 00309. Staff has prepared a Mitigated Negative Declaration of environmental impacts for consideration. CONTINUED FROM THE OCTOBER 25, 2006 MEETING. Lou LeBlanc, Assistant Planner, orally updated the Commission on the status of the project. He noted that a new resolution was placed before the Commissioners and the applicant had indicated to him that he would accept the conditions shown in the resolution. Commissioner Munoz asked for a recap of what is happening with the project. Mr. LeBlanc stated that Engineering has revised their conditions because the project will be phased and since that was different from the original request; that was the main reason for the continuance. Chairman Stewart noted the public hearing from the October 25,2006 meeting was still open and that the applicant was present. Robert Weinberger, 1407 High Bluff Drive, Newport Beach, stated he had just received and read the resolution but that he is looking for both an option of phasing the project and for doing one final map Planning Commission Minutes -3- November 8, 2006 P226 RESOLUTION NO. () t;, .-;3? () A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA ORDERING THE VACATION (V-209) OF A PORTION OF PECAN AVENUE LOCATED NORTH OF VISTA STREET AND SOUTH OF TRACT 16279 WHEREAS, by Chapter 4, Article 1, Section 8334, of the Streets and Highway Code, the City Council of the City of Rancho Cucamonga is authorized to vacate that portion of the City Street hereinafter more particularly described; and WHEREAS, the City of Rancho Cucamonga Planning Commission on November 8, 2006, by minute actiop finds and determines that the vacation of the subject street rights-of- way herein contemplated conform to the City's General Plan; and WHEREAS, the City Council found all the evidence submitted that portions of Pecan Avenue are unnecessary for present or prospective public street purposes because it is not required for street or highway purposes. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rancho Cucamonga as follows: SECTION 1: That the City Council of the City of Rancho Cucamonga hereby makes its order vacating Pecan Avenue (V-209), on file in the office of the City Clerk of the City of Rancho Cucamonga, which have been further shown on Exhibit nAn. and by reference made a part thereof. SECTION 2: That from and after the date the resolution is recorded, said street no longer constitutes a public easement. SECTION 3: That the City Clerk shall cause a certified copy of this resolution to be recorded in the office of the County Recorder of San Bernardino County, California. P227 STAFF REpORT ENGINEERING DEP",RThIENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: APPROVAL OF IMPROVEMENT AGREEMENT EXTENSION FOR PARCEL MAP 16455, LOCATED ON THE NORTHEAST CORNER OF HERMOSA AND WILSON AVENUES, SUBMITTED BY IYAD HAIFA AND HUMBERTO ZARATE , RECOMMENDATION It is recommended that City Council adopt the attached resolution accepting the subject agreement extension and security and authorizing the Mayor and City Clerk to sign said agreement. BACKGROUND/ANALYSIS Improvement Agreement and Improvement Security to guarantee the construction of the public improvements for Parcel Map 16455 were approved by the City Council on 10/19/05, in the following amounts: Faithful Performance Bond: Labor and Material Bond: Monumentation Cash Deposit $ $ $ 260,000.00 130,000.00 2,550.00 Due to unexpected delays with Southern California Edison the street improvements have been put on hold. The developer, lyad Haifa and Humberto Zarate, is requesting approval of a 12-month extension on said improvement agreement. Copies of the Improvement Agreement Extension are available in the City Clerk's office. Respectfully submitted, "",\:;':-'(1/1 f) (;,(1 1.,__ (/ t, .' [/ L-t"~ -l/ ..// William J. O'Neil City Engineer WJO:TCH:tv Attachment(s) P228 Iyad Haifa 10114 Wilson Ave Alta Loma Ca, 9173 7 (909)730-8747 Subject: Improvement Agreement Extension for Parcel Map 16455 To the City Council, I would like to request an extension for the improvements on the subject mentioned above. In July 2005,1 have filled out an application to Edison requesting to underground all above electrical wires and remove all poles. As of today 12/4/06 Edison has not responded on a date to the start of construction. Infact I have contacted Felipe at Edison four different times since I filled out the application, and he keeps saying that they have other projects that they have to finish before starting this one. Do to the policy of City Of Rancho Cucamonga; I can't hire any other contractor to do the underground work for the overhead electrical. All the other improvements will start as soon as Edison is done. If you have any questions, please call me. Thank you, Iyad Haifa 1 2104/06 , L ---' J~~'U P229 VISTA GROVE ST. ~ ~ ~ ~ a5 '<( '<( ::;;; '<( HILLSIDE ROAD c::, 0 C5 -.J ~ ~ SI7E' I ::;;; WILSON AVE. 15 :I -is ::;:: I:l:: 0 '<( N.TS. BANYAN STREET VlCINfTY MAP CITY OF RANCHO CUCAMONGA ENGINEERING DIVISION ~ . N ITEM: ?m \ Ltl455 TITLE: EXHIBIT: P230 RESOLUTlONNO. 0&-31/ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING IMPROVEMENT AGREEMENT EXTENSION AND IMPROVEMENT SECURITY FOR PARCEL MAP 16455 WHEREAS, the City Council of the City of Rancho Cucamonga, California, has for its consideration an Improvement Agreement Extension executed on December 20, 2006, by Iyad Haifa and Humberto Zarate, as developer, for the improvement of public right-of-way adjacent to the real property specifically described therein, and generaliy located on the northeast comer of Hermosa and Wilson Avenues; and WHEREAS, the installation of such improvements, described in said Improvement Agreement and subject to the terms thereof, is to be done in conjUllction with the development of said Parcel Map 16455; and WHEREAS, said Improvement Agreement Extension is secured and accompanied by good and sufficient Improvement Security, which is identified in said Improvement Agreement Extension. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, that said Improvement Agreement Extension and said Improvement Security be and the same are hereby approved and the Mayor is hereby authorized to sign said Improvement Agreement Extension on behalf of the City of Rancho Cucamonga, and the City Clerk to attest thereto. P231 STAFF REpORT ENGINEERING DEP.\RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: APPROVAL OF IMPROVEMENT AGREEMENT EXTENSION FOR TRACT 16716, LOCATED ON THE EAST SIDE OF ETIWANDA AVENUE BETWEEN ETIWANDA INTERMEDIATE SCHOOL AND ETIWANDA RAILWAY STATION, SUBMITTED BY MONTE SAN SAVINO, LLC RECOMMENDATION It is recommended that City Council adopt the attached resolution accepting the subject agreement extension and security and authorizing the Mayor and City Clerk to sign said agreement. BACKGROUND/ANALYSIS . Improvement. Agreement and Improvement Security to guarantee the construction of the public improvements for Tract 16716 were approved by the City Council on October 19, 2005, in the following amounts: Faithful Performance Bond: Labor and Material Bond: $ $ 1,108,900.00 554,450.00 Due to the size of the project the street improvements have not been completed. The developer, Monte San Savino, LLC, is requesting approval of a 12-month extension on said improvement agreement. Copies of the Improvement Agreement Extension are available in the City Clerk's office. Respectfully submitted, . }v/( C'"/)(' (' '."C{ I A.- L/ / ' ./ William J. O'Neil City Engineer WJO:TCH:tv Attachment(s) P232 November 15th. 2006 Tasha Hunter Public Service Tech I City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga. CA 91729 Re: Improvement Agreement Extension for Tract 16716 Dear Tasha I would like to request an extension for our improvement agreement for another 12 months. The work has not been completed as it is a large project and we are still working on it. We expect the work to be completed within the next 12 months. Please call me if you have any questions. I can be reached at 909-229-7333. Sincerely. ]~~, c!h ~~w-IC j'i!V Jay Ahl::aJ~ Partner P233 VICINITY MAP NOT TO SCALE I" 81111111~ 111111!l -l". ~..} ,':J . , . N fE S City of Rancho Cucamonga ENGINEERING DIVISION Item: Tract No. 16716 Title: VICINITY MAP EXHIBIT: 1 !D7 P234 RESOLUTION NO. () (,,- 3q 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING IMPROVEMENT AGREEMENT EXTENSION AND IMPROVEMENT SECURITY FOR TRACT 16716 WHEREAS, the City Council of the City of Rancho Cucamonga, California, has for its consideration an Improvement Agreement Extension executed on December 20, 2006, by Monte San Savino, LLC, as deveioper, for the improvement of public right-of- way adjacent to the real property specifically described therein, and generally located on the east side of Etiwanda Avenue between Etiwanda Intermediate School and Etiwanda Railway Station; and WHEREAS, the installation of such improvements, described in said Improvement Agreement and subject to the terms thereof, is to be done in conjunction with the development of said Tract 16716; and WHEREAS, said Improvement Agreement Extension is secured and accompanied by good and sufficient Improvement Security, which is identified in said Improvement Agreement Extension. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, that said Improvement Agreement Extension and said Improvement Security be and the same are hereby approved and the Mayor is hereby authorized to sign said Improvement Agreement Extension on behalf of the City of Rancho Cucamonga, and the City Clerk to attest thereto. P235 STAFF REpORT ENGINEERING DEP"WThIENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Willie Valbuena, Assistant Engineer Subject: APPROVAL OF MAP, IMPROVEMENT AGREEMENT, IMPROVEMENT SECURITIES, MONUMENTATION CASH DEPOSIT, INTERIM BASIN MAINTENANCE AGREEMENT AND ORDERING THE ANNEXATION TO LANDSCAPE MAINTENANCE DISTRICT NO. 7 AND STREET LIGHT MAINTENANCE DISTRICT NOS. 1 AND 7 FOR TRACT 16114, LOCATED ON THE EAST SIDE OF EAST AVENUE, SOUTH OF WILSON AVENUE, SUBMITTED BY TRlMARK PACIFIC-RANCHO CUCAMONGA, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY RECOMMENDATION It is recommended that the City Council adopt the attached resolutions approving Tract Map 16114, accepting the subject agreements, securities, monumentation cash deposit and ordering the annexation to Landscape Maintenance District No.7 and Street Light Maintenance District Nos. I and 7 for Tract Map 16114 and authorizing the Mayor to sign said agreement and the City Clerk to cause said map to record. BACKGROUND/ANALYSIS Tentative Tract Map 16114, located on the east side of East Avenue, south of Wilson Avenue, in the Very Low Residential District within the Etiwanda Specific Plan, was approved by the Planning Commission on April 26, 2006. This project is for a subdivision of 15.15 acres ofland into 21 lots and an interim detention basin. The Developer, Trimark Pacific-Rancho Cucamonga, LLC, A California Limited Liability Company, is submitting an agreement, securities and monumentation cash deposit to guarantee the construction of the public street improvements in the following amounts: Faithful Performance Bond Street/Storm Drain Imorovements Future Storm Drain Imnrovements $ 1,112,500.00 $ 132,900.00 Labor and Material Bond $ 1,112,500.00 $ 132,900.00 Monumentation Cash Deposit $ 3,450.00 Copies of the agreement and securities are available in the City Clerk's Office. P236 CITY COUNCIL STAFF REPORT RE: PrlRCEL ~LW 16114 DECEMBER 20, 2006 PAGE 2 A letter of approval has been received from Cucamonga Valley Water District. The Consent and Waiver to Annexation forms signed by the Developer are on file in the City Clerk's Office. Respectfully submitted, C}ct#tU William J. O'Neil City Engineer WJO:WV:tv Attachment( s) P237 WILSON AVENUE - 24TH ST. . SUMMIT AVE ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ PROJECT . LOCA TION A N ITEM: T~ACT 1~114 TITLE:Y/CINI,Y MA? CITY OF RANCHO CUCAMONGA ENGINEERING DIVISION P238 RESOLUTION NO. 6 (p- 3 93 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING TRACT MAP NUMBER 16114, IMPROVEMENT AGREEMENT, IMPROVEMENT SECURITIES, MONUMENTATION CASH DEPOSIT AND INTERIM BASIN MAINTENANCE AGREEMENT WHEREAS, Tentative Tract Map 16114, submitted by Trimark Pacific-Rancho Cucamonga, a California Limited Liability Company and consisting of a subdivision of 15.15 acres of land into 21 lots and an interin detention basin, located on the east side of East Avenue, south of Wilson Avenue, in the Very Low Residential District within the Etiwanda Specific Plan, was ap.proved by the Planning Commission of the City of Rancho Cucamonga on April 26, 2006; and WHEREAS, Tract Map 16114 is the final map of the division of land approved as shown on the Tentative Tract Map; and WHEREAS, all the requirements established as prerequisite to approval of the installation of public street and storm drain improvements by the City Council of said City have now been met by posting the Improvement Securities and Monumentation Cash Deposit by Trimark Pacific-Rancho Cucamonga, LLC, a California Limited Liability Company, as developer; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, that said Improvement Agreement, Improvement Securities, Monumentation Cash Deposit and said Interim Basin Maintenance Agreement, submitted by said developer be and the same are hereby approved and the Mayor is hereby authorized to sign said Maintenance and Improvement Agreements on behalf of the City of Rancho Cucamonga, and that said Tract Map 16114 be and the same is hereby approved and the City Engineer is authorized to present same to the County Recorder to be filed for record. P239 RESOLUTION NO. 610 - .3 q Lj A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA,CALlFORNIA, ORDERING THE ANNEXATION OF CERTAIN TERRITORY TO LANDSCAPE MAINTENANCE DISTRICT NO. 7 AND STREET LIGHTING MAINTENANCE DISTRICT NOS. 1 AND 7 FOR TRACT MAP 16114 WHEREAS, the City Council of the City of Rancho Cucamonga, California, has previously formed a special maintenance district pursuant to the terms of the "Landscaping and Lighting Act of 1972", being Division 15, Part 2 of the Streets and Highways Code of the State of California (the "1972 Act"), said special maintenance district known and designated as Landscape Maintenance District No.7, Street Lighting Maintenance District NO.1 and Street Lighting Maintenance District NO.7 (referred to collectively as the "Maintenance Districts"); and WHEREAS, the provisions of Article 2 of Chapter 2 of the 1972 Act authorize the annexation of additional territory to the Maintenance Districts; and WHEREAS, such provisions also provide that the requirement for the preparation of resolutions, an assessment engineer's report, notices of public hearing and the right of majority protest may be waived in writing with the written consent of all of the owner of property within the territory to be annexed; and WHEREAS, notwithstanding the such provisions of the 1972 Act related to the annexation of territory to the Maintenance District, Article XIIID of the Constitution of the State of California ("Article XIIID") establishes certain procedural requirements for the authorization to levy assessments which apply to the levy of annual assessments for the maintenance Districts on the territory proposed to. be annexed to such districts; and WHEREAS, the owners of certain property described in Exhibit A attached hereto and incorporated herein by this reference have requested that such property (collectively, the "Territory") be annexed to the Maintenance Districts in order to provide for the levy of annual assessments to finance the maintenance of certain improvements described in Exhibit B hereto (the "Improvements"); and WHEREAS, all of the owners of the Territory have filed with the City Clerk duly executed forms entitled "Consent And Waiver To Annexation Of Certain Real Property To A Maintenance District And Approval Of The Levy Of Assessments On Such Real Property" (the "Consent and Waiver"); and P240 WHEREAS, by such Consent and Waiver, all of the owners of the Territory have expressly waived any and all of the procedural requirements as prescribed in the 1972 Act to the annexation of the Territory to the Maintenance Districts and have expressly consented to the annexation of the Territory to the Maintenance Districts; and WHEREAS, by such Consent and Waiver, all of the owners of the Territory have also expressly waived any and all of the procedural requirements as prescribed in the 1972 Act and/or Article XIIID applicable to the authorization to levy the proposed annual assessment against the Territory set forth in Exhibit A attached hereto and incorporated herein by this reference and have declared support for, consent to and approval of the authorization to levy such proposed annual assessment set forth in Exhibit B attached hereto; and WHEREAS, at this time the City Council desires to order the annexation of the Territory to the Maintenance Districts and to authorize the levy of annual assessments against the Territory in amounts not to exceed the amounts set forth in Exhibit C hereto. NOW, THEREFORE, THE CITY COUNCil OF THE CITY OF RANCHO CUCAMONGA HEREBY RESOLVE AS FOllOWS: SECTION 1: The above recitals are all true and correct SECTION 2: This City Council hereby finds and determines that: a. The annual assessments proposed to be levied on each parcel in the Territory do not exceed the reasonable cost of the proportional special benefit conferred on each such parcel from the Improvements. b. The proportional special benefit derived by each parcel in t.he Territory from the Improvements has been determined in relationship to the entirety of the cost of the maintenance of the Improvements. . c. Only special benefits will be assessed on the Territory by the levy of the proposed annual assessments. SECTION 3: This legislative body hereby orders the annexation of the Territory to the Maintenance Districts, approves the financing of the maintenance of the Improvements from the proceeds of annual assessments to be levied against the Territory and approves and orders the levy of annual assessments against the Territory in amounts not to exceed the amounts set forth in Exhibit B. SECTION 4: All future proceedings of the Maintenance Districts, including levy of all assessments, shall be applicable to the Territory. 2 TRACT 16114 P241 Exhibit A Identification of the Owner and Description of the Property To Be Annexed The Owner of the Property is: Trimark Pacific Rancho Cucamonga, LLC, a California Limited Liability Company The legal description of the Property is: THE SOUTH 630 FEET, MEASURED ALONG THE WEST LINE OF THE NORTHWEST '4 OF THE NORTHEAST '4 OF SECTION 28, TOWNSHIP 1 NORTH, RANGE 6 WEST, SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL GOVERNMENT PLAT THEREOF. EXCEPTING THAT PORTION THEREOF LYING WITHIN THE FOLLOWING DESCRIBED LINE: BEGINNING AT THE NORTHEAST CORNER OF SAID NORTHWEST Y. OF THE NORTHEAST '4; THENCE SOUTH 0 DEG. 04' 16" EAST, 1321.20 FEET, TO THE SOUTHEAST CORNER OF SAID NORTHWEST v.. OF THE NORTHEAST '4; THENCE SOUTH 89 DEG. 10' 00" WEST, 290.00 FEET, ALONG THE SOUTH LINE OF SAID NORTHWEST '4 OF THE NORTHEAST '4; THENCE NORTH 05 DEG. 24' 00" WEST, 233.00 FEET; THENCE NORTH 13 DEG. 15' 00" EAST, 456.00 FEET; THENCE NORTH 04 DEG. 36' 00" WEST 413.00 FEET; THENCE NORTH 17 DEG. 04' 00" WEST, 244.00 FEET TO A POINT IN THE NORTH LINE OF SAID NORTHWEST '4 OF THE NORTHEAST '4; THENCE NORTH 89 DEG. 90' 40" EAST, 310.66 FEET, ALONG SAID NORTH LINE TO THE POINT OF BEGINNING. A-I TR 16114 Exll/B/7 '',4-IQ P242 ASSESSMENT DIAGRAM LANDSC-APt. MAIN I ENANCFffiSTRfCT NO.7' - . ..... STREET LIGHTING MAINTENANCE DISTRICT NOS. 1 AND 7 " " , 3 4 9 ~ 10 ~ -. 8 " . ft" CJI ' ":::-l 2 0' 5 Q... FIRE ~ ~ t:2 ~ STATION 7 ~" 6 " 7 ~ 12 ~ 1 ~ ~ ./ " " " ./ =----- ~C/N7 CLt/,B L?.A'/VE I- ~~ 13 'lL. " 2t 20 -19 18 17 16 15 14 " "" " \ Wh't'I1I/ IY llY1/L TRACT 16114 SjfiEq L/G#;S 7 ~. ~ JftlCS ee. 6&\. IJECtWfiJstP ~/7c 1"4t?/K Sr- A CITY OF RANCHO CUCAMONGA NORTII COUNTY OF SAN BERNARDINO STATE OF CALIFORNIA QAC7/~//4 P243 Exhibit B To Description of the District Improvements Fiscal Year 2006/2007 LANDSCAPE MAINTENANCE DISTRICT NO.7 (NORTH ETIWANDA): Landscape Maintenance District No. 7 (LMD #7) represents landscape sites throughout the Etiwanda North Area. These sites are associated with areas within that district and as such any benefit derived from the landscape installation can be directly attributed to those parcels within that district. Because of this, assessments required for this district are charged to those parcels within that district. The various sites maintained by the district consist of parkways, median islands, paseos, street trees, community trails and Etiwanda Creek Park. STREET LIGHT MAINTENANCE DISTRICT NO.1 (ARTERIAL STREETS): Street Light Maintenance District No. 1 (SLD #1) is used to fund the maintenance and/or installation of street lights and traffic signals located on arterial streets throughout the City. The facilities within this district, being located on arterial streets, have been determined to benefit the City as a whole on an equal basis and as such those costs associated with the maintenance and/or installation of the facilities is assigned to the City-wide district. The sites maintained by the district consist of street lights on arterial streets and traffic signals on arterial streets within the rights-of-way or designated easements of streets dedicated to the City. STREET LIGHT MAINTENANCE DISTRICT NO.7 (NORTH ETIWANDA): Street Light Maintenance District No. 7 (SLD #7) Is used to fund the maintenance and/or installation of street lights and traffic signals located on local streets in what is termed the North Etiwanda area of the City. Generally, this area encompasses the area of the City east of Day Creek Channel and north of Highland Avenue within the incorporated area of the City. . It has been determined that the facilities in this district' benefit the properties within this area of the City. The sites maintained by the district consist of street lights on local streets and traffic signals (or a portion thereof) on local streets within the North Etiwanda area. B-1 TRACT 16114 P244 Proposed additions to Work Program (Fiscal Year 2006/2007) For Project: TRACT 16114 Street Lights SLD # 1 SLD # 7 5800L Number of Lamps 9500L 16,000L 22,000L 27,500L 12 Community Trail Turf Non-Turf Trees Landscaping DGSF SF SF EA LMD # 7 40,018 82 'Existing items installed with original project Assessment Units by District Parcel(s) DU S1 S7 L7 21 21 21 21 B-2 TRACT 16114 P245 Exhibit C Proposed Annual Assessment Fiscal Year 2006/2007 LANDSCAPE MAINTENANCE DISTRICT NO.7 (NORTH ETIWANDA): The rate per assessment unit (A.U.) is $307.05 for the fiscal year 2006/07. The following table summarizes the assessment rate for Landscape Maintenance District NO.7 (North Etiwanda): # of # of Rate Per Physical Assessment Assessment Assessment Land Use Type Units Units Factor Units Unit Revenue Single Parcel 2155 1.00 2155 $307.05 $661,692.75 Family Comm/lnd. Acre 5 2.00 10 $307.05 $3,070.50 TOTAL $664,763.25 The Proposed Annual Assessment against the Property (TRACT 16114) is: 21 Parcels x 1 A.U. Factor x $307.05 Rate Per A.U. = $6,448.05 Annual Assessment STREET LIGHT MAINTENANCE DISTRICT NO.1 (ARTERIAL STREETS): The rate per assessment unit (A.U.) is $17.77 for the fiscal year 2006/07. The following table summarizes the assessment rate for Street Light Maintenance District No.1 (Arterial Streets): # of # of Rate Per Physical Physical Assessment Assessment Assessment Land Use Unit Type Units Units Factor Units Unit Revenue Single Parcel 22,901 1.00 22,901 $17.77 $406,950.77 Family Multi-Family Unit 10,449 1.00 10,449 $17.77 $185,678.73 Commercial Acre 2,835 2.00 5,670 $17.77 $100,755.90 TOTAL $693,385.40 The Proposed Annual Assessment against the Property (TRACT 16114) is: 21 Parcels x 1 A.U. Factor x $17.77 Rate Per A.U. = $373.17 Annual Assessment c-! TRACT 16114 P246 STREET LIGHT MAINTENANCE DISTRICT NO.7 (NORTH ETIWANDA): The rate per assessment unit (AU.) is $33.32 for the fiscal year 2006/07. The following table summarizes the assessment rate for Street Light Maintenance District NO.7 (North Etiwanda): # of #01 Rate Per Physical Physical Assessment Assessment Assessment Land Use Unit Type Units Units Factor Units Unit Revenue Single Parcel 2502 1.00 2502 $33.32 $83,366.64 Family Commllnd Acre 5 2.00 10 $33.32 $333.20 TOTAL $83,699.84 The Proposed Annual Assessment against the Property (TRACT 16114) is: 21 Parcels x 1 AU. Factor x $33.32 Rate Per AU. = $699.72 Annual Assessment C-2 TRACT 16114 P247 CERTIFICATE OF SUFFICIENCY CONSENT AND WAIVER TO ANNEXATION FOR TRACT 16114 lANDSCAPE MAINTENANCE DISTRICT NO.7, STREET LIGHTING MAINTENANCE DISTRICT NO.1 AND STREET LIGHTING MAINTENANCE DISTRICT NO.7 STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO CITY OF RANCHO CUCAMONGA WilLIAM J. O'NEil, the undersigned, hereby certifies as follows: That I am the CITY ENGINEER of the CITY OF RANCHO CUCAMONGA, CALIFORNIA. That on the 20th day of December, 2006, I reviewed a Consent and Waiver to Annexation pertaining to the annexation of certain property to the Maintenance District, a copy of which is on file in the Office of the City Clerk. That I caused said Consent and Waiver to Annexation to be examined and my examination revealed that said Consent and Waiver to Annexation has been signed by the owners of all of the property within the territory proposed to be annexed to the Maintenance District. That said Consent and Waiver to Annexation meets the requirements of Section 22608.1 of the Streets and Highways Code of the State of California. EXECUTED this 20th day of December, 2006, at Rancho Cucamonga, California. CITY ENGINEER CITY OF RANCHO CUCAMONGA STATE OF CALIFORNIA P248 STAFF REpORT ENGINEERING DEP"\RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Willie Valbuena, Assistant Engineer Subject: RELEASE OF DRAINAGE ACCEPTANCE AGREEMENT FOR LOTS 3 AND 4 OF PARCEL MAP 15692, LOCATED ON IOAMOSA COURT, WEST OF HELLMAN AVENUE, SUBMITTED .BY PAT PRUTTING RECOMMENDATION It is recommended that the City Council adopt the attached resolution releasing the drainage acceptance agreement for lots 3 and 4 of Parcel Map 15692 and authorizing the Mayor to sign said release and the City Clerk to record same. BACKGROUND/ANALYSIS A Drainage Acceptance Agreement was approved by the City Council on March 7, 2001 and recorded on June 20, 2001 as Document No. 20010238408 in the office of the County Recorder, San Bernardino County, California. The Agreement was for the construction of the required future storm drain facilities. Said required storm drain facilities were installed when loamosa Court was extended under Tract 16461 and accepted by the City on June 7, 2006. Respectfully submitted, c:}y(( (l c{l j William J. O'Neil City Engineer WJO:WV:dlw Attachment(s) P249 I I'/LLS>;:?C A'C1/tP_ -,- ---I . I' I I i I .~ t-...I t...;. -------._-----. ----::- ----, , :"~-~-;-:=-~-~:t:::::-:::~:~:- :,--:;--: '; SBCH;D --. ,&'""y...1!:I~QutrnlI>../~A '_, ','._'_., to. ~_~T[ lIlUD'mA.(........Tl: __--:.~........!.~-EA3ElUl<T ,.. +- I CITY OF RANCHO CUCAMONGA A. N ITEM: PA'? /H6/ TITLE: V/C/N/Tj M~ ENGINEERING DIVISION P250 RESOLUTION NO. {)(,,- 315 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA RELEASING A DRAINAGE ACCEPTANCE AGREEMENT FROM PAT PRUTTING WHEREAS, the City Council of the City of Rancho Cucamonga, California, adopted Resolution No. 01-043 on March 7, 2001, accepting a Drainage Acceptance Agreernent frorn Pat Prutting; and WHEREAS, said Drainage Acceptance Agreement was recorded in Official Records of San Bernardino County, California on June 20, 2001 as Document No. 20010238408; and WHEREAS, said Drainage Acceptance Agreement is no longer required. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Rancho Cucamonga does hereby release said Drainage Acceptance Agreement for Parcel 3 and 4 of Parcel Map 15692 and that the City Clerk shall cause release of said Drainage Acceptance Agreement to be recorded in the office of the County Recorder of San Bernardino, California P251 STAFF REpORT E0'GlCiEERhG DEP~\RTilIENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer . By: Mike Olivier, Senior Civil Engineer Subject: APPROVAL AND EXECUTION OF A JOINT CONSTRUCTION AGREEMENT BETWEEN THE SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT AND THE CITY OF RANCHO CUCAMONGA FOR THE SAN SEVAINE STORM CHANNEL AND THE EAST AVENUE MASTER PLAN STORM DRAIN CONNECTION AT FOOTHILL BOULEVARD RECOMMENDATION It is recommended that the City Council approve a Joint Construction Agreement between the San Bernardino County Flood Control District and the City of Rancho Cucamonga for the San Sevaine Storm Channel and the East Avenue Master Plan Storm Drain connection at Foothill Boulevard and authorize the Mayor to sign the agreement. BACKGROUND/ANALYSIS The San Bernardino County Flood Control District (District) plans to construct an enlarged reinforced concrete box culvert across Foothill Boulevard for the San Sevaine Creek Channel storm water run-off system, which will also allow the upstream Etiwanda Creek Channel storm water run- off to be conveyed into the proposed San Sevaine Creek Channel across Foothill Boulevard. The City has future plans for a storm drain in East Avenue, north of Foothill Boulevard, and has requested the District to construct that portion of the East Avenue Storm Drain across Foothill Boulevard to outlet into the San Sevaine Creek Channel south of Foothill Boulevard. Said City's work is referred to as the East Avenue Storm Drain connection into the San Sevaine Creek Channel. The District has agreed to construct the East Avenue connection at City's expense. It is to the City's benefit that the District construct the City's East Avenue Storm Drain connection with their construction of the San Sevaine box under Foothill Boulevard because when the City constructs the East Avenue Storm Drain, Foothill Boulevard will not have to be traversed again. Funding for the City's East Avenue Storm Drain connection is from RDA Regional Facilities Fund. Respectfully submitted, Cleft CtCe Willam J. O'Neil City Engineer WJO:MO:ls Attachments P252 FO \U > <( \U > :i! '" 5TH 5T GTH 5T 4TH 5T ONTARIO CITY LI PROJECT LOCATION CITY OF RANCHO CUCAMONGA VICINITY MAP EAST AVENUE STORM DRAIN CONNECTION EAST AVENUE AT FOOTHILL BOULEVARD '0oOT \--\ \ \....'\-, Cy ~ ~ < uJ ~ ~ .s /I! / Q..; ! \c.-.\r..<7IV\v'\k. \ l \0 \; / (/' / 1'1\ \? o\v\ 6 uv\"- 6 ) 1 c1 / I". // VJ - - - /-- s- / ! ~'--, A 0- / I /,?/I I /..'.::-cf"(/ / C/] / I / IV .: \ I u 1 / I I \ -" I ""- --- C \ \'-\ '> L<^. ') \- {\ 'J~ DvC\\V\. ~OV\V1GC.\-\OV\ ?YO)~C\ l \0 'v~ Co '" ') \-vv "- \ <c. ~ b ~ -\ ~ e f'\\Jo6 Coy\~V'(J\ 'V\S\V-\c:.-\-) \'\0 Sco-.. \ ~ P253 k~w,J~y\~'1 Cyl(e.. ~ \ \; f I " I3L'J\:J. /'v / \ /1j " >--.:: I -----r-- <Y c. c)vV\-\'1 /---- / \ ;;- ~\oo~ :; I <5" GoV'\-\vV \ .5 ox Cv\v~('~ I v V-(O e (::\ 9" > -- 6 / ()/ V' ! D V' 3",\"\,, Cq,^- "> \vv'Q\1 UVJ V\~Y'f~VV1~V\1 C<l ~V\~ -r-\ oo~ Covy\"'-o\ tX.V\d. c ,\-"" -t-c<, \""'1< cJvV\.\v\,> ';o..",Sll.vC>.,\,,\€' c..""""V\V\e\ <\V\6 -\:'-1€. c\~\ t=.o.,s\- A-.Jf. S-\;:OYW\. Vy<^,\,,\ CoV\,,~c\\ I)V\ ~\ . . ~, P254 STAFF REpORT ENGINEERING DEP.WnIENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Willie Valbuena, Assistant Engineer Subject: APPROVAL OF MAP FOR TRACT 17923, LOCATED AT 9356 19TH STREET, EAST OF HELLMAN AVENUE, SUBMITTED BY DEKEL, LLC, A CALIFORNIA LIMITED LIABILITY CORPORATION RECOMMENDATION It is recommended that the City Council adopt the attached resolution approving Tract Map 17923 and authorizing the City Clerk to cause said map to record. BACKGROUND/ANALYSIS Tentative Tract Map 17923, located at 9356 19th Street, east of Hellman Avenue, in the Medium Residential District (8-14 dwelling units per acre), was approved by the Planning Commission on July 26, 2006. This project is for a subdivision converting 10 existing rental units into 10 residential condominiums on 1.03 acres afland. Respectfully submitted, Gc( ([tel) / / William J. O'Neil City Engineer WJO:WV:tv Attachment(s) ";;.: .....; :'~:;"":.:.'";.:t.,,, .::. ;: ~/ . . ::~:: :;,~::::: r[;:~:~;{~ '~": ~:~rH :::I.';' "" ....., ...~ . .::~' ~;? ::~:;: ~.'.'. ~~t " :','; '.-.',f .~~: ;';:;': ...... -;.:;. :"'.1 ::J.:=:~::::;::::...::;:.:C ::'::(;it) CITY OF RANCHO CUCAMONGA ENGINEERING DIVISION :';'.' ...... ...... ..... "., ~;~r 3~ ~~~~ P255 I PROJECT' LOCATION ~~~ i. , ; '.'~. ;':ff:: ~~~~ ~~::~: ~:~.~ ~.;~. ;:~S: ...... " ":0:': ~;:? ;J i~~ .... ~-.":' ..... ':< :'J-.:: ....... ::~t A.. N ITEM: T,RAC7 17f1.'J TITLE:YIC/NITr ~ P256 RESOLUTION NO. () (,,-.11 t A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, APPROVING TRACT MAP NO. 17923 WHEREAS, Tentative Tract Map 17923, submitted by Dekel, LLC., a California Limited Liability Corporation and consisting of a subdivision converting 10 existing residential rental units into 10 residential condominiums on 1.03 acres of land, located at 9356 19th Street, east of Hellman Avenue, in the Medium Residential District (8-14 dwelling units per acre), was approved by the Planning Commission of the City of Rancho Cucamonga on July 26, 2006; and WHEREAS, Tract Map No. 17923 is the final map of the division of land approved as shown on the Tentative Parcel Map; and WHEREAS, all the requirements established as prerequisite to approval of the final map by the City Council of said City have now been met by Dekel, LLC, a California Limited Liability Company, as developer; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, that said Tract Map NO.17923 be and the same is hereby approved and the City Engineer is authorized to present same to the County Recorder to be filed for record. P257 STAFF REpORT ENGINEERING DEP.WTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: ACCEPT IMPROVEMENTS, RELEASE THE FAITHFUL PERFORMANCE CASH DEPOSIT, ACCEPT A MAINTENANCE CASH DEPOSIT AND FILE A NOTICE OF COMPLETION FOR IMPROVEMENTS FOR DRC2003-00213 LOCATED ON THE EAST SIDE OF MILLIKEN AVENUE, NORTH OF 4TH STREET, SUBMITTED BY FAIRMONT HOSPITALITY, INC. RECOMMENDATION: The required improvements for DRC2003'-00213 have been completed in an acceptable manner, arid it is recommended that the City Council accept said improvements, authorize the City Engineer to file a Notice of Completion and authorize the City Clerk to release the Faithful Perfonnance Cash Deposit and accept a Maintenance Cash Deposit. BACKGROUND/ANALYSIS: As a condition of approval of completion of DRC2003-00213, located on the east side of Milliken Avenue, north of 4th Street, the applicant was required to complete improvements. The improvements have been completed and it is recommended that the City Council release the existing Faithful Performance Cash Deposit and accept the Maintenance Cash Deposit. Developer: Fairmont Hospitality, Inc.: 17100 Pioneer Blvd., #400, Artesia, Ca 90702 Release: Faithful Performance Cash Deposit # CR054915 (Cash Deposit No.) $67,900.00 Accept: Maintenance Cash Deposit # CR095003 (Cash Deposit No.) $8,150.00 Respectfully submitted, " ,,' J' , .. ,,_) - ,/t '. '.j!2r' ( r ({ C William J. O'Neil City Engineer WJO:TCH Attachment(s) P258 . VICINITY MAP ARROW HWY. 9 < CD o It:: < E AIRPORT 0 City of Rancho Cucamonga ENGINEERING. DIVISION NOT TO SCALE FOOlHIU. 4lH SlREET i5 lC :s 10 Item: DRC2003-00213 Title: VICINITY MAP EXHIBIT: 1 P259 RESOLUTION NO. ()(P-,dCf 7 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF . RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR DRC2003-00213 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK WHEREAS, the construction of public improvements for DRC2003-00213 have been completed to the satisfaction of the City Engineer; and WHEREAS, a Notice of Completion is required to be filed, certifying the work is complete. NOW, THEREFORE, the City Council of the City of Rancho Cucamonga hereby resolves, that the work is hereby accepted and the City Engineer is authorized to sign and file a Notice of Completion with the County Recorder of San Bernardino County. P260 STAFF REpORT ENGINEERING DEP.~RT^IENT Date: December 20, 2006 . RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Council From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: ACCEPT IMPROVEMENTS, RETAIN $1,240.00 OF THE FAITHFUL PERFORMANCE CASH DEPOSIT IN LIEU OF A MAINTENANCE BOND AND FILE A NOTICE OF COMPLETION FOR IMPROVEMENTS FOR DRC2002-010B, LOCATED ON THE SOUTHWEST CORNER OF ARROW ROUTE AND WHITE OAK AVENUE, SUBMITTED BY STOR-N-LOCK PARTNERS # 18, LLC RECOMMENDATION: The required improvements for Stor-N-Lock Partners # 18, LLC have been completed in an acceptable manner~ and it is recommended that the City Council accept said improvements, authorize the City Engineer to file a Notice of Completion and authorize the City Clerk to retain $1,240.00 of the Faithful Performance Cash Deposit in lieu of a Maintenance Bond. BACKGROUND/ANALYSIS: As a condition of approval of completion of DRC2002-0 I 023, located on the southwest comer of Arrow Route and White Oak Avenue, the applicant was required to complete street improvements. The improvements have been completed and it is recommended that the City Council retain a portion of the Faithful Performance Cash Deposit in lieu of a Maintenance Bond. Respectfully submitted, (_1Y ((('tel William J. O'Neil City Engineer WJO:TCH Attachment(s) ~ N.TS ! f;:j I w > '" < o o '" ll:: JERSEY . 'METRO . UNK '" ::> z ~ r ()'\-\ ffi ~ P261 DRC2002. -0 1023. VICINITY MAP BLVD. '" ::> z ~ ~G'00 \Z~. . 1 1 -, O'0G~ ,.,', '4-: , -'~ I ~ . IY:'. ~\L ~ </ . 0 ~ I I SAN BERNAROINO AVENUE 'r- \-- z . -, < OUJ '-.) ~ 4TH STREET ffi g '" 3 0: :i w ~ INTERSTATE 10 ~-- 1--1 I GITI' OF FONTANA cln OF ONTARIO VICINITY MAP ._~ P262 RESOLUTION NO. {)(p- 318 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR DRC2002-01023 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK WHEREAS, the construction of public improvements for DRC2002-01023 have been completed to the satisfaction of the City Engineer; and WHEREAS, a Notice of Completion is required to be filed, certifying the work is complete. NOW, THEREFORE, the City Council of the City of Rancho Cucamonga hereby resolves, that the work is hereby accepted and the City Engineer is authorized to sign and file a Notice of Completion with the County Recorder of San Bernardino County. P263 STAFF REpORT ENGINEERING DEP.\RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: ACCEPT IMPROVEMENTS, RELEASE THE FAITHFUL PERFORMANCE BOND, ACCEPT A MAINTENANCE BOND AND FILE A NOTICE OF COMPLETION FOR IMPROVEMENTS FOR TRACT 14496-1 LOCATED ON THE NORTHWEST CORNER OF WILSON AVENUE AND DAY CREEK BOULEVARD, SUBMITTED BY GRANITE HOMES RECOMMENDATION The required improvements for Tract 14496-1 have been completed in an acceptable manner, and it is recommended that the City Council accept said improvements, authorize the City Engineer to file a Notice of Completion and authorize the City Clerk to release the Faithful Performance Bond and accept a Maintenance Bond. BACKGROUND/ANALYSIS: As a condition of approval of completion of Tract 14496-1, located on the northwest comer of Wilson Avenue and Day Creek Boulevard, the applicant was required to complete improvements. The improvements have been completed and it is recommended that the City Council release the existing Faithful Performance Bond and accept the Maintenance Bond. Developer: Granite Homes: 17891 Cartwright Road, Irvine, Ca 92614 Release: Faithful Performance Bond # B34226990 (Bond No.) # SU5012868 (Bond No.) $743,700.00 Accept: Maintenance Bond $74,370.00 Respectfully submitted, Jt (({i:>cl , / William J. O'Neil City Engineer WJO:TCH:tv Attachment(s) P26 .~ . .. . . ILlL/~'-' .. (""'1\ ,;1 "lu.," C>. ~J ..-.-- . I W ((_SoN . . . t . . : < .. . ;; i . . . . ... 1: . . u .; u .. "". ~AN'IAN S"m.nu:l 4..e.....~ ~ .: . .. . :. ,; oj .. " .. .; a . BOUNOARY OF ANNEXATION ~... .. .. . . E .E . " CITY OF RANCHO CUCAMONGA ENGINEERING DIVISION NORTIrlf NTS ITEM: Tract -- ~ TITLE: Rancho Etiwanda EXHIBIT: Vicinity Map P265 RESOLUTION NO. 6to- 3q1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR TRACT 14496-1 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK WHEREAS, the construction of public improvements for Tract 14496-1 have been completed to the satisfaction of the City Engineer; and WHEREAS, a Notice of Completion is required to be filed, certifying the work is complete. NOW, THEREFORE, the City Council of the City of Rancho Cucamonga hereby resolves, that the work is hereby accepted and the City Engineer is authorized to sign and file a Notice of Completion with the County Recorder of San Bernardino County. P266 STAFF REpORT ENGINEERING DEP"\RT~IENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: RELEASE OF MAINTENANCE GUARANTEE BOND FOR DRC2002-00511, LOCATED AT 8657 AND 8661 PECAN A VENUE (APN: 229-181-09 AND 229- 181-12), SUBMITTED BY SAMUEL V. DICARLO AND BARBARA J. DICARLO RECOMMENDATION It is recommended that City Council authorize the City Clerk to release the Maintenance Guarantee Bond, for DRC2002-00511, located at 8657 and 8661 Pecan Avenue (APN: 229-181-09 and 229- 181-12), submitted by Samuel V. DiCarlo and Barbara J. DiCarlo BACKGROUND/ANALYSIS The required one-year maintenance period has ended and the street improvements remain free from defects in materials and workmanship. DEVELOPER Samuel V. DiCarlo and Barbara J. DiCarlo 8657 Pecan Ave., Ste. # 100 Rancho Cucamonga, Ca 91737 Release: Maintenance Guarantee Bond #836472S $2,710.00 Respectfully submitted, C}dft{ l~GQ j William J. O'Neil City Engineer WJO:TCH:tv Attachment P267. Page 1 of 1 City 01 Rancho Cucamonga ENGINEERING DIVISIOt; OLVD ~ RO~~ ~-.ctl -"""'2..ob5ll ."'.~ hem 1........Ul-U) 6657 Po:>on IAl'lI:ZllI-1Bl-<l9) , STRUT' 10 PWY 1 I Item: Staff Roport TItle: VloInlly Map EXHIBIT 1: DRC2002.0051 1 P268 STAFF REpORT ENGINEERlNG DEP",RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: RELEASE OF MAINTENANCE GUARANTEE CASH DEPOSIT FOR DRC2002- 00499, LOCATED AT THE SOUTHWEST CORNER OF 6TH STREET AND FAIRWAY VIEW PLACE, SUBMITTED BY KSL RANCHO CUCAMONGA, L.P. RECOMMENDATION It is recommended that City Council authorize the City Clerk to release the Maintenance Guarantee Cash Deposit, for DRC2002-00499, located at the southwest comer of 6th Street and Fairway View Place, submitted by KSL Rancho Cucamonga, L.P. BACKGROUND/ANALYSIS The required one-year maintenance period has ended and the street improvements remain free from defects in materials and workmanship. DEVELOPER KSL Rancho Cucamonga, L.P. 5790 Fleet St. Carlsbad, Ca 92008 Release: Maintenance Guarantee Cash Deposit # CR080865 $3,910.00 Respectfully submitted, /-, (~r (([c. cf / " William J. O'Neil City Engineer WJO:TCH:tv Attachment(s) , .. .... P269- 'i) (J-r:~ .1_.." 'I' \ " '.-' ',.- ,;,}""..: ARROW : I".: - ~.... . EMPIRE LAkES ' GOLF COUR$j:: .,-,~'; .t.. i- w > <: 6TH '~ ST. > <: I . , NORlH CITY OF RANCHO CUCAMONGA ENGINEERING DIVIBION ~',~ >--. ~ ~~ ::f ~~ ::i ~h,i ,~~' -'-t... c' . . '.... '. . 'ROUTE . ' . ' ,SITE, " .. 5177 SJ: ' ,4TH STREET ~ " I'J ITEM:afCI1ld2-tJlJ~9'1 TITLE:J/IC/NITr M~ EXHIBIT: P270 STAFF REpORT ENGINEERING DEP.~RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: RELEASE OF MAINTENANCE GUARANTEE LETTER OF CREDIT FOR DRC2001-00638, LOCATED ON THE WEST SIDE OF DAY CREEK BOULEVARD AT HIGHLAND AVENUE, SUBMITTED BY DAY CREEK INVESTORS, LLC RECOMMENDATION It is recommended that City Council authorize the City Clerk to release the Maintenance Guarantee Letter of Credit, for DRC2001-00638, located on the west side of Day Creek Boulevard at Highland Avenue, submitted by Day Creek Investors, LLC BACKGROUND/ANALYSIS The required one-year maintenance period has ended and the street improvements remain free from defects in materials and workmanship. DEVELOPER Day Creek Investors, LLC 567 San Nicholas Dr., Ste #340 Newport Beach, Ca 92660 Release: Maintenance Guarantee Letter of Credit "Highland Avenue" #NZS527105 "Day Creek Blvd." #NZS527096 $25,390.00 $19,350.00 Respectfully submitted, ...--, t'" . (. ;;; IV) .t/ I ! (' f --1/"(/ / / ~t. ./ / . , ./ William 1. O'Neil City Engineer WJO:TCH:tv Attachment(s) G P271 1 ....-.----.."....- , .-....---.-----.t, -'. J .-. --_.._--_.!.~.- ._.._._-~~----.,- -..... t ~~~~~_L--.:.-,____._"_,,_. " \\ ":.! !I ~ n :1 J . 'ii' ....._~------ - ':' ;;::;.. H. .." 'I' ..,- I", . ~i. 1.; : - ~ :1 I.; h t' H I"j :1 JJ r , . , I;;;. I' I:: i~': , : cl' '>,; , ~'. i' =.. , i;: i I~: l~: <. Q .. .. ....-,.-.~:. ..~ NQ. ~ '" ;'i_/~~;. .,.:' ..i'.-;..... .\i --\ I: ; ___,r I'," i Ii : :.'. t.! " t: ~ j u. f 1\ " ..\1 J" il "ill l:\,;.. '.: -:'" . ,,~,,~;. 'j., L ',-----' .~..-.-- / ,/ Ii \ i " ,. ~, if ;;, 'i, :f- i '-'-"::"~<"";'~'.. . i..--~'''. . ,. J I .~ ;.:-.,,:;/: , , ! -' .-' !' ..1 I I Q a , " , , i \-'----- \i , , I i NORTH 11' NTS CITY OF RANCHOCUCAMONGA ENGINEERING DIVISION TITLE: DRC2001-00638 EXHIBIT: Vicinity Map P272 STAFF REpORT ENGINEERING DEP"~RTMENT Date: December 20, 2006 To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: RELEASE OF MAINTENANCE GUARANTEE CASH DEPOSIT FOR PARCEL MAP 16271, LOCATED ON THE WEST SIDE OF UTICA AVENUE, NORTH OF JERSEY BOULEVARD, SUBMITTED BY BAKKEN INDUSTRIAL PROPERTIES, LLC RECOMMENDATION It is recommended that City Council authorize the City Clerk to release the Maintenance Guarantee Cash Deposit, for Parcel Map 16271, located on the west side of Utica Avenue, north of Jersey Boulevard, submitted by Bakken Industrial Properties, LLC BACKGROUND/ANALYSIS The required one-year maintenance period has ended and the street improvements remain free from defects in materials and workmanship. DEVELOPER Bakken Industrial Properties, LLC 31685 Sea Bluff Lane Laguna Beach, Ca 92651 Release: Maintenance Guarantee Cash Deposit # CR065579 $2,800.00 Respectfully submitted, .' ',. '; / t') ( . ,")' ' .", I ..~tt (t (j;' C . ..' William 1. O'Neil City Engineer WJO:TCH:tv Attachment(s) P273. Page I of I FOOlHlLL il\'1l. ~Ct.i ~ i lRROw ~rE 2~lh st. i ~ j lACm,ll. (]A. I ! Ijh St Q ~ 1A'IF.. ':1 ~ It:.II:lA Sf. CITY OF RANCHO CUCAMONGA . N ITEM: ~or, MA,P 1~971 TITLE: V/C'/Nt,..,.. ~ RNClNk&RJNG DIVISION P274 STAFF REpORT ENGINEERING DEP.WTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: RELEASE OF MAINTENANCE GUARANTEE CASH DEPOSIT FOR PARCEL MAP 16297, LOCATED AT THE SOUTHEAST CORNER OF WHITE OAK AVENUE AND EUCALYPTUS STREET, SUBMITTED BY LOT NUMBER ONE PARTNERSHIP, LLC RECOMMENDATION It is recommended that City Council authorize the City Clerk to release the Maintenance Guarantee Cash Deposit, for Parcel Map 16297, located at the southeast comer of White Oak Avenue and Eucalyptus Street, submitted by Lot Number One Partnership, LLC BACKGROUND/ANALYSIS The required one-year maintenance period has ended and the street improvements remain free from defects in materials and workmanship. DEVELOPER Lot Number One Partnership, LLC 28631 Paseo Zorro San Juan Capistrano, Ca 92675 Release: Maintenance Guarantee Cash Deposit # CR068382 $1,540.00 Respectfully submitted, 1 ... ." /' ". (' ,~-;(c~ ( ( Cf C . .I William J. O'Neil City Engineer WJO:TCH:tv Attachment(s) P275- , :,,;;R~:[': '" "RE' PARCEL MAP No. 16297 SHEU Z Of 2 LINE DATA T"SLE -., 11- 1.,rWn"L tl IIJT\1&"W. U .~.,'( .... " ')j.-" u "l,"~~'l ... .1 ,.r. u. " 'I U\ ._".( U2 " ." W ilU'l'.r\rl ~ .~ ~ .W......l 1M ."".'ff'. ---. -.. p .~ IjIO. LEGEND (....1 IN THE CITY OF RANCHO CUCAMONGA, CALIFORNIA BEING'" $UBOlVISlON or LOT 1 or C(RTlneAr[ Of' COlJPUANC( FOR LOT UH( 4.0JUSTt.lHH No. 5015, R'ECOROCO srpJE~8ER 2.3. 2003 ,\$ lHSTRUl.4ENT No. 2003-0720290. OfnCIJ.l RECORDS Of THE COV"TY RECORO(R Of THE COUNTY Of SAN BfRNARDIHO. STATE OF CALlmRHlA. DAN GUERRA .t AS$OCI,uES UAY, zoos CURVE DATA. TABLE ~. .- '- ...""... " J"u'st. llHlIl 91,01 " orw,.' ,~. !lUG " """.~ ,..."" "/." ~ \..~/ T '~..4G' 1 \ ~( I(J1 '?~. <0 .('v ,'~Q' .",D~ ,,"'. --=u 1'", -- ..... 0-0.'?61'~S,~~E~AL .yp.ri;;.".' '!~;'.J'-:l -~ ~'~1II ..'\.~ ,..-,,) 1ln-~'J.[2U,OO' __, _ -.... ",..0 l'" ~ ~ 1t,,.U')t'(lIOJ,J'(_.''1l) 1 .,.+ \.110 C. _ I ~__..... r:""l' 0;'" J'l"IlIUl:VQJnu.$C)l[lfll"(ll ~USOll:"'P(. .,'" ,.,:0 ~' IIITlO,N1:II1 ... 11_'__ (UL n' IlUC.. _ _-ow_ 'A. , ."," . ,.......,..'\.. 1 Of'" I "Q .~'...... JI.l2fI... It. .. t ..... ~ ~ I , ~l............... , ~.. ~ ! : \..0-( ........ . J \....\....p.... ;.r .., , t\oo. .: ~ ! I \\'lj31"....'Zoo 0 .~. 11.TU... It. is t t'lt'I~012v UJ.\aoooI 11:! .'2."" I ...J '2. 6An '" 6>7~1'"o,," <;""S'-'.r;;:.t. p .> .iJ1 .s. /) '~ < ..~,,,,Q'" ^~,^, 1(" 2 .. ~.,~' MatCe\ ~~ ,r ~ " ..-./ , \" / ?_~I~~\_~;AP" ~~~:~;' / P.MB. .z~;;"'~~;\ ,../ ," __./ \, ~aTce\ ,'.--,--::,/ \\/,A ),. ./ \ \ '\ /" v-- cal a \ " \ ?3' ~, ',- , , '" . o '" .. '_'Tn "" .....u..o.r .00:- ... '" =~~~ ":,"f:'" ....... "". ,.~. '..... '."-'. '''/M-SS "'D ~'r,",ft~.~~~ !;;.;.r.~\"'...~;,-r,;J_~,:,.,~nft ::::C=~5 ...~~[mcm',~,:"~.II?:~mtD 'r" 0" ~ ''''''''un "'K[, .....1-1[.. .,....'"(0 I.C_', ..... 'e or '1' BASIS of BEARING rid "..."" ,,_ 1.F'''',i.' t_ .,"'" ""( w.mo..... 0' l~t''''JUI "orn u...,""....o.....ca _It'CIJ'.','.L ".,.r:rI,<-UOI'<CO.,n Of '11[ ~ Of _ ~_. s...., c"'-"_..., VSO U ,.., ........OIM:"-""""S""''''''...... P276 STAFF REpORT ENGINEERING DEP.\RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: RELEASE OF MAINTENANCE GUARANTEE BOND FOR TRACT 16432, LOCATED AT THE SOUTHWEST CORNER OF 19TH STREET AND AMETHYST STREET, SUBMITTED BY CUCAMONGA VENTURES, LLC RECOMMENDATION It is recommended that City Council authorize the City Clerk to release the Maintenance Guarantee Bond, for Tract 16432, located at the southwest comer o.f 19th Street and Amethyst Street, submitted by Cucamonga Ventures, LLC BACKGROUND/ANALYSIS The required one-year maintenance period has ended and the street improvements remain free from defects in materials and workmanship. DEVELOPER Cucamonga Ventures, LLC c/o Manning Homes 20151 SW Birch Street, Ste. # 150 Newport Beach, Ca 92660 Release: Maintenance Guarantee Bond #2123123 OO-M $246,900.00 Respectfully submitted, (fc/lie cQ William J. O'Neil City Engineer WJO:TCH:tv Attachment(s) P277- , -J t; w J z w Z cr q: f-- I HILLSIDE (/) u ROAD q: f t;:; ::E RANCHO 0 >- -J f-- CUCAMONGA I w W W W t; W ~ :l :::> I :::> w =< ::> z z z n:: <t Z w W : NOT TO!iCA.t.E W f- <( > ~ ~ 1Il W c( ~ LEMON AVENUE . I 'HIGHLAND AVE. ! 19TH STREET ;z 0 c( -J q: :J <( z CD 1Il W W I 0 Z ~ Z ::; w :J a:: u a:: ~ <( a: w --' U <( I I ::E ROAD PROJECT SITE VICINITY MAP CITY OF RANCHO CUCAMONGA ENGINEERING DIVISION ITEM: ~CT MAP ffo4-'32- TITLE: VICIIVITY MAP EXHIBIT: .t P278 STAFF REpORT ENGINEERING DEP.\RTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: RELEASE OF MAINTENANCE GUARANTEE BOND FOR THE LANDSCAPE INFRASTRUCTURE PHASE I, II & III IMPROVEMENTS FOR RANCHO ETIWANDA, LOCATED ON BOTH SIDES OF DAY CREEK BOULEVARD NORTH OF THE 210 FREEWAY, SUBMITTED BY RANCHO ETIWANDA 685, LLC RECOMMENDATION It is recommended that City Council authorize the City Clerk to release the Maintenance Guarantee Bond, for the Landscape Infrastructure Phase I, II & III Improvements for Rancho Etiwanda, located on both sides of Day Creek Boulevard north of the 210 Freeway, submitted by Rancho Etiwanda 685, LLC BACKGROUND/ANALYSIS The required one-year maintenance period has ended and the street improvements remain free from defects in materials and workmanship. DEVELOPER Rancho Etiwanda 685, LLC Attn: Susan Morales 2392 Morse Avenue Irvine, Ca 92614 Release: Maintenance Bonds (Landscape Infrastructure) Phase I: #SU6001717 Phase II: #SU6001712 Phase II: #SU6001750 $ 102,500.00 $ 171,530.00 $ 39,930.00 Respectfully submitted, ...--, ()ZC'tt/{l C/ WIlliam J. O'Neil City Engineer WJO:TCH:tv Attachment(s) // L I ---- ~'/:/Y '\\111,'- / -------~' r--- 1= ~ ~ ""- ~ ~- /-~ ~ ~ ~ I- ~<Z~ 'f-V I~tl ffi:B:HH ~ lIT] .HI ,(3::i fi ~?I I; Y HJJIIII ~;t6-Q r / 1: H II I III1 I J r-, It::::4 1=1 ~ W~ .~ I~ Dr . I III II I ,r III, I1I111I ,,51 1111 " T l1=ralll: j M--,~ I t<:V Will jJ '-4/ II / i=lu i M-" Iffr<n~ ~~ I H ,.1111 lLJ IWIIIII. -.J t::( 1t:'-v~ --.J it:J ,=1\-i:'-i:::H \ 1I11 J II I : U 'J I 1IIII1 1 /1 I ~JI Day Creek Boulevard ' i Lil I IL'H lOJ:rr,-' \r II _ j III II J t : R LII 1111111 /T 1/ 0 Median, 210 Fwy to Wilson, ...... r 0 Both sides, Vintage to Wilson \JIIIII I:: . f-LJJII 1111- 0 West side north of Wilson "l.UW LU U/ : III~: r ~ ~ lilli 111//: u 1I11r:- L , P. .."- /rTr ~ , 'TNUL ' ;rm I- lIUJIUILJ . I ~~/ ....../ I t= ~LJ f- : ~\l ~ ffia=J ; laiL l~ Q;LHj i ~,ffi1H1Hffi1 _, ~ r- llllllll~ ~~8 I ' >-----I:fj /5 WI" I I l . VIHTJ/It,E III ~ llli Jill v a I CITY OF RANCHO CUCAMONGA ENGINEERING DIVISION P279. , LMD 10 Vintage Drive o North side with Paseo Banyan Str . Trail (T) to Bluegr . North sid eet on south side, Rochester ass e, SCE to Rocking Horse Wilson Avenue o Median, Day Creek to Bluegrass o Trail (T) on south side, SCE to Bluegrass . North side, SeE to Day Creek Bluegrass Avenue . West side, School to Wilson Existing Intenor Paseos (5) are 8W Concrete (C) with no landscaping May 2005 NORTH 11 1 H = 1000' Vicinity Map LMD 10: Rancho Etiwanda Landscape Infrastructure P280 STAFf REpORT ENGINEERING DEP.WTMENT Date: December 20, 2006 RANCHO CUCAMONGA To: Mayor and Members of the City Council Jack Lam, AICP, City Manager From: William J. O'Neil, City Engineer By: Tasha Hunter, Public Service Tech I Subject: ACCEPT IMPROVEMENTS, RELEASE THE FAITHFUL PERFORMANCE BOND, ACCEPT A MAINTENANCE BOND AND FILE A NOTICE OF COMPLETION FOR IMPROVEMENTS FOR PARCEL MAP 15923 LOCATED AT THE SOUTHWEST CORNER OF CHURCH STREET AND MAYTEN AVENUE, SUBMITTED BY LDC COUGAR, LLC RECOMMENDATION The required improvements for Parcel Map 15923 have been completed in an acceptable manner, and it is recommended that the City Council accept said improvements, authorize the City Engineer to file a Notice of Completion and authorize the City Clerk to release the Faithful Performance Bond and accept a Maintenance Bond. BACKGROUND/ANALYSIS As a condition of approval of completion of Parcel Map 15923, located at the southwest comer of Church Street and Mayten Avenue, the applicant was required to complete improvements. The improvements have been completed and it is recommended that the City Council release the existing Faithful Performance Bond and accept the Maintenance Bond. Developer: LDC Cougar, LLC: 1156 N. Mountain Avenue, Upland, Ca 91786 Release: Faithful Performance Bond # 8368915 (Bond No.) #8368915 (Bond No.) $508,800.00 Accept: Maintenance Bond $50,880.00 Respectfully submitted, I,._//{((l ~( William J. O'Neil City Engineer WJO:TCH:tv Attachment(s) ) .> ~, 4:, !i .~ ','~, ~ :I: , ' FOOTHill '. BLW ARROW ROUlE PARCEL MAP 15923 c\..c.~,,\,o\. ....'~r-..- h")'~;t . jf~',,;., ~V;;;'\1g.""ee,,;))':>.~, '- r ..., 'f}iXi'" '"' 0, c.../f:,( ~ E~f6' " ~, 1977 CITY OF RANCHO CUCAlvIONGA ENGINEERING DIVISION VICINITY MAP P281 ..... , I title; ^ N pa~e '-It P282 RESOLUTION NO. OitJ- LjDO A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACCEPTING THE PUBLIC IMPROVEMENTS FOR PARCEL MAP 15923 AND AUTHORIZING THE FILING OF A NOTICE OF COMPLETION FOR THE WORK WHEREAS, the construction of public improvements for Parcel Map 15923 have been completed to the satisfaction of the City Engineer; and WHEREAS, a Notice of Completion is required to be filed, certifying the work is complete. NOW, THEREFORE, the City Council of the City of Rancho Cucamonga hereby resolves, that the work is hereby accepted and the City Engineer is authorized to sign and file a Notice of Completion with the County Recorder of San Bernardino County. P283 STAFF REpORT RANCHO CUCAMONG"~ FIRE PROTECTION DISTRICT Date: December 20, 2006 RANCHO CUCAMONGA To: President and Members of the Board of Directors Jack Lam, AICP, City Manager From: Peter M. Bryan, Fire Chief By: Janet Walker, Management Analyst II-Financial Administration Subject: ANNEXATION OF APN 0201-811-56 TO AN EXISTING COMMUNITY FACILITIES DISTRICT (CFD NO. 85-1) RECOMMENDATION Consideration of adoption of a resolution making determinations and authorizing the submittal of the levy of special taxes to the qualified electors of territory proposed to be annexed (Rancho Plaza Partnership, LLC - Annexation No. 06-11) to an existing Community Facilities District and calling a special election. BACKGROUND Rancho Plaza Partnership, LLC (APN 0201-811-56) has submitted a proposal to demolish an existing 6,188 square foot building and replace with a 11,870 square foot building and is conditioned by the City and Fire District to annex to the existing Community Facilities District (CFD) No. 85-1 in order to mitigate the development's impact upon fire protection services. On November 15, 2006, the Board initiated formal annexation proceedings by adopting a . resolution approving a boundary map (Exhibit "A") of the territory proposed to be annexed and the Resolution of Intention to Annex APN 0201-811-56 into the existing CFD 85-1. This resolution, among other things, declared the intention of the Board of Directors to levy a special tax within the territory proposed to be annexed to finance fire protection and suppression services and setting a public hearing regarding the proposed annexation to be held on December 20, 2006. Through adoption of this resolution before the Board this evening, the Board will accomplish the following: . Make certain determinations as set forth in the resolution . Call for a special election to be conducted on December 21, 2006 . Authorize submittal of the levy of the special tax to qualified electors P284 Annexation of Territory to an existing CFD No. 85-1 December 20, 2006 ANALYSIS The annexation of APN 0201-811-56 into CFD 85-1 will satisfy the conditions of development relating to mitigating impacts upon fire protection services. Rancho Plaza Partnership, LLC, property owner, is in full support of the annexation of the property being annexed. The Registrar of Voters has certified there are no registered voters residing within the territory to be annexed. Therefore, the election will be a landowners vote, the landowner having one vote per acre or portion thereof of land within the territory proposed to be annexed. Rancho Plaza Partnership, LLC has executed a "Consent and Waiver" of time frames relating to the election. Exhibit "A" of the Resolution sets forth the rate and method of apportionment of the special tax proposed to be levied within the territory to be annexed which is consistent with the special tax levied upon all territory currently within CFD No. 85-1. At the special election to be held on December 21, 2006, the landowner will cast their vote ballot(s). The Board Secretary will then canvas the ballot(s). At the next Board meeting the Board will consider adopting the resolution declaring the election results. If 2/3rds of the votes cast are in favor of the levy of the special tax, the Board may declare the property to be annexed. A representative for the property owner will be present during the meeting should any questions arise regarding these proceedings. The Public Notice regarding the Public Hearing has been advertised in the Inland Valley Daily Bulletin. ZectfuIlY,"bm;"d' Peter M. Bryan Fire Chief Attachments P285 RESOLUTION NO. FD 06- 061 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT, RANCHO CUCAMONGA, CALIFORNIA, DECLARING THE ANNEXATION OF TERRITORY (ANNEXATION NO. 06-11) TO AN EXISTING COMMUNITY FACILITIES DISTRICT (CFD 85-1), CALLING A SPECIAL ELECTION AND AUTHORIZING THE SUBMITTAL OF THE LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS WHEREAS, the BOARD OF DIRECTORS (the "Board of Directors") of the RANCHO CUCAMONGA FIRE PROTECTION DISTRICT (the "Fire Protection District"), RANCHO CUCAMONGA, CALIFORNIA, has previously declared its intention and held and conducted proceedings relating to the annexation of territory to an existing community facilities district pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, and specifically Article 3.5 thereof (the "Act"). The existing Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 85-1 (the "District"); and, WHEREAS, notice of a public hearing relating to the annexation of territory to the District, the extent of the territory to be annexed (the "Annexation Area"), the furnishing of certain public services and all other related matters has been given; and, WHEREAS, it has now been determined that written protests have not been received by 50% or more of the registered voters residing either within the Annexation Area or the District and/or property owners representing more than one-half (1 /2) or more of the area of land within the Annexed Area or within District; and, WHEREAS, inasmuch as there have been less than twelve (12) persons registered to vote within the Annexation Area for each of the 90 preceding days, this legislative body desires to submit the levy of the required special tax to the landowners of the Annexation Area, said landowners being the qualified electors as authorized by law. NOW, THEREFORE, the Board of Directors of the Rancho Cucamonga Fire Protection District does hereby resolve as follows: SECTION 1. RECITALS The above recitals are all true and correct. SECTION 2. DETERMINATIONS It is determined by this Board of Directors that: A. all proceedings prior hereto were valid and taken in conformity with the requirements of law, and specifically the provisions of the Act; B. less than twelve (12) registered voters have resided within the Annexation Area for each of the ninety (90) days preceding the close of the public hearing and, consequently, the qualified electors shall be the landowners of the Annexation Area and each landowner who is the owner of record as of the close of the public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that she or he owns within the Annexation Area; C. the time limit specified by the Act for conducting an election to submit the levy of the special taxes to the qualified electors of the Annexation Area and the requirements for impartial analysis and ballot P286 Resolution No. FD 06- Page -2- arguments have been waived with the unanimous consent of the qualified electors ofthe Annexation Area; D. the Secretary, acting as the election official, has consented to conducting any required election on a date which is less than 125 days following the adoption of any resolution annexing the Annexation Area to the District; and E. the public services proposed to be financed from the proceeds of special taxes to be levied within the Annexation Area are necessary to meet increased demands placed upon the Fire Protection District as a result of development and/or rehabilitation occurring in the Annexation Area. SECTION 3. BOUNDARIES OF ANNEXED AREA The boundaries and parcels of land in the Annexation Area and on which special taxes are proposed to be levied in order to pay the costs and expenses for the public facilities and services described in Section 4 below are generally described as follows: All that property and territory proposed to be annexed to the District, as said property is shown on a map as previously approved by this legislative body, said map entitled "Boundary Map of Community Facilities District No. 85-1 Annexation No. 06-11 Rancho Cucamonga Fire Protection District, County Of San Bernardino, State Of California" (the "Annexation Map"), a copy of which is on file in the Office of the Secretary and shall remain open for public inspection. SECTION 4. DESCRIPTION OF SERVICES The services that are authorized to be financed from the proceeds of special taxes levied within the District are certain services which are in addition to those services required for the territory within the District and will not be replacing services already available. A general description of the services authorized to be financed by the District is as follows: The performance by employees of functions, operations, maintenance and repair activities in order to provide fire protection and suppression services. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide such services. The same types of services which are authorized to be financed by the District from the proceeds of special taxes levied within the District are the types of services proposed to be financed from the special taxes proposed to be levied within the Annexation Area. If and to the extent possible such services shall be provided in common with District and the Annexation Area. SECTION 5. SPECIAL TAX Except where funds are otherwise available and subject to the approval of the qualified electors of the Annexation Area, a special tax sufficient to pay for such services required for the Annexation Area, secured by recordation of a continuing lien against all non-exempt real property in the Annexation Area will be levied annually within the boundaries of the Annexation Area. For particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit "A" which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the Annexation Area to clearly estimate the maximum amount of the special tax that such person will have to pay. P287 Resolution No. FD 06- Page -3- The special taxes shall be collected in the same manner as ad valorem properly taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency, as applicable for ad valorem taxes; however, as applicable, this Board of Directors may, by resolution, establish and adopt an alternate or supplemental procedure as necessary. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer of the Rancho Cucamonga Fire Protection District, acting for and on behalf of the District. SECTION 6. SPECIAL TAX ACCOUNTABILITY MEASURES Pursuant to and in compliance with the provisions of Government Code Section 50075.1, this Board of Directors hereby establishes the following accountability measures pertaining to the levy by the District of the special taxes within the Revised Annexation Area as described in Section 5 above: A. Each such special tax shall be levied for the specific purposes section in Section 5. above. B. The proceeds of the levy of each such special tax shall be applied only to the specific applicable purposes set forth in Section 5. above. C. The District shall establish a separate account into which the proceeds of the special taxes levied within the District shall be deposited. D. The Fire Chief or his or her designee, acting for and on behalf of the District, shall annually file a report with the Board of Directors as required pursuant to Government Code Section 50075.3. SECTION 7. ELECTION The proposition related to the levy of the special tax shall be submitted to the qualified electors of the Annexation Area, said electors being the landowners, with each landowner having one (1) vote for each acre or portion thereof of land which he or she owns within said annexed territory. The special election shall be held on the 21st day of December 2006, and said election shall be a special election to be conducted by the Secretary (hereinafter "Election Official"). If the proposition for the levy of the special tax receives the approval of more than two-thirds (2/3) of the votes cast on the proposition, the special tax may be levied as provided for in this Resolution and the Board of Directors may determine that the Annexation Area is added to and part of the District. SECTION 8. BALLOT The ballot proposal to be submitted to the qualified voters at the election shall generally be as follows: . PROPOSITION A RANCHO CUCAMONGA FIRE PROTECTION DISTRICT COMMUNITY FACILITIES DISTRICT NO. 85-1, . AUTHORIZATION FOR SPECIAL TAX LEVY Shall Community Facilities District No. 85-1 of the Rancho Cucamonga Fire Protection District be authorized to levy special taxes within the territory shown on "Boundary Map of Community Facilities District No. 85-1 Annexation No. 06-11 Rancho Cucamonga Fire Protection District, County Of San Bernardino, State Of California" (the "Annexation Map") P288 Resolution No. FD 06- Page -4- pursuant to the rate and method of apportionment of special taxes (the "Special Tax Formula") set forth in Ordinance No. FD 43 to finance authorized services and administrative expenses? SECTION 9. VOTE The appropriate mark placed in the voting square after the word "YES" shall be counted in favor of the adoption of the proposition, and the appropriate mark placed in the voting square afte'r the word "NO" in the manner as authorized, shall be counted against the adoption of said proposition. SECTION 10. ELECTION PROCEDURE The Election Official is hereby authorized to take any and all steps necessary for the holding of said election. Said Election Official shall perform and render all services and proceedings incidental to and connected with the conduct of said election, and said services shall include, but not be limited to the following: A. Prepare and furnish to the election officers necessary election supplies for the conduct of the election. B. Cause to be printed the requisite number of official ballots, tally sheets and other necessary forms. C. Furnish and address official ballots for the qualified electors of the Annexation Area. D. Cause the official ballots to be mailed and/or delivered, as required by law. E. Receive the returns of the election. F. Sort and assemble the election material and supplies in preparation for the canvassing of the returns. G. Canvass the returns of the election. H. Furnish a tabulation of the number of votes given in the election. I. Make all arrangements and take the necessary steps to pay all costs of the election incurred as a result of services performed for the District and pay costs and expenses of all election officials. J. Conduct and handle all other matters relating to the proceedings and conduct of the election in the manner and form as required by law. P289 Resolution No. FD 06- Page -5- PASSED, APPROVED, AND ADOPTED this _ day of AYES: NOES: ABSENT: ABSTAINED: 2006. Donald J. Kurth, M.D., President ATTEST: Debra J. Adams, Secretary I, DEBRA J. ADAMS, SECRETARY of the Rancho Cucamonga Fire Protection District, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the Board of Directors of the Rancho Cucamonga Fire Protection District, at a Regular Meeting of said Board held on the _ day of 2006. Executed this _ day of 2006 at Rancho Cucamonga, California. Debra J. Adams, Secretary P290 Resolution No. FD 06- Page -6- EXHIBIT "A" COMMUNITY FACILITIES DISTRICT NO. 85-1 ANNEXATION NO. 06-11 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES The rate and method of apportionment, limitations on and adjustment to the Special Tax shall be as follows: To pay for fire suppression services and to finance fire suppression facilities, the Maximum Special Tax in Community Facilities District No. 85-1, Annexation No. 06-11 for Fiscal Year 2006-2007 shall be: Stru ctu res Maximum Annual Special Tax Multi-Family 2DU: 3 DU: 4 DU: 5-14 DU: 15-30 DU: 31-80 DU: 81-upDU: 1.75 2.25 2.65 2.65 6.15 10.65 23.15 = ($138.06) = ($138.06) = ($138.06) = ($138.06) = ($138.06) + {.35 (TU-4) = ($138.06) + {.30 (TU-14) = ($138.06) + {.25 (TU-30) = ($138.06) + {.20 (TU-80) ($138.06)) ($138.06)} ($138.06)} ($138.06)} Residential 1 DU Industrial ($138.06) per acre + $.075 per SF ($138.06) per a'cre + $.092 per SF Commercial Note: DU = Dwelling Unit TU = Total Units SF = Square Foot ANNUAL ADJUSTMENT The maximum Special Tax shall be annually adjusted commencing on July 1, 2006 and each July 1st thereafter for (a) changes in the cost of living or (b) changes in cost of living and changes in population as defined in Section 7901 of the Government Code; as amended, whichever is lesser. P291 Resolution No. FD 06- Page -7- REDUCTION IN SPECIAL TAX . Commercial and industrial structures shall be granted a reduction in the Special Tax for the installation of complete sprinkler systems. In addition, multi-floor commercial and industrial structures. shall be granted a reduction in Special Tax for each separate floor above or below the main ground floor of the structure. LIMITATION ON SPECIAL TAX LEVY The Special Tax shall only be levied on Developed Property. Developed Property is defined to be property: which is not owned by a public or governmental agency; which is not vacant; where a "certificate of occupancy" or "utility release" from the City of Rancho Cucarnonga has been issued; which has an existing building or structure onsite; which does not have as its sole use power transmission towers, railroad tracks, and flood control facilities. Areas granted as easements for such purposes shall be subtracted from the total acreage of the underlying lot. The annual levy of the Special Tax shall be based upon an annual determination by the Board of Directors of the Rancho Cucamonga Fire Protection District of the amount of other revenues available to meet budget requirements. As used in this formula, "available revenue" shall include ad valorem taxes, State of California augmentation, tax increment revenues received from the Redevelopment Agency of the City of Rancho Cucamonga and any other source of revenue except the Special Tax. The Board of Directors shall take all responsible steps to retain maximum Redevelopment Agency funding to which, by agreement, they may lawfully receive. To the extent available revenues are insufficient to meet budget requirements, the Board of Directors may levy the Special Tax. For further particulars regarding the rate and method of apportionment of the Special Tax, reference is made to the Final Report Mello-Roos Community Facilities District No. 85-1 for Fire Suppression Facilities/Services - Foothill Fire Protection District, a copy of which is on file in the office of the Fire Chief of the Rancho Cucamonga Fire Protection District. P292 RANCHO CUCAMONGA FIRE PROTECTION DISTRICT Staff Report DATE: December 20, 2006 TO: President and Members of the Board of Directors Jack Lam, AICP, City Manager FROM: Peter M. Bryan, Fire Chief BY: Pamela Pane, Management Analyst II SUBJECT: APPROVAL FOR THE DISTRICT TO PROCEED WITH THE CURRENT CONCEPT PLANS FOR STATION 177 AND APPROVAL TO PROCEED WITH DISCUSSIONS WITH SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT, AND PROCEED WITH THE COMPLETION OF AN EIR TO LOCATE STATION 177 ON THE ALTERNATIVE SURPLUS FLOOD CONTROL PROPERTY LOCATED ON THE WEST SIDE OF HELLMAN AVENUE, SOUTH OF HILLSIDE ROAD RECOMMENDATION It is recommended that the Fire District Board of Directors approve direction for the District to proceed with the current concept plans for Station 177 and approval to proceed with discussions with San Bernardino County Flood Control District, and proceed with the completion of an Environmental Impact Report (EIR) to locate Station 177 on the alternative surplus flood control property located on the west side of Hellman Avenue, south of Hillside Road. BACKGROUND/ANALYSIS The Fire District has received the draft EIR for the Station 177 project, as prepared by LSA Associates, Inc. The EIR process and the information in the draft EIR has steered the District to seek an alternative location to site the station. The District would recommend the alternative surplus flood control property, located on the west side of Hellman Avenue, south of Hillside Road, as the alternative location for the EIR process. In discussions with the EIR consultant, they have indicated the alternative location will lengthen the Station 177 project process by approximately one (1) year. There will be additional costs associated with the alternative site. P293 APPROVAL TO PROCEED WITH THE CURRENT CONCEPT PLANS FOR STATION 177 December 20, 2006 Page 2 The initial appraisal for the property by the County is $850,000; a revised and updated appraisal has been requested from the County and the District is proposing to hire an independent appraiser to verify the value of the property. The independent appraisal may also provide the District a negotiating position in order to reduce the purchase cost. The District's civil engineering firm has estimated the cost of necessary soil for filling and compacting the site at approximately $900,000. The County has fill material near the proposed parcel and negotiations with them may lead to reduced fill and compaction costs. Site development conditions are being investigated and determined by the City's Community Development departments. There will most likely be street improvements, drainage and other conditions. Once the development conditions are determined, the concept plan developed and the environmental completed, the District will present a more accurate amount of the cost for Station 177. The goal is to get the EIR process to transition to the new site and to also advise the Board that increased costs in the project are associated with it. The additional costs are not expected to affect the construction of Station 178 or 172; those projects are both Redevelopment projects. Station 177 is proposed to be funded by District and City reserves, and cannot be funded by the Agency. It is hoped that the alternative site will also reduce impacts associated with the environmental issues. The proposed alternative site is approximately 3.9 acres and the larger site could provide environmental mitigation offset for future Station 178. Consideration of this alternative will continue to site the station within the area that will meet the primary project objective of obtaining a four-minute travel time to emergency incidents in the northwest portion of the City. Staff would recommend approval and requests direction from the Fire District Board to proceed with the current concept plans for Station 177 and approval to proceed with discussions with San Bernardino County Flood Control District, and proceed with the completion of an Environmental Impact Report (EIR) to locate Station 177 on the alternative surplus flood control property located on the west side of Hellman Avenue, south of Hillside Road. Respectfully Submitted, 1!!!~~ Supplemental Information to the City Manager's St~ff Reports Fire Protection District December 20,2006 Northwest Fire Station 177 Project Timeline . August 2005 - Fire District began gathering data for possible vacant property of Y2 acre or greater, in the area south of Hillside, north of Wilson, east of Carnelian, and west of Amethyst - as shown on the aerial map generated by the GIS division, within the black border · August 23, 2005 - Chief Bryan met with representatives from four (4) horse riding clubs to discuss and prioritize equestrian concerns with a station in the northwest area and to list the potential site locations in the area . October 19, 2005 - Letters mailed to seven (7) parcel owners (two within the black border and five outside) to scope interest to sell. One (1) parcel owned by San Bernardino Flood Control District could not be sold, one (1) owner contacted the District to indicate they were not interested in selling, (2) two properties indicated interest, and no response from the remaining three (3) owners (two (2) of those were under one (1) acre) · October 20, 2005 - Community meeting on Mustang Rd. with residents from that street and surrounding area · December 1,2005 - Meeting with community and equestrian groups at Heritage Park Equestrian Center · Anyone who expressed interest in updated information was included on a distribution list and periodic informational updates were sent · June 7, 2006 - Community meeting held at Heritage Park Equestrian Center · June 21, 2006 - Fire Board approved Station 177 concept plans and gave direction to proceed with the project at Heritage Park · Jljly 2006 - Request for Proposals received from three (3) Environmental Consultants to complete an Environmental Impact Report (EIR) - Negative Declarations are typically prepared for Fire Stations, but due to the nature of this project, the Fire District was advised to proceed with the EIR ' · July 25, 2006 - Architect Request for Qualifications (RFQ) released - award of RFQ is pending · August 16, 2006 - Award by the Fire Board to LSA Associates to prepare the EIR · September 6, 2006 - Fire Board approved the Public Noticing Distance for the EIR to be set at 1,000 feet (increased from the 300 foot requirement) · September 26, 2006 - Notice of Preparation of a Draft EIR released and the Public Review Period began on September 2ih. · October 16,2006 - Public Scoping meeting in Council Chambers · October 27, 2006 - Public Review Period of the Notice of Preparation ended · December 14, 2006 - Draft EIR released - information contained in the EIR has steered the Fire District to seek an alternative location to site the project . Negative Declaration - If an Initial Study does not produce substantive evidence, nor reasonably infer that the project may produce significant adverse environmental impacts, the lead agency must adopt a Negative Declaration. Mitigated Negative Declaration - If the Initial Study determines that the proposed action, with the incorporation of identified mitigation measures, will not have a significant effect on the environment, a Mitigated Negative Declaration can be prepared. . Environmental Impact Report (EIR) - An EIR is prepared to provide the public and the decision-makers with detailed information about a project's environmental effects, ways to minimize the project's significant environmental effects, and reasonable alternatives to the project. Under the California Environmental Quality Act (CEQA), an EIR must be prepared whenever there is substantial evidence, in light of the whole record, that a project may have a significant effect on the environment. 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Bruce, GIS/Special Districts Manager AUTHORIZATION OF THE ISSUANCE OF THE CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) 2007 SPECIAL TAX BONDS AND APPROVAL OF THE FORMS OF THE FISCAL AGENT AGREEMENT, BOND PURCHASE AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND OTHER TRANSACTIONAL DOCUMENTS. RECOMMENDATION: It is recommended that the City Council, acting in its capacity as the legislative body of Community Facilities District No. 2006-01 (Vintner's Grove) (the "District"), adopt the resolution (the "Resolution ofIssuance") to authorize the issuance of bonds for the District to finance the acquisition or construction of certain authorized public improvements and to approve the form of a Fiscal Agent Agreement, Bond Purchase Agreement, Preliminary Official Statement and Continuing Disclosure Agreement pertaining to such bonds. BACKGROUND: The District - Formation: Authorized Improvements The District was formed by the City Council on October 18, 2006, following a public hearing on such date. Following the formation of the District, the City of Rancho Cucamonga (the "City") conducted an election within the District and the qualified electors of the District voted unanimously to authorize the issuance of bonds in a maximum principal amount of $5,800,000 to be secured by the levy of special taxes within the District. . The improvements authorized to be financed from the proceeds of such bonds include: (a) streets; (b) landscape within the public right-of-way; (c) other facilities to be owned by the City which are authorized to be financed from the proceeds of the City's transportation, P295 Page 2 December 20, 2006 beautification, parks and recreation facility and drainage fees levied by the City within the District; (d) water and sewer facilities to be owned by Cucamonga Valley Water District ("CVWD") which are authorized to be financed from the proceeds of capacity charges levied by CVWD; and (e) wastewater treatment facilities to be owned by the Inland Empire Utilities Agency ("IEUA") from the proceeds of fees levied by IEUA within the District. On October 18, 2006, the City Council also approved an AcquisitionlFinancing Agreement by and between the City, Lewis Investment Company, LLC, the master developer of the property within the District, and William Lyon Homes, the owner of the property within the District to establish, among other provisions, the terms and conditions pursuant to which the special tax bonds would be issued and pursuant to which the proceeds of such bonds would be utilized to acquire or construct the authorized improvements. The City has also entered into Joint Community Facilities Agreements with both CVWD and IEUA, the other public agencies which will own improvements to be financed through the District. The District encompasses approximately 20.5 gross acres of land in the southerly portion of the City. Of this acreage, approximately 9.5 acres are expected to be developed into uses subject to the special tax. At buildout, it is currently expected the District will contain approximately 76 detached residential dwelling units ranging in size from 2,188 to 3,173 square feet, and 78 attached residential units ranging in size from 1,335 to 1,920 square feet. The Prooosed Soecial Tax Bonds. The City Council is now being asked to adopt the Resolution of Issuance to approve the issuance of not to exceed $5,800,000 City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds (the "Bonds") to finance the acquisition and construction of the authorized improvements, to fund a reserve fund, to fund capitalized interest on the Bonds through September I, 2007 and to pay costs of issuance of the Bonds and formation of the District. The Bonds will be secured solely from the proceeds of special taxes levied within the District pursuant to the rate and method of apportionment of the special taxes. Neither the faith and credit nor the general taxing power of the City is pledged to the payment of the Bonds. The Resolution oflssuance. By adoption ofthe Resolution ofIssuance the City Council will be: . Authorizing the issuance of the Bonds in a principal amount not to exceed $5,800,000; . Approving the form of the following documents related to the issuance, sale and delivery of the Bonds: P296 Page 3 December 20, 2006 c Fiscal Agent Agreement (the "Fiscal Agent Agreement") by and between the City, for and on behalf of the District, and Wells Fargo Bank, National Association (the "Fiscal Agent"); c Preliminary Official Statement; c Bond Purchase Agreement by and between the City and Stone & Youngberg LLC (the "Underwriter"); and c Continuing Disclosure Agreement by and between the City, on behalf of itself and the District, and the Fiscal Agent, as dissemination agent (the "Continuing Disclosure Agreement"). . Delegating to the City Manager the authority to approve the final form of the foregoing documents (collectively, the "Bond Documents") with such additions therein or changes as the City Manager may deem necessary and advisable and to execute the Bond Documents for and on behalf of the City and the District. . Authorizing the sale of the Bonds to the Underwriter so long as the terms of such sale conform to the following financial parameters: c The aggregate principal amount of the Bonds shall not exceed $5,800,000; . c The annual interest rate on the Bonds shall not exceed 6.5%; and c The purchase price to be paid by the Underwriter for the Bonds shall not exceed 98% of the par amount of the Bonds, e.g., if the par amount of the Bonds is $5,800,000 and the purchase price is 98%, the Underwriter will pay the City $5,684,000 for the Bonds. Description of the Bond Documents. The Bond Documents are on file in the office of the City Clerk and are available for inspection and review during normal business hours of such office. The following is a brief description of the Bond Documents: . Fiscal Agent Agreement. The Fiscal Agent Agreement establishes the terms and conditions pursuant, to which the Bonds will be issued and subsequently administered. Among other terms and conditions the Fiscal Agent Agreement: c Sets forth the maturity schedule and interest rates applicable to the Bonds; c Establishes various funds and accounts to be held by the Fiscal Agent into which the proceeds of the Bonds and the special taxes will be distributed and establishes the terms and conditions pursuant to which such funds are to be transferred to, among other purposes, pay (a) the costs of issuance of the P297 Page 4 December 20, 2006 Bonds, (b) debt service on the Bonds, (b) the purchase price for the acquisition of the authorized improvements, (c) the costs of administration of the Bonds and the District for the first year (such costs shall be funded from special tax revenues in all subsequent years); c Sets forth covenants of the City necessary to, among other purposes, maintain the tax -exempt status of the Bonds and insure that adequate special taxes are levied annually to pay scheduled debt service on the Bonds. . Bond Purchase Agreement. The Bond Purchase Agreement establishes the terms and conditions pursuant to which the City will offer to sell and the Underwriter will offer to purchase the Bonds. The Bond Purchase Agreement will be finalized and executed on the day on which the Bonds are priced, i.e., the day on which the City staff, with the assistance of Fieldman Rolapp "& Associates, the City's financial advisor, -and the Underwriter negotiate and agree upon the final principal amount of the Bonds, the principal amount of the Bonds to mature each year, the interest rates payable on Bonds the purchase price to be paid for the Bonds by the Underwriter. The schedule contemplates that the Bonds will be priced on January 11,2007. . Preliminary Official Statement. The Preliminary Official Statement is the offering document and is required to contain all relevant and material information necessary to enable a prospective purchaser of the Bonds to make an informed decision to purchase or not to purchase the Bonds. The Preliminary Official Statement contains, among other information, information regarding: o The District including the ownership of the property within the District, the proposed development within the District, the facilities to be financed, the projected absorption of property within the District, the appraised value of the property within the District and the cumulative tax, assessment and fee burden on the properties within the District; c The security for the Bonds; c The rate and method of apportionment of the special taxes authorized to be levied within the District; c The terms and conditions pursuant to which the Bonds will be issued and administered; c The risks that prospective purchasers of the Bonds should consider before making an investment decision. . Continuing Disclosure Agreement. The Continuing Disclosure Agreement contains the commitment by the City mandated by federal securities to provide ongoing information to the municipal bond market regarding the Bonds and the District. The City is agreeing to provide an annual report regarding the status of the Bonds and the District and to Page 5 December 20, 2006 provide additional reports in the event of the occurrence of certain specified events such as a delinquency in the payment of scheduled debt service on the Bonds, optional redemption of the Bonds pursuant to the Fiscal Agent Agreement or amendments to the Fiscal Agent Agreement. Value to Debt Ratio - Conformance with the Acquisition/Financing Agreement and Applicable Goals and Policies. The AcquisitionlFinancing Agreement provides that the value of the property within the District subject to the levy of special taxes as determined by an independent appraisal undertaken for the City utilizing appraisal assumptions approved by the City shall be at least three times (3: 1) the principal amount of the Bonds. The City retained the services of Bruce W. Hull & Associates, Inc. (the "Appraiser") to conduct an independent appraisal of the property within the District. The Appraiser submitted an appraisal dated October 23, 2006 in which the Appraiser estimated that the fee simple market value of the properties within the District as of October 15, 2006 was $22,000,000. Based upon this appraisal, the appraised . value of the property within the District subject to the levy of the special taxes shall be 3.85 times the principal amount of the Bonds. Therefore, the proposed issuance of the Bonds does conform to the terms of the Acquisition Agreement. In addition, the value to debt ratio of 3.85:1 also complies with the requirements of the Act and the City's Amended and Restated Goals and Policies that were in effect at the time the District was formed and which are applicable to the District. Staff will be prepared to answer specific questions, which the City Council may have regarding the proposed issuance of the Bonds, the Bond Documents and/or the Resolution of Issuance. ~;r~ ~~ela S. Easter Assistant City Manager /{~!/3 ~.( Brucee GIS/Special Districts Manager Attachments: Resolution Fiscal Agent Agreement Bond Purchase Agreement Preliminary Official Statement P29S P299 RESOLUTION NO. 06-!iJ2J RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2006- 01 (VINTNER'S GROVE), AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF SPECIAL TAX BONDS OF THE DISTRICT, APPROVING THE FORM OF FISCAL AGENT AGREEMENT, BOND PURCHASE AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND OTHER DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS WHEREAS, the CITY COUNCIL of the CITY OF RANCHO CDCAMONGA, CALIFORNIA (this "City Council"), did previously conduct proceedings to form and did form a community facilities district pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act ofl982", being Chapter 2.5, Part I, Division 2, Title 5 of the Government Code of the State of California (the "Act"), such Community Facilities District designated as COMMUNITY FACILITIES NO. 2006-01 (VINTNER'S GROVE) (the "Community Facilities District") for the purpose of financing the acquisition or construction of certain public improvements; and, WHEREAS, as required by the Act, this City Council has previously adopted a statement of local goals and policies concerning the use of the Act entitled the "City of Rancho Cucamonga Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts" (the "Goals and Policies"); and WHEREAS, this City Council has previously declared its intention to issue bonds to finance the acquisition or construction of such improvements, such bonds to be issued pursuant to the terms and provisions ofthe Act and the Goals and Policies; and, WHEREAS, at this time this City Council desires to set forth the general terms and conditions relating to the authorization, issuance and administration of such bonds; and, WHEREAS, the forms ofthe following documents have been presented to and considered for approval by this City Council: A. Fiscal Agent Agreement by and between the City and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent") setting forth the terms and conditions relating to the issuance and sale of bonds (the "Fiscal Agent Agreement''); B. Bond Purchase Agreement authorizing the sale of bonds to Stone & Youngberg LLC, the designated underwriter (the "Bond Purchase Agreement"); C. Preliminary Official Statement containing information including but not limited to the Community Facilities District and the bonds, including the terms and conditions thereof (the "Preliminary Official Statement"); and P300 D. Continuing Disclosure Agreement by and between the City and Wells Fargo Bank, National Association, as dissemination agent, pursuant to which the Community Facilities District will be obligated to provide ongoing annual disclosure relating to the bonds (the "Continuing Disclosure Agreement"); and WHEREAS, this City Council, with the aid of City staff, has reviewed and considered the Fiscal Agent Agreement, the Bond Purchase Agreement, the Continuing Disclosure Agreement and the Preliminary Official Statement and finds those documents suitable for approval, subject to the conditions set forth in this resolution;'and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance ofthe bonds as contemplated by this resolution and the documents referred to herein exist, have happened and have been performed or have been ordered to have been performed in due time, form and manner as required by the laws ofthe State of California, including the Act and the applicable policies and regulations of the City of Rancho Cucamonga. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE), DOES HEREBY RESOLVE, DECLARE, FIND, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. Recitals. The above recitals are true and correct. SECTION 2. Determinations. This legislative body hereby makes the following determinations pertaining to the proposed issuance of the Bonds: (a) The Act authorizes the City Council, acting as the legislative body of the Community Facilities District, to sell the Bonds only if the City Council has determined prior to . the award of the sale of the Bonds that the value of such properties will be at least 3 times the principal amount of the Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the Community Facilities District or a special assessment levied on property within the Community Facilities District (collectively, "Land Secured Bonded Indebtedness") The value of the property within Community Facilities District which will be subject to the special tax to pay debt service on the Bonds will be at least 3 times the Land Secured Bonded Indebtedness Allocable to such properties. The foregoing determinations are based upon the full cash value of such properties and development areas as shown upon an appraisal of the subject properties prepared by Bruce Hull & Associates, a state certified real estate appraiser, as defined in Business and Professions Code Section l1340( c). Such determination was made in a manner consistent with the Goals and Policies. P301 (b) The terms and conditions of the Bonds as contained in the Fiscal Agent Agreement are consistent with and conform to the Goals and Policies. (c) As a result of the current status of development of the property within the Community Facilities District and the relative overall lack of diversity of ownership of property within the Community Facilities District, the private sale of the Bonds will result in a lower overall cost to the Community Facilities District. SECTION 3. Bonds Authorized. Pursuant to the Act, this Resolution and the Fiscal Agent Agreement, special tax bonds of the City designated as "City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2005 Special Tax Bonds," (the "Bonds") in an aggregate principal amount not to exceed $5,800,000 are hereby authorized to be issued. The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms, covenants and conditions ofthe Bonds shall be as provided in the Fiscal Agent Agreement as finally executed. SECTION 4. Authorization and Conditions. The City Manager and such other official or officials of the City as may be designated by this City Councilor the City Manager (each, an "Authorized Officer") are each hereby authorized and directed to execute and deliver the final form of the various documents and instruments described in this Resolution, with such additions thereto or changes therein as such Authorized Officer may deem necessary and advisable provided that no additions or changes shall authorize an aggregate principal amount of Bonds in excess of$5,800,000, an annual interest rate on the Bonds in excess of six and one half percent (6.50%) per year and a purchase price for the Bonds not less than ninety eight percent (98%) of the par amount of the Bonds (excluding original issue discount, if any). The approval of such additions or changes shall be conclusively evidenced by the execution and delivery of such documents or instruments by an Authorized Officer, following consultation with and review by the City Attorney and Best Best & Krieger LLP, the City's bond counsel. SECTION 5. Fiscal Al!ent Al!reement. The form of Fiscal Agent Agreement by and between the City and the Fiscal Agent, with respect to the Bonds as presented to this City Council and on file with the City Clerk is hereby approved. An Authorized Officer is hereby authorized and directed to cause the same to be completed and executed, subject to the provisions of Section 4 above. SECTION 6. Official Statement and Continuinl! Disclosure Al!reement. The City Council hereby approves the form of the Preliminary Official Statement as presented to this City Council and on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the City Manager or, in the absence of the City Manager, another Authorized Officer. Pursuant to Rule l5c2-12 under the Securities Exchange Act of 1934 (the "Rule") the City Manager or, in the absence of the City Manager, another Authorized Officer is authorized to determine when the Preliminary Official Statement is deemed final, and the City Manager or such other Authorized Official is hereby authorized and directed to provide written certification thereof. The execution of the final Official Statement, which shall include such changes and additions thereto deemed advisable by the City Manager or, in the absence of the City Manager, another Authorized Officer pursuant to the Rule, shall be conclusive evidence of the approval of the final Official P302 Statement by the Community Facilities District. The City Council hereby authorizes the distribution ofthe final Official Statement by the Underwriter as the initial purchaser of the Bonds. The form of Continuing Disclosure Agreement as presented to this City Council and on file with the City Clerk is hereby approved. An Authorized Officer is hereby authorized and directed to cause the same to be completed and executed on behalf ofthe Community Facilities District, subject to the provisions of Section 4 above. SECTION 7. Sale of Bonds. This City Council hereby authorizes and approves the negotiated sale of the Bonds to Stone & Youngberg LLC (the "Underwriter"). The form ofthe Bond Purchase Agreement is hereby approved and an Authorized Officer is hereby authorized and directed to execute the Bond Purchase Agreement upon the execution thereofby the Underwriter, subject to the provisions of Section 4 above. SECTION 8. Bonds PreDared and Delivered. Upon the execution ofthe Bond Purchase Agreement, the Bonds shall be prepared, authenticated and delivered, all in accordance with the applicable terms of the Act and the Fiscal Agent Agreement, and any Authorized Officer and other responsible City officials, acting for and on behalf ofthe Community Facilities District, are hereby authorized and directed to take such actions as are required under the Bond Purchase Agreement and the Fiscal Agent Agreement to complete all actions required to evidence the delivery of the Bonds upon the receipt of the purchase price thereof from the Underwriter. SECTION 9. Actions. All actions heretofore taken by the officers and agents of the City with respect to the establishment ofthe Community Facilities District and the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the proper officers ofthe City, acting for and on behalf ofthe Community Facilities District, are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements, contracts, and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with the Act, this Resolution, the Fiscal Agent Agreement, the Bond Purchase Agreement, the Continuing Disclosure Agreement, and any certificate, agreement, contract, and other document described in the documents herein approved. SECTION 10. Effective Date. This resolution shall take effect from and after its adoption. P303 PASSED, APPROVED, And ADOPTED this AYES: day of ,2006. NOES: ABSENT: ATTEST: Ronald J. Kurth, M.D. Mayor Debra J. Adams, CMC, City Clerk P304 FISCAL AGENT AGREEMENT by and between CITY OF RANCHO CUCAMONGA and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Fiscal Agent Dated as of December 1, 2006 Relating to: $ City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds SDPUB\ WDlVEN\338650.2 P305 TABLE OF CONTENTS PAGE ARTICLE I. STATUTORY AUTHORITY AND DEFINITIONS............................................... 2 Section 1.1. Authoritv for this Agreement................................................................................. 2 Section 1.2. Agreement for Benefit of Owners of the Bonds ....................................................2 Section 1.3. Definitions.............................................................................................................. 2 ARTICLE II. THE BONDS......................................................................................................... IS Section 2.1. Principal Amount: Designation............................................................................ 15 Section 2.2. Terms of the Bonds.............................................................................................. 15 Section 2.3. Redemption. .... ... .......................................... ............................................ .... ........ 17 Section 2.4. Effect of Redemption...................................................................... .....................19 Section 2.5. FOrln of Bonds .....................................................................................................20 Section 2.6. Execution of Bonds ............................................... .................................... ........... 20 Section 2.6. Transfer of Bonds ................................................................................................ 20 Section 2.8. Exchange of Bonds .............................................................................................. 21 Section 2.9. Bond Register....................................................................................................... 21 Section 2.10. Temporary Bonds...............................................................................................21 Section 2.11. Bonds Mutilated. Lost. Destroved or Stolen...................................................... 21 Section 2.12. Limited Obligation............................................................................................. 22 Section 2.13. No Acceleration ................................................................................................. 22 Section 2.14. Book-Entry Svstem............................................................................................23 ARTICLE III. ISSUANCE OF BONDS ..................................................................................... 24 Section 3.1. Issuance and Delivery of Bonds .......................................................................... 24 Section 3.2. Pledge of Special Tax Revenues........................................................................... 24 Section 3.3. Validity of Bonds................................................................................ ................. 25 ARTICLE IV. FUNDS AND ACCOUNTS ................................................................................ 26 Section 4.1. Deposits of Bond Proceeds ..................................................................................26 Section 4.2 Proiect Fund ................................................................. ................: ........... .... ......... 26 Section 4.3. Costs ofIssuance Fund ........................................................................................ 28 Section 4.4. Reserve Fund .......................................................................................................29 Section 4.5. Bond Fund.............................. .................................................................... .......... 30 Section 4.6. Special Tax Fund ................................................................................................. 31 Section 4.7. Administrative Expense Fund.............................................................................. 33 Section 4.8. Rebate Fund ...................... ............. ..................................................... ................. 33 Section 4.9 Redemption Fund.... ... ........... ...................................................................... .......... 34 ARTICLE V. OTHER COVENANTS OF THE CITy............................................................... 34 Section 5.1. Punctual Pavrnent................................................................................................. 34 Section 5.2. Extension of Time for Pavrnent. .......................................................................... 35 Section 5.3. Against Encumbrances......................................................................................... 35 Section 5.4. Books and Records .............................................................................................. 35 -I- SDPUBIWDIYEN\338650.2 P306 Section 5.5. Protection ofSecuritv and Rights of Owners ...................................................... 35 Section 5.6. Compliance with Law .......................................................................................... 35 Section 5.7. Collection of Special Tax Revenue......................................:............................... 36 Section 5.8. Reduction in Maximum Annual Special Tax....................................................... 37 Section 5.9. Covenant to Foreclose...........................,..............................................................37 Section 5.10. Further Assurances.............................................................................................38 Section 5.11. Private Activitv Bond Limitations. .................................................................... 38 Section 5.12. Federal Guarantee Prohibition ........................................................................... 38 Section 5.13. Rebate ReQuirement..........................................................................................38 Section 5.14. No Arbitrage ......................................................................................................39 Section 5.15. Yield ofthe Bonds. ............................................................................................ 39 Section 5.16. Maintenance of Tax-Exemption ........................................................................39 Section 5.17. Continuing Disclosure to Owners...................................................................... 39 Section 5.18. Tender of Bonds............................................................................... ..................40 Section 5.19. No Parity Bonds.................................................................................................40 ARTICLE VI. INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE CITY .............................................................................................................................. 40 Section 6.1. Deposit and Investment ofMonevs in Funds ...................................................... 40 Section 6.2. Liabi1itv ofCitv...............,.................................................................................... 42 Section 6.3. Employment of Agents bv City ............................................................................ 43 ARTICLE VII. THE FISCAL AGENT ....................................................................................... 44 Section 7.1. Appointment of Fiscal Agent....................................:.......................................... 44 Section 7.2. Liabilitv of Fiscal Agent ......................................................................................45 Section 7.3. Information ..................................................................... .............. ............... ........ 46 Section 7.4. Notice to Fiscal Agent ......................................................................................... 46 Section 7.5. Compensation; Indemnification........................................................................... 46 ARTICLE VIII. MODIFICATION OR AMENDMENT OF THIS AGREEMENT ..................47 Section 8.1. Amendments Permitted........................................................................................ 47 Section 8.2. Owners' Meetings ................................................................................................ 47 Section 8.3. Procedure for Amendment with Written Consent of Owners.............................. 48 Section 8.4. Disqualified Bonds...... .............................................................................. ........... 48 Section 8.5. Effect of Supplemental Agreement...................................................................... 49 Section 8.6. Endorsement or Replacement of Bonds Issued After Amendments.................... 49 Section 8.7. Amendatory Endorsement of Bonds.................................................................... 49 ARTICLE IX. EVENTS OF DEFAULT; REMEDIES............................................................... 50 Section 9.1. Events of Default ................................................................................................. 50 Section 9.2. Remedies of Owners............................................................................. ...............50 Section 9.3. Application of Special Tax Revenues and Other Funds After Defaul!................ 51 ARTICLE X. MISCELLANEOUS ............................................................................................. 53 Section 10.1. Benefits of Agreement Limited to Parties. ........................................................ 53 Section 10.2. Successor is Deemed Included in All References to Predecessor ..................... 53 Section 10.3. Discharge of Agreement. ................................................................................... 53 -11- SDPUBI WDlVENI338650.2 P307 Section 10.4. Execution of Documents and Proof of Ownership by Owners. ......................... 54 Section 10.5. Waiver of Personal Liability.............................................................................. 54 Section 10.6. Notices to and Demands on City and Fiscal Agent ...........................................54 Section 10.7. State Reporting Requirements ........................................................................... 55 Section 10.8. Partial Invalidity.................................................................................................56 Section10.9. Unclaimed Monevs. ............................................................................................ 56 Section 10.10. Applicable Law................................................................................................ 56 Section 10.11. Conflict with Act.............................................................................................. 56 Section 10.12. Conclusive Evidence of Regularity ................................................................. 56 Section 10.13. Payment on Business Day................................................................................ 56 Section 10.14. Counterparts .................... ................ .............. ........................... ............ ...... ...... 56 EXHIBIT A: FORM OF SERIES 2006-01 (VINTNER'S GROVE) BOND EXHIBIT B: FORM OF REQUEST FOR DISBURSEMENT OFFICER'S CERTIFICATE -111- SDPUBIWDIVENI338650.2 P308 FISCAL AGENT AGREEMENT $ City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds THIS FISCAL AGENT AGREEMENT (the "Agreement") is made and entered into as of December I, 2006, by and between the City of Rancho Cucamonga, California, a mimicipal corporation, organized and existing under and by virtue of the Constitution and laws of the State of California (the "City") for and on behalf of the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) (the "District"), and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent"). WITNESSETH: WHEREAS, the City Council of the City has formed the District under the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311, et seq. of the California Government Code) (the "Act") and Resolution No. 06-322 of the City Council adopted on October 18, 2006 (the "Resolution of Formation"); WHEREAS, the City Council, as the legislative body with respect to the District, is authorized under the Act to levy Special Taxes (as herein defined) to pay for the costs of acquisition or construction of public facilities within the District and to authorize the issuance of bonds secured by said Special Taxes under the Act; WHEREAS, under the provisions of the Act, on December 6, 2006, the City Council of the City adopted its Resolution No. 06-_ (the "Resolution"), which resolution, among other matters, authorized the issuance of the City of Rancho Cucamonga, Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds (the "Bonds"), in the aggregate principal amount of not to exceed $5,800,000 and provided that such issuance would be in accordance with the Act and this Agreement, and authorized the execution hereof; WHEREAS, it is in the public interest and for the benefit of the City, the District and the Owners of the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, the disposition of the Special Taxes securing the Bonds and the administration and payment of the Bonds; and WHEREAS, all things necessary to cause the Bonds, when authenticated by the City for the District and issued as in the Act, the Resolution and this Agreement provided, to be legal, valid and binding and special obligations of the City for the District in accordance with their terms, and all things necessary to cause the creation, authorization, execution and delivery of this Agreement and the creation, authorization, execution and issuance of the Bonds, subject to the terms hereof, have in all respects been duly authorized; -1- SDPUB\WDIVEN\338650.2 P309 NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 1.1 Authoritv for this Agreement. This Agreement is entered into pursuant to the provisions of the Act and the Resolution. Section 1.2 Agreement for Benefit of Owners of the Bonds. The provISIOns, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Owners of the Bonds. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent may become the Owner of any of the Bonds in its own or any other capacity with the same rights it would have if it were not Fiscal Agent. Section 1.3 Definitions. Unless. the context otherwise requires, the terms defined in this Section 1.3 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof, unless otherwise specifically stated. "ACQuisition Account" the account within the Project Fund by that name established pursuant to Section 4.2(A) hereof. "AcQuisition/Financing Agreement" means the Acquisition/Financing Agreement by and between the City and Lewis Investment Company, LLC, a California Limited Liability Company, and William Lyon Homes, Inc., a California corporation, dated as of October 18, 2006. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Govemment Code. "Administrative Expense Fund" means the fund by that name established by Section 4.7(A) hereof. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of the District: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City, a designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); -2- SDPUBI WDIVEN\338650.2 P310 the costs of remitting the Special Taxes to the Fiscal Agent; the costs of the Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under this Agreement; the costs to the City, the District or any designee of either thereof of complying with arbitrage rebate requirements; the costs to the City, the District or any designee of either thereof of complying with City, District or obligated persons disclosure requirements; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, the District or any designee of either thereof related to an appeal of the Special Tax; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or District for any other administrative purposes of the District, including reasonable attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Administrative Expense ReQuirement" means an annual amount, initially equal to $25,000, to be allocated each Fiscal Year for payment of Administrative Expenses. This amount shall be annually adjusted upward by 2% per year. "Finance Director" means the Finance Director of the City, or the designee thereof as evidenced by a written certificate of the City Manager or the Finance Director delivered to the Fiscal Agent, acting for and on behalf of the District. "Agencv" means the Inland Empire Utilities Agency. "Agencv Account" the account within the Project Fund by that name established pursuant to Section 4.2(A) hereof. "Agencv Capacitv Facilities Amount" shall have the meaning given such term in the Water District JCFA. "Agreement" means this Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the provisions hereof. "Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of the provisions of Section 2.3(A)(iii) providing for mandatory sinking fund payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking fund payment due in such Bond Year pursuant to Section 2.3(A)(iii)). "Assistant Citv Manager" means the Assistant City Manager of the City, or the designee thereof as evidenced by a written certificate of the City Manager or the Assistant City Manager delivered to the Fiscal Agent, acting for and on behalf ofthe District. "Auditor" means the Auditor-Controller of the County. -3- SDPUBIWDIVEN\338650.2 P311 "Authorized Officer" means the City Manager, the Assistant City Manager or the Finance Director, acting on behalf of the District, or any person designated by the City Council, the City Manager or the Finance Director and authorized to act on behalf of the District under or with respect to this Agreement and all other agreements related hereto. "Average Annual Debt Service" means the average over all Bond Years (from the date of the Bonds to their maturity) of Annual Debt Service. "Bond Counsel" means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities. "Bond Fund" means the fund by that name established by Section 4.5(A) hereof. "Bond Register" means the books for the registration and transfer of Bonds maintained by the Fiscal Agent under Section 2.9 hereof. "Bond Year" means the one-year period beginning on September 2nd in each year and ending on the day prior to September I st in the following year, except that the first Bond Year shall begin on the Closing Date for the Bonds and end on September I, 2007. "Bonds" means the City of Rancho Cucamonga Community Facilities District No. 2006- 01 (Vintner's Grove) 2006 Special Tax Bonds at any time Outstanding under this Agreement or any Supplemental Agreement. . "Business Day" means any day other than (i) a Saturday or a Sunday, or (ii) a day on which banking institutions in the state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed. "CDIAC" means the Catifornia Debt and Investment Advisory Commission of the office of the State Administrative Services Director of the State of California or any successor agency or bureau thereto. "City" means the City of Rancho Cucamonga, California, and any successor thereto. "City Attorney" means any attorney or firm of attorneys employed by the City in the capacity of city attorney. "City Council" means the City Council ofthe City. "City Manager'~ means the City Manager of the City, acting for and on behalf of the District. "Closing Date" means , 2007, being the date upon which there is a delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser. -4- SDPUBIWDlVENI338650.2 P312 "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, . under the Code. "Commission" means the United States Securities and Exchange Commission. "Comptroller of the Currencv" means the Comptroller of the Currency of the United States. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, the printing costs, costs of reproducing and binding documents, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee, expenses incurred by the City in connection with the issuance of the Bonds and the expenses of the City in connection with the establishment of the District, special tax consultant fees and expenses, preliminary engineering fees and expenses, legal fees and charges, including Bond Counsel fees, financial consultant fees, appraiser fees and expenses, absorption consultant fees and expenses, charges for execution, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name established by Section 4.3(A) hereof. "Countv" means the County of San Bernardino, California. "Debt Service" means the scheduled amount of interest and amortization of principal payable by reason of Sections 2.2(D) and (E) on the Bonds during the period of computation, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Depositorv" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.14. "District" or "CFD" means the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove), formed by the City under the Act and the Resolution of Formation. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded -5- SDPUBIWDIVEN\338650.2 P313 on an established securities market (within the meaning of section 1273 of the Code) and, othetwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a fotward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is. a United States Treasury Security-State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. "Federal Securities" means any of the following which are non-callable and which at the time of investment are legal investments under the laws of the State of California for funds held by the Fiscal Agent: (i) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the United States Department of the Treasury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America, including, without limitation, such of the foregoing which are cornmonly referred to as "stripped" obligations and coupons; or (ii) any of the following obligations of the following agencies of the United States of America: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial ownership issued by the Farmers Home Administration, (c) participation certificates issued by the General Services Administration, (d) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, (e) project notes issued by the United States Department of Housing and Urban Development, and (f) public housing notes and bonds guaranteed by the United States of America. "Fiscal Agent" means the Fiscal Agent appointed by .the City and acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.1. "Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive. "Government Obligations" means obligations described in paragraph 1 of the definition of Permitted Investments. -6- SDPUB\WDIVEN\338650.2 P314 "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the City or the Finance Director, and who, or each of whom: (i) is judged by the Finance Director to have experience in matters relating to the issuance and/or administration of bonds under the Act; (ii) is in fact independent and not under the domination of the City; (iii) does not have any substantial interest, direct or indirect, with or in the City, or any owner of real property in the District, or any real property in the District; and (iv) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to . the City. "Information Services" means Bloomberg Municipal Repositories, P.O. Box 840, Princeton, New Jersey, 08542-0840; DPC Data Inc., One Executive Drive, Fort Lee, New Jersey, 07024; Interactive Data, 100 Williams Street, New York, New York, 10038, Attention: Repository; Standard & Poor's J. J. Kenny Repository, 55 Water Street, 45th Floor, New York, New York, 10041; and, in accordance with then current guidelines of the Commission, such other services providing information with respect to called bonds as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Interest Account" means the account within the Bond Fund by that name established pursuant to Section 4.5(A) hereof. "Interest Payment Dates" means March I and September I of each year, commencing March I, 2007. "Legislative Bodv" means the City Council of the City acting as the legislative body of the District. "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Moodv's" means Moody's Investors Service, and its successor's and assigns. "Officer's Certificate" means a written certificate of the City signed by an Authorized Officer of the City. "Ordinance" means Ordinance No. 769 of the City of Rancho Cucamonga. "Original Purchaser" means Stone & Youngberg LLC. "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.4) all Bonds except: (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) 10.3; and Bonds paid or deemed to have been paid within the meaning of Section -7- SDPUBIWDlVEN\338650.2 P315 (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City pursuant to this Agreement or any Supplemental Agreement. "Owner" or "Bondowner" means any Person who shall be the registered owner of any Outstanding Bond. "Owner Constructed Citv Improvements" shall have the meaning given such term in the Acquisition/Financing Agreement. "Owner Constructed Water District Facilities" shall have the meaning given such term in the Water District JCFA. "Permitted Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein (the Fiscal Agent shall be entitled to rely upon any written investment direction from an Authorized Officer of the District as a certification to the Fiscal Agent that such investment constitutes a Permitted Investment): 1. A. Direct obligations (other than an obligation subject to variation in principal payment) of the United States of America ("United States Treasury Obligations"); B. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America; C. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America;or D. Evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any Person claiming through the custodian or to whom the custodian may be obligated. 2. Federal Housing Administration debentures. 3. The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America: A. Federal Home Loan Mortgage Corporation (FHLMC) -8- SDPUB\WDIVEN\338650.2 P316 (1) Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) (2) Senior debt obligations B.. Farm Credit Banks (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) (1) Consolidated system-wide bonds and notes C. Federal Home Loan Banks (FHL Banks) (I) Consolidated debt obligations D. Federal National Mortgage Association (FNMA) (1) Senior debt obligations (2) Mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) E. Student Loan Marketing Association (SLMA) (1) Senior debt obligations (excluded are securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date) F. Financing Corporation (FICO) (1) Debt obligations G. Resolution Funding Corporation (REFCORP) (1) Debt obligations 4. Unsecured certificates of deposit, time deposits, and bankers' acceptances (having maturities of not more than 30 days) of any bank (including the Fiscal Agent and its affiliates) the short-term obligations of which are rated "A-I" or better by S&P. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $5 million (including the Fiscal Agent and its affiliates). 6. Commercial paper (having original maturities of not more than 270 days) rated "A-l" by S&P and "Prime-l" by Moody's. 7. Money market funds rated "AAm-l" or "AAm-G" by S&P, or better. 8. State Obligations, which means: A. Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and -9- SDPUBIWDIVEN\338650.2 P317 credit of a state the unsecured general obligation debt of which is rated "A3" by Moody's and "A" by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. B. Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rated "A-l+" by S&P and "Prime-I" by Moody's. C. Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated "AA" or better by S&P and "AA" or better by Moody's. 9. Pre-refunded municipal obligations rated "AAA" by S&P and "AAA" by Moody's meeting the following requirements: A. the municipal obligations are (I) not subject to redemption prior to maturity or (2) the trustee/fiscal agent for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; B. the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of interest and premium on such municipal obligations; C. the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations; D. the cash or United States Treasury Obligations serving as security for the municipal obligations are held, by an escrow agent or trustee/fiscal agent in trust for owners of the municipal obligations; E. no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new verification; and F. the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee/fiscal agent or escrow agent. 10. Investment agreements with a domestic or foreign bank or corporation the long- term debt or financial strength of which, it or its guarantor is rated at least "AA-" -10- SDPUB\WDIVENI338650.2 P318 by S&P and "Aa3" by Moody's; provided that, by the terms ofthe investment agreement: A. the invested funds are available for withdrawal without penalty or premium, upon not more than seven days' prior notice; the District and the Fiscal Agent hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; B. the investment agreement shall state that it is the unconditional and general obligation of and is not subordinated to any other obligation of, the provider thereof, or, in the case of a bank, that the obligation of the bank to make payments urider the agreement ranks pari passu with the obligations of the bank to its other depositors and its other unsecured and unsubordinated creditors; C. the District and the. Fiscal Agent receives the opinion of domestic counsel that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable); D. the investment agreement shall provide that if during its term (I) the provider's rating by either S&P or Moody's falls below "AA-" or "Aa3", respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (a) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider' s books) to the District, the Fiscal Agent or a Holder of the Collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (b) transfer and assign the investment agreement to a then qualifying counterparty , which is to be approved by the District, with ratings specified above; and (2) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction of the District or the Fiscal Agent, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment; -11- SDPUBI WDIVEN\338650.2 P319 E. the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, tliat the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all ;roceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); F. the investment agreement must provide that if during its term (1) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the District or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate; and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate. 11. The Local Agency Investment Fund (LAlF) administered by the Finance Director of the State to the extent such deposits remain in the name of and control of the Fiscal Agent. "Person" means an individual, a corporation, a partnership, a joint venture, a trust, an unincorporated organization or a government or any agency or political subdivision thereof. "Principal Account" means the account within the Bond Fund by that name established pursuant to Section 4.5(A) hereof. "Principal Office" means the office of the Fiscal Agent at Los Angeles, California or such other offices as may be specified to the City and the District by the Fiscal Agent in writing. "Proiect" means the facilities more particularly described in the AcquisitionlFinancing Agreement. "Proiect Fund" means the fund by that name created by and held by the Fiscal Agent pursuant to Section 4.2(A) hereof. "Rate and Method" means the Rate and Method of Apportionment of the Special Taxes set forth in the Ordinance. "Rebate Fund" means the fund by that name established pursuant to Section 4.8(A) hereof. -12- SDPUBIWDlVENI338650.2 P320 "Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such day is a Business Day. "Redemption Fund" means the fund by that name established pursuant to Section 4.9(A) hereof. "Reserve Fund" means the fund by that name established pursuant to Section 4.4(A) hereof. "Reserve Requirement" means, as of any date of calculation, (i) Maximum Annual Debt Service on the Outstanding Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service on the Outstanding Bonds, or (iii) ten percent (10%) of the face amount of the Outstanding Bonds. "Resolution" means Resolution No. 06-_ adopted by the City Council of the City on December 6, 2006. "Resolution of Formation" means Resolution No. 06-322 adopted by the City Council on October 18, 2006. "S&P" means Standard & Poor's Rating Services, a division of the McGraw Hill Companies, Inc. and its successors and assigns. "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041, Attention: Call Notification Department, Fax-(212) 855- 7232; and, in accordance with then current guidelines of the Commission, such other addresses and/or such other securities depositories as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Special Tax" or "Special Taxes" means Special Tax as defined in the Rate and Method authorized to be levied within the District pursuant to the Act, the Ordinance and this Agreement. "Special Tax Fund" means the fund by that name established by Section 4.6(A) hereof. "Special Tax Prepavrnents" means the proceeds of any Special Tax prepayments received by the City, as calculated pursuant to Section I of the Rate and Method, less any administrative fees or penalties collected as part of any such prepayment. "Special Tax Revenues" means the proceeds of the Special Taxes received by the City, including any scheduled payments and any prepayments thereof, interest thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and interest thereon. "Special Tax Revenues" does not include any penalties collected in connection with delinquent Special Taxes. "State" means the State of California. -13- SDPUB\WDlVEN\338650.2 P321 "Supplemental Agreement" means an agreement the execution of which is authorized by a resolution which has been duly adopted by the City Council under the Act and which agreement is amendatory of or supplemental to this Agreement, but only if and to the extent that such agreement is specifically authorized hereunder. "Tax Consultant" means David Taussig & Associates, Inc. or another independent financial or tax consultant retained by the City for the purpose of computing the Special Taxes. "Water District" means the Cucamonga Valley Water District. "Water District Account" the account within the Project Fund by that name established pursuant to Section 4.2(A) hereof. "Water District Capacitv Facilities Proceeds" shall have the meaning given such term in the Water District JCFA. "Water District JCFA" means that Joint Community Facilities Agreement, dated as of October _' 2006, by and between the City and the Water District pertaining to the funding by the District of the Water District Capacity Facilities Proceeds and the Agency Capacity Facilities Proceeds and the acquisition of the Owner Constructed Water District Facilities. -14- SDPUB\WDlVEN\338650.2 P322 ARTICLE II THE BONDS Section 2.1 Principal Amount Designation. Bonds in the aggregate principal amount of Dollars ($ ) are hereby authorized to be issued by the City for the District under and subject to the terms of the Resolution and this Agreement, the Act and other applicable laws of the State ofCalifomia. Section 2.2 Terms of the Bonds. (A) Form: Denominations. The Bonds shall be issued as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple of $5,000 in excess thereof, except that one Bond of each maturity may be in a denomination less than $5,000, if necessary, in connection with a partial redemption of the Bonds pursuant to Section 2.3 hereof. (B) Date of Bonds. The Bonds shall be dated the Closing Date. (C) CUSIP Identification Numbers. "CUSIP" identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and pay for the Bonds. In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the City's contract with such Owners and shall not impair the effectiveness of any such notice. CD) Maturities. Interest Rates. The Bonds shall mature and become payable on September 1 of each year, and shall bear interest at the rates, as follows: Principal Payment Date (Seotember 1 ) Interest Rate Principal Amount -15- SDPUBI WDIVEN\338650.2 P323 (E) Interest. The Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such date of authentication, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. (F) Method of Payment. Interest on the Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on the Interest Payment Dates or date of redemption by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the Registration Books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date or date ofredemption, or by wire transfer (i) to the Depository (so long as the Bonds are in book- entry form pursuant to Section 2.14), or (ii) to an account within the United States made on such Interest Payment Date or date of redemption upon instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds, which instructions shall continue in effect until revoked in writing, or until such Bonds are transferred to a new Owner. The principal of the Bonds and any premium on the Bonds are payable by check in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent. All Bonds paid by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds and is,sue a certificate of destruction thereof to the City upon the City's request. -16- SDPUBIWDlVEN\338650.2 P324 Section 2.3 Redemption. (A) Redemption Dates. (i) Optional Redemption. The Bonds are subject to optional redemption prior to their stated maturity on any Interest Payment Date, as a whole or in part, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price March 1, 2007 through March 1,20_ September 1, 20_ and March 1,20_ September 1, 20_ and March 1,20_ September 1, 20_ and thereafter 1 % 1 % 1_% 100% (ii) Mandatory Redemption from Proceeds of Special Tax Prepayments The Bonds shall be subject to redemption on any Interest Payment Date, prior to maturity, as a whole or in part on a pro rata basis among maturities from amounts deposited to the Redemption Fund representing Special Tax Prepayments. An Authorized Representative shall deliver written instructions to the Fiscal Agent not less than 60 days prior to the redemption date directing the Fiscal Agent to utilize the Special Tax Revenues transferred to the Redemption Fund and the Interest Account of the Bond Fund pursuant to Section 4.6(C) and the amount transferred to the Redemption Fund and/or Interest Account from the Reserve Fund pursuant to Section 4.4(F) to redeem Bonds pursuant to this Section 2.3(A)(ii). Such mandatory redemption of the Bonds shall be at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price September 1, 20_ and March 1,20_ September 1, 20_ and March 1,20_ September 1, 20_ and thereafter 1 % I % 100% (iii) Mandatory Sinking Fund Payment Redemption. The Bonds maturing on September 1, 20_ are subject to mandatory sinking fund payment redemption in part on September 1, 20_, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: -17- SDPUBI WDlVENI338650.2 P325 Redemption Date (September I) Sinking Fund Payments The Bonds maturing on September 1,20_ are subject to mandatory sinking fund payment redemption in part on September I, 20-, and on each September I thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (Seotember I) Sinking Fund Payments The amounts in the foregoing tables shall be reduced, as a result of any prior partial redemption of the Bonds pursuant to Section 2.3(A)(i) or (ii) above as specified in an Officer's Certificate filed with the Fiscal Agent, in inverse order of sinking fund payment date. (B) Notice to Fiscal Agent. The City shall give the Fiscal Agent written notice, by filing an Officer's Certificate with the Fiscal Agent, of its intention to redeem Bonds pursuant to subsection 2.3(A)(i) or (ii) not less than sixty (60) days prior to the applicable redemption date or such shorter period as shall be acceptable to the Fiscal Agent. (C) Purchase of Bonds in Lieu of Redemption. In lieu of redemption under Section . 2.3(A), moneys in the Bond Fund or Redemption Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest -18- SDPUBIWDNENI338650.2 P326 accrued to the date of purchase and any premium which would otherwise be due if such Bonds were to be redeemed in accordance with this Agreement. (D) Redemption Procedure bv Fiscal Agent. The Fiscal Agent shall cause. notice of any redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, to the Original Purchaser, to the Securities Depositories, to one or more Information Services, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond Register in the Principal Office of the Fiscal Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and Bond number of each Bond to be redeemed or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. Upon the payment of the redemption price, plus accrued interest to the date of redemption, of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, of the Bonds being redeemed with the proceeds of such check or other transfer. Except as otherwise provided for herein, whenever provision is made in this Agreement for the redemption of less than all of the Bonds or any given portion thereof, the Fiscal Agent shall determine the amount of Bonds to be redeemed from each maturity in any manner the City specifies, and the Fiscal Agent shall select the Bonds to be redeemed, from each maturity of the Bonds or such given portion thereof not previously called for redemption, according to any manner which the Fiscal Agent deems fair. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the City, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion ofthe Bond or Bonds. Section 2.4 Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the Bonds so called for redemption shall have been deposited in the Bond Fund or Redemption Fund, such Bonds so called shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price and interest thereon accrued through the date of -19- SDPUB\WDlVEN\338650.2 P327 redemption, and no interest shall accrue thereon on or after the redemption date specified in such notice. All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy. the canceled Bonds and issue a certificate of destruction thereof to the City. Section 2.5 Form of Bonds. The Bonds and the form of Fiscal Agent's certificate of authentication and the form of assignment, to appear thereon, shall be substantially in the form set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement, the Resolution and the Act. Section 2.6 Execution of Bonds. The Bonds shall be executed on behalf of the City manually or by the facsimile signatures of its Mayor and City Clerk who are in office on the date of adoption of this Agreement or at any time thereafter, and the seal of the City shall be impressed, imprinted or reproduced by facsimile thereon. If any officer whose signature appears on any Bond ceases to be such officer before delivery ofthe Bonds to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the Owner. Any Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City although at the nominal date of such Bond any such person shall not have been such officer of the City. Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered hereunder have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Agreement. Section 2.7 Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.9 by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate principal amount. No transfers of Bonds shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect to a Bond -20- SDPUBI WDlVENI338650.2 P328 after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. Section 2.8 Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same series and maturity. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such exchange any tax or other goyernmental charge required to be paid with respect to such exchange. No exchanges of Bonds shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. Section 2.9 Bond Register. The Fiscal Agent will keep or cause to be kept, at its Principal Office sufficient books for the registration and transfer ofthe Bonds, which books shall show the series, number, date, amount, rate of interest and last known Owner of each Bond and shall at all times be open to inspection by the City during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided. The City and the Fiscal Agent will treat the Owner of any Bond whose name appears on the Bond Register as the absolute Owner of such Bond for any and all purposes, and the City and the Fiscal Agent shall not be affected by any notice to the contrary. The City and the Fiscal Agent may rely on the address of the Bondowner as it appears in the Bond Register for any and all purposes. Section 2.10 Temporarv Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder. Section 2.11 Bonds Mutilated. Lost. Destroved or Stolen. If any Bond shall become mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled by it and destroyed by the Fiscal Agent who shall deliver a certificate of destruction thereof to the -21- SDPUBIWDIVEN\338650.2 P329 City. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity for the City and the Fiscal Agent satisfactory to the Fiscal Agent shall be given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City may require payment of a sum not exceeding the actual cost of preparing each new Bond delivered under this Section and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation, execution, authentication and delivery. Any Bond delivered under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement. Section 2.12 Limited Obligation. The Bonds and interest thereon, together with any premium paid thereon upon redemption, are not obligations of the City, but are limited obligations of the District secured by and payable from an irrevocable first lien on the Special Tax Revenues and on the monies in the funds and accounts established herein (including the investment earnings thereon) with the exception of the Rebate Fund, the Costs of Issuance Fund, the Administrative Expense Fund and the Project Fund. Except for the Special Tax Revenues, neither the credit nor the taxing power of the District or the City is pledged for the payment of the Bonds or the interest thereon, and no Owner of the Bonds may compel the exercise of taxing power by the District or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and premiums upon the redemption thereof, if any, are not a debt of the District or the City, the State or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds are not a legal or equitable pledge, charge, lien or encumbrance, upon any property of the City or the District, or upon any of income, receipts or revenues of the City or the District, except the amounts which are, under this Agreement and the Act, set aside for the payment of the Bonds and interest thereon and neither the members of the Legislative Body, the City Council of the City, nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. Notwithstanding anything contained in this Agreement, neither the City nor the District shall be required to advance any money derived from any source of income other than the Special Tax Revenues for the payment of the interest on or the principal of the Bonds or for the performance of any covenants herein contained. Nothing in this Agreement or in any Supplemental Agreement shall preclude the redemption prior to maturity of any Bonds subject to call and redemption or the payment of the Bonds from proceeds of refunding bonds issued under the Act or under any other law of the State. Section 2.13 No Acceleration. The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section shall in any way prohibit the prepayment or redemption of Bonds under Section 2.3 hereof, or the defeasance of the Bonds and discharge of this Agreement under Section 10.3 hereof. -22- SDPUBIWDlVENI338650.2 P330 Section 2.14 Book-Entry Svstem. DTC shall act as the initial Depository for the Bonds. One Bond for each maturity of the Bonds shall be initially executed, authenticated, and delivered as set forth herein with a separate fully registered certificate (in print or typewritten form). Upon initial execution, authentication, and delivery, the ownership of the Bonds shall be registered in the Bond Register kept by the Fiscal Agent for the Bonds in the name of Cede & Co., as nominee ofDTC or such nominee as DTC shall appoint in writing. The representatives ofthe City and the Fiscal Agent are hereby authorized to take any and all actions as may be necessary and not inconsistent with this Agreement to qualify the Bonds for the Depository's book-entry system, including the execution of the Depository's required representation letter. With respect to Bonds registered in the Bond Register in the name of Cede & Co., as nominee ofDTC, neither the City nor the Fiscal Agent shall have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which DTC holds Bonds as Depository from time to time (the "DTC Participants") or to any Person for which a DTC Participant acquires an interest in the Bonds (the "Beneficial Owners"). Without limiting the immediately preceding sentence, neither the City, the District nor the Fiscal Agent shall have any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co., or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant, any Beneficial Owner, or any other Person, other than DTC, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the event the City, on behalf of the District, elects to redeem the Bonds in part, (iv) the payment to any DTC Participant, any Beneficial Owner, or any other Person, other than DTC, of any amount with respect to the principal of or interest on, or premium on, the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the Bonds. Except as set forth above, the Fiscal Agent may treat as and deem DTC to be the absolute Owner of each Bond for which DTC is acting as Depository for the purpose of payment of the. principal of and interest on such Bonds, for the purpose of giving notices of prepayment and other matters with respect to such Bonds, for the purpose of registering transfers with respect to such Bonds, and for all purposes whatsoever. The Fiscal Agent shall pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown on the Bond Register, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to the principal of and interest on the Bonds to the extent of the sums or sums so paid. No Person other than an Owner, as shown on the Bond Register, shall receive a physical Bond. Upon delivery by DTC to the Fiscal Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer provisions in Section 2.7 hereof, references to "Cede & Co." in this Section 2.14 shall refer to such new nominee ofDTC. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the Fiscal Agent during any time that the Bonds are Outstanding, and discharging its responsibilities with respect thereto under applicable law. The City may -23- SDPUBI WDlVENI338650.2 P331 terminate the services of DTC with respect to the Bonds if it determines that DTC is unable to discharge its responsibilities with respect to the Bonds or that continuation of the system of book-entry transfers through DTC is not in the best interest of the Beneficial Owners, and the City shall mail notice of such termination to the Fiscal Agent. Upon the termination of the services of DTC as provided in the previous paragraph, and if no substitute Depository willing to undertake the functions hereunder can be found which is willing and able to undertake such functions upon reasonable or customary terms, or if the City determines that it is in the best interest of the Beneficial Owners of the Bonds that they be able to obtain certificated Bonds, the Bonds shall no longer be restricted to being registered in the Bond Register of the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may be . registered in whatever name or name the Owners shall designate at that time, in accordance with Section 2.7. To the extent that the Beneficial Owners are designated as the transferee by the Owners, in accordance with Section 2.7, the Bonds will be delivered to such Beneficial Owners as soon as practicable. ARTICLE III ISSUANCE OF BONDS Section 3.1 Issuance and Deliverv of Bonds. At any time after the execution of this Agreement, the City may issue the Bonds for the District in the aggregate principal amount set forth in Section 2.1 and deliver the Bonds to the Original Purchaser. The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of the Bonds and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser. Section 3.2 Pledge of Special Tax Revenues. The Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Special Tax Revenues (except Special Tax Revenues deposited in the Administrative Expense Fund) and all moneys deposited in the Bond Fund and, until disbursed as provided herein, in the Redemption Fund and the Special Tax Fund. The Bonds are further secured by a first pledge of all of the moneys deposited in the Reserve Fund. The Special Tax Revenues and all moneys deposited into said funds (except as otherwise provided herein) are hereby dedicated to the payment of the principal of, and interest and any premium on, the Bonds as provided herein and in the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with Section 10.3. Amounts in the Administrative Expense Fund, the Rebate Fund, the Costs of Issuance Fund and the Project Fund are not pledged to the repayment of the Bonds. The facilities acquired or constructed with the proceeds of the Bonds are not in any way pledged to pay the Debt Service -24- SDPUBI WDlVENI338650.2 P332 on the Bonds. Any proceeds of condemnation or destruction of any facilities financed with the proceeds of the Bonds are not pledged to pay the Debt Service on the Bonds and are free and clear of any lien or obligation imposed hereunder. Section 3.3 Validitv of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the completion of the Project or upon the performance by any Person of such Person's obligation(s) with respect to the Project. -25- SDPUBIWDIVEN\338650.2 P333 ARTICLE IV FUNDS AND ACCOUNTS Section 4.1 Deposits of Bond Proceeds. The proceeds of the purchase of the Bonds by the Original Purchaser thereof shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date for the Bonds as follows: (A) to the Interest Account of the Bond Fund $ (B) to the Reserve Fund $ (C) to the Costs ofIssuance Fund $ (D) to the Acquisition Account ofthe Project Fund $ (E) to the Agency Account of the Project Fund $ (F) to the Water District Account ofthe Project Fund $ (G) to a temporary expense account hereby created for such purpose for immediate transfer to the Finance Director for deposit by the Finance Director in the Administrative Expense Fund $25,000.00. Section 4.2 Proiect Fund. (A) Establishment of Proiect Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Project Fund, and with such Fund three accounts, the Acquisition Account, the Agency Account and the Water District Account, to the credit of which deposits shall be made as required by Section 4.1(D), (E) and (F). The Fiscal Agent may establish such other temporary funds or accounts on its records as it may deem appropriate to facilitate such deposits and transfers. Moneys in the Acquisition Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, and shall be disbursed, except as otherwise provided in subsection (C) of this Section, solely for the payment or reimbursement of costs of the Project and Costs of Issuance not paid from the Costs of Issuance Fund prior to the closure thereof pursuant to Section 4.3(B). Moneys in the Agency Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, the Agency and the Water District, and shall be disbursed, except as otherwise provided in subsection (C) of this Section, solely for the funding of the Agency Capacity Facilities Proceeds pursuant to the Water District JCFA. -26- SDPUBIWDIVENI338650.2 P334 Moneys in the Water District Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City and the Water District, and shall be disbursed, except as otherwise provided in subsection (C) of this Section, solely for the funding of the Water District Capacity Facilities Proceeds and the acquisition of the Owner Constructed Water District Facilities pursuant to the Water District JCFA. (B) Procedure for Disbursement from the Proiect Fund Accounts. (i) ACQuisition Account. The Fiscal Agent shall make disbursements from the Acquisition Account upon receipt of an Officer's Certificate, in substantially the form set forth in Exhibit C to this Agreement, attached hereto and incorporated herein by reference, which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Acquisition Account; and the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (ii) Agencv Account. The Fiscal Agent shall make disbursements from the Agency Account upon receipt of an Officer's Certificate, in substantially the form set forth in Exhibit C which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Agency Account; and the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (iii) Water District Account. The Fiscal Agent shall make disbursements from the Water District Account upon receipt of an Officer's Certificate, in substantially the form set forth in Exhibit C which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Water District Account; and the Person to which the disbursement is to be paid; and -27- SDPUB\WDIVEN\338650.2 P335 (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (C) Investment. Moneys in the accounts of the Project Fund shall be invested and deposited in accordance with Section 6.1. Interest eamings and profits resulting from the investment of moneys in an account of the Project Fund shall be invested and deposited and shall be retained in such account to be used for the purposes thereof. (D) Transfer of Funds not Reauired. (i) Agencv Account. Upon the filing of an Officer's Certificate stating that all Agency Capacity Facilities Proceeds have been disbursed to the Water District pursuant to the Water District JCFA, or that any such funds are not required to be disbursed from the Agency Account, the Fiscal Agent shall transfer the amount, if any, remaining in the Agency Account to the Acquisition Account. (ii) Water District Account. Upon the filing of an Officer's Certificate stating that all Water District Capacity Facilities Proceeds have been disbursed to !he Water District and that all Owner Constructed Water District Facilities have been acquired pursuant to the Water District JCFA, or that any such funds are not required to be disbursed or paid from the Water District Account, the Fiscal Agent shall transfer the amount, if any, remaining in the Water District Account to the Acquisition Account. (iii) Acauisition Account. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project and all Costs of Issuance have been paid, or that such costs are not required to be paid from the Acquisition Account, the Fiscal Agent shall transfer the amount, if any, remaining in the Acquisition Account to the Special Tax Fund. Upon the filing of an Officer's Certificate stating that the City has terminated the AcquisitionlFinancing Agreement pursuant to the provisions thereof and that the City has elected not to advertise and bid the balance of the Owner Constructed City Improvements following such a termination, any monies remaining in the Acquisition Account and not appropriated or subject to appropriation to pay costs of the Project or Costs of Issuance previously incurred shall be transferred to the Special Tax Fund. Section 4.3 Costs ofIssuance Fund. (A) Establishment of Costs of Issuance Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Costs of Issuance Fund, to the credit of which a deposit shall be made as required by Section 4.I(C). Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance. -28- SDPUBIWDIVEN\338650.2 P336 (B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the Bonds. The Fiscal Agent shall pay all Costs of Issuance after receipt of an invoice from any such payee which requests payment in ar1 amount which is less than or equal to the amount set forth with respect to such payee pursuant to an Officer's Certificate requesting payment of Costs of Issuance. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 180 days from the date of delivery of the Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Acquisition Account ofthe Project Fund. (C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the Costs ofIssuance Fund to be used for the purposes of such fund. Section 4.4 Reserve Fund. (A) Establishment of Fund. There is hereby established as a separate fund to be held by the Fiscal Agent the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Reserve Fund, to the credit of which Fund a deposit shall be made as required by Section 4.I(B) which deposit is equal to the Reserve Requirement as of the Closing Date for the Bonds, and deposits shall be made as provided in Section 4.6(B)3. Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of principal of, and interest and any premium on, the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. (B) Use of Funds. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the provisions of this Section, for the purpose of redeeming Bonds from the Bond Fund. (C) Transfer Due to Deficiencv in Bond Fund. Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall provide written notice thereof to the Finance Director, specifying the amount withdrawn. (D) Transfer of Excess of Reserve Requirement. If on any August 15, or the first Business Day thereafter if August 15 is not a Business Day, of each year, the amount in the Reserve Fund exceeds the Reserve Requirement, the Fiscal Agent shall, as directed in an Officer's Certificate, transfer an amount equal to the excess from the Reserve Fund to the Interest Account of the Bond Fund to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with Section 4.5. -29- SDPUB\WDIVEN\338650.2 P337 (E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving an Officer's Certificate (upon which the Fiscal Agent may conclusively rely) so directing the Fiscal Agent, transfer the amount in the Reserve Fund to the Redemption Fund to be applied to the payment and redemption, in accordance with Section 2.3(A) of all of the Outstanding Bonds. In the event that the amount so transferred from the. Reserve Fund to the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Redemption Fund shall be transferred to the District to be used for any lawful purpose ofthe District. Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to this Section 4.4(E) until after (i) the calculation of any amounts due to the federal government pursuant to Section 5.13 following payment of the Bonds and withdrawal of any such amount from the Reserve Fund for purposes of making such payment to the federal government, and (ii) payment of any fees and expenses due to the Fiscal Agent. (F) Transfer Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and Bonds are to be redeemed with the proceeds of such prepayment pursuant to Section 2.3(A)(ii) and 4.9(B) hereof, a proportionate amount in the Reserve Fund (determined on the basis of the principal of Bonds to be redeemed and the then principal of the Bonds Outstanding) shall be transferred upon such prepayment by the Fiscal Agent to the Redemption Fund or the Interest Account of the Bond Fund, as applicable, to be applied to the redemption of the Bonds pursuant to written instructions contained in an Officer's Certificate in accordance with Section 4.9(B) hereof. (G) Investment and Transfer to Pav Rebate. Moneys in the Reserve Fund shall be invested and deposited in accordance with Section 6.1. All Permitted Investments in the Reserve Fund shall be valued at their Fair Market Value at least semiannually on March 1 and September 1. Interest earnings and profits resulting from said investment shall be used as required by the District to comply with Section 5.13. No earnings on amounts in the Reserve Fund shall be used by th,e District to comply with Section 5.13 unless the amount on deposit in the Reserve Fund is equal to the Reserve Requirement. Section 4.5 Bond Fund. (A) Establishment of Bond Fund and Interest Account and Principal Account. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Bond Fund, and within such Fund two accounts, the Interest Account and the Principal Account, to the credit of which deposits shall be made as required by Sections 4.l(A), 4.2(C), 4.4(B), 4.4(D), 4.4(F) and 4.6(B), and any other amounts required to be deposited therein by this Agreement or the Act. -30- SDPUBI WDlVENI338650.2 P338 Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. (B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Interest Account of the Bond Fund and pay to the Owners of the Bonds the interest then due and payable on the Bonds, including any interest due on the Bonds being redeemed pursuant to Section 2.3(A). On each Interest Payment Date, the Fiscal Agent shall withdraw from the Principal Account of the Bond Fund and pay to the Owners of the Bonds the principal of the Bonds at the maturity thereof or the principal of the term Bonds upon the mandatory sinking fund redemption thereof pursuant to this Agreement. (C) Investment. Moneys in the Bond Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from the investment and deposit of amounts in the Bond Fund shall be retained in the Bond Fund and used for purposes of such fund. Section 4.6 Special Tax Fund. (A) Establishment of Special Tax Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Special Tax Fund to the credit of which deposits shall be made as required pursuant to this Section 4.6 and may be made as permitted by Section 4.2(D). Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit of the District and the Owners ofthe Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds and the District. No later than the tenth (loth) Business Day after which Special Tax Revenues have been received by the City, and in any event not later than February 15th and August 15th of each year, the City shall transfer such Special Tax Revenues to the Fiscal Agent, less an amount equal to the Administrative Expense Requirement, and, except as set forth in the following sentence, such amounts shall be deposited in the Special Tax Fund. (B) Disbursements. With the exception of the Special Tax Revenues representing Special Tax Prepayments which shall be transferred pursuant to Section 4.6(C), below, the Special Tax Revenues deposited in the Special Tax Fund shall be deposited in the following accounts of the Special Tax Fund or transferred to the following other funds and accounts on the dates and in the amounts set forth in the following paragraph and in the following order of priority: 1. The Fiscal Agent shall deposit in the Interest Account of the Bond Fund, on each Interest Payment Date and date for redemption of the Bonds, an amount required to cause the aggregate amount on deposit in the Interest Account to equal the -31- SDPUB\ WDIVEN\338650.2 P339 amount of interest due or becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds being redeemed on such date. 2. The Fiscal Agent shall deposit in the Principal Account of the Bond Fund, on each Interest Payment Date and redemption date on which principal of the Bonds, including sinking fund payments, shall be payable an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to this Agreement. 3. On or after March 2 and September 2 of each year after making the transfer and deposits required under paragraphs 1 and 2 above, the Fiscal Agent shall transfer the amount, if any, necessary to replenish the amount then on deposit in the Reserve Fund to an amount equal to the Reserve Requirement. 4. On or after September 2 of each year after making the deposits and transfers required under paragraphs 1 through 3 above, upon receipt of written instructions from an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Rebate Fund the amount specified in such request. 5. On or after September 2 of each year after making the deposits and transfers required under paragraphs I through 4 above, upon receipt of a written request of an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Finance Director for deposit in the Administrative Expense Fund the amounts specified in such request to pay those Administrative Expenses which the District reasonably expects (a) will become due and payable during such Fiscal Year or the cost of which Administrative Expenses have previously been incurred and paid by the District from funds other than the Administrative Expense Fund and (b) the cost of which Administrative Expenses will be in excess of the Administrative Expense Requirement for such Fiscal Year. 6. If, on or after September 2 of each year, after making the deposits and transfers required under paragraphs 1 through 5 above, monies remain in the Special Tax Fund, such monies shall remain on deposit in the Special Tax Fund and shall be subsequently deposited or transferred pursuant to the provisions of paragraphs I through 5 above. (C) Prepayments. The Fiscal Agent shall, upon receipt of Special Tax Revenues representing Special Tax Prepayments together with written instructions of the District executed by an Authorized Officer, immediately transfer such Special Tax Prepayments pursuant to such written instructions into the Interest Account of the Bond Fund and the Redemption Fund, as applicable, and utilize such funds to pay the interest and premium, if any, on and principal of -32- SDPUB\WDlVEN\338650.2 P340 Bonds to be redeemed pursuant to Section 2.3(A)(ii). The Fiscal Agent may conclusively rely upon such instructions. (D) Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from such investment and deposit shall be transferred to the Special Tax Fund to be used for the purposes thereof. (E) Transfer to Redemption Fund. Any Officer's Certificate issued pursuant to Section 4.2(D)(iii) of this Agreement (other than an Officer's Certificate issued more than one year prior to the first date on which optional redemption of Bonds is permitted pursuant to subsection 2.3(A)(i) of this Agreement) may direct that all or any portion of the funds which would otherwise be transferred to the Special Tax Fund be transferred to the Redemption Fund, in which case the Fiscal Agent shall apply such arnounts in accordance with Section 4.9 of this Agreement as directed in an Officer's Certificate. (F) Transfer to the District. When there are no longer any Bonds Outstanding, any amounts then remaining on deposit in the Special Tax Fund shall be transferred to the District and used for any lawful purpose under the Act. Section 4.7' Administrative Expense Fund. (A) Establishment of Administrative Expense Fund. There is hereby established as a separate fund to be held by the Finance Director, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Administrative Expense Fund to the credit of which deposits shall be made as required by Section 4.1(G) and 4.6(B)(5). In addition to the foregoing deposits, the City shall each Fiscal Year deposit in the Administrative Expense Fund from Special Tax Revenues received by the City an amount equal to the Administrative Expense Requirement for such Fiscal Year. Moneys in the Administrative Expense Fund shall be held in trust by the Finance Director for the benefit of the City and the District and shall be used to pay Administrative Expenses from time to time. (B) Investment. Moneys in the Administrative Expense Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from said investment shall be retained by the Finance Director in the Administrative Expense Fund to be used for the purposes thereof. Section 4.8 Rebate Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Rebate Fund. The Rebate Fund shall be held and maintained by the Fiscal Agent. On September IS of each year (or at such other times and or such other intervals as may be required or permitted by regulations of the United States Internal Revenue Service), the City shall determine whether any portion of investment earnings from any account established by this Agreement must be rebated to the United States pursuant to Section 148 of the Code. At the written direction of the District, any amounts required to be rebated will -33- SDPUBIWDIVEN\338650.2 P341 be transferred from any available source, including the Special Tax Fund pursuant to Section 4.6, to the Rebate Fund. The City is authorized to retain independent attorneys, accountants and other consultants to assist in complying with the requirements of the Code, and the fees of such consultants may be paid from the Administrative Expense Account. The Fiscal Agent may rely conclusively upon the City's determinations, calculations and certifications required by this Section 4.8. The Fiscal Agent shall have no responsibility to make any independent calculation or determination or to review the City's calculations hereunder. Amounts in the Rebate Fund shall be invested without yield restriction and shall be held in trust for rebate to the United States at the written direction of the Finance Director. Earnings on the Rebate Fund are to remain in that account and shall similarly be held in trust for rebate to the United States. Section 4.9 Redemption Fund. (A) Establishment of Redemption Fund. There is hereby established as a separate fund to beheld in trust by the Fiscal Agent for the Owners of the Bonds, the Community Facilities District 2006-01 (Vintner's Grove) 2006 Special Tax Bonds, Redemption Fund, to the credit of which deposits shall be made from funds received by the City representing Special Tax Prepayments and other funds required for redemptions, other than mandatory sinking fund redemptions and which shall be administered as provided below. (B) Disbursement. Monies shall be deposited into the Redemption Fund by the Fiscal Agent pursuant to the terms of Section 4.4(E), 4.4(F), 4.6(C), 4.6(E) and/or 10.3 and an Officer's Certificate filed with the Fiscal Agent in accordance with Section 2.3 hereof and shall be set aside and used solely for the purpose of redeeming Bonds in accordance with such Officer's Certificate. Following the redemption of any Bonds, if any funds remain in the Redemption Fund, such funds shall be transferred to the Special Tax Fund. (C) Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes thereof. ARTICLE V OTHER COVENANTS OF THE CITY Section 5.1 Punctual Payment. The City will punctually payor cause to be paid the principal of, and interest and any premium on, the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds. -34- SDPUBI WDlVENI338650.2 . P342 Section 5.2 Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not on the District's behalf, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claiins for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subj ect to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have so extended or funded. Section 5.3 Against Encumbrances. Neither the City nor the District will encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement. Section 5.4 Books and Records. The City will keep, or cause to be kept, on behalf of the District proper books of record and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. Such books of record and accounts shall at all times during normal business hours of the City be subj ect to the inspection of the Fiscal Agent, the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing, and . the payors of the Special Taxes, or their representatives duly authorized in writing. The Fiscal Agent will keep, or. cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Special Tax Fund, the Bond Fund, the Redemption Fund, the Project Fund, the Reserve Fund, the Costs ofIssuance Fund and the Rebate Fund. Such books of record and accounts shall at all times during normal business hours of the Fiscal Agent be subject to the inspection of the City, the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing, and the payors of the Special Taxes, or their representatives duly authorized in writing. Section 5.5 Protection of Securitv and Rights of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all Persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City acting either on its own behalf or on behalf ofthe District. Section 5.6 Compliance with Law. The City will comply with all applicable provisions ofthe Act and law in completing the construction or acquisition of the Project. -35- SDPUBIWDIVENI338650.2 P343 Section 5.7 Collection of Special Tax Revenues. The City shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of delinquent Special Taxes. On or within five (5) Business Days of each June I, the Fiscal Agent shall provide the Finance Director with a notice stating the amount then on deposit in the Interest Account and Principal Account of the Bond Fund, the Special Tax Fund and the Reserve Fund, and informing the City that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for Annual Debt Service and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance therein equals the Reserve Requirement. The receipt of or failure to receive such notice by the Finance Director shall in no way affect the obligations of the Finance Director under the following two paragraphs. Upon receipt of such notice, the Finance Director shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. The Finance Director shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance by each August I that the Bonds are Outstanding, or otherwise such that the computation of the levy is complete before the final date on which Auditor will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Finance Director shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Finance Director shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any Outstanding Bonds of the District becoming due and payable during the ensuing year, including any necessary replenishment or 'expenditure of the amount within the Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any obligation under Section 5.13) during such year, taking into account the balances in such funds and in the Bonds Fund, the Redemption Fund and the Special Tax Fund. The Special Taxes so levied shall not exceed the authorized amounts as provided in the Ordinance. The Special Taxes shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable, and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. Notwithstanding the foregoing, the Finance Director shall, not later than July 15 of each Fiscal Year, determine whether or not to cause the collection of any Special Taxes by direct, first class mail billing to the then owner of each parcel of property in lieu of billing for such Special Taxes in the same manner as general taxes as aforesaid. Such direct mail billing shall be made not later than November I of the Fiscal Year and shall direct the owner of the property affected -36- SDPUB\ WDIVEN\338650,2 . P344 to pay the Special Taxes directly to the Finance Director in two equal installments, the first of which shall be due and delinquent if not paid on December 10 and the second of which may be paid with the first and which, in any event, shall be due and delinquent if not paid on April 10 of the Fiscal Year. Any such Special Taxes so billed shall have the same priority and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. Notwithstanding the foregoing, the Legislative Body may waive delinquency penalties and redemption penalties ifit makes all of the determinations set forth in Section 53340(f) of the Act. Section 5.8 Reduction in Maximum Annual Special Tax. The District finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facility districts in Southern California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the City has determined that, absent the certification described below, a reduction in the Maxil]1um Annual Special Tax (as such term is defined in the Rate and Method) authorized to be levied below the levels provided would interfere with the timely retirement of the Bonds. The City has determined it to be necessary in order to preserve the security for the Bonds to covenant and, to the maximum extent that the law permits it to do so, the City does covenant, that it shall not initiate proceedings to reduce the Maximum Special Tax Rates (as such term is defined in the Rate and Method) unless, in connection therewith, (i) the City receives a certificate from one or more Tax Consultants which, when taken together, certify that, on the basis of the parcels of land and improvements existing in the City as of the July I preceding the reduction, the Maximum Annual Special Tax which may be levied on all Assessor's Parcels (as such term is defined in the Rate and Method) of taxable property on which a completed structure is located in each Fiscal Year will equal at least 110% of the gross debt service on all Bonds to remain Outstanding after the reduction is approved and will not reduce the Maximum Annual Special Tax payable from parcels on which a completed structure is located to less than 110% of Maximum Annual Debt Service; and (ii) the Legislative Body finds pursuant to this Agreement that any reduction made under such conditions will not adversely affect the interests of the Bondowners. Any reduction in the Maximum Annual Special Tax approved pursuant to the preceding sentence may be approved without the consent of the Bondowners. The City covenants that, in the event that any initiative is adopted by the qualified electors which purports to reduce the Maximum Annual Special Tax below the levels authorized pursuant to the Rate and Method or to limit the power or authority of the City to levy Special Taxes pursuant to the Rate and Method, the City shall, from funds available hereunder, commence and pursue legal action in order to preserve the authority and power of the City to levy Special Taxes pursuant to the Rate and Method. Section 5.9 Covenant to Foreclose. On or before March I and June I of each Fiscal year, the City will review the public records of the County in connection with the Special Taxes -37- SDPUBIWDIVENI338650.2 P345 levied in such Fiscal Year to determine the amount of Special Taxes actually collected in such Fiscal Year. If the City determines that (a) any single parcel subject to the Special Taxes is delinquent in the payment of Special Taxes in the aggregate of $4,000 or more or (b) any parcels under common ownership subject to the Special Taxes are delinquent in the payment of Special Taxes in the aggregate of $20,000 or more, the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner. The City shall cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to this section and for which the Special Taxes remain delinquent. With respect to aggregate delinquencies throughout the District, if the City determines that it has collected less than 95% of the Special Taxes levied in the such Fiscal Year, then the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owner of each delinquent parcel (regardless of the amount of such delinquency). The City will cause judicial foreclosure proceedings to.be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to this section and for which the Special Taxes remain delinquent. Section 5.10 Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in this Agreement. Section 5.11 Private Activitv Bond Limitations. The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section l41(c) of the Code. Section 5.12 Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) ofthe Code. Section 5.13 Rebate Requirement. The City shall take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. Funds shall be ~ansferred to a Rebate Fund, to be held by the Fiscal Agent, in accordance with this Agreement. If necessary, the City may use (i) earnings on amounts in the Reserve Fund if the amount on deposit in the Reserve Fund, following the proposed transfer, is equal to the Reserve Requirement, (ii) amounts on deposit in the Administrative Expense Fund, and (iii) any other funds available to the District, including amounts advanced by the City, in its sole discretion, to be repaid by the District in connection with the District as soon as practicable from amounts described in the preceding clauses (i), (ii) and (iii), to satisfy its obligations under this Section -38- SDPUBIWDIVENI338650.2 P346 5.13. The Finance Director shall take note of any investment of monies hereunder in excess of the yield on the Bonds, and shall take such actions as are necessary to ensure compliance with this Section 5.13, such as increasing the portion of the Special Tax levy for Administration Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under this Section 5.13. Section 5.14 No Arbitrage. The City shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Section 5.15 Yield of the Bonds. In determining the yield of the Bonds to comply with Section 5.13 and 5.14 hereof, the City will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City, as of the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or Bonds redeemed. Section 5.16 Maintenance of Tax-Exemption. The City shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds. Section 5.17 Continuing Disclosure to Owners. (A) In addition to its obligations under Section 10.7, the City covenants and agrees that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Agreement dated as of December I, 2006 between the City and the Fiscai Agent (the "Continuing Disclosure Agreement"). Notwithstanding any other provision of this Agreement, failure of the City to comply with the Continuing Disclosure Agreement shall not be considered a breach of the provisions of this Agreement; however, upon the written direction of the owners of at least 25% aggregate principal amount of the Bonds Outstanding, the Fiscal Agent shall, or any Bondowner may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section. The Finance Director shall provide copies of any reports prepared pursuant to the Continuing Disclosure Agreement to any Bondowner upon the written request of a Bondowner, delivered to the Finance Director accompanied by payment by the Person requesting the information of the cost of the City to photocopy and pay any postage or other delivery cost to provide the same, as determined by the Finance Director. (B) The City further agrees, in addition to the foregoing, to provide to any Bondowner upon the written request of such Bondowner delivered to the Finance Director accompanied by payment by such Bondowner of the cost of the City to photocopy and pay any postage or other -39~ SDPUBlWDIVENI338650.2 P347 delivery cost to provide the same, as determined by the Finance Director, the following: an annual report regarding the District which report shall include the amount of Special Taxes levied on each County Assessor's Parcel of real property in the District in the preceding year, the then delinquency status of Special Taxes with respect to each such parcel as known to the Finance Director, and a summary of any deposits to and/or withdrawals from the Special Tax Fund and the Reserve Fund in the prior year. (C) As used in this Section and Section 10.7, where the Bonds are held in book-entry form, the term "Bondowner" shall be deemed to include any Beneficial Owner of Bonds who provides to the Finance Director a written request accompanied by payment of costs to provide information, as described in Section 5.17(A) and (B) and the final paragraph of Section 10.7 countersigned by the relevant DTC participant acting on behalf of such Beneficial Owner or such similar evidence of beneficial ownership reasonably satisfactory to the Finance Director. (D) None of the City and its officers, agents and employees, the Finance Director, the Original Purchaser or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 5.17. Section 5.18 Tender of Bonds. The City covenants that it will not adopt any policy pursuant to Section 53341.1 of the Act permitting tender of Bonds in full payment or partial payment of any Special Taxes unless it first receives a certificate of a Tax Consultant that accepting such tender will not result in the District having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds when due. Section 5.19 No Paritv Bonds. The City will issue no additional bonds on a parity with the Bonds; provided, that nothing contained herein shall limit the issuance of any Special Tax Bonds of the District if (a) the rights and claims of such bonds to the Special Tax Revenues and the funds and accounts established or described in this Agreement are in all respects subordinate to the rights and claims of the Bonds, or (b) after the issuance and delivery of such Special Tax Bonds, none of the Bonds shall be Outstanding. Defeased Bonds, or Bonds in exchange for or in lieu of which other bonds have been delivered, shall not be considered Outstanding. ARTICLE VI INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE CITY Section 6.1 Deposit and Investment of Monevs in Funds. Moneys in the Administrative Expense Fund shall be invested by the Finance Director in Permitted Investments, which will, by their terms, mature as close as practicable to the date the Finance Director estimates the moneys represented by the particular investment will be needed for withdrawal from the Administrative Expense Fund. Except as otherwise specified herein, moneys in the Special Tax Fund, the Bond Fund, the Project Fund, the Reserve Fund and the -40- SDPUBI WDlVEN\338650.2 P348 Costs of Issuance Fund shall at the written direction of the District contained in an Officer's Certificate given at least two (2) days prior, be invested and reinvested by the Fiscal Agent in Permitted Investments (including investments with the Fiscal Agent or an affiliate of the Fiscal Agent or investments for which the Fiscal Agent or an affiliate of the Fiscal Agent acts as investment advisor or provides other services so long as the investments are Permitted Investments). Moneys in the Redemption Fund and the Rebate Fund shall, as set forth in an . Officer's Certificate, be invested by the Fiscal Agent in Government Obligations. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest solely in Permitted Investments described in paragraph 7 of the definition thereof. The Finance Director shall make note of any investment of funds hereunder in excess of the yield on the Bonds, so that appropriate actions can be taken to assure compliance with Section 5.13. The District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent will furnish the District periodic cash transaction statements, which include detail for all investment transactions made by the Fiscal Agent hereunder. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. Any income realized on or losses resulting from investments in any fund or account shall be credited or changed to such fund or account. Whenever in this Agreement any moneys are required to be transferred by the City to the Fiscal Agent, such transfer may be accomplished by transferring a like amount of Permitted Investments. The Fiscal Agent and its affiliates or the Finance Director may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section The Fiscal Agent shall not be required to determine the legality of any investments. Except as otherwise provided in the next sentence, all investments of amounts deposited in any fund or account created by or pursuant to this Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Agreement of the Code) at Fair Market Value. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under the applicable provisions of the Code and (unless valuation is undertaken at least annually) investments in the Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Code). The Fiscal Agent shall not be liable for verification of the application of such sections of the Code. Investments in any and all funds and accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times -41- SDPUBIWDIVENI338650.2 P349 account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement. Subject to the restrictions set forth herein and/or any written investment instructions received by Fiscal Agent pursuant to this Section 6.1, monies in said funds and accounts may be from time to time invested by the Fiscal Agent in any manner so long as: (I) Monies in the Project Fund shall be invested in obligations which will by their terms mature as close as practicable to the date the District estimates the monies represented by the particular investment will be needed for withdrawal from such Fund; and (2) Monies in the Special Tax Fund, the Bond Fund, the Redemption Fund and the Reserve Fund shall be invested only in obligations which will by their terms either mature or allow for withdrawals at par on such dates so as to ensure the payment of principal and interest on the Bonds as the same become due; provided, however, that except for investment agreements as described in paragraph II of the definition of Permitted Investments which permit withdrawal at par, investment of monies on deposit in the Reserve Fund shall have an average aggregate weighted term not greater than five (5) years. The Fiscal Agent or Finance Director, as applicable shall sell at Fair Market Value, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and neither the Fiscal Agent nor the Finance Director shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith. Section 6.2 Liabilitv of Citv. The City shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it on behalf of the District. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The City shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions covenants or agreements of the Fiscal Agent herein or of any of the documents executed by the Fiscal Agent in connection with the Bonds, or as to the existence of a default or event of default thereunder. In the absence of gross negligence or bad faith, the City, including the Finance Director, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the City and conforming to the requirements of this Agreement. The City, including the Finance Director, shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. -42- SDPUB\WDlVEN\338650.2 P350 No provision of this Agreement shall require the City to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Special Tax Revenues) in the performance of any of its obligations hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The City and the Finance Director may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel, who may be the City Attorney, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. Neither the City nor the District shall be bound to recognize any Person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and title thereto satisfactory established, if disputed. Whenever in the administration of its duties under this Agreement the City or the Finance Director shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereofbe herein specifically prescribed) may, in the absence of willful misconduct on the part of the City, be deemed to be conclusively proved and established by a certificate of the Fiscal Agent, an Independent Financial Consultant, an Appraiser or a Tax Consultant, as appropriate, and such certificate shall be full warranty to the City and the Finance Director for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the City or the Finance Director may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 6.3 Emolovment of Agents bv City. In order to perform its duties and obligations hereunder, the City and/or the Finance Director may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities. -43- SDPUBI WDlVEN\338650.2 P351 ARTICLE VII THE FISCAL AGENT Section 7.1 Appointment of Fiscal Agent. Wells Fargo Bank, National Association, is hereby appointed Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section, shall be the successor to such Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. Upon thirty (30) days prior written notice, the City may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.1, combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation.. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Fiscal Agent shall have given to the City written notice of its resignation or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. If, by reason of the judgment of any court, or regulatory agency, the Fiscal Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent hereunder shall be assumed by and vest in the Finance Director of the City in -44- SDPUB\WDlVEN\338650.2 P352 trust for the benefit of the Owners. The City covenants for the direct benefit of the Owners that its Finance Director in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the Fiscal Agent hereunder, in trust for the benefit of the Owners of the Bonds. In such event, the Finance Director may designate a successor Fiscal Agent qualified to act as Fiscal Agent hereunder. Section 7.2 Liabilitv of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. In the absence of bad faith or gross negligence, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed. therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement; but in the case of any such certificates or opinions by which any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to. the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper Person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Fiscal Agent shall not be liable for any error of judgment made in good faith unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or -45- SDPUB\WDIVEN\338650.2 P353 indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Fiscal Agent may become the Owner of the Bonds with the same rights it would have if it were not the Fiscal Agent. Section 7.3 Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including but not limited to, quarterly statements reporting funds held and transactions by the Fiscal Agent. Section 7.4 Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been. signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Fiscal Agent shall not be bound to recognize any Person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and title thereto satisfactorily established, if disputed. Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by an Officer's Certificate, and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 7.5 Compensation: Indemnification. The City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Agreement, but the Fiscal Agent shall not have a lien therefor on any funds at any time held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to indemnifY and save the Fiscal Agent, its officers, employees, directors and agents harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the City under this Section shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement, but any monetary obligation of the City arising under this Section shall be limited solely to amounts on deposit in the Administrative Expense Fund. -46- SDPUB\WDIVEN\338650.2 P354 ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.1 Amendments Permitted. This Agreement and the rights and obligations of the City and/or District and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without.a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.4. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the City of any pledge or lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), or reduce the percentage of Bonds required for the amendment hereof. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. This Agreement and the rights and obligations of the City and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for anyone or more of the following purposes: (A) to add to the covenants and agreements of the District or City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City or District; (B) to make modifications not adversely affecting any Outstanding Bonds of the City or the District in any material respect; (C) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the District or City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights of the Owners ofthe Bonds; and (D) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from gross federal income taxation of interest on the Bonds. Section 8.2 Owners' Meetings. The City on behalf of the District may at any time call a meeting of the Owners. In such event the City is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof, and to fix and adopt rules and regulations for the conduct of said meeting. -47- SDPUBIWDIVEN\338650.2 P355 Section 8.3 Procedure for Amendment with Written Consent of Owners. The City on behalf of the District and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.1, to take effect when and as provided in this Section. A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided. Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.4) and a notice shall have been mailed as hereinafter in this Section provided each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 10.4. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of . . the papers required by this Section 8.3 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the District, City and the Owners of all Bonds at the expiration of thirty (30) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such thirty-day period. Section 8.4 Disqualified Bonds. Bonds owned or held for the account of the District or City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VIII. -48- SDPUBI WDIVENI338650.2 P356 Section 8.5 Effect of Suoolemental Agreement. From and after the time any "Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under. this Agreement of the City, District, and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. Section 8.6 Endorsement or Reolacement of Bonds Issued After Amendments. The City or District may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, . in form approved by the City or District, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City on behalf of the District may determine that new Bonds, so modified as in the opinion of the City on behalf ofthe District is necessary to conform to such Owner's action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds. Section 8.7 Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. -49- SDPUBI WDIVEN\338650.2 P357 ARTICLE IX EVENTS OF DEFAULT; REMEDIES Section 9.1 Events of Default. Anyone or more of the following events shall constitute an "event of default": (A) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (B) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or (C) Default by the City or the District in the observance of any of the agreements, conditions or covenants on its part in this Agreement or in the Bonds contained (other than a payment default referred to in subparagraph (A) and (B) above), and the continuation of such default for a period of 60 days after the City and the District shall have been given notice in writing of such default by the Fiscal Agent or by the Owners of 25% aggregate principal amount of Bonds Outstanding, provided that if within 60 days the City or the District, as applicable, has commenced curing of the default and diligently pursues elimination thereof, such period shall be extended to permit such default to be eliminated. Section 9.2 Remedies of Owners. Following the occurrence of an event of default, any Owner shall have the right for the equal benefit and protection of all Owners similarly situated: (A) By mandamus or other suit or proceeding at law or in equity to enforce his or her rights against the City or the District and any of the members, officers and employees of the City or the District, and to compel the City or District, as applicable, or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Agreement; (B) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (C) By a suit in equity to require the City or the District, as applicable, and its members, officers and employees to account as the trustee of an express trust. Nothing in this article or in any other provision of this Agreement, or in the Bonds, shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as herein provided, out of the Special Tax Revenues pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners -50- SDPUB\WDIVEN\338650.2 P358 to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in this Agreement. A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Act or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the City, the District and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. The Fiscal Agent shall not be obligated to take any action on behalf of the Owners if the City or the District defaults under this Agreement. Section 9.3 Application of Special Tax Revenues and Other Funds After Default. All amounts received by the Fiscal Agent pursuant to any right given or action taken by the Owners under the provisions of this Agreement shall be applied by the Fiscal Agent in the following order upon presentation of the several Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid - First, to the payment of the costs and expenses of the Fiscal Agent, including reasonable compensation to its agents, attorneys and counsel; Second, to the payment of the whole amount of interest on and principal of the Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority: (i) to the payment of all installments of interest on the Bonds then due and unpaid, on a pro rata basis in the event that the available amounts are insufficient to pay all such interest in full; (ii) to the payment of all installments of principal of the Bonds then due and payable; on a pro rata basis in the event that the available amounts are insufficient to pay all such principal in full; and -51- SDPUB\ WDlVEN\338650.2 P3S9 (iii) to the payment of interest on overdue installments of principal and interest with respect to the Bonds, on a pro rata basis in the event that the available amounts are insufficient to pay all such interest in full. -52- SDPUB\WDIVEN\338650.2 P360 ARTICLE X MISCELLANEOUS Section 10.1 Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any Person other than the City, the District, the Fiscal Agent and the Owners, any right, remedy, claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit ofthe Owners and the Fiscal Agent. Section 10.2 Successor is Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 10.3 Discharge of Agreement. The City shall have the option to pay and discharge the entire indebtedness on all or any portion of the Bonds Outstanding in anyone or more ofthe following ways: (A) by well and truly paying or causing to be paid the principal of, and interest and any premium on, such Bonds Outstanding, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in Sections 4.4 and 4.5 is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or (C) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal Securities in such amount as the City on behalf of the District shall determine as confirmed by an independent certified public accountant will, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in Sections 4.4 and 4.5, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates. If the City shall have taken any of the actions specified in (A), (B) or (C) above, and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in this Agreement and all other obligations of the City under this -53- SDPUBIWDlVEN\338650.2 P361 Agreement with respect to such Bonds Outstanding shall cease and terminate. Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the foregoing, the obligation of the City to payor cause to be paid to the Owners of the Bonds not so surrendered arid paid all sums due thereon, all amounts owing to the Fiscal Agent pursuant to Section 7.5, and otherwise to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, shall continue in any event. Upon compliance by the City with the foregoing with respect to all Bonds Outstanding, any funds held by the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent, which are not required for the purposes of the preceding paragraph, shall be paid over to the City and any Special Taxes thereafter received by the City shall not be remitted to the Fiscal Agent but shall be retained by the City to be used for any purpose permitted under the Act. Section 10.4 Execution of Documents and Proof of Ownership bv Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor,. and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the Person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books. Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in good faith and in accordance therewith. Section 10.5 Waiver of Personal Liabilitv. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 10.6 Notices to and Demands on Citv and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the City with the Fiscal Agent) as follows: -54- SDPUBI WDIVEN\338650.2 P362 City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, California 91730 Attention: Finance Director Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Fiscal Agent with the City) as follows: Wells Fargo Bank 707 Wilshire Boulevard, 17th Floor Los Angeles, California 90071 Attention: Corporate Trust Services Section 10.7 State Reporting Requirements. The following requirements shall apply to the Bonds, in addition to those requirements under Section 5.17: (A) Annual Reporting. Not later than October 30 of each calendar year; beginning with the October 30 first succeeding the date of the Bonds, and in each calendar year thereafter until the October 30 following the final maturity of the Bonds, the Finance Director shall cause the following information to be supplied to CDIAC and to the other entities specified in Section 5.17(A): (i) the principal amount of the Bonds Outstanding; (ii) the balance in the Reserve Fund; (iii) the balance in the Interest Account of the Bond Fund representing capitalized interest; (iv) the number of parcels in the District which are delinquent in the payment of Special Taxes, the amount of each delinquency, the length of time delinquent and when foreclosure was commenced for each delinquent parcel; (v) the balance in the Project Fund; and (vi) the assessed value of all parcels in the District subject to the levy of the Special Taxes as shown in most recent equalized roll. The annual reporting shall be made using such form or forms as may be prescribed by CDIAC. (B) Other Reporting. If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bonds, or if funds are withdrawn from the Reserve Fund to pay principal and interest on the Bonds beyond levels set by CDIAC, the Fiscal Agent shall notify the Finance Director of such failure or withdrawal in writing. The Finance Director shall notify CDIAC and the Original Purchaser of such failure or withdrawal within 10 days of such failure or withdrawal. (C) Amendment. The reporting requirements of this Section 10.7 shall be amended from time to time, without action by the District, City or the Fiscal Agent, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act. (D) No Liabilitv. None of the District, City and its officers, agents and employees, the Finance Director or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 10.7. -55- SDPUB\WDlVEN\338650.2 P363 The Finance Director shall provide copies of any of such reports to any Bondowner upon the written request of a Bondowner and payment by the Person requesting the information of the cost of the City to photocopy and pay any postage or other delivery cost to provide the same, as determined by the Finance Director. The term "Bondowner" for purposes of this Section 10.7. shall include any beneficial owner of the Bonds as described in Section 5. I 7(B). Section 10.8 Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have adopted this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that anyone or more Sections, paragraphs, sentences, clauses, or phrases of this Agreement may be' held illegal, invalid or unenforceable. Section 10.9 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payments of such principal, interest and premium have become payable, if such moneys was held by the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners shall look only to the City for the payment of the principal of, and interest and any premium on, such Bonds. Section 10.10 Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Section 10.11 Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Act as in effect on the Closing Date, the provision of the Act shall prevail over the conflicting provision ofthis Agreement. Section 10.12 Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes. Section 10.13 Payment on Business Day. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be taken pursuant to this Agreement is other than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required and no interest shall accrue for the period after such date. Section 10.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. -56- SDPUBI WDIVENI338650.2 P364 IN WITNESS WHEREOF, the City caused this Agreement to be executed and the Fiscal Agent has caused this Agreement to be executed. CITY OF RANCHO CUCAMONGA, for and on behalf of City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) By: Title: City Manager WELLS FARGO BANK, NATIONAL ASSOCIATION By: Authorized Officer SDPUBI WDIVENI338650.2 S-I P365 EXHIBIT A FORM OF BOND No. $ UNITED STATES OF AMERICA STATE OF CALIFORNIA CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) 2006 SPECIAL TAX BOND INTEREST RATE MATURITY DATE September 1, _ BOND DATE ,2007 CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Rancho Cucamonga (the "City") for and on behalf of City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) (the "District"), for value received, hereby promises to pay solely from the Special Taxes (as hereinafter defined) to be collected in the District or amounts in the funds and accounts held under the Agreement (as hereinafter defined), to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above, or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2007, at the interest rate set forth above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to the registered owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office (as defined in the Agreement referred to below) of Wells Fargo Bank, National Association (the "Fiscal Agent). Interest on this Bond shall be paid by check of the Fiscal Agent mailed on each interest payment date to the registered owner hereof as of the close of business on the 15th day of the month preceding the month in which the interest payment date occurs (the "Record Date") at Exhibit A Page 1 P366 such registered owner's address as it appears on the registration books maintained by the Fiscal Agent, or (i) if the Bonds are in book-entry-only form, or (ii) otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request, respectively. This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $5,800,000 designated "City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds" (the "Bonds"). The issuance of the Bonds was approved by the qualified electors of the CFD on October 18, 2006, pursuant to the Mello- Roos Community Facilities Act of 1982, as amended, Sections 53311, et seq., of the California Government Code (the "Mello-Roos Act") for the purpose of financing the acquisition or construction of certain public facilities within the District, and the financing of certain incidental expenses. The creation of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City on December 6, 2006 (the "Resolution"), and the Fiscal Agent Agreement, dated as of December I, 2006, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with, the laws of the State of California. Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on the Bonds are payable solely from the annual special tax authorized under the Mello- Roos Act to be collected within the District (the "Special Taxes") and certain funds held under the Agreement. Interest on this Bond shall be payable from the interest payment date next preceding the date of authentication hereof, unless (i) it is authorized on an interest payment date, in which event it shall bear interest for such interest payment date, or (ii) such date of authentication is after a Record Date but on or prior to an interest payment date, in which event interest will be payable from such interest payment date, or (iii) such date of authentication is prior to the first Record Date, in which event interest will be payable from the Bond Date set forth above; provided however, that if at the time of authentication of this Bond, interest is in default hereon, this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment hereon. Any tax for the payment hereof shall be limited to the Special Taxes, except to the extent that provision for payment has been made by the City of Rancho Cucamonga, as may be permitted by law. The Bonds do not constitute obligations of the City of Rancho Cucamonga for which said City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. The Bonds are subject to optional redemption prior to their stated maturity on any Interest Payment Date, as a whole or in part, at the following redemption prices (expressed as Exhibit A Page 2 P367 percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price March 1,2007 through March 1,20_ September 1, 20_and March 1, 20_ September 1,20_ and March 1, 20_ September 1, 20_ and thereafter 10 % 10_% 10% 100% The Bonds shall be subject to redemption on any Interest Payment Date, prior to maturity, as a whole or in part on a pro rata basis among maturities from amounts deposited to the Redemption Fund representing Special Tax Prepayments. An Authorized Representative shall deliver written instructions to the Fiscal Agent not less than 60 days prior to the redemption date directing the Fiscal Agent to utilize the Special Tax Revenues transferred to the Redemption Fund and the Interest Account of the Bond Fund pursuant to the Fiscal Agent Agreement. Such mandatory redemption of the Bonds shall be at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price March 1, 2007 through March 1,20 September 1, 20_ and March 1,20_ September 1, 20_ and March 1, 20_ September 1, 20_ and thereafter 10_% 10 % 10 % 100% The Bonds maturing on September 1, 20_ are subject to mandatory sinking fund payment redemption in part on September 1, 20_, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1) Sinking Fund Payments Exhibit A Page 3 P368 The Bonds maturing on September 1, 20_ are subject to mandatory sinking fund payment redemption in part on September 1, 20_, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1 ) Sinking Fund Payments For any redemption of any of the Bonds, notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner, to the extent and subject to the provisions of the Agreement. In the event of a redemption of less than all of the Bonds, the Bonds shall be redeemed in inverse order of maturity and by lot within a maturity. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon. No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such Owner's order. The Fiscal Agent shall require the registered owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. The Agreement and the rights and obligations of the City thereunder may be modified or amended as set forth therein. Exhibit A Page 4 P369 The Bonds are not general obligations of the City, but are limited obligations payable solely from the revenues and funds pledged therefor under the Fiscal Agent Agreement. Neither the faith and credit of the City or the State of California or any political subdivision thereof is pledged to the payment of the Bonds. This Bond shall not become valid or obligatory for any purpose until the certificate of a authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent. Unless this certificate is presented by an authorized representative of The Depository Trust Company to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond does not exceed any debt limit prescribed by the laws or Constitution of the State of California. Exhibit A Page 5 P370 IN WITNESS WHEREOF, City of Rancho Cucamonga has caused this Bond to be dated the Bond Date. set forth above, to be signed by the facsimile signature of its Mayor and countersigned by the facsimile signature of its City Clerk. CITY OF RANCHO CUCAMONGA Mayor ATTEST City Clerk Exhibit A Page 6 P371 FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the Resolution and in the Agreement which has been authenticated on Fiscal Agent By: Authorized Officer Exhibit A Page 7 P372 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within-registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney, to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever Exhibit A Page 8 P373 EXHIBIT B FORM OF REQUEST FOR DISBURSEMENT - OFFICER'S CERTIFICATE with reference to City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds Date: To Wells Fargo Bank, National Association: This Officer's Certificate is issued to you pursuant to the Fiscal Agent Agreement dated as of December 1,2006, by and between the City of Rancho Cucamonga and you, as fiscal agent, with respect to the above-referenced issue (the "Fiscal Agent Agreement"). Except where the context requires otherwise, all capitalized terms shall have the meanings ascribed to them in the Fiscal Agent Agreement. Pursuant to Section 4.2(C)(insert applicable subjection) of the Fiscal Agent Agreement, you are instructed to disburse $ from the [insert applicable account] ofthe Project Fund. This Disbursement shall be made to: purpose ofthis disbursement is: the disbursement is a proper expenditure from the account show above. . The , and The undersigned certifies that no portion of the amount being requested to be disbursed has been set forth in any prior certificate requesting disbursement. CITYOFRANCHOCUCAMONGACOMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) By: Authorized Officer Exhibit B Page I P374 Asset Systems, Inc (ASI) Project Asset Mgmt Software (AssetWIN) P375 BOND PURCHASE AGREEMENT City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2006 Special Tax Bonds January _, 2007 City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) c/o City of Rancho Cucamonga J 0500 Civic Center Drive Rancho Cucamonga, CA 91730 Ladies and Gentlemen: Stone & Youngberg LLC (the "Underwriter") offers to enter into this Bond Purchase Agreement (this "Purchase Agreement") with the City of Rancho Cucamonga (the "City"), for itself and on behalf of the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) (the "District") which will be binding upon the City and the Underwriter upon the acceptance hereof by the City. Upon your acceptance of this offer, this Purchase Agreement will be binding upon the City and the Underwriter. This offer is made subject to its acceptance by the City by execution of this Purchase Agreement and its delivery to the Underwriter on or before 5:00 p.m., California time, on the date hereof. Terms not otherwise defined herein shall have the same meanings as set forth in the Fiscal Agent Agreement described below. Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the City for offering to the public, and the City, for itself and on behalf of the District, hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the City of Rancho Cucamonga Community Facilities District No. 2006-0J (Vintner's Grove) 2006 Special Tax Bonds (the "Bonds"). The purchase price for the Bonds is $ (representing the aggregate principal amount of the Bonds of $ less an underwriter's discount of $ and an original issue discount of $ ). The Bonds will mature on the dates and in the amounts, and bear interest at the rates, and be subject to mandatory redemption as set forth in Appendix A attached hereto. Section 2. Description of the Bonds. The Bonds will be issued pursuant to the following: . the Mello-Roos Community Facilities Act of 1982 (constituting Sections 53311 et seq. of the California Government Code) (the "Act"); . a resolution adopted on December _, 2006 (the "Resolution of Issuance") by the City Council oflhe City, acting as the legislative body of the District; and . a Fiscal Agent Agreement dated as of January J, 2007 (the. "Fiscal Agent Agreement"), by and between the City and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent"). The Bonds will mature on the dates and in the principal amounts, and will bear interest at the rates, as set forth 'in Appendix A hereto, and will be as described in the Fiscal Agent Agreement and the R VPUB\KSNOWl 722285.1 P376 Official Statement dated the date hereof relating to the Bonds (together with all appendices, amendments and supplements thereto, the "Official Statement"). The City shall apply the proceeds of the Bonds to finance the purchase of the Facilities described in the Official Statement. Section 3. Public Offering. The Underwriter agrees to make a bona fide public offering of all the Bonds initially at the public offering prices (or yields) set forth on the cover of the Official Statement. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on the cover of the Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. Section 4. Official Statement; Continuing Disclosure. The City has delivered or caused to be delivered to the Underwriter prior to the execution of this Purchase Agreement or the first offering of the Bonds, whichever first occurs, copies of the Preliminary Official Statement. Such Preliminary Official Statement is the official statement deemed final by the City for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") (except for the omission of certain information as permitted by the Rule), and approved for distribution by resolution of the City. The City shall have executed and delivered to the Underwriter a certification to such effect in the form attached as Appendix B. Within 7 business days after the date of this Purchase Agreement, and in sufficient time to accompany any confirmation that requests payment from a customer, the City shall deliver .to the Underwriter a final Official Statement, executed on behalf of the City by an authorized representative of the City and dated the date hereof, which shall include information permitted to be omitted by paragraph (b)( 1) of the Rule and with such other amendments or supplements as shall have been approved by the City and the Underwriter. The City, for itself and on behalf of the District, will undertake, pursuant to the Fiscal Agent Agreement and a Continuing Disclosure Agreement (the "Continuing Disclosure Agreement"), to provide certain annual financial information and notices of the occurrence of certain events, if material. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. Section 5. The Closing. At 8:00 a.m., California time, on January _, 2007, or at such other time or on such earlier or later business day as are mutually agreed upon by the City and the Underwriter, the City will deliver (i) the Bonds in definitive form to the 'Underwriter at The Depository Trust Company in New York, New York, or such other location as may be specified by the Underwriter, with CUSlP identification numbers printed thereon, in fully registered form and registered in the name of Cede & Co., and (ii) the closing documents hereinafter mentioned at the offices of Best Best & Krieger LLP, San Diego, California or another place to be mutually agreed upon by the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section I hereof by federal funds wire payable to the order of the Fiscal Agent on behalf of the City. This payment and delivery, together with the delivery of the aforementioned documents, is herein called the "Closing." The Bonds will be delivered in such denominations and deposited in the account or accounts specified by the Underwriter pursuant to written notice not later than five business days prior to Closing. The Bonds will be made available to The Depository Trust Company for inspection not less than 24 hours prior to the Closing. Section 6. Representations, Warranties and Covenants. The City, for itself and on behalf ofthe District represents, warrants and covenants to the Underwriter that: RVPUB\KSNOW\722285.1 2 P377 (a) Due Organization. Existence and Authority. The City, is a duly organized municipal corporation and existing under the laws of the State of California, with full right, power and authority, on behalf of itself and the District, to execute, deliver and perform its obligations under this Purchase Agreement; the Fiscal Agent Agreement and the Continuing Disclosure Agreement (together, the "City Documents") and to issue the Bonds and otherwise carry out and consummate the transactions contemplated by the City Documents and the Official Statement. (b) Due Authorization and Approval. By all necessary official action, the City Council, as legislative body of the District, has: (i) held a public hearing and adopted resolutions (collectively with the Resolution of Issuance the "City Resolutions") forming the District, authorizing the levy of the Special Taxes and the incurrence of bonded indebtedness by the District; (ii) called, held and conducted an election within the District to approve the levy of the Special Taxes on parcels of property within the District and the issuance of the Bonds; (iii) adopted the Resolution of Issuance and approved and authorized the execution and delivery of the Bonds, the Fiscal Agent Agreement, this Purchase Agreement, the Official Statement and the Continuing Disclosure Agreement (as hereinafter defined); and (iv) authorized and approved the performance by the City and the District of their obligations contained in, and the taking of any and all action on their part as may be necessary to carry out, give effect to and consummate the transactions on the part of the City and/or the District contemplated by each 'of said documents; and at the Closing Date, the Bonds, the Resolution of Issuance, the Fiscal Agent Agreement, this Purchase Agreement, the Continuing Disclosure Agreement and any other applicable documents will constitute legal, valid and binding obligations of the District, enforceable against the District in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer and other laws affecting the enforcement of creditors' rights generally and to the application of equitable principles and the exercise of judicial discretion in appropriate cases. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. (c) Official Statement Accurate and Complete. The Preliminary Official Statement was as of its date, and the final Official Statement is, and at all times subsequent to the date of the final Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement and the final Official Statement contain, and up . to and including the Closing will contain, no misstatement of any material fact and do not, and up to and including the Closing will not, omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading. (d) Underwriter's Consent to Amendments and Supplements to Official Statement. The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any RVPUB\KSNOW\722285.1 3 P378 governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. If, at any time prior to the earlier of (i) receipt of notice from the Underwriter that the Official Statement is no longer required to be delivered under Rule 15c2-12 or (ii) the Closing Date (as described in Section 5 above), any event known to the officers of the City participating in the issuance of the Bonds occurs with respect to the District or the City as a result of which the final Official Statement as then amended or supplemented might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the District shall promptly notity the Underwriter in writing of such event. Any information supplied by the City for inclusion in any amendments or supplements to the final Official Statement will not contain any untrue or misleading statement of a material fact relating to the District or the City or omit to state any material fact relating to the District or the City necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (e) No Breach or Default. As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the District and the City are not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State of California or the United States, or any applicable judgment or decree or any fiscal agent agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the District or the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument. As of the time of acceptance hereof and as of the time of the Closing, except as disclosed in the Official Statement, the authorization, execution and delivery of the City Documents and compliance with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State of California or the United States, or any applicable judgment, decree, license, permit, fiscal agent agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the City (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. The City, acting as the administrator for and on behalf of certain other community facilities districts, has on two occasions not met the continuing disclosure requirements on a timely basis. In each instance the City failed to timely file reports on behalf of these community facilities districts, due on February I, 2001 for the Community Facilities District No. 2000-01 (South Etiwanda) Special Tax Bonds, Series 2000 and for the Community Facilities District No. 2000-02 (Rancho Cucamonga Corporate Park) Special Tax bonds, Series 2001. Such reports were subsequently filed on June 12, 2001. It should be noted that these bond issues closed in December 2000 and the information that was contained in the annual reports filed on June 12, 200 I was identical to the information contained in the official statements relating to these bond issues distributed to the purchasers of the Bonds. (f) No Litigation. As of the time of acceptance hereof and the Closing, except as may be disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government authority, public board or body, pending or threatened (i) in any way questioning the corporate existence of the District or the City, or the RVPUBIKSNOWI722285.! 4 P379 titles of the officers of the District or the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or. the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or City Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds trom taxation or contesting the powers of the City or the District and either of their authority to pledge the revenues securing the Bonds; (iii) which may result in any material adverse change relating to the District or the City; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the final Official Statement or any supplement or amendment thereto or asserting that the Preiiminary Official Statement or the final Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence. (g) Compliance with Local Goals and Policies. The issuance of the Bonds by the District conforms with the "Statement of Goals and Policies for the Use of the. Mello-Roos Community Facilities Act of 1982" as amended and restated by the City on July 21, 1999. (h) Blue Skv Laws. The City or the District shall cooperate with the Underwriter in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City shall not be required to execute a special or general consent to service of process in any jurisdiction in which it is not now so subject or to qualify to do business in any jurisdiction where it is not now so qualified. (i) Neither the District nor the City shall take or omit to take, as appropriate, any action that would cause the interest on the Bonds to be subject to California personal income taxation or affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. Section 7. Closing Conditions. The Underwriter has entered into this Purchase Agreement in reliance upon the representations, warranties and covenants herein and the performance by the City and the District of their obligations hereunder, both as of the date hereof and as of the date of the Closing. The Underwriter's obligations under this Purchase Agreement to purchase and pay for the Bonds are subject to the following additional conditions: (a) Bring-Down Representation. The representations, warranties and covenants of the City contained in this Purchase Agreement must be true, complete and correct at the date hereof and at the time of the Closing, as ifmade on the date of the Closing. (b) Effectiveness of City Documents, Official Statement and City Resolutions. At the time of the Closing: (i) the City Documents must be in full force and effect, and neither the City Documents nor the Official Statement may have been amended, modified or supplemented except with the written consent of the Underwriter, and (ii) there shall be in full force and effect such resolutions as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated by this Purchase Agreement, the Official Statement and the City Documents. . RVPUB\KSNOW\722285.1 5 P380 (c) Closing Documents. At or prior to the Closing, the Underwriter shall receive each of the documents identified in Section 8. Section 8. Closing Documents. In addition to the other conditions to the Underwriter's obligations under this Purchase Agreement to purchase and pay for the Bonds, at or before the Closing the Underwriter shall receive each of the following documents, provided that the actual payment for the Bonds by the Underwriter and the acceptance of delivery thereof shall be conclusive evidence that the requirements of this Section 8 shall have been satisfied or waived by the Underwriter. (a) Bond Opinion and Reliance Letter. An approving opinion of Bond Counsel dated the date of the Closing and substantially in the form appended to the Official Statement, together with a letter from such counsel, dated the date of the Closing and addressed to the Underwriter, to the effect that the foregoing opinion addressed to the City may be relied upon by the Underwriter to the same extent as if such opinion were addressed to the Underwriter. (b) . Supplemental Opinion. A supplemental opinion or opinions of Bond Counsel addressed to the Underwriter, in form and substance acceptable to the Underwriter, and dated the date of the Closing substantially to the following effect: (i) The City Documents, the Bonds and the Official Statement have been duly authorized, executed and delivered by the City, and the City Documents and the Bonds constitute the valid, legal and binding agreements of the District, enforceable in accordance with their respective terms. (ii) The statements contained.in the Official Statement (including the cover page and the Appendices thereto) that purport to summarize certain provisions of the Bonds, the Fiscal Agent Agreement, the City Resolutions and the City Documents, the approving opinion of Bond Counselor federal tax law, are accurate; provided that Bond Counsel need not express any opinion with respect to any financial or statistical information contained in the Official Statement. (iii) The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. (iv) The District is a community facilities district duly organized and validly existing under the laws of the State of California, including the Act. (c) District Counsel Opinion. An opinion of Richards, Watson & Gershon, counsel to the City, dated the date of the Closing and addressed to the Underwriter, in form and substance acceptable to Bond Counsel substantially to the following effect: (i) The City is a municipal corporation duly organized and existing under the laws of the State of California. (ii) The City is duly authorized to approve and execute the City Resolutions and City Documents. (iii) The individuals executing the City Documents and Official Statement on behalf of the City are officers of the City holding the offices set forth after their respective signatures, and are lawfully authorized to execute and deliver such documents on behalf of the City. RVPU8\KSNOW\722285.! 6 P381 (iv) District, and rescinded. The City Resolutions and City Documents have been duly adopted by the are in full force and effect and have not been modified, amended or (v) Without conducting an independent investigation, except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending or threatened against the District challenging the creation, organization or existence of the District, or the validity of the City Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City to enter into or perform its obligations under any of the City Documents, or under which a determination adverse to the City would have a material adverse effect upon the financial condition or the revenues of the District, or which, in any manner, questions the right of the City to pledge the Revenues to the payment of the Bonds. (d) Fiscal Agent Counsel Opinion. The opinion of counsel to the Fiscal Agent, dated the date of the Closing, addressed to the Underwriter, to the effect that: (i) The Fiscal Agent is a national banking association duly organized and validly existing under the laws of the United States of America, having full power to enter into, accept and administer the trust created under the Fiscal Agent Agreement and obligations as Dissemination Agent under the Continuing Disclosure Agreement. (ii) The Fiscal Agent Agreement and Continuing Disclosure Agreement have been duly authorized, executed and delivered by the Fiscal Agent and Dissemination Agent and constitute the legal, valid and binding obligations of the Fiscal Agent and Dissemination Agent enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles, if equitable remedies are sought. (e) Disclosure Counsel Opinion. An opinion of Best Best & Krieger, LLp, a limited liability partnership ("Disclosure Counsel"), dated the Closing Date, and addressed to the City and Underwriter, to the effect that during the course of serving as Disclosure Counsel in connection with the execution and delivery of the Bonds and without having undertaken to determine independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, no information came to the attention of the attorneys in such firm rendering legal services in connection with the issuance of the Bonds that would lead them to believe that the Official Statement (excluding therefrom the financial statements, any financial or statistical data, or forecasts, charts, numbers, estimates, projections, assumptions or expressions of opinion included in the Official Statement, information regarding DTC, and the appendices to the Official Statement as to which no opinion need be expressed), as of the date thereof or the Closing Date, contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, riot misleading. (I) District 15c2-l2 Certificate. A certificate of the City, dated the date of the Preliminary Official Statement, signed by the City for itself and on behalf ofthe District by a duly authorized officer of the City, in the form attached as Appendix B or such other form approved by the Underwriter. RVPUBIKSNOW\722285.! 7 P382 (g) District Closing Certificate. A certificate of the City, dated the date of the Closing, signed by the City and for itself and on behalf of the District by a duly authorized officer of the City, in the form attached as Appendix C or such other form approved by the Underwriter. (h) Fiscal Agent's Certificate. A certificate of the Fiscal Agent, dated the date of the Closing, signed on behalf of the Fiscal Agent by a duly authorized officer of the Fiscal Agent, in the form attached as Appendix D or such other form approved by the Underwriter. (i) Fiscal Agent Resolution and Incumbencv Certificate. A copy of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers ofthe Fiscal Agent, which resolution authorizes the authentication and delivery of the Bonds and the execution and delivery of the Fiscal Agent Agreement and Continuing Disclosure Agreement, along with an incumbency certificate with respect to the officers of the Fiscal Agent. (j) Developers' IOb-5 Certificate. A Certificate from William Lyon Homes, Inc., a California corporation (the "Developer") and Lewis Investment, LLC ("Lewis"); dated the date of the Preliminary Official Statement, signed on behalf of such Developer or Lewis, as applicable, by duly authorized officers of the Developer and Lewis, as applicable, in the form attached as Appendix E or such other form approved by the Underwriter. (k) Developers' Closing Certificate. A Certificate from the Developer, dated the date of the Closing, signed on behalf of such Developer by duly authorized officers of such Developer in the form attached as Appendix F or such other form approved by the Underwriter. (I) No-Litigation Letter of Developer. A No-Litigation Letter of the Developer, dated the date of the Closing, signed on behalf of such Developer by a Senior Vice President of such Developer, in form and substance satisfactory to the Underwriter and the District. (m) Developers' Counsel. One or more opinions of in-house or special counsel to the Developer, dated the date of the Closing, addressed to the Underwriter and the District, to the effect that: (i) The Developer has been incorporated and is validly existing in good standing under the laws of the State of the State of California. (ii) The Developer Continuing Disclosure Agreement has been duly and validly authorized, executed and delivered by the Developer, and, assuming due authorization and execution by the other parties thereto, constitutes a legally valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms, subject to certain equitable, legal or statutory principles affecting the enforcement of contractual rights generally, regardless of whether such enforcement is considered in a proceeding in equity or at law, including, without limitation, concepts of notice, materiality, impairment of security, reasonableness, good faith and fair dealing, jurisdiction, service of process, venue and applicable statues of limitation and judicial discretion or statutory limitations with respect to the availability of equitable remedies or defenses, the calculation of damages, and the entitlement to attorneys' fees and other fees and costs. (iii) In the course of acting as special counsel to the Developer in connection with the preparation of the final Official Statement, he reviewed those sections of the Official Statement relating to the Developer and its proposed development plans in the District, and participated in conferences and telephone conversations with officers and other representatives of the Developer, during which conferences and conversations the RVPUBIKSNOW\722285.1 8 P383 contents of the Official Statement and related matters were discussed. Based solely on our knowledge and written statements of the. Developer, we advise you that no information came to the attention of the attomey in our firm rendering services as special counsel to the Developer that caused us to believe that, as of the date thereof and the date hereof, the statements contained in the final Official Statement relating to the Developer, its proposed development of property in the District, its property ownership in the District and its contractual arrangements (except that no opinion or belief is expressed as to (i) any financial statements and other financial, statistical, economic, or engineering data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, or (ii) any information about valuation, appraisals, markets absorption, archaeological or environmental matters) under the sections of the Official Statement entitled "INTRODUCTORY STATEMENT - The District and the Development," "THE DEVELOPER AND THE PROPOSED DEVELOPMENT" (except for the information under the captions "- Lewis Investment" and "-Recent Projects of Lewis Investment" for which no opinion is provided), and "CONCLUDING INFORMATION - Continuing Disclosure," (only as to the last paragraph), contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (n) Opinion of Counsel to Lewis. An opinion of counsel to Lewis dated the date of the Closing addressed to the Underwriter and the District, in form and substance similar to the opinions of counsel to the Developer in (m) above. (0) Market Absorption Consultant's Certificate. A certificate of the Market Absorption Consultant dated the date of the Closing in the form attached as Appendix H or such other form approved by the Underwriter, relating to the Official Statement. (p) Appraiser's Certificate. A certificate of the Appraiser, dated the date of the Closing, in the form attached as Appendix I or such other form approved by the Underwriter, relating to the Official Statement. (q) Original Executed Documents. An original executed copy of the Official Statement, the City Resolutions and each of the City Documents. (r) Developer Continuing Disclosure Agreement. An original executed copy of the Developer Continuing Disclosure Agreement. (s) Additional Documents. Such additional certificates, instruments and other documents as Bond Counsel, Disclosure Counsel, the District or the Underwriter may reasonably deem necessary. If the City is unable to satisfY the conditions contained in this Purchase Agreement, or if the obligations of the Underwriter are terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the District shall be under further obligation hereunder, except as further set forth in Section] O. Section 9. Termination Events. The Underwriter may terminate this Purchase Agreement, without liability, by notification to the City .if at any time between the date hereof and prior to the Closing: (a) any event occurs which causes any statement contained in the Official Statement to be materially misleading or results in a failure of the Official Statement to state a material fact RVPUBIKSNOW\722285.! 9 P384 necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading; (b) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any Federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority materially adversely affecting the federal or State tax status of the District, or the interest on bonds or notes or obligations of the general character of the Bonds; (c) any legislation, ordinance, rule or regulation is introduced in, or enacted by any governmental body, department or authority of the State, or a decision by any court of competent jurisdiction within the State or any court of the United States is rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; (d) legislation is enacted by the Congress of the United States, or a decision by a court of the United States is rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental district having jurisdiction of the subject matter is issued or made to the effect that the issuance, offering. or sale of obligations of the general character of the Bonds, orthe issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Fiscal Agent Agreement needs to be qualified under the Trust Fiscal Agent Agreement Act of 1939, as amended and as then in effect; (e) additional material restrictions not in force as of the date hereof are imposed upon trading in securities generally by any governmental authority or by any national securities exchange which restrictions materially adversely affect the Underwriter's ability to trade the Bonds; (f) a general banking moratorium is established by federal or California authorities; (g) the United States becomes engaged in hostilities that resulted in a declaration of war or a national emergency or any other outbreak of hostilities or a national or international calamity or crisis occurs, or any escalation of existing hostilities, calamity or crisis occurs, financial or otherwise, the effect of which on the financial markets of the United States being such as, in the reasonable opinion of the Underwriter, would affect materially and adversely the ability of the Underwriter to market the Bonds; RVPU8\KSNOW\722285.! 10 P385 (h) any action, suit or proceeding described in Section 6(f) is commenced with respect to either the District or the City which, in the judgment of the Underwriter, materially adversely affects the market price of the Bonds; or (i) a general suspension of trading on the New York Stock Exchange is in force. Section 10. Expenses. The Underwriter has no obligation to pay, and the City shall payor cause to be paid, the expenses incident to the performance of the obligations of the City under this Purchase Agreement, including but not limited to (a) the costs of the preparation and printing, or other reproduction (for distribution on or prior to the date hereof) of the City Documents and the cost of preparing, printing, issuing and delivering the definitive Bonds; (b) the fees and disbursements of any counsel, financial advisors, appraisers, market consultants, accountants or other experts or consultants retained by the District and the City; (c) the fees and disbursements of Bond Counsel and Disclosure Counsel; and (d) the cost of printing of the Preliminary Official Statement and any supplements and amendments thereto and the cost of printing of the Official Statement, including the requisite number of copies thereoffor distribution by the Underwriter. The Underwriter shall pay, and the District has no obligation to pay, all expenses incurred by it in connection with the public offering and distribution of the Bonds, including but not limited to (a) reporting fees chargeable by the California Debt and Investment Advisory Commission; (b) the fee of Underwriter Counsel; and (c) CUSIP Service Bureau fees. Section 11. Notice. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the address set forth above. Any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to: Stone & Youngberg LLC, One Ferry Building, San Francisco, CA 94] II, Attention: Mr. Jim Cervantes. Section 12. Entire Agreement. This Purchase Agreement, when accepted by the City, constitutes the entire agreement between the City and the Underwriter and is made solely for the benefit of the City and the Underwriter (including the successors or assigns of any Underwriter). No other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. All the City's representations, warranties and agreements in this Purchase Agreement shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter. Section 13. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 14. Severability. In case anyone or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. Section 15. Governing Law. The validity, interpretation and performance of this Purchase Agreement shall be governed by the Bond Laws of the State of California. RVPUB\KSNOW\722285.1 11 P386 Section 16. No Assignment. The rights and obligations created by this Purchase Agreement shall not be subject to assignment by the Underwriter or the District without the prior written consent of the other parties hereto. STONE & YOUNGBERG LLC, as Underwriter By: Managing Director Accepted as of the date first stated above: CITY OF RANCHO CUCAMONGA, for itself and on behalf of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) By: City Manager RVPUB\KSNOW\721285. J 12 Principal Payment Date (September I) RVPUBIKSNOW\722285. I Principal Amount P387 APPENDIX A Maturity Schedule of Bonds Interest Rate Yield Price A-I P388 APPENDIX B CITY RULE 15c2-12 CERTIFICATE The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of the City of Rancho Cucamonga (the "City"), the city council of which is the legislative body of the City of Rancho Cucamonga Community Facilities District No. 2006-0 I (Vintner's Grove) (the "District"), and as such is duly authorized to execute and deliver this Certificate on behalf of the City in connection with the issuance of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the District as follows: (i) This Certificate is delivered in order to enable the underwriter of the Bonds to comply with Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"); (ii) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement (the "Preliminary Official Statement"); (iii) As used herein, "Permitted Omissions" shall mean the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all with respect to the Bonds; and (iv) The Preliminary Official Statement IS, except for the Permitted Omissions, deemed final within the meaning of the Rule. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: December _, 2006 . CITY OF RANCHO CUCAMONGA, for itself and on behalf of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) By: City Manager RVPUBIKSNOW\722285. 1 B-1 P389 APPENDIX C CITY CLOSING CERTIFICATE The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of the City of Rancho Cucamonga (the "City"), the city council of which is the legislative body of the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) (the "District"), and as such is duly authorized to execute and deliver this Certificate on behalf of the City and District in connection with the issuance of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the City and District as follows: (i) The representations, warranties and covenants of the District contained in the Bond Purchase Agreement by and between the City and Stone & Youngberg LLC, dated December _, 2006 (the "Purchase Agreement") are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing and the District has complied with all of the terms and conditions ofthe Purchase Agreement required to be complied with by the District or the City at or prior to the date of the Closing; (ii) No event affecting the District or the City has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light ofthe circumstances under which they were made, not misleading; and (iii) Except as otherwise disclosed in the Official Statement and to the best knowledge of such signing officer without conducting an independent investigation, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending or threatened against the District or the City challenging the creation, organization or existence of the City or the District, or the validity of the City Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City or the District to enter into or perform its obligations under any of the City Documents, or under which a determination adverse to the District or the City would have a material adverse effect upon the financial condition or the revenues of the District, or which, in any manner, questions the right of the District to pledge the Revenues to the payment of the Bonds. Capitalized terms not defined herein shall have the same meaning as is set forth in the Purchase Agreement. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _, 2007 CITY OF RANCHO CUCAMONGA, for itself and on behalf of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) By: City Manager RVPUBIKSNOw\722285. I C-I P390 APPENDIX D FISCAL AGENT CERTIFICATE The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of Wells Fargo Bank, National Association, a national banking association (the "Fiscal Agent"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Fiscal Agent in connection with the issuance by the City of Rancho Cucamonga Community Facilities District No. 2006-0] (Vintner's Grove) of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Fisca] Agent as follows: (i) The Fisca] Agent is duly organized and existing as a national banking association in good standing under the laws of the United States of America, having the full power and authority to enter into and perform its duties under the Fiscal Agent Agreement and Continuing Disclosure Agreement (the "Fiscal Agent Documents"); (ii) The Fiscal Agent is duly authorized to enter into the Fiscal Agent Documents; and (iii) To its best knowledge after due inquiry, there is no action, suit, proceeding or investigation, at law or in equity, before or by any court or governmental district, public board or body pending against the Fisca] Agent or threatened against the Fisca] Agent which, in the reasonable judgment of the Fiscal Agent, would affect the existence of the Fiscal Agent, contests or affects the validity or enforceability of the Fiscal Agent Documents, or contests the powers of the Fiscal Agent or its authority to enter into and perform its obligations under the Fisca] Agent Documents. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _' 2007 WELLS FARGO BANK, NATIONAL ASSOCIATION By: Authorized Officer RVPUBIKSNOWI722285. I 0-1 P391 APPENDIX E lOb-5 CERTIFICATE OF DEVELOPER William Lyon Homes, Inc. (the "Developer"), hereby certifies that: I. The Developer is the developer of certain land ("Land), in City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) (the "District"), as described in the Preliminary Official Statement of the District dated December _, 2006 (the "Preliminary Official Statement") relating to the above-referenced Bonds. . 2. Any and all information, as updated and amended from time to time prior to the date hereof, submitted by the Developer to the District and its counsel in connection with the preparation of the Preliminary Official Statement was, to the Actual Knowledge of the Developer, true and correct in all material respects when given and, as it may have been updated or amended or as included in the Preliminary Official Statement, remains true and correct in all material respects as of the date hereof. 3. Statements relating to the Developer, its proposed development of property in the District, its property ownership in the District and its contractual arrangements contained in the sections of Preliminary Official Statement entitled "INTRODUCTORY STATEMENT - The District and the Development," "THE DEVELOPER AND THE PROPOSED DEVELOPMENT" (except for the information under the captions "- Lewis Investment" and "-Recent Projects of Lewis Investment" for which no opinion is provided), and "CONCLUDING INFORMATION - Continuing Disclosure," (only as to the last paragraph) do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 4. Except as disclosed in the Preliminary Official Statement, the Developer has not entered into a contract to sell, nor is it in the process of selling, any portion of the Land to any person or entity other than as described in the Preliminary Official Statement. For purpose of this Certificate, the term "Actual Knowledge of the Developer" shall mean the knowledge that the undersigned currently have or have obtained from interviews with such officers and responsible employees of the Developer as the undersigned have reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, the undersigned have not conducted any additional inspection or inquiry. The undersigned make the representations in this Certificate for, and on behalf of, the Developer, and as officers of the Developer. Dated: December _, 2006 WILLIAM LYON HOMES, INC., a California corporation By: Name: Title: By: Name: Title: RVPUBIKSNOw\722285. 1 E-I P392 APPENDIX F CLOSING CERTIFICATE OF DEVELOPER The undersigned are authorized officers of William Lyon Homes, Inc., a California corporation (the "Developer"), and as such are duly authorized to execute and deliver this Certificate on behalf of the Developer in connection with the issuance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-01 (Vintner's Grove) (the "District") of its 2007 Special Tax Bonds (the "Bonds"), and further hereby certifY and reconfirm on behalf ofthe Developer as follows: (I) The Developer has duly authorized, by all necessary action, the execution, delivery and due performance of the Developer Continuing Disclosure Agreement. Except as described in the final Official Statement, the Developer has never failed to comply in all material respects with any continuing disclosure undertakings with regard to Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended, to provide annual reports or notices of material events specified in such rule. (2) The Developer Continuing Disclosure Agreement has been duly executed and delivered by the Developer. (3) The information contained in the sections of the final Official Statement entitled "INTRODUCTORY STATEMENT - The District and the Development" "THE DEVELOPER AND THE PROPOSED DEVELOPMENT" (except for the information under the captions "- Lewis Investment" and "-Recent Projects of Lewis Investment" for which no opinion is provided), and "CONCLUDING INFORMATION - Continuing Disclosure" (only as to the last paragraph), as they relate to the Developer, its proposed development of property in the District (the "Development"), its property ownership in the District and its contractual arrangements, is true and correct in all material respects and does not contain any untrue or incorrect statement of a material fact and does not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (4) The Developer has full power and authority to own its property (including, without limitation, the Development) and to carry on its business as presently conducted and as described in the final Official Statement. (5) There are no pending (based on proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Developer, threatened legal or administrative proceedings against the Developer or to which propertY of the Developer is subject, which if decided adversely to the Developer could materially and adversely affect the transactions contemplated by the final Official Statement or which could materially and adversely affect the validity or enforceability of the Bonds, the Issuance Resolution, the Fiscal Agent Agreement, the Developer Continuing Disclosure Agreement or the Bond Purchase Agreement dated December _, 2006, between the City and Stone & Youngberg, LLC (the "Purchase Agreement"). (6) Except as disclosed in the final Official Statement, to the Actual Knowledge of the Developer, no event has occurred since the date of the Preliminary Official Statement which would cause statements relating to the Developer, its proposed development of property in the District, its property ownership in the District and its contractual arrangements under the captions "INTRODUCTORY STATEMENT - The District and the Development," "THE DEVELOPER AND THE PROPOSED DEVELOPMENT" (except for the information under the captions "- Lewis Investment" and "-Recent Projects of Lewis Investment" for which no opinion is provided), and "CONCLUDING INFORMATION - Continuing Disclosure" (only as to the last paragraph) to contain any untrue or incorrect statement of material fact necessary in order to RVPUB\KSNOw\722285. J F-I P393 make the statements made therein in light of the circumstances under which they are made, not misleading. (7) The Developer is solvent and no proceedings are pending (based on property service of process having been accomplished) or, to the Actual Knowledge of the Developer threatened against the Developer may be adjudicated as bankrupt, or become the debtor in a bankruptcy proceeding, or discharged from any or all of its debts or obligations or granted an extension oftime to pay its debts or a reorganization or readjustment of its debts. (8) To the Actual Knowledge of the Developer, the Developer has not been delinquent in the payment of special taxes or assessments with respect to property within an assessment or community facilities district that was not cured within the fiscal year in which the special tax or assessment was levied within the past five years. (9) Except as disclosed in the final Official Statement, the Developer has not submitted an application for, nor received actual notice of, (i) the formation or authorization of any assessment district or community facilities district which would include any portion of the land within the District, or (ii) the authorization or issuance of any debt secured by a special tax to be levied on any portion of the land within the District, other than the Special Tax. Capitalized terms not defined herein shall have the same meaning as is set forth in the Purchase Agreement. For purposes of this Certificate, the term "Actual Knowledge of the Developer" shall mean the knowledge that the undersigned currently have or have obtained from interviews with such officers and responsible employees of the Developer as the undersigned have reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, the undersigned have not conducted any additional inspection or inquiry. The undersigned make the representations in this Certificate for, and on behalf of, the Developer, and as officers of the Developer. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _, 2007 WILLIAM LYON HOMES, INC. By: Name: Title: By: Name: Title: RVPUBIKSNOWI722285. 1 F-2 P394 APPENDIX G CERTIFICATE OF SPECIAL TAX CONSULTANT The undersigned hereby certifies and represents that he' or she is a duly appointed and acting authorized officer of David Taussig & Associates (the "Special Tax Consultant"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Special Tax Consultant in connection with the issuance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-01 (Vintner's Grove) (the "District") of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Special Tax Consultant as follows: (i) Based upon the Special Tax Consultant's review of the Rate and Method of Apportionment of the Special Tax (the "Rate and Method") set forth in Appendix B to the Official Statement, the Special Tax Consultant hereby certifies that the Special Tax, if levied in the maximum amounts permitted pursuant to the Special Tax formula set forth in the Rate and Method, would be levied in an amount equal to at least 110% of the gross annual debt service on the Bonds, provided that the annual debt service figures on the attached debt service schedule, which were relied upon by Special Tax Consultant, are substantially true and correct; (ii) Although the Special Tax, if levied in the maximum amounts under the Special Tax formula set forth in the Rate and Method, would be levied in an amount equal to at least 110% of the gross annual debt service payable with respect to the Bonds each year, no representation is made herein as to actual amounts that will be collected in future years; and (iii) All information provided by or related to materials provided by the Special Tax Consultant in the Official Statement, including but not limited to information regarding Rate and Method, are true and correct as of the date of the Official Statement and as of the date hereof. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _, 2007 DAVID TAUSSIG & ASSOCIATES By: Its: RVPUBIKSNOw\722285, 1 G-I RVPUBlKSNOw\722285. 1 P395 DEBT SERVICE SCHEDULE Period Ending (September 1) Special Tax Bonds 0-2 Aggregate Debt Service P396 APPENDIX H CERTIFICATE OF MARKET ABSORPTION CONSULTANT The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of Empire Economics, Inc. (the "Market Absorption Consultant"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Market Absorption Consultant in connection with the issuance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-01 (Vintner's Grove) (the "District") of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Market Absorption Consultant as follows: (i) The Market Absorption Consultant prepared a market absorption study relating to the absorption of properties within the District dated September 21, 2006 (the "Market Absorption Study"). The Market Absorption Study is described and summarized in the Preliminary Official Statement dated (the "Preliminary Official Statement") and the Official Statement dated (the "Official Statement"), including Appendix A thereto, relating to the Bonds; (ii) The Market Absorption Consultant hereby certifies that all information with respect to the Market Absorption Study in the Official Statement is true and correct as of the date of the Official Statement and as ofthe date hereof; and (iii) The Market Absorption Consultant hereby consents to the use of the Market Absorption Study in connection with the distribution and use of the Preliminary Official Statement and Official Statement. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _,2007 EMPIRE ECONOMICS, INC. By: Its: RVPUBlKSNOWI722285. I H-1 P397 APPENDIX I CERTIFICATE OF APPRAISER The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized' officer of Bruce W. Hull & Associates, Inc. (the "Appraiser"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Appraiser in connection with the issuance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-01 (Vintner's Grove) (the "District") of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Appraiser as follows: (i) The Appraiser prepared an appraisal of the properties within the District dated November _' 2006 (the "Appraisal"). . The Appraisal is described and summarized in the Preliminary Official Statement dated December _, 2006 (the "Preliminary Official Statement") and the Official Statement dated December _' 2006 (the "Official Statement"), including Appendix A thereto, relating to the Bonds; (ii) The Appraiser hereby certifies that all information with respect to the Appraisal in the Official Statement is true and correct as of the date of the Official Statement and as of the date hereof; and (iii) The Appraiser hereby consents to the use of the Appraisal in connection with the distribution and use ofthe Preliminary Official Statement and Official Statement. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _' 2007 BRUCE W. HULL & ASSOCIATES, INC. By: Its: RVPUBlKSNOW\722285. I I-I .5 . " ." 'C " o ~ ~ " 05 ~ o " " . ;>, a " "' ~ " 05 ~ " o o :>: " "' B ~ d ~ 0 o '.0 i:6 ~ . o '0 8 .;; ._ .c .~ ~ ~'o @ ~ " " " - o . - " ~ :~ B B " ~ i!j " 005 ~.s ~ 5 .~ !=: - 0 8'~ uS - .- fi";i 5 6- - " " 0 V3 0 ~.$2 Id o'~ ~g o 's 5 ._ 'I:: 0;0- ~~ .c " ;g ~~ .'" ~3 H Eo!! " ~ ,g 5 o . 8 .~ ~ :s -g :Q ::>~ g,g <8 0 ~-E lC 5l o.c .- 0 -e:E " ~ .~ .S 0; . "'0.9 .~ t) ....~ fi 'c 5 " $J'- ~~ P39a PRELIMINARY OFFICIAL STATEMENT DATED JANUARY _,2007 NOT RATED NEW ISSUE - BOOK-ENTRY ONLY In the opinion of Best Best & Krieger LLP, San Diego. California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and compliance with certain covenants and requirements discussed herein, interest on the bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax. See "TAX MATTERS." - $5,685,000. City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Speci!!1 Tax Bonds Dated: Date of Delivery Due: September 1, as shown below The City of Rancho Cucamonga (the "City"), for itself and on behalf of the City of Rancho Cucamonga Corrrrnunity Facilities District No. 2006-01 (Vintner's Grove) (the "District") is issuing its 2007 Special Tax Bonds (the "Bonds") to (i) finance certain street, landscaping, storm drains and park facilities to be owned by the City and certain water and sewer facilities to be owned by the Cucamonga County Valley Water District and the Inland Empire Utilities Agency (collectively, the "Facilities"), (ii) provide for capitalized interest on the Bonds through September 1, 2007. (iii) fund a Reserve fund, (iv) pay the costs of issuance relating to the Bonds, and (v) pay certain administrative costs of the District. The Bonds are being issued under the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), and a Fiscal Agent Agreement dated as of December 1, 2006 (the ''Fiscal Agent Agreement"), by and between the District and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent"). The Bonds are payable from the proceeds of annual special taxes to be levied on property located within the District and from certain other funds pledged under the Fiscal Agent Agreement. The special taxes authorized to be levied on the taxable property in the District are to be levied according to the rate and method of apportionment approved by a vote of the qualified electors within the District. See Appendix B - "Rate and Method of Apportionment of Special Taxes." The special taxes are to be collected in the same manner and at the same time as ad valorern property taxes are collected by the County of San Bernardino and, when received, will be placed in the Special Tax Fund established and maintained by the Fiscal Agent. The special taxes are secured by liens on taxable real property within the District and do not constitute a personal indebtedness of the respective landowners. Accordingly, in the event of delinquency in the payment Qf special taxes when due, proceedings to recover such delinquent special taxes may be directed only against such real property securing the delinquent special taxes. Thus, the value of the land in the District that is subject to the levy of special taxes by the District is a critical factor in determining the investment quality of the Bonds. See "SECURITY FOR THE BONDS" and "THE DISTRICT - Appraisal of Parcels". The Bonds will be issued in fully registered form only, and, when executed and delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (collectively referred to as "DTC"). DIC will act as securities depository for the Bonds. Ownership interest in the Bonds may be purchased in book-entry form only, in denominations of $5,000. Interest on the Bonds accrues from their date, and is payable on March 1 and September 1 of each year, commencing March 1,2007. Principal, premium (if any), and interest due on the Bonds will be paid by the Fiscal Agent to DTC or its nominee, which will in turn remit such payments to its participants for subsequent disbursement to the beneficial owners of interest in the Bonds. See "Appendix D - Book-Entry Only System". Bonds", The Bonds are subject to.redemption prior to maturity, as more fully described in this Official Statement. See "THE BONDS - Redemption of NEITHER THE FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE CITY, THE COUNTY OF SAN BERNARDINO, THE STATE OF CALIFORNIA, NOR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE DISTRICT OR THE CITY. THE BONDS ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM THE PROCEEDS OF THE SPECIAL TAX LEVIED WITHIN THE DISTRICT AND CERTAIN FUNDS ESTABLISHED UNDER THE FtSCAL AGENT AGREEMENT AND HELD BY THE FISCAL AGENT, AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT. This cover page contains information for quick reference only. It is not a summary of the Bonds. Prospective purchasers must read the entire Official Statement to obtain information essential to the making of an informed investment decision. See "BONDOWNERS' RISKS" for a discussion of factors that should be considered, in addition to the other matters set forth in this Offici~1 Statement, in evaluating the investment quality of the Bonds. The Bonds are offered, when, as and if issued, subject to approval as to their legality by Best Best & Krieger UP, San Diego, California, Bond Counsel, and certain other conditions. Certain legal matters will be passed on for the City by Best' Best & Krieger LLP, Riverside, California, as Disclosure Counsel. and by Richards Watson & Gershon, a professional corporation, Los Angeles, California. Additionally, it is anticipated that the Bonds in book-entry form will be available for delivery through the book-entry system of DTC in New York, New York on or about January.---' 2007. STONE & YOUNGBERG LLC The date of this Official Statement is ,2007 . Preliminary, subject to change. RVPUBIKSNOw\721973.1 Maturity Date (Sentember I) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 % Term Bonds Due September I, 20~ Price % Term Bonds Due September I, 20 ~ Price $ $ P399 $5,685,000' City of Rancho Cncamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds Maturity Schedule* (Base CUSIP )(1) $ Serial Bonds Principal Amount CUSIP(1) Suffix Interest Rate Yield to Yield to Yield % CUSIP(I) ~% CUSIP(I) . Preliminary, subject to change. (1) Copyright 2006, American Bankers Association. CUSIP data hereio is provided by Standard & Poor's, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve io any way as a substitute for the CUSIP services. RVPUBIKSNOw\721973.1 P400 CITY OF RANCHO CUCAMONGA MAYOR AND CITY COUNCIL Donald J. Kurth, M.D., Mayor Diane Williams, Mayor Pro Tem Rex Gutierrez, Councilmember L. Dennis Michael, Councilmember Sam Spagnolo, Councilmember CITY STAFF Jack Lam, City Manager Pamela S. Easter, Assistant City Manager Tamara L. Layne, Finance Director Ingrid Y. Bruce, GIS/Special Districts Manager James L. Marlm1an, Esq., City Attorney Joe O'Neil, City Engineer BOND COUNSEL FINANCIAL ADVISOR TO THE CITY Best Best & Krieger LLP San Diego, California Fieldman, Rolapp & Associates Irvine, California APPRAISER SPECIAL TAX CONSULTANT Bruce W. Hull & Associates, Inc. Ventura, California David Taussig & Associates, Inc. Newport Beach, California FISCAL AGENT! DISSEMINATION AGENT DISCLOSURE COUNSEL Wells Fargo Bank, National Association Los Angeles, California Best Best & Krieger LLP Riverside, California MARKET ABSORPTION CONSULTANT Empire Economics, Inc. Capistrano Beach, California RVPUBIKSNOW\721973.1 P401 TABLE OF CONTENTS Page INTRODUCTORY STATEMENT........................... I Genera!.............. ................. ...... .... .......... ........... I Authority for Issuance ...................................... I The District and the Development .................... I Purpose of the Bonds ........................................ 2 Description of the Bonds .................................. 2 Security for the Bonds ...................................... 2 Risk Factors ...................................................... 3 Tax Matters ....................................................... 3 Professionals Involved in the Offering ............. 3 Continuing Disclosure ...................................... 4 Other Information ............................................. 4 FINANCING PLAN..................................................4 Estimated Sources And Uses Of Funds ............5 THE BONDS............................................................. 5 Authority for Issuance ...................................... 5 Description of the Bonds .................................. 6 Redemption of Bonds ....................................... 7 Parity Bonds...................................................... 9 Debt Service Schedule ....................................10 SECURITY FOR THE BONDS ............................. II Genera!............................................................ II Limited Obligation.......................................... II The Special Taxes........................................... II The Rate and Method...................................... 14 Reserve Fund .................................................. 17 Delinquent Special Taxes; Covenant To Foreclose......................................................... 17 THE DISTRICT ......................................................19 General Description and Location of the District............................................................ 19 AcquisitionIFinancing Agreement .................. 19 Facilities to be Financed with the Bonds ........ 20 Absorption Study............................................ 20 Appraisal of Parcels ........................................ 21 . Direct and Overlapping Deb!.......................... 21 Estimated Value-to-Lien Ratios...................... 22 Cumulative Tax, Assessment and Fee Burden on Property......................................... 22 THE DEVELOPER AND THE PROPOSED DEVELOPMENT ....................................................24 The Developer ................................................24. The Proposed Development............................ 26 RVPUB\KSNOW\721973.1 Page BONDOWNERS' RISKS ....................................... 31 Not a General Obligation of the District or the City ........................................................... 31 Levy of the Special Taxes............................... 31 Exempt Properties........................................... 31 Collection of the Special Taxes ...................... 32 Concentration of Property Ownership ............32 Not a Personal Obligation............................... 33 Parity Taxes and Special Assessments............ 33 Land Values and Development....................... 33 Notice of Special Taxes; Disclosures To Future Purchasers............................................ 35 Bankruptcy and Foreclosure Delays ............... 36 Limitation on Remedies ofBondbolders; No Acceleration .............................................. 37 Loss of Tax Exemption................................... 37 Secondary Markets and Prices ........................ 38 CONCLUDING INFORMATION.......................... 38 Tax Matters..................................................... 38 Legal Opinions................................................ 38 Litigation ........................................................ 39 Continuing Disclosure .................................... 39 No Rating........................................................ 40 Underwriting.. ................................... ........ ...... 40 Professional Fees ............................................40 Miscellaneous ...................................... ........... 40 Appendix A - Summary Appraisal Report............ A-I Appendix B - Rate and Method of Apportionment of Special Taxes ...................... B-1 Appendix C - Summary of the Fiscal Agent Agreement ........................................................ C-l Appendix D - Book-Entry Only System...............D-l Appendix E - Form of Continuing Disclosure Agreements.... .......................................... ......... E-l Appendix F - Form of Bond Counsel Opinion ......F-I Appendix G - General Information of the City of Rancho Cucamonga .....................................G-I.: Appendix H - Summary Absorption Study...........H-l P402 No Offering May be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale ofthe Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the City, the District, any other parties described in this Official Statement, or in the condition of property within the District since the date of this Official Statement. Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds. Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. Document References and Summaries. All references to and summaries of the Fiscal Agent Agreement or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents. Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. Bonds are Exempt from Securities Laws Registration. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934. Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "budget" or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR. RVPUBIKSNOw\72 I 973.1 P403 REGIONAL LOCATION MAP City of Rancho Cucamonga San Bernardino County, California .', , 6tl &-- LOS ANGELES COUNTY , , \ , , j , , I I I I SAN BERNARDINO COUNTY (iJ-") Redlanels ( ~ --v --~-- ~--- ~ Beaumont RIVERSIDE C 0 U 'N T V Hemet I "'~ C',,-, 'C' o . C'~ ~II.- &~ NORIH 5 .11 miles ----0:1 API'IIOkl......TE RVPUBIKSNOW\721973.1 P404 AERIAL LOCATION MAP City of Rancho Cucamonga San Bernardino County, California RVPUBIKSNOW\721973.1 P405 OFFICIAL STATEMENT $5,685,000. City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds INTRODUCTORY STATEMENT Geueral The purpose of this Official Statement, which includes the cover page and attached Appendices, is to provide certain information concerning the issuance by the City, for itself and on behalf of the District, of its City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds (the "Bonds"). The Bonds are being issued under a Fiscal Agent Agreement (the "Fiscal Agent Agreement") dated as of December I, 2006, by and between the City and Wells Fargo Bank, National. Association, a national banking association, as fiscal agent (the "Fiscal Agent"). This introduction is subject in all respects to the more complete information set forth in this Official Statement. All capitalized terms used in this Official Statement and not otherwise defined have the same meaning as in the Fiscal Agent Agreement. See "Appendix C - Summary of the Fiscal Agent Agreement - Definitions" . Authority for Issuance The Bonds will be issued under the Mello-Roos Community Facilities Act of 1982, as amended, constituting Sections 53311 et seq. of the California Government Code (the "Act"), the approving vote of the eligible landowner voters of the District, a resolution of the City Council of the City (the "City Council"), acting in its capacity as the legislative body of the District adopted on December --' 2006, and the Fiscal Agent Agreement. The City Council has authorized the issuance and delivery of the Bonds in the maximum principal amount of $5,800,000. See "THE BONDS - Authority for Issuance." The District aud the Development The District was formed by the City on October 16, 2006, under the Act following a public hearing held on such date. Following the formation of the District, the City conducted a special election at which the qualified electors of the District approved the levy of special taxes within the District and the issuance of bonds secured by such special taxes. The amount of bonded indebtedness and levy of special taxes were subsequently amended. See "THE BONDS - Authority for Issuance." The District encompasses approximately 20.5 gross acres of land in the southerly portion of the City of Rancho Cucamonga. Of this acreage, approximately 9.5 acres are expected to be developed into uses subject to the special tax. At buildout, it is currently expected the District will contain approximately 76 detached residential dwelling units ranging in size from 2,188 to 3,173 square feet, and 78 attached residential units ranging in size from 1,335 to 1,920 square feet. All of the Property within the District was acquired by William Lyon Homes, Inc., a California corporation (the "Developer") under a purchase arrangement with Lewis Investment Company, LLC ("Lewis Investment"). Under the purchase arrangement, the Developer is to construct certain off-site public improvements and Lewis Investment is obligated to reimburse William Lyon for such expenditures. These off- site facilities will be paid for with Bond proceeds by making payments to Lewis Investment in an amount equal to such reimbursement payments. See "THE DISTRICT - AcquisitionlFinancing Agreement." The Developer . Preliminary, subject to change. RVPUBIKSNOW\721973.! I P406 has extensive experience in developing homes in a variety of Southern California communities. See "THE DEVELOPER AND THE PROPOSED DEVELOPMENT." Purpose of the Bonds The Bonds are being issued to (a) provide funds for the acquisition and construction of certain public improvements (See "THE DISTRICT - Facilities to be Financed with the Bonds"), (b) fund a reserve fund for. the Bonds, (c) pay certain administrative expenses of the District, (d) provide for capitalized interest on the Bonds through September I, 2007, and (e) pay costs associated with the issuance of the Bonds. Description of the Bonds The Bonds are being issued in the aggregate principal amount of $5,685,000' and are dated their date of delivery and mature in the amounts and in the years, and bear interest at the rates set forth on the cover page of this Official Statement. Interest on the Bonds will be payable on each March I and September I each year, beginning March I, 2007. Registration, book-entry provisions, denominations. The Bonds will be delivered in fully registered form only and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be purchased in book-entry form only in the principal amount of $5,000 or any integral multiple. See "Appendix D - Book-Entry Only System." Transfer and exchange. If the book-entry only system described below is no longer used with respect to the Bonds, the Bonds may be transferred and exchanged in accordance with the Fiscal Agent Agreement. Redemption provisions. The Bonds are subject to optional and mandatory sinking fund redemption prior to their respective maturity dates. See "THE BONDS - Redemption of Bonds." Security for the Bonds Limited Obligation. Neither the full faith and credit nor the general taxing power of the City, the County of San Bernardino (the "County"), the State of California (the "State"), or any political subdivision of the State is pledged to the payment ofthe Bonds. Except for the Special Taxes (defined below), no other taxes are pledged to the payment of the Bonds. The Bonds are not general obligations of the District or the City. The Bonds are limited obligations of the District payable solely from the proceeds of the Special Taxes levied within the District and other sources described in the Fiscal Agent Agreement and held by the Fiscal Agent. . The Special Taxes. Payments of interest on and principal of the Bonds are to be made from the proceeds of the Special Tax, as defined in the Rate and Method, as defined below, authorized to be levied annually by the District pursuant to the Rate and Method on all taxable property within the District (the "Special Taxes"). The Special Taxes are authorized to be levied under the Act and in accordance with the special election held in the District and the Rate and Method. See "SECURITY FOR THE BONDS - The Special Taxes" and "- The Rate and Method" and Appendix B - Rate and Method of Apportionment of Special Taxes. . Preliminary, subject to change. RVPUB\KSNOW\721973.1 2 P407 Appraised Value of Property within the District, Absorption and Value to Debt Ratio. An appraisal dated October 23, 2006 of the market value of the fee simple estate in the land within the District that is subject to the levy of Special Taxes (the "AppraisaJ?') has been prepared by Bruce W. Hull & Associates, Inc. (the "Appraiser") of Ventura, California and is attached as Appendix A. Subject to the assumptions contained in the Appraisal, the Appraiser estimated that the fee simple market value of the properties in the District as of October 15,2006 was $22,000,000. A Market Absorption Study dated September 21, 2006, regarding the proposed development within the District was conducted by Empire Economics, Inc., Capistrano Beach, California. This report indicates that full absorption of the proposed development is expected to begin by the Fall of 2007 and to be completed by 2009. See "Appendix H - Summary Absorption Study." The aggregate market values reported in the Appraisal results in estimated overall value-to-debt ratios of 3.85 to I, calculated with respect to all applicable direct and overlapping tax and fixed lien assessment debt, if any, as of the projected closing date for the Bonds. The value-to-debt ratios of individual parcels within the District will differ from the foregoing aggregate ratios. See "THE DISTRICT - Appraisal of Parcels" and "THE DISTRICT - Value to Debt Ratio". See also "THE DISTRICT - Cumulative Tax, Assessment and Fee Burden on Property" for a description of certain additional debt or other obligations secured by liens on the property within the District. Reserve Fund. The Fiscal Agent Agreement establishes a Reserve Fund for the Bonds which is required to be funded in an amount equal to the Reserve Requirement. The Reserve Requirement is (a) as of any date of calculation, an amount not to exceed the lesser of (i) the Maximum Annual Debt Service on the Outstanding Bonds, (ii) 125% of Average Annual Debt Service on the Outstanding Bonds, or (iii) 10% of the face amount of the Outstanding Bonds. See "SECURITY FOR THE BONDS - Reserve Fund." Risk Factors Certain events could affect the ability of the District to pay debt service on the Bonds when due. See the section of this Official Statement entitled "BONDOWNERS' RISKS" for a discussion of special factors which should be considered, in addition to the other matters set forth herein, in considering the investment quality of the Bonds. Tax Matters In the opinion of Bond Counsel, under existing laws, regulations, rulings and court decisions, the interest on the Bonds is exempt from personal income taxes of the State and, assuming certain representations and compliance with certain covenants and requirements described in the section entitled "CONCLUDING INFORMATION - Tax Matters", is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax on individuals and corporations. See Appendix F hereto for the form of the opinion of Bond Counsel expected to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion, see "CONCLUDING INFORMATION - Tax Matters." ProCessionals Involved in the Offering Wells Fargo Bank, National Association, will serve as Fiscal Agent for the Bonds. The Bonds will be delivered subject to approval as to their validity by Best Best & Krieger, LLP, San Diego, California, Bond. Counsel. Certain legal matters will be passed upon for the Underwriter by disclosure counsel, Best Best & Krieger LLP, Riverside, California, and for the City and the District by Richards Watson & Gershon, a professional corporation, Los Angeles, California. Certain legal matters will be passed upon for the Developer RVPUB\KSNOW\721973.1 3 P408 by its counsel Goodwin Procter LLP, Los Angeles, California. An appraisal of the property within the District has been prepared by Bruce W. Hull & Associates, Inc., Ventura, California. Fieldman, Rolapp & Associates of Irvine, California, has served as financial advisor to the City and the District for the financing. David Taussig & Associates, Inc. of Newport Beach, California, has served as special tax consultant to the District for the financing, and Empire Economics, Inc., Capistrano Beach, California, has acted as market absorption consultant. For information concerning circumstances in which certain of the above - named professionals may have a financial or other interest in the offering of the Bonds, see "CONCLUDING INFORMATION _ Professional Fees." Continuing Disclosure The District has agreed to provide, or cause to be provided, to each nationally recognized municipal securities information repository ("NRMSIR") and any public or private repository or entity designated by the State as a state repository ("State Repository") periodic reports, commencing October 31, 2007 as to the District, containing certain financial information and operating data relating to the District, and to provide notices of the occurrence of certain enumerated events, if material. The Developer has also agreed for the benefit of the Owners of the Bonds to provide or cause to be provided, to each NRMSIR and any State Repository semi-annual reports containing certain financial information and operating data relating to the development of their respective properties, and to provide notices of the occurrence of certain enumerated events, if material regarding their respective properties. The timing of such reports and the specific nature of the information required to be contained in each of these reports and the notices of material events are set forth in "Appendix E - Forms of Continuing Disclosure Agreements." See also "CONCLUDING INFORMATION - Continuing Disclosure." Other Iuformation This Official Statement speaks only as of its date, and the information contained herein is subject to change. Brief descriptions of the Bonds, certain sections of the Fiscal Agent Agreement, security for the Bonds, special risk factors, the District, the City, the Developer and its proposed plan of development and other information are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. The descriptions of the Bonds, the Fiscal Agent Agreement, and other resolutions and documents are qualified in their entirety by reference to the forms thereof and the information with respect thereto included in the Bonds, the Fiscal Agent Agreement, such resolutions and other documents. All such descriptions are further qualified in their entirety by reference to laws and to principles of equity relating to or affecting generally the enforcement of creditors' rights. Copies of such documents may be obtained from the office of the City Clerk of the City, 10500 Civic Center Drive, Rancho Cucamonga, California 91730. FINANCING PLAN Facilities to be Financed With Bond Proceeds. Bond proceeds in the estimated amount of $4,670,000' will be used to construct or to acquire certain public facilities to be owned by the City, the Cucamonga Valley Water District and the Inland Empire Utilities Agency. See ''THE DISTRiCT - Facilities to be Financed with Bonds." The Bond proceeds will be used to acquire the Facilities by making payments to Lewis Investment under the terms of an Acquisition/Financing Agreement dated , 2006, among the City, the District, the Developer and Lewis Investment (the "Acquisition Agreement"). See ''THE DISTRiCT _ Acquisition/Financing Agreement." The City anticipates acquiring approximately $3,978,000' of public . Preliminary, subject to change. RVPUB\KSNOW\721973.1 4 P409 facilities with Bond proceeds including, street improvements, landscaping improvements, drainage improvements and certain dry utilities with Bond proceeds under the terms of the Acquisition Agreement. Joint Financing Agreements. In connection with the formation of the District, the City has entered into separate Joint Community Facilities Financing Agreements with the Cucamonga Valley Water District (the "Water District") and the Inland Empire Utilities Agency (the "Utilities Agency"). Under each of these agreements, the City and the respective public agencies have agreed that a portion of the proceeds of the Bonds will be used to finance public facilities that will be owned by such public agencies. The amount of bond proceeds and the facilities or property to be financed for the Water District and the Utilities Agency are as follows: Public Agencv Inland Empire Utilities Agency Cucamonga Valley Water District TOTAL Bond Proceeds $245,000 447.000 $692,000 FacilitieslUse Wastewater Water and Sewer Estimated Sources And Uses Of Funds The following table sets forth the estimated sources and uses of the Bond proceeds: TABLE 1 City of Rancho Cucamonga, Commnnity Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds Estimated Sources and Uses of Funds SOURCES OF FUNDS Principal Amount of the Bonds Less Underwriter's Discount Less Original Issue Discount Total Sources of Funds USES OF FUNDS Deposit to the Project Fund(!) Deposit to Reserve Fund Deposit to Interest Account(2) Deposit to Costs ofIssuance Fund Deposit for Administrative Expenses(3) Total Uses of Funds (I) (2) (3) Includes amounts payable to the Water District and the Utility Agency. Represents capitalized interest on the Bonds through September 1,2007. Represents the anticipated administrative expenses of the District for Fiscal Year 2006-2007. THE BONDS Authority for Issuance The Act was enacted by the California Legislature to provide an alternate method of financing certain public capital facilities and services, especially in developing areas of the State. Once duly established, a community facilities district is a legally constituted governmental entity within defined boundaries, with the governing board or legislative body of the local agency that established the district acting on its behalf. Subject to approval by a two-thirds vote of qualified electors and compliance with the provisions of the Act, a legislative body of a local agency may issue debt securities for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness. RVPUBIKSNOW\721973.1 5 P410 Under the Act, the City Council has iaken the following actions: On August 16, 2006, the City Council adopted the following resolutions: · Resolution No. 06-250 declaring the intention ofthe City Council to establish the District and to authorize the levy of special taxes therein to finance the acquisition and construction of certain public facilities. · Resolution No. 06-0253 declaring the intention of the City Council to issue bonds secured by special taxes to pay for the acquisition of certain facilities in the District. On October 18, 2006, the City Council, following a public hearing held on such date, adopted: · Resolution No. 06-322 forming and establishing Community Facilities District No. 2006-01 (Vintner's Grove) and authorizing submittal of levy of special taxes therein to the qualified electors thereof. · Resolution No. 06-323 declaring the necessity to incur a bonded indebtedness, submitting to the qualified electors of the District a proposition to incur a bonded indebtedness secured by a special tax to pay for certain facilities in the District and a proposition to establish an appropriateness limit for such District, and giving notice thereof. On October 18, 2006, the qualified electors within the District, authorized the issuance of bonds in a maximum principal amount of $5,800,000 to be secured by the levy of the special taxes to finance the acquisition and construction of such facilities, established an annual appropriations limit for the District, and approved the levy of the special taxes pursuant to a rate and method of apportionment of special taxes (the "Rate and Method"). The City Council, following the certification of the election results by the City Clerk, adopted Resolution No. 06-324 on October 18,2006 declaring the results of the special election within the District. On October 18, 2006, the City Council also introduced and waived the first reading of Ordinance No. 769 authorizing the levy of a special tax within the District. The City Council adopted Ordinance No. 769 (the "Ordinance") on November 1,2006, and such Ordinance became effective on December 1,2006. On , 2006, the City Council also adopted Resolution No. authorizing the issuance of the Bonds and approving the forms of the Fiscal Agent Agreement, Bond Purchase Agreement, Preliminary Official Statement and Continuing Disclosure Agreement. Description of the Bonds The Bonds will mature on the dates and in the principal amounts and will bear interest at the rates per annum set forth on the inside cover page of the Official Statement. Interest on the Bonds will accrue from their date, and will be payable semiannually on March I and September I each year (each an "Interest Payment Date") commencing March I, 2007. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. The Bonds will be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple. All of the Bonds, when issued, will be registered in the name of Cede & Co., as nominee of DTC, New York, New Yark, which will act as securities depository for the Bonds. Purchasers will not receive physical certificates representing their interests in the Bonds. Principal of and interest on the Bonds will be paid by the Fiscal Agent to DTC for subsequent disbursement to DTC Participants, who will remit such payments to the beneficial owners of the Bonds. See "Appendix D - Book-Entry Only System." RVPUB\KSNOw\721973.1 6 P411 Redemption of Bonds Optional Redemption. The Bonds are subject to optional redemption prior to their stated maturity on any Interest Payment Date, as a whole or in part, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be reduced), together with accrued interest thereon to date of redemption: Redemption Date Redemption Price Mandatory Redemption from Proceeds of Special Tax Prepayments. The Bonds shall be subject to redemption on any Interest Payment Date, prior to maturity, as a whole or in part on a pro rata basis among maturities from amounts deposited to the Redemption Fund representing Special Tax Prepayments. An Authorized Representative shall deliver written instructions to the Fiscal Agent not less than 60 days prior to the redemption date directing the Fiscal Agent to utilize the Special Tax Revenues transferred to the Redemption Fund and the Interest Account of the Bond Fund pursuant to the Fiscal Agent Agreement. Such mandatory redemption of the Bonds shall be at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price The Bonds will be subject to such mandatory redemption as a result of a Special Tax Buydown (as such term is used in the Rate and Method) in the event of certain changes in development. See "APPENDIX B - Rate and Method of Apportionment of Special Taxes - Special Tax Buydown." Mandatory Sinkin!! Fund Redemption. The Bonds maturing on September I, 20_ are subject to mandatory sinking fund redemption in part on September I, 20-, and on any date thereafter each September I thereafter to maturity, by lot, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date' (September 1) Principal Amount Redeemed The Bonds maturing on September 1,20_ are subject to mandatory sinking fund redemption in part on September 20_, and on each September I thereafter to maturity by lot, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1) Principal Amount Redeemed RVPUBIKSNOW\721973.1 7 P412 Redemption Date (September 1) Principal Amonnt Redeemed The principal amounts of the Bonds subject to mandatory sinking fund redemption in the preceding tables shall be reduced, as a result of any prior partial optional redemption or mandatory redemption from the proceeds of Special Tax Prepayments, in reverse order of sinking fund payment date. Selection of Bonds for Redemption. Whenever provision is made for the redemption of less than all of the Bonds or any given portion thereof, the Fiscal Agent shall select the Bonds to be redeemed, from each maturity in any manner the City specifies, with such selection within a maturity to be done in any manner which the Fiscal Agent deems fair. Notice of Redemption. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the date fixed for redemption, to the Original Purchaser, to the Securities Depositories, to one or more Information Services, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond Register in the Principal Office of the Fiscal Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and Bond number of each Bond to be redeemed or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the Bonds so called for redemption shall have been deposited in the Bond Fund or Redemption Fund, such Bonds so called shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price and interest thereon through the date of redemption, and no interest shall accrue thereon on or after the redemption date specified in the notice of redemption. . All Bonds redeemed will be canceled immediately by the Fiscal Agent and will not be reissued. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the City, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds. . RVPUB\KSNOW\721973.1 8 P413 Purchase in Lieu of Redemption. In lieu of optional mandatory or mandatory sinking fund redemption, moneys in the Bond Fund or Redemption Fund may be used and withdrawn by the Fiscal Agent for purchase of outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase and any premium which would otherwise be due if such Bonds were to be redeemed in accordance with the Fiscal Agent Agreement. In lieu of optional redemption, the District may elect to purchase Bonds at public or private sale at such prices as the District may in its discretion determine; provided, that, unless otherwise authorized by law, the purchase price (including brokerage and other charges) of Bonds so purchased may not exceed the principal amount of those Bonds plus accrued interest to the purchase date. Parity Bonds The City will covenant in the Fiscal Agent Agreement that it will issue no additional bonds on a parity with the Bonds; provided, however, nothing in the Fiscal Agent Agreement limits the issuance of any bonds on behalf of the District if(a) the rights and claims of such bonds to the Special Tax Revenues and the funds and accounts established and described in the Fiscal Agent Agreement are in all respects subordinate to the rights and claims of the Bonds, or (b) after the issuance and delivery of such bonds, none of the Bonds shall be Outstanding. The Bonds defeased pursuant to the Fiscal Agent Agreement or Bonds in exchange or in lieu of which other bonds have been delivered are not considered to be Outstanding. RVPUBIKSNOW\721973.1 9 Debt Service Schedule P414 The table below sets forth the scheduled payments of principal and interest for the Bonds, including annual debt service totals. Year Ending (SeDtember 1) 2007(!) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 .2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 TOTAL TABLE 2 City of Rancho Cucamonga, Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds Debt Service Schedule PrinciDal Interest(!) Total Debt Service (I) Interest for the 2007 Bond Year will be paid from the moneys deposited to the Interest Account on the Closing Date. RVPUBIKSNOw\721973.l 10 P415 SECURITY FOR THE BONDS General The Bonds are secured by and payable from an irrevocable first lien on the Special Tax Revenues (defined below) and moneys on deposit in the following funds established pursuant to the Fiscal Agent Agreement: the Bond Fund, the Reserve Fund, and the Redemption Fund, until disbursed as provided in the Fiscal Agent Agreement. Amounts in the Project Fund, the Cost of Issuance Fund, the Special Tax Fund, the Administrative Expense Fund and the Rebate Fund established pursuant to the Fiscal Agent Agreement are not pledged to the repayment of the Bonds. "Special Tax Revenues" include the proceeds of Special Taxes received by the City, including any scheduled payments and any prepayments of such Special Taxes, accrued interest and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of such Special Taxes to the amount of such lien and accrued interest; provided, however, such Special Tax Revenues do not include amounts retained by the Finance Director for deposit in the Administrative Expense Fund and any penalties collected in connection with any Special Taxes that are delinquent. Such Special Tax Revenues and all moneys deposited into the above referenced funds (except as otherwise provide in the Fiscal Agent Agreement) are dedicated to the payment of the principal of, and interest and premium on, the Bonds as provided in the Fiscal Agent Agreement and the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with the provisions of the Fiscal Agent Agreement. No Pledge of the Facilities. The Facilities constructed and acquired with the proceeds of the Bonds are not in any.way pledged to pay the debt service on, nor do such Facilities secure in any way payment of debt service on the Bonds. Any proceeds of condemnation or destruction of any Facilities financed with the proceeds of the Bonds are not pledged to pay debt service on the Bonds. Limited Obligation Neither the full faith and credit nor the general taxing power of the City, the County, the State, or any political subdivision is pledged to the payment of the Bouds. The Bonds are not general obligations of the District or the City. The Bonds are limited obligations of the District payable solely from the proceeds of the Special Taxes and other sources described in the Fiscal Agent Agreement and held by the Fiscal Agent. The Special Taxes Approval of the Special Tax. On October 18, 2006, the City Council established the District in accordance with the provisions of the Act. In a special election held following the establishment of the District, the qualified electors within the District, the owners of land within the District, authorized the issuance of Bonds in the maximum principal amount of $5,800,000. The City Council, acting as the legislative body of the District, will establish tax rates to levy and apportion the special tax against property within the District on an annual basis. RVPUBIKSNOW\721973.1 II P416 District Covenant to Levy the Special Tax. Under the Fiscal Agent Agreement, the City is required to comply with all requirements of the Act so as to assure the timely collection of the Special Tax Revenues, including without limitation, the enforcement of delinquent Special Taxes. On or within five Business Days of each June I, the Fiscal Agent shall provide the Finance Director of the City with a notice stating the amount then on deposit in the Interest Account and Principal Account of the Bond Fund, and the Reserve Fund, and informing the City that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for Annual Debt Service and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance equals the Reserve Requirement. The receipt of or failure to receive such notice by the Finance Director in no way affects the obligations of the Finance Director described below. Upon receipt of such notice, the Finance Director shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. The Finance Director shall effect the levy of the Special Taxes within the District each Fiscal Year in accordance with the Ordinance No. 769 by each July IS that the Bonds are Outstanding, or otherwise such that the computation of the levy is complete before the final date on which the Auditor will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Finance Director shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Finance Director shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any Outstanding Bonds becoming due and payable during the ensuing year, including any necessary replenishment or expenditure of the amount within the Reserve Fund for such Bonds and an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any rebate obligation owing to the federal government) during such year, taking into account the balances in such funds and in the Special Tax Fund. The Special Taxes so levied shall not exceed the authorized amounts as provided in the proceedings pursuant to the Rate and Method. Duration of Special Tax Levy. The Special Taxes shall be levied for a period not to exceed 50 years commencing with Fiscal Year 2007-2008; provided, however, Special Taxes will cease to be levied within the District in an earlier Fiscal Year if the CFD Administrator (as such term is defined in the Rate and Method) has determined that (i) all required interest and principal payments on the Bonds secured by and payable from such Special Taxes have been paid; and (ii) all Authorized Facilities have been constructed. Covenant not to Reduce Special Tax Rates Unless Certain Conditions are Met. The City has covenanted in the Fiscal Agent Agreement, that to the maximum extent that the law permits it to do so, that the City shall not initiate proceedings to reduce the Maximum Special Tax Rate (as such term is defined in the Rate and Method) unless, in connection therewith, (i) the City receives a certificate from one or more Tax Consultants which, when taken together, certify that, on the basis of the parcels of land and improvements existing in the District as of the July I preceding the reduction, the Maximum Annual Special Tax which may be levied on all Assessor's Parcels (as such term is defined in the Rate and Method) of taxable property within the District on which a completed structure is located in each Fiscal Year will equal at least 110% of the sum of the gross debt service on all Bonds to remain Outstanding plus the Administrative Expense Requirement after the reduction is approved and will not reduce the Maximum Annual Special Tax payable from parcels within the District on which a completed structure is located to less than the sum of 110% of Maximum Annual Debt Service, and (ii) the City Council finds pursuant to the Fiscal Agent Agreement that any reduction made under such conditions will not adversely affect the interests of the Bondowners. Any reduction RVPUBIKSNOw\721973.1 12 P417 in the Maximum Annual Special Tax approved pursuant to the preceding sentence may be approved without the consent of the Bondowners. The City has covenanted in the Fiscal Agent Agreement that, if any initiative is adopted by the qualified electors which purports to reduce the Maximum Annual Special Tax below the levels authorized under the Rate and Method, or to limit the power or authority of the District to levy Special Taxes under the Rate and Method, the District will commence and pursue legal action in order to preserve the authority and power of the District to levy Special Taxes, from funds available under the Fiscal Agent Agreement. Manner of Collection. The Special Taxes will be collected in the manner and at the same time as ad valorem property taxes are collected by the County; provided, however, the City may directly bill the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations. In cases of delinquency, the Special Taxes will generally be subject to the same penalties and the same procedures, sale and lien priority as is provided for ad valorem property taxes. Taxes are levied by the County for each Fiscal Year on taxable real property that is situated in the County as of the preceding January 1. Property taxes on the secured roll (that is, taxes against real property having a tax lien that is sufficient, in the opinion of the County Assessor, to secure payment of the taxes) are due in two installments, on November I and February I of each Fiscal Year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. Property on the secured roll with respect to which taxes are delinquent become tax defaulted on June 30 of the Fiscal Year; such property may thereafter be redeemed by payment of the penalty set forth in the Revenue and Tax Code, together with the defaulted taxes, the delinquency penalty, costs, and a redemption fee. If taxes are unpaid for a period of five years or more, the property is subject to auction sale by the County. Because the District does not participate in the "Teeter Plan" (which is the County's Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code), collections of assessments and Special Taxes will reflect actual delinquencies. Deposit and Application of Special Taxes. Under the Fiscal Agent Agreement, all proceeds of the annual Special Taxes (except prepayments of Special Taxes and amounts retained by the Finance Director for deposit into the Administrative Expense Account in the amounts of each applicable Administrative Expense Requirement to pay Administrative Expenses) are to be deposited in the Special Tax Fund established by the Fiscal Agent Agreement, and applied as follows: 1. The Fiscal Agent shall deposit in the Interest Account of the Bond Fund, on each Interest Payment Date and date for redemption of the Bonds, an amoul)t required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest due or becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds being redeemed on such date. 2. The Fiscal Agent shall deposit in the Principal Account of the Bond Fund, on each Interest Payment Date and redemption date on which principal of the Bonds, including sinking fund payments, shall be payable, including sinking fund payments, an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to the Fiscal Agent Agreement. RVPUBIKSNOw\721973.1 \3 P418 3. On or after March 2 and September 2 of each year after making the transfer and deposits required under paragraphs I and 2 above, the Fiscal Agent shall transfer the amount, if any, necessary to replenish the amount then on deposit in the Reserve Fund to an amount equal to the Reserve Requirement. 4. On or after September 2 of each year after making the deposits and transfers required under paragraphs I through 3 above, upon receipt of written instructions from an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Rebate Fund the amount specified in such request. 5. On or after September 2 of each year after making the deposits and transfers required under paragraphs I through 4 above, upon receipt of a written request of an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Administrative Expense Fund the amounts specified in such request to pay those Administrative Expenses which the District reasonably expects (a) will become due and payable during such Fiscal Year or the cost of which Administrative Expenses have previously been incurred and paid by the District from funds other than the Administrative Expense Fund and (b) the cost of which Administrative Expenses will be in excess of the Administrative Expense Requirement for such Fiscal Year. 6. If, on or after September 2 of each year, after making the deposits and transfers required under paragraphs I through 5 above, moneys remain in the Special Tax Fund, such moneys shall remain on deposit in the Special Tax Fund and shall be subsequently deposited or transferred pursuant to the provisions of paragraphs I through 5 above. Special Taxes are not a Personal Obligation. Although the Special Taxes will constitute a lien on property subject to taxation within the District in which such property is located, it does not constitute a personal indebtedness of the owners of such property. There is no assurance that the property owners will be financially able to pay the annual Special Tax or that they will pay such tax even if financially able to do so. The risk of the property owners not paying the annual Special Tax is more fully described in "BONDOW]'lERS' RISKS - Collection of the Special Taxes." The Rate and Method The District is legally authorized in the Fiscal Agent Agreement to cause the levy of special taxes within the District in accordance with the Rate and Method. The Rate and Method apportions the total amount of Special Tax to be collected among the Taxable Property (as defined in the Rate and Method) within the District as more particularly described therein. Excerpts from the Rate and Method are provided below. All capitalized terms used in the following summary and not otherwise defined in this Official Statement shall have the meanings given to such terms in the Rate and Method as set forth in Appendix B. The Special Tax shall be levied on all Assessor's Parcels of Taxable Property in the District and collected each Fiscal Year commencing in Fiscal Year 2007-08, in an amount determined through the application of the Rate and Method. All of the real property in the District, unless exempted by law or by the provisions of the Rate and Method, shall be taxed for the purposes, to the extent and in the manner herein provided. Assignment to Land Use Categories. Each Fiscal Year, all Taxable Property within the District will be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped Property, and shall be subject to Special Taxes in accordance with the Rate and Method. Residential Property shall be assigned to Land Use Classes I through 8, as listed in Table A below, and Non- Residential Property shall be assigned to Land Use Class 9. Maximum Special Tax. The Maximum Special Tax for each Assessor's Parcel of Residential Property shall be based on the Residential Floor Area of the dwelling unit(s) located on such Assessor's Parcel. The RVPUB\KSNOW\721973.! 14 P419 Maximum Special Tax for each Assessor's Parcel of Non-Residential Property shall be based on the Acreage of such Assessor's Parcel. The Maximum Special Tax for any Assessor's Parcel of Developed Property containing more than one Land Use Class shall be determined pursuant to Section C below. Developed Property (a) Maximum Special Tax. The Maximum Special Tax for each Assessor's Parcel classified as Developed Property is shown below in Table A. Land Use Class I 2 3 4 5 6 7 8 9 Description Single Family Detached Property Single Family Detached Property Single Family Detached Property Single Family Detached Property Single Family Attached Property Single Family Attached Property Single Family Attached Property Single Family Attached Property Non-Residential Property Residential Floor Area More than 2,900 SF 2,60 I - 2,900 Sf 2,30 I - 2,600 SF Less than 2,30 I SF More than 1,850 SF 1,601- 1,850 SF 1,351-1,600 SF Less than 1,351 SF N/A Maximum Special Tax $3,687 per unit $3,379 per unit $3,244 per unit $3,109 per unit $2,774 per unit $2,678 per unit $2,50 I per unit $2,324 per unit $49,234 per Acre (b) Multiple Land Use Classes. In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on such an Assessor's Parcel shall be the sum of the Maximum Special Taxes for all Land Use Classes located on that Assessor's Parcel. For an Assessor's Parcel that contains both Residential Property and Non-Residential Property, the acreage of such Assessor's Parcel shall be allocated to each type of property based on the amount of Acreage, or equivalent entitlement, designated for each land use as determined by reference to the site plan approved by the City for such Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property (a) Maximum Special Tax. The Maximum Special Tax for Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property shall be $54,668 per Acre. Special Tax Buydown. The Rate and Method provides for a Special Tax Buydown that can occur based upon a change in development after the issuance of the Bonds. See "APPENDIX B - Rate and Method of Apportionment of Special Taxes - Special Tax Buydown" and "THE BONDS - Redemption - Mandatory Redemption from Proceeds of Special Tax Prepayments." . Method of Apportionment of the Special Tax. Commencing with Fiscal Year 2006-07 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the total Special Tax levy equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Maximum Special Tax; Second: If additional moneys are needed to satisfY the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property; Third: If additional moneys are needed to satisfY the Special Tax Requirement after the first two steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's RVPUBIKSNOW\721973.1 15 P420 Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to the Maximum Special Tax for Taxable Public Property and Taxable Property Owner Association Property; Notwithstanding the above the Council may, in any Fiscal Year, levy Proportionately less than 100% of the Maximum Special Tax in step one (above), when (i) the Council is no longer required to levy the Special Tax pursuant to steps two and three above in order to meet the Special Tax Requirement; and (ii) all authorized District Bonds have already been issued or the Council has covenanted that it will not issue any additional District Bonds (except refunding bonds) to be supported by the Special Tax. Further notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use has been issued by increased by more than ten percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within the District. Exemptions. No Special Tax shall be levied on up to 11.0 Acres of Public Property and/or Property Owner Association Property. A tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Public Property or Property Owner Association Property. However, should an Assessor's Parcel no longer be classified as Public Property or Property Owner Association Property, its tax-exempt status will be revoked. Public Property or Property Owner Association Property that is not exempt from the Special Tax under this section shall be subject to the levy of the Special Tax and shall be taxed proportionately as part of the third step in Section E above, at up to 100% of the applicable Maximum Special Tax for Taxable Public Property and Taxable Property Owner Association Property. Manner of Collection. The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the District may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. Prepayment of Special Tax. Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The Special Tax obligation applicable to an Assessor's Parcel in the District may only be prepaid after all authorized District Bonds have already been issued, or after the Council has covenanted that it will not issue any additional District Bonds (except refunding bonds) to be supported by Special Taxes levied under the Rate and Method of Apportionment. The manner in which the Special Tax may be prepaid is set forth in "Exhibit B - Rate and Method of Apportionment of Special Tax - Prepayment." Special Taxes for Project The annual levy of Special Taxes at buildout of the proposed development within the District, which is anticipated to occur in the Fall of2007 is summarized on the basis of the anticipated floor plan of each lot. See "THE DISTRICT" for additional information. Table 3 on the following page provides a summary of residential development and special taxes within the District. RVPUBIKSNOw\721973.1 16 P421 TABLE 3 City of Rancho Cncamonga, Commnnity Facilities District No. 2006-01 (Vintner's Grove) Residential Development and Special Tax Snmmary(!) Home Size Nnmber of Total %of Tract Floor Plan (in Sq. ft.)!') Units(') Special Tax Special Taxes Total TIM 1738i!) Tri-Plex Plan I 1,335 26 $2,324 $60,424 13% Tri-Plex Plan 2 1,803 26 2,678 69,628 15 Tri-Plex Plan 3 1,920 26 2,774 72,124 16 SFD Plan 4 2,188 28 3,109 87,052 19 SFD Plan 5 2,627 28 3,379 94,612 20 SFD Plan 6 3,173 -.lL 3,687 81.114 --.lL Total 156 $464,954 100% (1) All property within the District is located within Tentative Tract Map No. 17-382. (') Provided by the Developer. Source: David Taussig and Associates, Inc. Special Tax Revenue - Debt Service Coverage. For fiscal year 2007-08, and in each year thereafter, the annual Maximum Special Tax that may be levied on Taxable Property in the District, less administrative expenses, will be no less than 110% of the gross annual debt service expected to be due on the Bonds plus administrative expenses. Reserve Fund The Fiscal Agent Agreement requires that the. Fiscal Agent establish and maintain a Reserve Fund for the Bonds in an amount equal to the Reserve Requirement. Except as otherwise provided in the Fiscal Agent Agreement, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and any interest and premium on, the Bonds. If Special Taxes for any property within the District are prepaid and Bonds are to be redeemed with the proceeds of such prepayment, a proportionate amount of the Reserve Fund will be applied to the redemption of such Bonds. The Reserve Requirement for the Bonds will be funded initially from the proceeds of the sale of the Bonds. See "Appendix C - Summary of The Fiscal Agent Agreement." Delinquent Special Taxes; Covenant To Foreclose Sale of Property for Nonpayment of Real Property Taxes. The Fiscal Agent Agreement provides that the Special Taxes are to be levied within the District and collected in the same manner as ordinary ad valorem property taxes are collected; provided, however, the Fiscal Agent Agreement further provides that the District may directly bill the Special Taxes or may collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations. Except as provided in the special covenant for foreclosure described below and in the Act, the Special Taxes that are collected in the same manner as ordinary ad valorem property taxes are subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes. RVPUBIKSNOW\721973.! 17 P422 Under these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County. Judicial Foreclosure Proceedings. Under Section 53356.1 of the Act, if any payment of the Special Tax for a taxable parcel is delinquent, the City may order the institution of a court action to foreclose the lien on the Taxable Parcel within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale. The ability of the City to foreclose the lien of delinquent unpaid Special Taxes may be limited in certain instances and may require prior consent of the property owner if the property is owned by or in receivership of the Federal Deposit Insurance Corporation (the "FDIC"). See "BONDOWNERS' RISKS - Bankruptcy and Foreclosure Delays." Such judicial foreclosure action is not mandatory. However, the City has covenanted (the "Foreclosure Covenant") in the Fiscal Agent Agreement that on or before March 1 and June 1 of each Fiscal year, the City will review the public records of the County in connection with the Special Taxes levied in such Fiscal Year to determine the amount of Special Taxes actuaHy coHected in such Fiscal Year. If the City determines that (a) any single parcel subject to the Special Taxes is delinquent in the payment of Special Taxes in the aggregate of $4,000 or more or (b) any single parcel or parcels under common ownership subject to the Special Taxes are delinquent in the payment of Special Taxes in the aggregate of $20,000 or more, the City shaH, not later than 45 days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owners of aH such delinquent parcels. The City shaH cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than 90 days after such determination against any parcel for which a notice of delinquency was given and for which the Special Taxes remain delinquent. If the City determines that it has coHected less than 95% of the Special Taxes levied in the such Fiscal Year, then the City shaH, not later than 45 days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owner of each delinquent parcel (regardless of the amount of such delinquency). The City will cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than 90 days after such determination against any parcel for which a notice of delinquency was given pursuant to this section and for which the Special Taxes remain delinquent. Subject to the maximum rates, the Rate and Method is designed to generate from aH non-exempt property within the District the current year's debt service on the Bonds, administrative and other expenses, and replenishment of the Reserve Fund for the Bonds to the Reserve Requirement. However, if foreclosure proceedings are necessary, and the Reserve Fund has been depleted, there could be a delay in payments to Owners of the Bonds pending prosecution of the foreclosure proceedings and receipt by the District of the proceeds of the foreclosure sale. Priority of Lien. The Act specifies that the Special Taxes will have the same lien priority as ad valorem property taxes in the case of delinquency but does not further specify the priority relationship, if any, between the Special Taxes and other special taxes, assessments and ad valorem taxes on a taxed parcel. The District (and other jurisdictions) may levy additional special taxes to finance other infrastructure needed for the development of the . property in the District. See "THE DISTRICT - Cumulative Tax, Assessment and Fee Burden on Property". If foreclosure proceedings were ever instituted, any holder of a mortgage or deed of trust on the affected property could, but would not be required to, advance the amount of the delinquent Special Tax payment to protect its security interest. RVPUBIKSNOW\721973.1 18 P423. Sufficiency of Foreclosure Sale Proceeds. No assurances can be given that a judicial foreclosure action, once conunenced, will be completed or that it will be completed in a timely manner. See "BONDHOLDER'S RISKS - Bankruptcy and Forec]osure De]ays." If a judgment of foreclosure and order of sale is obtained, the judgment creditor, i.e., the District or the City acting on behalf of the District, must cause a Notice of Levy to be issued. Under current law, a judgment debtor, i.e., the property owner, has 120 days for residential property (up to a fourplex) and 20 days for other property from the date of the service of the Notice of Levy and 20 days from the subsequent notice of sale in which to redeem the property to be sold. If a judgment debtor fails to so redeem a!ld the property is sold, the former owner's only remedy is an action to set aside the sale, which must be brought within 90 days of the date of the sale. If, as a result of such action, a foreclosure sale is set aside, the judgment is revived and the judgment creditor is entitled to interest on the revived judgment as if the sale had not been made. The constitutionality of the aforementioned ]egislation, which repeals the former one-year redemption period, has not been tested; and there can be no assurance that, if tested, such legis]ation will be upheld. Any parcel subject to foreclosure sale must be sold at the minimum bid price unless a lesser minimum bid price is authorized by the Owners of 75% of the principal amount of the Bonds. No assurance can be given that the real property subject to sale or foreclosure will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment. The Act does not require the City or the District to purchase or otherwise acquire any parcel of property offered for sale or subject to foreclosure if there is no other purchaser at such sale or if the bid of any prospective pnrchaser is less than the minimum bid price. If the Reserve Fund for the Bonds is depleted and delinquencies in the payment of Special Taxes exist, there could be a default or delay in payments to the owners of the affected Bonds pending prosecution of foreclosure proceedings and receipt by the District or the City of the foreclosure sale proceeds, if any. THE DISTRICT General Description and Location of the District The District. The District encompasses approximately 20.5 gross acres of land in the southerly portion of the City of Rancho Cucamonga. Of this acreage, approximately 9.5 acres are expected to be developed into uses subject to the special tax. At bui]dout, it is currently expected the District will contain approximately 78 detached residential dwelling units ranging in size from 2,188 to 3,] 73 square feet, and 78 attached residential units ranging in size from 1,335 to 1,920 square feet. The District was formed by the City on October 18, 2006 under the Act following a public hearing held on such date. Following the formation of the District, the City conducted a special election at which the qualified electors of the District approved the levy of special taxes within the District and the issuance of bonds secured by such special taxes. Following the adoption of the resolutions, the City conducted a special election at which qualified electors of the District approved such amendments. AcquisitioniFinancing Agreement The City, the District, the Developer and Lewis Investment entered into an Acquisition/Financing Agreement dated as of , 2006. Under the Acquisition Agreement, the Deve]oper has agreed to construct certain improvements to be owned by the City, Cucamonga County Water District and the In]and Empire Utility Agency. Such improvements are to be financed with Bond proceeds. Under the purchase arrangement between the Developer and Lewis Investment, Lewis Investment has agreed to reimburse the Developer for the construction of certain off-site public improvements to be acquired by the City, the Water District or the Agency as set forth in the Acquisition Agreement (the "Facilities"). Lewis Investment is to be RVPUBIKSNOW\721973.1 19 P424 paid proceeds of the Bonds in an amount equal to all costs eligible to be reimbursed to the Developer pursuant to the terms of the Acquisition Agreement. Facilities to be Financed with the Bonds The proceeds of the Bonds are intended to provide financinK for a portion of the cost of the acquisition and construction of the Facilities as set forth in the Acquisition Agreement. Any costs of the Facilities not financed through the use of Bonds proceeds will be financed by the Developer. The cost of the Facilities will include the costs of engineering, design, planning, permitting, and construction, coordination, together with other incidental costs. The following table summarizes the estimated sources offunds and costs of the Facilities to be acquired with Bond proceeds as of December 1, 2006: TABLE 4 City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) Estimated Facilities Costs Sources Bond Proceeds Developer Equity Total Estimated Cost $4,670,000' 391.676 $5,061,676 Description of Facilities Street Landscaping Parks and Recreation Drainage Dry Utilities Water (I) Sewer (1) Miscellaneous Costs and Contingency Total $865,722 527,624 478,710 851,895 230,825 530,664 858,484 717.752 $5,061,676 (1) Of such amounts, $447,000 will be used by the Cucamonga Valley Water District to acquire water and sewer facilities and $245,000 will be used by the Inland Empire Utilities Agency to acquire wastewater facilities. · Preliminary, subject to change. Absorption Study The Market Absorption Study dated September 21, 2006 for the District has been prepared by Empire Economics, Inc., Capistrano Beach, California (the "Market Absorption Consultant"). A copy of the Market Absorption Study Summary and Conclusions is included as Appendix H. The Market Absorption Consultant has estimated, based upon the analysis of relevant demographic and economic conditions in the San Bernardino area, the number and proportion of housing units in the District that can be expected to be marketed annually using the estimated absorption schedules for each of the product types. The Market Absorption Study concludes that final units will be constructed and sold to homeowners by the Fall of 2007 with final absorption occurring by the third quarter of 2009. The Market Absorption Study assumes that all required governmental approvals will be obtained, that there are no physical impediments to construction such as earthquakes and hazardous waste, that the public infrastructure necessary to develop will be provided in a timely manner, that the Developer will respond to market conditions with products that are competitively priced and have the features and amenities desired by purchasers, that the developers and their lenders have sufficient financial strength to funq adequately the projects and that they have sufficient cash flow reserves to supplement their cash flow positions in the event that RVPUB\KSNOW\721973.1 20 P425 adverse economic or market conditions occur. The actual absorption of units could be adversely affected if one or more of the foregoing assumptions is not realized. See "Appendix H - Absorption Study." Appraisal of Parcels An Appraisal dated October 23 was prepared by the Appraiser to ascertain the market value of the fee simple estate of the property in the District subject to the levy of the Special Taxes. The Appraisal was intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report, and with the California Debt and Investment Advisory Commission Appraisal Standards for Land Secured Financing. The Appraiser determined that as of October 15, 2006, the property within the District had an estimated market value of $22,000,000. The Appraisal is attached as Appendix A. The City and the District make no representation as to the accuracy or completeness of the Appraisal. Direct and Overlapping Debt The District is subject to existing authorized indebtedness payable from taxes and assessments that are authorized to be levied on property within the District. In addition, other public agencies may issue additional indebtedness at any time, without the consent or approval of the City or the District. The direct and overlapping indebtedness of the District, as of September 30, 2006, is shown in Table 5 below. The Bonds are secured by the Special Taxes which may include amounts realized upon foreclosure sale of delinquent parcels. Therefore, the ability of the District to meet debt service on the Bonds may depend on the ability of delinquent parcels to generate sufficient proceeds upon foreclosure sale to pay delinquent Special Taxes. TABLE 5 City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) Estimated Direct and Overlapping Debt Summary Over.aoDine: District(l} Chaffey Community College District GO Bonds Chaffey Joint Union High School District GO Bonds Metropolitan Water District GO Bonds 2005-2006 Total Levv $11,711,469 7,164,769 103,904,001 Amount of Levy on Parcels in the District $1,179 1,362 332 Percent of Levy on Parcels in the District 0.00101% 0.0190% 0.0003% Total Debt Outstandint!(2) $110,995,000 109,710,000 389,565,000 District Share of Total Debt Outstandine. $11,172 20,860 1.244 $33,276 5.685 000(3) Total Overlapping Dept Plus: The Bonds Estimated Share of Direct and Overlapping Debt $5,718,276 Source: David Taussig and Associates, Inc.; County of San Bernardino Auditor/Controller's Office. (I) Includes ad valorem, general obligation, special taxes, and standby charges that support any type of outstanding debt. (2) As of September 30, 2006. (3) Preliminary, subject to change. RVPUBIKSNOWl721973.1 21 P426 Estimated Value-to-Lien Ratios' The $5,685,000 principal amount of Bonds constitutes direct debt for the property in the District. As set forth in Table 5, as of September 30, 2006, there is approximately $33,276 of other outstanding public indebtedness applicable to the property in the District. Thus, the estimated direct and overlapping debt allocable to property in the District is approximately $5,718,276. The Market Value of the property in the District as of October 15, 2006, as estimated by the Appraiser in the Appraisal, is $22,000,000, which is approximately 3.85 times the sum of the principal amount of the Bonds, plus the amount of all the other outstanding public indebtedness allocable thereto, under the assumptions listed in Table 5. Cumulative Tax, Assessment and Fee Burden on Property In addition to paying the Special Tax, property owners within the District will be obligated to pay ad valorem property taxes and other existing and any additional special taxes, assessments, and fees (some of which secure other debt issued by the City and overlapping jurisdictions). Under the City's "Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982" (the "Goals and Policies") adopted on July 21,1999 projected special taxes, when added to the existing ad valorem property tax and other direct and overlapping debt for any parcel within a community facilities district, may not exceed 2% of the projected assessed value of each improved parcel within the district upon completion of improvements to the parcel. The District has determined that the projected tax, assessment and fee burden (including the Special Taxes) conforms to the requirements of the Goals and Policies. The following Sample Property Tax Bill generally includes long term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long term obligations generally are not payable from property taxes, assessment or special taxes on land in the District. In many cases long term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency. Additional indebtedness could be authorized by other public agencies at any time. . Preliminary, subject to change. RVPUBIKSNOW\721973.1 22 r-- 9 '" o o N a <l) :>- .... ~ o ~ , ... '" .. :5 ~ .. '" .. ~ = ::I ~ = z ~... a't'ai'~Cl: ~.... ;;. = ~ u.::o~........ \,Q ::I lI.l .... >.- f;l;1UiS"t:13 ~ 0 lI.l...lI.l Q,).fa ~ "5.~ ~ ~~ ....=;;=...r-- ~=:::l==~q ~~._Q;l\O 'Er;..c,'C.a:5 .to '" .to ._ .. 'C .... = 00 Q;I u= ~ a a e ;: = '" U f5, 0; " '" ~ .... <S ... 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P428 THE DEVELOPER AND THE PROPOSED DEVELOPMENT The information contained in this Official Statement regarding the ownership of the development of property in the District has been included because it is considered relevant to an informed evaluation of the Bonds. The inclusion in this Official Statement of information related to property ownership and development should not be construed to suggest that the Bonds, or the Special Taxes that will be used to pay debt service on the Bonds, are recourse obligations of any property owner in the District. The Developer and any other property owner may sell or otherwise dispose of land within the District or a development at any time. As the proposed land development progresses and parcels are sold, it is expected that the ownership of the land within the District will become more diversified. No assurance can be given that the proposed development of the land within the District will occur, or that it will occur in a timely manner or in the configuration or intensity described in this Official Statement, or that the Developer will retain ownership of any of the undeveloped land within the District. The Bonds and the Special Taxes are not personal obligations of the Developer and its proposed development within the District and, in the event that the Developer or any subsequent landowner defaults in the payment of the Special Taxes, the District may proceed with judicial foreclosure but has no direct recourse to the assets of the Developer or any subsequent landowner. As a result, other than as provided herein, no financial statements or information is, or will be, provided about the Developer. The Bonds are secured solely by the Special Taxes and other amounts pledged under the Fiscal Agent Agreement. Unless otherwise indicated, the information about the Developer contained in this Official Statement has been provided by the Developer and information about Lewis Investment has been provided by Lewis Investment. The information has been provided by sources that are believed by the Underwriter, the District and the City to be reliable, but has not been independently confirmed or verified by either the Underwriter, the District or the City. No representation is made by the Underwriter, the District or the City as to the accuracy or adequacy of such information or as to the absence of material adverse changes in such information subsequent to the date of this Official Statement, or that the information given below or incorporated herein by reference is correct as of any time subsequent to its date. The Developer William Lvon Homes. Inc. A\1 of the property within the District is currently owned by William Lyon Homes, Inc., a California corporation (the "Developer"). The Developer is a who\1y owned subsidiary of William Lyon Homes, a Delaware corporation ("Delaware Lyon"). Delaware Lyon's principal executive offices are located in Newport Beach, California. Delaware Lyon and its subsidiaries are primarily engaged in designing, constructing and selling single family detached and attached homes in California, Arizona and Nevada. Since the founding of its predecessor in 1956, Delaware Lyon has sold over 65,000 homes. Delaware Lyon conducts its homebuilding operations through five geographic divisions (Southern California, San Diego, . Northern California, Arizona and Nevada) including both who\1y owned projects and projects being developed in unconsolidated joint ventures. Home sales in California accounted for approximately 63% of Delaware Lyon's home deliveries in Fiscal Year 2005, which runs from January I through December 31. Delaware Lyon and its unconsolidated joint ventures delivered 3,196 homes in Fiscal Year 2005, compared with 3,471 home deliveries in Fiscal Year 2004. Revenues from home sales were approximately $1.745 billion in Fiscal Year 2005 generating a net income of approximately $190.6 mi\1ion, compared to revenues from home sales of approximately $1.786 billion with a net income of approximately $171.6 million in Fiscal Year 2004. In Fiscal Year 2005, Delaware Lyon's average home se\1ing price was approximately $546,000, ranging from approximately $197,000 to approximately $2,070,000, compared to Fiscal Year 2004 where Delaware's average se\1ing price was approximately $514,400, ranging from approximately $119,000 to approximately $2,070,000. In the Form 8-K which was filed on October II, 2006, for the first three quarters of 2006 (ending September 30, 2006), Delaware Lyon reported that new home orders were 1,698, a decrease of 41% as RVPUBIKSNOw\721973.1 24 P429 compared to 2.961 for the same time period in 2005. In addition, the cancellation rate was 33% for the first three quarters of2006 (compared to 13% for the same time period in 2005). Delaware Lyon was a publicly traded company with its stock listed on the New York Stock Exchange (the "NYSE") under the symbol "WLS." However, Delaware Lyon recently converted to a privately-held company, as discussed further below. The Tender Offer. On March 17, 2006, Gerieral William Lyon, Chairman of'the Board and Chief Executive Officer of Delaware Lyon, announced that he had commenced a tender offer to purchase all outstanding shares of common stock of Delaware Lyon not already owned by him, The William Harwell Lyon 1987 Trust, or The William Harwell Lyon Separate Property Trust. On May 18, 2006, General Lyon announced the completion of the tender offer and that he had accepted for payment all shares validly tendered in the offer, a portion of which remain subject to guaranteed delivery procedures. The shares tendered in the offer, together with the shares already owned by General Lyon, The William Harwell Lyon 1987 Trust and The William Harwell Lyon Separate Property Trust, represent over 90% of the outstanding shares of Delaware Lyon. Accordingly, upon completion of the purchase of the tendered shares (including those still subject to guaranteed delivery procedures) and contribution of all shares held by General Lyon and the aforementioned trusts into a newly formed Delaware corporation (the "Acquisition Corporation"), the Acquisition Corporation would hold a sufficient number of shares to enable General Lyon to effect a short-form merger between the Acquisition Corporation and Delaware Lyon under Delaware law. The merger occurred on July 25, 2006 with Delaware Lyon continuing as the surviving corporation of the merger. . At the time of the merger, each outstanding share of Delaware Lyon common stock (except for shares owned by the Acquisition Corporation and by stockholders who properly exercised their appraisal rights in accordance with Delaware law) was cancelled and converted into a right to receive $109 per share in cash without interest. Informational Reoorting. Delaware Lyon is currently subject to certain informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the SEC. Such filings, particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such files can also be accessed over the Internet at the SEe's website at www.sec.gov. Copies of such material can be obtained from the public reference section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the aforementioned material may also be inspected at the office of the NYSE at 20 Broad Street, New York, New York 10005. Copies of Delaware Lyon's Annual Report and related financial statements are available on its website at www.lyonhomes.com. The Internet addresses and references to filings with the SEC are included for reference only, and the information on these Internet sites and on file with the SEC are not a part of this Official Statement and are not incorporated by reference into this Official Statement. RVPUBIKSNOW\721973.1 25 P430 Development Experience of Developer: In addition to the Project, recent projects developed or under development by the Developer include the following: Planned Estimated Estimated EstimatedJ Actnal Number of Square Averqe Completion Proiect Name Location Units Footage Sellin'! Price Date Garland Park Irvine 166 1,355-1,971 $500,000 December 2006 Lombard Court Irvine 150 1,086-1,635 $400,000 December 2006 Ambridge Irvine 128 1,205-1,833 $400,000 June 2006 Sea Cove Huntington 106 1,619-2,693 $700,000 March 2006 Beach FIHearthstonelisa San Juan 80 4,874-5,500 $1,600,000 May 2007 Capistrano Mirador San Clemente 76 3,705-4,539 $1,100,000 July 2006 Amarante Ladera Ranch 71 2,907-3,764 $1,000,000 November 2006 Estrella Rosa San Juan 40 3,363-4,383 $1,200,000 March 2007 Capistrano The Proposed Development Solera and Canela The Developer intends to construct two gated developments to be known as Solera and Canela. The developments feature a private community center, a swimming pool and cabanas. Each development is located close to Interstates 10, 15 and 210. Solera is expected to consist of 78 single family detached homes to be offered in three plans. Plan One consists of 28 homes priced at approximately $535,000 with 2,188 square feet of living space. PI~ Two consists of 28 homes priced at approximately $577,000 with 2,627 square feet of living space. Pla~ Three consists of22 homes priced at approximately $625,000 with 3,173 square feet ofliving space. " ..r! ,t\~. Canela is expected to include 78 units of triplex, attached homes to be marketed in three pla3.i Plan One consists of 26 homes priced at approximately $405,000 for 1,335 square feet of living space. pIilh Two consists of 26 homes priced at approximately $460,000 for 1,803 square feet of living space, PI~' Three consists of26 homes priced at $475,000 for 1,920 square feet ofliving space. t,1 ~ . f- l I f, ". .. , ,. ;v.::-..'V'" ~.' ~ " , RVPUB\KSNOW\721973.1 26 P431 Development Status and Proiected Completion Under the Purchase Agreement (as defined below), the Developer is required to construct certain off- site improvements on behalf of Lewis lnvestment Company, LLC ("Lewis lnvestment"). The off-site improvements consist of the improvements necessary to provide water, sewer, drainage, electricity, gas, phone and CATV services to the property sufficient to serve all of the units in the Project. In addition, the Developer is currently undertaking the ground preparation and in-tract improvements to proceed with home construction. The following table shows the status, cost and estimated completion dates for ground preparation and off-site and in-tract improvements, all as of November I, 2006. Improvements Grading Sewer Water Storm Drain Street Dry Utilities Landscaping and Walls Total Source: The Developer. Table 7 William Lyon Homes, Inc. Estimated Grading Infrastructnre Costs and Scheduled Estimated Cost $467,000 370,500 294,900 1,050,715 1,221,870 1,298,572 542.480 $4,757,805 % Complete as of 12/1/06 100% 0% 0% 0% 0% 0% 0% Expected Completion Date Complete 12/18/06 01/31/07 12/31/06 02/28/07 03/23/07 02/01/07 The Developer anticipates that construction of model homes will begin by February, 2007 and that all model and production homes will be complete by January 2009. Proiect Approval All master infrastructure plans with the exception of landscaping have been obtained as follows: On March 22, 2006, the City of Rancho Cucarnonga adopted a Mitigated Negative Declaration for the proj ect. On March 22, 2006, the City of Rancho Cucamonga, by Resolution No. 06-025, approved Tentative Tract Map No. 17382. The final map for Tract Map is expected to be recorded in February 2007. Permits and Geotechnical Report The Developer has represented that all necessary permits to proceed with the proposed project have been received, except for the final Tract Map and building permits for the production homes. Petra Geotechnical, lnc. was engaged by the Developer to complete a geotechnical investigation of the property within the District. On September 14, 2006, Petra Geotechnical, lnc. delivered its report describing the site condition, results of their field exploration and laboratory testing, conclusions and recommendations. Based upon the specific data and information contained in its report, Petra Geotechnical, Inc. found in their professional opinion that the proposed development is geologically and geotechnically feasible subject to implementation of the recommendations contained in such report. The District is not located in an Alquist-Priola Earthquake Fault Zone. There are earthquake faults in the area, including the Cucamonga fault zone, the San Andreas fault zone and the San Jacinto fault zone which is within 6 miles from the District. All properties in California are subject to some degree of seismic risk. See RVPUB\KSNOW\721973.1 27 P432 "APPENDIX A - Summary Appraisal Reports - Bondowner's Risks, Land Value and Development, Natural Disasters. " Financing. The Developer expects that the aggregate acquisition and construction costs of its proposed development will cost approximately $77,671,257. The Developer plans to finance the costs of the development with internal sources of cash, home sales revenues .and reimbursement payments from Lewis Investment. Pursuant to the Purchase Agreement, the Developer will receive reimbursements from Lewis Investment for costs incurred in connection with the construction of off-site improvements and Lewis Investment will receive all of the proceeds of the Bonds to the extent that such amounts are for off-site improvements. The Developer's parent company, Delaware Lyon, reported net income of $30,381,000. Delaware Lyon is involved in the construction and financing of many projects in addition to the proposed development in the District. If and to the extent their sources of financing are inadequate to complete the planned development within the District, there can be no assurance of the willingness or ability of Delaware Lyon to make such funds available in the future, or the ability of Developer to obtain financing from other sources. In addition, if and to the extent that internal financing and home sales revenues are inadequate to pay the costs to complete Developer's planned development within the District and other financing by Developer is not put into place, there could be a shortfall in the funds required to complete the proposed development by the Developer and portions of the project may not be developed. Sale of Property from Lewis Investment Company, LLC to William Lyon Homes, Inc. On November 30, 2004, Lewis Investment Company, LLC ("Lewis Investment") and the Developer entered into a purchase and sale agreement for the Property (as amended, the "Purchase Agreement"). Pursuant to the PurchaseAgreement, Lewis Investment sold the Property to the Developer in consideration for (a) the payment of the purchase price for the Property, a portion of which was paid through a purchase money note by the Developer to Lewis Investment (the "Note"), which is secured by a deed of trust encumbering the Property; and (b) a profit participation for each phase payable by the Developer to Lewis Investment from its sale of each unit to individual homeowners in accordance with a schedule set forth in the Purchase Agreement. The Note requires payment by the Developer to Lewis Investment on a pro-rata basis (based upon the number of units in each phase as a percentage of all lots provided for on the project tentative map) to release each respective phase from the deed of trust. In the event of a default under the Note, Lewis Investment, as the holder of the Note, has the right to declare the entire unpaid balance of the Note, together with accrued interest thereon, immediately due and payable. Lewis Investment. Lewis Investment is owned by The Lewis Group of Companies. The Lewis Group of Companies is a collection of affiliated entities including partnerships, joint ventures, wholly-owned subsidiaries and partially owned subsidiaries collectively referred to herein as "The Lewis Group of Companies." The Lewis Group of Companies is one of the nation's largest privately-held affiliates group of real estate development companies. The Lewis Group of Companies mainly plans and develops mixed-use planned communities and residential subdivisions in California and Nevada, as well as building multi-family communities, shopping centers, office parks and industrial space. The Lewis Group of Companies works with major landowners, other developers, financial institutions and companies in other businesses which also have real estate holdings. The arrangements vary depending on many circumstances. The Lewis Group of Companies will manage for a fee commercial and residential real estate or, contribute equity, or joint venture in the development of such real estate. The Lewis Group of Companies originated in 1955 in Claremont, California. Since 1955, The Lewis Group of Companies has developed over 56,000 homes, 9,000 apartment units, 7.4 million square feet of retail, office and industrial developments, and has developed and sold 6,000 lots to other builders in California, Nevada, Arizona and Utah. RVPUBIKSNOw\721973.1 28 P433 As of October 15, 2006, The Lewis Group of Companies, owned or controlled approximately 16,000 acres of land to potentially be developed into residential communities, owned or managed approximately 7,500 apartment units, and owned or managed approximately 4 million square feet of investment property. Recent Projects. Some of the projects currently under active development by The Lewis Group of Companies in the Southern California area include: Proiect Name Sierra Lakes The Preserve at Chino Citrus Heights Approximate Number of Units 1,821 7,000 487 Location (CA) Fontana Chino Fontana Expended Buildout Built Out 2016 February 2007 Units Closed as of October 15. 2006 1,821 384 408 Source: Lewis Investment. Pro Forma. The following shows the Developer's pro forma cash flow summary and projected land sales revenue within the District. 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'" N ~ o z ~ '" :0 .. ~ P435 BONDOWNERS'RISKS The following is a discussion of certain risk factors that should be considered, in addition to other maUers set forth in this Official Statement, in evaluating the investment quality of the Bonds. This discussion does not purport to be comprehensive or definitive. The occurrence of one or more of the events discussed in this Official Statement could adversely affect the ability or willingness of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in a rapid depletion of the Reserve Fund and/or a default in payments of the principal of, and interest on, the Bonds. In addition, the occurrence of one or more of the events discussed in this Section could adversely affect the value of the property in the District. . Not a General Obligation of the District or the City The Bonds are not general obligations of the District or the City but are limited obligations of the District payable solely from proceeds of the Special Taxes and, to a limited extent, proceeds of the Bonds, including amounts in the Reserve Fund and investment income on funds held under the Fiscal Agent Agreement (other than funds held in the Costs ofIssuance Fund, the Project Fund, the Administrative Expense Fund and the Rebate Fund as to the Fiscal Agent Agreement). Levy of the Special Taxes The principal source of payment of debt service on the Bonds is the proceeds of the annual levy and collection of the Special Taxes. The annual levy of the Special Tax is subject to the maximum tax rates authorized in the Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the Bonds. Other funds that might be available to pay debt service on the Bonds include funds derived from the payment of delinquent special taxes and funds derived from the foreclosure and sale of parcels on which the Special Taxes levied are delinquent. The levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of the Taxable Property (as such term is defined in the Rate and Method) and the amount of the levy of the Special Tax. Thus, there will rarely, if ever, be a uniform relationship between the value of a parcel and the proportionate share of Bond debt service levied on the parcel, and certainly not a direct relationship. The Special Tax levied in any particular tax year on a Taxable Property is based upon the application of the Rate and Method. See Appendix B - Rate and Method of Apportionment. Application of the Rate and Method will, in turn, be dependent upon certain development factors with respect to each Taxable Property by comparison with similar development factors with respect to other Taxable Properties within the District. Thus, the following are some of the factors that might cause the levy of the Special Tax on any particular Taxable Property to vary from the Special Tax that might otherwise be expected: (i) Reduction in the number of parcels of Taxable Property, for such reasons as acquisition of Taxable Property by a government and failure of the government to pay the Special Tax based upon a claim of exemption, thereby resulting in an increased tax burden on the remaining Taxable Property; and (ii) Failure of the owners of Taxable Property to pay the Special Tax and delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, thereby resulting in an increased tax burden on the remaining parcels of Taxable Property. Exempt Properties Certain private properties owned by Property Owner Associations are exempt from the Special Tax in accordance with the Rate and Method. In addition, the Rate and Method provides that certain properties of the state, federal or local governments are exempt from the Special Taxes. Therefore, property acquired by a public RVPUBIKSNOW\721973.1 31 P436 entity following the issuance of the Bonds will be exempt from the Special Tax. See "SECURITY FOR THE BONDS - The Special Tax" herein and "Appendix B - Rate and Method of Apportionment of Special Taxes." In particular, insofar as the Rate and Method requires payment of the Special Tax by a federal entity acquiring a parcel of Taxable Property, it may be unconstitutional. If for any reason a parcel of Taxable Property becomes exempt from taxation by reason of ownership by a nontaxable entity such as the federal government, another public agency or a religious organization, subject to the limitation of the maximum rate, the Special Tax will be reallocated to the remaining Taxable Properties within the District in which the parcel is located. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the timely payment of the Special Tax. Moreover, if a substantial portion of the Taxable Property within the District becomes exempt from the Special Tax because of public ownership, or otherwise, the maximum rate that could be levied upon the remaining acreage might not be sufficient to pay principal of and interest on Series of the Bonds secured by such Special Tax when due and a default would occur with respect to the payment of such principal and interest. Collection of the Special Taxes The District has no obligation to pay debt service on the Bonds in the event Special Tax installments are delinquent, nor is the District obligated to advance funds to pay such debt service. The Rate and Method provides that the Special Taxes are to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described below, are to be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County. Under the Fiscal Agent Agreement, in the event of any delinquency in the payment of the Special Tax, the District may order the institution of a superior court action to foreclose the lien in the amount of the delinquent Special Taxes plus penalties, interest, and costs (including attorney's fees) within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not mandatory. However, the District has covenanted to cause foreclosure proceedings to be commenced and prosecuted against those properties that are delinquent in the payment of the Special Tax. For a description of the foreclosure covenant and the limitations upon foreclosure, see "SECURITY FOR THE BONDS - Delinquent Special Taxes; Covenant To Foreclose." In the event that sales or foreclosures of property within the District are necessary as a result of the delinquency in the payment of Special Taxes, there could be a delay in payment of the Bonds if the Reserve . Fund is depleted pending such sales or the prosecution of foreclosure proceedings against such delinquent property and receipt by the District of the proceeds of such a sale. In addition, there can be no assurance that the sale of delinquent parcels in foreclosure will produce sufficient proceeds to cover such delinquencies. Although below peak delinquency rates experienced in 1996, delinquency rates have been increasing in the State of California, Southern California and the county of San Bernardino over the last several years. See "APPENDIX H - Summary Absorption Study - Delinquency Rates and Types of Loans." Concentration of Property Ownership As of the date of this Official Statement, all of the property in the District subject to the levy of the Special Tax is owned by the Developer. The willingness and ability of the Developer to pay property taxes and the Special Taxes could be adversely affected by changes in general or local economic conditions, fluctuations in the real estate market and other factors. Failure of the Developer (or any future owner of significant property within the District subject to the levy of the Special Taxes) to pay installments of such Special Taxes when due could cause the depletion of the Reserve Fund for the Bonds prior to reimbursement from the resale of foreclosed property or payment of the delinquent Special Tax and, consequently, result in the delinquency rate reaching a level that would cause an RVPUBIKSNOW\721973.1 32 P437 insufficiency in collection of the Special Tax to meet the District's obligations under the Fiscal Agent Agreement. For a description of the Developer, see "THE DEVELOPER AND THE PROPOSED DEVELOPMENT." In that event, there could be a delay or failure .in payments on the Bonds. See "BONDOWNERS - Bankruptcy and Foreclosure Delays" and "SECURITY FOR THE BONDS - Delinquent Special Taxes; Covenant to Foreclose" for a further discussion. Not a Personal Obligation An owner of Taxable Property is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation only against the Taxable Property. If the value of the Taxable Property is not sufficient, taking into account other obligations also payable thereby to fully secure the Special Tax, the District has no recourse against the property owner. Parity Taxes and Special Assessments The Special Taxes and any related penalties will constitute a lien against the lots and parcels of land on which they will be annually imposed until they are paid. This tax lien is on a parity with all special taxes and special assessments levied by other agencies and is co-equal to and independent of the lien for general property taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all existing and future private liens imposed on the property. However, neither the District nor the City has any control over the ability of other entities and districts to issue indebtedness secured by special taxes or. assessments payable from all or a portion of the property within the District. If any additional improvements or fees are financed by an assessment district or another district formed under the Act, any taxes or assessment levied to finance such improvements will have a lien on a parity with the lien of the Special Tax. For information concerning existing direct and overlapping public indebtedness within the District, see "THE DISTRICT - Cumulative Tax, Assessment and Fee Burden on Property." The existence of general property taxes, other special taxes, and assessments may reduce the value-to-debt ratio of the affected parcels and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes or the principal of and interest on the Bonds when due. The City has covenanted that it will not issue .additional bonds having a lien upon the Special Taxes superior to or on a parity with the lien ofthe Bonds. Land Values and Development The development of the Taxable Property within the District and the value of such Taxable Property is a critical factor in determining the investment quality of the Bonds. Ifa property owner defaults in the payment of the Special Tax, the City's only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax. Land values could be adversely affected by economic factors beyond the City's control, such as relocation of employers out of the area, stricter land use regulations, the absence of water, or destruction of property caused by, among other eventualities, earthquake, flood or other natural disasters, or by environmental pollution or contamination. In addition, a major risk to Bondowners is that development by the Developer of property within the District may be subject to unexpected delays, disruptions and changes that may affect the willingness and ability of the property owners to pay Special Taxes when due. Land Development. Land values are influenced by the level of development in the area in many respects: First, partially developed land is generally less valuable than developed land and provides less security to the owners of the Bonds should it be necessary for the City to foreclose on undeveloped property due to the nonpayment of Special Taxes. Moreover, failure to complete development on a timely basis could adversely affect the land values of those parcels that have been completed. Lower land values would result in less security for the payment of principal of and interest on the Bonds and lower proceeds from any foreclosure sale necessitated by RVPUBIKSNOW\721973.1 33 P438 delinquencies in the payment of the Special Tax. Currently, the property within the District is under development. As of October 15,2006, the appraised value of the Property was $22,000,000. No assurance can be given that the property within the District will be developed, and in assessing the investment quality of the Bonds, prospective purchasers should evaluate the risks of non-completion. Special Tax Buydown. Change in development plans for the proposed housing project could result in a Special Tax Buydown causing a redemption of the Bonds. See "APPENDIX B - Rate and Method of Apportionment of Special Taxes- Special Tax Buydown." Risks of Real Estate Investment Generally. Continuing development of land within the District may be adversely affected by changes in general or local economic conditions, fluctuations in the real estate market, increased construction costs, development, financing and marketing capabilities of individual property owners, water shortages and other similar factors. Development in the District may also be affected by development in surrounding areas, which may compete with the District. In addition, land development operations are subject to comprehensive federal, state and local regulations, including environmental, land use, zoning and building requirements. There can be no assurance that proposed land development operations within the District wi\1 not be adversely affected by future government policies, including, but not limited to, governmental policies to restrict or control development, or future growth control initiatives. There can be no assurance that land development operations within the District wi\1 not be adversely affected by these risks. The City has not evaluated development risks. Since these are largely business risks of the type that property owners customarily evaluate individually, and inasmuch as changes in land ownership may well mean changes in the evaluation with respect to any particular parcel, the City is issuing the Bonds without regard to any such evaluation. Thus, the creation of the District and the issuance of the Bonds by the City in no way implies that the City has evaluated these risks or the reasonableness of these risks even though such risks may be serious and may ultimately halt or slow the progress of land development and forestall the realization of Taxable Property values. The Market Absorption Study indicates certain risks associated with increasing home loan interest rates, other inflationary factors and adjustable interest rate mortgages which have been utilized in the past several years by homeowners and are subject to reset at higher rates. See Appendix H - "Summary of Absorption Study _ POTENTIAL "FINANCIAL" RISK FACTORS UNDERLYING THE CREDIT QUALITY AND BOND SIZING FOR LAND SECURED FINANCINGS IN SOUTHERN CALIFORNIA." Natural Disasters. The value of the Taxable Property in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the Taxable Property and the continued habitability and enjoyment of such private improvements. For example, the areas in and surrounding the District, like those in much of California, may be subject to unpredictable seismic activity. Other such occurrences could include, without limitation, landslides, floods, droughts, and tornadoes. Although the District is not located within the boundaries of a state established Earthquake Fault Study Zone, several known faults are in the area, including the Cucamonga fault zone, the San Andreas fault zone and the San Jacinto fault zone. All properties in California are subject to some degree of seismic risk. See "APPENDIX A - Summary of Appraisal Report." One or more of such natural disasters, including earthquake and flood, could occur and could result in damage to improvements of varying seriousness. The damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost, or because repair or replacement wi\1 not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances there could be significant delinquencies in the payment of Special Taxes, and the value of the Taxable Property may well depreciate or disappear. RVPUBIKSNOW\721973.1 34 P439 Fire Hazard. Like the natural disasters discussed above, fire damage entail significant repair and replacement costs. If such repairs are not made after a fire, there could be significant delinquencies in the payment of Special Taxes, and the value of the Taxable Property may well depreciate or disappear. The District is not located in a "Very High Fire Hazard Severity Zone" as shown on the maps produced by the California Department of Forest and Fire. Legal Requirements. Other events that may affect the value of a Taxable Property include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures. Development in the District may also be adversely affected by the application of laws protecting endangered or threatened species. See "CONCLUDING INFORMATION - Litigation". Hazardous Substances. One of the most serious risks in terms of the potential reduction in the value of a Taxable Property is a claim with regard to a hazardous substance. In general, the owners and operators of a Taxable Property may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as "CERCLA" or the "Superfund Act," is the most well-known of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the Taxable Property be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller. The values set forth in the Appraisal do not take into account the possible reduction in marketability and value of any of the Taxable Property by reason of the possible liability of the owner or operator for the remedy of a hazardous substance condition of the parcel. Although the City is not aware that the owner or operator of any of the Taxable Property has such a current liability with respect to any ofthe Taxable Property, it is possible that such liabilities do currently exist and that the City is not aware of them. Further, it is possible that liabilities may arise in the future with respect to any of the Taxable Property resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but that has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but that may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a Taxable Property that is realizable upon a delinquency. Notice of Special Taxes; Disclosures To Future Purchasers The willingness or ability of an owner of a Taxable Property to pay the Special Taxes even if the value is sufficient may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel should the Special Tax be levied at the maximum tax rate and the risk of such a levy and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The City has caused a notice of the Special Tax to be recorded in the Office of the Recorder for the County against each Taxable Property. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a property within the District or lending of money thereon. RVPUBIKSNOw\721973.1 35 P440 The Act requires the subdivider (or its agent or representative) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a special tax levied pursuant to the Act of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section II02.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Taxes, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Taxes when due. Bankruptcy and Foreclosure Delays GeneraL The payment of the Special Taxes and the ability of the City to foreclose the lien of a delinquent unpaid tax, as discussed under "SECURITY FOR THE BONDS," may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. In addition, the prosecution of a foreclosure action could be delayed due to crowded local court calendars or delays in the legal process. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases. Although bankruptcy proceedings would not cause the lien of the Special Taxes to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings. The federal bankruptcy laws provide for an automatic stay of foreclosure and tax sale proceedings, thereby delaying such proceedings, perhaps for an extended period. Any such delays would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds secured by the levy of Special Taxes in which such property is located and the possibility of delinquent tax installments not being paid in full. To the extent that bankruptcy or similar proceedings were to involve a large property owner, the chances would increase the likelihood that the Reserve Fund could be fully depleted during any resulting delay in receiving payment of delinquent Special Taxes. As a result, sufficient moneys would not be available in such Reserve Fund for transfer to the Bond Fund to make up any shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Bonds on a timely basis. Property Owned by the FDIC. The ability of the City to foreclose upon the lien relating to property on which Special Taxes have not been paid may be limited in certain respects with regard to properties in which the FDIC has an interest. On November 26, 1996, the FDIC adopted a Statement of Policy Regarding the Payment of State and Local Property Taxes (the "Policy Statement") (which superseded a prior statement issued by the FDIC and the Resolution Trust Corporation in 1991). The Policy Statement applies to the FDIC when it is liquidating an asset in its corporate and receivership capacities. The Policy Statement provides, in part, that owned real property of the FDIC is subject to state and local real property taxes if those taxes are assessed according to the property's value, and that the FDIC is immune from ad valorem real property taxes assessed on other bases. The Policy Statement also provides that the FDIC will pay its proper tax obligations when they become due and will pay claims for delinquencies as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC interest in the property is appropriate. It further provides that the FDIC will pay claims for interest on delinquent property taxes owned at the rate provided under state law, but only to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay for any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. The Policy Statement also provides that if any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those RVPUB\KSNOWl721973.1 36 P441 claims. No property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, a lien for taxes and interest may attach, but the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent. With respect to challenges to assessments, the Policy Statement provides: "The [FDIC] is only liable for state and local taxes which are based on the value of the property during the period for which the tax is imposed, notwithstanding the failure of any person, including prior record owners, to challenge an assessment under the procedures available under state law. In the exercise of its business judgment, the [FDIC] may challenge assessments which do not conform with the statutory provisions, and during the challenge may pay tax claims based on the assessment level deemed appropriate, provided such payment will not prejudice the challenge. The [FDIC] will generally limit challenges to the current and immediately preceding taxable year and to the pursuit of previously filed tax protests. However, the [FDIC] may, in the exercise of its business judgment, challenge any prior taxes and assessments provided that (I) the [FDIC's] records (including appraisals, offers or bids received for the purchase of the property, etc.) indicate that the assessed value is clearly excessive, (2) a successful challenge will result in a substantial savings to the [FDIC], (3) the challenge will not unduly delay the sale of the property, and (4) there is a reasonable likelihood of a successful challenge." The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time the FDIC acquires its fee interest in the property, nor will the FDIC recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Because the Special Taxes are neither ad valorem taxes nor special assessments, the City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency on a parcel included in the District in which the FDIC has an interest, although prohibiting the lien of the FDIC to be foreclosed on at a judicial foreclosure sale would likely reduce the number of or eliminate the persons willing to purchase a parcel at a foreclosure sale. Owners of the Bonds should assume that the Cjty will be unable to foreclose on parcels of land in the District owned by the FDIC. Such an outcome would cause a draw on the Reserve Fund and perhaps, ultimately, a default in payment of the Bonds. Limitation on Remedies of Bondholders; No Acceleration Remedies available to Bondholders may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds, or to preserve the tax-exempt status of the Bonds. Bond Counsel has limited its opinion as to the enforceability of the Bonds and the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, or similar laws affecting generally the enforcement of creditors' rights. Additionally, the Bonds are not subject to acceleration in the event of the breach of any covenant or duty under the Fiscal Agent Agreement. Lack of remedies may entail risks of delay, limitation, or modification of Bondowner rights. Judicial remedies, such as foreclosure and enforcement of covenants, are subject to exercise of judicial discretion. A California court may not strictly apply certain remedies or enforce certain covenants if it concludes that application or enforcement would be unreasonable under the circumstances and it may delay the application of such remedies and enforcement. Loss of Tax Exemption As discussed under the caption "CONCLUDING INFORMATION - Tax Matters," interest on either Series of the Bonds might become includable in gross income for purposes of federal income taxation' retroactive to the date of the Bonds were issued, as a result of future acts or omissions of the District or City in violation of the City's covenants in the Fiscal Agent Agreement. The Fiscal Agent Agreement does not contain a special redemption feature triggered by the occurrence of an event of taxability. As a result, if interest on the Bonds were to be includable in gross income for purposes of federal income taxation, the Bonds would continue to remain outstanding until maturity unless earlier redeemed under the Fiscal Agent Agreement. See "THE BONDS - Redemption of Bonds". RVPUBIKSNOw\721973.1 37 P442 Secondary Markets and Prices The Underwriter will not be obligated to repurchase any of the Bonds, and no representation is made concerning the existence of any secondary market for the Bonds. No assurance can be given that any secondary market will develop following the completion of the offering of the Bonds, and no assurance can be given that the initial offering prices for the Bonds will continue for any period of time. CONCLUDING INFORMATION Tax Matters In the opinion of Best Best & Krieger LLP, San Diego, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from State of California personal income tax. Bond Counsel notes that, with respect to corporations, interest on the Bonds will be included as an adjustment in the calculation of alternative minimum taxable income, which may affect the alternative minimum taxable liability of such corporations. Bond Counsel's opinion as to the exclusion from gross income for federal income tax purposes of interest on the Bonds is based upon certain representations of fact and certifications made by the City, the Underwriter and others and is subject to the condition that the City complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the bonds to assure that interest on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such requirements. Should the interest on the Bonds become includable in gross income for federal income tax purposes, the Bonds are not subject to early redemption as a result of such occurrence and will remain outstanding until maturity or until otherwise redeemed in accordance with the Fiscal Agent Agreement. The Internal Revenue Service (the "IRS") has initiated an extensive program for the auditing of tax- exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar bonds). Bond Counsel's opinion may be affected by action taken (or not taken) or events occurring (or not occurring) after the date of issuance of the bonds. Bond Counsel has not undertaken to determine, or to inform any person, whether any such action or events are taken or do occur, or whether such actions or events may adversely affect the value of tax treatment of a Bond and Bond Counsel expresses no opinion with respect thereto. Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes provided the City continues to comply with certain requirements of the Code, the accrual or receipt of interest on the Bonds may otherwise affect the tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status and other items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all potential purchasers should consult their tax advisors before purchasing any of the Bonds. Legal Opinions The legal opinion of Best Best & Krieger LLP, San Diego, California, approving the validity of the Bonds in substantially the form set forth as Appendix F hereto, will be made available to purchasers at the time of original delivery. A copy of the legal opinion for the Bonds will be provided wiih each definitive bond. RVPUBIKSNOW\721973.1 38 P443 Certain legal matters will be passed upon for the City and the District by Richards Watson & Gershon, a professional corporation, Los Angeles, California, City Attorney and by Best Best & Krieger LLP, Riverside, California, as disclosure counsel to the City. Litigation At the time of delivery of and payment for the Bonds, the District will certify that, to the current actuai knowledge (after reasonable investigation) of the officer of the City executing the certificate, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or regulatory agency, public board or body pending or overtly threatened in writing against the District or the City that in any way seeks to affect the existence of the District or the City or the titles oftheir officers to their respective offices, or that seeks to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds of the Bonds in accordance with the Fiscal Agent Agreement, or in any way contests or seeks to affect the validity or enforceability of the Bonds, the Fiscal Agent Agreement, or the Bond Purchase Agreement or any action of the District or the City contemplated by any of said documents, or that in any way contests the completeness or accuracy of this Official Statement or the powers of the District or the City or their authority with respect to the Bonds or the Fiscal Agent Agreement or any action of the District or the City contemplated by any of said . documents, or that would adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or the exemption of such interest for California personal income taxation. Continuing Disclosure The City, acting as the administrator for and on behalf of the District, will covenant for the benefit of the Bondowners to provide annually, commencing February I, 2008, certain financial information and operating data relating to the District (the "District's Annual Reports"), and to provide notices of the occurrence of certain enumerated events, if material. The District's Annual Report will be delivered not later than seven months after the end of the City's fiscal year (which currently ends on June 30), commencing with the report for the 2006- 2007 fiscal year. The Developer will covenant for the benefit of the Bondowners to provide certain information and operating data regarding their respective development of their property in the District on a semi-annual basis (the "Property Owner's Semi-Annual Reports"), and to provide notices of the occurrence of certain enumerated events, if material within their respective properties. The Property Owner's Semi-Annual Reports will be distributed by the dissemination agent on April 30 and October 31 of each year, commencing, April 30, 2007. See "APPENDIX E - Form of Continuing Disclosure Agreements - DEVELOPER CONTINUING DISCLOSURE AGREEMENT." The District's Annual Reports and the Property Owner's Semi-Annual Reports will be filed with each Nationally Recognized Municipal Securities Information Repository and with the appropriate State information depository, ifany. The notices of material events will be filed with the Municipal Securities Rulemaking Board (and with the appropriate State information depository, if any). The specific nature of the information to be contained in the District's Annual Reports, the Property Owner's Semi-Annual Reports and the notices of material events is set forth in "Appendix E - Forms of Continuing Disclosure Agreements." These covenants have been made in order to assist the Underwriter in complying with SEC Rule ISc2-12(b)(S) (the "Rule"). The obligation of the property owners to provide information is limited to the type of information described in its continuing disclosure undertakings. Neither the City nor the District will assume any responsibility for the enforcement of the property owners' obligations under their continuing disclosure undertakings nor for the accuracy of the information contained in the Property Owner's Semi-Annual Reports. The City, acting as the administrator for and on behalf of certain other community facilities districts, has on two occasions not met the continuing disclosure requirements under the Rule on a timely basis. In each instance the City failed to timely file reports on behalf of these community facilities districts, due on February I, 2001 for the Community Facilities District No. 2000-01 (South Etiwanda) Special Tax Bonds, Series 2000 and for the Community Facilities District No. 2000-02 (Rancho Cucamonga Corporate Park) Special Tax Bonds, RVPUBIKSNOw\72!973.! 39 P444 Series 2001. Such reports were subsequently filed on June 12, 2001. It should be noted that these bond issues closed in December 2000 and the information that was contained in the annual reports filed on June 12, 2001 was identical to the information contained in the official statements relating to these bond issues distributed to the purchasers of the Bonds. The Developer has not failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events, however, the Developer observes that it purchased certain property in Community Facilities District No. 98-1 (Chapman Heights) of the City of Yucaipa from a property owner who had purchased such property from Chapman Heights, L.P., a Washington limited partnership. Pursuant to developer continuing disclosure agreements relating to the Community Facilities District No. 98-1 (Chapman Heights) 1998 Special Tax Bonds, 1999 Special Tax Bonds, and 2003 Special Tax Bonds, separate annual reports were due to be filed by March 1, 2005 by Chapman Heights, L.P. Although the Developer was not obligated to file such annual reports pursuant to the terms of the developer continuing disclosure agreements, it filed such annual reports in June 2005. No Rating The District has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the Bonds. Underwriting Stone & Youngberg LLC, the Underwriter of the Bonds, has agreed to purchase the Bonds from the District at a purchase price of $ (representing the original principal amount of the Bonds of $ , less an underwriter's discount of $ and less an original issue discount of $ ). The purchase contract under which the Underwriter is purchasing the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in such contract of purchase. The public offering prices of the Bonds may be changed from time to time by the Underwriter. The Underwriter may offer and sell Bonds to certain dealers and others at a price lower than the offering price stated on the cover page of this Official Statement. Professional Fees In connection with the issuance of the Bonds, fees payable to certain professionals are contingent upon the issuance and delivery of the Bonds, including: the Underwriter, Best Best & Krieger LLP, as bond counsel and disclosure counsel; Wells Fargo Bank, National Association, as Fiscal Agent; and Fieldman Rolapp & Associates, as financial advisor to the City (a portion of whose fee is contingent). Miscellaneous All quotations from, and summaries and explanations of the Fiscal Agent Agreement, the Bonds, other documents and statutes contained in this Official Statement do not purport to be complete, and reference is made to said documents, the Fiscal Agent Agreement, and statutes for full and complete statements of their provisions. This Official Statement is submitted only in connection with the sale of the Bonds by the District. The information contained in this Official Statement should not be construed as representing all conditions affecting the District, the City or the Bonds. RVPUBIKSNOw\721973.1 40 P445 All information contained in this Official Statement pertaining to the District and the City has been furnished by the City and the execution and delivery of this Official Statement has been duly authorized by the District and the City. CITY OF RANCHO CUCAMONGA, for itself and on behalf of CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT 2006-01 (VINTNER'S GROVE) By: City Manager RVPUBIKSNOW\721973.1 41 P446 APPENDIX A SUMMARY APPRAISAL REPORT RVPUBIKSNOw\721973 I A-I RVPUBIKSNOw\721973.1 P447 APPENDIX B RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2006-01 OF THE CITY OF RANCHO CUCAMONGA (VINTNER'S GROVE) B-1 P448 APPENDIX C SUMMARY OF THE FISCAL AGENT AGREEMENT The following is a summary of certain provisions of the Fiscal Agent Agreement not otherwise described in the text of this Official Statement. This summary is not intended to be definitive, and reference is made to the text of the Fiscal Agent Agreement for the complete provisions thereof DEFINITIONS The following are some of the terms which are defined in the Fiscal Agent Agreement (the "Agreement"). Except as defined below, the terms previously defined in this Official Statement have the meanings previously given. . "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Government Code. "Administrative Expense Fund" means the fund by that name established by Fiscal Agent Agreement. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of the District: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City, a designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxes to the Fiscal Agent; the costs of the Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under the Fiscal Agent Agreement; the costs to the City, the District or any designee of either thereof of complying with arbitrage rebate requirements; the costs to the City, the District or any designee of either thereof of complying with City, District or obligated persons disclosure requirements; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, the District or any designee of either thereof related to an appeal of the Special Tax; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or District for any other administrative purposes of the District, including reasonable attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. . "Administrative Expense Requirement" means an annual amount, initially equal to $25,000, to be allocated each Fiscal Year for payment of Administrative Expenses. This amount shall be annually adjusted upward by 2% per year. "Agreement" means the Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the provisions of the Fiscal Agent Agreement. "Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of the provisions of the Fiscal Agent Agreement providing for mandatory sinking fund payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking fund payment due in such Bond Year pursuant to the Fiscal Agent Agreement. "AcquisitionlFinancing Agreement" means the AcquisitionlFinancing Agreement by and between the City and the Developer, dated as of , 2006. "Finance Director" means the Finance Director of the City, acting for and on behalf of the District. "Affiliate" means any entity owned, controlled or under common ownership or control by or with, as applicable, the Developer and includes all general partners of any entity which is a partnership. Control shall RVPUBIKSNOW\721973.1 C-l P449 mean ownership of fifty percent (50%) or more of the voting power of or ownership interest in the respective entity. "Agency Account" means the account within the Project Fund by that name established pursuant to the Fiscal Agent Agreement. "Agency Capacity Facilities AmoUnt" has the meaning given to such term in the Water District JCFA. "Auditor" means the Auditor-Controller of the County. "Authorized Officer" means the City Manager or the Finance Director, acting on behalf of the District, or any person designated by the City Council, the City Manager or the Finance Director and authorized to act on behalf of the District under or with respect to the Fiscal Agent Agreement and all other agreements related thereto. "Average Annual Debt Service" means the average over all Bond Years (from the date of the Bonds to their maturity) of Annual Debt Service. "Bond Counsel" means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities. "Bond Fund" means the fund by that name established by the Fiscal Agent Agreement. "Bond Register" means the books for the registration and transfer of Bonds maintained by the Fiscal Agent under the Fiscal Agent Agreement. . "Bond Year" means the one-year period beginning on September I st in each year and ending on the day prior to September 1st in the following year, except that the first Bond Year shall begin on the Closing Date for the Bonds and end on September I, 2007. "Bonds" means the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds at any time Outstanding under the Fiscal Agent Agreement or any Supplemental Agreement. "Business Day" means any day other than (i) a Saturday or a Sunday, or (ii) a day on which banking institutions in the state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed. "Cash Deposit" means a deposit of good funds by the Developer with the Fiscal Agent in the applicable Stated Amount in lieu of depositing a Letter of Credit or Substitute Letter of Credit pursuant to the Fiscal Agent Agreement. "CD lAC" means the California Debt and Investment Advisory Commission of the office of the State Finance Director of the State of California or any successor agency or bureau thereto. "City Improvements" shall have the meaning given such term in the Acquisition/Financing Agreement. "City Improvements Account" means the account by that name established pursuant to the Fiscal Agent Agreement. "City" means the City of Rancho Cucamonga, California, and any successor thereto. "City Attorney" means any attorney or firm of attorneys employed by the City in the capacity of city attorney. "City Council" means the City Council of the City. RVPUBIKSNOW\721973.1 C-2 P450 "City Manager" means the City Manager of the City, acting for and on behalf of the District. "Closing Date" means January _,2007, being the date upon which there is a delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced in the Fiscal Agent Agreement) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Commission" means the United States Securities and Exchange Commission. "Comptroller of the Currency" means the Comptroller of the Currency of the United States. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be iimited to, the printing costs, costs of reproducing and binding documents, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee, expenses incurred by the City in connection with the issuance of the Bonds and the expenses of the City in connection with the establishment of the District, special tax consultant fees and expenses, preliminary engineering fees and expenses, legal fees and charges, including Bond Counsel fees, financial consultant fees, appraiser fees and expenses, absorption consultant fees and expenses, charges for execution, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name established by the Fiscal Agent Agreement. "County" means the County of San Bernardino, California. "Debt Service" means the scheduled amount of interest and amortization of principal payable by reason of the Fiscal Agent Agreement on the Bonds during the period of computation, excluding amounts scheduled during, such period which relate to principal which has been retired before the beginning of such period. "Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to the Fiscal Agent Agreement. "Developer Property" means any Taxable Property (as such term is defined in the Rate and Method) within the District which is owned or controlled by the Developer. "District" or "District" means the City of Rancho Cucamonga Community Facilities District No. 2006- 01 (Vintner's Grove), formed by the City under the Act and the Resolution of Formation. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security-State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. RVPUBIKSNOW\72!973.! C-3 P451 "Federal Securities" means any of the following which are non-callable and which at the time of investment are legal investments under the laws of the State of California for funds held by the Fiscal Agent: (i) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the United States Department of the Treasury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America, including, without limitation, such of the foregoing which are commonly referred to as "stripped" obligations and coupons; or (ii) any of the following obligations of the following agencies of the United States of America: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial ownership issued by the Farmers Home Administration, (c) participation certificates issued by the General Services Administration, (d) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, (e) project notes issued by the United States Department of Housing and Urban Development, and (f) public housing notes and bonds guaranteed by the United States of America. "Fiscal Agent" means the Fiscal Agent appointed by the City and acting as an independent fiscal agent with the duties and powers in the Fiscal Agent Agreement provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in the Fiscal Agent Agreement. "Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive. "Government Obligations" means obligations described in paragraph I of the definition of Permitted Investments. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the City or the Finance Director, and who, or each of whom: (i) is judged by the Finance Director to have experience in matters relating to the issuance and/or administration of bonds under the Act; (ii) is in fact independent and not under the domination of the City; (iii) does not have any substantial interest, direct or indirect, with or in the City, or any owner of real property in the District, or any real property in the District; and (iv) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service", 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service", 65 Broadway, 16th Floor, New York, New York 10006; Moody's Investors SerVice "Municipal and Government", 99 Church Street, New York, New York 10007, Attention: Municipal News Reports; Standard & Poor's Corporation "Called Bond Record", 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Commission, such other addresses and/or such services providing information with respect to called bonds as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Interest Account" means the account within the Bond Fund by that name established pursuant to the Fiscal Agent Agreement. "Interest Payment Dates" means March I and September 1 of each year, commencing March I, 2007. "Legislative Body" means the City Council of the City acting as the legislative body of the District. "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Moody's" means Moody's mvestors Service, and its successor's and assigns. RVPUBIKSNOW\721973.1 C-4 P452 "Officer's Certificate" means a written certificate of the City signed by an Authorized Officer of the City. "Ordinance" means Ordinance No. 770 of the City of Rancho Cucamonga. "Original Purchaser" means Stone & Youngberg LLC. "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of the Fiscal Agent Agreement) all Bonds except: (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds paid or deemed to have been paid within the meaning of the Fiscal Agent Agreement; and (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City pursuant to the Fiscal Agent Agreement or any Supplemental Agreement. "Owner" or "Bondowner" means any Person who shall be the registered owner of any Outstanding Bond. "Permitted Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein (the Fiscal Agent shall be entitled to rely upon any written investment direction from an Authorized Officer of the District as a certification to the Fiscal Agent that such investment constitutes a Permitted Investment): 1. A. Direct obligations (other than an obligation subject to variation in principal payment) of the United States of America ("United States Treasury Obligations"); B. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America; C. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or D. Evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any Person claiming through the custodian or to whom the custodian may be obligated. 2. Federal Housing Administration debentures. 3. The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America: A. Federal Home Loan Mortgage Corporation (FHLMC) (1) Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) (2) Senior debt obligations RVPUBIKSNOW\721973.1 C-5 P453 B. Farm Credit Banks (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) (I) Consolidated system-wide bonds and notes C. Federal Home Loan Banks (FHL Banks) (I) Consolidated debt obligations D. Federal National Mortgage Association (FNMA) (1) Senior debt obligations (2) Mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) E. Student Loan Marketing Association (SLMA) (1) Senior debt obligations (excluded are securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date) F. Financing Corporation (FICO) (1) Debt obligations G. Resolution Funding Corporation (REFCORP) (I) Debt obligations 4. Unsecured certificates of deposit, time deposits, and bankers' acceptances (having maturities of not more than 30 days) of any bank (including the Fiscal Agent and its affiliates) the short-term obligations of which are rated "A-I" or better by S&P. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $5 million (including the Fiscal Agent and its affiliates). 6. Commercial paper (having original maturities of not more than 270 days) rated "A-I" by S&P and "Prime-I" by Moody's. 7. Money market funds rated "AAm-I" or "AAm-G" by S&P"or better. 8. State Obligations, which means: A. Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated "A3" by Moody's and "A" by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. B. Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rated "A-I +" by S&P and "Prime-I" by Moody's. C. Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated "AA" or better by S&P and "AA" or better by Moody's. RVPUB\KSNOW\721973.! C-6 P454 9. Pre-refunded municipal obligations rated "AAA" by S&P and "AAA" by Moody's meeting the following requirements: A. the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee/fiscal agent for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; B. the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of interest and premium on such municipal obligations; C. the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations; D. the cash or United States Treasury Obligations serving as security for the municipal obligations are held, by an escrow agent or trustee/fiscal agent in trust for owners of the municipal obligations; E. no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new verification; and F. the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee/fiscal agent or escrow agent. 10. Investment agreements with a domestic or foreign bank or corporation the long-term debt or financial strength of which, it or its guarantor is rated at least "AA-" by S&P and "Aa3" by Moody's; provided that, by the terms of the investment agreement: A. the invested funds are available for withdrawal without penalty or premium, upon not more than seven days' prior notice; the District and the Fiscal Agent agree, pursuant to the Fiscal Agent Agreement, to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; B. the investment agreement shall state that it is the unconditional and general obligation of and is not subordinated to any other obligation of, the provider thereof, or, in the case of a bank, that the obligation of the bank to make payments under the agreement ranks pari passu with the obligations of the bank to its other depositors and its other unsecured and unsubordinated creditors; C. the District and the Fiscal Agent receives the opinion of domestic counsel that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable); D. the investment agreement shall provide that if during its term (1) the provider's rating by either S&P or Moody's falls below "AA-" or "Aa3", respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (a) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the District, the Fiscal Agent or a Holder of the Collateral free and clear of any RVPUBIKSNOw\721973.1 C-7 P455 third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (b) transfer and assign the investment agreement to a then qualifying counterparty , which is to be approved by the District, with ratings specified above; and (2) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction ofthe District or the Fiscal Agent, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment; E. the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); F. the investment agreement must provide that if during its term (I) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the District or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate, and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate. 11. The Local Agency Investment Fund (LAIF) administered by the Finance Director of the State to the extent such deposits remain in the name of and control of the Fiscal Agent. "Person" means an individual, a corporation, a partnership, a joint venture, a trust, an unincorporated organization or a government or any agency or political subdivision thereof. "Principal Account" means the account within the Bond Fund by that name established pursuant to the Fiscal Agent Agreement. "Principal Office" means the office of the Fiscal Agent at Los Angeles, California or such other offices as may be specified to the City and the District by the Fiscal Agent in writing. "Project" means the facilities more particularly described in the Acquisition/Financing Agreement. "Project Fund" means the fund by that name created by and held by the Fiscal Agent pursuant to the Fiscal Agent Agreement. "Rate and Method" means the Rate and Method of Apportionment of the Special Taxes set forth in the Ordinance. "Rebate Fund" means the fund by that name established pursuant to the Fiscal Agent Agreement. "Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such day is a Business Day. RVPUBIKSNOWl721973.1 C-8 P456 "Redemption Fund" means the fund by that name established pursuant to the Fiscal Agent Agreement. "Reserve Fund" means the fund by that name established pursuant to the Fiscal Agent Agreement. "Reserve Requirement" means: as of any date of calculation, an amount not to exceed the lesser of (i) Maximum Annual Debt Service on the Outstanding Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service on the Outstanding Bonds, or (iii) ten percent (10%) of the face amount of the Outstanding Bonds. 2006. "Resolution" means Resolution No. 06-_ adopted by the City Council of the City on December 6, 2006. "Resolution of Formation" means Resolution No. 06-_ adopted by the City Council on October 18, "S&P" means Standard & Poor's Rating Services, a division of the McGraw Hill Companies, Inc. and its successors and assigns. "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041, Attention: Call Notification Department, Fax-(212) 855-7232; and, in accordance with then current guidelines of the Commission, such other addresses and/or such other securities depositories as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Special Tax" or "Special Taxes" means the Special Tax as defined in the Rate and Method authorized to be levied within the District pursuant to the Act, the Ordinance and the Fiscal Agent Agreement. "Special Taxes" do not include Special Tax B as defined in the Rate and Method. "Special Tax Fund" means the fund by that name established by the Fiscal Agent Agreement. "Special Tax Prepayments" means the proceeds of any Special Tax prepayments received by the City, as calculated pursuant to Section H of the Rate and Method, less any administrative fees or penalties collected as part of any such prepayment. "Special Tax Revenues" means the proceeds of the Special Taxes received by. the City, including any scheduled payments and any prepayments thereof, interest thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to tlie amount of said lien and interest thereon. "Special Tax Revenues" does not include any penalties collected in connection with delinquent Special Taxes. "State" means the State of California. "Stated Amount" means the amount available to be drawn under the Letter of Credit or Cash Deposit from time to time. During each Fiscal Year in which the Letter of Credit is in effect, the Stated Amount of the Letter of Credit shall equal the estimated amount of Special Taxes to be levied on the Developer Property during that Fiscal Year. "Supplemental Agreement" means an agreement the execution of which is authorized by a resolution which has been duly adopted by the City Council under the Act and which agreement is amendatory of or supplemental to the Fiscal Agent Agreement, but only if and to the extent that such agreement is specifically authorized thereunder. "Tax Consultant" means David Taussig & Associates, Inc. or another independent financial or tax consultant retained by the City for the purpose of computing the Special Taxes. "Water District" means the Cucamonga Valley Water District. RVPUBIKSNOW\721973.1 C-9 P457 "Water District Account" means the account within the Project Fund by that name established pursuant to the Fiscal Agent Agreement. "Water District Capacity Facilities Proceeds" has the meaning given such term in the Water District JCFA. "Water District JCFA" means the Joint Community Facilities Agreement by and between the City and the Water District pertaining to the funding by the District of the Water District Capacity Facilities Proceeds and the Agency Capacity Facilities Proceeds and the acquisition ofthe Owner Constructed Water District Facilities. "Zone D Parcels" means each of the parcels within the District which on the Closing Date are located within the Zone D special flood area as designated by the Federal Emergency Management Agency. FUNDS AND ACCOUNTS Project Fund Establishment of Project Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds, Project Fund and within such Fund three accounts, the Acquisition Account, the Agency Account and the Water District Account, to the credit of which deposits shall be made as required by the Fiscal Agent Agreement. The Fiscal Agent may establish such temporary funds or accounts on its records as it may deem appropriate to facilitate such deposits and transfers. Moneys in the Acquisition Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, and shall be disbursed, except as otherwise provided in the Fiscal Agent Agreement, solely for the payment or reimbursement of costs of the Project and Costs of Issuance not paid from the Costs of Issuance Fund prior to the closure thereof. Moneys in the Agency Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, the Agency and the Water District, and shall be disbursed, except as otherwise provided in the Fiscal Agent Agreement of this Section, solely for the funding of the Agency Capacity Facilities Proceeds pursuant to the Water District JCF A. Moneys in the Water District Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City and the Water District, and shall be disbursed, except as otherwise provided in the Fiscal Agent Agreement, solely for the funding of the Water District Capacity Facilities Proceeds and the acquisition of the Owner Constructed Water District Facilities pursuant to the Water District JCF A. . Procedure for Disbursement from the Project Fund Accounts. (i) Acquisition Account. The Fiscal Agent shall make disbursements from the Acquisition Account upon receipt of an Officer's Cenificate, in substantially the form set forth in the Fiscal Agent Agreement which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Acquisition Account; and the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (ii) Agencv Account. The Fiscal Agent shall make disbursements from the Agency Account upon receipt of an Officer's Certificate which shall: RVPUB\KSNOW\721973.! C-lO P458 (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Agency Account; and the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed set forth in any Officer's Certificate previously filed requesting a disbursement. (iii) Water District Account. The Fiscal Agent shall make disbursements from the Water District Account upon receipt of an Officer's Certificate, which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Water District Account; and .the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. Transfers to the Bond Fund. On any Interest Payment Date, if there is a deficiency in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds after all available amounts in the Reserve Fund have been transferred to the Bond Fund pursuant to the Fiscal Agent Agreement, the City may, but is not required to, direct the Fiscal Agent to transfer moneys from the Project Fund to the Bond Fund pursuant to an Officer's Certificate which shall set forth the amount to be transferred. Investment. Moneys in the Project Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from such investment shall be invested and deposited and shall be retained in the Project Fund to be used for the purposes thereof. Transfer of Funds not Required for Project. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid, or that any such costs are not required to be paid from the Project Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Project Fund to the Special Tax Fund. Transfer of Funds in case of Abandonment. Upon the filing of an Officer's Certificate stating that the Authorized Officer has determined in his sole discretion that work necessary to construct and complete the Project has ceased for a continuous period of over six months such that the construction of the Project effectively has been abandoned, or that for any reason all or any portion of the amounts then on deposit in the Project Fund will not be expended for Project costs, the Fiscal Agent shall transfer the amounts in the Project Fund as set forth in the Fiscal Agent Agreement. Costs of Issuance Fund Establishment of Costs of Issuance Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-0 I (Vintner's Grove) 2007 Special Tax Bonds, Costs of Issuance Fund, to the credit of which a deposit shall be made as required by the Fiscal Agent Agreement. Moneys in the Costs ofIssuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in the Fiscal Agent Agreement for the payment or reimbursement of Costs of Issuance. Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the Bonds. The Fiscal Agent shall pay all Costs of Issuance after receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee pursuant to an Officer's Certificate requesting payment of Costs of Issuance. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 180 days from the date of delivery of the Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Project Fund. RVPUBIKSNOW\721973.1 C-II P459 Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the Costs ofIssuance Fund to be used for the purposes of such fund. Reserve Fund Establishment of Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds, Reserve Fund, to the credit of which Fund a deposit shall be made as required by the Fiscal Agent Agreement which deposit is equal to the Reserve Requirement as of the Closing Date for the Bonds, and deposits shall be made as provided in the Fiscal Agent Agreement). Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of principal of, and iriterest and any premium on, the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. Use of Funds. Except as otherwise provided in the Fiscal Agent Agreement, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the provisions of the Fiscal Agent Agreement, for the purpose of redeeming Bonds from the Bond Fund. Transfer Due to Deficiency in Bond Fund. Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall provide written notice thereof to the Finance Director, specifying the amount withdrawn. Transfer of Excess of Reserve Requirement. If on any September I, or the first Business Day thereafter if September I is not a Business Day, of each year, the amount in the Reserve Fund exceeds the Reserve Requirement, the Fiscal Agent shall, as directed in an Officer's Certificate, transfer an amount equal to the excess from the Reserve Fund to the Interest Account of the Bond Fund to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with the Fiscal Agent Agreement. Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, iricluding interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall transfer the amount in the Reserve Fund to the Redemption Fund to be applied to the payment and redemption, in accordance with the Fiscal Agent Agreement, of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Redemption Fund shall be transferred to the District to be used for any lawful purpose of the District. Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to the Fiscal Agent Agreement the calculation of any amounts due to the federal government pursuant to the Fiscal Agent Agreement following payment of the Bonds and withdrawal of any such amount from the Reserve Fund for purposes of making such payment to the federal government, and (ii) payment of any fees and expenses due to the Fiscal Agent. Transfer Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and Bonds are to be redeemed with the proceeds of such prepayment pursuant to the Fiscal Agent Agreement, a proportionate amount in the Reserve Fund (determined on the basis of the principal of Bonds to be redeemed and the then principal of the Bonds Outstanding) shall be transferred upon such prepayment by the Fiscal Agent to the Redemption Fund or the Interest Account of the Bond Fund, as applicable, to be applied to the redemption ofthe Bonds pursuant to written instructions contained in an Officer's Certificate in accordance with the Fiscal Agent Agreement. Investment and Transfer to Pay Rebate. Moneys in the Reserve Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. All Permitted Investments in the Reserve Fund shall be valued at RVPUBIKSNOW\721973.1 C-12 P460 their Fair Market Value at least semiannually on March 1 and September 1. Interest earnings and profits resulting from said investment shall be used as required by the District to comply with the Fiscal Agent Agreement. No earnings on amounts in the Reserve Fund shall be used by the District to comply with the Fiscal Agent Agreement unless the amount on deposit in the Reserve Fund is equal to the Reserve Requirement. Bond Fund Establishment of Bond Fund and Interest Account and Principal Account. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds, Bond Fund, and within such Fund two accounts, the Interest Account and the Principal Account, to the credit of which deposits shall be made as required by the Fiscal Agent Agreement, and any other amounts required to be deposited therein by the Fiscal Agent Agreement or the Act. Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Interest Account of the Bond Fund and pay to the Owners of the Bonds the interest then due and payable on the Bonds, including any interest due on the Bonds being redeemed pursuant to the Fiscal Agent Agreement. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Principal Account of the Bond Fund and pay to the Owners of the Bonds the principal of the Bonds at the maturity thereof or the principal of the term Bonds upon the mandatory sinking fund redemption thereof pursuant to the Fiscal Agent Agreement. Investment. Moneys in the Bond Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from the investment and deposit of amounts in the Bond Fund shall be retained in the Bond Fund and used for purposes of such fund. Special Tax Fund Establishment of Special Tax Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds, Special Tax Fund. Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit of the District and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds and the District. No later than the tenth (lOth) Business Day after which Special Tax Revenues have been received by the City, and in any event not later than February 15th and August 15th of each year, the City shall transfer such Special Tax Revenues to the Fiscal Agent, less an amount equal to the Administrative Expense Requirement, and, except as set forth in the following sentence, such amounts shall be deposited in the Special Tax Fund. Disbursements. With the exception of the Special Tax Revenues representing Special Tax Prepayments which shall be transferred pursuant to the Fiscal Agent Agreement, below, the Special Tax Revenues deposited in the Special Tax Fund shall be deposited in the following accounts of the Special Tax Fund or transferred to the following other funds and accounts on the dates and in the amounts set forth in the following paragraph and in the following order of priority: 1. The Fiscal Agent shall deposit in the Interest Account of the Bond Fund, on each Interest Payment Date and date for redemption of the Bonds, an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest due or becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds being redeemed on such date. RVPUB\KSNOW\721973.1 C-13 P461 2. The Fiscal Agent shall deposit in the Principal Account of the Bond Fund, on each Interest Payment Date and redemption date on which principal of the Bonds, including sinking fund payments, shall be payable an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to the Fiscal Agent Agreement. 3. On or after March 2 and September 2 of each year after making the transfer and deposits required under paragraphs 1 and 2 above, the Fiscal Agent shall transfer the amount, if any, necessary to replenish the amount then on deposit in the Reserve Fund to an amount equal to the Reserve Requirement. . 4. On or after September 2 of each year after making the deposits and transfers required under paragraphs 1 through 3 above, upon receipt of written instructions from an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Rebate Fund the amount specified in such request. 5. On' or after September 2 of each year after making the deposits and transfers required under paragraphs 1 through 4 above, upon receipt of a written request of an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Finance Director for deposit in the Administrative Expense Fund the amounts specified in such request to pay those Administrative Expenses which the District reasonably expects (a) will become due and payable during such Fiscal Year or the cost of which Administrative Expenses have previously been incurred and paid by the District from funds other than the Administrative Expense Fund and (b) the cost of which Administrative Expenses will be in excess of the Administrative Expense Requirement for such Fiscal Year. 6. If, on or after September 2 of each year, after making the deposits and transfers required under paragraphs I through 5 above, moneys remain in the Special Tax Fund, such moneys shall remain on deposit in the Special Tax Fund and shall be subsequently deposited or transferred pursuant to the provisions of paragraphs 1 through 5 above. Prepayments. The Fiscal Agent shall, upon receipt of Special Tax Revenues representing Special Tax Prepayments together with written instructions of the District executed by an Authorized Officer, immediately transfer such Special Tax Prepayments pursuant to such written instructions into the Interest Account of the Bond Fund and the Redemption Fund, as applicable, and utilize such funds to pay the interest and premium, if any, on and principal of Bonds to be redeemed pursuant to the Fiscal Agent Agreement. The Fiscal Agent may conclusively rely upon such instructions. Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from such investment and deposit shall be transferred to the Special Tax Fund to be used for the purposes thereof. Transfer to Redemption Fund. Any Officer's Certificate issued pursuant to the Fiscal Agent Agreement (other than an Officer's Certificate issued more than one year prior to the first date on which optional redemption of Bonds is permitted pursuant to the Fiscal Agent Agreement) may direct that all or any portion of. the funds which would otherwise be transferred to the Special Tax Fund be transferred to the Redemption Fund, in which case the Fiscal Agent shall apply such amounts in accordance with the Fiscal Agent Agreement as directed in an Officer's Certificate. Transfer to the District. When there are no longer any Bonds Outstanding, any amounts then remaining on deposit in the Special Tax Fund shall be transferred to the District and used for any lawful purpose under the Act. RVPUBIKSNOw\721973.1 C-14 P462 Administrative Expense Fnnd Establishment of Administrative Expense Fund. There is established by the Fiscal Agept Agreement, as a separate fund to be held by the Finance Director, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds, Administrative Expense Fund to the credit of which deposits shall be made as required by the Fiscal Agent Agreement. Moneys in the Administrative Expense Fund shall be held in trust by the Finance Director for the benefit of the District and shall be used to pay Administrative Expenses from time to time. Investment. Moneys in the Administrative Expense Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from said investment shall be retained by the Finance Director in the Administrative Expense Fund to be used for the purposes thereof. Rebate Fund There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds, Rebate Fund. The Rebate Fund shall be held and maintained by the Fiscal Agent. On September 15 of each year (or at such other times and or such other intervals as may be required or permitted by regulations of the United States Internal Revenue Service), the City shall determine whether any portion of investment earnings from any account established by the Fiscal Agent Agreement must be rebated to the United States pursuant to Section 148 of the Code. At the written direction of the District, any amounts required to be rebated will be transferred from any available source, including the Special Tax Fund pursuant to the Fiscal Agent Agreement, to the Rebate Fund. The City is authorized to retain independent attorneys, accountants and other consultants to assist in complying with the requirements of the Code, and the fees of such consultants may be paid from the Administrative Expense Account. The Fiscal Agent may rely conclusively upon the City's determinations, calculations and certifications required by the Fiscal Agent Agreement. The Fiscal Agent shall have no responsibility to make any independent calculation or determination or to review the City's calculations thereunder. Amounts in the Rebate Fund shall be invested without yield restriction and shall be held in trust for rebate to the United States at the written direction of the Finance Director. Earnings on the Rebate Fund are to remain in that account and shall similarly be held in trust for rebate to the United States. Redemption Fund Establishment of Redemption Fund. There is established by the Fiscal Agent Agreement, as a separate fund to beheld in trust by the Fiscal Agent for the Owners of the Bonds, the Community Facilities District 2006- 01 (Vintner's Grove) 2007 Special Tax Bonds, Redemption Fund, to the credit of which deposits shall be made from funds received by the City representing Special Tax Prepayments and other funds required for redemptions, other than mandatory sinking fund redemptions and which shall be administered as provided below. Disbursement. Moneys shall be deposited into the Redemption Fund by the Fiscal Agent pursuant to the terms of the Fiscal Agent Agreement and shall be set aside and used solely for the purpose of redeeming Bonds in accordance with written instructions of the District executed by an Authorized Officer given in accordance with the Fiscal Agent Agreement. Following the redemption of any Bonds, if any funds remain in the Redemption Fund, such funds shall be transferred to the Special Tax Fund. Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes thereof. RVPUBIKSNOW\721973.1 C-15 P463 OTHER COVENANTS OF THE CITY Punctual Payments The City will punctually payor cause to be paid the principal of, and interest and any premium on, the Bonds when and as due in strict conformity with the terms of the Fiscal Agent Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions covenants and requirements of the Fiscal Agent Agreement and all Supplemental Agreements and of the Bonds. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not on the District's behalf, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default thereunder, to the benefits of the Fiscal Agent Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have so extended or funded. Against Encumbrances Neither the City nor the District will encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien therein created for the benefit of the Bonds, except as permitted by the Fiscal Agent Agreement. Books and Records The City will keep, or cause to be kept, on behalf of the District proper books of record and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. . Such books ofrecord and accounts shall at all times during normal business hours of the City be subject to the inspection of the Fiscal Agent, the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing, and the payers of the Special Taxes, or their representatives duly authorized in writing. Protection of Security and Rights of Owners The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all Persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City acting either on its own behalf or on behalf of the District. Compliance with Law The City will comply with all applicable provisions of the Act and law in completing the construction or acquisition of the Project. Collection of Special Tax Revenues The City shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of delinquent Special Taxes. On or within five (5) Business Days of each June I, the Fiscal Agent shall provide the Finance Director with a notice stating the amount then on deposit in the Interest Account and Principal Account of the Bond Fund, and the Reserve Fund, and informing the City that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for Annual Debt Service and Administrative Expenses and replenishment (if RVPUB\KSNOW\721973.1 C-16 P464 necessary) of the Reserve Fund so that the balance therein equals the Reserve Requirement. The receipt of or failure to receive such notice by the Finance Director shall in no way affect the obligations of the Finance Director under the following two paragraphs. Upon receipt of such notice, the Finance Director shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. The Finance Director shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance by each August I that the Bonds are Outstanding, or otherwise such that the computation of the levy is complete before the final date on which Auditor will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Finance Director shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Finance Director shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any Outstanding Bonds of the District becoming due and payable during the ensuing year, including any necessary replenishment or expenditure of the amount within the Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any obligation under the Fiscal Agent Agreement) during such year, taking into account the balances in such funds and in the Bonds Fund, the Redemption Fund and the Special Tax Fund. The Special Taxes so levied shall not exceed the authorized amounts as provided in the Ordinance. The Special Taxes shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable, and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. Notwithstanding the foregoing, the Finance Director shall, not later than July IS of each Fiscal Year, determine whether or not to cause the collection of any Special Taxes by direct, first class mail billing to the then owner of each parcel of property in lieu of billing for such Special Taxes in the same manner as general taxes as aforesaid. Such direct mail billing shall be made not later than November I of the Fiscal Year and shall direct the owner of the property affected to pay the Special Taxes directly to the Finance Director in two equal installments, the first of which shall be due and delinquent if not paid on December 10 and the second of which may be paid with the first and which, in any event, shall be due and' delinquent if not paid on April 10 of the Fiscal Year. Any such Special Taxes so billed shall have the same priority and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. Notwithstanding the foregoing, the Legislative Body may waive delinquency penalties and redemption penalties ifit makes all of the determinations set forth in Section 53340(1) of the Act. Reduction in Maximum Annual Special Tax The District finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facility districts in Southern California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the City has determined that, absent the certification described below, a reduction in the Maximum Annual Special Tax (as such term is defined in the Rate and Method) authorized to be levied below the levels provided would interfere with the timely retirement of the Bonds. The City has determined it to be necessary in order to preserve the security for the Bonds to covenant and, to the maximum extent that the law permits it to do so, the City does covenant, that it shall not initiate proceedings to reduce the Maximum Special Tax Rates (as such term is defined in the Rate and Method) unless, in connection therewith, (i) the City receives a certificate from one or more Tax Consultants which, when taken together, certify that, on the basis of the parcels of land and improvements existing in the City as of the July I preceding the reduction, the Maximum Annual Special Tax which may be levied on all Assessor's Parcels (as such term is defined in the Rate and Method) of taxable property on which a completed structure is located in each Fiscal Year will equal at least 110% of the gross debt RVPUB\KSNOW\721973,! C-17 P465 service on all Bonds to remain Outstanding after the reduction is approved and will not reduce the Maximum Annual Special Tax payable from parcels on which a completed structure is located to less than 110% of Maximum Annual Debt Service, and (ii) the Legislative Body finds pursuant to the Fiscal Agent Agreement that any reduction made under such conditions will noi adversely affect the interests of the Bondowners. Any reduction in the Maximum Annual Special Tax approved pursuant to the preceding sentence may be approved without the consent of the Bondowners. The City covenants that, in the event that any initiative is adopted by the qualified electors which purports to reduce. the Maximum Annual Special Tax below the levels authorized pursuant to the Rate and Method or to limit the power or authority of the City to levy Special Taxes pursuant to the Rate and Method, the City shall, from funds available thereunder, commence and pursue legal action in order to preserve the authority and power of the City to levy Special Taxes pursuant to the Rate and Method. Covenant to Foreclose On or before March 1 and June 1 of each Fiscal year, the City will review the public records of the County in connection with the Special Taxes levied in such Fiscal Year to determine the amount of Special Taxes actually collected in such Fiscal Year. If the City determines that (a) any single parcel subject to the Special Taxes is delinquent in the payment of Special Taxes in the aggregate of $4,000 or more or (b) any parcels under common ownership subject to the Special Taxes are delinquent in the payment of Special Taxes in the aggregate of $20,000 or more, the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner. The City shall cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to the Fiscal Agent Agreement and for which the Special Taxes remain delinquent. With respect to aggregate delinquencies throughout the District, if the City determines that it has collected less than 95% of the Special Taxes levied in the such Fiscal Year, then the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owner of each delinquent parcel (regardless of the amount of such delinquency). The City will cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to the Fiscal Agent Agreement and for which the Special Taxes remain delinquent. Further Assurances The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Fiscal Agent Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in the Fiscal Agent Agreement. Private Activity Bond Limitations The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code. Federal Guarantee Prohibition The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. RVPUBIKSNOW\721973.! C-18 P466 Rebate Requirement The City shall take any and all actions necessary to assure compliance with section l48(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. Funds shall be transferred to a Rebate Fund, to be held by the Fiscal Agent, in accordance with the Fiscal Agent Agreement. If necessary, the City may use (i) earnings on amounts in the Reserve Fund if the amount on deposit in the Reserve Fund, following the proposed transfer, is equal to the Reserve Requirement, (ii) amounts on deposit in the Administrative Expense Fund, and (iii) any other funds available to the District, including amounts advanced by the City, in its sole discretion, to be repaid by the District in connection with the District as soon as practicable from amounts described in the preceding clauses (i), (ii) and (iii), to satisfy its obligations under the Fiscal Agent Agreement. The Finance Director shall take note of any investment of moneys thereunder in excess of the yield on the Bonds, and shall take such actions as are necessary to ensure compliance with the Fiscal Agent Agreement, such as increasing the portion of the Special Tax levy for Administration Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under the Fiscal Agent Agreement. No Arbitrage The City shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Yield of the Bonds In determining the yield of the Bonds to comply with the Fiscal Agent Agreement, the City will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City, as of the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or Bonds redeemed. Maintenance of Tax-Exemption The City shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds. No Parity Bonds The City will issue no additional bonds on a parity with the Bonds; provided, that nothing contained therein shall limit the issuance ofany Special Tax Bonds of the District if (a) the rights and claims of such bonds to the Special Tax Revenues and the funds and accounts established or described in the Fiscal Agent Agreement are in all respects subordinate to the rights and claims of the Bonds, or (b) after the issuance and delivery of such Special Tax Bonds, none of the Bonds shall be Outstanding. Defeased Bonds, or Bonds in exchange for or in lieu of which other bonds have been delivered, shall not be considered Outstanding. INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS The District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confIrmations of security transactions as they occur, the District specifIcally waives receipt of such confIrmations to the extent permitted by law. The Fiscal Agent will furnish the District periodic cash transaction statements, which include detail for all investment transactions made by the Fiscal Agent thereunder. RVPUBIKSNOw\721973.1 C-19 P467 Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. Any income realized on or losses resulting from investments in any fund or account shall be credited or changed to such fund or account. Whenever in the Fiscal Agent Agreement any moneys are required to be transferred by the City to the Fiscal Agent, such transfer may be accomplished by transferring a like amount of Permitted Investments. The Fiscal Agent and its affiliates or the Finance Director may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to the Fiscal Agent Agreement. The Fiscal Agent shall not be required to determine the legality of any investments. Except as otherwise provided in the next sentence, all investments' of amounts deposited in any fund or account created by or pursuant to the Fiscal Agent Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by the Fiscal Agent Agreement of the Code) at Fair Market Value. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under the applicable provisions of the Code and (unless valuation is undertaken at least annually) investments in the Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Code). The Fiscal Agent shall not be liable for verification of the application of such sections of the Code. Investments in any and all funds and accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions therein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent thereunder, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in the Fiscal Agent Agreement. Subject to the restrictions set forth therein and/or any written investment instructions received by Fiscal Agent pursuant to the Fiscal Agent Agreement, moneys in said funds and accounts may be from time to time invested by the Fiscal Agent in any manner so long as: (I) Moneys in the Project Fund shall be invested in obligations which will by their terms mature as close as practicable to the date the District estimates the moneys represented by the particular investment will be needed for withdrawal from such Fund; and (2) Moneys in the Special Tax Fund, the Bond Fund, the Redemption Fund and the Reserve Fund shall be invested only in obligations which will by their terms either mature or allow for withdrawals at par on such dates so as to ensure the payment of principal and interest on the Bonds as the same become due; provided, however, that except for investment agreements as described in paragraph II of the defmition of Permitted Investments which permit withdrawal at par, investment of moneys on deposit in the Reserve Fund shall have an average aggregate weighted term not greater than five (5) years. The Fiscal Agent or Finance Director, as applicable shall sell at Fair Market Value, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and neither the Fiscal Agent nor the Finance Director shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance therewith. THE FISCAL AGENT Appointment of Fiscal Agent Wells Fargo Bank, National Association, is appointed Fiscal Agent pursuant to the Fiscal Agent Agreement and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such RVPUBIKSNOW\721973.! C-20 P468 duties, as are specifically set forth in the Fiscal Agent Agreement, and no implied covenants or obligations shall be read into the Fiscal Agent Agreement against the Fiscal Agent. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of the Fiscal Agent Agreement, shall be the successor to such Fiscal Agent without the execution or filing of any paper or any further act; anything therein to the contrary notwithstanding. Upon thirty (30) days prior written notice, the City may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of the Fiscal Agent Agreement, combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of the' Fiscal Agent Agreement within forty-five (45) days after the Fiscal Agent shall have given to the City written notice of its resignation or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal. Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. Liability of Fiscal Agent The recitals of facts, covenants and agreements therein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of the Fiscal Agent Agreement or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations therein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties thereunder, except for its own negligence or willful default. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. In the absence of bad faith or gross negligence, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of the Fiscal Agent Agreement; but in the case of any such certificates or opinions by which any provision thereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of the Fiscal Agent Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of the Fiscal Agent Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper Person or to have been prepared and furnished pursuant to any provision of the Fiscal Agent Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. RVPUBIKSNOW\72 1973.1 C-21 P469 The Fiscal Agent shall not be liable for any error of judgment made in good faith unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. No provision of the Fiscal Agent Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties thereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by the Fiscal Agent Agreement at the request or direction of any of the Owners pursuant to the Fiscal Agent Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Fiscal Agent may become the Owner of the Bonds with the same rights it would have if it were not the Fiscal Agent. MODIFICATION OR AMENDMENT OF THE AGREEMENT Amendments Permitted The Fiscal Agent Agreement and the rights and obligations of the City and/or District and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in the Fiscal Agent Agreement. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the City of any pledge or lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or the Fiscal Agent Agreement), or reduce the percentage of Bonds required for the amendment thereof. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The Fiscal Agent Agreement and the rights and obligations of the City and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for anyone or more of the following purposes: (i) to add to the covenants and agreements of the District or City in the Fiscal Agent Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power therein reserved to or conferred upon the City or District; (ii) to make modifications not adversely affecting any outstanding series of Bonds of the City or District in any material respect; (iii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Fiscal Agent Agreement, or in regard to questions arising under the Fiscal Agent Agreement, as the District or City and the Fiscal Agent may deem necessary or desirable and not inconsistent with the Fiscal Agent Agreement, and which shall not adversely affect the rights of the Owners of the Bonds; and (iv) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from gross federal income taxation of interest on the Bonds. RVPUBIKSNOw\721973.1 C-22 P470 Owners' Meetings The City on behalf of the District may at any time call a meeting of the Owners. In such event the City is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof, and to fix and adopt rules and regulations for the conduct of said meeting. Procedure for Amendment with Written Consent of Owners The City on behalf of the District and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of the Fiscal Agent Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by the Fiscal Agent Agreement, to take effect when and as provided in the Fiscal Agent Agreement. A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as provided in the Fiscal Agent Agreement. Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in the Fiscal Agent Agreement) and a notice shall have been mailed as hereinafter in this Section provided each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by the Fiscal Agent Agreement. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this . Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by the Fiscal Agent Agreement to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the District, City and the Owners of all Bonds at the expiration of thirty (30) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such thirty-day period. Effect of Snpplemental Agreement From and after the time any Supplemental Agreement becomes effective pursuant to the Fiscal Agent Agreement, this Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Agreement of the City, District, and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. DISCHARGE OF THE AGREEMENT The City shall have the option to pay and discharge the entire indebtedness on all or any portion of the Bonds Outstanding in anyone or more of the following ways: RVPUBIKSNOW\721973.1 C-23 P471 (A) by well and truly paying or causing to be paid the principal of, and interest and any premium on, such Bonds Outstanding, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in the Fiscal Agent Agreement is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or (C) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal Securities in such amount as the City on behalf of the District shall determine as confirmed by an independent certified public accountant will, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in the Fiscal Agent Agreement, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates. If the City shall have taken any of the actions specified in (A), (B) or (C) above, and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent s~all have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in the Fiscal Agent Agreement and all other obligations of the City under this Agreement with respect to such Bonds Outstanding shall cease and terminate. Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the foregoing, the obligation of the City to payor cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, all amounts owing to the Fiscal Agent pursuant to the Fiscal Agent Agreement, and otherwise to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, shall continue in any event. Upon compliance by the City with the foregoing with respect to all Bonds Outstanding, any funds held by the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent, which are not required for the purposes of the preceding paragraph, shall be paid over to the City and any Special Taxes thereafter received by the City shall not be remitted to the Fiscal Agent but shall be retained by the City to be used for any purpose permitted under the Act. EVENTS OF DEFAULT; REMEDIES Events of Default Anyone or more of the following events shall constitute an "event of default": (i) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (ii) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or (iii) Default by the City or the District in the observance of any of the agreements, conditions or covenants on its part in the Fiscal Agent Agreement or in the Bonds contained (other than a payment default referred to in subparagraph (A) and (B) above), and the continuation of such default for a period of 60 days after the City and the District shall have been given notice in writing of such default by the Fiscal Agent or by the Owners of25% aggregate principal amount of Bonds Outstanding, provided that if within 60 days the City or the District, as applicable, has commenced curing of the default and diligently pursues elimination thereof, such period shall be extended to permit such default to be eliminated. RVPUBIKSNOW\721973.! C-24 P472 Remedies of Owners Following the occurrence of an event of default, any Owner shall have the right for the equal benefit and protection of all Owners similarly situated: (i) By mandamus or other suit or proceeding at law or in equity to enforce his or her rights against the City or the District and any of the members, officers and employees of the City or the District, and to compel the City or District, as applicable, or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in the Fiscal Agent Agreement; (ii) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (iii) By a suit in equity to require the City or the District, as applicable, and its members, officers and employees to account as the trustee of an express trust. Nothing in this article or in any other provision of the Fiscal Agent Agreement, or in the Bonds, shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as therein provided, out of the Special Tax Revenues pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in the Fiscal Agent Agreement. A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Act or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the City, the District and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. No remedy therein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given under the Fiscal Agent Agreement, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. The Fiscal Agent shall not be obligated to take any action on behalf of the Owners if the City or the District defaults under the Fiscal Agent Agreement. RVPUBIKSNOw\721973.1 C-25 P473 APPENDIX D BOOK-ENTRY ONLY SYSTEM The information in this section concerning DTC and DTC 's book-entry only system has been obtained from DTC. The City takes no responsibility for the accuracy thereof The City cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest or principal with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. DTC in New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered initially in the name of Cede & Co. (DTC's partnership nominee). One fully-registered bond certificate will be issued for each maturity of the Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking law, a "banking organization" within the meaning of the New York Banking law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities .brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of Bonds (a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive physical certificates representing t}.leir ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the. name of DTC' s partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participimts to Beneficial Owners will be RVPUB\KSNOW\721973.1 D-l P474 governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. While Bonds are in the book-entry only system, redemption notices shall be sent to Cede & Co. Ifless than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participation in such maturity to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.' s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on a payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Fiscal Agent, or the City, subject to any statutory or regulatory requirements as may be in effect form time to time. Payment of principal and interest to DTC is the responsibility of the Fiscal Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Fiscal Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. Procedures If Book-Entry-Only System Is Discontinued If the book-entry-only system should be discontinued, the interest on, principal of and redemption premium (if any) on the Bonds would be payable at the principal corporate trust office of the Fiscal Agent. The interest due on or before maturity or redemption would be payable only to the person whose name appears as registered owner in the registration books required to be kept by the Fiscal Agent at the close of business as of the 15th day of the month next preceding each interest payment date. Interest would be paid by check mailed by first class mail to such registered owner at his or her address as it appears on such books, except that a registered owner of $1,000,000 or more in aggregate principal amount of Bonds then outstanding may request with 15 days' prior notice that payment be made by wire transfer on each such interest payment date. The principal of and redemption premium, if any, on the Bonds would be payable only to the person whose name appears in such registration books as the registered owner, such principal and redemption premium, if any, to be paid only on the surrender of each Bond to the Fiscal Agent at maturity or on redemption prior to maturity. If the book-entry-only system should be discontinued, the Bonds will be delivered in certificated form to the registered owners. Thereafter, any Bond may, in accordance with its terms, be transferred or exchanged on such books by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon payment by the bondholder requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange and upon surrender of such Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer of exchange in a form acceptable to the Fiscal Agent. Neither the City nor the Fiscal Agent is required (i) to transfer or exchange any Bonds during the IS-day period prior to the selection of any Bonds for redemption, or (ii) to transfer or exchange any Bond that has been selected for redemption in whole or in part, except the unredeemed portion of such Bond selected for redemption in part, from and after the day that such Bond has been selected for redemption. RVPUBIKSNOw\721973.1 D-2 P475 APPENDIX E FORMS OF CONTINUING DISCLOSURE AGREEMENTS CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) 2007 SPECIAL TAX BONDS CITY CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and delivered by City of Rancho Cucamonga, for itself and on behalf of the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) (the "Issuer"), and Wells Fargo Bank, National Association, a national banking association duly organized and existing under the laws of the United States of America (the "Dissemination Agent") in connection with the issuance of the $ City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds (the "Bonds"). The Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of December I, 2006 (the "Fiscal Agent Agreement") between the Issuer and Wells Fargo Bank, National Association, as Fiscal Agent (the "Fiscal Agent"). The Issuer and the Dissemination Agent covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer for the benefit of the Owners of the Bonds and in order to assist the Participating Underwriters (as defined herein) in complying with S.E.C. Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Reports provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of any Bonds for federal income tax purposes. "District" shall mean the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove). "Disclosure Representative" shall mean the Finance Director of the Issuer or his or her designee, or such other officer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to time. "Dissemination Agent" shall mean Wells Fargo Bank, National Association, acting in its capacity as Dissemination Agent, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Fiscal Year" shall mean the twelve month period beginning on July 1 of each year and ending on June 30 of the following year. . "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "National Repository" shall mean any Nationally Recognized Municipal Securities Repository for purposes of the Rule. The Nationally Recognized Municipal Securities Information Repository for purposes of the Rule are identified in the Securities and Exchange Commission website located at http://www .sec.gov/consumer/nrmsir .hlm. RVPUBIKSNOW\72!973.! E-I P476 "Participating Underwriters" shall mean Stone & Youngberg LLC whose address IS: One Ferry Building, San Francisco, California 94111. "Repository" shall mean each National Repository and each State Repository. "Rule" shaH mean Rule l5c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" shall mean any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule. As of the date of this Disclosure Agreement, there is no State Repository. "Tax-exempt" shall mean that interest on the Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax. Section 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than February I of each year, commencing February 1,2007, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement; provided, however, that the Annual Report due on February I, 2007, shall consist solely of the Official Statement. Not later than fifteen (15) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross- reference other information as provided in Section 4 of this Disclosure Agreement. The information contained or incorporated in each Annual Report shall be for the Fiscal Year which ended on the preceding June 30. The Issuer shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certifications of the Issuer and shall have no duty or obligation to review any such Annual Report. (b) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the Repositories by the date specified in subsection (a), the Dissemination Agent shall send a notice to each Repository in substantially the form attached as Attachment A. (c) The Dissemination Agent shall: I. determine each year prior to the date for providing the Annual Report the name and address of each National Repository and each State Repository, if any; and 2. . to the extent it can confirm such filing of the Annual Report, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, 'stating the date it was provided and listing all the Repositories to which it was provided. (d) Notwithstanding any statement to the contrary, any filing under this agreement may be made solely by transmitting such filing to the Texas Municipal Advisory Council (the "MAC"), or any other central post office approved by the Securities and Exchange Commission as provided at httn://www.disclosureusa.org unless the United States Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7, 2004. (e) The Issuer shall, or if received by the Dissemination Agent, the Dissemination Agent shall, deliver a copy of each Annual Report to the Participating Underwriter at the time the Annual Report is provided to the Repositories in accordance with this section. RVPUB\KSNOW\721973.! E-2 P477 Section 4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the information set forth in Exhibit B, any or all of which may be included by specific reference to other documents, including official statements of debt issuances of the City, the District or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identifY each such other document so included by reference. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identifY each such other document so incorporated by reference. Audited financial statements of the Issuer shall be audited by such auditor as shall then be required or permitted by the laws of the State of California or the Fiscal Agent Agreement. Audited financial statements, if prepared by the Issuer, shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Issuer may from time to time, if required by federal or state legal requirements, modifY the basis upon which its financial statements are prepared. In the event that the Issuer shall modifY the basis upon which its financial statements are prepared, the Issuer shall provide a notice of such modification to each Repository, including the reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. Section 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Issuer shall give or cause to be given, notice of the occurrence of any of the following events: 1. Delinquency in payment when due of any principal of or interest on the Bonds. 2. Occurrence of any default under the Fiscal Agent Agreement (other than as described in clause (I) above). 3. Amendment to or modification of the Fiscal Agent Agreement or this Disclosure Agreement modifYing the rights of the Owners of the Bonds. 4. Giving of a notice of optional or unscheduled redemption of any of the Bonds. 5. Defeasance of the Bonds or any portion thereof. 6. Any change in any rating on the Bonds. 7. Adverse tax opinions or events affecting the Tax-exempt status of the Bonds. 8. difficulties. Any unscheduled draw on the Reserve Fund or any account therein reflecting financial 9. Unscheduled draws on credit enhancements reflecting financial difficulties. 10. Substitution of credit or liquidity providers, or their failure to perform. 11. The release, substitution or sale of property securing repayment of the Bonds (including property leased, mortgaged or pledged as such security). (b) The Dissemination Agent shall, within one (1) Business Day of obtaining actual knowledge of the occurrence of any of the Listed Events (except events listed in clauses (a)(l), (4) or (5)), or as soon as is RVPUBIKSNOW\721973.! E-3 P478 reasonably possible, with no obligation to determine the materiality thereof, contact the Disclosure Representative, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (t). For the purpose of this Disclosure Agreement "actual knowledge" means actual knowledge at the corporate trust office of the Dissemination Agent by an officer of the Dissemination Agent with responsibility for matters related to the administration of the Fiscal Agent Agreement. (c) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, whether because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the Issuer shall as soon as possible determine if such event would constitute material information for Owners of the Bonds under applicable Federal securities law, provided that any event under subsection (a) (6) will always be deemed to be material. (d) If the Issuer has determined that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Issuer shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (t). (e) If in response to a request under subsection (b), the Issuer determines that the Listed Event would not be material, the Issuer shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (t). (t) If the Dissemination Agent has been instructed by the Issuer to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the Municipal Securities Rulemaking Board and each State Repository. Notwithstanding the foregoing: 1. Notice of the occurrence of a Listed Event described in subsections (a)(l), (4) or (5) shall be given by the Dissemination Agent unless the Issuer gives the Dissemination Agent affirmative instructions not to disclose such occurrence; and 2. Notice of Listed Events described in subsections (a)(4) and (5) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Owners of the affected Bonds pursuant to the Fiscal Agent Agreement. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be Wells Fargo Bank, National Association. The Dissemination Agent may resign by providing thirty (30) days written notice to the Issuer and the Fiscal Agent. If at any time there is no designated Dissemination Agent appointed by the Issuer, or if the Dissemination Agent so appointed is unwilling or unable to perform the duties of the Dissemination Agent hereunder, the Issuer shall be the Dissemination Agent and undertake or assume its obligations hereunder. Section 8. Amendment: Waiver. Notwithstanding any other provISIon of this. Disclosure Agreement, the Issuer may amend this Disclosure Agreement (and the Dissemination Agent shall agree to any amendment requested by the Issuer, provided the Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations), and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in Federal securities law, acceptable to both the Issuer and the Dissemination Agent, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. RVPUBIKSNOw\721973.1 E-4 P479 Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. ' Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Agreement, any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an event of default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties. Immunities and Liabilities of the Dissemination Agent. Section 7.2 of the Fiscal Agent Agreement is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Fiscal Agent Agreement. The Dissemination Agent shall be entitled to the protections and limitations afforded to the Fiscal Agent under said Section 7.2. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule of fees as amended from time to time and shall be reimbursed by the Issuer for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder but solely from amounts in the Administrative Expense Fund established under the Fiscal Agent Agreement. Neither the Dissemination Agent nor the Fiscal Agent shall have any duty or obligation to review any information provided to it hereunder or shall be deemed to be acting in any fiduciary capacity for the Issuer, the Owners of the Bonds or any other party. The obligations of the Issuer under this section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Any company succeeding to all or substantially all of the Dissemination Agent's corporate trust, business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any document or any further act. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and the Owners from time to time of the Bonds, and shall create no rights in any other person or entity. RVPUBIKSNOw\721973.1 E-5 P480 Section 13. Counteroarts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Dated: January I, 2007 City of Rancho Cucamonga, for itself and on behalf of City of Rancho Cucamonga Community Facilities District 2006-0 I (Vintner's Grove) By: City Manager Wells Fargo Bank, National Association, as Dissemination Agent By: Authorized Signatory RVPUBIKSNOW\721973.1 E-6 P481 ATTACHMENT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Rancho Cucamonga Name of Bond Issue: CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) 2007 Special Tax Bonds Date ofIssuance: January _, 2007 NOTICE IS HEREBY GIVEN that the Issuer of has not provided an Annual Report with respect to the above-referenced Bonds as required by the Continuing Disclosure Agreement dated as of January 1, 2007 between the Issuer and Wells Fargo Bank, National Association, as Fiscal Agent. The Issuer anticipates that the Annual Report will be filed by Dated: Wells Fargo Bank, National Association, as Dissemination Agent on Behalf of the Issuer By: Authorized Signatory RVPUBIKSNOW\721973.1 E-7 P482 EXHIBIT B ISSUER ANNUAL REPORT City Of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds This Annual Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate dated as of January I, 2007 executed by the undersigned (the "District") in connection with the issuance by the District of the above-captioned bonds. (a) Financial Statements. . Attached to this Annual Report are (i) audited financial statements of the District and the. City prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board, or (ii) unaudited financial statements of the District and the City (because the audited financial statements were not available by the Report Date), and the audited financial statements will be filed in the same manner as this Annual Report when they become available. (b) Yearly Report Provided to CDlAC. Attached to this Annual Report is copy of the most recent Yearly Fiscal Status Report required to be filed by the District with the California Debt and Investment Advisory Commission pursuant to the Act. The report includes the following information as of the close of the most recent fiscal year: 1. The current minimum balance in the Reserve Fund. 2. The outstanding principal amount of the Bonds. 3. Balances in the Reserve Fund, Improvement Fund, and Bond Fund. 4. Assessed value of all parcels in the District subject to the Special Tax. 5. Total amount of Special Taxes due and total amount uncollected from properties within the District. 6. Total number of delinquent parcels within the District, total amount of Special Taxes due on delinquent parcels within the District, and information on foreclosure against delinquent parcels within the District. (c) Maturity and Redemption Schedule. Below is the maturity schedule for the outstanding Bonds and a listing of Bonds redeemed prior to maturity. RVPUBIKSNOW\72!973.! E-8 P483 Maturity Schedule of the Bouds Principal Payment Date (September I) Principal Amount Interest Rate Price Yield Early Redemption Date 2007 2008. 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 (d) Special Tax Prepayments. Below is a listing of all parcels within the District for which the Special Tax obligation was fully or partially prepaid for the prior fiscal year, along with the Special Tax prepayment amount. Parcel APN Full or Partial Prepayment Prepayment Amount RVPUBIKSNOW\721973.1 E-9 P484 (e) Additional Delinquency Information. I. Below is a listing of all parcels within the District that were delinquent in the payment of the Special Taxes, as applicable, in the aggregate of $4,000 or more for the prior fiscal year: Parcel APN Delinquency Amount Length of Delinquency Total: 2. Below is a listing of all parcels within the District that are under common ownership and were delinquent in the payment of the Special Taxes, as applicable, in the aggregate of $20,000 or more during the prior fiscal year: Parcel APN Delinquency Amount Length of Delinquency Total: 3. If the total delinquencies within the District as of the prior June I exceed 5% of the total Special Tax levied for the prior fiscal year, below is a listing of all parcels that were delinquent in the payment of the Special Taxes: Parcel APN Delinquency Amount Length of Delinquency Total: RVPUB\KSNOW\721973.! E-IO P485 (f) Property Ownership. Below is a listing of all property owners responsible for more than 5% of the Special Taxes levied within the District as shown on the San Bernardino County Assessor's last equalized tax roll prior to the September next preceding the Report Date, and each owner's percentage share of the Special Taxes. Parcel APN Property Owner Share of Special Taxes (g) Value to Debt Ratio. Attached is an updated version of Table 5 in the final Official Statement showing the value-to-debt calculation for the property in the District, but substituting assessed property values for the appraised values of such property. (h) Rate and Method. Below is a statement of any changes to the Rate and Method of Apportionment of Special Tax for the District during the prior fiscal year. Dated: CITY OF RANCHO CUCAMONGA, acting for and on behalf of COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) By: Title: RVPUBIKSNOW\721973.1 E-11 P486 CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-01, (VINTNER'S GROVE) 2007 SPECIAL TAX BONDS DEVELOPER CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (the "Continuing Disclosure Agreement") is executed and delivered by William Lyon Homes, Inc., a California corporation (the "Developer"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (the "Fiscal Agent" and "Dissemination Agent") in connection with the issuance by the City of Rancho Cucamonga (the "Issuer") of the $ aggregate principal amount Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds (the "Bonds"). The Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of December I, 2006, between the Issuer and Wells Fargo Bank, National Association, as Fiscal Agent (the "Fiscal Agent Agreement"). The Dissemination Agent, the Fiscal Agent and the Developer hereby covenant and agree as follows: Section 1. Puroose of the Continuing Disclosure Agreement. This Continuing Disclosure Agreement is being executed and delivered by the Dissemination Agent, the Fiscal Agent and the Developer for the benefit of the owners of the Bonds and in order to assist the Participating Underwriters (as defined herein) in complying with S.E.C. Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized term used in this Continuing Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Disclosure Representative" shall mean the officers executing this Continuing Disclosure Agreement or such other officer or employee as the Developer shall designate in writing to the Dissemination Agent and the Fiscal Agent from time to time. "Dissemination Agent" shall mean Wells Fargo Bank, National Association, acting in its capacity as the Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Dissemination Agent or the Fiscal Agent a written acceptance of such designation. "District" shall mean Community Facilities District No. 2006-01 (Vintner's Grove). "Fiscal Agent Agreement" shall mean the Fiscal Agent Agreement referred to in the initial paragraph of this Continuing Disclosure Agreement. "Fiscal Year" shall mean the 12-month period commencing on July 1 of any year and ending on June 30 of the following year. "Issuer" shall mean City of Rancho Cucamonga for and on behalf of the District. "National Reoository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Currently, the following are National Repositories: RVPUBIKSNOW\721973.1 E-12 P487 Bloomberg Municipal Repository P. O. Box 840 Princeton, NJ 08542-0840 (609) 279-3200 FAX (609) 279-5962 Internet address: Munis@Bloomberg.com Kenny Information Services, Inc. The Repository 65 Broadway, 16th Floor New York, NY 10006 Attn: Kenny Repository Service (212) 770-4595 FAX (212) 797-7994 DPC Data Inc. One Executive Drive Fort Lee, NJ 07024 (20 I) 346-070 I FAX (201) 947-0107 Internet address: nrmsir@dpcdata.com Thomson NRMSIR Attn: Municipal Disclosure 395 Hudson Street, 3d Floor New York, NY 10014 (212) 807-5001 or (800) 689-8466 FAX (212) 989-2078 . Internet address: Disclosure@Muller.com "Participating Underwriters" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. The Participating Underwriter is Stone & Youngberg LLC whose address is: One Ferry Building, San Francisco, CA 94111. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Semi-Annual Report" sl)all mean any Semi-Annual Report certified by the Developer pursuant to, arid as described in, Sections 3 and 4 of this Continuing Disclosure Agreement. "Special Taxes" shall mean the Special Taxes levied by the Issuer on property in the District to pay debt service on outstanding Bonds. "State Reoository" shall mean any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule and recognized as such by the Securities Exchange Commission. As of the date of this Continuing Disclosure Agreement, there is no State Repository. RVPUBIKSNOw\721973.1 E-13 P488 Section 3. Provision of Semi-Annual Reports. (a) The Dissemination Agent shall, not later than April 30 and October 31 of each year, commencing on April 30, 2007, provide to each Repository a Semi-Annual Report which is consistent with the requirements of Section 4 of this Continuing Disclosure Agreement. Not later than fifteen (15) calendar days prior to said date, the Developer shall provide the Semi-Annual Report to the Dissemination Agent and the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent). In each case, the Semi-Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Continuing Disclosure Agreement. The Developer shall provide a written certification with each Semi- Annual Report furnished to the Dissemination Agent and the Fiscal Agent to the effect that such Semi- Annual Report constitutes the Semi-Annual Report required to be furnished by the Developer hereunder. The Dissemination Agent and the Fiscal Agent may conclusively rely upon such certifications of the Developer and shall have no duty or obligation to review such Semi-Annual Report. The information contained or incorporated in the Semi-Annual Reports due on April 30 shall be for the six-month period from September 1 of the preceding calendar year to February 28 of the current calendar year, and the information contained or incorporated in the Semi-Annual Reports due on October 31 shall be for the six month period from March 1 to August 30 of the current calendar year. (b) Ifby fifteen (15) calendar days prior to the date specified in subsection (a) for providing a Semi-Annual Report to the Repositories, the Dissemination Agent has not received a copy of the Semi- Annual Report, the Dissemination Agent shall contact the Developer to determine if the Developer is in compliance with subsection (a). (c) If the Dissemination Agent is unable to verify that a Semi-Annual Report has been provided to the Repositories by the date required in subsection (a), the Dissemination Agent shall send a notice to the Municipal Securities Rulemaking Board in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall: (i) determine each year prior to the date for providing each Semi-Annual Report the name and address of each National Repository and each State Repository, if any; (ii) file with the Repositories any Semi-Annual Report that it receives from the Developer; and (iii) file a report with the Developer, the Issuer and (if the Dissemination Agent is not the Fiscal Agent) the Fiscal Agent certifying that the Semi-Annual Report has been provided pursuant to this Continuing Disclosure Agreement, stating the date it was provided and listing all the Repositories to which it was provided. (e) The Developer shall, or if received by the Dissemination Agent, the Dissemination Agent shall, deliver a copy of each Semi-Annual Report to the Participating Underwriter at the time the Semi- Annual Report is provided to the Repositories in accordance with this section. Section 4. Content of Semi-Annual Reports. The Semi-Annual Report shall contain or incorporate by reference the following: 1. A statement summarizing the current status of construction and financing of the development of property owned by the Developer in the District presented in the same general format as the information in the Official Statement in the section entitled "THE DEVELOPER AND THE PROPOSED DEVELOPMENT WITHIN THE DISTRICT;" RVPUB\KSNOWl721973.1 E-14 P489 2. The total number of subdivided lots in the District sold by the Developer and the number of subdivided lots and/or the acreage of any parcels of property sold by the Developer in such Fiscal Year to a purchaser other than a homeowner and the identification of each such purchaser (excluding individual homeowners); 3. The total number of parcels and the total acreage of property in the District which were owned by the Developer at the end of the preceding calendar year; 4. For Semi-Annual Reports due on April 30, any audited financial statements of the Developer, if such statements are prepared for the Developer in the ordinary course of business; 5. Information regarding a failure by the Developer pay any real property taxes (including the Special Taxes) levied on a parcel of property in the District which is owned by the Developer; 6. Information regarding any material default by the Developer on any commercial loan with respect to the construction or permanent financing of the improvements which are necessary to the development of property then owned by the Developer in the District; 7. Information regarding any material default by the Developer on any commercial loan secured by property within the District then owned by the Developer; 8. Information regarding any uncured payment default by the Developer on any commercial loan as to which the Developer is a borrower or guarantor (whether or not such loan is secured by property in the District) and as to which the lender has recourse against the Developer; 9. Information regarding the filing by the Developer a petition in bankruptcy or any determination by a court that the Developer is unable to pay its debts as they become due; 10. Information regarding the filing of any lawsuit with claim for damages in excess of $1,000,000 against the Developer which may adversely affect the completion of the development of property then owned by the Developer within the District; and II. Any event that would constitute an Event of Default under the Purchase and Sale Agreement between Lewis Investment Company, LLC and William Lyon Homes, Inc. dated as of November 30, 2004. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission or any offering statement of any securities offering of the Developer or any related or affiliated entity of the Developer. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. Section 5. Termination of Reporting Obligation; Reporting Obligation of Transferees. The Developer's obligations under this Continuing Disclosure Agreement, unless sooner terminated as provided below, shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. The Developer shall have no further obligation under this Continuing Disclosure Agreement when the Developer and any owner of a 25% or greater interest in the Developer or a subsidiary or affiliated entity of the Developer no longer owns Undeveloped Property (as defined in the Rate and Method of Apportionment of Special Taxes) in the District which is responsible for payment of 10% or more of the Special Taxes levied on property in the District. In such event, the Developer shall provide RVPUBIKSNOW\721973.1 E-15 P490 written notice to the Fiscal Agent that the Developer has no further obligation under this Continuing Disclosure Agreement. Section 6. Amendment. (a) This Continuing Disclosure Agreement may be amended, by written agreement of the parties, without the consent of the owners of the Bonds, if all of the following conditions are satisfied: (1) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of the Developer or the type of business conducted by the Developer, (2) this Continuing Disclosure Agreement as so amended would have complied with the requirements of the Rule as of the date of this Continuing Disclosure Agreement, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, (3) the Issuer or Developer shall have delivered to the Fiscal Agent an opinion of nationally recognized bond counselor counsel expert in federal securities law, addressed to the Issuer and the Fiscal Agent, to the same effect as set forth in clause (2) above, (4) the Issuer shall have delivered to the Dissemination Agent an opinion of nationally recognized bond counselor counsel expert in federal securities law, addressed to the Issuer and the Fiscal Agent, to the effect that the amendment does not materially impair the interests of the owners of the Bonds, and (5) the Issuer or the Developer shall have delivered copies of such opinion and amendment to each Repository. (b) This Continuing Disclosure Agreement may be amended, by written agreement of the parties, upon obtaining consent of the owners of at least 25% of the outstanding Bonds. (c) To the extent any amendment to this Continuing Disclosure Agreement results in a change in the type of financial information or operating data provided pursuant to this Continuing Disclosure Agreement, the first Semi-Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the effect of the change. (d) If an amendment is made to the basis on which financial statements are prepared, the Semi-Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent feasible, qualitative discussion of the differences in the accounting principles and the effect of the change in the accounting principles on the presentation of the financial information. Section 7. Additional Information. Nothing in this Continuing Disclosure Agreement shall be deemed to prevent the Issuer or the Developer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Agreement or any other means of communication, or including any other information in any Semi-Annual Report, in addition to that which is required by this Continuing Disclosure Agreement. If the Issuer or the Developer chooses to include any information in any Semi-Annual Report in addition to that which is specifically required by this Continuing Disclosure Agreement, the Issuer or the Developer shall have no obligation under this . Continuing Disclosure Agreement to update such information or include it in any futUre Semi-Annual Report. Section 8. Default. In the event of a failure of the Developer to comply with any provision of this Continuing Disclosure Agreement, any beneficial owner of the Bonds may take such actions as .may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Developer to comply with its obligations under this Continuing Disclosure Agreement. A default under this Continuing Disclosure Agreement shall not be deemed a default under the Fiscal Agent Agreement and the sole remedy under this Continuing Disclosure Agreement in the event of any failure of the Developer to comply with this Continuing Disclosure Agreement shall be an action to compel performance. . RVPUBIKSNOW\721973.! E-16 P491 Section 9. Duties. Immunities and Liabilities of Fiscal Agent and Dissemination Agent: Compensation. Article VII of the Fiscal Agent Agreement is hereby made applicable to this Continuing Disclosure Agreement as if this Continuing Disclosure Agreement were (solely for this purpose) contained in the Fiscal Agent Agreement. The Dissemination Agent and the Fiscal Agent shall have only such duties as are specifically set forth in this Continuing Disclosure Agreement. The Developer agrees to indemnifY and save the Dissemination Agent, the Fiscal Agent, their officers, directors, employees and agents, harmless (each an "Indemnified Party") against any loss, expense and liabilities which it may incur to the extent arising out of the negligence or willful misconduct of the Developer in the performance of its obligations hereunder, including the costs and expenses (including reasonable attorney's fees of counsel acceptable to the Developer) of defending against any claim of such liability, but excluding losses, expenses and liabilities, in any event, to the extent due to the negligence or willful misconduct of an Indemnified Party. The Dissemination Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule of fees as amended from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. Neither the Dissemination Agent nor the Fiscal Agent shall have any duty or obligation to review any information provided to it hereunder or shall be deemed to be acting in any fiduciary capacity for the Issuer, the District the owners of the Bonds, or any other party. The obligations of the Developer under this section shall survive resignation or removal of the Dissemination Agent or the Fiscal Agent and payment of the Bonds. Section 10. Resignation or Termination. The Dissemination Agent may resign upon 30 days' notice. Upon the Dissemination Agent's resignation, the Developer and the Issuer shall appoint a successor Dissemination Agent. Section II. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows: If to the Issuer If to the Fiscal Agent: If to the Developer: City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Attention: Deputy City Manager Telephone: (909) 477-2700 Telecopier: (909) 477-2846 Wells Fargo Bank, National Association 707 Wilshire Boulevard, 17" Floor Los Angeles, CA 90071 Telephone: (213) 614-3353 Telecopier: (213) 614-3355 William Lyon Homes, Inc. 4490 Von Karman Avenue Newport Beach, CA 92660-2008 Telephone: (949) 476-5467 Telecopier: (949) 252-2566 Section 12. Beneficiaries. This Continuing Disclosure Agreement shall inure solely to the benefit of the Issuer, the Developer, the Fiscal Agent, the Dissemination Agent, the Participating Underwriters and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. RVPUBIKSNOw\721973.1 E-17 P492 Section 13. Counteroarts. This Continuing Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Dated: January 1,2007 WILLIAM LYON HOMES, INC. By: Name: Title: By: Name: Title: Date: January 1,2007 WELLS FARGO BANK, NATIONAL ASSOCIATION, as Dissemination Agent and Fiscal Agent By: Authorized Officer RVPUBIKSNOW\721973.1 E-18 P493 EXHIBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE SEMI-ANNUAL REPORT Name of Issuer: CITY OF RANCHO CUCAMONGA Name of Bond Issue: COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) 2007 Special Tax Bonds Date ofIssuance: January _, 2007 NOTICE IS HEREBY GIVEN that (the "Developer") has not provided an Semi-Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement dated as of January I, 2007 between the Developer and Wells Fargo Bank, National Association, as Dissemination Agent. The Developer anticipates that the Semi-Annual Report will be filed by Dated: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Dissemination Agent on behalf of the Merchant Builder cc: Issuer By: Authorized Officer RVPUBIKSNOW\721973.! E-19 P494 APPENDIX F FORM OF OPINION OF BOND COUNSEL ,2006 Mayor and City Council City of Rancho Cucamonga 10500 Civic Center Drive P.O. Box 807 Rancho Cucamonga, CA 91730 BOND OPINION $ CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-01 (VINTNER'S GROVE) 2007 SPECIAL TAX BONDS Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the City of Rancho Cucamonga (the "City") for and on behalf of Community Facilities District No. 2006-01 (Vintner's Grove) (the "District") situated in and formed by the City, of $ aggregate principal amount of the City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) 2007 Special Tax Bonds (the "Bonds"). The Bonds are issued pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part I of Division 2 of Title 5 of the Government Code of the State of California (the "Act"), a resolution adopted by the City Council on December 20, 2006 (the "Resolution"), and a Fiscal Agent Agreement, dated as of January I, 2007 (the "Fiscal Agent Agreement"), between the City and Wells Fargo, National Association, as fiscal agent (the "Fiscal Agent"). We have examined the Act, the Resolution, the Fiscal Agent Agreement and certified copies of the proceedings taken for the issuance and sale of the Bonds. As to questions of fact which are material to our opinion, we have relied upon the representations of the City without having undertaken to verify the accuracy of any such representations by independent investigation. . Based upon such examination, we are of the opinion, as of the date hereof, that the proceedings referred to above have been taken in accordance with the laws and the Constitution of the State of California, and that the Bonds, having been issued in duly authorized form and executed by the proper officials and delivered to and paid for by the purchaser thereof, and the Fiscal Agent Agreement having been duly authorized and executed by the proper official, constitute the legally valid and binding obligations of the City, for and on behalf of the District, enforceable in accordance with their terms subject to the qualifications specified below. Except where funds are otherwise available, as may be permitted by law, the Bonds are payable, as to both principal and interest, solely from certain special taxes to be levied and collected within the District and other funds available therefor held under the Fiscal Agent Agreement. The Internal Revenue Code of 1986, as amended (the "Code"), sets forth certain investment, rebate and related requirements which must be met subsequent to the issuance and delivery of the Bonds for the interest on the Bonds to be and remain exempt from federal income taxation. Noncompliance with such requirements could cause the interest on the Bonds to be subject to federal income taxation retroactive to the date of issuance of the Bonds. Pursuant to the Fiscal Agent Agreement, the City has covenanted to comply with the requirements of the Code and applicable regulations promulgated thereunder. RVPUBIKSNOW\721973.1 F-I P495 We are of the opinIOn that, under existing statutes, regulations, rulings and court decisions, and assuming compliance by the District with the aforementioned covenant, the interest on the Bonds is excluded from gross income for purposes of federal income taxation and is exempt from personal income taxation imposed by the State of California. Weare further of the opinion that interest on the Bonds is not a specific preference item for purposes of the alternative minimum tax provisions of the Code. However, interest on the Bonds received by corporations will be included in corporate adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of the same maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount, and the amount of original issue discount that accrues to the owner of the Bond is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and is exempt from State of California personal income tax. Although interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these tax consequences will depend on the recipient's particular tax status or other items of income or deduction. We express no opinion regarding any such consequences. The opinions expressed herein may be affected by actions which may be taken (or not taken) or events which may occur (or not occur) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or occur or are not taken or do not occur. The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted, and their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Respectfully submitted, RVPUBIKSNOW\721973.1 F-2 APPENDIX G P496 GENERAL INFORMATION ABOUT THE CITY OF RANCHO CUCAMONGA General The City of Rancho Cucamonga (the "City") is located in the foothills of the Los Angeles-San Bernardino Basin in the western portion of San Bernardino County, approximately 40 miles east of the City of Los Angeles and 18 miles west of the City of San Bernardino. The City covers approximately 40.2 square miles and is bordered by Ontario on the south, Upland on the west and Fontana to the east; to the north are Cucamonga Peak and Mount Baldy. Municipal Government The City was incorporated on November 30, 1977, as a general law city operating under the council- manager form of government. It is governed by a five-member City Council (the "Council"), which includes a Mayor who is elected at large for a four year. term, and four Council Members are elected at large for staggered four year terms. The Council appoints the City Manager and City Attorney. The City Manager is responsible for the daily administration of City affairs and for implementing Council policy and program decisions. The current Council members are as follows: Donald J. Kurth, M.D., Mayor Diane Williams, Mayor Pro Tern Rex Gutierrez, Councilmember L. Dennis Michael, Councilmember Sam Spagnolo, Councilmember The City's General Plan provides a coordinated policy of development planning, balancing residential, commercial, and industrial expansion. Coordinated transportation planning with the Southern California Regional Association of Governments and the County of San Bernardino is being provided by a traffic model that sets forth the optimum size of streets and timing necessary to accommodate traffic on both existing and future streets. Population Prior to incorporation, the area generally within the corporate boundaries of the City experienced a rapid growth in population. Population figures for the City, the County and the State for the last six years along with population figures for 1980, 1990 and 2000 are shown in the following table. Population Estimates Year 1980 1990 2000 2001 2002 2003 2004 2005 2006 CITY OF RANCHO CUCAMONGA City of Rancho Cucamonl!a 55,250 98,500 125,585 130,842 137,119 147,462 155,723 161,830 170,479 County of San Bernardino 895,016 1,418,380 1,689,281 1,741,137 1,783,656 1,842,904 1,897,950 1,946,202 1,991,829 Source: State Department of Finance estimates (as of January 1). G-l RVPUBIKSNOW\721973.1 State of California 23,782,000 29,758,213 34,336,091 35,037,000 35,301,000 35,691,442 36,271,091 36,810,358 37,172,015 P497 Employment The City is included in the Riverside-San Bernardino Metropolitan Statistical Area ("MSA"). The unemployment rate in the Riverside-San Bernardino MSA was an estimated 4.6% during May 2005. This compares to the unadjusted unemployment rates of 5.5% for Los Angeles County and 5.3% for California for the same month. . The following table summarizes the civilian labor force, employment and unemployment in the County .for the calendar years 2001 through 2005. These figures are Countywide statistics and may not necessarily accurately reflect employment trends in the City. RIVERSIDE-SAN BERNARDINO-ONTARIO METROPOLITAN STATISTICAL AREA Civilian Labor Force, Employment and Unemployment (Annual Averages) 2001 2002 2003 2004 2005 Civilian Labor Force(l) 1,504,400 1,566,400 1,618,400 1,688,800 1,711,800 Civilian Employment 1,423,000 1,472,700 1,529,400 1,586,200 1,625,500 Civilian Unemployment 81,500 93,700 89,000 82,600 86,300 Civilian Unemployment Rate 5.4% 5.0% 5.5% 5.0% 5.0% (2) Wal!e and Salary Emplovment: Total All Industries 1,072,900 1,114,900 1,152,400 1,190,300 1,235,400 Total Farm 21,200 19,900 18,700 18,400 18,000 Total Nonfarm 1,051,700 1,095,000 1,133,700 1,171,900 1,217,100 Natural Resources and Mining 1,200 1,300 1,200 1,200 1,300 Construction 89,600 93,900 103,400 115,000 122,200 Manufacturing 114,900 115,600 118,500 119,600 120,200 Trade Transportation & Utilities 227,700 238,200 249,900 262,300 273,900 Wholesale Trade 40,100 42,900 43,100 45,200 49,200 Retail Trade 140,500 146,000 154,400 160,800 165,000 Information 14,700 14,000 13,900 13,600 14,400 Financial Activities 38,800 40,600 44,400 45,800 48,700 Professional and Business Services 102,500 111,800 121,600 126,800 132,500 Educational and Health Services 109,900 116,000 118,100 117,800 120,000 Leisure and Hospitality 106,000 109,500 113 ,200 116,600 122,400 Government 208,800 216,200 211,300 214,800 220,400 Source: State of California Employment Development Department. (I) Annual labor force data is by place of residence; includes self-employed individuals, nnpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, nnpaid family workers, household. domestic workers, and workers on strike. The total number of nonfarm jobs in Riverside and San Bernardino counties increased by 139,100jobs between 2001 and 2005 to reach 1,217,100 jobs. Construction employment grew by 30,400 jobs. The professional and business services industry division also added 27,600 jobs. Trade, transportation and utilities grew by 38,000 jobs. Other industry divisions with year-over job gains between 2001 and 2005 include: manufacturing (up 6,400 jobs); wholesale trade (up 5,300 jobs); retail trade (up 22,400 jobs); financial activities (up 8,400 jobs); educational and health services (up 9,700 jobs), leisure and hospitality (up 10,500 jobs), professional government (up 10,400 jobs). RVPUBIKSNOW\721973.1 G-2 Major Employers P498 The following table lists the major manufacturing and non-manufacturing employers within the City of Rancho Cucamonga and their estimated number of employees as of August 2005. EmDlover Chaffey Community College Etiwanda School District Alta Lorna School District Frito-Lay Inc. C.W. Construction Mission Foods Central School District Target Southern California Edison Mercury Insurance Company Wal-Mart Stores, Inc. City of Rancho Cucamonga Costco Wholesale Corp. Tamco The Cheesecake Factory Albertson's J C Penney Corp., Inc. Cucamonga School District Safetran Systems Corporation Proficient Food Company General Motors Robinson's May PAC-Rancho, Inc. Wickes Furniture Lucille's Smokehouse BBQ CITY OF RANCHO CUCAMONGA Major Employers As of August 2005 Number of EmDlovees 1,100 1,015 920 .600 600 573 500 475 450 437 427 410 375 300 300 278 270 265 250 225 205 200 196 182 180 Source: Rancho Cuc.monga Redevelopment Agency. RVPUBIKSNOw\721973.l G-3. TVDe of Business Education Education Education Snack Food Manufacturer Special Trades Nondurable Wholesalel Food Mfg. Education General Merchandise Electric, Gas, Sanitation Insurance General Merchandise Government General Merchandise Metal Manufacturer Restaurant Food Stores Department Stores Education Electronic equipment Wholesale Service and Parts Operations Department Stores Metal Manufacturer Special Warehousing & Storage Restaurant Commercial Activity . P499 In the calendar year 2005, total taxable transactions in the City were $ or approximately 33% greater than total taxable transactions of $ that occurred in the City in calendar year 2001. A summary of historic taxable sales within the City during the past five years is shown in the following table. CITY OF RANCHO CUCAMONGA Taxable Transactions (figures in thousands) Retail Stores 2001 2002 2003 2004 Apparel Stores $22,735 $19,553 $16,216 $42,400 General Merchandise 238,841 529 298,154 380,401 Food Stores 7&,026 097 82) 54 80,083 Eat and Drink 130,229 138,880 155,903 181,973 Furniture 19,448 22,202 39,702 99,573 Building Materials 125,897 142,899 162,629 200,152 Automotive 17,397 18,865 19,678 23,681 Service Station 72,899 67,778 89,451 105,112 Other Retail Stores 176.164 164.431 173.072 209.422 Total Retail $879,636 $912,234 $1,037,000 $1,322,813 Non-Store $329.102 $380.386 $375.665 $425.309 TOTAL OUTLETS $1,208,738 $1,292,620 $1,412,665 $1,748,122 Source: State Board of Equalization. . (I) Drug stores have been merged with general merchandise stores and packaged liquor stores have been merged with other retail stores. Construction Activity Building activity for the past ten fiscal years in the City is shown in the following table. CITY OF RANCHO CUCAMONGA Construction Activity Number of Permits Issued Fiscal Year 1996-97 1997 -98 1998-99 1999-00 2000-0 I 2001-02 2002-03 2003-04 2004-05 2005-06 Source: City of Rancho Cucamonga Comprehensive Annual Financial Report FY 2005-06. RVPUBIKSNOW\721973.1 3,336 3,330 3,465 3,841 4,050 4,549 5,229 5,327 5,364 4,790 G-4 Building Permit Valuation 138,045,375 185,119,239 259,593,466 370,105,582 454,882,923 498,964,341 532,582,019 754,911,074 711,730,564 558,062,563 P500 Public Utilities and Services Police protection is contracted from the San Bernardino County Sheriffs Department. A Sheriff's substation is located within the City limits. Fire protection and rescue service are provided by the City-managed Fire Protection District, which covers an area of approximately 53 square miles. Southern California Edison Company furnishes electricity and Southern California Gas Company furnishes natural gas to the City. Industrial waste and sewer services are provided by the Inland Empire Utilities Agency (formerly, the Chino Basin Municipal Water District), and water is furnished to the City by the Cucamonga Valley Water District. Community Facilities The City of Rancho Cucamonga currently has 26 parks and 7 community centers for residents. Library services are provided by the City. Rancho Cucamonga Quakes baseball club (an Anaheim Angels minor league affiliate) currently plays its home games at the City's sports complex, the Epicenter. Education Six school districts serve the residents of the City providing local educational opportunities from kindergarten through junior college. Major colleges and universities are located within commuting distance to the City providing residents with both public and private educational opportunities in most of the major professions. Transportation Two interstate highways traverse the area. Interstate 10 is located south of the City's boundary and runs east and west, Interstate 210 is located north of the City's boundary and also runs east and west and Interstate 15 in the eastern section of the city runs north and south. Through these highways the City is linked by interstate highways to all areas of the State and to other states to the east. Three transcontinental railroads provide freight service to the City: Union Pacific Railroad, Southern Pacific Railroad, and the Atchison, Topeka and Santa Fe Railroad. Amtrak and Metrolink provide passenger service to the City. Several truck terminals are located nearby. Airline service from Ontario International Airport, which is adjacent to the City's southern boundary, is provided to approximately 50 cities in the United States. The airport has the capacity to serve wide-bodied jet airplanes and has recently undergone an expansion. Los Angeles International Airport is located approximately 40 miles to the west of the City. The Port of Los Angeles is located approximately 45 miles to the west and the Port of Long Beach is located approximately 75 miles to the southwest. Greyhound and Continental Trailways provide transcontinental bus service. The Southern California Rapid Transit District and Omnitrans furnish intercounty and local bus service. RVPUB\KSNOW\721973.1 G-5 P653 APPENDIX A SUMMARY APPRAISAL REPORT RVPUBIKSNOw\7221131 A-I P501 APPENDIX H SUMMARY ABSORPTION STUDY RVPUB\KSNOWl721973 1 H-l P502 THE CITY OF ~>mM";;:(j:~rl';'':8',!iI,lA':;;'M;;{''';lt;;; '"'lI1:i;;,l:ti'~li-";it<A" 1~Fi~'J1l..tli'.t:,~:;;;"'" ,'j",~i,!,;;W-ol":~,,-::.::, :0;': . '",' ;,'" "'.'4 RANCIIO CUCAMONGA ""';' '.."....,:-'.;; ;;~-, ,~..::I s1affReport DAlE: TO: FROM: SUBJECf: December 20, 2006 Mayor and Members ofthe City Council Jack Lam, AICP, City Manager Pamela S. Easter, Assistant City Manager Ingrid Y. Bruce, GIS/Special Districts Manager AUTHORIZATION OF THE ISSUANCE OF THE CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) 2007 SPECIAL TAX BONDS AND APPROVAL OF THE FORMS OF THE FISCAL AGENT AGREEMENT, BOND PURCHASE AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND OTHER TRANSACTIONAL DOCUMENTS. RECOMMENDATION: It is recommended that the City Council, acting in its capacity as the legislative body of Community Facilities District No. 2006-02 (Amador on Route 66) (the "District"), adopt the resolution (the "Resolution of Issuance") to authorize the issuance of bonds for the District to finance the acquisition or construction of certain authorized public improvements and to approve the form of a Fiscal Agent Agreement, Bond Purchase Agreement, Preliminary Official Statement and Continuing Disclosure Agreement pertaining to such bonds. BACKGROUND: The District - Formation; Authorized Improvements The District was formed by the City Council on October 18, 2006, following a public hearing on such date. Following the formation of the District, the City of Rancho Cucamonga (the "City") conducted an election within the District and the qualified electors of the District voted unanimously to authorize the issuance of bonds in a maximum principal amount of $3,000,000 to be secured by the levy of special taxes within the District. P503 Page 2 December 20, 2006 The improvements authorized to be financed from the proceeds of such bonds include: (a) streets (b) landscape within the public right-of-way, (c) other facilities to be owned by the City which are authorized to be financed from the proceeds of the City's transportation, beautification, parks and recreation facility and drainage fees levied by the City within the District (d) water and sewer facilities to be owned by Cucamonga Valley Water District ("CVWD") which are authorized to be financed from the proceeds of capacity charges levied by CVWD; and (e) wastewater treatment facilities to be owned by the Inland Empire Utilities Agency ("IEVA") from the proceeds offees levied by IEVA within the District. On October 18, 2006, the City Council also approved an AcquisitionlFinancing Agreement by and between the City, Lewis Investment Company, LLC, the master developer of the property within the District, and William Lyon Homes, the owner of the property within the District to establish, among other provisions, the terms and conditions pursuant to which the special tax bonds would be issued and pursuant to which the proceeds of such bonds would be utilized to acquire or construct the authorized improvements. The City has also entered into Joint Community Facilities Agreements with both CVWD and IEVA, the other public agencies which will own improvements to be financed through the District. The District encompasses approximately 10 gross acres ofland in the southerly portion of the City. Of this acreage, approximately 4 acres are expected to be developed into uses subject to the special tax. At buildout, it is currently expected the District will contain approximately 99 attached residential dwelling units ranging in size from 1,335 to 1,920 square feet. The Proposed Special Tax Bonds. The City Council is now being asked to adopt the Resolution of Issuance to approve the issuance of not to exceed $3,000,000 City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds (the "Bonds") to finance the acquisition and construction of the authorized improvements, to fund a reserve fund, to fund capitalized interest on the Bonds through September I, 2007 and to pay costs of issuance of the Bonds and formation of the District.. The Bonds will be secured solely from the proceeds of special taxes levied within the District pursuant to the rate and method of apportionment of the special taxes. Neither the faith and credit nor the general taxing power of the City is pledged to the payment ofthe Bonds. The Resolution ofIssuance. By adoption of the Resolution ofIssuance the City Council will be: . Authorizing the issuance of the Bonds in a principal amount not to exceed $3,000,000; . Approving the form of the following documents related to the issuance, sale and delivery of the Bonds: P504 Page 3 December 20, 2006 c Fiscal Agent Agreement (the "Fiscal Agent Agreement") by and between the City, for and on behalf of the District, and Wells Fargo BaTIk, National Association (the "Fiscal Agent"); c Preliminary Official Statement; c Bond Purchase Agreement by and between the City and Stone & Youngberg LLC (the "Underwriter"); and c Continuing Disclosure Agreement by and between the City, on behalf of itself and the District, and the Fiscal Agent, as dissemination agent (the "Continuing Disclosure Agreement"). . Delegating to the City Manager the authority to approve the final form of the foregoing documents (collectively, the "Bond Documents") with such additions therein or changes as the City Manager may deem necessary and advisable and to execute the Bond Documents for and on behalf of the City and the District. . Authorizing the sale of the Bonds to the Underwriter so long as the terms of such sale conform to the following financial parameters: c The aggregate principal amount of the Bonds shall not exceed $3,000,000; c The annual interest rate on the Bonds shall not exceed 6.5%; and c The purchase price to be paid by the Underwriter for the Bonds shall not exceed 98% of the par amount of the Bonds, e.g., if the par amount of the Bonds is $3,000,000 and the purchase price is 98%, the Underwriter will pay the City $2,940,000 for the Bonds. Description of the Bond Documents. The Bond Documents are on file in the office of the City Clerk and are available for inspection and review during normal business hours of such office. The following is a brief description of the Bond Documents: . Fiscal Agent Agreement. The Fiscal Agent Agreement establishes the terms and conditions pursuant, to which the Bonds will be issued and subsequently administered. Among other terms and conditions the Fiscal Agent Agreement: c Sets forth the maturity schedule and interest rates applicable to the Bonds; c Establishes various funds and accounts to be held by the Fiscal Agent into which the proceeds of the Bonds and the special taxes will be distributed and establishes the terms and conditions pursuant to which such funds are to be transferred to, among other purposes, pay (a) the costs of issuance of the P505 Page 4 December 20, 2006 Bonds, (b) debt service on the Bonds, (b) the purchase price for the acquisition of the authorized improvements, (c) the costs of administration of the Bonds and the District for the first year (such costs shall be funded from special tax revenues in all subsequent fiscal years); o Sets forth covenants of the City necessary to, among other purposes, maintain the tax-exempt status of the Bonds and insure that adequate special taxes are levied annually to pay scheduled debt service on the Bonds. . Bond Purchase Agreement. The Bond Purchase Agreement establishes the terms and conditions pursuant to which the City will offer to sell and the Underwriter will offer to purchase the Bonds. The Bond Purchase Agreement will be finalized and executed on the day on which the Bonds are priced, i.e., the day on which the City staff, with the assistance of Fieldman Rolapp & Associates, the City's financial advisor, and the Underwriter negotiate and agree upon the final principal amount of the Bonds, the principal amount of the Bonds to mature each year, the interest rates payable on Bonds the purchase price to be paid for the Bonds by the Underwriter. The schedule contemplates that the Bonds will be priced on January 11, 2007. . PreliminarY Official Statement. The Preliminary Official Statement is the offering document and is required to contain all relevant and material information necessary to enable a prospective purchaser of the Bonds to make an informed decision to purchase or not to purchase the Bonds. The Preliminary Official Statement contains, among other information, information regarding: o The District including the ownership of the property within the District, the proposed development within the District, the facilities to be financed, the projected absorption of property within the District, the appraised value of the property within the District and the cumulative tax, assessment and fee burden on the properties within the District; o The security for the Bonds; o The rate and method of apportionment of the special taxes authorized to be levied within the District; o The terms and conditions pursuant to which the Bonds will be issued and administered; o The risks that prospective purchasers of the Bonds should consider before making an investment decision. . Continuing Disclosure Agreement. The Continuing Disclosure Agreement contains the commitment by the City mandated by federal securities to provide ongoing information to the municipal bond market regarding the Bonds and the District. The City is agreeing to provide an annual report regarding the status of the Bonds and the District and to P506 Page 5 December 20, 2006 provide additional reports in the event of the occurrence of certain specified events such as a delinquency in the payment of scheduled debt service on the Bonds, optional redemption of the Bonds pursuant to the Fiscal Agent Agreement or amendments to the Fiscal Agent Agreement. Value to Debt Ratio - Conformance with the Acqnisition/Financing Agreement and Applicable Goals and Policies. The AcquisitionlFinancing Agreement provides that the value of the property within the District subject to the levy of special taxes as determined by an independent appraisal undertaken for the City utilizing appraisal assumptions approved by the City shall be at least three times (3: 1) the principal amount of the Bonds. The City retained the services of Bruce W. Hull & Associates, Inc. (the "Appraiser") to conduct an independent appraisal of the property within the District. The Appraiser submitted an appraisal dated October 23, 2006 in which the Appraiser estimated that the fee simple market value of the properties within the District as of October 15, 2006 was $9,000,000. Based upon this appraisal, the appraised value of the property within the District subject to the levy of the special taxes shall be 3.00 times the principal amount of the Bonds. Therefore, the proposed issuance of the Bonds does conform to the terms of the Acquisition Agreement. In addition, the value to debt ratio of 3.00:1 also complies with the requirements of the Act and the City's Amended and Restated Goals and Policies that were in effect at the time the District was formed and which are applicable to the District. Staff will be prepared to answer specific questions, which the City Council may have regarding the proposed issuance of the Bonds, the Bond Documents and/or the Resolution of Issuance. r;;;:~ t4mela S. Easter Assistant City Manager ~~;r-~~ ~~.tf. Bruce t/'-- GIS/Special Districts Manager Attachments: Resolution Fiscal Agent Agreement Bond Purchase Agreement Preliminary Official Statement PS07 RESOLUTION NO. 06- 1.../0 Z. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2006- 02 (AMADOR ON ROUTE 66), AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF SPECIAL TAX BONDS OF THE DISTRICT, APPROVING THE FORM OF FISCAL AGENT AGREEMENT, BOND PURCHASE AGREEMENT, PRELIMINARY OFFICIAL STATEMENT AND OTHER DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS WHEREAS, the CITY COUNCIL of the CITY OF RANCHO CDCAMONGA, CALIFORNIA (this "City Council"), did previously conduct proceedings to form and did form a community facilities district pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of1982", being Chapter 2.5, Part I, Division 2, Title 5 of the Government Code of the State of California (the "Act"), such Community Facilities District designated as COMMUNITY FACILITIES NO. 2006-02 (AMADOR ON ROUTE 66) (the "Community Facilities District") for the purpose of financing the acquisition or construction of certain public improvements; and, I I WHEREAS, as required by the Act, this City Council has previously adopted a statement of local goals and policies concerning the use of the Act entitled the "City of Rancho Cucamonga Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts" (the "Goals and Policies"); and WHEREAS, this City Council has previously declared its intention to issue bonds to finance the acquisition or construction of such improvements, such bonds to be issued pursuant to the terms and provisions of the Act and the Goals and Policies; and, WHEREAS, at this time this City Council desires to set forth the general terms and conditions relating to the authorization, issuance and administration of such bonds; and, WHEREAS, the forms of the following documents have been presented to and considered for approval by this City Council: A. Fiscal Agent Agreement by and between the City and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent") setting forth the terms and conditions relating to the issuance and sale of bonds (the "Fiscal Agent Agreement"); B. Bond Purchase Agreement authorizing the sale of bonds to Stone & Youngberg LLC, the designated underwriter (the "Bond Purchase Agreement"); C. Preliminary Official Statement containing information including but not limited to the Community Facilities District andthe bonds, including the terms and conditions thereof (the "Preliminary Official Statement"); and P508 D. Continuing Disclosure Agreement by and between the City and Wells Fargo Bank, National Association, as dissemination agent, pursuant to which the Community Facilities DistTIct will be obligated to provide ongoing annual disclosure relating to the bonds (the "Continuing Disclosure Agreement"); and WHEREAS, this City Council, with the aid of City staff, has reviewed and considered the Fiscal Agent Agreement, the Bond Purchase Agreement, the Continuing Disclosure Agreement and the Preliminary Official Statement and finds those documents suitable for approval, subject to the conditions set forth in this resolution; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the bonds as contemplated by this resolution and the documents referred to herein exist, have happened and have been performed or have been ordered to have been performed in due time, form and manner as required by the laws ofthe State of California, including the Act and the applicable policies and regulations of the City of Rancho Cucamonga. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66), DOES HEREBY RESOLVE, DECLARE, FIND, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. Recitals. The above recitals are true and correct. SECTION 2. Determinations. This legislative body hereby makes the following determinations pertaining to the proposed issuance ofthe Bonds: (a) The Act authorizes the City Council, acting as the legislative body of the Community Facilities District, to sell the Bonds only if the City Council has determined prior to the award of the sale of the Bonds that the value of such properties will be at least 3 times the principal amount of the Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the Community Facilities District or a special assessment levied on property within the Community Facilities District (collectively, "Land Secured Bonded Indebtedness") The value of the property within Community Facilities District which will be subject to the special tax to pay debt service on the Bonds will be at least 3 times the Land Secured Bonded Indebtedness Allocable to such properties. The foregoing determinations are based upon the full cash value of such properties and development areas as shown upon an appraisal ofthe subject properties prepared by Bruce Hull & Associates, a state certified real estate appraiser, as defined in Business and Professions Code Section l1340( c). Such determination was made in a manner consistent with the Goals and Policies. P509 (b) The terms and conditions ofthe Bonds as contained in the Fiscal Agent Agreement are consistent with and conform to the Goals and Policies. (c) As a result of the current status of development of the property within the Community Facilities District and the relative overall lack of diversity of ownership of property within the Community Facilities District, the private sale of the Bonds will result in a lower overall cost to the Community Facilities District. SECTION 3. Bonds Authorized. Pursuant to the Act, this Resolution and the Fiscal Agent Agreement, special tax bonds of the City designated as "City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2005 Special Tax Bonds," (the "Bonds") in an aggregate principal amount not to exceed $3,000,000 are hereby authorized to be issued. The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms, covenants and conditions of the Bonds shall be as provided in the Fiscal Agent Agreement as finallyexecuted. SECTION 4. Authorization and Conditions. The City Manager and such other official or officials of the City as may be designated by this City Councilor the City Manager (each, an "Authorized Officer") are each hereby authorized and directed to execute and deliver the final form of the various documents and instruments described in this Resolution, with such additions thereto or changes therein as such Authorized Officer may deem necessary and advisable provided that no additions or changes shall authorize an aggregate principal amount of Bonds in excess of$3,000,000, an annual interest rate on the Bonds in excess of six and one half percent (6.50%) per year and a purchase price for the Bonds not less than ninety eight percent (98%) ofthe par amount of the Bonds (excluding original issue discount, if any). The approval of such additions or changes shall be conclusively evidenced by the execution and delivery of such documents or instruments by an Authorized Officer, following consultation with and review by the City Attorney and Best Best & Krieger LLP, the City's bond counsel. SECTION 5. Fiscal Al!ent Al!reement. The form of Fiscal Agent Agreement by and between the City and the Fiscal Agent, with respect to the Bonds as presented to this City Council and on file with the City Clerk is hereby approved. An Authorized Officer is hereby authorized and directed to cause the same to be completed and executed, subject to the provisions of Section 4 above. SECTION 6. Official Statement and Continuinl! Disclosure Al!reement. The City Council hereby approves the form of the Preliminary Official Statement as presented to this City Council and on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the City Manager or, in the absence of the City Manager, another Authorized Officer. Pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") the City Manager or, in the absence of the City Manager, another Authorized Officer is authorized to determine when the Preliminary Official Statement is deemed final, and the City Manager or such other Authorized Official is hereby authorized and directed to provide written certification thereof. The execution ofthe final Official Statement, which shall include such changes and additions thereto deemed advisable by the City Manager or, in the absence ofthe City Manager, another Authorized Officer pursuant to the Rule, shall be conclusive evidence of the approval of the final Official P510 Statement by the Community Facilities District. The City Council hereby authorizes the distribution of the final Official Statement by the Underwriter as the initial purchaser of the Bonds. The form of Continuing Disclosure Agreement as presented to this City Council and on file with the City Clerk is hereby approved. An Authorized Officer is hereby authorized and directed to cause the same to be completed and executed on behalf of the Community Facilities District, subject to the provisions of Section 4 above. SECTION 7. Sale of Bonds. This City Council hereby authorizes and approves the negotiated sale of the Bonds to Stone & Youngberg LLC (the "Underwriter"). The form ofthe Bond Purchase Agreement is hereby approved and an Authorized Officer is hereby authorized and directed to execute the Bond Purchase Agreement upon the execution thereofby the Underwriter, subject to the provisions of Section 4 above. SECTION 8. Bonds Prepared and Delivered. Upon the execution of the Bond Purchase Agreement, the Bonds shall be prepared, authenticated and delivered, all in accordance with the applicable terms of the Act and the Fiscal Agent Agreement, and any Authorized Officer and other responsible City officials, acting for and on behalf of the Community Facilities District, are hereby authorized and directed to take such actions as are required under the Bond Purchase Agreement and the Fiscal Agent Agreement to complete all actions required to evidence the delivery of the Bonds upon the receipt of the purchase price thereof from the Underwriter. SECTION 9. Actions. All actions heretofore taken by the officers and agents of the City with respect to the establishment of the Community Facilities District and the sale and issuance of the Bonds are hereby approved, confinued and ratified, and the proper officers of the City, acting for and on behalf ofthe Community Facilities District, are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements, contracts, and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with the Act, this Resolution, the Fiscal Agent Agreement, the Bond Purchase Agreement, the Continuing Disclosure Agreement, and any certificate, agreement, contract, and other document described in the documents herein approved. SECTION 10. Effective Date. This resolution shall take effect from and after its adoption. P511 PASSED, APPROVED, And ADOPTED this AYES: day of ,2006. NOES: ABSENT: ATTEST: Donald J. Kurth, M.D. Mayor Debra 1. Adams, CMC, City Clerk .P512 FISCAL AGENT AGREEMENT by and between CITY OF RANCHO CUCAMONGA and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Fiscal Agent Dated as of December 1, 2006 Relating to: $ City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds SDPUBI WDlVENI339385.1 P513 TABLE OF CONTENTS PAGE ARTICLE I. STATUTORY AUTHORITY AND DEFINITIONS............................................... 2 Section 1.1. Authoritv for this Agreement................................................................................. 2 Section 1.2. Agreement for Benefit of Owners ofthe Bonds .................................................... 2 Section 1.3. Definitions.............................................................................................................. 2 ARTICLE II. THE BONDS......................................................................................................... 15 Section 2.1. Principal Amount; Designation............................................................................15 Section 2.2. Terms of the Bonds.............................................................................................. 15 Section 2.3. Redemption. ......................................................................................................... 17 Section 2.4. Effect of Redemption............................................................... ............................19 Section 2.5. Form of Bonds ..................................................................................................... 20 Section 2.6. Execution of Bonds .................................................................:............. ............... 20 Section 2.6. Transfer of Bonds ................................................................................................20 Section 2.8. Exchange of Bonds .............................................................................................. 21 Section 2.9. Bond Register.......................................................................................................21 Section 2.10. Temporary Bonds...............................................................................................21. Section 2.11. Bonds Mutilated. Lost. Destroved or Stolen...................................................... 21 Section 2.12. Limited Obligation.............................................................................................22 Section 2.13. No Acceleration ................................................................................................. 22 Section 2.14. Book-Entry Svstem............................................................................................23 ARTICLE III. ISSUANCE OF BONDS ..................................................................................... 24 Section 3.1. Issuance and Delivery of Bonds .......................................................................... 24 Section 3.2. Pledge of Special Tax Revenues.......................................................................... 24 Section 3.3. Validity of Bonds................................................................................ .................25 ARTICLE IV. FUNDS AND ACCOUNTS ................................................................................26 Section 4.1. Deposits of Bond Proceeds .................................................................................. 26 Section 4.2 Proiect Fund ..........................................................................................................26 Section 4.3. Costs ofIssuance Fund ........................................................................................ 28 Section 4.4. Reserye Fund ......................... ........ ................... ................................~......... ......... 29 Section 4.5. Bond Fund............ ......................... .......... ...... ............................................ ........... 30 Section 4.6. Special Tax Fund ................................................................................................. 31 Section 4.7. Administrative Expense Fund.............................................................................. 33 Section 4.8. Rebate Fund ......................................................................................................... 33 Section 4.9 Redemption Fund... ... .............. ..... ......................................................... ............. ... 34 ARTICLE V. OTHER COVENANTS OF THE CITy............................................................... 34 Section 5.1. Punctual Pavment........................................................................ ......................... 34 Section 5.2. Extension of Time for Payment. .......................................................................... 35 Section 5.3. Against Encumbrances............................ ... ......................................... ...... ........... 35 Section 5.4. Books and Records .............................................................................................. 35 -i- SDPUBI WDIVEN\339385.1 P514 Section 5.5. Protection of Security and Rights of Owners ...................................................... 35 Section 5.6. Compliance with Law .............................................:............................................35 Section 5.7. Collection of Special Tax Reyenue...................................................................... 36 Section 5.8. Reduction in Maximum Annual Special Tax....................................................... 37 Section 5.9. Covenant to Foreclose.......................................................................................... 37 Section 5.10. Further Assurances.............................................................................................38 Section 5.11. Private Activity Bond Limitations. .................................................................... 38 Section 5.12. Federal Guarantee Prohibition ........................................................................... 38 Section 5.13. Rebate Requirement.......................................................................................... 38 Section 5.14. No Arbitrage ......................................................................................................39 Section 5.15. Yield of the Bonds. ............................................................................................39 Section 5.16. Maintenance of Tax-Exemption ........................................................................ 39 Section 5.17. Continuing Disclosure to Owners...................................................................... 39 Section 5.18. Tender of Bonds.................................................................... ............................. 40 Section 5.19. No Parity Bonds ................................................................................................. 40 ARTICLE VI. INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE CITY .............................................................................................................................. 40 Section 6.1. Deposit and Investment of Moneys in Funds ...................................................... 40 Section 6.2. Liability of City.......................................................................... ..........................42 Section 6.3. Emplovment of Agents by City .....................................................................:...... 43 ARTICLE VII. THE FISCAL AGENT ....................................................................................... 44 Section 7.1. Appointment of Fiscal Agent............................................................................... 44 Section 7.2. Liability of Fiscal Agent ...................................................................................... 45 Section 7.3. Information ............ ................... ...................... ............... ........................... ........... 46 Section 7.4. Notice to Fiscal Agent ......................................................................................... 46 Section 7.5. Compensation; Indemnification........................................................................... 46 ARTICLE VIII. MODIFICATION OR AMENDMENT OF THIS AGREEMENT .................. 47 Section 8.1. Amendments Permitted........................................................................................ 47 Section 8.2. Owners' Meetings ................................................................................................ 47 Section 8.3. Procedure for Amendment with Written Consent of Owners.............................. 48 Section 8.4.. Disqualified Bonds...................... ......................................... ... .........................:... 48 Section 8.5. Effect of Supplemental Agreement...................................................................... 49 Section 8.6. Endorsement or Replacement of Bonds Issued After Amendments.................... 49 Section 8.7. Amendatory Endorsement of Bonds.................................................................... 49 ARTICLE IX. EVENTS OF DEFAULT; REMEDIES............................................................... 50 Section 9.1. Events of Default ................................................................................................. 50 Section 9.2. Remedies of Owners ............................................................................................ 50 Section 9.3. Application of Special Tax Revenues and Other Funds After Default................ 51 ARTICLE X. MISCELLANEOUS ............................................................................................. 53 Section 10.1. Benefits of Agreement Limited to Parties. ........................................................ 53 Section 10.2. Successor is Deemed Included in All References to Predecessor .....................53 Section 10.3. Discharge of Agreement. ................................................................................... 53 -11- SDPUBI WDlVEN\339385.! P515 Section 10.4. Execution of Documents and Proof of Ownership bv Owners. ......................... 54 Section 10.5. Waiver of Personal Liabilitv .............................................................................. 54 Section 10.6. Notices to and Demands on City and Fiscal Agent ........................................... 54 Section 10.7. State Reporting Requirements ........................................................................... 55 Section 10.8. Partial Invaliditv................................................................................................. 56 Section10.9. Unclaimed Monevs. ............................................................................................ 56 Section 10.10. Applicable Law ................................................................................................ 56 Section 10.11. Conflict with Act.............................................................................................. 56 Section 10.12. Conclusive Evidence of Regularitv ................................................................. 56 Section 10.13. Payment on Business Dav................................................................................ 56 Section 10.14. Counterparts ............ ...... .......................................... ........... ................... ........... 56 EXHIBIT A: FORM OF SERIES 2006-02 (AMADOR ON ROUTE 66) BOND EXHIBIT B: FORM OF REQUEST FOR DISBURSEMENT OFFICER'S CERTIFICATE -iii- SDPUBIWDlVEN\339385.! P516 FISCAL AGENT AGREEMENT $ City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds THIS FISCAL AGENT AGREEMENT (the "Agreement") is made and entered into as of December 1, 2006, by and between the City of Rancho Cucamonga, California, a municipal corporation, organized and existing under and by virtue of the Constitution and laws of the State of California (the "City") for and on behalf of the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) (the "District"), and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent''). WITNESSETH: WHEREAS, the City Council of the City has formed the District under the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311, et seq. of the California Govemment Code) (the "Act") and Resolution No. 06-327 of the City Council adopted on October 18, 2006 (the "Resolution of Formation"); WHEREAS, the City Council, as the legislative body with respect to the District, is authorized under the Act to levy Special Taxes (as herein defined) to pay for the costs of acquisition or construction of public facilities within the District and to authorize the issuance of bonds secured by said Special Taxes under the Act; WHEREAS, under the provisions of the Act, on December 6, 2006, the City Council of the City adopted its Resolution No. 06-_ (the "Resolution"), which resolution, among other matters, authorized the issuance of the City of Rancho Cucamonga, Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds (the "Bonds"), in the aggregate principal amount of not to exceed $5,800,000 and provided that such issuance would be in accordance with the Act and this Agreement, and authorized the execution hereof; WHEREAS, it is in the public interest and for the benefit of the City, the District and the Owners of the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, the disposition of the Special Taxes securing the Bonds and the administration and payment of the Bonds; and WHEREAS, all things necessary to cause the Bonds, when authenticated by the City for the District and issued as in the Act, the Resolution and this Agreement provided, to be legal, valid and binding and special obligations of the City for the District in accordance with their terms, and all things necessary to cause the creation, authorization, execution and delivery of this Agreement and the creation, authorization, execution and issuance of the Bonds, subject to the terms hereof, have in all respects been duly authorized; -1- SDPUBI WDIVEN\339385.1 P517 NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 1.1 Authoritv for this Agreement. This Agreement is entered into pursuant to the provisions of the Act and the Resolution. Section 1.2 Agreement for Benefit of Owners of the Bonds. The provlSlons, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Owners of the Bonds. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent may become the Owner of any of the Bonds in its own or any other capacity with the same rights it would have if it were not Fiscal Agent. Section 1.3 Definitions. Unless the context otherwise requires, the terms defined in this Section 1.3 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof, unless otherwise specifically stated. "ACQuisition Account" the account within the Project Fund by that name established pursuant to Section 4.2(A) hereof. "AcQuisition/Financing Agreement" means the Acquisition/Financing Agreement by and between the City and Lewis Investment Company, LLC, a California Limited Liability Company; and William Lyon Homes, Inc., a California corporation, dated as of October 18, 2006. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Govemment Code. "Administrative Expense Fund" .means the fund by that name established by Section 4.7(A) hereof. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of the District: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City, a designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); -2- SDPUBI WDlVEN\3J9J85.! P518 the costs of remitting the Special Taxes to the Fiscal Agent; the costs of the Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under this Agreement; the costs to the City, the District or any designee of either thereof of complying with arbitrage rebate requirements; the costs to the City, the District or any designee of either thereof of complying with City, District or obligated persons disclosure requirements; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, the District or any designee of either thereof related to an appeal of the Special Tax; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or District for any other administrative purposes of the District, including reasonable attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Administrative Expense Requirement" means an annual amount, initially equal to $25,000, to be allocated each Fiscal Year for payment of Administrative Expenses. This amount shall be annually adjusted upward by 2% per year. "Finance Director" means the Finance Director of the City, or the designee thereof as evidenced by a written certificate of the City Manager or the Finance Director delivered to the Fiscal Agent, acting for and on behalf of the District. "Agencv" means the Inland Empire Utilities Agency. "Agencv Account" the account within the Project Fund by that name established pursuant to Section 4.2(A) hereof. "Agencv Capacitv Facilities Amount" shall have the meaning given such term in the Water District JCFA. ."Agreement" means this Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the provisions hereof. "Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of the provisions of Section 2.3(A)(iii) providing for mandatory sinking fund payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking fund payment due in such Bond Year pursuant to Section 2.3(A)(iii)). "Assistant Citv Manager" means the Assistant City Manager of the City, or the designee thereof as evidenced by a written certificate of the City Manager or the Assistant City Manager delivered to the Fiscal Agent, acting for and on behalf of the District. "Auditor" means the Auditor-Controller of the County. -3- SDPUBI WDIVEN\339385.1 P519 "Authorized Officer" means the City Manager, the Assistant City Manager or the Finance Director, acting on behalf of the District, or any person designated by the City Council, the City Manager or the Finance Director.and authorized to act on behalf of the District under or with respect to this Agreement and all other agreements related hereto. "Average Annual Debt Service" means the average over all Bond Years (from the date of the Bonds to their maturity) of Annual Debt Service. "Bond Counsel" means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax -exempt status of securities issued by public entities. "Bond Fund" means the fund by that name established by Section 4.5(A) hereof. "Bond Register" means the books for the registration and transfer of Bonds maintained by the Fiscal Agent under Section 2.9 hereof. "Bond Year" means the one-year period beginning on September 2nd in each year and ending on the day prior to September 1 st in the following year, except that the first Bond Year shall begin on the Closing Date for the Bonds and end on September 1, 2007. "Bonds" means the City of Rancho Cucamonga Community Facilities District No. 2006- 02 (Amador on Route 66) 2006 Special Tax Bonds at any time Outstanding under this Agreement or any Supplemental Agreement. "Business Dav" means any day other than (i) a Saturday or a Sunday, or (ii) a day on which banking institutions in the state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed. "CDIAC" means the California Debt and Investment Advisory Commission of the office of the State Administrative Services Director of the State of California or any successor agency or bureau thereto. "Citv" means the City of Rancho Cucamonga, California, and any successor thereto. "City Attorney" means any attorney or firm of attorneys employed by the City in the capacity of city attorney. "City Council" means the City Council of the City. "City Manager" means the City Manager of the City, acting for and on behalf of the District. . "Closing Date" means , 2007, being the date upon which there is a delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser. -4- SDPUBI WDIYEN\339385.1 P520 "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Commission" means the United States Securities and Exchange Commission. "Comptroller of the Currencv" means the Comptroller of the Currency of the United States. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, the printing costs, costs of reproducing and binding documents, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee, expenses incurred by the City in connection with the issuance of the Bonds and the expenses of the City in connection with the establishment of the District, special tax consultant fees and expenses, preliminary engineering fees and expenses, legal fees and charges, including Bond Counsel fees, financial consultant fees, appraiser fees and expenses, absorption consultant fees and expenses, charges for execution, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name established by Section 4.3(A) hereof. "Countv" means the County of San Bernardino, California. "Debt Service" means the scheduled amount of interest and amortization of principal payable by reason of Sections 2.2(D) and (E) on the Bonds during the period of computation, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Depositorv" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.14. "District" or "CFD" means the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66), formed by the City under the Act and the Resolution of Formation. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded -5- SDPUBIWDIVENI339385.1 P521 on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security-State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. "Federal Securities" means any of the following which are non-callable and which at the time of investment are legal investments under the laws of the State of California for funds held by the Fiscal Agent: (i) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the United States Department of the Treasury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America, including, without limitation, such of the foregoing which are commonly referred to as "stripped" obligations and coupons; or (ii) any of the following obligations of the following agencies of the United States of America: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial ownership issued by the Farmers Home Administration, (c) participation certificates issued by the General Services Administration, (d) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, (e) project notes issued by the United States Department of Housing and Urban Development, and (f) public housing notes and bonds guaranteed by the United States of America. "Fiscal Agent" means the Fiscal Agent appointed by the City and acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.1. "Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive. "Government Obligations" means obligations described in paragraph 1 of the definition of Permitted Investments. -6- SDPUBI WDIVEN\339385.1 P522 "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the City or the Finance Director, and who, or each of whom: (i) is judged by the Finance Director to have experience in matters relating to the issuance and/or administration of bonds under the Act; (ii) is in fact independent and not under the domination of the City; (iii) does not have any substantial interest, direct or indirect, with or in the City, or any owner of real property in the District, or any real property in the District; and (iv) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City. "Information Services" means Bloomberg Municipal Repositories, P.O. Box 840, Princeton, New Jersey, 08542-0840; DPC Data Inc., One Executive Drive, Fort Lee, New Jersey, 07024; Interactive Data, 100 Williams Street, New York, New York, 10038, Attention: Repository; Standard & Poor's J. J. Kenny Repository, 55 Water Street, 45th Floor, New York, New York, 10041; and, in accordance with then current guidelines of the Commission, such other services providing information with respect to called bonds as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Interest Account" means the account within the Bond Fund by that name established pursuant to Section 4.5(A) hereof. "Interest Payment Dates" means March I and September 1 of each year, commencing March 1,2007. "Legislative Bodv" means the City Council of the City acting as the legislative body of the District. "Maximum Annual Debt Service" meanS the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Moodv's" means Moody's Investors Service, and its successor's and assigns. "Officer's Certificate" means a written certificate of the City signed by an Authorized Officer of the City. "Ordinance" means Ordinance No. 770 of the City of Rancho Cucamonga. "Original Purchaser" means Stone & Youngberg LLC. "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.4) all Bonds except: (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) 10.3; and Bonds paid or deemed to have been paid within the meaning of Section -7- SDPUB\WDIVEN\339385.1 P523 (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City pursuant to this Agreement or any Supplemental Agreement. "Owner" or "Bondowner" means any Person who shall be the registered owner of any Outstanding Bond. "Owner Constructed City Improvements" shall have the meaning given such term in the AcquisitionlFinancing Agreement. "Owner Constructed Water District Facilities" shall have the meaning given such term in the Water District JCFA. "Permitted Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein (the Fiscal Agent shall be entitled to rely upon any written investment direction from an Authorized Officer of the District as a certification to the Fiscal Agent that such investment constitutes a Permitted Investment): 1. A. Direct obligations (other than an obligation subject to variation in principal payment) of the United States of America ("United States Treasury Obligations"); B. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America; C. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America;or D. Evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any Person claiming through the custodian or to whom the custodian may be obligated. 2. Federal Housing Administration debentures. 3. The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America: A. Federal Home Loan Mortgage Corporation (FHLMC) -8- SDPUBI WDIVEN\339385.1 P524 (1) Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) (2) Senior debt obligations B. Farm Credit Banks (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) (1) Consolidated system-wide bonds and notes C. Federal Home Loan Banks (FHL Banks) (1) Consolidated debt obligations D. Federal National Mortgage Association (FNMA) (1) Senior debt obligations (2) Mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) E. Student Loan Marketing Association (SLMA) (1) Senior debt obligations (excluded are securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date) F. Financing Corporation (FICO) (l) Debt obligations G. Resolution Funding Corporation (REFCORP) (1) Debt obligations 4. Unsecured certificates of deposit, time deposits, and bankers' acceptances (having maturities of not more than 30 days) of any bank (including the Fiscal Agent and its affiliates) the short-term obligations of which are rated "A-I" or better by S&P. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $5 million (including the Fiscal Agent and its affiliates). 6. Commercial paper (having original maturities of not more than 270 days) rated "A-I" by S&P and "Prime-I" by Moody's. 7. Money market funds rated "AAm-l" or "AAm-G" by S&P, or better. 8. State Obligations, which means: A. Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and -9- SDPUBI WDIVEN\339385.! P525 credit of a state the unsecured general obligation debt of which is rated "A3" by Moody's and "A" by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. B. Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rate.d "A-I +" by S&P and "Prime-I" by Moody's. C. Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated "AA" or better by S&P and "AA" or better by Moody's. 9. Pre-refunded municipal obligations rated "AAA" by S&P and "AAA" by Moody's meeting the following requirements: A. the municipal obligations are (I) not subject to redemption prior to maturity or (2) the trustee/fiscal agent for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; B. the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of interest and premium on such municipal obligations; C. the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations; D. the cash or United States Treasury Obligations serving as security for the municipal obligations are held, by an escrow agent or trustee/fiscal agent in trust for owners of the municipal obligations; E. no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new verification; and F. the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee/fiscal agent or escrow agent. 10. Investment agreements with a domestic or foreign bank or corporation the long- term debt or financial strength of which, it or its guarantor is rated at least "AA-" -10- SDPUB\WDlVEN\339385.1 P526 by S&P and "Aa3" by Moody's; provided that, by the terms of the investment agreement: A. the invested funds are available for withdrawal without penalty or premium, upon not more than seven days' prior notice; the District and the Fiscal Agent hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; B. the investment agreement shall state that it is the unconditional and general obligation of and is not subordinated to any other obligation of, the provider thereof, or, in the case of a bank, that the obligation of the bank to make payments under the agreement ranks pari passu with the obligations of the bank to its other depositors and its other unsecured and unsubordinated creditors; C. the District and the Fiscal Agent receives'the opinion of domestic counsel that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable); D. the investment agreement shall provide that if during its term (1) the provider's rating by either S&P or Moody's falls below "M-" or "Aa3", respectively, the provider shall, at its option, within 1 0 days of receipt of publication of such downgrade, either (a) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the District, the Fiscal Agent or a Holder of the Collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (b) transfer and assign the investment agreement to a then qualifying counterparty , which is to be approved by the District, with ratings specified above; and (2) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction of the District or the Fiscal Agent, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment; -11- SDPUBI WDIVEN\339385,1 P527 E. the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all ;roceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); F. the investment agreement must provide that if during its term (1) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the District or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate; and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate. 11. The Local Agency Investment Fund (LAlF) administered by the Finance Director of the State to the extent such deposits remain in the name of and control of the Fiscal Agent. "Person" means an individual, a corporation, a partnership, a joint venture, a trust, an unincorporated organization or a government or any agency or political subdivision thereof. "Principal Account" means the account within the Bond Fund by that name established pursuant to Section 4.5(A) hereof. "Principal Office" means the office of the Fiscal Agent at Los Angeles, California or such other offices as may be specified to the City and the District by the Fiscal Agent in writing. "Proiect" means the facilities more particularly described in the AcquisitionlFinancing Agreement. "Proiect Fund" means the fund by that name created by and held by the Fiscal Agent pursuant to Section 4.2(A) hereof. "Rate and Method" means the Rate and Method of Apportionment of the Special Taxes set forth in the Ordinance. "Rebate Fund" means the fund by that name established pursuant to Section 4.8(A) hereof. -12- SDPUBI WDlVEN\339385.1 P528 "Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such day is a Business Day. "Redemption Fund" means the fund by that name established pursuant to Section 4.9(A) hereof. "Reserve Fund" means the fund by that name established pursuant to Section 4.4(A) hereof. "Reserve Requirement" means, as of any date of calculation, (i) Maximum Annual Debt Service on the Outstanding Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service on the Outstanding Bonds, or (iii) ten percent (10%) of the face amount of the Outstanding Bonds. "Resolution" means Resolution No. 06-_ adopted by the City Council of the City on December 6, 2006. "Resolution of Formation" means Resolution No. 06-322 adopted by the City Council on October 18, 2006. "S&P" means Standard & Poor's Rating Services, a division of the McGraw Hill Companies, Inc. and its successors and assigns. "Securities Deoositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041, Attention: Call Notification Department, Fax-(212) 855- 7232; and, in accordance with then current guidelines of the Commission, such other addresses and/or such other securities depositories as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Special Tax" or "Special Taxes" means Special Tax as defined in the Rate and Method authorized to be levied within the District pursuant to the Act, the Ordinance and this Agreement. "Special Tax Fund" means the fund by that name established by Section 4.6(A) hereof. "Special Tax Prepayments" means the proceeds of any Special Tax prepayments received by the City, as calculated pursuant to Section I of the Rate and Method, less any administrative fees or penalties collected as part of any such prepayment. "Special Tax Revenues" means the proceeds of the Special Taxes received by the City, . including any scheduled payments and any prepayments thereof, interest thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and interest thereon. "Special Tax Revenues" does not include any penalties collected in connection with delinquent Special Taxes. "State" means the State ofCalifomia. -13- SDPUB\ WDIVEN\339385.1 P529 "Supplemental Agreement" means an agreement the execution of which is authorized by a resolution which has been duly adopted by the City Council under the Act and which agreement is amendatory of or supplemental to this Agreement, but only if and to the extent that such agreement is specifically authorized hereunder. "Tax Consultant" means David Taussig & Associates, Inc. or another independent financial or tax consultant retained by the City for the purpose of computing the Special Taxes. "Water District" means the Cucamonga Valley Water District. "Water District Account" the account within the Project Fund by that name established pursuant to Section 4.2(A) hereof. "Water District Capacitv Facilities Proceeds" shall have the meaning given such term in the Water District JCFA. "Water District JCFA" means that Joint Community Facilities Agreement, dated as of October _,2006, by and between the City and the Water District pertaining to the funding by the District of the Water District Capacity Facilities Proceeds and the Agency Capacity Facilities Proceeds and the acquisition of the Owner Constructed Water District Facilities. -14- SDPUBI WDIVEN\339385.1 P530 ARTICLE II THE BONDS Section 2.1 Principal Amount Designation. Bonds in the aggregate principal amount of Dollars ($ ) are hereby authorized to be issued by the City for the District under and subject to the terms of the Resolution and this Agreemerit, the Act and other applicable laws of the State of California. Section 2.2 Terms of the Bonds. (A) Form: Denominations. The Bonds shall be issued as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple of $5,000 in excess thereof, except that one Bond of each maturity may be in a denomination less than $5,000, if necessary, in connection with a partial redemption ofthe Bonds pursuant to Section 2.3 hereof. (B) Date of Bonds. The Bonds shall be dated the Closing Date. (C) CUSIP Identification Numbers. "CUSIP" identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and pay for the Bonds. In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the City's contract with such Owners and shall not impair the effectiveness of any such notice. (D) Maturities. Interest Rates. The Bonds shall mature and become payable on September 1 of each year, and shall bear interest at the rates, as follows: Principal Payment Date (September 1) Interest Rate Principal Amount -15- SDPUBIWDIVEN\339385.1 P531 (E) Interest. The Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such date of authentication, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. (F) Method of Payment. Interest on the Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on the Interest Payment Dates or date of redemption by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the Registration Books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date or date of redemption, or by wire transfer (i) to the Depository (so long as the Bonds are in book- entry form pursuant to Section 2.14), or (ii) to an account within the United States made on such Interest Payment Date or date of redemption upon instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds, which instructions shall continue in effect until revoked in writing, or until such Bonds are transferred to a new Owner. The principal of the Bonds and any premium on the Bonds are payable by check in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent. All Bonds paid by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds and issue a certificate of destruction thereof to the City upon the City's request. -16- SDPUBIWDIVEN\339385.1 P532 Section 2.3 Redemption. (A) Redemption Dates. (i) Optional Redemption. The Bonds are subject to optional redemption prior to their stated maturity on any Interest Payment Date, as a whole or in part, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price March 1,2007 through March 1,20_ September 1, 20_ and March 1,20_ September 1,20_ and March 1,20_ September 1, 20_ and thereafter 1 % 1_% 1 % 100% (ii) Mandatory Redemption from Proceeds of Special Tax Prepayments The Bonds shall be subject to redemption on any Interest Payment Date, prior to maturity, as a whole or in part on a pro rata basis among maturities from amounts deposited to the Redemption Fund representing Special Tax Prepayments. An Authorized Representative shall deliver written instructions to the Fiscal Agent not less than 60 days prior to the redemption date directing the Fiscal Agent to utilize the Special Tax Revenues transferred to the Redemption Fund and the Interest Account of the Bond Fund pursuant to Section 4.6(C) and the amount transferred to the Redemption Fund and/or Interest. Account from the Reserve Fund pursuant to Section 4.4(F) to redeem Bonds pursuant to this Section 2.3(A)(ii). Such mandatory redemption of the Bonds shall be at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price September 1, 20 and March 1, 20 - - September 1,20_ and March 1, 20_ September 1, 20_ and thereafter 1 % 1 % 100% (iii) Mandatory Sinking Fund Payment Redemption. The Bonds maturing on September 1,20_ are subject to mandatory sinking fund payment redemption in part on September 1, 20-, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed. for redemption, without premium, from sinking fund payments as follows: -17- SDPUBlWDIVEN\339385.1 P533 Redemption Date (September 1) Sinking Fund Payments The Bonds maturing on September 1,20_ are subject to mandatory sinking fund payment redemption in part on September 1, 20_, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1) Sinking Fund Payments The amounts in the foregoing tables shall be reduced, as a result of any prior partial redemption of the Bonds pursuant to Section 2.3(A)(i) or (ii) above as specified in an Officer's Certificate filed with the Fiscal Agent, in inverse order of sinking fund payment date. (B) Notice to Fiscal Agent. The City shall give the Fiscal Agent written notice, by filing an Officer's Certificate with the Fiscal Agent, of its intention to redeem Bonds pursuant to subsection 2.3(A)(i) or (ii) not less than sixty (60) days prior to the applicable redemption date or such shorter period as shall be acceptable to the Fiscal Agent. (C) Purchase of Bonds in Lieu of Redemption. In lieu of redemption under Section 2.3(A), moneys in the Bond Fund or Redemption Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's . Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest -18- SDPUBlWDIVEN\339385.1 P534 accrued to the date of purchase and any premium which would otherwise be due if such Bonds. were to be redeemed in accordance with this Agreement. (D) Redemption Procedure bv Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, to the Original Purchaser, to the Securities Depositories, to one or more Information Services, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond Register in the Principal Office of the Fiscal Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and Bond number of each Bond to be redeemed or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. Upon the payment of the redemption price, plus accrued interest to the date of redemption, of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, of the Bonds being redeemed with the proceeds of such check or other transfer. Except as otherwise provided for herein, whenever provision is made in this Agreement for the redemption of less than all of the Bonds or any given portion thereof, the Fiscal Agent shall determine the amount of Bonds to be redeemed from each maturity in any manner the City specifies, and the Fiscal Agent shall select the Bonds to be redeemed, from each maturity of the Bonds or such. given portion thereof not previously called for redemption, according to any manner which the Fiscal Agent deems fair. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the City, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds. Section 2.4 Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on; the Bonds so called for redemption shall have been deposited in the Bond Fund or Redemption Fund, such Bonds so called shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price and interest thereon accrued through the date of -19- SDPUB\WDlYEN\339385.1 P535 redemption, and no interest shall accrue thereon on or after the redemption date specified in such notice. All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds and issue a certificate of destruction thereof to the City. Section 2.5 Form of Bonds. The Bonds and the form of Fiscal Agent's certificate of authentication and the form of assigruuent, to appear thereon, shall be substantially in the form set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement, the Resolution and the Act. Section 2.6 Execution of Bonds. The Bonds shall be executed on behalf of the City manually or by the facsimile signatures of its Mayor and City Clerk who are in office on the date of adoption of this Agreement or at any time thereafter, and the seal of the City shall be impressed, imprinted or reproduced by facsimile thereon. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the Owner. Any Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City although at the nominal date of such Bond any such person shall not have been such officer of the City. Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered hereunder have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Agreement. Section 2.7 Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.9 by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate principal amount. No transfers of Bonds shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect to a Bond -20- SDPUB\WDIVEN\339385.1 P536 after such Bond has been selected for redemption, or (iii) between a Record Date. and the succeeding Interest Payment Date. Section 2.8 Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same series and maturity. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such exchange any tax or other governmental charge required to be paid with respect to such exchange. No exchanges of Bonds shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. Section 2.9 Bond Register. The Fiscal Agent will keep or cause to be kept, at its Principal Office sufficient books for the registration and transfer of the Bonds, which books shall show the series, number, date, amount, rate of interest and last known Owner of each Bond and shall at all times be open to inspection by the City during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided. The City and the Fiscal Agent will treat the Owner of any Bond whose name appears on the Bond Register as the absolute Owner of such Bond for any and all purposes, and the City and the Fiscal Agent shall not be affected by any notice to the contrary. The City and the Fiscal Agent may rely on the address of the Bondowner as it appears in the Bond Register for any and all purposes. Section 2.10 Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder. Section 2.11 Bonds Mutilated. Lost. Destroved or Stolen. If any Bond shall become mutilated, the City, at the expense .ofthe Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled by it and destroyed by the Fiscal Agent who shall deliver a certificate of destruction thereof to the -21- SDPUBI WDIVEN\339385.! P537 City. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity for the City and the Fiscal Agent satisfactory to the Fiscal Agent shall be given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City may require payment of a sum not exceeding the actual cost of preparing each new Bond delivered under this Section and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation, execution, authentication and delivery. Any Bond delivered under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement. Section 2.12 Limited Obligation. The Bonds and interest thereon, together with any premium paid thereon upon redemption, are not obligations of the City, but are limited obligations of the District secured by and payable from an irrevocable first lien on the Special Tax Revenues and on the monies in the funds and accounts established herein (including the investment earnings thereon) with the exception of the Rebate Fund, the Costs of Issuance Fund, the Administrative Expense Fund and the Project Fund. Except for the Special Tax Revenues, neither the credit nor the taxing power of the District or the City is pledged for the payment of the Bonds or the interest thereon, and no Owner of the Bonds may compel the exercise of taxing power by the District or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and premiums upon the redemption thereof, if any, are not a debt of the District or the City, the State or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds are not a legal or equitable pledge, charge, lien or encumbrance, upon any property of the City or the District, or upon any of income, receipts or revenues of the City or the District, except the amounts which are, under this Agreement and the Act, set aside for the payment of the Bonds and interest thereon and neither the members of the Legislative Body, the City Council of the City, nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. Notwithstanding anything contained in this Agreement, neither the City nor the District shall be required to advance any money derived from any source of income other than the Special Tax Revenues for the payment of the interest on or the principal of the Bonds or for the performance of any covenants herein contained. Nothing in this Agreement or in any Supplemental Agreement shall preclude the redemption prior to maturity of any Bonds subject to call and redemption or the payment of the Bonds from proceeds of refunding bonds issued under the Act or under any other law of the State. Section 2.13 No Acceleration. The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section shall in any way prohibit the prepayment or redemption of Bonds under Section 2.3 hereof, or the defeasance of the Bonds and discharge of this Agreement under Section 10.3 hereof. -22- SDPUBI WDIVEN\339385.1 P538 Section 2.14 Book-Entrv Svstem. DTC shall act as the initial Depository for the Bonds. One Bond for each maturity of the Bonds shall be initially executed, authenticated, and delivered as set forth herein with a separate fully registered certificate (in print or typewritten form). Upon initial execution, authentication, and delivery, the ownership of the Bonds shall be registered in the Bond Register kept by the Fiscal Agent for the Bonds in the name of Cede & Co., as nominee ofDTC or such nominee as DTC shall appoint in writing. The representatives of the City and the Fiscal Agent are hereby authorized to take any and all actions as may be necessary and not inconsistent with this Agreement to qualify the Bonds for the Depository's book-entry system, including the execution of the Depository's required representation letter. With respect to Bonds registered in the Bond Register in the name of Cede & Co., as nominee ofDTC, neither the City nor the Fiscal Agent shall have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which DTC holds Bonds as Depository from time to time (the "DTC Participants") or to any Person for which a DTC Participant acquires an interest in the Bonds (the "Beneficial Owners"). Without limiting the immediately preceding sentence, neither the City, the District nor the Fiscal Agent shall have any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co., or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant, any Beneficial Owner, or any other Person, other than DTC, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the event the City, on behalf of the District, elects to redeem the Bonds in part, (iv) the payment to any' DTC Participant, any Beneficial Owner, or any other Person, other than DTC, of any amount with respect to the principal of or interest on, or premium on, the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the Bonds. Except as set forth above, the Fiscal Agent may treat as and deem DTC to be the absolute Owner of each Bond for which DTC is acting as Depository for the purpose of payment of the principal of and interest on such Bonds, for the purpose of giving notices of prepayment and other matters with respect to such Bonds, for the purpose ofregistering transfers with respect to such Bonds, and for all purposes whatsoever. The Fiscal Agent shall pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown on the Bond Register, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to the principal of and interest on the Bonds to the extent of the sums or sums so paid. No Person other than an Owner, as shown on the Bond Register, shall receive a physical Bond. Upon delivery by DTC to the Fiscal Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer provisions in Section 2.7 hereof, references to "Cede & Co." in this Section 2.14 shall refer to such new nominee ofDTC. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the Fiscal Agent during any time that the Bonds are Outstanding, and discharging its responsibilities with respect thereto under applicable law. The City may . -23- SDPUB\WDNEN\339385.1 P539 terminate the services of DTC with respect to the Bonds if it determines that DTC is unable to discharge its responsibilities with respect to the Bonds or that continuation of the system of book-entry transfers through DTC is not in the best interest of the Beneficial Owners, and the City shall mail notice of such termination to the Fiscal Agent. Upon the termination of the services of DTC as provided in the previous paragraph, and if no substitute Depository willing to undertake the functions hereunder can be found which is willing and able to undertake such functions upon reasonable or customary terms, or if the City determines that it is in the best interest ofthe Beneficial Owners of the Bonds that they be able to obtain certificated Bonds, the Bonds shall no longer be restricted to being registered in the Bond Register of the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or name the Owners shall designate at that time, in accordance with Section 2.7. To the extent that the Beneficial Owners are designated as the transferee by the Owners, in accordance with Section 2.7, the Bonds will be delivered to such Beneficial Owners as soon as practicable. ARTICLE III ISSUANCE OF BONDS Section 3.1 Issuance and Deliverv of Bonds. At any time after the execution of this Agreement, the City may issue the Bonds for the District in the aggregate principal amount set forth in Section 2.1 and deliver the Bonds to the Original Purchaser. The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of the Bonds and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser. Section 3.2 Pledge of Soecial Tax Revenues. The Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Special Tax Revenues (except Special Tax Revenues deposited in the Administrative Expense Fund) and all moneys deposited in the Bond Fund and, until disbursed as provided herein, in the Redemption Fund and the Special Tax Fund. The Bonds are further secured by a first pledge of all of the moneys deposited in the Reserve Fund. The Special Tax Revenues and all moneys deposited into said funds (except as otherwise provided herein) are hereby dedicated to the payment of the principal of, and interest and any premium on, the Bonds as provided herein and in the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with Section 10.3. Amounts in the Administrative Expense Fund, the Rebate Fund, the Costs of Issuance Fund and the Project Fund are not pledged to the repayment of the Bonds. The facilities acquired or constructed with the proceeds of the Bonds are not in any way pledged to pay the Debt Service -24- SDPUBI WDlVEN\339385.1 P540 on the Bonds. Any proceeds of condemnation or destruction of any facilities financed with the proceeds of the Bonds are not pledged to pay the Debt Service on the Bonds and are free and clear of any lien or obligation imposed hereunder. Section 3.3 Validitv of Bonds. The validity of the authorization and issuance of the Bonds shall not be dependent upon the completion of the Project or upon the performance by any Person of such Person's obligation(s) with respect to the Project. -25- SDPUB\WDIYEN\339385.1 P541 ARTICLE IV FUNDS AND ACCOUNTS Section 4.1 Deposits of Bond Proceeds. The proceeds of the purchase of the Bonds by the Original Purchaser thereof shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date for the Bonds as follows: (A) to the Interest Account of the Bond Fund $ (B) to the Reserve Fund $ (C) to the Costs ofIssuance Fund $ (D) to the Acquisition Account of the Project Fund $ (E) to the Agency Accountofthe Project Fund $ (F) to the Water District Account of the Project Fund $ (G) to a temporary expense account hereby created for such purpose for immediate transfer to the Finance Director for deposit by the Finance Director in the Administrative Expense Fund $25,000.00. Section 4.2 Proiect Fund. (A) Establishment of Proiect Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Project Fund, and with such Fund three accounts, the Acquisition Account, the Agency Account and the Water District Account, to the credit of which deposits shall be made as required by Section 4.1(D), (E) and (F). The Fiscal Agent may establish such other temporary funds or accounts on its records as it may deem appropriate to facilitate such deposits and transfers. Moneys in the Acquisition Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, and shall be disbursed, except as otherwise provided in subsection (C) of this Section, solely for the payment or reimbursement of costs of the Project and Costs of Issuance not paid from the Costs of Issuance Fund prior to the closure thereof pursuant to Section 4.3(B). Moneys in the Agency Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, the Agency and the Water District, and shall be disbursed, except as otherwise provided in subsection (C) of this Section, solely for the funding of the . Agency Capacity Facilities Proceeds pursuant to the Water District JCFA. -26- SDPliBIWDIVEN\339385.1 P542 Moneys in the Water District Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City and the Water District, and shall be disbursed, except as otherwise provided in subsection (C) of this Section, solely for the funding of the Water District Capacity Facilities Proceeds and the acquisition of the Owner Constructed Water District Facilities pursuant to the Water District JCFA. (B) Procedure for Disbursement from the Proiect Fund Accounts. (i) Acquisition Account. The Fiscal Agent shall make disbursements from the Acquisition Account upon receipt of an Officer's Certificate, in substantially the form set forth in Exhibit C to this Agreement, attached hereto and incorporated herein by reference, which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Acquisition Account; and the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (ii) Agencv Account. The Fiscal Agent shall make disbursements from the Agency Account upon receipt of an Officer's Certificate, in substantially the form set forth in Exhibit C which shall: .(a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Agency Account; and the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (iii) Water District Account. The Fiscal Agent shall make disbursements from the Water District Account upon receipt of an Officer's Certificate, in substantially the form set forth in Exhibit C which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Water District Account; and the Person to which the disbursement is to be paid; and -27- SOPUBI WOIVEN\339385.1 P543 (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (C) Investment. Moneys in the accounts of the Project Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from the investment of moneys in an account of the Project Fund shall.be invested and deposited and shall be retained in such account to be used for the purposes thereof. (D) Transfer of Funds not Required. (i) Agencv Account. Upon the filing of an Officer's Certificate stating that all Agency Capacity Facilities Proceeds have been disbursed to the Water District pursuant to the Water District JCFA, or that any such funds are not required to be disbursed from the Agency Account, the Fiscal Agent shall transfer the amount, if any, remaining in the Agency Account to the Acquisition Account. (ii) Water District Account. Upon the filing of an Officer's Certificate stating that all Water District Capacity Facilities Proceeds have been disbursed to the Water District and that all Owner Constructed Water District Facilities have been acquired pursuant to the Water District JCFA, or that any such funds are not required to be disbursed or paid from the Water District Account, the Fiscal Agent shall transfer the amount, if any, remaining in the Water District Account to the Acquisition Account. (iii) Acquisition Account. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project and all Costs of Issuance have been paid, or that such costs are not required to be paid from the Acquisition Account, the Fiscal Agent shall transfer the amount, if any, remaining in the Acquisition Account to the Special Tax Fund. Upon the filing of an Officer's Certificate stating that the City has terminated the Acquisition/Financing Agreement pursuant to the provisions thereof and that the City has elected not to advertise and bid the balance of the Owner Constructed City Improvements following such a termination, any monies remaining in the Acquisition Account and not appropriated or subject to appropriation to pay costs of the Project or Costs of Issuance. previously incurred shall be transferred to the Special Tax Fund. Section 4.3 Costs ofIssuance Fund. (A) Establishment of Costs of Issuance Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Costs of Issuance Fund, to the credit of which a deposit shall be made as required by Section 4.1(C). Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs ofIssuance. -28- SDPUB\WDIVEN\339385.1 P544 (B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the Bonds. The Fiscal Agent shall pay all Costs of Issuance after receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee pursuant to an Officer's Certificate requesting payment of Costs of Issuance. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 180 days from the date of delivery of the Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Acquisition Account of the Project Fund. (C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be used for the purposes of such fund. Section 4.4 Reserve Fund. (A) Establishment of Fund. There is hereby established as a separate fund to be held by the Fis~al Agent the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Reserve Fund, to the credit of which Fund a deposit shall be made as required by Section 4.1(B) which deposit is equal to the Reserve Requirement as of the Closing Date for the Bonds, and deposits shall be made as provided in Section 4.6(B)3. Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of principal of, and interest and any premium on, the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. (B) Use of Funds. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the provisions of this Section, for the purpose of redeeming Bonds from the Bond Fund. (C) Transfer Due to Deficiencv in Bond Fund. Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall provide written notice thereof to the Finance Director, specifying the amount withdrawn. (D) Transfer of Excess of Reserve Requirement. If on any August 15, or the first Business Day thereafter if August 15 is not a Business Day, of each year, the amount in the Reserve Fund exceeds the Reserve Requirement, the Fiscal Agent shall, as directed in an Officer's Certificate, transfer an amount equal to the excess from the Reserve Fund to the Interest Account of the Bond Fund to be used for the payment of interest on the. Bonds on the next Interest Payment Date in accordance with Section 4.5. -29- SDPUB\ WDIVEN\339385.\ P545 (E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving an Officer's Certificate (upon which the Fiscal Agent may conclusively rely) so directing the Fiscal Agent, transfer the amount in the Reserve Fund to the Redemption Fund to be applied to the payment and redemption, in accordance with Section 2.3(A) of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Redemption Fund shall be transferred to the District to be used for any lawful purpose of the District. Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to this Section 4.4(E) until after (i) the calculation of any amounts due to the federal government pursuant to Section 5.13 following payment of the Bonds and withdrawal of any such amount from the Reserve Fund for purposes of making such payment to the federal government, and (ii) payment of any fees and expenses due to the Fiscal Agent. (F) Transfer Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and Bonds are to be redeemed with the proceeds of such prepayment pursuant to Section 2.3(A)(ii) and 4.9(B) hereof, a proportionate amount in the Reserve Fund (determined on the basis of the principal of Bonds to be redeemed and the then principal of the Bonds Outstanding) shall be transferred upon such prepayment by the Fiscal Agent to the Redemption Fund or the Interest Account of the Bond Fund, as applicable, to be applied to the redemption of the Bonds pursuant to written instructions contained in an Officer's Certificate in accordance with Section 4.9(B) hereof. (G) Investment and Transfer to Pav Rebate. Moneys in the Reserve Fund shall be invested and deposited in accordance with Section 6.1. All Permitted Investments in the Reserve Fund shall be valued at their Fair Market Value at least semiannually on March 1 and September 1. Interest earnings and profits resulting from said investment shall be used as required by the District to comply with Section 5.13. No earnings on amounts in.the Reserve Fund shall be used by the District to comply with Section 5.13 unless the amount on deposit in the Reserve Fund is equal to the Reserve Requirement. Section 4.5 Bond Fund. (A) Establishment of Bond Fund and Interest Account and Principal Account. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga CommUnity Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Bond Fund, and within such Fund two accounts, the Interest Account and the Principal Account, to the credit of which deposits shall be made as required by Sections 4.1(A), 4.2(C), 4.4(B), 4.4(D), 4.4(F) and 4.6(B), and any other amounts required to be deposited therein by this Agreement or the Act. -30- SDPUB\ WDIVEN\339385.1 P546 Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. . (B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Interest Account ofthe Bond Fund and pay to the Owners of the Bonds the interest then due and payable on the Bonds, including any interest due on the Bonds being redeemed pursuant to Section 2.3(A). On each Interest Payment Date, the Fiscal Agent shall withdraw from the Principal Account of the Bond Fund and pay to the Owners of the Bonds the principal of the Bonds at the maturity thereof or the principal of the term Bonds upon the mandatory sinking fund redemption thereof pursuant to this Agreement. (C) Investment. Moneys in the Bond Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from the investment and deposit of amounts in the Bond Fund shall be retained in the Bond Fund and used for purposes of such fund. Section 4.6 Special Tax Fund. (A) Establishment of Special Tax Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Special Tax Fund to the credit of which deposits shall be made as required pursuant to this Section 4.6 and may be made as permitted by Section 4.2(D). Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit of the District and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds and the District. No later than the tenth (loth) Business Day after which Special Tax Revenues have been received by the City, and in any event not later than February 15th and August 15th of each year, the City shall transfer such Special Tax Revenues to the Fiscal Agent, less an amount equal to the Administrative Expense Requirement, and, except as set forth in the following sentence, such amounts shall be deposited in the Special Tax Fund. (B) Disbursements. With the exception of the Special Tax Revenues representing Special Tax Prepayments which shall be transferred pursuant to Section 4.6(C), below, the Special Tax Revenues deposited in the Special Tax Fund shall be deposited in the following accounts of the Special Tax Fund or transferred to the following other funds and accounts on the dates and in the amounts set forth in the following paragraph and in the following order of priority: 1. The Fiscal Agent shall deposit in the Interest Account of the Bond Fund, on each Interest Payment Date and date for redemption of the Bonds, an amount required to cause the aggregate amount on deposit in the Interest Account to equal the -31- SDPUBI WDIVEN\339385.1 P547 amount of interest due or becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds being redeemed on such date. 2. The Fiscal Agent shall deposit in the Principal Account of the Bond Fund, on each Interest Payment Date and redemption date on which principal of the Bonds, including sinking fund payments, shall be payable an amount required to cause. the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to. this Agreement. 3. On or after March 2 and September 2 of each year after making the transfer and deposits required under paragraphs 1 and 2 above, the Fiscal Agent shall transfer the amount, if any, necessary to replenish the amount then on deposit in the Reserve Fund to an amount equal to the Reserve Requirement. 4. On or after September 2 of each year after making the deposits and transfers required under paragraphs 1 through 3 above, upon receipt of written instructions from an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Rebate Fund the amount specified in such request. 5. On or after September 2 of each year after making the deposits and transfers required under paragraphs 1 through 4 above, upon receipt of a written request of an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Finance Director for deposit in the Administrative Expense Fund the amounts specified in such request to pay those Administrative Expenses which the District reasonably expects (a) will become due and payable during such Fiscal Year or the cost of which Administrative Expenses have previously been incurred and paid by the District from funds other than the Administrative Expense Fund and (b) the cost of which Administrative Expenses will be in excess of the Administrative Expense Requirement for such Fiscal Year. 6. If, on or after September 2 of each year, after making the deposits and transfers required under paragraphs 1 through 5 above, monies remain in the Special Tax Fund, such monies shall remain on deposit in the Special Tax Fund and shall be subsequently deposited or transferred pursuant to the provisions of paragraphs 1 through 5 above. (C) Preoayments. The Fiscal Agent shall, upon receipt of Special Tax Revenues representing Special Tax Prepayments together with written instructions of the District executed by an Authorized Officer, immediately transfer such Special Tax Prepayments pursuant to such written instructions into the Interest Account of the Bond Fund and the Redemption Fund, as applicable, and utilize such funds to pay the interest and premium, if any, on and principal of -32- SDPUB\ WDlVEN\339385.! P548 Bonds to be redeemed pursuant to Section 2.3(A)(ii). The Fiscal Agent may conclusively rely upon such instructions. (D) Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from such investment and deposit shall be transferred to the Special Tax Fund to be used for the purposes thereof. (E) Transfer to Redemption Fund. Any Officer's Certificate issued pursuant to Section 4.2(D)(iii) of this Agreement (other than an Officer's Certificate issued more than one year prior to the first date on which optional redemption of Bonds is permitted pursuant to subsection 2.3(A)(i) of this Agreement) may direct that all or any portion of the funds which would otherwise be transferred to the Special Tax Fund be transferred to the Redemption Fund, in which case the Fiscal Agent shall apply such amounts in accordance with Section 4.9 of this Agreement as directed in an Officer's Certificate. (F) Transfer to the District. When there are no longer any Bonds Outstanding, any amounts then remaining on deposit in the Special Tax Fund shall be transferred to the District and used for any lawful purpose under the Act. Section 4.7 Administrative Expense Fund. (A) Establishment of Administrative Expense Fund. There is hereby established as a separate fund to be held by the Finance Director, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Administrative Expense Fund to the credit of which deposits shall be made as required by Section 4.1 (G) and 4.6(B)(5). In addition to the foregoing deposits, the City shall each Fiscal Year deposit in the Administrative Expense Fund from Special Tax Revenues received by the City an amount equal to the Administrative Expense Requirement for such Fiscal Year. Moneys in the Administrative Expense Fund shall be held in trust by the Finance Director for the benefit of the City and the District and shall be used to pay Administrative Expenses from time to time. (B) Investment. Moneys in the Administrative Expense Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from said investment shall be retained by the Finance Director in the Administrative Expense Fund to be used for the purposes thereof. Section 4.8 Rebate Fund. There is hereby established as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Rebate Fund. The Rebate Fund shall be held and maintained by the Fiscal Agent. On September 15 of each year (or at such other times and or such other intervals as may be required or permitted by regulations of the United States Internal Revenue Service), the City shall determine whether any portion of investment earnings from any account established by this Agreement must be rebated to the United States pursuant to Section 148 of the Code. At the written direction of the District, any amounts required to be -33- SDPUB\WDIVEN\339385.1 P549 rebated will be transferred from any available source, including the Special Tax Fund pursuant to Section 4.6, to the Rebate Fund. The City is authorized to retain independent attorneys, accountants and other consultants to assist in complying with the requirements ofthe Code, and the fees of such consultants may be paid from the Administrative Expense Account. The Fiscal Agent may rely conclusively upon the City's determinations, calculations and certifications required by this Section 4.8. The Fiscal Agent shall have no responsibility to make any independent calculation or determination or to review the City's calculations hereunder. Amounts in the Rebate Fund shall be invested without yield restriction and shall be held in trust for rebate to the United States at the written direction of the Finance Director. Earnings on the Rebate Fund are to remain in that account and shall similarly be held in trust for rebate to the United States. Section 4.9 Redemption Fund. (A) Establishment of Redemption Fund. There is hereby established as a separate fund to beheld in trust by the Fiscal Agent for the Owners of the Bonds, the Community Facilities District 2006-02 (Amador on Route 66) 2006 Special Tax Bonds, Redemption Fund, to the credit of which deposits shall be made from funds received by the City representing Special Tax Prepayments and other funds required for redemptions, other than mandatory sinking fund redemptions and which shall be administered as provided below. (B) Disbursement. Monies shall be deposited into the Redemption Fund by the Fiscal Agent pursuant to the terms of Section 4.4(E), 4.4(F), 4.6(C), 4.6(E) and/or 10.3 and an Officer's Certificate filed with the Fiscal Agent in accordance with Section 2.3 hereof and shall be set aside and used solely for the purpose of redeeming Bonds in accordance with such Officer's Certificate. Following the redemption of any Bonds, if any funds remain in the Redemption Fund, such funds shall be transferred to the Special Tax Fund. (C) Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with Section 6.1. Interest earnings and profits resulting from such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes thereof. ARTICLE V OTHER COVENANTS OF THE CITY Section 5.1 Punctual Payment. The City will punctually payor cause to be paid the principal of, and interest and any premium on, the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions covenants and requirements of this Agreement and all Supplemental Agreements and ofthe Bonds. -34- SDPUBIWDIVENI339385.1 P550 Section 5.2 Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not on the District's behalf, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have so extended or funded. Section 5.3 Against Encumbrances. Neither the City nor the District will encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement. Section 5.4 Books and Records. The City will keep, or cause to be kept, on behalf of the District proper books of record and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. Such books of record and accounts shall at all times during normal business hours of the City be subject to the inspection of the Fiscal Agent, the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing, and the payors Of the Special Taxes, or their representatives duly authorized in writing. The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Special Tax Fund, the Bond Fund, the Redemption Fund, the Project Fund, the Reserve Fund, the Costs ofIssuance Fund and the Rebate Fund. Such books ofrecord and accounts shall at all times during normal business hours of the Fiscal Agent be subject to the inspection of the City, the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing, and the payors of the Special Taxes, or their representatives duly authorized in writing. Section 5.5 Protection of Security and Rights of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all Persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City acting either on its own behalf or on behalf ofthe District. Section 5.6 Compliance with Law. The City will comply with all applicable provisions of the Act and law in completing the construction or acquisition ofthe Project. -35- SDPUBI WDlVEN\339385.1 P551 Section 5.7 Collection of Special Tax Revenues. The City shall comply with all requirements of the ACt so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of delinquent Special TaXes. On or within five (5) Business Days of each June 1, the Fiscal Agent shall provide the Finance Director with a notice stating the amount then on deposit in the Interest Account and Principal Account of the Bond Fund, the Special Tax Fund and the Reserve Fund, and informing the City that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for Annual Debt Service and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance therein equals the Reserve Requirement. The receipt of or failure to receive such notice by the Finance Director shall in no way affect the obligations of the Finance Director under the following two paragraphs. Upon receipt of such notice, the Finance Director shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. The Finance Director shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance by each August 1 that the Bonds are Outstanding, or otherwise such that the computation of the levy is complete before the final date on which Auditor will accept the transmission of the Special Tax amounts for the parcels within. the District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Finance Director shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Finance Director shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any Outstanding Bonds of the District becoming due and payable during the ensuing year, including any necessary replenishment or expenditure of the amount within the Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any obligation under Section 5.13) during such year, taking into account the balances in such funds and in the Bonds Fund, the Redemption Fund and the Special Tax Fund. The Special Taxes so levied shall not exceed the authorized amounts as provided in the Ordinance. The Special Taxes shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable, and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. Notwithstanding the foregoing, the Finance Director shall, not later than July 15 of each Fiscal Year, determine whether or not to cause the collection of any Special Taxes by direct, first class mail billing to the then owner of each parcel of property in lieu of billing for such Special Taxes in the same manner as general taxes as aforesaid. Such direct mail billing shall be made not later than November 1 of the Fiscal Year and shall direct the owner of the property affected -36- SDPUBI WDlVENI339385.1 P552 to pay the Special Taxes directly to the Finance Director in two equal installments, the first of which shall be due and delinquent if not paid on December 10 and the second of which may be paid with the first and which, in any event, shall be due and delinquent if not paid on April 10 of the Fiscal Year. Any such Special Taxes so billed shall have the same priority and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. - Notwithstanding the foregoing, the Legislative Body may waive delinquency penalties and redemption penalties ifit makes all of the determinations set forth in Section 53340(f) ofthe Act. Section 5.8 Reduction in Maximum Annual Special Tax. The District finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facility districts in Southern California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the City has determined that, absent the certification described below, a reduction in the Maximum Annual Special Tax (as such term is defined in the Rate and Method) authorized to be levied below the levels provided would interfere with the timely retirement of the Bonds. The City has determined it to be necessary in order to preserve the security for the Bonds to covenant and, to the maximum extent that the law permits it to do so, the City does covenant, that it shall not initiate proceedings to reduce the Maximum Special Tax Rates (as such term is defined in the Rate and Method) unless, in connection therewith, (i) the City receives a certificate from one or more Tax Consultants which, when taken together, certify that, on the basis of the parcels of land and improvements existing in the City as of the July 1 preceding the reduction, the Maximum Annual Special Tax which may be levied on all Assessor's Parcels (as such term is defined in the Rate and Method) oftaxable property on which a completed structure is located in each Fiscal Year will equal at least 11 0% of the gross debt service on all Bonds to remain Outstanding after the reduction is approved and will not reduce the Maximum Annual Special Tax payable from parcels on which a completed structure is located to less than 110% of Maximum Annual Debt Service; and (ii) the Legislative Body finds pursuant to this Agreement that any reduction made under such conditions will not adversely affect the interests of the Bondowners. Any reduction in the Maximum Annual Special Tax approved pursuant to the preceding sentence may be approved without the consent of the Bondowners. The City covenants that, in the event that any initiative is adopted by the qualified electors which purports to reduce the Maximum Annual Special Tax below the levels authorized pursuant to the Rate and Method or to limit the power or authority of the City to levy Special Taxes pursuant to the Rate and Method, the City shall, from funds available hereunder, commence and pursue legal action in order to preserve the authority and power of the City to levy Special Taxes pursuant to the Rate and Method. Section 5.9 Covenant to Foreclose. On or before March 1 and June I of each Fiscal year, the City will review the public records of the County in connection with the Special Taxes -37- i SDPUBI WDlVEN\339385.! P553 levied in such Fiscal Year to determine the amount of Special Taxes actually collected in such Fiscal Year. If the City determines that (a) any single parcel subject to the Special Taxes is delinquent in the payment of Special Taxes in the aggregate of $4,000 or more or (b) any parcels under common ownership subject to the Special Taxes are delinquent in the payment of Special Taxes in the aggregate of $20,000 or more, the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner. The City shall cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to this section and for which the Special Taxes remain delinquent. With respect to aggregate delinquencies throughout the District, if the City determines that it has collected less than 95% of the Special Taxes levied in the such Fiscal Year, then the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owner of each delinquent parcel (regardless of the amount of such delinquency). The City will cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to this section and for which the Special Taxes remain delinquent. Section 5.10 Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in this Agreement. Section 5.11 Private Activitv Bond Limitations. The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section l4l(b) of the Code or the private loan financing test of section l4l(c) of the Code. Section 5.12 Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 5.13 Rebate Reouirement. The City shall take any and all actions necessary to assure compliance with section l48(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. Funds shall be transferred to a Rebate Fund, to be held by the Fiscal Agent, in accordance with this Agreement. If necessary, the City may use (i) earnings on amounts in the Reserve Fund if the amount on deposit in the Reserve Fund, following the proposed transfer, is equal to the Reserve Requirement, (ii) amounts on deposit in the Administrative Expense Fund, and (iii) any other funds available to the District, including amounts advanced by the City, in its sole discretion, to be repaid by the District in connection with the District as soon as practicable from amounts described in the preceding clauses (i), (ii) and (iii), to satisfy its obligations under this Section -38- SDPUB\WDIVEN\339385.! P554 5.13. The Finance Director shall take note of any investment of monies hereunder in excess of the yield on the Bonds, and shall take such actions as are necessary to ensure compliance with this Section 5.13, such as increasing the portion of the Special Tax levy for Administration Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under this Section 5.13. Section 5.14 No Arbitrage. The City shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Section 5.15 Yield of the Bonds. In determining the yield of the Bonds to comply with Section 5.13 and 5.14 hereof, the City will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City, as of the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or Bonds redeemed. Section 5.16 Maintenance of Tax-Exemption. The City shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date.ofissuance of the Bonds. Section 5.17 Continuing Disclosure to Owners. (A) In addition to its obligations under Section 10.7, the City covenants and agrees that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Agreement dated as of December 1, 2006 between the City and the Fiscal Agent (the "Continuing Disclosure Agreement"). Notwithstanding any other provision of this Agreement, failure of the City to comply with the Continuing Disclosure Agreement shall not be considered a breach of the provisions of this Agreement; however, upon the written direction of the owners of at least 25% aggregate principal amount of the Bonds Outstanding, the Fiscal Agent shall, or any Bondowner may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section. The Finance Director shall provide copies of any reports prepared pursuant to the Continuing Disclosure Agreement to any Bondowner upon the written request of a Bondowner, delivered to the Finance Director accompanied by payment by the Person requesting the information of the cost of the City to photocopy and pay any postage or other delivery cost to provide the same, as determined by the Finance Director. (B) The City further agrees, in addition to the foregoing, to provide to any Bondowner upon the written request of such Bondowner delivered to the Finance Director accompanied by payment by such Bondowner of the cost of the City to photocopy and pay any postage or other -39- SDPUBI WDIVEN\339385.1 P555 delivery cost to provide the same, as determined by the Finance Director, the following: an annual report regarding the District which report shall include the amount of Special Taxes levied on each County Assessor's Parcel of real property in the District in the preceding year, the then delinquency status of Special Taxes with respect to each such parcel as known to the Finance Director, and a summary of any deposits to and/or withdrawals from the Special Tax Fund and the Reserve Fund in the prior year. (C) As used in this Section and Section 10.7, where the Bonds are held in book-entry form, the term "Bondowner" shall be deemed to include any Beneficial Owner of Bonds who provides to the Finance Director a written request accompanied by payment of costs to provide information, as described in Section 5.17(A) and (B) and the final paragraph of Section 10.7 countersigned by the relevant DTC participant acting on behalf of such Beneficial Owner or such similar evidence of beneficial ownership reasonably satisfactory to the Finance Director. (D) None of the City and its officers, agents and employees, the Finance Director, the Original Purchaser or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 5.17. Section 5.18 Tender of Bonds. The City covenants that it will not adopt any policy pursuant to Section 53341.1 of the Act permitting tender of Bonds in full payment or partial payment of any Special Taxes unless it first receives a certificate of a Tax Consultant that accepting such tender will not result in the District having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds when due. Section 5.19 No Paritv Bonds. The City will issue no additional bonds on a parity with the Bonds; provided, that nothing contained herein shall limit the issuance of any Special Tax Bonds of the District if (a) the rights and claims of such bonds to the Special Tax Revenues and the funds and accounts established or described in this Agreement are in all respects subordinate to the rights and claims of the Bonds, or (b) after the issuance and delivery of such Special Tax Bonds, none of the Bonds shall be Outstanding. Defeased Bonds, or Bonds in exchange for or in lieu of which other bonds have been delivered, shall not be considered Outstanding. ARTICLE VI INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS, LIABILITY OF THE CITY Section 6.1 Deoosit and Investment of Monevs in Funds. Moneys in the Administrative Expense Fund shall be invested by the Finance Director in Permitted Investments, which will, by their terms, mature as close as practicable to the date the Finance Director estimates the moneys represented by the particular investment will be needed for withdrawal from the Administrative Expense Fund. Except as otherwise specified herein, moneys in the Special Tax Fund, the Bond Fund, the Project Fund, the Reserve Fund and the -40- SDPUBIWDlVENI339385.1 P556 Costs of Issuance Fund shall at the written direction of the District contained in an Officer's Certificate given at least two (2) days prior, be invested and reinvested by the Fiscal Agent in Permitted Investments (including investments with the Fiscal Agent or an affiliate of the Fiscal Agent or investments for which the Fiscal Agent or an affiliate of the Fiscal Agent acts as investment advisor or provides other services so long as the investments are Permitted Investments). Moneys in the Redemption Fund and the Rebate Fund shall, as set forth in an Officer's Certificate, be invested by the Fiscal Agent in Govemment Obligations. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest solely in Permitted Investments described in paragraph 7 of the definition thereof. The Finance Director shall make note of any investment of funds hereunder in excess of the yield on the Bonds, so that appropriate actions can be taken to assure compliance with Section 5.13. The District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent will furnish the District periodic cash transaction statements, which include detail for all investment transactions made by the Fiscal Agent hereunder. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. Any income realized on or losses resulting from investments in any fund or account shall be credited or changed to such fund or account. Whenever in this Agreement any moneys are required to be transferred by the City to the Fiscal Agent, such transfer may be accomplished by transferring a like amount of Permitted Investments. The Fiscal Agent and its affiliates or the Finance Director may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section The Fiscal Agent shall not be required to determine the legality of any investments. Except as otherwise provided in the next sentence, all investments of amounts deposited in any fund or account created by or pursuant to this Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Agreement ofthe Code) at Fair Market Value. Investments in funds or accounts (or portions thereot) that are subject to a yield restriction under the applicable provisions of the Code and (unless valuation is undertaken at least annually) investments in the Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Code). The Fiscal Agent shall not be liable for verification of the application of such sections of the Code. Investments in any and all funds and accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times -41- SDPUBI WDIVEN\339385.1 P557 account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement. Subject to the restrictions set forth herein andlor any written investment instructions received by Fiscal Agent pursuant to this Section 6.1, monies in said funds and accounts may be from time to time invested by the Fiscal Agent in any manner so long as: (I) Monies in the Project Fund shall be invested in obligations which will by their terms mature as close as practicable to the date the District estimates the monies represented by the particular investment will be needed for withdrawal from such Fund; and (2) Monies in the Special Tax Fund, the Bond Fund, the Redemption Fund and the Reserve Fund shall be invested only in obligations which will by their terms either mature or allow for withdrawals at par on such dates so as to ensure the payment of principal and interest on the Bonds as the same become due; provided, however, that except for investment agreements as described in paragraph 11 of the definition of Permitted Investments which permit withdrawal at par, investment of monies on deposit in the Reserve Fund shall have an average aggregate weighted term not greater than five (5) years. The Fiscal Agent or Finance Director, as applicable shall sell at Fair Market Value, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and neither the Fiscal Agent nor the Finance Director shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith. Section 6.2 Liabilitv of Citv. The City shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it on behalf of the District. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The City shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions covenants or agreements of the Fiscal Agent herein or of any of the documents executed by the Fiscal Agent in connection with the Bonds, or as to the existence of a default or event of default thereunder. In the absence of gross negligence or bad faith, the City, including the Finance Director, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the City and conforming to the requirements ofthis Agreement. The City, including the Finance Director, shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. -42- SDPUBIWDIVEN\339385.\ P558 No provision of this Agreement shall require the City to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Special Tax Revenues) in the performance of any of its obligations hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The City and the Finance Director may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel, who may be the City Attorney, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. Neither the City nor the District shall be bound to recognize any Person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and title thereto satisfactory established, if disputed. Whenever in the administration of its duties under this Agreement the City or the Finance Director shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the City, be deemed to be conclusively proved and established by a certificate of the Fiscal Agent, an Independent Financial Consultant, an Appraiser or a Tax Consultant, as appropriate, and such certificate shall be full warranty to the City and the Finance Director for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the City or the Finance Director may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 6.3 Emplovment of Agents bv Citv. In order to perform its duties and obligations hereunder, the City and/or the Finance Director may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities. -43- SDPUBI WDlVEN\339385.1 P559 ARTICLE VII THE FISCAL AGENT Section 7.1 Appointment of Fiscal Agent. Wells Fargo Bank, National Association, is hereby appointed Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section, shall be the successor to such Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. Upon thirty (30) days prior written notice, the City may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7. I, combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Fiscal Agent shall have given to the City written notice of its resignation or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. If, by reason of the judgment of any court, or regulatory agency, the Fiscal Agent is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent hereunder shall be assumed by and vest in the Finance Director ofthe City in -44- SDPUBI WOIVEN\339385.1 P560 trust for the benefit of the Owners. The City covenants for the direct benefit of the Owners that its Finance Director in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and shall assume all of the responsibilities and perform all of the duties of the Fiscal Agent hereunder, in trust for the benefit of the Owners of the Bonds. In such event, the Finance Director may designate a successor Fiscal Agent qualified to act as Fiscal Agent hereunder. Section 7.2 Liabilitv of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. In the absence of bad faith or gross negligence, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement; but in the case of any such certificates or opinions by which any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper Person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Fiscal Agent shall not be liable for any error of judgment made in good faith unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or -45- SDPUBI WDlVEN\339385.! P561 indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Fiscal Agent may become the Owner of the Bonds with the same rights it would have ifit were not the Fiscal Agent. Section 7.3 Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including but not limited to, quarterly statements reporting funds held and transactions by the Fiscal Agent. Section 7.4 Notice to Fiscal Agent. The Fisc~l Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Fiscal Agent shall not be bound to recognize any Person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and title thereto satisfactorily established, if disputed. Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescrib~d) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed. to be conclusively proved and established by an Officer's Certificate, and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 7.5 Compensation; Indemnification. The City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Agreement, but the Fiscal Agent shall not have a lien therefor on any funds at any time held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the City under this Section shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement, but any monetary obligation of the City arising under this Section shall be limited solely to amounts on deposit in the Administrative Expense Fund. -46- SPPUBIWPIVEN\339385.1 P562 ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.1 Amendments Permitted. This Agreement and the rights and obligations of the City and/or District and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.4. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the City of any pledge or lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), or reduce the percentage of Bonds required for the amendment hereof. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. This Agreement and the rights and obligations of the City and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for anyone or more of the following purposes: (A) to add to the covenants and agreements of the District or City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City or District; (B) to make modifications not adversely affecting any Outstanding Bonds of the City or the District in any material respect; (C) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the District or City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights ofthe Owners of the Bonds; and (D) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from gross federal income taxation of interest on the Bonds. Section 8.2 Owners' Meetings. The City on behalf of the District may at any time call a meeting of the Owners. In such event the City is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof, and to fix and adopt rules and regulations for the conduct of said meeting. -47- SDPUBI WDlVEN\339385.1 P563 Section 8.3 Procedure for Amendment with Written Consent of Owners. The City on behalf of the District and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.1, to take effect when and as provided in this Section. A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shail be mailed by first class mail, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided. Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.4) and a notice shall have been mailed as hereinafter in this Section provided each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 10.4. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the marmer hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effectiv.e as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by this Section 8.3 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the District, City and the Owners of all Bonds at the expiration of thirty (30) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such thirty-day period. Section 8.4 DiSQualified Bonds. Bonds owned or held for the account of the District or City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VIII. -48- SDPUBI WDIVEN\339385.1 P564 Section 8.5 Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Agreement of the City, District, and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. Section 8.6 Endorsement or Reolacement of Bonds Issued After Amendments. The City or District may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City or District, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City on behalf of the District may determine that new Bonds, so modified as in the opinion of the City on behalf ofthe District is necessary to conform to such Owner's action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds. Section 8.7 Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds. -49- SDPUBI WDI'IEN\339385.! P565 ARTICLE IX EVENTS OF DEFAULT; REMEDIES Section 9.1 Events of Default. Anyone or more of the following events shall constitute an "event of default": (A) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (B) Default in the due and punctual payment ofthe interest on any Bond when and as the same shall become due and payable; or (C) Default by the City or the District in the observance of any of the agreements, conditions or covenants on its part in this Agreement or in the Bonds contained (other than a payment default referred to in subparagraph (A) and (B) above), and the continuation of such default for a period of 60 days after the City and the District shall have been given notice in writing of such default by the Fiscal Agent or by the Owners of 25% aggregate principal amount of Bonds Outstanding, provided that if within 60 days the City or the District, as applicable, has commenced curing of the default and diligently pursues elimination thereof, such period shall be extended to permit such default to be eliminated. Section 9.2 Remedies of Owners. Following the occurrence of an event of default, any Owner shall have the right for the equal benefit and protection of all Owners similarly situated: (A) By mandamus or other suit or proceeding at law or in equity to enforce his or her rights against the City or the District and any of thy members, officers and employees of the City or the District, and to compel the City or District, as applicable, or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Agreement; (B) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (C) By a suit in equity to require the City or the District, as applicable, and its members, officers and employees to account as the trustee of an express trust. Nothing in this article or in any other provision of this Agreement, or in the Bonds, shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as herein provided, out ofthe Special Tax Revenues pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners -50- SDPUBI WDIVEN\339385.1 P566 to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in this Agreement. A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Act or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the City, the District and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. The Fiscal Agent shall not be obligated to take any action on behalf of the Owners if the City or the District defaults under this Agreement. Section 9.3 Application of Special Tax Revenues and Other Funds After Default. All amounts received by the Fiscal Agent pursuant to any right given or action taken by the Owners under the provisions of this Agreement shall be applied by the Fiscal Agent in the following order upon presentation of the several Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the surrender thereof if fully paid - First, to the payment of the costs and expenses of the Fiscal Agent, including reasonable compensation to its agents, attorneys and counsel; Second, to the payment of the whole amount of interest on and principal of the Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority: (i) to the payment of all installments of interest on the Bonds then due and unpaid, on a pro rata basis in the event that the available amounts are insufficient to pay all such interest in full; (ii) to the payment of all installments of principal of the Bonds then due and payable, on a pro rata basis in the event that the available amounts are insufficient to pay all such principal in full; and -51- SDPUB\WDIVEN\339385.1 P567 (iii) to the payment of interest on overdue installments of principal and interest with respect to the Bonds, on a pro rata basis in the event that the available amounts are insufficient to pay all such interest in full. -52- SDPUBI WDlVENI339385.1 P568 ARTICLE X MISCELLANEOUS Section 10.1 Benefits of AlITeement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any Person other than the City, the District, the Fiscal Agent and the Owners, any right, remedy, claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent. Section 10.2 Successor is Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 10.3 Discharge of AlITeement. The City shall have the option to pay and discharge the entire indebtedness on all or any portion of the Bonds Outstanding in anyone or more of the following ways: (A) by well and truly paying or causing to be paid the principal of, and interest and any premium on, such Bonds Outstanding, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in Sections 4.4 and 4.5 is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or (C) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal Securities in such amount as the City on behalf of the District shall determine as confirmed by an independent certified public accountant will, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in Sections 4.4 and 4.5, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates. If the City shall have taken any of the actions specified in (A), (B) or (C) above, and if such Bonds are to be redeemed prior to the maturitythereof notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in this Agreement and all other obligations of the City under this -53- SDPUBI WDIVEN\339385.! P569 Agreement with respect to such Bonds Outstanding shall cease and terminate. Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the foregoing, the obligation of the City to payor cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, all amounts owing to the Fiscal Agent pursuant to Section 7.5, and otherwise to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, shall continue in any event. Upon compliance by the City with the foregoing with respect to all Bonds Outstanding, any funds held by the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent, which are not required for the purposes of the preceding paragraph, shall be paid over to the City and any Special Taxes thereafter received by the City shall not be remitted to the Fiscal Agent but shall be retained by the City to be used for any purpose permitted under the Act. Section 10.4 Execution of Documents and Proof of Ownership bv Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the Person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books. Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in good faith and in accordance therewith. Section 10.5 Waiver of Personal Liabilitv. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 10.6 Notices to and Demands on Citv and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the City with the Fiscal Agent) as follows: -54- SDPUB\WDIVEN\339385.1 P570 City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, California 91730 Attention: Finance Director Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Fiscal Agent with the City) as follows: Wells Fargo Bank 707 Wilshire Boulevard, lib Floor Los Angeles, California 90071 Attention: Corporate Trust Services Section 10.7 State Reporting Requirements. The following requirements shall apply to the Bonds, in addition to those requirements under Section 5.17: (A) Annual Reoorting. Not later than October 30 of each calendar year, beginning with the October 30 first succeeding the date of the Bonds, and in each calendar year thereafter until the October 30 following the final maturity of the Bonds, the Finance Director shall cause the following information to be supplied to CDIAC and to the other entities specified in Section 5.17(A): (i) the principal amount of the Bonds Outstanding; (ii) the balance in the Reserve Fund; (iii) the balance in the Interest Account of the Bond Fund representing capitalized interest; (iv) the number of parcels in the District which are delinquent in the payment of Special Taxes, the amount of each delinquency, the length of time delinquent and when foreclosure was commenced for each delinquent parcel; (v) the balance in the Project Fund; and (vi) the assessed value of all parcels in the District subject to the levy of the Special Taxes as shown in most recent equalized roll. The annual reporting shall be made using such form or forms as may be prescribed by CDIAC. (B) Other Reporting. If at any time the Fiscal Agent fails to pay principal and interest due on any scheduled payment date for the Bonds, or if funds are withdrawn from the Reserve Fund to pay principal and interest on the Bonds beyond levels set by CDIAC, the Fiscal Agent shall notify the Finance Director of such failure or withdrawal in writing. The Finance Director shall notify CDIAC and the Original Purchaser of such failure or withdrawal within 10 days of such failure or withdrawal. (C) Amendment. The reporting requirements of this Section 10.7 shall be amended from time to time, without action by the District, City or the Fiscal Agent, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) ofthe Act. (D) No Liability. None of the District, City and its officers, agents and employees, the Finance Director or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 10.7. -55- SDPUB\WDIVEN\339385.1 P571 The Finance Director shall provide copies of any of such reports to any Bondowner upon the written request of a Bondowner and payment by the Person requesting the information of the cost of the City to photocopy and pay any postage or other delivery cost to provide the same, as determined by the Finance Director. The term "Bondowner" for purposes of this Section 10.7 shall include any beneficial owner of the Bonds as described in Section 5.17(B). Section 10.8 Partial Invaliditv. If any Section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have adopted this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that anyone or more Sections, paragraphs, sentences, clauses, or phrases of this Agreement may be held illegal, invalid or unenforceable. Section 10.9 Unclaimed Monevs. Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payments of such principal, interest and premium have. become payable, if such moneys was held by the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners shall look only to the City for the payment of the principal of, and interest and any premium on, such Bonds. Section 10.10 Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Section 10.11 Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Act as in effect on the Closing Date, the provision of the Act shall prevail over the conflicting provision of this Agreement. Section 10.12 Conclusive Evidence of Regularitv. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes. Section 10.13 Pavrnent on Business Dav. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be taken pursuant to this Agreement is other than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required and no interest shall accrue for the period after such date. Section 10.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. -56- SDPUB\WDIVEN\339385.1 P572 IN WITNESS WHEREOF, the City caused this Agreement to be executed and the Fiscal Agent has caused this Agreement to be executed. CITY OF RANCHO CDCAMONGA, for and on behalf of City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) By: Title: City Manager WELLS FARGO BANK, NATIONAL ASSOCIATION By: Authorized Officer SDPUB\WDIVEN\339385.1 S-l P573 EXHIBIT A FORM OF BOND No. $ UNITED STATES OF AMERICA STATE OF CALIFORNIA CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) 2006 SPECIAL TAX BOND INTEREST RATE MATURITY DATE September 1, _ BOND DATE ,2007 CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Rancho Cucamonga (the "City") for and on behalf of City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) (the "District"), for value received, hereby promises to pay solely from the Special Taxes (as hereinafter defined) to be collected in the District or amounts in the funds and accounts held under the Agreement (as hereinafter defined), to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from the Bond Date set forth above, or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1,2007, at the interest rate set forth above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to the registered owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office (as defined in the Agreement referred to below) of Wells Fargo Bank, National Association (the "Fiscal Agent). Interest on this Bond shall be paid by check of the Fiscal Agent mailed on each interest payment date to the registered owner hereof as of the close of business on the 15th day of the month preceding the month in which the interest payment date occurs (the "Record Date") at Exhibit A Page 1 P574 such registered owner's address as it appears on the registration books maintained by the Fiscal Agent, or (i) if the Bonds are in book-entry-only form, or (ii) otherwise upon written request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to the depository for the Bonds or to an account in the United States designated by such registered owner in such written request, respectively. This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $3,100,000 designated "City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds" (the "Bonds"). The issuance of the Bonds was approved by the qualified electors of the CFD on October 18, 2006, pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311, et seq., of the California Government Code (the "Mello-Roos Act") for the purpose of financing the acquisition or construction of certain public facilities within the District, and the financing of certain incidental expenses. The creation of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City on December 6, 2006 (the "Resolution"), and the Fiscal Agent Agreement, dated as of December 1, 2006, between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. The Resolution is adopted and the Agreement is entered into under and this Bond is issued under, and all are to be construed in accordance with, the laws of the State of California. Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on the Bonds are payable solely from the annual special tax authorized under the Mello- Roos Act to be collected within the District (the "Special Taxes") and certain funds held under the Agreement. Interest on this Bond shall be payable from the interest payment date next preceding the date of authentication hereof, unless (i) it is authorized on an interest payment date, in which event it shall bear interest for such interest payment date, or (ii) such date of authentication is after a Record Date but on or prior to an interest payment date, in which event interest will be payable from such interest payment date, or (iii) such date of authentication is prior to the first Record Date, in which event interest will be payable from the Bond Date set forth above; provided however, that if at the time of authentication of this Bond, interest is in default hereon, this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment hereon. Any tax for the payment hereof shall be limited to the Special Taxes, except to the extent that provision for payment has been made by the City of Rancho Cucamonga, as may be permitted by law. The Bonds do not constitute obligations of the City of Rancho Cucamonga for which said City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. The Bonds are subject to optional redemption prior to their stated maturity on any Interest Payment Date, as a whole or in part, at the following redemption prices (expressed as Exhibit A Page 2 P575 percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date ofredemption: Redemption Date Redemption Price March 1, 2007 through March 1, 20_ September 1,20_ and March 1, 20_ September 1, 20_ and March 1,20_ September 1, 20_ and thereafter 10_% 10 % 10% 100% The Bonds shall be subject to redemption on any Interest Payment Date, prior to maturity, as a whole or in part on a pro rata basis among maturities from amounts deposited to the Redemption Fund representing Special Tax Prepayments. An Authorized Representative shall deliver written instructions to the Fiscal Agent not less than 60 days prior to the redemption date directing the Fiscal Agent to utilize the Special Tax Revenues transferred to the Redemption Fund and the Interest Account of the Bond Fund pursuant to the Fiscal Agent Agreement. Such mandatory redemption of the Bonds shall be at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price March 1, 2007 through March I, 20_ September 1, 20_ and March 1, 20_ September 1, 20_ and March 1,20_ September 1, 20_ and thereafter 10_% 10_% 10_% 100% The Bonds maturing on September 1, 20_ are subject to mandatory sinking fund payment redemption in part on September 1, 20_, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1) Sinking Fund Payments Exhibit A Page 3 P576 The Bonds maturing on September 1, 20_ are subject to mandatory sinking fund payment redemption in part on September 1, 20_, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1) Sinking Fund Payments For any redemption of any of the Bonds, notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner, to the extent and subject to the provisions of the Agreement. In the event of a redemption of less than all of the Bonds, the Bonds shall be redeemed in inverse order of maturity and by lot within a maturity. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon.. No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such Owner's order. The Fiscal Agent shall require the registered owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption, (ii) with respect to a Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the succeeding Interest Payment Date. The Agreement and the rights and obligations of the City thereunder may be modified or amended as set forth therein. Exhibit A Page 4 P577 The Bonds are not general obligations of the City, but are limited obligations payable solely from the revenues and funds pledged therefor under the Fiscal Agent Agreement. Neither the faith and credit of the City or the State of California or any political subdivision thereof is pledged to the payment of the Bonds. This Bond shall not become valid or obligatory for any purpose until the certificate of a authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent. Unless this certificate is presented by an authorized representative of The Depository Trust Company to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an in.terest herein. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond does not exceed any debt limit prescribed by the laws or Constitution of the State of California. Exhibit A Page 5 P578 IN WITNESS WHEREOF, City of Rancho Cucamonga has caused this Bond to be dated the Bond Date set forth above, to be signed by the facsimile signature of its Mayor and countersigned by the facsimile signature of its City Clerk. CITY OF RANCHO CUCAMONGA Mayor ATTEST City Clerk Exhibit A Page 6 P579 FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the Resolution and in the Agreement which has been authenticated on Fiscal Agent By: Authorized Officer Exhibit A Page 7 P580 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within-registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney, to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises. . Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever Exhibit A Page 8 P581 EXHIBIT B FORM OF REQUEST FOR DISBURSEMENT - OFFICER'S CERTIFICATE with reference to City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds Date: To Wells Fargo Bank, National Association: This Officer's Certificate is issued to you pursuant to the Fiscal Agent Agreemenfdated as of December I, 2006, by and between the City of Rancho Cucamonga and you, as fiscal agent, with respect to the above-referenced issue (the "Fiscal Agent Agreement"). Except where the context requires otherwise, all capitalized terms shall have the meanings ascribed to them in the Fiscal Agent Agreement. Pursuant to Section 4.2(C)(insert applicable subjection) of the Fiscal Agent Agreement, you are instructed to disburse $ from the [insert applicable account) of the Project Fund. This Disbursement shall be made to: purpose of this disbursement is: the disbursement is a proper expenditure from the account show above. . The , and The undersigned certifies that no portion ofthe amount being requested to be disbursed has been set forth in any prior certificate requesting disbursement. CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) By: Authorized Officer Exhibit B Page I P582 BOND PURCHASE AGREEMENT City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds January _, 2007 City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) c/o City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Ladies and Gentlemen: Stone & Youngberg LLC (the "Underwriter") offers to enter into this Bond Purchase Agreement (this "Purchase Agreement") with the City of Rancho Cucamonga (the "City"), for itself and on behalf of the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) (the "District") which will be binding upon the City and the Underwriter upon the acceptance hereof by the City. Upon your acceptance of this offer, this Purchase Agreement will be binding upon the City and the Underwriter. This offer is made subject to its acceptance by the City by execution of this Purchase Agreement and its delivery to the Underwriter on or before 5:00 p.m., California time, on the date hereof. Terms not otherwise defined herein shall have the same meanings as set forth in the Fiscal Agent Agreement described below. Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the City for offering to the public, and the City, for itself and on behalf of the District, hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2006 Special Tax Bonds (the "Bonds"). The purchase price for the Bonds is $ (representing the aggregate principal amount of the Bonds of $ less an underwriter's discount of $ and an original issue discount of $ ). The Bonds will mature on the dates and in the amounts, and bear interest at the rates, and be subject to mandatory redemption as set forth in Appendix A attached hereto. Section 2. Description of the Bonds. The Bonds will be issued pursuant to the following: . the Mello-Roos Community Facilities Act of 1982 (constituting Sections 533 II et seq. ofthe California Government Code) (the "Act"), . a resolution adopted on December _, 2006 (the "Resolution oflssuance") by the City Council of the City, acting as the legislative body of the District, and . a Fiscal Agent Agreement dated as of January I, 2007 (the "Fiscal Agent Agreement"), by and between the City and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent"). The Bonds will mature on the dates and in the principal amounts, and will bear interest at the rates, as set forth in Appendix A hereto, and will be as described in the Fiscal Agent Agreement and the RVPUB\KSNOW\722329.1 I P583 Official Statement dated the date hereof relating to the Bonds (together with all appendices, amendments and supplements thereto, the "Official Statement"). The City shall apply the proceeds of the Bonds to finance the purchase of the Facilities described in the Official Statement. Section 3. Public Offering. The Underwriter agrees to make a bona fide public offering or' all the Bonds initially at the public offering prices (or yields) set forth on the cover of the Official Statement. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on the cover of the Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. Section 4. Official Statement; Continuing Disclosnre. The City has delivered or caused to be delivered to the Underwriter prior to the execution of this Purchase Agreement or the first offering of the Bonds, whichever first occurs, copies of the Preliminary Official Statement. Such Preliminary Official Statement is the official statement deemed final by the City for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") (except for the omission certain information as permitted by the Rule) and approved for distribution by resolution of the City. The City shall have executed and delivered to the Underwriter a certification to such effect in the form attached as Appendix B. Within 7 business days after the date of this Purchase Agreement, and in sufficient time to accompany any confirmation that requests payment from a customer, the City shall deliver to the Underwriter a final Official Statement, executed on behalf of the City by an authorized representative of the City and dated the date hereof, which shall include information permitted to be omitted by paragraph (b)( I) of the Rule and with such other amendments or supplements as shall have been approved by the City and the Underwriter. The City, for itself and on behalf of the District, will undertake, pursuant to the Fiscal Agent Agreement and a Continuing Disclosure Agreement (the "Continuing Disclosure Agreement"), to provide certain annual financial information and notices of the occurrence of certain events, if material. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. Section 5. The Closing. At 8:00 a.m., California time, on January _, 2007, or at such. other time or on such earlier or later business day as are mutually agreed upon by the City and the Underwriter, the City will deliver (i) the Bonds in definitive form to the Underwriter at The Depository Trust Company in New York, New York, or such other location as may be specified by the Underwriter, with CUSIP identification numbers printed thereon, in fully registered form and registered in the name of Cede & Co., and (ii) the closing documents hereinafter mentioned at the offices of Best Best & Krieger LLP, San Diego, California or another place to be mutually agreed upon by the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section I hereof by federal funds wire payable to the order of the Fiscal Agent on behalf of the City. This payment and delivery, together with the delivery of the aforementioned documents, is herein called the "Closing." The Bonds will be delivered in such denominations and deposited in the account or accounts specified by the Underwriter pursuant to written notice not later than five business days prior to Closing. The Bonds will be made available to The Depository Trust Company for inspection not less than 24 hours prior to the Closing. Section 6. Representations, Warranties and Covenants. The City, for itself and on behalf of the District represents, warrants and covenants to the Underwriter that: RVPUBlKSNOW\722329.1 2 P584 (a) Due Organization, Existence and Authority. The City, is a duly organized municipal corporation and existing under the laws of the State of California, with full right, power and authority, on behalf of itself and the District, to execute, deliver and perform its obligations under this Purchase Agreement, the Fiscal Agent Agreement and the Continuing Disclosure Agreement (together, the "City Documents") and to issue the Bonds and otherwise carry out and consummate the transactions contemplated by the City Documents and the Official Statement. (b) Due Authorization and Approval. By all necessary official action, the City Council, as legislative body of the District, has: (i) held a public hearing and adopted resolutions (collectively with the Resolution ofIssuance the "City Resolutions") forming the District, authorizing the levy of the Special Taxes and the incurrence of bonded indebtedness by the District; (ii) called, held and conducted an election within the District to approve the levy of the Special Taxes on parcels of property within the District and the issuance of the Bonds; (iii) adopted the Resolution of Issuance and approved and authorized the execution and delivery of the Bonds, the Fiscal Agent Agreement, this Purchase Agreement, the Official Statement and the Continuing Disclosure Agreement (as hereinafter defined); and (iv) authorized and approved the performance by the City and the District of their obligations contained in, and the taking of any and all action on their part as may be necessary to carry out, give effect to and consummate the transactions on the part of the City and/or the District contemplated by each of said documents; and at the Closing Date, the Bonds, the Resolution of Issuance, the Fiscal Agent Agreement, this Purchase Agreement, the Continuing Disclosure Agreement and any other applicable documents will constitute legal, valid and binding obligations of the District, enforceable against the District in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer and other laws affecting the enforcement of creditors' rights generally and to the application of equitable principles and the exercise of judicial discretion in appropriate cases. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. (c) Official Statement Accurate and Complete. The Preliminary Official Statement was as of its date, and the final Official Statement is, and at all times subsequent to the date of the final Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement and the final Official Statement contain, and up to and including the Closing will contain, no misstatement of any material fact and do not, and up to and including the Closing will not, omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading. (d) Underwriter's Consent to Amendments and Supplements to Official Statement. The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any RVPUBIKSNOW\722329.1 3 P585 governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution ofthe Bonds. If, at any time prior to the earlier of (i) receipt of notice from the Underwriter that the Official Statement is no longer required to be delivered under Rule 15c2-12 or (ii) the Closing Date (as described in Section 5 above), any event known to the officers of the City participating in the issuance of the Bonds occurs with respect to the District or the City as a result of which the final Official Statement as then amended or supplemented might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the District shall promptly notify the Underwriter in writing of such event. Any information supplied by the City for inclusion in any amendments or supplements to the final Official Statement will not contain any untrue or misleading statement of a material fact relating to the District or the City or omit to state any material fact relating to the District or the City necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (e) No Breach or Default. As of the time of acceptance hereof and as ofthe time of the Closing, except as otherwise disclosed in the Official Statement, the District and the City are not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State of California or the United States, or any applicable judgment or decree or any fiscal agent agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the District or the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument. As of the time of acceptance hereof and as of the time of the Closing, except as disclosed in the Official Statement, the authorization, execution and delivery of the City Documents and compliance with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State of California or the United States, or any applicable judgment, decree, license, permit, fiscal agent agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the City (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. The City, acting as the administrator for and on behalf of certain other community facilities districts, has on two occasions not met the continuing disclosure requirements on a timely basis. In each instance the City failed to timely file reports on behalf of these community facilities districts, due on February I, 2001 for the Community Facilities District No. 2000-01 (South Etiwanda) Special Tax Bonds, Series 2000 and for the Community Facilities District No. 2000-02 (Rancho Cucamonga Corporate Park) Special Tax bonds, Series 2001, Such reports were subsequently filed on June 12,2001. It should be noted that these bond issues closed in December 2000 and the information that was contained in the annual reports filed on June 12, 200 I was identical to the information contained in the official statements relating to these bond issues distributed to the purchasers of the Bonds. (f) No Litigation. As of the time of acceptance hereof and the Closing, except as may be disclosed in the Official Statement, no action, suit, proceeding, inquiry'or investigation, at law or in equity, before or by any court, government authority, public board or body, pending or threatened (i) in any way questioning the corporate existence of the District or the City, or the RVPUBIKSNOw\722329,1 4 P586 titles of the officers of the District or the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the. issuance or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or City Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the City or the District and either of their authority to pledge the revenues securing the Bonds; (iii) which may result in any material adverse change relating to the District or the City; or(iv) contesting the completeness or accuracy of the Preliminary Official Statement or the final Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the final Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence. (g) Compliance with Local Goals and Policies. The issuance of the Bonds by the District conforms with the "Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982" as amended and restated by the City on July 21, 1999. (h) Blue Sky Laws. The City and the District shall cooperate with the Underwriter in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City shall not be required to execute a special or general consent to service of process in any jurisdiction in which it is not now so subject or to qualify to do business in any jurisdiction where it is not now so qualified. (i) Neither the District nor the City shall take or omit to take, as appropriate, any action that would cause the interest on the Bonds to be subject to California personal income taxation or affect the exclusion of interest on the Bonds from gross income for federal income tax purposes. Section 7. Closing Conditions. The Underwriter has entered into this Purchase Agreement in reliance upon the representations, warranties and covenants herein and the performance by the City and the District of their obligations hereunder, both as of the date hereof and as of the date of the Closing. The Underwriter's obligations under this Purchase Agreement to purchase and pay for the Bonds are subject to the following additional conditions: (a) Bring-Down Representation. The representations, warranties and covenants of the City contained in this Purchase Agreement must be true, complete and correct at the date hereof and at the time of the Closing, as if made on the date of the Closing. (b) Effectiveness of City Documents, Official Statement and City Resolutions. At the time of the Closing: (i) the City Documents must be in full force and effect, and neither the City Documents nor the Official Statement may have been amended, modified or supplemented except with the written consent of the Underwriter, and (ii) there shall be in full force and effect such resolutions as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated by this Purchase Agreement, the Official Statement and the City Documents. RVPUBIKSNOW\722329.1 5 P587 (c) Closing Documents. At or prior to the Closing, the Underwriter shall receive each of the documents identified in Section 8. Section 8. Closing Documents. In addition to the other conditions to the Underwriter's obligations under this Purchase Agreement to purchase and pay for the Bonds, at or before the Closing the Underwriter shall receive each of the following documents, provided that the actual payment for the Bonds by the Underwriter and the acceptance of delivery thereof shall be conclusive evidence that the requirements of this Section 8 shall have been satisfied or waived by the Underwriter. (a) Bond Opinion and Reliance Letter. An approving opinion of Bond Counsel dated the date of the Closing and substantially in the form appended to the Official Statement, together with a letter from such counsel, dated the date of the Closing and addressed to the Underwriter, to the effect that the foregoing opinion addressed to the City may be relied upon by the Underwriter to the same extent as if such opinion were addressed to the Underwriter. (b) Supplemental Opinion. A supplemental opinion or opinions of Bond Counsel addressed to the Underwriter, in form and substance acceptable to the Underwriter, and dated the date of the Closing substantially to the following effect: (i) The City Documents, the Bonds and the Official Statement have been duly authorized, executed and delivered by the City, and the City Documents and the Bonds constitute the valid, legal and binding agreements of the District, enforceable in accordance with their respective terms. (ii) The statements contained in the Official Statement (including the cover page and the Appendices thereto) that purport to summarize certain provisions of the Bonds, the Fiscal Agent Agreement, the City Resolutions and the City Documents, the approving opinion of Bond Counselor federal tax law, are accurate; provided that Bond Counsel need not express any opinion with respect to any financial or statistical information contained in the Official Statement. (iii) The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. (iv) The District is a community facilities district duly organized and validly existing under the laws of the State of California, including the Act. (c) District Counsel Ooinion. An opinion of Richards, Watson & Gershon, counsel to the City, dated the date of the Closing and addressed to the Underwriter, in form and substance acceptable to Bond Counsel substantially to the following effect: (i) The City is a municipal corporation duly organized and existing under the laws ofthe State of California. (ii) The City is duly authorized to approve and execute the City Resolutions and City Documents. (iii) The individuals executing the City Documents and Official Statement on behalf of the City are officers of the City holding the offices set forth after their respective signatures, and are lawfully authorized to execute and deliver such documents on behalf of the City. RVPUBIKSNOW\722329.1 6 P588 (iv) District, and rescinded. The City Resolutions and City Documents have been duly adopted by the are in full force and effect and have not been modified, amended or (v) Without conducting an independent investigation. except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending or threatened against the District challenging the creation, organization or existence of the District, or the validity of the City Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City to enter into or perform its obligations under any of the City Documents, or under which a determination adverse to the City would have a material adverse effect upon the financial condition or the revenues of the District, or which, in any manner, questions the right of the City to pledge the Revenues to the payment of the Bonds. (d) Fiscal Agent Counsel Opinion. The opinion of counsel to the Fiscal Agent, dated the date of the Closing, addressed to the Underwriter, to the effect that: (i) The Fiscal Agent is a national banking association duly organized and validly existing under the laws of the United States of America, having full power to enter into, accept and administer the trust created under the Fiscal Agent Agreement and obligations as Dissemination Agent under the Continuing Disclosure Agreement. (ii) The Fiscal Agent Agreement and Continuing Disclosure Agreement have been duly authorized, executed and delivered by the Fiscal Agent and Dissemination Agent and constitute the legal, valid and binding obligations of the Fiscal Agent and Dissemination Agent enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles, if equitable remedies are sought. (e) Disclosure Counsel Opinion. An opinion of Best Best & Krieger, LLP, a limited liability partnership ("Disclosure Counsel"), dated the Closing Date, and addressed to the City and Underwriter, to the effect that during the course of serving as Disclosure Counsel in connection with the execution and delivery of the Bonds and without having undertaken to determine independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, no information came to the attention of the attorneys in such firm rendering legal services in connection with the issuance of the Bonds that would lead them to believe that the Official Statement (excluding therefrom the financial statements, any financial or statistical data, or forecasts, charts, numbers, estimates, projections, assumptions or expressions of opinion included in the Official Statement, information regarding DTC, and the appendices to the Official Statement as to which no opinion need be expressed), as of the date thereof or the Closing Date, contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (f) District l5c2-12 Certificate. A certificate of the City, dated the date of the Preliminary Official Statement, signed by the City for itself and on behalf of the District by a duly authorized officer of the City, in the form attached as Appendix B or such other form approved by the Underwriter. RVPUBIKSNOW\722329.1 7 P5S9 (g) District Closing Certificate. A certificate of the City, dated the date of the Closing, signed by the City and for itself and on behalf of the District by a duly authorized officer of the City, in the fonn attached as Appendix C or such other fonn approved by the Underwriter. (h) Fiscal Agent's Certificate. A certificate of the Fiscal Agent, dated the date of the Closing, signed on behalf of the Fiscal Agent by a duly authorized officer of the Fiscal Agent, in the fonn attached as Appendix D or such other fonn approved by the Underwriter. (i) Fiscal Agent Resolution and Incumbencv Certificate. A copy of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers of the Fiscal Agent, which resolution authorizes the authentication and delivery of the Bonds and the execution and delivery of the Fiscal Agent Agreement and Continuing Disclosure Agreement, along with an incumbency certificate with respect to the officers of the Fiscal Agent. (j) Developers' IOb-5 Certificates. Certificates from William Lyon Homes, Inc., a California corporation (the "Developer") and Lewis Investment, LLC ("Lewis"); dated the date of the Preliminary Official Statement, signed on behalf of such Developer or Lewis, as applicable, by duly authorized officers of the Developer and Lewis, as applicable, in the fonn attached as Appendix E or such other fonn approved by the Underwriter. (k) Developers' Closing Certificate. A Certificate from the Developer, dated the date of the Closing, signed on behalf of such Developer by duly authorized officers of such Developer in the fonn attached as Appendix F or such other fonn approved by the Underwriter. (I) No-Litigation Letter of Developer. A No-Litigation Letter of the Developer, dated the date of the Closing, signed on behalf of such Developer by a Senior Vice President of such Developer, in fonn and substance satisfactory to the Underwriter and the District. (m) Developers' Counsel. One or more opinions ofin-house or special counsel to the Developer, dated the date of the Closing, addressed to the Underwriter and the District, to the effect that: (i) The Developer has been incorporated and is validly existing in good standing under the laws of the State of the State of California. (ii) The Developer Continuing Disclosure Agreement has been duly and validly authorized, executed and delivered by the Developer, and, assuming due authorization and execution by the other parties thereto, constitutes a legally valid and binding obligation of the Developer, enforceable against the Developer in accordance with its tenns, subject to certain equitable, legal or statutory principles affecting the enforcement of contractual rights generally, regardless of whether such enforcement is considered in a proceeding in equity or at law, including, without limitation, concepts of notice, materiality, impainnent of security, reasonableness, good faith and fair dealing, jurisdiction, service of process, venue and applicable statues of limitation and judicial discretion or statutory limitations with respect to the availability of equitable remedies or defenses, the calculation of damages, and the entitlement to attorneys' fees and other fees and costs. (iii) In the course of acting as special counsel to the Developer in connection with the preparation of the final Official Statement, he reviewed those sections of the Official Statement relating to the Developer and its proposed development plans in the District, and participated in conferences and telephone conversations with officers and other representatives of the Developer, during which conferences and conversations the RVPUBIKSNOW\722329.1 8 P590 contents of the Official Statement and related matters were discussed. Based solely on our knowledge and written statements of the Developer, we advise you that no information came to the attention of the attorney in our firm rendering services as special counsel to the Developer that caused us to believe that, as of the date thereof and the date hereof, the statements contained in the final Official Statement relating to the Developer, its proposed development of property in the District, its property ownership in the District and its contractual arrangements (except that no opinion or belief is expressed as to (i) any financial statements and other financial, statistical, economic, or engineering data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, or (ii) any information about valuation, appraisals, markets absorption, archaeological or environmental matters) under the sections of the Official Statement entitled "INTRODUCTORY STATEMENT - The District and the Development," "THE DEVELOPER AND THE PROPOSED DEVELOPMENT - General," "-The Developer and the Housing Project," and "-The Proposed Housing Development," and "CONCLUDING INFORMATION - Continuing Disclosure," (only as to the last paragraph), contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (n) Opinion of Counsel to Lewis. An opinion of counsel to Lewis dated the date of the Closing addressed to the Underwriter and the District, in form and substance similar to the opinion of counsel to the Developer in (m) above. (0) Special Tax Consultant's Certificate. A certificate of the Special Tax Consultant, dated the date of the Closing, in the form attached as Appendix G or such other form approved by the Underwriter, relating to the Official Statement. (p) Market AbSOrPtion Consultant's Certificate. A certificate of the Market Absorption Consultant dated the date of the Closing in the form attached as Appendix H or such other form approved by the Underwriter, relating to the Official Statement. (q) Appraiser's Certificate. A certificate of the Appraiser, dated the date of the Closing, in the form attached as Appendix I or such other form approved by the Underwriter, relating to the Official Statement. (r) Original Executed Documents. An original executed copy of the Official Statement, the City Resolutions and each of the City Documents. (s) Developer Continuing Disclosure Agreement. An original executed copy ofthe Developer Continuing Disclosure Agreement. (t) Additional Documents. Such additional certificates, instruments and other documents as Bond Counsel, Disclosure Counsel, the District or the Underwriter may reasonably deem necessary. If the City is unable to satisfY the conditions contained in this Purchase Agreement, or if the obligations of the Underwriter are terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the District shall be under further obligation hereunder, except as further set forth in Section 10. Section 9. Termination Events. The Underwriter may terminate this Purchase Agreement, without liability, by notification to the City if at any time between the date hereof and prior to the Closing: RVPUBIKSNOW\722329.1 9 P591 (a) any event occurs which causes any statement contained in the Official Statement to be materially misleading or results in a failure of the Official Statement to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading; (b) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any Federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority materially adversely affecting the federal or State tax status of the District, or the interest on bonds or notes or obligations of the general character of the Bonds; (c) any legislation, ordinance, rule or regulation is introduced in, or enacted by any governmental body, department or authority of the State, or a decision by any court of competent jurisdiction within the State or any court of the United States is rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; (d) legislation is enacted by the Congress of the United States, or a decision by a court of the United States is rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental district having jurisdiction of the subject matter is issued or made to the effect that the issuance, offering . or sale of obligations of the general character ofthe Bonds, orthe issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Fiscal Agent Agreement needs to be qualified under the Trust Fiscal Agent Agreement Act of 1939, as amended and as then in effect; (e) additional material restrictions not in force as of the date hereof are imposed upon trading in securities generally by any governmental authority or by any national securities exchange which restrictions materially adversely affect the Underwriter's ability to trade the Bonds; (f) a general banking moratorium is established by federal or California authorities; (g) the United States becomes engaged in hostilities that resulted in a declaration of war or a national emergency or any other outbreak of hostilities or a national or international calamity or crisis occurs, or any escalation of existing hostilities, calamity or crisis occurs, financial or otherwise, the effect of which on the financial markets of the United States being RVPUBlKSNOW\722329.1 10 P592 such as, in the reasonable opinion of the Underwriter, would affect materially and adversely the ability of the Underwriter to market the Bonds; (h) any action, suit or proceeding described in Section 6(f) is commenced with respect to either the District or the City which, in the judgment of the Underwriter, materially adversely affects the market price of the Bonds; or (i) a general suspension of trading on the New York Stock Exchange is in force. Section 10. Expenses. The Underwriter has no obligation to pay, and the City shall payor cause to be paid, the expenses incident to the performance of the obligations of the City under this Purchase Agreement, including but not limited to (a) the costs of the preparation and printing, or other reproduction (for distribution on or prior to the date hereof) of the City Documents and the cost of preparing, printing, issuing and delivering the definitive Bonds; (b) the fees and disbursements of any counsel, financial advisors, appraisers, market consultants, accountants or other experts or consultants retained by the District and the City; (c) the fees and disbursements of Bond Counsel and Disclosure Counsel; and (d) the cost of printing of the Preliminary Official Statement and any supplements and amendments thereto and the cost of printing ofthe Official Statement, including the requisite number of copies thereoffor distribution by the Underwriter. The Underwriter shall pay, and the District has no obligation to pay, all expenses incurred by it in connection with the public offering and distribution of the Bonds, including but not limited to (a) reporting fees chargeable by the California Debt and Investment Advisory Commission; (b) the fee of Underwriter Counsel's; and (c) CUSIP Service Bureau fees. Section 11. Notice. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the address set forth above. Any ilOtice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to: Stone & Youngberg LLC, One Ferry Building, San Francisco, CA 94111, Attention: Mr. Jim Cervantes. Section 12. Entire Agreement. This Purchase Agreement, when accepted by the City, constitutes the entire agreement between the City and the Underwriter and is made solely for the benefit of the City and the Underwriter (including the successors or assigns of any Underwriter). No other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. All the City's representations, warranties and agreements in this Purchase Agreement shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter. Section 13. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 14. Severability. In case anyone or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. Section 15. Governing Law. The validity, interpretation and performance of this Purchase Agreement shall be governed by the Bond Laws of the State of California. R VPUBIKSNOw\ 722329.1 11 P593 Section 16. No Assignment. The rights and obligations created by this Purchase Agreement shall not be subject to assignment by the Underwriter or the District without the prior written consent of the other parties hereto. Accepted as of the date first stated above: CITY OF RANCHO CUCAMONGA, for itself and on behalf of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) By: City Manager R VPUBIKSNOWI 722329.1 STONE & YOUNGBERG LLC, as Underwriter By: Managing Director 12 Principal Payment Date (September I) RVPUB\KSNOWl722329.! Principal Amount P594 APPENDIX A Maturity Schedule of Bonds Interest Rate Yield Price A-I P595 APPENDIX B CITY RULE 15c2-12 CERTIFICATE The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of the City of Rancho Cucamonga (the "City"), the city council of which is the legislative body of the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) (the "District"), and as such is duly authorized to execute and deliver this Certificate on behalf of the City in connection with the issuance of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the District as follows: (i) This Certificate is delivered in order to enable the underwriter of the Bonds to comply with Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"); (ii) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement (the "Preliminary Official Statement"); (iii) As used herein, "Permitted Omissions" shall mean the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all with respect to the Bonds; and (iv) The Preliminary Official Statement is, except for the Permitted Omissions, deemed final within the meaning of the Rule. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: December _' 2006 CITY OF RANCHO CUCAMONGA, for itself and on behalf of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) By: City Manager RVPUBIKSNOWlJ22329.! B-1 P596 APPENDIX C CITY CLOSING CERTIFICATE The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of the City of Rancho Cucamonga (the "City"), the city council of which is the legislative body of the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) (the "District"), and as such is duly authorized to execute and deliver this Certificate on behalf of the City and District in connection with the issuance of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf ofthe City and District as follows: (i) The representations, warranties and covenants of the District contained in the Bond Purchase Agreement by and between the City and Stone & Youngberg LLC, dated December _, 2006 (the "Purchase Agreement") are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing and the District has complied with all of the terms and conditions of the Purchase Agreement required to be complied. with by the District or the City at or prior to the date of the Closing; (ii) No event affecting the District or the City has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (iii) Except as otherwise disclosed in the Official Statement and to the best knowledge of such signing officer without conducting an independent investigation, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending or threatened against the District or the City challenging the creation, organization or existence of the City or the District, or the validity of the City Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the City Documents or contesting the authority of the City or the District to enter into or perform its obligations under any ofthe City Documents, or under which a determination adverse to the District or the City would have a material adverse effect upon the financial condition or the revenues of the District, or which, in any manner, questions the right of the District to pledge the Revenues to the payment of the Bonds. Capitalized terms not defined herein shall have the same meaning as is set forth in the Purchase Agreement. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _, 2007 CITY OF RANCHO CUCAMONGA, for itself and on behalf of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) By: City Manager RVPUBIKSNOw\722329. J C-l P59? APPENDIX D FISCAL AGENT CERTIFICATE The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of Wells Fargo Bank, National Association, a national banking association (the "Fiscal Agent"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Fiscal Agent in connection with the issuance by the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Fiscal Agent as follows: (i) The Fiscal Agent is duly organized and existing as a national banking association in good standing under the laws of the United States of America, having the full power and authority to enter into and perform its duties under the Fiscal Agent Agreement and Continuing Disclosure Agreement (the "Fiscal Agent Documents"); (ii) The Fiscal Agent is duly authorized to enter into the Fiscal Agent Documents; and (iii) . To its best knowledge after due inquiry, there is no action, suit, proceeding or investigation, at law or in equity, before or by any court or governmental district, public board or body pending against the Fiscal Agent or threatened against the Fiscal Agent which, in the reasonable judgment of the Fiscal Agent, would affect the existence of the Fiscal Agent, contests or affects the validity or enforceability of the Fiscal Agent Documents, or contests the powers of the Fiscal Agent or its authority to enter into and perform its obligations under the Fiscal Agent Documents. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _, 2007 WELLS FARGO BANK, NATIONAL ASSOCIATION By: Authorized Officer RVPUBIKSNOWI722329.1 D-l P598 APPENDIX E IOb-5 CERTIFICATE OF DEVELOPER William Lyon Homes, Inc. (the "Developer"), hereby certifies that: I. The Developer is the developer of certain land ("Land), in City of Rancho Cucamonga Community Facilities District No. 2006-01 (Vintner's Grove) (the "District"), as described in the Preliminary Official Statement of the District dated December _, 2006 (the "Preliminary Official Statement") relating to the above-referenced B?nds. 2. Any and all information, as updated and amended from time to time prior to the date hereof, submitted by the Developer to the District and its counsel in connection with the preparation of the Preliminary Official Statement was, to the Actual Knowledge of the Developer, true and correct in all material respects when given and, as it may have been updated or amended or as included in the Preliminary Official Statement, remains true and correct in all material respects as of the date hereof. 3. Statements relating to the Developer, its proposed development of property in the District, its property ownership in the District and its contractual arrangements contained in the sections of Preliminary Official Statement entitled "INTRODUCTORY STATEMENT - The District and the Development," "THE DEVELOPER AND THE PROPOSED DEVELOPMENT - General," "-The Developer and the Housing Project," and "-The Proposed Hosing Development," and "CONCLUDING INFORMA nON - Continuing Disclosure," (only as to the last paragraph) do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 4. Except as disclosed in the Preliminary Official Statement, the Developer has not entered into a contract to sell, nor is it in the process of selling, any portion of the Land to any person or entity other than as described in the Preliminary Official Statement. For purpose of this Certificate, the term "Actual Knowledge of the Developer" shall mean the knowledge that the undersigned currently have or have obtained from interviews with such officers and responsible employees of the Developer as the undersigned have reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, the undersigned have not conducted any additional inspection or inquiry. The undersigned make the representations in this Certificate for, and on behalf of, the Developer, and as officers of the Developer. Dated: December , 2006 WILLIAM LYON HOMES, INC., a California corporation By: Name: Title: By: Name: Title: RVPUB\KSNOW\722329.! E-I P599 APPENDIX F CLOSING CERTIFICATE OF DEVELOPER The undersigned are authorized officers of William Lyon Homes, Inc., a California corporation (the "Developer"), and as such are duly authorized to execute and deliver this Certificate on behalf of the Developer in connection with the issuance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-01 (Vintner's Grove) (the '.'District") of its 2007 Special Tax Bonds (the "Bonds"), and further hereby certifY and reconfirm on behalf of the Developer as follows: (I) The Developer has duly authorized, by all necessary action, the execution, delivery and due performance of the Developer Continuing Disclosure Agreement. Except as described in the final Official Statement, the Developer has never failed to comply in all material respects with any continuing disclosure undertakings with regard to Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended, to provide annual reports or notices of material events specified in such rule. (2) The Developer Continuing Disclosure Agreement has been duly executed and delivered by the Developer. (3) The information contained in the sections of the final Official Statement entitled "INTRODUCTORY STATEMENT - The District and the Development" "THE DEVELOPER AND THE PROPOSED DEVELOPMENT - General," "-The Developer and the Housing Project," and "-The Proposed Housing Development," and "CONCLUDING INFORMATION _ Continuing Disclosure" (only as to the last paragraph), as they relate to the Developer, its proposed development of property in the District (the "Development"), its property ownership in the District and its contractual arrangements, is true and correct in all material respects and does not contain any untrue or incorrect statement of a material fact and does not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (4) The Developer has full power and authority to own its property (including, without limitation, the Development) and to carry on its business as presently conducted and as described in the final Official Statement. (5) There are no pending (based on proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Developer, threatened legal or administrative proceedings against the Developer or to which property of the Developer is subject, which if decided adversely to the Developer could materially and adversely affect the transactions contemplated by the final Official Statement or which could materially and adversely affect the validity or enforceability of the Bonds, the Issuance Resolution, the Fiscal Agent Agreement, the Developer Continuing Disclosure Agreement or the Bond Purchase Agreement dated December -' 2006, between the City and Stone & Youngberg, LLC (the "Purchase Agreement"). (6) Except as disclosed in the final Official Statement, to the Actual Knowledge of the Developer, no event has occurred since the date of the Preliminary Official Statement which would cause statements relating to the Developer, its proposed development of property in the District, its property ownership in the District and its contractual arrangements under the captions "INTRODUCTORY STATEMENT - The District and the Development," "THE DEVELOPER AND THE PROPOSED DEVELOPMENT - General," "-The Developer and the Housing Project," and "-The Proposed Housing Development," and "CONCLUDING INFORMATION _ Continuing Disclosure" (only as to the last paragraph) to contain any untrue or incorrect RVPUB\KSNOW\722329.1 F-I P600 statement of material fact necessary in order to make the statements made therein in light of the circumstances under which they are made, not misleading. (7) The Developer is solvent and no proceedings are pending (based on property service of process having been accomplished) or, to the Actual Knowledge of the Developer threatened against the Developer may be adjudicated as bankrupt, or become the debtor in a bankruptcy proceeding, or discharged from any or all of its debts or obligations or granted an extension of time to pay its debts or a reorganization or readjustment of its debts. (8) To the Actual Knowledge of the Developer, the Developer has not been delinquent in the payment of special taxes or assessments with respect to property within an assessment or community facilities district that was not cured within the fiscal year in which the special tax or assessment was levied within the past five years. (9) Except as disclosed in the final Official Statement, the Developer has not submitted an application for, nor received actual notice of, (i) the formation or authorization of any assessment district or community facilities district which would include any portion of the land within the District, or (ii) the authorization or issuance of any debt secured by a special tax to be levied on any portion ofthe land within the District, other than the Special Tax. Capitalized terms not defined herein shall have the same meaning as is set forth in the Purchase Agreement. For purposes of this Certificate, the term "Actual Knowledge of the Developer" shall mean the knowledge that the undersigned currently have or have obtained from interviews with such officers and responsible employees of the Developer as the undersigned have reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge ofthe matters set forth herein. Other than as set forth in the immediately preceding sentence, the undersigned have not conducted any additional inspection or inquiry. The undersigned make the representations in this Certificate for, and on behalf of, the Developer, and as officers of the Developer. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _' 2007 WILLIAM LYON HOMES, INe. By: Name: Title: By; Name: Title; RVPUB\KSNOW\722329.1 F-2 P601 APPENDIX G CERTIFICATE OF SPECIAL TAX CONSULTANT The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of David Taussig & Associates (the "Special Tax Consultant"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Special Tax Consultant in connection with the is.suance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-02 (Amador on Route 66) (the "District") of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Special Tax Consultant as follows: (i) Based upon the Special Tax Consultant's review of the Rate and Method of Apportionment of the Special Tax (the "Rate and Method") set forth in Appendix B to the Official Statement, the Special Tax Consultant hereby certifies that the Special Tax, if levied in the maximum amounts permitted pursuant to the Special Tax formula set forth in the Rate and Method, would be levied in an amount equal to at least 110% of the gross annual debt service on the Bonds, provided that the annual debt service figures on the attached debt service schedule, which were relied upon by Special Tax Consultant, are substantially true and correct; (ii) Although the Special Tax, if levied in the maximum amounts under the Special Tax formula set forth in the Rate and Method, would be levied in an amount equal to at least 110% of the gross annual debt service payable with respect to the Bonds each year, no representation is made herein as to actual amounts that will be collected in future years; and (iii) All information provided by or related to materials provided by the Special Tax Consultant in the Official Statement, including but not limited to information regarding Rate and Method, are true and correct as ofthe date of the Official Statement and as of the date hereof. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _, 2007 DAVID TAUSSIG & ASSOCIATES By: Its: R VPUBlKSNOW\722329.1 G-I R VPUBIKSNOWl 722329.1 P602 DEBT SERVICE SCHEDULE Period Ending !Seotember ]) Special Tax Bonds G-2 Aggregate Debt Service P603 APPENDIX H CERTIFICATE OF MARKET ABSORPTION CONSULTANT The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of Empire Economics, Inc. (the "Market Absorption Consultant"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Market Absorption Consultant in connection with the issuance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-02 (Amador on Route 66) (the "District") of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Market Absorption Consultant as follows:, (i) The Market Absorption Consultant prepared a market absorption study relating to the absorption of properties within the District dated September 21, 2006 (the "Market' Absorption Study"). The Market Absorption Study is described and summarized in the Preliminary Official Statement dated (the "Preliminary Official Statement") and the Official Statement dated (the "Official Statement"), including Appendix A thereto, relating to the Bonds; (ii) The Market Absorption Consultant hereby certifies that all information with respect to the Market Absorption Study in the Official Statement is true and correct as of the date of the Official Statement and as of the date hereof; and (iii) The Market Absorption Consultant hereby consents to the use of the Market Absorption Study in connection with the distribution and use of the Preliminary Official Statement and Official Statement. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _, 2007 EMPIRE ECONOMICS, INC. By: Its: RVPUBIKSNOW\722329.1 H-I P604 APPENDIX I CERTIFICATE OF APPRAISER The undersigned hereby certifies and represents that he or she is a duly appointed and acting authorized officer of Bruce W. Hull & Associates, Inc. (the "Appraiser"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Appraiser in connection with the issuance by the City of Rancho Cucamonga of its Community Facilities District No. 2006-02 (Amador on Route 66) (the "District") of its 2006 Special Tax Bonds (the "Bonds"), and further hereby certifies and reconfirms on behalf of the Appraiser as follows: (i) The Appraiser prepared an appraisal of the properties within the District dated November _' 2006 (the "Appraisal"). The Appraisal is described and summarized in the Preliminary Official Statement dated December _, 2006 (the "Preliminary Official Statement") and the Official Statement dated December _, 2006 (the "Official Statement"), including Appendix A thereto, relating to the Bonds; (ii) The Appraiser hereby certifies that all information with respect to the Appraisal in the Official Statement is true and correct as of the date of the Official Statement and as of the date hereof; and (iii) The Appraiser hereby consents to the use of the Appraisal in connection with the distribution and use of the Preliminary Official Statement and Official Statement. IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below. Dated: January _' 2007 BRUCE W. HULL & ASSOCIATES, INe. By: Its: RVPUB\KSNOW\722329.1 I-I "a .S 'C "" IE .~ o .C " " -5 ~ " ~ " " ~ o " ~ ,., a " .c ~ " " ii " o o >. " .c .9 " . ~ a o ''::: li~ ~ ~ O.C a';;; ._ .c .~ ~ ~'o o ~ : ~ " - o ~ - " ~:~ .9 S " ~ ,,!l " '15-5 li.g " 0 .~ ~ - 0 8 ''iil u~ c:.=: " . ~ 6- S ::; "'0 ""ili .g H EL:~:t Oaf ~s .~ ::; ._ 'C -p. J:;z :E ~ ':::c ] " ~~ ~ ~ ~;; .n 6-" " m .~ ::; o . ~L~ ~ 1'i E:g :00 ~ g,g <8 0 ~'5 t;::: ~ 0", .- 0 ~ .- ~~ .~ .5 " 0 "0.52 .~ t) -;0 ~ .i:! " " ".- a~ P605 PRELIMINARY OFFICIAL STATEMENT DATED JANUARY _.2007 NEW ISSUE - BOOK-ENTRY ONLY NOT RATED In the opinion of Best Best & Krieger LLP, San Diego, California, Bond Counsel, under existing statutes. regulations, rulings andjudicial decisions and assuming the accuracy of certain representations and compliance with certain covenants and requirements discussed herein. interest on the bonds is excluded from gross income for federal income tax purposes. and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax. See "TAX MAlTERS." - $2,925,000' City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds Dated: Date of Delivery Due: September 1, as shown below The City of Rancho Cucamonga (the "City"), for itself and on behalf of the City of Rancho Cucamonga Connnunity Facilities District No. 2006-02 (Amador on Route 66) (the "District") is issuing its 2007 Special Tax Bonds (the "Bonds") to (i) finance certain street, landscaping, storm drains and park facilities to be owned by the City and certain water and sewer facilities to be owned by the Cucamonga County Valley Water District and the Inland Empire Utilities Agency (collectively, the "Facilities"), (ii) provide for capitalized interest on the Bonds through September I, 2007, (iii) fund a Reserve Fund; (iv) pay the costs of issuance relating to the Bonds; and (v) pay certain administrative costs of the District. The proceeds of the Bonds will also provide funds to fund a Reserve Fund for the Bonds and to pay costs associated with the issuance of the Bonds. The Bonds are being issued under the Mello-Roos Connnunity Facilities Act of 1982, as amended (the "Act"), and a Fiscal Agent Agreement dated as of December 1, 2006 (the "Fiscal Agent Agreement"), by and between the City and Wells Fargo Bank, National Association, as fiscal agent (the "Fiscal Agent"). The Bonds are payable from the proceeds of annual special taxes to be levied on property located within the District and from certain other funds pledged under the Fiscal Agent Agreement. The special taxes authorized to be levied on the taxable property in the District are to be levied according to the rate and method of apportionment approved by a vote of the qualified electors within the District. See Appendix B - "Rate and Method of Apportionment of Special Taxes." The special taxes are to be collected in the same manner and at the same time as ad valorem property taxes are collected by the County of San Bernardino and, when received, will be placed in the Special Tax Fund established and maintained by the Fiscal Agent. The special taxes are secured by liens on taxable real property within the District and do not constitute a personal indebtedness of the respective landowners. Accordingly, in the event of delinquency in the payment of special taxes when due, proceedings to recover such delinquent special taxes may be directed only against such real property securing the delinquent special taxes. Thus, the value of the land in the District that is subject to the levy of special taxes by the District is a critical factor in determining the investment quality of the Bonds. See "SECURITY FOR THE BONDS" and "THE DISTRICT - Appraisal of Parcels". The Bonds will be issued in fully registered form only, and, when executed and delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (collectively referred to as "DTC"). DTC will act as securities depository for the Bonds. Ownership interest in the Bonds may be purchased in book-entry form only, in denominations of $5,000. Interest on the Bonds accrues from their date, and is payable on March I and September I of each year, commencing March I, 2007. Principal, premium (if any), and interest due on the Bonds will be paid by the Fiscal Agent" to DTC or its nominee, which will in turn remit such payments to its participants for subsequent disbursement to the beneficial owners of interest in the Bonds. See "Appendix 0 - Book-Entry Only System". The Bonds are subject to redemption prior to maturity, as more fully described in this Official Statement. See "THE BONDS - Redemption of Bonds". NEITHER THE FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE CITY, THE COUNTY OF SAN BERNARDINO, THE STATE OF CALIFORNIA, NOR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE DISTRICT OR THE CITY. THE BONDS ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM THE PROCEEDS OF THE SPECIAL TAX LEVIED WITHIN THE DISTRICT AND CERTAIN FUNDS ESTABLISHED UNDER THE FISCAL AGENT AGREEMENT AND HELD BY THE FISCAL AGENT, AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT. This cover page contains information for quick reference only. It is not a summary of the Bonds. Prospective purchasers must read the entire Official Statement to obtain information essential to the making of an informed investment decision. See "BONDOWNERS' RISKS" for a discussion of factors that should be considered, in addition to the other matters set forth in this Official Statement, in evaluating the investment quality of the Bonds. The Bonds are offered, when, as and if issued. subject to approval as to their legality by Best Best & Krieger LLP. San Diego, California, Bond Counsel, and certain other conditions. Certain legal matters will be passed on for the City by Best Best & Krieger LLP, Riverside, California, as Disclosure Counsel, and by Richards Watson & Gershon, a professional corporation, Los Angeles, California. Additionally. it is anticipated that the Bonds in book-entry form will be available for delivery through the book-entry system of DTC in New York, New York on or about January --.--J 2007. STONE & YOUNGBERG LLC The date of this Official Statement is ,2007 . Preliminary, subject to change. RVPUBIKSNOw\722!13.! $2,925,000' City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds Matnrity Schedule (Base CUSIP )(1)* $ Serial Bonds Maturity Date (September 1) 2007 2008 2009 2010 2011 2012 2013 2014 Principal Amount CUSIP(I) Yield . Suffix Principal Amount Interest Rate Maturity Date (Seotember 1\ 2015 2016 2017 2018 2019 2020 2021 Interest Rate Yield $ $ to Yield % CUSIP(I) to Yield - % CUSIP(I)= % Term Bonds Due September 1,20_, Price % Term Bonds Due September I, 20_, Price P606 CUSIP(I) Suffix . Preliminary, subject to change. (I) Copyright 2006, American Bankers Association. CUSIP data herein is provided by Standard & Poor's, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP services. RVPUB\KSNOW\722113.\ P607 CITY OF RANCHO CUCAMONGA MAYOR AND CITY COUNCIL Donald J. Kurth, M.D., Mayor Diane Williams, Mayor Pro Tem Rex Gutierrez, Councilmember L. Dennis Michael, Councilmember Sam Spagnolo, Councilmember CITY STAFF Jack Lam, City Manager Pamela S. Easter, Assistant City Manager Tamara L. Layne, Finance Director Ingrid Y. Bruce, GIS/Special Districts Manager James L. Markman, Esq., City Attorney Joe O'Neil, City Engineer BOND COUNSEL FINANCIAL ADVISOR TO THE CITY Best Best & Krieger LLP San Diego, California Fieldman, Rolapp & Associates Irvine, California APPRAISER SPECIAL TAX CONSULTANT Bruce W. Hull & Associates, Inc. Ventura, California David Taussig & Associates, Inc. Newport Beach, California FISCAL AGENT! DISSEMINATION AGENT DISCLOSURE COUNSEL Wells Fargo Bank, National Association Los Angeles, California Best Best & Krieger LLP Riverside, California MARKET ABSORPTION CONSULTANT Empire Economics, Inc. Capistrano Beach, California RVPUBIKSNOw\722113.1 P608 TABLE OF CONTENTS Page INTRODUcrORY STATEMENT...........................I General..... ............................................ ............. I Anthority for Issuance ...................................... I The District and the Development .................... I Purpose of the Bonds ........................................ 2 Description of the Bonds ..................................2 Security for the Bonds ...................................... 2 Risk Factors ...................................................... 3 Tax Matters ....................................................... 3 Professionals Involved in the Offering ............. 3 Continuing Disclosure ......................................4 Other Information ............................................. 4 FINANCING PLAN.................................................. 4 Estimated Sources And Uses Of Funds ............ 5 THE BONDS............................................................. 5 Authority for Issuance ......................................5 Description of the Bonds .................................. 6 Redemption of Bonds ....................................... 6 Parity Bonds...................................................... 9 Debt Service Schedule.................................... 10 SECURITY FOR THE BONDS ............................. II General............................................................ II Limited Obligation.......................................... II The Special Taxes........................................... II The Rate and Method...................................... 14 Reserve Fund .................................................. 17 Delinquent Special Taxes; Covenant To Foreclose............................... ................ .......... 18 THE DISTRICT ......................................................19 General Description and Location of the District19 AcquisitionlFinancing Agreement..................19 Facilities to be Financed with the Bonds ........ 20 Absorption Study............................................ 20 Appraisal of Parcels ........................................ 21 Direct and Overlapping Debt.......................... 21 Estimated Value-to-Lien Ratios...................... 22 Cumulative Tax, Assessment and Fee Burden on Property...................................................... 22 THE DEVELOPER AND THE PROPOSED DEVELOPMENT ...................................................24 GeneraL................ ..... ........................ ............ 24 The Developer and the Housing Development25 RVPUB\KSNOWl722113.1 Page The Proposed Housing Development ............. 26 Lewis Investment and Off-Site Infrastructure. 30 BONDOWNERS' RISKS .......................................31 Not a General Obligation of the District or the City.................................................................31 Levy of the Special Taxes...............................31 Exempt Properties........................................... 32 Collection of the Special Taxes ...................... 32 Concentration of Property Ownership ............ 33 Not a Personal Obligation............................... 33 Parity Taxes and Special Assessments............ 33 Land Values and Development....................... 33 Notice of Special Taxes; Disclosures To Future Purchasers........................................... ............ 36 Bankruptcy and Foreclosure Delays ............... 36 Limitation on Remedies of Bondholders; No Acceleration.... ..................................... ........... 37 Loss of Tax Exemption..:................................ 38 Secondary Markets and Prices ........................ 38 CONCLUDING INFORMATION.......................... 38 Tax Matters..................................................... 38 Legal Opinions................................................ 39 Litigation ........................................................ 39 Continuing Disclosure .................................... 39 No Rating........................................................ 40 Underwtiting................................................... 40 . Professional Fees ............................................40 Miscellaneous .................................................41 Appendix A - Summary Appraisal Report............A-l Appendix B - Rate and Method of Apportionment of Special Taxes......................B-I Appendix C - Summary of the Fiscal Agent Agreement ........................................................ C-l Appendix D - Book-Entry Only System...............D-l . Appendix E - Form of Continuing Disclosure Agreements............. ........ ........ ................... ....... E-I Appendix F - Form of Bond Counsel Opinion ......F-l Appendix G - General Information of the City of Rancho Cucamonga ......,..............................G-I Appendix H - Summary Absorption Study...........H-I P609 . No Offering May be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the City, the District, any other parties described in this Official Statement, or in the condition of property within the District since the date of this Official Statement. Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds. Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the inforination in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness. of such information. Document References and Summaries. All references to and summaries of the Fiscal Agent Agreement or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents. Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. Bonds are Exempt from Securities Laws Registration. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934. Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "budget" or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR. RVPUBIKSNOW\722113.1 P610 REGIONAL LOCATION MAP City of Rancho Cucamonga San Bernardino County, California LOS ANGELES COUNTY , . \ . . j , , I , I SAN BEANARDINO COUNTY ( .. RIVERSIDE COUNTY. Hema. ,0-1 c/~ /0 00 ~ -1~. ~o 1"""1 N UH 5 11 miles - ~ ,.pjI1I()XIYoUl RVPUB\KSNOW\722113.1 RVPUBIKSNOw\722113.1 P611 AERIAL LOCATION MAP City of Rancho Cucamonga San Bernardino County, California P612 OFFICIAL STATEMENT $2,925,000' City of Rancho Cncamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds INTRODUCTORY STATEMENT General The purpose of this Official Statement, which includes the cover page and attached Appendices, is to provide certain information concerning the issuance by the City, for itself and on behalf of the District, of its City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds (the "Bonds"). The Bonds are being issued under a Fiscal Agent Agreement (the "Fiscal Agent Agreement") dated as of December I, 2006, by and between the City and Wells Fargo Bank, National Association, a national banking association, as fiscal agent (the "Fiscal Agent"). This introduction is subject in all respects to the more complete information set forth in this Official Statement. All capitalized terms used in this Official Statement and not otherwise defined have the same meaning as in the Fiscal Agent Agreement. See "Appendix C - Summary of the Fiscal Agent Agreement - Definitions. " Authority for Issuance The Bonds will be issued under the Mello-Roos Community Facilities Act of 1982, as amended, constituting Sections 53311 et seq. of the California Government Code (the "Act"), the approving vote of the eligible landowner voters of the District, a resolution of the City Council of the City (the "City Council"), acting in its capacity as the legislative body of the District adopted on December -' 2006, and the Fiscal Agent Agreement. The City Council has authorized the issuance and delivery of the Bonds in the maximum principal amount of$3,100,000*. See "THE BONDS - Authority for Issuance." The District and the Development The District was formed by the City on October 16, 2006, under the Act following a public hearing held on such date. Following the formation of the District, the City conducted a special election at which the qualified electors of the District approved the levy of special taxes within the District and the issuance of bonds secured by such special taxes. The amount of bonded indebtedness and levy of special taxes were subsequently amended. See 'THE BONDS - Authority for Issuance." The District encompasses approximately 10 gross acres of land in the southerly portion of the City of Rancho Cucamonga. Ofthis acreage, approximately 4 acres are expected to be developed into uses subject to the special tax. At buildout, it is currently expected the District will contain approximately 99 attached residential dwelling units ranging in size from 1,328 to 1,905 square feet. All of the Property within the District was acquired by William Lyon Homes, Inc., a California corporation (the "Developer") under a purchase agreement with Lewis Investment Company, LLC ("Lewis Investment"). Under the purchase arrangement Lewis Investment agreed to finance and construct certain off- site public improvements. Bond proceeds will be used to acquire these public improvement on behalf of the City and the Cucamonga Valley Water District. The Developer has extensive experience in developing homes in a variety of Southern California communities and plans on building 99 triplex homes within the District. See "THE DEVELOPER AND THE PROPOSED DEVELOPMENT." . Preliminary, snbject to change. RVPUBIKSNOWl722113.1 I P613 Purpose of the Bonds The Bonds are being issued to (a) provide funds for the acquisition and construction of certain public improvements (See "THE DISTRICT - Facilities to be Financed with the Bonds"), (b) fund a reserve fund for the Bonds, (c) pay certain administrative expenses of the District, (d) provide for capitalized interest on the Bonds through September I, 2007, and (e) pay costs associated with the issuance of the Bonds. Description of the Bonds The Bonds are being issued in the aggregate principal amount of $2,925,000' and are dated their date of delivery and mature in the amounts and in the years, and bear interest at the rates set forth on the cover page of this Official Statement. Interest on the Bonds will be payable on each March I and September I each year, beginning March I, 2007. Registration, book-entry provisions, denominations. The Bonds will be delivered in fully registered form only and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be purchased in book-entry form only in the principal amount of $5,000 or any integral multiple. See "Appendix D - Book-Entry Only System." Transfer and exchange. If the book-entry only system described below is no longer used with respect to the Bonds, the Bonds may be transferred and exchanged in accordance with the Fiscal Agent Agreement. Redemption provisions. The Bonds are subject to optional and mandatory sioking fund redemption prior to their respective maturity dates. See "THE BONDS - Redemption of Bonds." Security for the Bonds Limited Obligation. Neither the full faith and credit nor the general taxing power of the City, the County of San Bernardino (the "County"), the State of California (the "State"), or any political subdivision of the State is pledged to the payment of the Bonds. Except for the Special Taxes (defined below), no other taxes are pledged to the payment of the Bonds. The Bonds are not general obligations of the District or the City. The Bonds are limited obligations of the District payable solely from the proceeds of the Special Taxes levied within the District and other sources described in the Fiscal Agent Agreement and held by the Fiscal Agent. The Special Taxes. Payments of interest on and principal of the Bonds are to be made from the proceeds of the Special Tax, as defmed in the Rate and Method, as defined below, authorized to be levied armually by the District pursuant to the Rate and Method on all taxable property within the District (the "Special Taxes"). The Special Taxes are authorized to be levied under the Act and in accordance with the special election held in the District and the Rate and Method. See "SECURITY FOR THE BONDS - The Special Taxes" and "- The Rate and Method" and Appendix B - Rate and Method of Apportionment of Special Taxes. Appraised Value of Property within the District, Absorption and Value to Debt Ratio. An appraisal dated October 23, 2006 of the market value of the fee simple estate in the land within the District that is subject to the levy of Special Taxes (the "Appraisal") has been prepared by Bruce W. Hull & Associates, Inc. (the "Appraiser") of Ventura, California and is attached as Appendix A. . Preliminary, subject to change. RVPUBIKSNOWl722!13.! .2 P614 Subject to the assumptions contained in the Appraisal, the Appraiser estimated that the fee simple market value of the properties in the District as of October IS, 2006 was $9,000,000. A Market Absorption Study dated September 20, 2006, regarding the proposed development within the District was conducted by Empire Economics, Inc., Capistrano Beach, California. This report indicates that absorption of the proposed development is expected to begin in the forth quarter of2007 and full absorption to occur by the third quarter of2009. See "Appendix H - Summary Absorption Study." The aggregate market values reported in the Appraisal results in estimated overall value-to-debt ratio of 3.06 to I, calculated with respectto all applicable direct and overlapping tax and fixed lien assessment debt, if any, as of the projected closing date for the Bonds. The value-to-debt ratios of individual parcels within the District will differ from the foregoing aggregate ratios. See "THE DISTRICT - Appraisal of Parcels" and "THE DISTRICT - Value to Debt Ratio." See also "THE DISTRICT - Cumulative Tax, Assessment and Fee Burden on Property" for a description of certain additional debt or other obligations secured by liens on the property within the District. Reserve Fund. The Fiscal Agent Agreement establishes a Reserve Fund for the Bonds which is required to be funded in an amount equal to the Reserve Requirement. The Reserve Requirement is (a) as of any date of calculation, an amount not to exceed the lesser of (i) the Maximum Annual Debt Service on the Outstanding Bonds, (ii) 125% of Average Annual Debt Service on the Outstanding Bonds, or (iii) 10% of the face amount of the Outstanding Bonds. See "SECURITY FOR THE BONDS - Reserve Fund." Risk Factors Certain events could affect the ability of the District to pay debt service on the Bonds when due. See the section of this Official Statement entitled "BONDOWNERS' RISKS" for a discussion of special factors which should be considered, in addition to the other matters set forth herein, in considering the investment quality of the Bonds. Tax Matters In the opinion of Bond Counsel, under existing laws, regulations, rulings and court decisions, the . interest on the Bonds is exempt from personal income taxes of the State and, assuming certain representations and compliance with certain covenants and requirements described in the section entitled "CONCLUDING INFORMATION - Tax Matters," is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax on individuals and corporations. See Appendix F hereto for the form ofthe opinion of Bond Counsel expected to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion, see "CONCLUDING INFORMATION - Tax Matters." Professionals Involved in the Offering Wells Fargo Bank, National Association, will serve as Fiscal Agent for the Bonds. The Bonds will be delivered subject to approval as to their validity by Best Best & Krieger LLP, San Diego, California, Bond Counsel. Certain legal matters will be passed upon for the Underwriter by disclosure counsel, Best Best & Krieger LLP, Riverside, California, and for the City and the District by Richards Watson & Gershon, a professional corporation, Los Angeles, California. Certain legal matters will be passed upon for the Developer by its counsel, Goodwin Procter LLP, Los Angeles, California and for Lewis Investments by Hewitt & O'Neil, LLP, Irvine, California. An appraisal of the property within the District has been prepared by Bruce W. Hull & Associates, Inc., Ventura, California. Fieldman, Rolapp & Associates of Irvine, California, has served as financial advisor to the City and the District for the financing. David Taussig & Associates, Inc. of Newport Beach, California, has served as special tax consultant to the District for the financing, and Empire Economics, Inc., Capistrano Beach, California, has acted as market absorption consultant. RVPUBIKSNOw\722113.1 3 P615 For information concerning circumstances in which certain of the above - named professionals may have a financial or other interest in the offering of the Bonds, see "CONCLUDING INFORMATION - Professional Fees." Continuing Disclosure The District has agreed to provide, or cause to be provided, to each nationally recognized municipal securities information repository ("NRMSIR") and any public or private repository or entity designated by the State as a state repository ("State Repository") periodic reports, commencing October 31, 2007 as to the District, containing certain financial information and operating data relating to the District, and to provide notices of the occurrence of certain enumerated events, if material. The Developer has also agreed for the benefit of the Owners of the Bonds to provide or cause to be provided, to each NRMSIR and any State Repository semi-annual reports containing certain financial information and operating data relating to the development of their respective properties, and to provide notices of the occurrence of certain enumerated events, if material, regarding their respective properties. The timing of such reports and the specific nature of the information required to be contained in each of these reports and the notices of material events are set forth in "Appendix E - Forms of Continuing Disclosure Agreements." See also "CONCLUDING INFORMATION - Continuing Disclosure." Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change. Brief descriptions of the Bonds, certain sections of the Fiscal Agent Agreement, security for the Bonds, special risk factors, the District, the City, the Developer and its proposed plan of development and other information are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or defmitive. The descriptions of the Bonds, the Fiscal Agent Agreement, and other resolutions and documents are qualified in their entirety by reference to the forms thereof and the information with respect thereto included in the Bonds, the Fiscal Agent Agreement, such resolutions and other documents. All such descriptions are further qualified in their entirety by reference to laws and to principles of equity relating to or affecting generally the enforcement of creditors' rights. Copies of such documents may be obtained from the office of the City Clerk of the City, 10500 Civic Center Drive, Rancho Cucamonga, California 91730. FINANCING PLAN Facilities to be Financed. Bond proceeds in the estimated amount of $2,200,890' will be used to construct or acquire public facilities to be owned by the City, the Cucamonga Valley Water District and the Inland Empire Utilities Agency. See "THE DISTRICT - Facilities to be Financed with Bonds." The City anticipates acquiring $1,770,890* of public facilities with Bond proceeds including, street improvements, landscaping improvements, drainage improvements and certain dry utilities with Bond proceeds. Joint Financing Agreements. In connection with the formation of the District, the City has entered into separate Joint Community Facilities Financing Agreements with the Cucamonga Valley Water District (the "Water District") and the Inland Empire Utilities Agency (the "Utilities Agency"). Under each of these agreements, the City and the respective public agencies have agreed that a portion of the proceeds of the Bonds will be used to finance public facilities that will be owned by such public agencies. The amount of bond proceeds and the facilities or property to be financed for the Water District and the Utilities Agency are as follows: , Preliminary, subject to change. RVPUB\KSNOW\722113.l 4 P616 Public Agency Inland Empire Utilities Agency Cucamonga Valley Water District TOTAL Bond Proceeds $156,000 284.000 $430,000 Facilities/Use Wastewater Water and Sewer Estimated Sources And Uses Of Funds The following table sets forth the estimated sources and uses ofthe Bond proceeds: TABLE 1 City of Rancho Cucamonga, Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds Estimated Sources and Uses of Funds SOURCES OF FUNDS Principal Amount of the Bonds Less Underwriter's Discount Less Original Issue Discount Total Sources of Funds USES OF FUNDS Deposit to the Project Fund(l) Deposit to the Interest Account(2) Deposit to Reserve Fund Deposit to Costs ofIssuance Fund Deposit for Administrative Expenses(3) Total Uses of Funds (I) (2) (3) Includes amounts payable to the Water District and the Utility Agency. Represents capitalized interest on the Bonds through September 1,2007. Represents the anticipated administrative expenses of the District for Fiscal Year 2006-2007. THE BONDS Authority for Issuance The Act was enacted by the California Legislature to provide an alternate method of financing certain public capital facilities and services, especially in developing areas of the State. Once duly established, a community facilities district is a legally constituted governmental entity within defined boundaries, with the governing board or legislative body of the local agency that established the district acting on its behalf. Subject to approval by a two-thirds vote of qualified electors and compliance with the provisions of the Act, a legislative body of a local agency may issue debt securities for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness. Under the Act, the City Council has taken the following actions: On August 16,2006, the City Council adopted the following resolutions: . Resolution No. 06-246 declaring the intention ofthe City Council to establish the District and to authorize the levy of special taxes therein to finance the acquisition and construction of certain public facilities. . Resolution No. 06-248 declaring the intention of the City Council to issue bonds secured by special taxes to pay for the acquisition of certain facilities in the District. RVPUB\KSNOW\722113.1 5 P617 On October 18, 2006, the City Council, following a public hearing held on such date, adopted: . Resolution No. 06-327 forming and establishing Community Facilities District No. 2006-02 (Amador on Route 66) and authorizing submittal oflevy of special taxes therein to the qualified electors thereof. . Resolution No. 06-328 declaring the necessity to incur a bonded indebtedness, submitting to the qualified electors of the District a proposition to incur a bonded indebtedness secured by a special tax to pay for certain facilities in the District and a proposition to establish an appropriations limit for such District, and giving notice thereof. On October 18, 2006, the qualified electors within the District, authorized the issuance of bonds in a maximum principal amount of $3,100,000 to be secured by the levy of the special taxes to finance the acquisition and construction of such facilities, established an annual appropriations limit for the District, and approved the levy of the special taxes pursuant to a rate and method of apportionment of special taxes (the "Rate and Method"). The City Council, following the certification of the election results by the City Clerk, adopted Resolution No. 06-329 on October 18,2006 declaring the results of the special election within the District. On October 18, 2006, the City ,Council also introduced and waived the first reading of Ordinance No. 770 authorizing the levy of a special tax within the District. The City Council adopted Ordinance No. 770 (the "Ordinance") on November 1, 2006, and such Ordinance became effective on December 1, 2006. On , 2006, the City Council also adopted Resolution No. authorizing the issuance of the Bonds and approving the forms of the Fiscal Agent Agreement, Bond Purchase Agreement, Preliminary Official Statement and Continuing Disclosure Agreement. Description of the Bonds The Bonds will mature on the dates and in the principal amounts and will bear interest at the rates per annum set forth on the inside cover page of the Official Statement. Interest on the Bonds will accrue from their date, and will be payable semiannually on March 1 and September 1 each year (each an "Interest Payment Date") commencing March 1, 2007. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. The Bonds will be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple. All of the Bonds, when issued, will be registered in the name of Cede & Co., as nominee of DTC, New York, New York, which will act as securities depository for the Bonds. Purchasers will not receive physical certificates representing their interests in the Bonds. Principal of and interest on the Bonds will be paid by the Fiscal Agent to DTC for subsequent disbursement to DTC Participants, who will remit such payments to the beneficial owners of the Bonds. See "Appendix D - Book-Entry Only System." Redemption of Bonds Optional Redemption. The Bonds are subject to optional redemption prior to their' stated maturity on any Interest Payment Date, as a whole or in part, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be reduced), together with accrued interest thereon to date of redemption: Redemption Date Redemption Price RVPUBIKSNOW\722!!3.! 6 P618 Mandatorv Redemption from Proceeds of Special Tax Prepayments. The Bonds shall be subject to redemption on any Interest Payment Date, prior to matUrity, as a whole or in part on a pro rata basis among maturities from amounts deposited to the Redemption Fund representing Special Tax Prepayments. An Authorized Representative shall deliver written instructions to the Fiscal Agent not less than 60 days prior to the redemption date directing the Fiscal Agent to utilize the Special Tax Revenues transferred to the Redemption Fund and the Interest Account of the Bond Fund pursuant to the Fiscal Agent Agreement. Such mandatory redemption of the Bonds shall be at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Date Redemption Price The Bonds will be subject to such mandatory redemption as a result of a Special Tax Buydown (as such term is used in the Rate and Method) in the event of certain changes in development. See "APPENDIX B - Rate and Method of Apportionment of Special Taxes - Special Tax Buydown." Mandatory Sinkin!! Fund Redemption. The Bonds maturing on September I, 20_ are subject to mandatory sinking fund redemption in part on September I, 20_, and on any date thereafter each September I thereafter to maturity, by lot, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1) Principal Amount Redeemed The Bonds maturing on September 1, 20_ are subject to mandatory sinking fund redemption in part on September 20_, and on each September I thereafter to maturity by lot, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: Redemption Date (September 1) Principal Amount Redeemed RVPUBIKSNOW\722113.1 7 P619 The principal amounts of the Bonds subject to mandatory sinking fund redemption in the preceding tables shall be reduced, as a result of any prior partial optional redemption or mandatory redemption from the proceeds of Special Tax Prepayments, in reverse order of sinking fund payment date. Selection of Bonds for Redemption. Whenever provision is made for the redemption of less than all of the Bonds or any given portion thereof, the Fiscal Agent shall select the Bonds to be redeemed, from each maturity in any manner the City specifies, with such selection within a maturity to be done in any manner which the Fiscal Agent deems fair. Notice of Redemption. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the date fixed for redemption, to the Original Purchaser, to the Securities Depositories, to one or more Information Services, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond Register in the Principal Office of the Fiscal Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and Bond number of each Bond to be redeemed or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the Bonds so called for redemption shall have been deposited in the Bond Fund or Redemption Fund, such Bonds so called shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price and interest thereon through the date of redemption, and no interest shall accrue thereon on or after the redemption date specified in the notice of redemption. All Bonds redeemed will be canceled immediately by the Fiscal Agent and will not be reissued. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the City, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds. RVPUB\KSNOW\722113.lt 8 P620 Purchase in Lieu of Redemption. In lieu of optional mandatory or mandatory sinking fund redemption, moneys in the Bond Fund or Redemption Fund may be used and withdrawn by the Fiscal Agent for purchase of outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase and any premium which would otherwise be due if such Bonds were to be redeemed in accordance with the Fiscal Agent Agreement. In lieu of optional redemption, the District may elect to purchase Bonds at public or private sale at such prices as the District may in its discretion determine; provided, that, unless otherwise authorized by law, the purchase price (including brokerage and other charges) of Bonds so purchased may not exceed the principal amount of those Bonds plus accrued interest to the purchase date. Parity Bonds The City wiII covenant in the Fiscal Agent Agreement that it will issue no additional bonds on a parity with the Bonds; provided, however, nothing in the Fiscal Agent Agreement limits the issuance of any bonds on behalf of the District if (a) the rights and claims of such bonds to the Special Tax Revenues and the funds and accounts established and described in the Fiscal Agent Agreement are in all respects subordinate to the rights and claims of the Bonds, or (b) after the issuance and delivery of such bonds, none of the Bonds shall be Outstanding. The Bonds defeased pursuant to the Fiscal Agent Agreement or Bonds in exchange or in lieu of which other bonds have been delivered are not considered to be Outstanding. RVPUB\KSNOW\722113.1 9 Debt Service Schedule P621 The table below sets forth the scheduled payments of principal and interest for the Bonds, including annual debt service totals. Year Euding (September 1) 2007(1) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 TOTAL TABLE 2 City of Rancho Cucamonga, Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds Debt Service Schedule Principal Interest Total Debt Service Interest for the 2007 Bond Year will be paid from moneys deposited to the Interest Account on the Closing Date. (I) RVPUBIKSNOWl722113.1 10 P622 SECURITY FOR THE BONDS General The Bonds are secured by and payable from an irrevocable first lien on the Special Tax Revenues (defined below) and moneys on deposit in the following funds established pursuant to the Fiscal Agent Agreement: the Bond Fund, the Reserve Fund, and the Redemption Fund, until disbursed as provided in the Fiscal Agent Agreement. Amounts in the Project Fund, the Cost of Issuance Fund, the Special Tax Fund, the Administrative Expense Fund and the Rebate Fund established pursuant to the Fiscal Agent Agreement are not pledged to the repayment of the Bonds. "Special Tax Revenues" include the proceeds of Special Taxes received by the City, including any scheduled payments and any prepayments of such Special Taxes, accrued interest and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of such Special Taxes to the amount of such lien and accrued interest; provided, however, such Special Tax Revenues do not include amounts retained by the Finance Director for deposit in the Administrative Expense Fund and any penalties collected in connection with any Special Taxes that are delinquent. Such Special Tax Revenues and all moneys deposited into the above referenced funds (except as otherwise provide in the Fiscal Agent Agreement) are dedicated to the payment of the principal of, and interest and premium on, the Bonds as provided in the Fiscal Agent Agreement and the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with the provisions of the Fiscal Agent Agreement. No Pledge of the Facilities. The Facilities constructed and acquired with the proceeds of the Bonds are not in any way pledged to pay the debt service on, nor do such Facilities secure in any way payment of debt service on the Bonds. Any proceeds of condemnation or destruction of any Facilities fmanced with the proceeds of the Bonds are not ple~ged to pay debt service on the Bonds. Limited Obligation Neither the full faith and credit nor the general taxing power of the City, the County, the State, or any political subdivision is pledged to the payment of the Bonds. The Bonds are not general obligations of the District or the City. The Bonds are limited obligations ofthe District payable solely from the proceeds of the Special Taxes and other sources described in the Fiscal Agent Agreement and held by the Fiscal Agent. The Special Taxes Approval of the Special Tax. On October 18, 2006, the City Council established the District in accordance with the provisions of the Act. In a special election held following the establishment of the District, the qualified electors within the District, the owners of land within the District, authorized the issuance of Bonds in the maximum principal amount of $3, I 00,000. The City Council, acting as the legislative body of the District, will establish tax rates to levy and apportion the special tax against property within the District on an annual basis. RVPUBIKSNOW\722113.1 II P623 District Covenant to Levy the Special Tax. Under the Fiscal Agent Agreement, the City is required to comply with all requirements of the Act so as . to assure the timely collection of the SpeCial Tax Revenues, including without limitation, the enforcement of delinquent Special Taxes. On or within five Business Days of each June 1, the Fiscal Agent shall provide the Finance Director of the City with a notice stating the amount then on deposit in the Interest Account and Principal Account of the Bond Fund, and the Reserve Fund, and informing the City that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for Annual Debt Service and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance equals the Reserve Requirement. The receipt of or failure to receive such notice by the Finance Director in no way affects the obligations of the Finance Director described below. Upon receipt of such notice, the Finance Director shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. The Finance Director shall effect the levy of the Special Taxes within the District each Fiscal Year in accordance with the Ordinance by each July 15 that the Bonds are Outstanding, or otherwise such that the computation of the levy is complete before the final date on which the Auditor will'accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Finance Director shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Finance Director shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any Outstanding Bonds becoming due and payable during the ensuing year, including any necessary replenishment or expenditure of the amount within the Reserve Fund for. such Bonds and an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any rebate obligation owing to the federal government) during such year, taking into account the balances in such funds and in the Special Tax Fund. The Special Taxes so levied shall not exceed the authorized amounts as provided in the proceedings pursuant to the Rate and Method. Duration of Special Tax Levy. The Special Taxes shall be levied for a period not to exceed 50 years commencing with Fiscal Year 2007 -2008; provided, however, Special Taxes will cease to be levied within the District in an earlier Fiscal Year if the CFD Administrator (as such term is defined in the Rate and Method) has determined that all required interest and principal payments on the Bonds secured by and payable from such Special Taxes have been paid. Covenant not to Reduce Special Tax Rates Unless Certain Conditions are Met. The City has covenanted in the Fiscal Agent Agreement, that to the maximum extent that the law permits it to do so, that the City shall not initiate proceedings to reduce the Maximum Special Tax Rate (as such term is defined in the Rate and Method) unless, in connection therewith, (i) the City receives a certificate from one or more Tax Consultants which, when taken together, certify that, on the basis of the parcels of land and improvements existing in the District as of the July 1 preceding the reduction, the Maximum Annual Special Tax which may be levied on all Assessor's Parcels (as such term is defined in the Rate and Method) of taxable property within the District on which a completed structure is located in each Fiscal Year will equal at least 110% of the sum of the gross debt service on all Bonds to remain Outstanding plus the Administrative Expense Requirement after the reduction is approved and will not reduce the Maximum Annual Special Tax payable from parcels within the District on which a completed structure is located to less than the sum of 110% of Maximum Annual Debt Service, and (ii) the City Council finds pursuant to the Fiscal Agent Agreement that any reduction made under such conditions will not adversely affect the interests of the Bondowners. Any reduction in the Maximum Annual Special Tax approved pursuant to the preceding sentence may be approved without the consent of the Bondowners. ' RVPUBIKSNOw\722113.1 12 P624 The City has covenanted in the Fiscal Agent Agreement that, if any initiative is adopted by the qualified electors which purports to reduce the Maximum Annual Special Tax below the levels authorized under the Rate and Method, or to limit the power or authority of the District to levy Special Taxes under the Rate and Method, the District will commence and pursue legal action in order to preserve the authority and power of the District to levy Special Taxes, from funds available under the Fiscal Agent Agreement. Manner of Collection. The Special Taxes will be collected in the manner and at the same time as ad valorem property taxes are collected by the County; provided, however, the City may directly bill the Special Taxes at a different time or in , a different manner if necessary to meet its financial obligations, In cases of delinquency, the Special Taxes will generally be subject to the same penalties and the same procedures, sale and lien priority as is provided for ad valorem property taxes, Taxes are levied by the County for each Fiscal Year on taxable real property that is situated in the County as of the preceding January I. Property taxes on the secured roll (that is, taxes against real property having a tax lien that is sufficient, in the opinion of the County Assessor, to secure payment of the taxes) are due in two installments, on November I and February I of each Fiscal Year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. Property on the secured roll with respect to which taxes are delinquent become tax defaulted on Jime 30 of the Fiscal Year; such property may thereafter be redeemed by payment of the penalty set forth in the Revenue and Tax Code, together with the defaulted taxes, the delinquency penalty, costs, and a redemption fee. If taxes are unpaid for a period of five years or more, the property is subject to auction sale by the County. Because the District does not participate in the "Teeter Plan" (which is the County's Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code), collections of assessments and Special Taxes will reflect actual delinquencies. Deposit and Application of Special Taxes. Under the Fiscal Agent Agreement, all proceeds of the annual Special Taxes (except prepayments of Special Taxes and amounts retained by the Finance Director for deposit into the Administrative Expense Account in the amounts of each applicable Administrative Expense Requirement to pay Administrative Expenses) are to be deposited in the Special Tax Fund established by the Fiscal Agent Agreement, and applied as follows: I. The Fiscal Agent shall deposit in the Interest Account of the Bond Fund, on each Interest Payment Date and date for redemption of the Bonds, an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest due or becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds being redeemed on such date. 2. The Fiscal Agent shall deposit in the Principal Account of the Bond Fund, on each Interest Payment'Date and redemption date on which principal of the Bonds, including sinking fund payments, shall be payable, including sinking fund payments, an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to the Fiscal Agent Agreement. RVPUBIKSNOw\722113,1 13 P625 3. On or after March 2 and September 2 of each year after making the transfer and deposits required under paragraphs 1 and 2 above, the Fiscal Agent shall transfer the amount, if any, necessary to replenish the amount then on deposit in the Reserve Fund to an amount equal to the Reserve Requirement. 4. On or after September 2 of each year after making the deposits and transfers required under paragraphs 1 through 3 above, upon receipt of written instructions from an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Rebate Fund the amount specified in such request. 5. On or after September 2 of each year after making the deposits and transfers required under paragraphs I through 4 above, upon receipt of a written request of an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Administrative Expense Fund the amounts specified in such request to pay those Administrative Expenses which the District reasonably expects (a) will become due and payable during such Fiscal Year or the cost of which Administrative Expenses have previously been incurred and paid by the District from funds other than the Administrative Expense Fund and (b) the cost of which Administrative Expenses will be in excess of the Administrative Expense Requirement for such Fiscal Year. 6. If, on or after September 2 of each year, after making the deposits and transfers required under paragraphs I through 5 above, moneys remain in the Special Tax Fund, such moneys shall remain on deposit in the Special Tax Fund and shall be subsequently deposited or transferred pursuant to the provisions of paragraphs I through 5 above. Special Taxes are not a Personal Obligation. Although the Special Taxes will constitute a lien on property subject to taxation within the District in which such property is located, it does not constitute a personal indebtedness of the owners of such property. There is no assurance that the property owners will be financially able to pay the annual Special Tax or that they will pay such tax even if financially able to do so. The risk of the property owners not paying the annual Special Tax is more fully described in "BONDOWNERS' RISKS - Collection of the Special Taxes." The Rate and Method The District is legally authorized in the Fiscal Agent Agreement to cause the levy of special taxes within the District in accordance with the Rate and Method. The Rate and Method apportions the total amount of Special Tax to be collected among the Taxable Property (as defined in the Rate and Method) within the District as more particularly described therein. Excerpts from the Rate and Method are provided below. All capitalized terms used in the following summary and not otherwise defined in this Official Statement shall have the meanings given to such terms in the Rate and Method as set forth in Appendix B. The Special Tax shall be levied on all Assessor's Parcels of Taxable Property in the District and collected each Fiscal Year commencing in Fiscal Year 2007-08, in an amount determined through the application of the Rate and Method. All of the real property in the District, unless exempted by law or by the provisions of the Rate and Method, shall be taxed for the purposes, to the extent and in the manner herein provided. Assignment to Land Use Categories. Each Fiscal Year, all Taxable Property within the District will be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, or Undeveloped Property, and shall be subject to Special Taxes in accordance with the Rate and Method. Residential Property shall be assigned to Land Use Classes 1 through 4, as listed in Table A below, and Non- Residential Property shall be assigned to Land Use Class 5. Maximum Special Tax. The Maximum Special Tax for each Assessor's Parcel of Residential Property shall be based on the Residential Floor Area of the dwelling unites) located on such Assessor's Parcel. The RVPUBIKSNOw\722113.1 14 P626 Maximum Special Tax for each Assessor's Parcel of Non-Residential Property shall be based on the Acreage of such Assessor's Parcel. The Maximum Special Tax for any Assessor's Parcel of Developed Property containing more than one Land Use Class shall be determined pursuant to Section C below. Developed Property (a) Maximum Special Tax. The Maximum Special Tax for each Assessor's Parcel classified as Developed Property is shown below in Table A. Land Use Class I 2 3 4 5 Description Residential Property Residential Property Residential Property Residential Property Non-Residential Property Residential Floor Area More than 1,850 SF 1,601- 1,850 SF 1,351- 1,600 SF Less than 1,351 SF N/A Maximum Special Tax $2,816 per unit $2,697 per unit $2,469 per unit $2,241 per unit $64,747 per Acre (b) Multiple Land Use Classes. In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on such an Assessor's Parcel shall be the sum of the 'Maximum Special Taxes for all Land Use Classes located on that Assessor's Parcel. For an Assessor's Parcel that contains both Residential Property and Non-Residential Property, the acreage of such Assessor's Parcel shall be allocated to each type of property based on the amount of Acreage, or equivalent entitlement, designated for each land use as determined by reference to the site plan approved by the City for such Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final. Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property (a) Maximum Special Tax. The Maximum Special Tax for Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property shall be $71,889 per Acre. Special Tax Buydown. The Rate and Method provides for a Special Tax Buydown that can occur based upon a change in development after the issuance of the Bonds. See "APPENDIX B - Rate and Method of Apportionment of Special Taxes - Special Tax Buydown" and "THE BONDS - Redemption - Mandatory Redemption from Proceeds of Special Tax Prepayments." Method of Apportionment of the Special Tax. Commencing with Fiscal Year 2007-08 and for each following Fiscal Year, the Council shall determine the Special Tax Requirement and shall levy the Special Tax until the total Special Tax l<~vy equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: First: The Special Tax shall be levied on each Assessor's Parcel of Developed Property in an amount equal to 100% of the applicable Maximum Special Tax; Second: If additional moneys are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Special Tax for Undeveloped Property; Third: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor's Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to the Maximum Special Tax for Taxable Public Property and Taxable Property Owner Association Property; Notwithstanding the above the Council may, in any Fiscal Year, levy Proportionately less than 100% of the Maximum Special Tax in step one (above), when (i) the Council is no longer required to RVPUBIKSNOW\722113.1 15 P627 levy the Special Tax pursuant to steps two and three above in order to meet the Special Tax Requirement; and (ii) all authorized District Bonds have already been issued or the Council has covenanted that it will not issue any additional District Bonds (except refunding bonds) to be supported by the Special Tax. Further, notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor's Parcel of Residential Property for which an occupancy permit for private residential use has been issued by increased by more than ten percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel within the District. Exemptions. No Special Tax shall be levied on up to 6.0 Acres of Public Property and/or Property Owner Association Property. A tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Public Property or Property Owner Association Property. However, should an Assessor's Parcel no longer be classified as Public Property or Property Owner Association Property, its tax-exempt status will be revoked. Public Property or Property Owner Association Property that is not exempt from the Special Tax under this section shall be subject to the levy of the Special Tax and shall be taxed proportionately as part of the third step in Section E above, at up to 100% of the applicable Maximum Special Tax for Taxable Public Property and Taxable Property Owner Association Property. Manner of Collection. The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the District may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. Prepayment of Special Tax. Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit has been issued, may be prepaid. The Special Tax obligation applicable to an Assessor's Parcel in the District may only be prepaid after all authorized District Bonds have already been issued, or after the Council has covenanted that it will not issue any additional District Bonds (except refunding bonds) to be supported by Special Taxes levied under the Rate and Method of Apportionment. The manner in which the Special Tax may be prepaid is set forth in "Exhibit B - Rate and Method of Apportionment of Special Tax - Prepayment." RVPUB\KSNOW\722113.1 16 P628 Special Taxes for Project. The annual levy of Special Taxes at buildout of the proposed development within the District, which is anticipated to occur in the third quarter of 2009 is summarized on the basis of the anticipated floor plan of each lot. See "THE DISTRICT" for additional information. Table 3 on the following page provides a summary of residential development and special taxes within the District. TABLE 3 City of Rancho Cucamonga, Community Facilities District No. 2006-02 (Amador on Route 66) Residential Development and Special Tax Summary Total Floor Home Size Number Special Special Tract Plan (in SQ. ft.)(') of U nits(') Tax Taxes TIM 16882(1) Tri-Plex Plan I 1,335 33 $2,241 $73,953 Tri-Plex Plan 2 1,803 33 2,697 89,001 Tri-Plex Plan 3 1.920 33 2.816 92.928 Total 99 $255,882 (I) All property within the District is located in Tentative Tract Map 16882. (') Provided by the Developer Source: David Taussig and Associates, Inc. Special Tax Revenue - Debt Service Coverage. Percent of Total 29% 35 --.JL 100% For fiscal year 2007-08, and in each year thereafter, the annual Maximum Special Tax that may be levied on Taxable Property in the District, less administrative expenses, will be no less than 110% of the annual debt service expected to be due on the Bonds. Reserve Fund The Fiscal Agent Agreement requires that the Fiscal Agent establish and maintain a Reserve Fund for the Bonds in an amount equal to the Reserve Requirement. Except as otherwise provided in the Fiscal Agent Agreement, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and any interest and premium on, the Bonds. If Special Taxes for any property within the District are prepaid and Bonds are to be redeemed with the proceeds of such prepayment, a proportionate amount of the Reserve Fund will be applied to the redemption of such Bonds. The Reserve Requirement for the Bonds will be funded initially from the proceeds of the sale of the Bonds. See "Appendix C - Summary of The Fiscal Agent Agreement." RVPUBIKSNOW\722113.1 17 P629 Delinquent Special Taxes; Covenant To Foreclose Sale of Property for Nonpayment of Real Property Taxes. The Fiscal Agent Agreement provides that the Special Taxes are to be levied within the District and collected in the same manner as ordinary ad valorem property taxes are collected; provided, however, the Fiscal Agent Agreement further provides that the District may directly bill the Special Taxes or may collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations. Except as provided in the special covenant for foreclosure described below and in the Act, the Special Taxes that are collected in the same manner as ordinary ad valorem property taxes are subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County. Judicial Foreclosure Proceedings. Under Section 53356.1 of the Act, if any payment of the Special Tax for a taxable parcel is delinquent, the City may order the institution of a court action to foreclose the lien on the Taxable Parcel within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale. The ability of the City to foreclose the lien of delinquent unpaid Special Taxes may be limited in certain instances and may require prior consent of the property owner if the property is owned by or in receivership of the Federal Deposit Insurance Corporation (the "FDIC"). See "BONDOWNERS' RISKS - Bankruptcy and Foreclosure Delays." Such judicial foreclosure action is not mandatory. However, the City has covenanted (the "Foreclosure Covenant") in the Fiscal Agent Agreement that on or before March I and June I of each Fiscal year, the City will review the public records of the County in connection with the Special Taxes levied in such Fiscal Year to determine the amount of Special Taxes actually collected in such Fiscal Year. If the City determines that (a) any single parcel subject to the Special Taxes is delinquent in the payment of Special Taxes in the aggregate of $4,000 or more or (b) any single parcel or parcels under common ownership subject to the Special Taxes are delinquent in the payment of Special Taxes in the aggregate of $20,000 or more, the City shall, not later than 45 days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owners of all such delinquent payments. The City shall cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than 90 days after such determination against any parcel for which a notice of delinquency was given and for which the Special Taxes remain delinquent. If the City determines that it has collected less than 95% of the Special Taxes levied in the such Fiscal Year, then the City shall, not later than 45 days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owner of each delinquent parcel (regardless of the amount of such delinquency). The City will cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than 90 days after such determination against any parcel for which a notice of delinquency was given pursuant to this section and for which the Special Taxes remain delinquent. Subject to the maximum rates, the Rate and Method is designed to generate from all non-exempt property within the District the current year's debt service on the Bonds, administrative and other expenses, and replenishment of the Reserve Fund for the Bonds to the Reserve Requirement. However, if foreclosure proceedings are necessary, and the Reserve Fund has been depleted, there could be a delay in payments to Owners of the Bonds pending prosecution of the foreclosure proceedings and receipt by the District of the proceeds ofthe foreclosure sale. Priority of Lien. The Act specifies that the Special Taxes will have the same lien priority as ad valorem property taxes in the case of delinquency but does not further specify the priority relationship, if any, between the Special Taxes and other special taxes, assessments and ad valorem taxes on a taxed parcel. The District (and other RVPUBIKSNOw\722113.1 18 P630 jurisdictions) may levy additional special taxes to finance other infrastructure needed for the development of the property in the District. See "THE DISTRICT - Cumulative Tax, Assessment and Fee Burden on Property." If foreclosure proceedings were ever instituted, any holder of a mortgage or deed of trust on the affected property could, but would not be required to, advance the amount of the delinquent Special Tax payment to protect its security interest. Sufficiency of Foreclosure Sale Proceeds. No assurances can be given that a judicial foreclosure action, once commenced, will be completed or that it will be completed in a timely manner. See "BONDHOLDER'S RISKS - Bankruptcy and Foreclosure Delays." If a judgment of foreclosure and order of sale is obtained, the judgment creditor, i.e., the District or the City acting on behalf of the District, must cause a Notice of Levy to be issued. Under current law, a judgment debtor, i.e., the property owner, has 120 days for residential property (up to a fourplex) and 20 days for other property from the date of the service of the Notice of Levy and 20 days from the subsequent notice of sale in which to redeem the property to be sold. If a judgment debtor fails to so redeem and the property is sold, the former owner's only remedy is an action to set aside the sale, which must be brought within 90 days of the date of the sale. If, as a result of such action, a foreclosure sale is set aside, the judgment is revived and the judgment creditor is entitled to interest on the revived judgment as if the sale had not been made. The constitutionality of the aforementioned legislation, which repeals the former one-year redemption period, has not been tested; and there can be no assurance that, if tested, such legislation will be upheld. Any parcel subject to foreclosure sale must be sold at the minimum bid price unless a lesser minimum bid price is authorized by the Owners of 75% of the principal amount of the Bonds. No assurance can be given that the real property snbject to sale or foreclosure will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment. The Act does not require the City or the District to purchase or otherwise acquire any parcel of property offered for sale or subject to foreclosure if there is no other purchaser at such sale or if the bid of any prospective purchaser is less than the minimum bid price. If the Reserve Fund for the Bonds is depleted and delinquencies in the payment of Special Taxes exist, there could be a default or delay in payments to the owners of the affected Bonds pending prosecution of foreclosure proceedings and receipt by the District or the City of the foreclosure sale proceeds, ifany. THE DISTRICT General Description and Location of the District The District. The District encompasses approximately 10 gross acres ofland in the southerly portion of the City of Rancho Cucamonga. Of this acreage, approximately 4 acres are expected to be developed into uses subject to the special tax. At buildout, it is currently expected the District will contain approximately 99 attached residential dwelling units ranging in size from 1,335 to 1,920 square feet. The District was formed by the City on October 18, 2006 under the Act following a public hearing held on such date. Following the formation of the District, the City conducted a special election at which the qualified electors of the District approved the levy of special taxes within the District and the issuance of bonds secured by such special taxes. Following the adoption of the resolutions, the City conducted a special election at which qualified electors of the District approved such amendments. AcquisitionfFinancing Agreement The City, the District, the Developer and Lewis Investment entered into an Acquisition/Financing Agreement dated as of , 2006 (the "Acquisition Agreement"). Under the Acquisition Agreement,. RVPUBIKSNOWl722 I 13.1 19 P631 Lewis Investment is to construct certain public improvements to be acquired by the City and the Cucamonga Valley Water District. The Acquisition Agreement provides that the City will acquire the facilities from Lewis Investment with proceeds of the Bonds. See "THE DEVELOPER AND THE DEVELOPMENT - General." Facilities to be Financed with the Bonds The proceeds of the Bonds are intended to provide financing for a portion of the cost of the acquisition and construction of the Facilities undertaken by Lewis Investment, the City, the Water District and the Utilities Agency. Any costs of the Facilities not financed through the use of Bonds proceeds will be financed by Lewis Investment. The cost of the Facilities will include the costs of engineering, design, planning, permitting, and construction, coordination, together with other incidental costs. The following table summarizes the estimated costs of the Facilities to be acquired with Bond proceeds as of December I, 2006: TABLE 4 City of Rancho Cncamonga Community Facilities District No. 2006-02 (Amador on Route 66) Estimated Facilities Costs Sources Bond Proceeds Lewis Investment Equity Total Estimated Cost $2,200,890. 802.882 $3,003,772 Facilities Descriotion Transportation Landscaping Dry Utilities Parks and Recreation Drainage Water(l) Sewer(l) Miscellaneous Costs and Contingency Total $526,300 408,629 114,808 267,291 230,627 436,206 574,461 445.450 $3,003,772 (I) Of such amounts, $284,000 will be used by Cucamonga Valley Water District to construct water and sewer facilities and $145,000 will be used by Inland Empire Utilities Agency to construct wastewater facilities. .Prelintinary, subject to change. Absorption Study The Market Absorption Study dated September 20, 2006 for the District has been prepared by Empire Economics, Inc., Capistrano Beach, California (the "Market Absorption Consultant"). A copy of the Market Absorption Study Summary and Conclusions is included as Appendix H. The Market Absorption Consultant has estimated, based upon the analysis of relevant demographic and economic conditions in the San Bernardino area, the number and proportion of housing units in the District that can be expected to be marketed annually using the estimated absorption schedules for each of the product types. The Market Absorption Study concludes that absorption will begin by the fourth quarter of 2007 with final absorption occurring in the third quarter of 2009. The Market Absorption Study assumes that all required governmental approvals will be obtained, that there are no physical impediments to construction such as earthquakes and hazardous waste, that the public infrastructure necessary to develop will be provided in a timely manner, that the Developer will respond to market conditions with products that are competitively priced and have the features and amenities desired by purchasers, that the developers and their lenders have sufficient financial strength to fund adequately the RVPUBIKSNOw\722113.1 20 P632 projects and that they have sufficient cash flow reserves to supplement their cash flow positions in the event that adverse economic or market conditions occur. The actual absorption of units could be adversely affected if one or more of the foregoing assumptions is not realized. See "Appendix H - Absorption Study." Appraisal of Parcels An Appraisal dated October 23, 2006 was prepared by the Appraiser to ascertain the market value of the fee simple estate of the property in the District subject to the levy of the Special Taxes. The Appraisal was intended to comply with the reporting requirements set forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice for a Summary Appraisal Report, and with the California Debt and Investment Advisory Commission Appraisal Standards for Land Secured Financing. The Appraiser determined that as of October IS, 2006, the property within the District had an estimated market value of $9,000,000. The Appraisal is attached as Appendix A. The City and the District make no representation as to the accuracy or completeness of the Appraisal. Direct and Overlapping Debt The District is subject to existing authorized indebtedness payable from taxes and assessments that are authorized to be levied on property within the District. In addition, other public agencies may issue additional indebtedness at any time, without the consent or approval of the City or the District. The direct and overlapping indebtedness of the District, as of November 1,2006, is shown in Table 5 below. The Bonds are secured by the Special Taxes which may include amounts realized upon foreclosure sale of delinquent parcels. Therefore, the ability of the District to meet debt service on the Bonds may depend on the ability of delinquent parcels to generate sufficient proceeds upon foreclosure sale to pay delinquent Special Taxes. TABLE 5 City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) Estimated Direct and Overlapping Debt Summary OverlaODine: District<l) Chaffey Community College District G.O. Bonds Chaffey Joint Union High School District G.O. Bonds Metropolitan Water District G.o. Bonds 2005-2006 Total Levv $11,711,469 7,164,769 103,904,001 Amount of Levy on Parcels in the District $544 629 153 Percent of Levy on Parcels in the District 0.0046% 0.0088% 0.0001 % Total Debt Outstandim!(2) $110,995,000 109,710,000 389,565,000 District Share of Total Debt OutstandiDl! $5,155 9,626 574 Total Overlapping Dept Plus: The Bonds $15,355 $2.925.000(3) Estimated Share of Direct and Overlapping Debt $2,940,355 Source: David Taussig and Associates, Inc.; County of San Bernardino Auditor/Controller's Office. (lj Includes ad valorem, general obligation, special taxes, and standby charges that support any type of outstanding debt. (2) As of September 30, 2006. (3) Preliminary, subject to change. RVPUBIKSNOW\722!13.! 21 P633 Estimated Value-to-Lien Ratios' The $2,925,000 principal amount of Bonds constitutes direct debt for the property in the District. As set forth in Table 5, as of September 30, 2006, there is approximately $15,355 of other outstanding public indebtedness applicable to the property in the District. Thus, the estimated direct and overlapping debt allocable to property in the District is approximately $2,940,355. The Market Value of the property in the District as of October 15, 2006, as estimated by the Appraiser in the Appraisal, is $9,000,000, which is approximately 3.06 times the sum of the principal amount of the Bonds, plus the amount of all the other outstanding public indebtedness allocable thereto, under the assumptions listed in Table 5. Cumulative Tax, Assessment and Fee Burden on Property In addition to paying the Special Tax, property owners within the District will be obligated to pay ad valorem property taxes and other existing and any additional special taxes, assessments, and fees (some of which secure other debt issued by the City and overlapping jurisdictions). Under the City's "Statement of Goals and Policies for the Use of the Mello-Roos Community Facilities Act of 1982" (the "Goals and Policies") adopted on July 21, 1999, projected special taxes, when added to the existing ad valorem property tax and other direct and overlapping debt for any parcel within a community facilities district, may not exceed 2% of the projected assessed value of each improved parcel within the district upon completion of improvements to the parcel. The District has determined that the projected tax, assessment and fee burden (including the Special Taxes) conforms to the requirements of the Goals and Policies. The following Sample Property Tax Bill generally includes long term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long term obligations generally are not payable from property taxes, assessment or special taxes on land in the District. 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" I::: e ~ " >I.l .- p.. o -- u E'~"il "O"'l::lo..J:l ~ ~ ~:.8 " [> ~ eo 0 < 1-0 ~ (3..-0 ~ ~ q'agj uE=o 8r/.1g:::l ~ 0 '" .8,S ~ 0 <.> 0 " .., ,,0.. """ "l " i< " ~ u 0'" ~'I:: 0 ~ o p.. <ctt '8g.6~::E ctto~["--["-- eo>-o't't .tiJ 11) C \0 \0 rJ'JOCdOO !:! 0 11)00 ~..s.aNN "" ;>, "':><:>< ,-.0 > '" '" ~-o-occ f""'I Q) Q) 0 0 ~:-S~-o-o o ~ ~ ~ ~ U I-< rJ'J ctt ~ !30..-<~~ 0"....., ""' ,-., ,-, r"'_ <'l <"'> '<t ",........,....., ---- M ;:; N ~ o z ~ co ::> ~ ~ N o , '" o o N o Z M N P635 THE DEVELOPER AND THE PROPOSED DEVELOPMENT The information contained in this Official Statement regarding the ownership and the development of property in the District has been included because it is considered relevant to an informed evaluation of the Bonds. The inclusion in this Official Statement of information related to property ownership should not be construed to suggest that the Bonds, or the Special Taxes that will be used to pay debt service on the Bonds, are recourse obligations of any property owner in the District. The Developer and any other property owner may sell or otherwise dispose of land within the District or a development at any time. As the proposed land development progresses and parcels are sold, it is expected that the ownership of the land within the District wUl become more diversified. No assurance can be given that the proposed development of the land within the District will occur, or that it will occur in a timely manner or in the configuration or intensity described in this Official Statement, or that the Developer will retain ownership of any of the undeveloped land within the District. The Bonds and the Special Taxes are not personal obligations of the Developer and its proposed development within the District and, in the event that the Developer or any subsequent landowner defaults in the payment of the Special Taxes, the District may proceed with judicial foreclosure but has no direct recourse to the assets of the Developer or any subsequent landowner. As a result, other than as provided herein, no financial statement or information is, or will be, provided about the Developer. The Bonds are secured solely by the Special Taxes and other amounts pledged under the Fiscal Agent Agreement. Unless otherwise indicated, the information about the Developer contained in this Official Statement has been provided by the Developer and information about Lewis Investment has been provided by Lewis Investment. The information has been provided by sources that are believed by the Underwriter, the District and the City to be reliable, but has not been independently confirmed or verified by either the Underwriter, the District or the City. No representation is made by the Underwriter, the District or the City as to the accuracy or adequacy of such information or as to the absence of material adverse changes in such information subsequent to the date of this Official Statement, or that the information given below or incorporated herein by reference is correct as of any time subsequent to its date. General The Developer acquired all the property within the District from Lewis Investment under the terms of a Purchase Agreement (described below). While the Developer is responsible for the ultimate construction of the detached and attached housing units within the District, Lewis Investment is required under the terms of the Purchase Agreement to construct certain off-site infrastructure improvements. These off-site improvements will be financed with proceeds of the Bonds and the Developer is responsible for financing the remainder of the proposed development and related infrastructure from internal equity sources and from the sale of homes. Sale of Property from Lewis Investment Company, LLC to the Developer. On November 7, 2005, Lewis Investment and the Developer into a purchase and sale agreement for the Property (as amended, the "Purchase Agreement"). Pursuant to the Purchase Agreement, Lewis Investment sold the Property to the Developer in consideration for (a) the payment of the purchase price for the Property, a portion of which was paid through a purchase money note by the Developer to Lewis Investment (the "Note"), which is secured by a deed of trust encumbering the Property; and (b) a profit participation for each phase payable by the Developer to Lewis Investment from its sale of each unit to individual homeowners in accordance with a schedule set forth in the Purchase Agreement. The Note requires payment by the Developer to Lewis Investment on a pro-rata basis (based upon the number of units in each phase as a percentage of all lots provided for on the project tentative map) to release each respective phase from the deed of trust. In the event of a default under the Note, Lewis Investment, as the holder of the Note, has the right to declare the entire unpaid balance of the Note, together with accrued interest thereon, immediately due and payable. RVPUBIKSNOw\7221 13.1 24 P636 The Developer and the Honsing Development William Lvon Homes. Inc. All of the property within the District is currently owned by William Lyon Homes, Inc., a California corporation (the "Developer"). The Developer is a wholly owned subsidiary of William Lyon Homes, a Delaware corporation ("Delaware Lyon"). Delaware Lyon's principal executive offices are located in Newport Beach, California. Delaware Lyon and its subsidiaries are primarily engaged in designing, constructing and selling single family detached and attached homes in California, Arizona and Nevada. Since the founding of its predecessor in 1956, Delaware Lyon has sold over 65,000 homes. Delaware Lyon conducts its homebuilding operations through five geographic divisions (Southern California, San Diego, Northern California, Arizona and Nevada) including both wholly owned projects and projects being developed in unconsolidated joint ventures. Home sales in California accounted for approximately 63% of Delaware Lyon's home deliveries in Fiscal Year 2005, which runs from January 1 through December 31. Delaware Lyon and its unconsolidated joint ventures delivered 3,196 homes in Fiscal Year 2005, compared with 3,471 home deliveries in Fiscal Year 2004. Revenues from home sales were approximately $1.745 billion in Fiscal Year 2005 generating a net income of approximately $190.6 million, compared to revenues from home sales of approximately $1.786 billion with a net income of approximately $171.6 million in Fiscal Year 2004. In Fiscal Year 2005, Delaware Lyon's average home selling price was approximately $546,000, ranging from approximately $197,000 to approximately $2,070,000, compared to Fiscal Year 2004 where Delaware Lyon's average selling price was approximately $514,400, ranging from approximately $119,000 to approximately $2,070,000. In the Form 8-K which was filed on October II, 2006, for the first three quarters of 2006 (ending September 30, 2006), Delaware Lyon reported that new home orders were 1,698, a decrease of 41 % as compared to 2.961 for the same time period in 2005. In addition, the cancellation rate was 33% for the first three quarters of2006 (compared to 13% for the same time period in 2005). Delaware Lyon was a publicly traded company with its stock listed on the New York Stock Exchange (the "NYSE") under the symbol "WLS." However, Delaware Lyon recently converted to a privately-held company, as discussed further below. The Tender Offer. On March 17, 2006, General William Lyon, Chairman of the Board and Chief Executive Officer of Delaware Lyon, announced that he had commenced a tender offer to purchase all outstanding shares of common stock of Delaware Lyon not already owned by him, The William Harwell Lyon 1987 Trust, or The William Harwell Lyon Separate Property Trust. On May 18,2006, General Lyon announced the completion of the tender offer and that he had accepted for payment all shares validly tendered in the offer, a portion of which remain subject to guaranteed delivery procedures. The shares tendered in the offer, together with the shares already owned by General Lyon, The William Harwell Lyon 1987 Trust and The William Harwell Lyon Separate Property Trust, represent over 90% of the outstanding shares of Delaware Lyon. Accordingly, upon completion of the purchase of the tendered shares (including those still subject to guaranteed delivery procedures) and contribution of all shares held by General Lyon and the aforementioned trusts into a newly formed Delaware corporation (the "Acquisition Corporation"), the Acquisition Corporation would hold a sufficient number of shares to enable General Lyon to effect a short-form merger between the Acquisition Corporation and Delaware Lyon under Delaware law. The merger occurred on July 25, 2006 with Delaware Lyon continuing as the surviving corporation of the merger. At the time of the merger, each outstanding share of Delaware Lyon common stock (except for shares owned by the Acquisition Corporation and by stockholders who properly exercised their appraisal rights in accordance with Delaware law) was cancelled and converted into a right to receive $109 per share in cash without interest. Informational Reporting. Delaware Lyon is currently subject to certain informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the SEe. Such filings, particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such files can also be accessed RVPUB\KSNOw\722 I 13.1 25 P637 over the Internet at the SEC's website at www.sec.gov. Copies of such material can be obtained from the public reference section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the aforementioned material may also be inspected at the office of the NYSE at 20 Broad Street, New York, New York 10005. Copies of Delaware Lyon's Annual Report and related financial statements are available on its website at www.1yonhomes.com. The Internet addresses and references to filings with the SEC are included for reference only, and the information on these Internet sites and on file with the SEC are not a part of this Official Statement and are not incorporated by reference into this Official Statement. Development Experience. In addition to the Project, recent projects developed or under development by the Developer include the following: Planned Estimated Estimated Estimated! Actnal Nnmber of Square Average Completion Proiect Name Location Units Foota!!e Sellin!! Price Date!l) Garland Park Irvine 166 1,355-1,971 $500,000 December 2006 Lombard Court Irvine 150 1,086-1,635 400,000 December 2006 Ambridge Irvine 128 1,205-1,833 400,000 June 2006 Sea Cove Huntington 106 1,619-2,693 700,000 March 2006 Beach FlHearthstonelisa San Juan 80 4,874-5,500 1,600,000 May 2007 Capistrano Mirador San Clemente 76 3,705-4,539 1,100,000 July 2006 Amarante Ladera Ranch 71 2,907-3,764 1,000,000 November 2006 Estrella Rosa San Juan 40 3,363-4,383 1,200,000 March 2007 Capistrano The Proposed Housing Development Amador on Route 66 The Developer intends to construct 99 triplex homes within a gated development to be known as Amador on Route 66. The development is located close to Interstates 10, 15 and 210 and the Rancho Cucamonga Community Center. The homes will be marketed in three separate plans. Plan One is expected to have 33 homes that are anticipated to be priced at approximately $375,000 for 1,328 sq. ft. of living area. . Plan Two is expected to have 33 homes that are anticipated to be priced at approximately $432,500 for 1,728 sq. ft. of living area. Plan Three is expected to have 33 homes that are anticipated to be priced at approximately $447,500 for 1,905 sq. ft. of living area. The homes will have from 2 to 4 bedrooms, 2 to 3 bathrooms and 2-car garages. Proiect Approval All master infrastructure plans with the exception oflandscaping have been obtained. On January 11,2006, the City of Rancho Cucamonga adopted a Mitigated Negative Declaration for the Amador on Route 66 project. On January 11,2006, the City of Rancho Cucamonga, by Resolution No. 06-04, approved Tentative Tract Map No. 16882. The final map for Tract Map is expected to be recorded by mid-December. RVPUBIKSNOw\722113.1 26 Permits and Geotechnical Report P638 The Developer has represented that all necessary permits to proceed with the proposed project have been received, except the final map and building permits for production homes. Petra Geotechnical, Inc. was engaged by the Developer to complete a geotechnical investigation of the property within the District. In September 2006, Petra Geotechnical, Inc. delivered its report describing the site condition, results of their field exploration and laboratory testing, conclusions and recommendations. Based upon the specific data and information contained in its report, Petra Geotechnical, Inc. found in their professional opinion that the proposed development is geologically and geotechnically feasible subject to implementation of the recommendations contained in such report. The District is not located in an Alquist-Priola Earthquake Fault Zone. There are earthquake faults in the area, including the Cucamonga fault zone, the San Andreas fault zone and the San Jacinto fault zone. All properties in California are subject to some degree of seismic risk. See "APPENDIX A - Summary Appraisal Report - Bondowner's Risk, Land Value and Development, Natural Disasters." In-Tract Infrastructure Status and Financing The Developer is currently undertaking the ground preparation and in-tract improvements to proceed with home construction. The following table shows the status, cost and estimated completion dates for the in- tract improvements to be constructed by the Developer all of which will be paid from Developer sources and not from Bond proceeds: Table 7 William Lyon Homes Amador on Route 66 Estimated In-Tract Grading and Infrastructure Costs and Scheduled Completion Dates Improvements Gtading Water Sewer Storm Drain Street Dry Utilities Landscaping and Walls Total Estimated Cost $577,544 240,000 130,000 650,090 370,575 183,150 249,400 $2,151,269 Financing of In-Tract Infrastructure. % Complete as of 12/1106 100 100 100 100 o 50 o Expected Completion Date Completed Completed Completed Completed 1/3/07 12/15/06 1/15/07 The Developer expects that the aggregate acqUlS1l10n and construction costs for its proposed development will cost approximately $39,546,500. The foregoing sum does not include (i) the costs of the off- site improvements being constructed by Lewis Investment and funded by the proceeds of the Bonds or (ii) any governmental fees otherwise payable by the Developer in connection with the development of the project which are also being financed by the proceeds of the Bonds. The Developer plans to finance the costs of the development with internal sources of cash and lot and home sales revenues. Bond proceeds will not be used to finance the construction of the in-tract improvements. The Developer's parent company, Delaware Lyon, reported net income of $30,381,000 as of June 30, 2006. Delaware Lyon is involved in the construction and financing of many projects in addition to the proposed development in the District. If and to the extent this source of financing is inadequate to complete the planned development of the property, there can be no assurance of the willingoess or ability of the Developer or Delaware Lyon to make such funds available in the future, or the ability of Developer to obtain financing from other sources. In RVPUBIKSNOW\722113.1 27 P639 addition, if and to the extent that internal financing and home sales revenues are inadequate to pay the costs to complete Developer's planned development within the District and other financing by Developer is not put into place, there could be a shortfall in the funds required to complete the proposed development by the Developer and portions of the project may not be developed. As discussed below, Lewis Investment is required under the Purchase Agreement to construct certain off-site improvements for the project. Under the terms of the Purchase Agreement, Lewis Investment is required to cause the construction of the off-site improvements within 6 months after commencing the construction thereof. However, if Lewis Investment does not use commercially reasonable efforts to construct the off-site improvements, the Developer may assume control of the construction of the off-site improvements. In such an event, Lewis Investment will remain responsible for the off-site improvement costs, and reimburse the Developer for any costs relating to the construction of the off-site improvements and pay an administration and supervision fee. RVPUB\KSNOW\722 1 13.1 28 ii ~.s .g '" "J.; Eh, tS[ o 8 .... .- "';., '" " ..... '" g.g .Q.", ~ g OJ QI: OJ ~ !S '" OJ . > .~ ~ .~ .~ Q OJ OJ...l .,s;., o::~ .- .", o:SE .- 0 ~E OJ '" ~ 8 '" 0 OJ OJ 8~ o 0 ..c:- .",ZJ .B 0:: o OJ .~ s e ~ ",0 .", ~ 0:: 8 " .- QB " .- ~~ " 0 '" 0:: ~ .~ <;:; 0 ..c: OJ '" 0 ~ ~ " 0:: E~ ~""'"ri 0"" .E .... 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'a OJ) 1Zl 0 1Zl _::E u 0 U g=~~et)o:::>~St) s~~~o~,g~;~-B ~~Ci~oo~U)o~uo ~ " ~ f-< '" " '0 .2: " - ~ 01111 .", .s .13 : }1.S ~ i;I ~ ~::Eo(l e] '" 8.. ~ g 8 C; Q) ",,,,CI 00 '" .", " " ... .... o '" '" ~ ~ 1O- " " ~~o " f-< '" ~ o 'g. '" P640 ..; 00 E . o "".,,~ M -" .n Q) Q) 0\ ;sg ~ .S S. 1l] o 0 .",0:1 ..6;9 ~..E .~ ".", 8 .; o~ .- " 50" "'1O ~~ 00..... ell ~V7t;QJ '" .g E; ~ tI)--: J- .; .~ fA ~.3 " >- ".0 .0.", 00>>2 o ~ e (.) :;;;- ....E ~ ]8 vS ~ (.) "" ...." 0.0 ~.8 " ~ 8"E 8 E "'" " > ~~ " .- ..92 ~';;) .5lt= s 0 .0 " 0;9 >-- 8 g 0:: ~ - o " .g '" '" ~ o ; u ..Cl " ",- " ~ u 13 "\:l 0 Z::I:~ g ~ >-0 ....l1l 8- ,g .~ - - .- ~ ~'" '" N N ~ o z ~ '" :0 .. i,; :::-8: P641 Lewis Investment and Off-Site Infrastrncture Lewis Investment is owned by The Lewis Group of Companies. The Lewis Group of Companies is a collection of affiliated entities including partnership, joint ventures, wholly-owned subsidiaries and partially owned subsidiaries collectively referred to herein as "The Lewis Group of Companies." The Lewis Group of Companies is one of the nation's largest privately-held affiliated group of real estate development companies. The Lewis Group of Companies mainly plans and develops mixed-use planned communities and residential subdivisions in California and Nevada, as well as building multi-family communities, shopping centers, office parks and industrial space. The Lewis Group of Companies works with major landowners, other developers, financial institutions and companies in other businesses which have real estate holdings. The arrangements vary depending on many circumstances. The Lewis Group of Companies will manage for a fee commercial and residential real estate or, contribute equity, or joint venture in the development of such real estate. The Lewis Group of Companies originated in 1955 in Claremont, California. Since 1955, The Lewis Group of Companies has developed over 56,000 homes, 9,000 apartment units, 7.4 million square feet of retail, office and industrial developments, and has developed and sold 6,000 lots to other builders in California, Nevada, Arizona and Utah. As of October 15, 2006, The Lewis Group of Companies, owned or controlled approximately 16,000 acres of land to potentially be developed into residential communities, owned or managed approximately 7,500 apartment units, and owned or managed approximately 4 million square feet of investment property. Recent Projects. Some of the projects currently under active development by The Lewis Group of Companies in the Southern California area include: Project Name Sierra Lakes The Preserve at Chino Citrus Heights Source: Lewis Investment. Approximate Number of Units 1,821 7,000 487 Location (CA) Expended Buildout Units Closed as of October 15, 2006 1,821 384 408 Fontana Chino Fontana Built Out 2016 February 2007 Off-Site Infrastructure Status and Financing Under the Purchase Agreement, Lewis Investment is required to construct certain off-site improvements for the Project. The off-site improvements consist of the improvements necessary to provide water, sewer, drainage, electricity, gas, phone and CATV services to the property sufficient to serve all of the units in the Project. The following table shows the status, cost and estimated completion dates for the off-site improvements to be constructed by Lewis Investment: Table 9 Lewis Investment Amador on Route 66 Estimated Infrastructure Costs and Scheduled Completion Dates Improvements Street Landscaping Drainage Water Sewer Total RVPUBIKSNOw\722113.1 Estimated Cost $812,354 367,584 65,000 120,000 36.000 $1,400,938 % Complete as of 11/1/06 o o o o o Expected Completion Date April 23, 2007 May 25, 2007 January 31, 2007 January 31, 2007 January 31, 2007 30 P642 Financing of Off-Site Infrastructure. Lewis Investment expects that its remaining infrastructure costs for the proposed development will cost approximately $1.4 million. Lewis Investment plans to finance the costs of the infrastructure improvements with internal sources of cash and proceeds of the Bonds. There is no assurance that amounts necessary to finance its remaining site development costs within the District will be available from Lewis Investment, The Lewis Group of Companies or any of their affiliates, or any other source, when needed. Lewis Investment, The Lewis Group of Companies or any of its affiliates are not under any legal obligation of any kind to expend funds for the development of the property within the District. Any contributions by Lewis Investment, The Lewis Group of Companies or any of their affiliates to fund costs of infrastructures within the District are entirely voluntary. BONDOWNERS' RISKS The following is a discussion of certain risk factors that should be considered, in addition to other maUers set forth in this Official Statement, in evaluating the investment quality of the Bonds. 'This discussion does not purport to be comprehensive or definitive. The occurrence of one or more of the events discussed in this Official Statement could adversely affect the ability or willingness of property owners in the District to pay their Special Taxes when due. Such failures to pay Special Taxes could result in a rapid depletion of the Reserve Fund and/or a default in payments of the principal of, and interest on, the Bonds. In addition, the occurrence of one or more of the events discussed in this Section could adversely affect the value of the property in the District. Not a General Obligation of the District or the City The Bonds are not' general obligations of the District or the City but are limited obligations of the District payable solely from proceeds of the Special Taxes and, to a limited extent, proceeds of the Bonds, including amounts in the Reserve Fund and investment income on funds held under the Fiscal Agent Agreement (other than funds held in the Costs ofIssuance Fund, the Project Fund, the Administrative Expense Fund and the Rebate Fund as to the Fiscal Agent Agreement). Levy of the Special Taxes The principal source of payment of debt service on the Bonds is the proceeds of the annual levy and collection of the Special Taxes. The annual levy of the Special Tax is subject to the maximum tax rates authorized in the.Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the Bonds. Other funds that might be available to pay debt service on the Bonds include funds derived from the payment of delinquent special taxes and funds derived from the foreclosure and sale of parcels on which the Special Taxes levied are delinquent. The levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of the Taxable Property (as such term is defined in the Rate and Method) and the amount of the levy of the Special Tax. Thus, there will rarely, if ever, be a uniform relationship between the value of a parcel' and the proportionate share of Bond debt service levied on the parcel, and certainly not a direct relationship. The Special Tax levied in any particular tax year 0,\ a Taxable Property is based upon the application of the Rate and Method. See Appendix B - Rate and Method of Apportionment. Application of the Rate and Method will, in turn, be dependent upon certain development factors with respect to each Taxable Property by comparison with similar development factors with respect to other Taxable Properties within the District. Thus, the following are some of the factors that might cause the levy of the Special Tax on any particular Taxable Property to vary from the Special Tax that might otherwise be expected: (i) Reduction in the number of parcels of Taxable Property, for such reasons as acquisition of Taxable Property by a government and failure of the government to pay the Special Tax based upon a RVPUB\KSNOw\722113,1 31 P643 claim of exemption, thereby resulting in an increased tax burden on the remaining Taxable Property; and (ii) Failure of the owners of Taxable Property to pay the Special Tax and delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, thereby resulting in an increased tax burden on the remaining parcels of Taxable Property. Exempt Properties Certain private properties owned by Property Owner Associations are exempt from the Special Tax in accordance with the Rate and Method. In addition, the Rate and Method provides that certain properties of the state, federal or local governments are exempt from the Special Taxes. Therefore, property acquired by a public entity following the issuance of the Bonds will be exempt from the Special Tax. See "SECURITY FOR THE BONDS - The Special Tax" herein and "Appendix B - Rate and Method of Apportionment of Special Taxes." In particular, insofar as the Rate and Method requires payment of the Special Tax by a federal entity acquiring a parcel of Taxable Property, it may be unconstitutional. If for any reason a parcel of Taxable Property becomes exempt from taxation by reason of ownership by a nontaxable entity such as the federal government, another public agency or a religious organization, subject to the limitation of the maximum rate, the Special Tax will be reallocated to the remaining Taxable Properties within the District in which the parcel is located. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the timely payment of the Special Tax. Moreover, if a substantial portion of the Taxable Property within the District becomes exempt from the Special Tax because of public ownership, or otherwise, the maximum rate that could be levied upon the remaining acreage might not be sufficient to pay principal of and interest on Series of the Bonds secured by such Special Tax when due and a default would occur with respect to the payment of such principal and interest. Collection of the Special Taxes The District has no obligation to pay debt service on the Bonds in the event Special Tax installments are delinquent, nor is the District obligated to advance funds to pay such debt service. The Rate and Method provides that the Special Taxes are to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described below, are to be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is subject to sale by the County. Under the Fiscal Agent Agreement, in the event of any delinquency in the payment of the Special Tax, the District may order the institution of a superior court action to foreclose the lien in the amount of the delinquent Special Taxes plus penalties, interest, and costs (including attorney's fees) within. specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not mandatory. However, the District has covenanted to cause foreclosure proceedings to be commenced and prosecuted against those properties that are delinquent in the payment of the Special Tax. For a description of the foreclosure covenant and the limitations upon foreclosure, see "SECURlTY FOR THE BONDS - Delinquent Special Taxes; Covenant To Foreclose." In the event that sales or foreclosures of property within the District are necessary as a result of the delinquency in the payment of Special Taxes, there could be a delay in payment of the Bonds if the Reserve Fund is depleted pending such sales or the prosecution of foreclosure proceedings against such delinquent property and receipt by the District of the proceeds of such a sale. In addition, there can be no assurance that the sale of delinquent parcels in foreclosure will produce sufficient proceeds to cover such delinquencies. Although below peak delinquency rates experienced in 1996, delinquency rates have been increasing in the State of California, Southern California and the County of San Bernardino over the last several years. See "APPENDIX H - Summary Absorption Study - Delinquency Rates and Types of Loans." RVPUB\KSNOW\722113.1 32 P644 Concentration of Property Ownership As of the date of this Official Statement, all of the property in the District subject to the levy of the Special Tax is owned by the Developer. The willingness and ability of the Developer to pay property taxes and the Special Taxes could be adversely affected by changes in general or local economic conditions, fluctuations in the real estate market and other factors. Failure of the Developer (or any future owner of significant property within the District subject to the levy of the Special Taxes) to pay installments of such Special Taxes when due could cause the depletion of the Reserve Fund for the Bonds prior to reimbursement from the resale of foreclosed property or payment of the delinquent Special Tax and, consequently, result in the delinquency rate reaching a level that would cause an insufficiency in collection of the Special Tax to meet the District's obligations under the Fiscal Agent Agreement. For a description of the Developer, see "THE DEVELOPER AND THE PROPOSED DEVELOPMENT." In that event, there could be a delay or failure in payments on the Bonds. See "BONDOWNERS - Bankruptcy and Foreclosure Delays" and "SECURITY FOR THE BONDS - Delinquent Special Taxes; Covenant to Foreclose" for a further discussion. Not a Personal Obligation An owner of Taxable Property is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation only against the Taxable Property. If the value of the Taxable Property is not sufficient, taking into account other obligations also payable thereby to fully secure the Special Tax, the District has no recourse against the property owner. Parity Taxes and Special Assessments The Special Taxes and any related penalties will constitute a lien against the lots and parcels ofland on which they will be annually imposed until they are paid. This tax lien is on a parity with all special taxes and special assessments levied by other agencies and is co-equal to and independent of the lien for general property taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all existing and future private liens imposed on the property. However, neither the District nor the City has any control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the property within the District. If any additional improvements or fees are financed by an assessment district or another district formed under the Act, any taxes or assessment levied to finance such improvements will have a lien on a parity with the lien of the Special Tax. For information concerning existing direct and overlapping public indebtedness within the District, see "THE DISTRICT - Cumulative Tax, Assessment and Fee Burden on Property." The existence of general property taxes, other special taxes, and assessments may reduce the value-to-debt ratio of the affected parcels and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes or the principal of and interest on the Bonds when due. The City has covenanted that it will not issue additional bonds having a lien upon the Special Taxes superior to or on a parity with the lien of the Bonds. Land Values and Development The development of the Taxable Property within the District and the value of such Taxable Property is a critical factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of the Special Tax, the City's only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax. Land values could be adversely affected by economic factors beyond the City's control, such as relocation of employers out of the area, stricter land use regulations, the absence of water, or destruction of property caused by, among other eventualities, earthquake, flood or other natural disasters, or by environmental pollution or contamination. In addition, a major risk to Bondowners is that development by the Developer of property within the District may be subject to unexpected delays, RVPUB\KSNOW\722113.1 33 P645 disruptions and changes that may affect the willingness and ability of the property owners to pay Special Taxes when due. Land Development. Land values are influenced by the level of development in the area in many respects. First, partially developed land is generally less valuable than developed land and provides less security to the owners of the Bonds should it be necessary for the City to foreclose on undeveloped property due to the nonpayment of Special Taxes. Moreover, failure to complete development on a timely basis could adversely affect the land values of those parcels that have been completed. Lower land values would result in less security for the payment of principal of and interest on the Bonds and lower proceeds from any foreclosure sale necessitated by delinquencies in the payment of the Special Tax. Currently, the property within the District is under development. As of October 15, 2006, the appraised value of the Property was $8,500,000. No assurance can be given that the property within the District will be developed, and in assessing the investment quality of the Bonds, prospective purchasers should evaluate the risks of non-completion. Special Tax Buydown. Change in development plans for the proposed housing project could result in a Special Tax Buydown causing a redemption of the Bonds. See "APPENDIX B - Rate and Method of Apportionment of Special Taxes- Special Tax Buydown." Risks of Real Estate Investment Generally. Continuing development of land within the District may be adversely affected by changes in general or local economic conditions, fluctuations in the real estate market, increased construction costs, development, financing and marketing capabilities of individual property owners, water shortages and other similar factors. Development in the District may also be affected by development in surrounding areas, which may compete with the District. In addition, land development operations are subject to comprehensive federal, state and local regulations, including environmental, land use, zoning and building requirements. There can be no assurance that proposed land development operations within the District will not be adversely affected by future government policies, including, but not limited to, governmental policies to restrict or control development, or future growth control initiatives. There can be no assurance that land development operations within the District will not be adversely affected by these risks. The City has not evaluated development risks. Since these are largely business risks of the type that property owners customarily evaluate individually, and inasmuch as changes in land ownership may well mean changes in the evaluation with respect to any particular parcel, the City is issuing the Bonds without regard to any such evaluation. Thus, the creation of the District and the issuance of the Bonds by the City in no way implies that the City has evaluated these risks or the reasonableness of these risks even though such risks may be serious and may ultimately halt or slow the progress of land development and forestall the realization of Taxable Property values. The Market Absorption Study indicates certain risks associated with increasing home loan interest rates, other inflationary factors and adjustable interest rate mortgages which have been utilized in the past several years by homeowners and are subject to reset at higher rates. See Appendix H - "Summary of Absorption Study _ POTENTIAL "FINANCIAL" RISK FACTORS UNDERLYING THE CREDIT QUALITY AND BOND SIZING FOR LAND SECURED FINANCINGS IN SOUTHERN CALIFORNIA." Natural Disasters. The value of the Taxable Property in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the Taxable Property and the continued habitability and enjoyment of such private improvements. For example, the areas in and surrounding the District, like those in much of California, may be subject to unpredictable seismic activity. Other such occurrences could include, without limitation, landslides, floods, droughts, and tornadoes. Although the District is not located within the boundaries of a state established RVPUBIKSNOw\722113.1 34 P646 Earthquake Fault Study Zone, several known faults are in the area, including the Cucamonga fault zone, the San Andreas fault zone and the San Jacinto fault zone. All properties in California are subject to some degree of seismic risk. See "APPENDIX A - Summary of Appraisal Report." One or more of such natural disasters, including earthquake and flood, could occur and could result in damage to improvements of varying seriousness. The damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost, or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances there could be significant delinquencies in the payment of Special Taxes, and the value of the Taxable Property may well depreciate or disappear. Fire Hazard. Like the natural disasters discussed above, fire damage entail significant repair and replacement costs. If such repairs are not made after a fire, there could be significant delinquencies in the payment of Special Taxes, and the value of the Taxable Property may well depreciate or disappear. The District is not located in a "Very High Fire Hazard Security Zone" based on map produced by the California Department of Forestry and Fire. Legal Requirements. Other events that may affect the value of a Taxable Property include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures. Development in the District may also be adversely affected by the application oflaws protecting endangered or threatened species. See "CONCLUDING INFORMATION - Litigation." Hazardous Substances. One of the most serious risks in terms of the potential reduction in the value of a Taxable Property is a claim with regard to a hazardous substance. In general, the owners and operators of a Taxable Property may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as "CERCLA" or the "Superfund Act," is the most well-known of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the Taxable Property be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller. The values set forth in the Appraisal do not take into account the possible reduction in marketability and value of any of the Taxable Property by reason of the possible liability of the owner or operator for the remedy of a hazardous substance condition of the parcel. Although the City is not aware that the owner or operator of any of the Taxable Property has such a current liability with respect to any of the Taxable Property, it is possible that such liabilities do currently exist and that the City is not aware of them. Further, it is possible that liabilities may arise in the future with respect to any of the Taxable Property resulting from the existence, currently, .on the parcel of a substance presently classified as hazardous but that has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but that may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a Taxable Property that is realizable upon a delinquency. RVPUB\KSNOW\722113.1 35 P647 Notice of Special Taxes; Disclosures To Future Purchasers The willingness or ability of an owner of a Taxable Property to pay the Special Taxes even if the value is sufficient may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel.should the Special Tax be levied at the maximum tax rate and the risk of such a levy and, at the time of such a levy, has _ the ability to pay it as well as pay other expenses and obligations. The City has caused a notice of the Special Tax to be recorded in the Office of the Recorder for the County against each Taxable Property. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a property within the District or lending of money thereon. The Act requires the subdivider (or its agent or representative) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a special tax levied pursuant to the Act of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section II02.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Taxes, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Taxes when due. Bankruptcy and Foreclosu,:e Delays GeneraL The payment of the Special Taxes and the ability of the City to foreclose the lien of a delinquent unpaid tax, as discussed under "SECURITY FOR THE BONDS," may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. In addition, the prosecution of a foreclosure action could be delayed due to crowded local court calendars or delays in the legal process. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases. Although bankruptcy proceedings would not cause the lien of the Special Taxes to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings. The federal bankruptcy laws provide for an automatic stay of foreclosure and tax sale proceedings, thereby delaying such proceedings, perhaps for an extended period. Any such delays would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds secured by the levy of Special Taxes in which such property is located and the possibility of delinquent tax installments not being paid in full. To the extent that bankruptcy or similar proceedings were to involve a large property owner, the chances would increase the likelihood that the Reserve Fund could be fully depleted during any resulting delay in receiving payment of delinquent Special Taxes. As a result, sufficient moneys would not be available in such Reserve Fund for transfer to the Bond Furid to make up any shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Bonds on a timely basis. Property Owned by the FDIC. The ability of the City to foreclose upon the lien relating to property on which Special Taxes have not been paid may be limited in certain respects with regard to properties in which the FDIC has an interest. On November 26, 1996, the FDIC adopted a Statement of Policy Regarding the Payment of State and Local Property Taxes (the "Policy Statement") (which superseded a prior statement issued by the FDIC and the RVPUB\KSNOW\722113.1 36 P648 Resolution Trust Corporation in 1991). The Policy Statement applies to the FDIC when it is liquidating an asset in its corporate and receivership capacities. The Policy Statement provides, in part, that owned real property of the FDIC is subject to state and local real property taxes if those taxes are assessed according to the property's value, and that the FDIC is immune from ad valorem real property taxes assessed on other bases. The Policy Statement also provides that the FDIC will pay its proper tax obligations when they become due and will pay claims for delinquencies as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC interest in the property is appropriate. It further provides that the FDIC will pay claims for interest on delinquent property taxes owned at the rate provided under state law, but only to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay for any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. The Policy Statement also provides that if any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. No property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, a lien for taxes and interest may attach, but the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent. With respect to challenges to assessments, the Policy Statement provides: "The [FDIC] is only liable for state and local taxes which are based on the value of the property during the period for which the tax is imposed, notwithstanding the failure of any person, including prior record owners, to challenge an assessment under the procedures available under state law. In the exercise of its business judgment, the [FDIC] may challenge assessments which do not conform with the statutory provisions, and during the challenge may pay tax claims based on the assessment level deemed appropriate, provided such payment will not prejudice the challenge. The [FDIC] will generally limit challenges to the current and immediately preceding taxable year and to the pursuit of previously filed tax protests. However, the [FDIC] may, in the exercise of its business judgment, challenge any prior taxes and assessments provided that (I) the [FDIC's] records (including appraisals, offers or bids received for the purchase of the property, etc.) indicate that the assessed value is clearly excessive, (2) a successful challenge will result in a substantial savings to the [FDIC], (3) the challenge will not unduly delay the sale of the property, and (4) there is a reasonable likelihood of a successful challenge." The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time the FDIC acquires its fee interest in the property, nor will the FDIC recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Because the Special Taxes are neither ad valorem taxes nor special assessments, the City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency on a parcel included in the District in which the FDIC has an interest, although prohibiting the lien of the FDIC to be foreclosed on at a judicial foreclosure sale would likely reduce the number of or eliminate the persons willing to purchase a parcel at a foreclosure sale. Owners of the Bonds should assume that the City will be unable to foreclose on parcels of land in the District owned by the FDIC. Such an outcome would cause a draw on the Reserve Fund and perhaps, ultimately, a default in payment of the Bonds. Limitation on Remedies of Bondholders; No Acceleration Remedies available to Bondholders may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds, or to preserve the tax-exempt status of the Bonds. Bond Counsel has limited its opinion as to the enforceability of the Bonds and the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, or similar laws affecting generally the enforcement of creditors' rights. Additionally, the Bonds are not subject to acceleration in the event of the breach of any covenant or duty under the Fiscal Agent Agreement. Lack of remedies may entail risks of delay, limitation, or modification of Bondowner rights. Judicial remedies, such as foreclosure and enforcement of covenants, are subject to exercise of judicial discretion. A California court may not strictly apply certain remedies or enforce certain covenants if it concludes that application or enforcement would be unreasonable under the circumstances and it may delay the application of such remedies and enforcement. RVPUBIKSNOw\722!13.! 37 P649 Loss of Tax Exemption As discussed under the caption "CONCLUDING INFORMATION - Tax Matters," interest on the Bonds might become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued, as a result of future acts or omissions of the District or City in violation of the City's covenants in the Fiscal Agent Agreement. The Fiscal Agent Agreement does not contain a special redemption feature triggered by the occurrence of an event of taxability. As a result, if interest on the Bonds were to be includable in gross income for purposes of federal income taxation, the Bonds would continue to remain outstanding until maturity unless earlier redeemed under the Fiscal Agent Agreement. See "THE BONDS - Redemption of Bonds." Secondary Markets and Prices The Underwriter will not be obligated to repurchase any of the Bonds, and no representation is made concerning the existence of any secondary market for the Bonds. No assurance can be given that any secondary market will develop following the completion of the offering of the Bonds, and no assurance can be given that the initial offering prices for the Bonds will continue for any period of time. CONCLUDING INFORMATION Tax Matters In the opinion of Best Best & Krieger LLP, San Diego, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from State of California personal income tax. Bond Counsel notes that, with respect to corporations, interest on the Bonds will be included as an adjustment in the calculation of alternative' minimum taxable income, which may affect the alternative minimum taxable liability of such corporations. Bond Counsel's opinion as to the exclusion from gross income for federal income tax purposes of interest on the Bonds is based upon certain representations of fact and certifications made by the City, the Underwriter and others and is subject to the condition that the City complies with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the bonds to assure that interest on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such requirements. Should the interest on the Bonds become includable in gross income for federal income tax purposes, the Bonds are not subject to early redemption as a result of such occurrence and will remain outstanding until maturity or until otherwise redeemed in accordance with the Fiscal Agent Agreement. The Internal Revenue Service (the "IRS") has initiated an extensive program for the auditing of tax- exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar bonds). Bond Counsel's opinion may be affected by action taken (or not taken) or events occurring (or not occurring) after the date of issuance of the bonds. Bond Counsel has not undertaken to determine, or to inform any person, whether any such action or events are taken .or do occur, or wheiher such actions or events may adversely affect the value of tax treatment of a Bond and Bond Counsel expresses no opinion with respect thereto. RVPUBIKSNOW\722113.! 38 P650 Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes provided the City continues to comply with certain requirements of the Code, the accrual or receipt of interest on the Bonds may otherwise affect the tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status and other items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all potential purchasers should consult their tax advisors before purchasing any of the Bonds. Legal Opinions The legal opinion of Best Best & Krieger LLP, San Diego, California, approving the validity of the Bonds in substantially the form set forth as Appendix F hereto, will be made available to purchasers at the time of original delivery. A copy of the legal opinion for the Bonds will be provided with each definitive bond. Certain legal matters will be passed upon for the City and the District by Richards Watson & Gershon, a professional corporation, Los Angeles, California, City Attorney and by Best Best & Krieger LLP, Riverside, California, as disclosure counsel to the City. Litigation At the time of delivery of and payment for the Bonds, the District will certify that, to the current actual knowledge (after reasonable investigation) of the officer of the City executing the certificate, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or regulatory agency, public board or body pending or overtly threatened in writing against the District or the City that in any way seeks to affect the existence of the District or the City or the titles of their officers to their respective offices, or that seeks to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds of the Bonds in accordance with the Fiscal Agent Agreement, or in any way contests or seeks to affect the validity or enforceability of the Bonds, the Fiscal Agent Agreement, or the Bond Purchase Agreement or any action of the District or the City contemplated by any of said documents, or that in any way contests the completeness or accuracy of this Official Statement or the powers of the District or the City or their authority with respect to the Bonds or the Fiscal Agent Agreement or any action of the District or the City contemplated by any of said documents, or that would adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or the exemption of such interest for California personal income taxation. Continning Disclosure The City, acting as the administrator for and on behalf of the District, will covenant for the benefit of the Bondowners to provide annually, commencing February 1, 2008, certain financial information and operating data relating to the District (the "District's Annual Reports"), and to provide notices of the occurrence of certain enumerated events, if material. The District's Annual Report will be delivered not later than seven months after the end of the City's fiscal year (which currently ends on June 30), commencing with the report for the 2005- 2006 fiscal year. The Developer will covenant for the benefit of the Bondowners to provide certain information and operating data regarding their respective development of their property in the District on a semi-annual basis (the "Property Owner's Semi-Annual Reports"), and to provide notices of the occurrence of certain enumerated events, if material within their respective properties. The Property Owner's Semi-Annual Reports will be distributed by the dissemination agent on April 30 and October 31 of each year, commencing, April 30, 2007. See "APPENDIX E - Form of Continuing Disclosure Agreements - DEVELOPER CONTINUING DISCLOSURE AGREEMENT." The District's Annual Reports and the Property Owner's Semi-Annual Reports will be filed with each Nationally Recognized Municipal Securities Information Repository and with the appropriate State information depository, if any. The notices of material events will be filed with the Municipal Securities Rulemaking Board (and with the appropriate State information depository, if any). The specific nature of the information to be contained in the District's Annual Reports, the Property Owner's Semi-Annual Reports and the notices of RVPUBIKSNOw\722113.1 39 P651 material events is set forth in "Appendix E - Forms of Continuing Disclosure Agreements." These covenants have been made in order to assist the Underwriter in complying with SEC Rule l5c2-l2(b)(5) (the "Rule"). The obligation of the property owners to provide information is limited to the type of information described in its continuing disclosure undertakings. Neither the City nor the District will assume. any responsibility for the enforcement of the property owners' obligations under their continuing disclosure undertakings nor for the accuracy of the information contained in the Property Owner's Semi-Annual Reports. The City, acting as the administrator for and on behalf of certain other community facilities districts, has on two occasions not met the continuing disclosure requirements under the Rule on a timely basis. In each instance the City failed to timely file reports on behalf of these community facilities districts, due on February 1, 2001 for the Community Facilities District No. 2000-01 (South Etiwanda) Special Tax Bonds, Series 2000 and for the Community Facilities District No. 2000-02 (Rancho Cucamonga Corporate Park) Special Tax Bonds, Series 2001. Such reports were subsequently filed on June 12, 2001. It should be noted that these bond issues closed in December 2000 and the information that was contained in the annual reports filed on June 12, 200 I was identical to the information contained in the official statements relating to these bond issues distributed to the purchasers of the Bonds. . The Developer has not failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events, however, the Developer observes that it purchased certain property in Community Facilities District No. 98-1 (Chapman Heights) of the City of Yucaipa from a property owner who had purchased such property from Chapman Heights, L.P., a Washington limited partnership. Pursuant to developer continuing disclosure agreements relating to the Community Facilities District No. 98-1 (Chapman Heights) 1998 Special Tax Bonds, 1999 Special Tax Bonds, and 2003 Special Tax Bonds, separate annual reports were due to be filed by March I, 2005 by Chapman Heights, L.P. Although the Developer was not obligated to file such annual reports pursuant to the terms of the developer continuing disclosure agreements, it filed such annual reports in June 2005. No Rating The District has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the Bonds. Underwriting Stone & Youngberg LLC, the Underwriter of the Bonds, has agreed to purchase the Bonds from the District at a purchase price of $ (representing the original principal amount of the Bonds of $ , less an underwriter's discount of $ and less an original issue discount of $ ). The purchase contract under which the Underwriter is purchasing the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in such contract of purchase. The public offering prices of the Bonds may be changed from time to time by the Underwriter. The Underwriter may offer and sell Bonds to certain dealers and others at a price lower than the offering price stated on the cover page of this Official Statement. Professional Fees In connection with the issuance of the Bonds, fees payable to certain professionals are contingent upon the issuance and delivery of the Bonds, including: the Underwriter, Best Best & Krieger LLP, as bond counsel and disclosure counsel; Wells Fargo Bank, National Association, as Fiscal Agent; and Fieldman Rolapp & Associates, as financial advisor to the City (a portion of whose fee is contingent). RVPUBIKSNOw\722113.1 40 P652 Miscellaneous All quotations from, and summaries and explanations of the Fiscal Agent Agreement, the Bonds, other documents and statutes contained in this Official Statement do not purport to be complete, and reference is made to said documents, the Fiscal Agent Agreement, and statutes for full and complete statements of their provisions. This Official Statement is submitted only in connection with the sale of the Bonds by the District. The information contained in this Official Statement should not be construed as representing all conditions affecting the District, the City or the Bonds. All information contained in this Official Statement pertaining to the District and the City has been furnished by the City and the execution and delivery of this Official Statement has been duly authorized by the District and the City. CITY OF RANCHO CUCAMONGA, for itself and on behalf of CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT 2006-02 (AMADOR ON ROUTE 66) By: City Manager RVPUBIKSNOw\722113.1 41 RVPUBIKSNOWl722 I 13.1 P654 APPENDIX B RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES DISTRICT NO. 2006-02 OF THE CITY OF RANCHO CUCAMONGA (AMADOR ON ROUTE 66) B-1 P655 APPENDIX C SUMMARY OF THE FISCAL AGENT AGREEMENT The Jollowing is a summary oj certain provisions oj the Fiscal Agent Agreement not otherwise described in the text oj this Official Statement. . This summary is not intended to be definitive, and reJerence is made to the text oj the Fiscal Agent Agreement Jor the complete provisions thereof DEFINITIONS The following are some of the terms which are defined in the Fiscal Agent Agreement (the "Agreement"). Except as defined below, the terms previously defined in this Official Statement have. the meanings previously given. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. ofthe California Government Code. "Administrative Expense Fund" means the fund by that name established by Fiscal Agent Agreement. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of the District: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City, a designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxes to the Fiscal Agent; the costs of the Fiscal Agent (including its legal counsel) in the discharge of the duties required of it under the Fiscal Agent Agreement; the costs to the City, the District or any designee of either thereof of complying with arbitrage rebate requirements; the costs to the City, the District or any designee of either thereof of complying with City, District or obligated persons disclosure requirements; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, the District or any designee of either thereof related to an appeal of the Special Tax; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or District for any other administrative purposes of the District, including reasonable attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Administrative Expense Requirement" means an annual amount, initially equal to $25,000, to be allocated each Fiscal Year for payment of Administrative Expenses. This amount shall be annually adjusted upward by 2% per year. "Agreement" means the Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the provisions of the Fiscal Agent Agreement. "Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of the provisions of the Fiscal Agent Agreement providing for mandatory sinking fund payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any mandatory sinking fund payment due in such Bond Year pursuant to the Fiscal Agent Agreement. "AcquisitionlFinancing Agreement" means the AcquisitionlFinancing Agreement by and between the City and the Developer, dated as of , 2006. "Finance Director" means the Finance Director of the City, acting for and on behalf of the District. "Affiliate" means any entity owned, controlled or under common ownership or control by or with, as applicable, the Developer and includes all general partners of any entity which is a partnership. Control shall RVPUBIKSNOW\722113.1 C-I P656 mean ownership of fifty percent (50%) or more of the voting power of or oWnership interest in the respective entity. "Agency Account" means the account within the Project Fund by that name established pursuant to the Fiscal Agent Agreement. "Agency Capacity Facilities Amount" has the meaning given to such term in the Water District JCFA. "Auditor" means the Auditor-Controller of the County. "Authorized Officer" means the City Manager or the Finance Director, acting on behalf of the District, or any person designated by the City Council, the City Manager or the Finance Director and authorized to act on behalf of the District under or with respect to the Fiscal Agent Agreement and all other agreements related thereto. "Average Annual Debt Service" means the average over all Bond Years (from the date of the Bonds to their maturity) of Annual Debt Service. "Bond Counsel" means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities. "Bond Fund" means the fund by that name established by the Fiscal Agent Agreement. "Bond Register" means the books for the registration and transfer of Bonds maintained by the Fiscal Agent under the Fiscal Agent Agreement. "Bond Year" means the one-year period beginning on September I st in each year and ending on the day prior to September I st in the following year, except that the first Bond Year shall begin on the Closing Date for the Bonds and end on September 1, 2007. "Bonds" means the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds at any time Outstanding under the Fiscal Agent Agreement or any Supplemental Agreement. "Business Day" means any day other than (i) a Saturday or a Sunday, or (ii) a day on which banking institutions in the state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed. "Cash Deposit" means a deposit of good funds by the Developer with the Fiscal Agent in the applicable Stated Amount in lieu of depositing a Letter of Credit or Substitute Letter of Credit pursuant to the Fiscal Agent Agreement. "CD lAC" means the California Debt and Investment Advisory Commission of the office of the State Finance Director of the State of California or any successor agency or bureau thereto. "City Improvements" shall have the meaning given such term in the Acquisition/Financing Agreement. "City Improvements Account" means the account by that name established pursuant to the Fiscal Agent Agreement. "City" means the City of Rancho Cucamonga, California, and any successor thereto. "City Attorney" means any attorney or firm of attorneys employed by the City in the capacity of city attorney. "City Council" means the City Council of the City. RVPUBIKSNOW\722 I 13.1 C-2 P657 "City Manager" means the City Manager of the City, acting for and on behalf of the District. "Closing Date" means December _,2006, being the date upon which there is a delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser. "Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced in the Fiscal Agent Agreement) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. "Commission" means the United States Securities and Exchange Commission. "Comptroller of the Currency" means the Comptroller of the Currency of the United States. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, the printing costs, costs of reproducing and binding documents, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee, expenses incurred by the City in connection with the issuance of the Bonds and the expenses of the City in connection with the establishment of the District, special tax consultant fees and expenses, preliminary engineering fees and expenses, legal fees and charges, including Bond Counsel fees, financial consultant fees, appraiser fees and expenses, absorption consultant fees and expenses, charges for execution, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing. "Costs ofIssuance Fund" means the fund by that name established by the Fiscal Agent Agreement. "County" means the County of San Bernardino, California. "Debt Service" means the scheduled amount of interest and amortization of principal payable by reason of the Fiscal Agent Agreement on the Bonds during the period of computation, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to the Fiscal Agent Agreement. "Developer Properly" means any Taxable Property (as such term is defined in the Rate and Method) within the District which is owned or controlled by the Developer. "District" or "District" means the City of Rancho Cucamonga Community Facilities District No. 2006- 02 (Amador on Route 66), formed by the City under the Act and the Resolution of Formation. "DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if(i) the investment is a certificate of deposit that is acquired in ~ccordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security-State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States. RVPUBIKSNOW\722113.1 C-3 P658 "Federal Securities" means any of the following which are non-callable and which at the time of investment are legal investments under the laws of the State of California for funds held by the Fiscal Agent: (i) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the United States Department of the Treasury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America, including, without limitation, such of the foregoing which are commonly referred to as "stripped" obligations and coupons; or (ii) any of the following obligations of the following agencies of the United States of America: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial ownership issued by the Farmers Home Administration, (c) participation certificates issued by the General Services Administration, (d) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, (e) project notes issued by the United States Department of Housing and Urban Development, and (f) public housing notes and bonds guaranteed by the United States of America. "Fiscal Agent" means the Fiscal Agent appointed by the City and acting as an independent fiscal agent with the duties and powers in the Fiscal Agent Agreement provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in the Fiscal Agent Agreement. "Fiscal Year" means the twelve-month period extending from July I in a calendar year to June 30 of the succeeding year, both dates inclusive. "Government Obligations" means obligations described in paragraph I of the definition of Permitted Investments. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the City or the Finance Director, and who, or each of whom: (i) is judged by the Finance Director to have experience in matters relating to the issuance and/or administration of bonds under the Act; (ii) is in fact independent and not under the domination of the City; (iii) does not have any substantial interest, direct or indirect, with or in the City, or any owner of real property in the District, or any real property in the District; and (iv) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service", 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service", 65 Broadway, 16th Floor, New York, New York 10006; Moody's Investors Service "Municipal and Government", 99 Church Street, New York, New York 10007, Attention: Municipal News Reports; Standard & Poor's Corporation "Called Bond Record", 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Commission, such other addresses and/or such services providing information with respect to called bonds as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Interest Account" means the account within the Bond Fund by that name e'stablished pursuant to the Fiscal Agent Agreement. "Interest Payment Dates" means March I and September I of each year, commencing March 1,2007. "Legislative Body" means the City Council of the City acting as the legislative body ofthe District. "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. "Moody's" means Moody's Investors Service, and its successor's and assigns. RVPUB\KSNOW\722113.1 C-4 P659 "Officer's Certificate" means a written certificate of the City signed by an Authorized Officer of the City. "Ordinance" means Ordinance No. 770 ofthe City of Rancho Cucamonga. "Original Purchaser" means Stone & Youngberg LLC. "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of the Fiscal Agent Agreement) all Bonds except: (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds paid or deemed to have been paid within the meaning of the Fiscal Agent Agreement; and (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City pursuant to the Fiscal Agent Agreement or any Supplemental Agreement. "Owner" or "Bondowner" means any Person who shall be the registered owner of any Outstanding Bond. "Permitted Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein (the Fiscal Agent shall be entitled to rely upon any written investment direction from an Authorized Officer of the District as a certification to the Fiscal Agent that such investment constitutes a Permitted Investment): 1. A. Direct obligations (other than an obligation subject to variation in principal payment) of the United States of America ("United States Treasury Obligations"); B. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America; C. Obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or . D. Evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any Person claiming through the custodian or to whom the custodian may be obligated. 2. Federal Housing Administration debentures. 3. The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America: A. Federal Home Loan Mortgage Corporation (FHLMC) (1) Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts). (2) Senior debt obligations . RVPUB\KSNOW\722113.! C-5 P660 B. Farm Credit Banks (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) (I) Consolidated system-wide bonds and notes C. Federal Home Loan Banks (FHL Banks) (I) Consolidated debt obligations D. Federal National Mortgage Association (FNMA) (I) Senior debt obligations (2) Mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) E. Student Loan Marketing Association (SLMA) (I) Senior debt obligations (excluded are securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date) F. Financing Corporation (FICO) (I) Debt obligations G. Resolution Funding Corporation (REFCORP) (I) Debt obligations 4. Unsecured certificates of deposit, time deposits, and bankers' acceptances (having maturities of not more than 30 days) of any bank (including the Fiscal Agent and its affiliates) the short-term obligations of which are rated "A-I" or better by S&P. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $5 million (including the Fiscal Agent and its affiliates). 6. Commercial paper (having original maturities of not more than 270 days) rated "A-I" by S&P and "Prime-I" by Moody's. 7. Money market funds rated "AAm-I" or "AAm-G" by S&P, or better. 8. State Obligations, which means: A. Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated "A3" by Moody's and "A" by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. B. Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rated "A-I +" by S&P and "Prime-I" by Moody's. C. Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated "AA" or better by S&P and "AA" or better by Moody's. RVPUBIKSNOW\722113.1 C-6 P661 9. Pre-refunded municipal obligations rated "AAA" by S&P and "AAA" by Moody's meeting the following requirements: A. the municipal obligations are (I) not subject to redemption prior to maturity or (2) the trustee/fiscal agent for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; B. the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of interest and premium on such municipal obligations; C. the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations; D. the cash or United States Treasury Obligations serving as security for the municipal obligations are held, by an escrow agent or trustee/fiscal agent in trust for owners of the municipal obligations; E. no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new verification; and F. the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee/fiscal agent or escrow agent. 10. Investment agreements with a domestic or foreign bank or corporation the long-term debt or financial strength of which, it or its guarantor is rated at least "AA-" by S&P and "Aa3" by Moody's; provided that, by the terms of the investment agreement: A. the invested funds are available for withdrawal without penalty or premium, upon not more than seven days' prior notice; the District and the Fiscal Agent agree, pursuant to the Fiscal Agent Agreement, to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; B. the investment agreement shall state that it is the unconditional and general obligation of and is not subordinated to any other obligation of, the provider thereof, or, in the case of a bank, that the obligation of the bank to make payments under the agreement ranks pari passu with the obligations of the bank to its other depositors and its other unsecured and unsubordinated creditors; C. the District and the Fiscal Agent receives the opinion of domestic counsel that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable); D. the investment agreement shall provide that if during its term (1) the provider's rating by either S&P or Moody's falls below "AA-" or "Aa3", respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (a) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the District, the Fiscal Agent or a Holder of the Collateral free and clear of any RVPUBIKSNOw\7221 13.1 C-7 P662 third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (b) transfer and assign the investment agreement to a then qualifying counterparty, which is to be approved by the District, with ratings specified above; and (2) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction of the District or the Fiscal Agent, within I 0 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment; E. the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); F. the investment agreement must provide that if during its term (I) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the District or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate, and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Fiscal Agent, as appropriate. 11. The Local Agency Investment Fund (LAlF) administered by the Finance Director of the State to the extent such deposits remain in the name of and control of the Fiscal Agent. "Person" means an individual, a corporation, a partnership, a joint venture, a trust, an unincorporated organization or a government or any agency or political subdivision thereof. "Principal Account" means the account within the Bond Fund by that name established pursuant to the Fiscal Agent Agreement. "Principal Office" means the office of the Fiscal Agent at Los Angeles, California or such other offices as may be specified to the City and the District by the Fiscal Agent in writing. "Project" means the facilities more particularly described in the Acq~isition/Financing Agreement. "Project Fund" means the fund by that name created by and held by the Fiscal Agent pursuant to the Fiscal Agent Agreement. "Rate and Method" means the Rate and Method of Apportionment of the Special Taxes set forth in the Ordinance. "Rebate Fund" means the fund by that name established pursuant to the Fiscal Agent Agreement. "Record Date" means the fifteenth day of the month next preceding the month of the applicable Interest Payment Date, whether or not such day is a Business Day. . . RVPUBIKSNOW\722113.1 C-8 P663 "Redemption Fund" means the fund by that name established pursuant to the Fiscal Agent Agreement. "Reserve Fund" means the fund by that name established pursuant to the Fiscal Agent Agreement. "Reserve Requirement" means: as of any date of calculation, an amount not to exceed the lesser of (i) Maximum Annual Debt Service on the Outstanding Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service on the Outstanding Bonds, or (iii) ten percent (10%) of the face amount of the Outstanding Bonds. "Resolution" means Resolution No. 06-_ adopted by the City Council of the City on December 6, 2006. "Resolution of Formation" means Resolution No. 06-322 adopted by the City Council on October 18, 2006. "S&P" means Standard & Poor's Rating Services, a division of the McGraw Hill Companies, Inc. and its successors and assigns. "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041, Attention: Call Notification Department, Fax-(212) 855-7232; and, in accordance with then current guidelines of the Commission, such other addresses and/or such other securities depositories as the City may designate in 'an Officer's Certificate delivered to the Fiscal Agent. "Special Tax" or "Special Taxes" means the Special Tax as defined in the Rate and Method authorized to be levied within the District pursuant to the Act, the Ordinance and the Fiscal Agent Agreement. "Special Taxes" do not include Special Tax B as defined in the Rate and Method. "Special Tax Fund" means the fund by that name established by the Fiscal Agent Agreement. "Special Tax Prepayments" means the proceeds of any Special Tax prepayments received by the City, as calculated pursuant to Section H of the Rate and Method, less any administrative fees or penalties collected as part of any such prepayment. "Special Tax Revenues" means the proceeds of the Special Taxes received by the City, including any scheduled payments and any prepayments thereof, interest thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and interest thereon. "Special Tax Revenues" does not include any penalties collected in connection with delinquent Special Taxes. "State" means the State of California. "Stated Amount" means the amount available to be drawn under the Letter of Credit or Cash Deposit from time to time. During each Fiscal Year in which the Letter of Credit is in effect, the Stated Amount of the Letter of Credit shall equal the estimated amount of Special Taxes to be levied on the Developer Property during that Fiscal Year. "Supplemental Agreement" means an agreement the execution of which is authorized by a resolution which has been duly adopted by the City Council under the Act and which agreement is amendatory of or supplemental to the Fiscal Agent Agreement, but only if and to the extent that such agreement is specifically authorized thereunder. "Tax Consultant" means David Taussig & Associates, Inc. or another independent financial or tax consultant retained by the City for the purpose of computing the Special Taxes. "Water District" means the Cucamonga Valley Water District. RVPUBIKSNOw\7221 13.1 C-9 P664 "Water District Account" means the account within the Project Fund by that name established pursuant to the Fiscal Agent Agreement. "Water District Capacity Facilities Proceeds" has the meaning given such term in the Water District JCFA. "Water District JCFA" means the Joint Community Facilities Agreement by and between the City and the Water District pertaining to the funding by the District of the Water District Capacity Facilities Proceeds and the Agency Capacity Facilities Proceeds and the acquisition ofthe Owner Constructed Water District Facilities. FUNDS AND ACCOUNTS Project Fund Establishment of Project Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds, Project Fund and within such Fund three accounts, the Acquisition Account, the Agency Account and the Water District Account, to the credit of which deposits shall be made as required by the Fiscal Agent Agreement. The Fiscal Agent may establish such temporary funds or accounts on its records as it may deem appropriate to facilitate such deposits and transfers. Moneys in the Acquisition Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, and shall be disbursed, except as otherwise provided in the Fiscal Agent Agreement, solely for the payment or reimbursement of costs of the Project and Costs of Issuance not paid from the Costs of Issuance Fund prior to the closure thereof. Moneys in the Agency Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City, the Agency and the Water District, and shall be disbursed, except as otherwise provided in . the Fiscal Agent Agreement of this Section, solely for the funding of the Agency Capacity Facilities Proceeds pursuant to the Water District JCF A. Moneys in the Water District Account of the Project Fund shall be held in trust by the Fiscal Agent for the benefit of the City and the Water District, and shall be disbursed, except as otherwise provided in the Fiscal Agent Agreement, solely for the funding of the Water District Capacity Facilities Proceeds and tlie acquisition of the Owner Constructed Water District Facilities pursuant to the Water District JCF A. Procedure for Disbursement from the Project Fund Accounts. (i) Acquisition Account. The Fiscal Agent shall make disbursements from the Acquisition Account upon receipt of an Officer's Certificate, in substantially the form set forth in the Fiscal Agent Agreement which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Acquisition Account; and the Person to which the disbursement is to be paid; and (b) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. (ii) Agencv Account. The Fiscal Agent shall make disbursements from the Agency Account upon receipt of an Officer's Certificate which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Agency Account; and the Person to which the disbursement is to be paid; and RVPUBIKSNOw\722113.1 C-lO P665 (b) certifY that no portion of the amount then being requested to be disbursed set forth in any Officer's Certificate previously filed requesting a disbursement. (iii) Water District Account. The Fiscal Agent shall make disbursements from the Water District Account upon receipt of an Officer's Certificate, which shall: (a) set forth the amount required to be disbursed; the purpose for which the disbursement is to be made; that the disbursement is a proper expenditure from the Water District Account; and the Person to which the disbursement is to be paid; and (b) certifY that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting a disbursement. Transfers to the Bond Fund. On any Interest Payment Date, ifthere is a deficiency in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds after all available amounts in the Reserve Fund have been transferred to the Bond Fund pursuant to the Fiscal Agent Agreement, the City may, but is not required to, direct the Fiscal Agent to transfer moneys from the Project Fund to the Bond Fund pursuant to an Officer's Certificate which shall set forth the amount to be transferred. Investment. Moneys in the Project Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from such investment shall be invested and deposited and shall be retained in the Project Fund to be used for the purposes thereof. Transfer of Funds not Requiredfor Project. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid, or that any such costs are not required to be paid from the Project Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Project Fund to the Special Tax Fund. Transfer of Funds in case of Abandonment. Upon the filing of an Officer's Certificate stating that the Authorized Officer has determined in his sole discretion that work necessary to construct and complete the Project has ceased for a continuous period of over six months such that the construction of the Project effectively has been abandoned, or that for any reason all or any portion of the arnounts then on deposit in the Project Fund will not be expended for Project costs, the Fiscal Agent shall transfer the amounts in the Project Fund as set forth in the Fiscal Agent Agreement. Costs ofIssuance Fund Establishment of Costs of Issuance Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds, Costs of Issuance Fund, to the credit of which a deposit shall be made as required by the Fiscal Agent Agreement. Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in the Fiscal Agent Agreement for the payment or reimbursement of Costs of Issuance. Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs ofIssuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the Bonds. The Fiscal Agent shall pay all Costs of Issuance after receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee pursuant to an Officer's Certificate requesting payment of Costs of Issuance. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 180 days from the date of delivery of the Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Project Fund. Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the Costs ofIssuance Fund to be used for the purposes of such fund. RVPUBIKSNOw\722113.1 C-ll P666 Reserve Fund Establishment of Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds, Reserve Fund, to the credit of which Fund a deposit shall be made as required by the Fiscal Agent Agreement which deposit is equal to the Reserve Requirement as of the Closing Date for the Bonds, and deposits shall be made as provided in the Fiscal Agent Agreement). Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of principal of, and interest and any premium on, the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. Use of Funds. Except as otherwise provided in the Fiscal Agent Agreement, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the provisions of the Fiscal Agent Agreement, for the purpose of redeeming Bonds from the Bond Fund. Transfer Due to Deficiency in Bond Fund. Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall provide written notice thereof to the Finance Director, specifying the amount withdrawn. Transfer of Excess of Reserve Requirement. If on any September I, or the first Business Day thereafter if September I is not a Business Day, of each year, the amount in the Reserve Fund exceeds the Reserve Requirement, the Fiscal Agent shall, as directed in an Officer's Certificate, transfer an amount equal to the excess from the Reserve Fund to the Interest Account of the Bond Fund to be used for the payment of interest on the Bonds on the next Interest Payment Date in accordance with the Fiscal Agent Agreement. Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall transfer the amount in the Reserve Fund to the Redemption Fund to be applied to the payment and redemption, in accordance with the Fiscal Agent Agreement, of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Redemption Fund shall be transferred to the District to be used for any lawful purpose of the District. Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to the Fiscal Agent Agreement the calculation of any amounts due to the federal government pursuant to the Fiscal Agent Agreement following payment of the Bonds and withdrawal of any such amount from the Reserve Fund for purposes of making such payment to the federal government, and (ii) payment of any fees and expenses due to the Fiscal Agent. Transfer Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and Bonds are to be redeemed with the proceeds of such prepayment pursuant to the Fiscal Agent Agreement, a proportionate amount in the Reserve Fund (deterroined on the basis of the principal of Bonds to be redeemed and the then principal of the Bonds Outstanding) shall be transferred upon such prepayment by the Fiscal Agent to the Redemption Fund or the Interest Account of the Bond Fund, as applicable, to be applied to the redemption ofthe Bonds pursuant to written instructions contained in an Officer's Certificate in accordance with the Fiscal Agent Agreement. Investment and Transfer to Pay Rebate. Moneys in the Reserve Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. All Permitted Investments in the Reserve Fund shall be valued at their Fair Market Value at least semiannually on March 1 and September 1. Interest eamings and profits resulting from said investment shall be used as required by the District to comply with the Fiscal Agent Agreement. No earnings on amounts in the Reserve Fund shall be used by the District to comply with the Fiscal Agent Agreement unless the amount on deposit in the Reserve Fund is equal to the Reserve Requirement. RVPUBIKSNOW\722113.! C-12 P667 Bond Fund Establishment of Bond Fund and Interest Account and Principal Account. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds, Bond Fund, and within such Fund two accounts, the Interest Account and the Principal Account, to the credit of which deposits shall be made as required by the Fiscal Agent Agreement, and any other amounts required to be deposited therein by the Fiscal Agent Agreement or the Act. Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Interest Account of the Bond Fund and pay to the Owners of the Bonds the interest then due and payable on the Bonds, including any interest due on the Bonds being redeemed pursuant to the Fiscal Agent Agreement. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Principal Account of the Bond Fund and pay to the Owners of the Bonds the principal of the Bonds at the maturity thereof or the principal of the term Bonds upon the mandatory sinking fund redemption thereof pursuant to the Fiscal Agent Agreement. Investment. Moneys in the Bond Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest earnings and profits resulting from the investment and deposit of amounts in the Bond Fund shall be r~tained in the Bond Fund and used for purposes of such fund. Special Tax Fund Establishment of Special Tax Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds, Special Tax Fund. Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit of the District and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds and the District. No later than the tenth (lOth) Business Day after which Special Tax Revenues have been received by the City, and in any event not later than February 15th and August 15th of each year, the City shall transfer such Special Tax Revenues to the Fiscal Agent,. less an amount equal to the Administrative Expense Requirement, and, except as set forth in the following sentence, such amounts shall be deposited in the Special Tax Fund. Disbursements. With the exception of the Special Tax Revenues representing Special Tax Prepayments which shall be transferred pursuant to the Fiscal Agent Agreement, below, the Special Tax Revenues deposited in the Special Tax Fund shall be deposited in the following accounts of the Special Tax Fund or transferred to the following other funds and accounts on the dates and in the amounts set forth in the following paragraph and in the following order of priority: I. The Fiscal Agent shall deposit in the Interest Account of the Bond Fund, on each Interest Payment Date and date for redemption of the Bonds, an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest due or becoming due and payable on such Interest Payment Date on all Outstanding Bonds or to be paid on the Bonds being redeemed on such date. 2. The Fiscal Agent shall deposit in the Principal Account of the Bond Fund, on each Interest Payment Date and redemption date on which principal of the Bonds, including sinking fund payments, shall be payable an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of, and premium (if any) on, the Bonds coming due and payable on such Interest Payment Date, or required to be redeemed on such date pursuant to the Fiscal Agent Agreement. RVPUB\KSNOW\722113.! C-l3 P668 3. On or after March 2 and September 2 of each year after making the transfer and deposits required under paragraphs I and 2 above, the Fiscal Agent shall transfer the amount, if any, necessary to replenish the amount then on deposit in the Reserve Fund to an amount equal to the Reserve Requirement. 4. On or after September 2 of each year after making the deposits and transfers required under paragraphs I through 3 above, upon receipt of written instructions from an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Rebate Fund the amount specified in such request. 5. On or after September 2 of each year after making the deposits and transfers required under paragraphs I through 4 above, upon receipt of a written request of an Authorized Officer, the Fiscal Agent shall transfer from the Special Tax Fund to the Finance Director for deposit in the Administrative Expense Fund the amounts specified in such request to pay those Administrative Expenses which the District reasonably expects (a) will become due and payable during such Fiscal Year or the cost of which Administrative Expenses have previously been incurred and paid by the District from funds other than the Administrative Expense Fund and (b) the cost of which Administrative Expenses will be in excess of the Administrative Expense Requirement for such Fiscal Year. 6. If, on or after September 2 of each year, after making the deposits and transfers required under paragraphs I through 5 above, moneys remain in the Special Tax Fund, such moneys shall remain on deposit in the Special Tax Fund and shall be subsequently deposited or transferred pursuant to the .provisions of paragraphs I through 5 above. Prepayments. The Fiscal Agent shall, upon receipt of Special Tax Revenues representing Special Tax Prepayments together with written instructions of the District executed by an Authorized Officer, immediately transfer such Special Tax Prepayments pursuant to such written instructions into the Interest Account of the Bond Fund and the Redemption Fund, as applicable, and utilize such funds to pay the interest and premium, if any, on and principal of Bonds to be redeemed pursuant to the Fiscal Agent Agreement. The Fiscal Agent may conclusively rely upon such instructions. Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. Interest eamings and profits resulting from such investment and deposit shall be transferred to the Special Tax Fund to be used for the purposes thereof. Transfer to Redemption Fund. Any Officer's Certificate issued pursuant to the Fiscal Agent Agreement (other than an Officer's Certificate issued more than one year prior to the first date on which optional redemption of Bonds is permitted pursuant to the Fiscal Agent Agreement) may direct that all or any portion of the funds which would otherwise be transferred to the Special Tax Fund be transferred to the Redemption Fund, . in which case the Fiscal Agent shall apply such amounts in accordance with the Fiscal Agent Agreement as directed in an Officer's Certificate. Transfer to the District. When there are no longer any Bonds Outstanding, any amounts then remaining on deposit in the Special Tax Fund shall be transferred to the District and used for any lawful purpose under the Act. Administrative Expense Fund Establishment of Administrative Expense Fund. There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Finance Director, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds, Administrative Expense Fund to the credit of which deposits shall be made as required by the Fiscal Agent Agreement. Moneys in the Administrative Expense Fund shall be held in trust by the Finance Director for the benefit of the District and shall be used to pay Administrative Expenses from time to time. RVPUBIKSNOw\722113.1 C-14 P669 Investment. Moneys in the Administrative Expense Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. futerest earnings and profits resulting from said investment shall be retained by the Finance Director in the Administrative Expense Fund to be used for the purposes thereof. Rebate Fund There is established by the Fiscal Agent Agreement, as a separate fund to be held by the Fiscal Agent, the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds, Rebate Fund. The Rebate Fund shall be held and maintained by the Fiscal Agent. On September 15 of each year (or at such other times and or such other intervals as may be required or permitted by regulations of the United States futernal Revenue Service), the City shall determine whether any portion of investment earnings from any account established by the Fiscal Agent Agreement must be rebated to the United States pursuant to Section 148 of the Code. At the written direction of the District, any amounts required to be rebated will be transferred from any available source, including the Special Tax Fund pursuant to the Fiscal Agent Agreement, to the Rebate Fund. The City is authorized to retain independent attorneys, accountants and other consultants to assist in complying with the requirements of the Code, and the fees of such consultants may be paid from the Administrative Expense Account. The Fiscal Agent may rely conclusively upon the City's determinations, calculations and certifications required by the Fiscal Agent Agreement. The Fiscal Agent shall have no responsibility to make any independent calculation or determination or to review the City's calculations thereunder. Amounts in the Rebate Fund shall be invested without yield restriction and shall be held in trust for rebate to the United States at the written direction of the Finance Director. Earnings on the Rebate Fund are to remain in that account and shall similarly be held in trust for rebate to the United States. Redemption Fnnd Establishment of Redemption Fund. There is established by the Fiscal Agent Agreement, as a separate fund to beheld in trust by the Fiscal Agent for the Owners of the Bonds, the Community Facilities District 2006- 02 (Amador on Route 66) 2007 Special Tax Bonds, Redemption Fund, to the credit of which deposits shall be made from funds received by the City representing Special Tax Prepayments and other funds required for redemptions, other than mandatory sinking fund redemptions and which shall be administered as provided below. 'Disbursement. Moneys shall be deposited into the Redemption Fund by the Fiscal Agent pursuant to the terms of the Fiscal Agent Agreement and shall be set aside and used solely for the purpose of redeeming Bonds in accordance with written instructions of the District executed by an Authorized Officer given in accordance with the Fiscal Agent Agreement. Following the redemption of any Bonds, if any funds remain in the Redemption Fund, such funds shall be transferred to the Special Tax Fund. Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with the Fiscal Agent Agreement. futerest earnings and profits resulting from such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes thereof. OTHER COVENANTS OF THE CITY Punctual Payments The City will punctually payor cause to be paid the principal of, and interest and any premium on, the Bonds when and as due in strict conformity with the terms of the Fiscal Agent Agreement and any Supplemental Agreement, and it will faithfully observe and perform all of the conditions covenants and requirements of the Fiscal Agent Agreement and all Supplemental Agreements and of the Bonds. RVPUBIKSNOw\722!!3.! C-15 P670 Extension of Time for Payment In order to prevent any accumulation of claims for interest after maturity, the City shall not on the District's behalf, directly or indirectly, extend or consent to the extension of the time for the payment of any . claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default thereunder, to the benefits of the Fiscal Agent Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have so extended or funded. Against Encnmbrances Neither the City nor the District will encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien therein created for the benefit ofthe Bonds, except as permitted by the Fiscal Agent Agreement. Books and Records The City will keep, or cause to be kept, on behalf of the District proper books of record and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. . Such books of record and accounts shall at all times during normal business hours of the City be subject to the inspection of the Fiscal Agent, the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing, and the payers of the Special Taxes, or their representatives duly authorized in writing. Protection of Secnrity and Rights of Owners The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all Persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City acting either on its own behalf or on behalf of the District. Compliance with Law The City will comply with all applicable provisions of the Act and law in completing the construction or acquisition of the Project. Collection of Special Tax Revenues The City shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of delinquent Special Taxes. On or within five (5) Business Days of each June 1, the Fiscal Agent shall provide the Finance Director with a notice stating the amount then on deposit in the Interest Account and Principal Account of the Bond Fund, and the Reserve Fund, and informing the City that the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for Annual Debt Service and Administrative Expenses and replenishment (if necessary) of the Reserve Fund so that the balance therein equals the Reserve Requirement. The receipt of or failure to receive such notice by the Finance Director shall in no way affect the obligations of the Finance Director under the following two paragraphs. Upon receipt of such notice, the Finance Director shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year. The Finance Director shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance by each August I that the Bonds are Outstanding, or otherwise such that the computation of the levy is complete before the final date on which Auditor will accept the transmission of the Special Tax amounts for RVPUBIKSNOW\722113.1 C-16 P671 the parcels within the District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Finance Director shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the next real property tax roll. The Finance Director shall fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any Outstanding Bonds of the District becoming due and payable during the ensuing year, including any necessary replenishment or expenditure of the amount within the Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the Administrative Expenses (including amounts necessary to discharge any obligation under the Fiscal Agent Agreement) during such year, taking into account the balances in such funds and in the Bonds Fund, the Redemption Fund and the Special Tax Fund. The Special Taxes so levied shall not exceed the authorized amounts as provided in the Ordinance. The Special Taxes shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable, and have the same priority, become delinquent at the'same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. Notwithstanding the foregoing, the Finance Director shall, not later than July 15 of each Fiscal Year, determine whether or not to cause the collection of any Special Taxes by direct, first class mail billing to the then owner of each parcel of property in lieu of billing for such Special Taxes in the same manner as general taxes as aforesaid. Such direct mail billing shall be made not later than November I of the Fiscal Year and shall direct the owner of the property affected to pay the Special Taxes directly to the Finance Director in two equal installments, the first of which shall be due and delinquent if not paid on December 10 and the second of which may be paid with the first and which, in any event, shall be due and delinquent if not paid on April 10 of the Fiscal Year. Any such Special Taxes so billed shall have the same priority and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property. Notwithstanding the foregoing, the Legislative Body may waive delinquency penalties and redemption penalties ifit makes all of the determinations set forth in Section 53340(f) of the Act. Reduction in Maximum Annual Special Tax The District finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facility districts in Southern California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the City has determined that, absent the certification described below, a reduction in the Maximum Annual Special Tax (as such term is defined in the Rate and Method) authorized to be levied below the levels provided would interfere with the timely retirement of the Bonds. The City has determined it to be necessary in order to preserve the security for the Bonds to covenant and, to the maximum extent that the law permits it to do so, the City does covenant, that it shall not initiate proceedings to reduce the Maximum Special Tax Rates (as such term is defined in the Rate and Method) unless, in connection therewith, (i) the City receives a certificate from one or more Tax Consultants which, when taken together, certify that, on the basis of the parcels of land and improvements existing in the City as of the July I preceding the reduction, the Maximum Annual Special Tax which may be levied on all Assessor's Parcels (as such term is defined in the Rate and Method) of taxable property on which a completed structure is located in each Fiscal Year will equal at least 110% of the gross debt service on all Bonds to remain Outstanding after the reduction is approved and will not reduce the Maximum Annual Special Tax payable from parcels on which a completed structure is located to less than 110% of Maximum Annual Debt Service, and (ii) the Legislative Body finds pursuant to the Fiscal Agent Agreement that any reduction made under such conditions will not adversely affect the interests of the Bondowners. Any reduction in the Maximum Annual Special Tax approved pursuant to the preceding sentence may be approved without the consent of the Bondowners. The City covenants that, in the event that any initiative is adopted by the qualified electors which purports to reduce the Maximum Annual Special Tax below the levels authorized pursuant to the Rate and RVPUBIKSNOw\722113.1 C-17 P672 Method or to limit the power or authority ofthe City to levy Special Taxes pursuant to the Rate and Method, the City shall, from funds available thereunder, commence and pursue legal action in order to preserve the authority and power of the City to levy Special Taxes pursuant to the Rate and Method. Covenant to Foreclose On or before March I and June I of each Fiscal year, the City will review the public records of the County in connection with the Special Taxes levied in such Fiscal Year to determine the amount of Special Taxes actually collected in such Fiscal Year. If the City determines that (a) any single parcel subject to the Special Taxes is delinquent in the payment of Special Taxes in the aggregate of $4,000 or more or (b) any parcels under common ownership subject to the Special Taxes are delinquent in the payment of Special Taxes in the aggregate of $20,000 or more, the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner. The City shall cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to the Fiscal Agent Agreement and for which the Special Taxes remain delinquent. With respect to aggregate delinquencies throughout the District, if the City determines that it has collected less than 95% of the Special Taxes levied in the such Fiscal Year, then the City shall, not later than forty-five (45) days of such determination, send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the owner of each delinquent parcel (regardless of the amount of such delinquency). The City will cause judicial foreclosure proceedings to be commenced and filed in the Superior Court not later than ninety (90) days of such determination against any parcel for which a notice of delinquency was given pursuant to the Fiscal Agent Agreement and for which the. Special Taxes remain delinquent. Further Assnrances The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Fiscal Agent Agreement, and for the better assuring and confirming unto the Owners of the rights and benefits provided in the Fiscal Agent Agreement. Private Activity Bond Limitations The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code. Federal Guarantee Prohibition The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Rebate Requirement The City shall take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. Funds shall be transferred to a Rebate Fund, to be held by the Fiscal Agent, in accordance with the Fiscal Agent Agreement. If necessary, the City may use (i) earnings on amounts in the Reserve Fund if the amount on deposit in the Reserve Fund, following the proposed transfer, is equal to the Reserve Requirement, (ii) amounts on deposit in the Administrative Expense Fund, and (iii) any other funds available to the District, including amounts advanced by the City, in its sole discretion, to be repaid by the District in connection with the District as soon as practicable from amounts described in the preceding clauses (i), (ii) and (iii), to satisfy its obligations under the Fiscal Agent Agreement. The Finance Director shall take note of any investment of moneys thereunder in excess of the yield on the Bonds, and shall take such actions as are necessary to ensure compliance with the RVPUBIKSNOW\722113.1 C-18 P673 Fiscal Agent Agreement, such as increasing the portion of the Special Tax levy for Administration Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under the Fiscal Agent Agreement. No Arbitrage The City shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. Yield of the Bonds In determining the yield of the Bonds to comply with the Fiscal Agent Agreement, the City will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City, as of the Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or Bonds redeemed. Maintenance of Tax-Exemption The City shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds. . No ParityHonds The City will issue no additional bonds on a parity with the Bonds; provided, that nothing contained therein shall limit the issuance of any Special Tax Bonds of the District if (a) th~ rights and claims of such bonds to the Special Tax Revenues and the funds and accounts established or described in the Fiscal Agent Agreement are in all respects subordinate to the rights and claims of the Bonds, or (b) after the issuance and delivery of such Special Tax Bonds, none of the Bonds shall be Outstanding. Defeased Bonds, or Bonds in exchange for or in lieu of which other bonds have been delivered, shall not be considered Outstanding. INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS The District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent will furnish the District periodic cash transaction statements, which include detail for all investment transactions made by the Fiscal Agent thereunder. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. Any income realized on or losses resulting from investments in any fund or account shall be credited or changed to such fund or account. Whenever in the Fiscal Agent Agreement any moneys are required to be transferred by the City to the Fiscal Agent, such transfer may be accomplished by transferring a like amount of Permitted Investments. The Fiscal Agent and its affiliates or the Finance Director may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to the Fiscal Agent Agreement. The Fiscal Agent shall not be required to determine the legality of any investments. Except as otherwise provided in the next sentence, all investments of amounts deposited in any fund or account created by or pursuant to the Fiscal Agent Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by the Fiscal Agent Agreement of the Code) at Fair Market Value. Investments in RVPUBIKSNOw\722113.1 C-19 P674 funds or accounts (or portions thereof) that are subject to a yield restriction under the applicable provisions of the Code and (unless valuation is undertaken at least annually) investment~ in the Reserve Fund shall be valued at their present value (within the meaning of section 148 of the Code). The Fiscal Agent shall not be liable for verification of the application of such sections of the Code. Investments in any and all funds and accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions therein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent thereunder, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in the Fiscal Agent Agreement. Subject to the restrictions set forth therein and/or any written investment instructions received by Fiscal Agent pursuant to the Fiscal Agent Agreement, moneys in said funds and accounts may be from time to time invested by the Fiscal Agent in any manner so long as: (1) Moneys in the Project Fund shall be invested in obligations which will by their terms mature as close as practicable to the date the District estimates the moneys represented by the particular investment will be needed for withdrawal from such Fund; and (2) Moneys in the Special Tax Fund, the Bond Fund, the Redemption Fund and the Reserve Fund shall be invested only in obligations which will by their terms either mature or allow for withdrawals at par on such dates so as to ensure the payment of principal and interest on the Bonds as the same become due; provided, however, that except for investment agreements as described in paragraph II of the definition of Permitted Investments which permit withdrawal at par, investment of moneys on deposit in the Reserve Fund shall have an average aggregate weighted term not greater than five (5) years. The Fiscal Agent or Finance Director, as applicable shall sell at Fair Market Value, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and neither the Fiscal Agent nor the Finance Director shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance therewith. THE FISCAL AGENT Appointment of Fiscal Agent Wells Fargo Bank, National Association, is appointed Fiscal Agent pursuant to the Fiscal Agent Agreement and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in the Fiscal Agent Agreement, and no implied covenants or obligations shall be read into the Fiscal Agent Agreement against the Fiscal Agent. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of the Fiscal Agent Agreement, shall be the successor to such Fiscal Agent without the execution or filing of any paper or any further act, anything therein to the contrary notwithstanding. Upon thirty (30) days prior written notice, the City may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of the Fiscal Agent Agreement, RVPUBIKSNOw\722113.1 C-20 P675 combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent may at any time resign by giving written notice to the CitY and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of the Fiscal Agent Agreement within forty-five (45) days after the Fiscal Agent shall have given to the City written notice of its resignation or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. Liability of Fiscal Agent The recitals of facts, covenants and agreements therein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Fiscal Agent assurnes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of the Fiscal Agent Agreement or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations therein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties thereunder, except for its own negligence or willful default. The Fiscal Agent assumes no responsibility or liability tor any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. In the absence of bad faith or gross negligence, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of the Fiscal Agent Agreement; but in the case of any such certificates or opinions by which any provision thereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of the Fiscal Agent Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of the Fiscal Agent Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper Person or to have been prepared and furnished pursuant to any provision of the Fiscal Agent Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Fiscal Agent shall not be liable for any error of judgment made in good faith unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. No provision of the Fiscal Agent Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties thereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by the Fiscal Agent Agreement at the request or direction of any of the Owners pursuant to the Fiscal Agent Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Fiscal Agent may become the Owner of the Bonds with the same rights it would have if it were not the Fiscal Agent. RVPUBIKSNOW\722113.1 C-2l P676 MODIFICATION OR AMENDMENT OF THE AGREEMENT Amendments Permitted The Fiscal Agent Agreement and the rights and obligations of the City and/or District and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in the Fiscal Agent Agreement. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the City of any pledge or lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or the Fiscal Agent Agreement), or reduce the percentage of Bonds required for the amendment thereof. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The Fiscal Agent Agreement and the rights and obligations of the City and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for anyone or more of the following purposes: (i) to add to the covenants and agreements of the District or City in the Fiscal Agent Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power therein reserved to or conferred upon the City or District; (ii) to make modifications not adversely affecting any outstanding series of Bonds of the City or District in any material respect; . (iii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Fiscal Agent Agreement, or in regard to questions arising under the Fiscal Agent Agreement, as the District or City and the Fiscal Agent may deem necessary or desirable and not inconsistent with the Fiscal Agent Agreement, and which shall not adversely affect the rights of the Owners of the Bonds; and (iv) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from gross federal income taxation of interest on the Bonds. Owners' Meetings The City on behalf of the District may at any time call a meeting of the Owners. In such event the City is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof, and to fix and adopt rules and regulations for the conduct of said meeting. Procedure for Amendment with Writteu Consent of Owners The City on behalf of the District and the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of the Fiscal Agent Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by the Fiscal Agent Agreement, to take effect when and as provided in the Fiscal Agent Agreement. A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as provided in the Fiscal Agent Agreement. Such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in the Fiscal Agent Agreement) and a RVPUBIKSNOWl722113.1 C-22 P677 notice shall have been mailed as hereinafter in this Section provided each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by the Fiscal Agent Agreement. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect tlie validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by the Fiscal Agent Agreement to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the District, City and the Owners of all Bonds at the expiration of thirty (30) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such thirty-day period. Effect of Supplemental Agreement From and after the time any Supplemental Agreement becomes effective pursuant to the Fiscal Agent Agreement, this Agreement shall be' deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Agreement of the City, District, and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. DISCHARGE OF THE AGREEMENT The City shall have the option to pay and discharge the entire indebtedness on all or any portion of the Bonds Outstanding in anyone or more of the following ways: (A) by well and truly paying or causing to be paid the principal of, and interest and any premium on, such Bonds Outstanding, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the funds and accounts provided for in the Fiscal Agent Agreement is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or (C) by irrevocably depositing with the Fiscal Agent, in trust, cash and Federal Securities in such amount as the City on behalf of the District shall determine as confirmed by an independent certified public accountant will, together with the interest to accrue thereon and moneys then on deposit in the fund and accounts provided for in the Fiscal Agent Agreement, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates. If the City shall have taken any of the actions specified in (A), (B) or (C) above, and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in the Fiscal Agent Agreement and all RVPUBIKSNOW\722113.! C-23 P678 other obligations of the City under this Agreement with respect to such Bonds Outstanding shall cease and terminate. Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the foregoing, the obligation of the City to payor cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, all amounts owing to the Fiscal Agent pursuant to the Fiscal Agent Agreement, and otherwise to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, shall continue in any event. Upon compliance by the City with the foregoing with respect to all Bonds Outstanding, any funds held by the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent, which are not required for the purposes of the preceding paragraph, shall be paid over to the City and any Special Taxes thereafter received by the City shall not be remitted to the Fiscal Agent but shall be retained by the City to be used for any purpose permitted under the Act. EVENTS OF DEFAULT; REMEDIES Events of Defanlt Anyone or more of the following events shall constitute an "event of default": (i) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (ii) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or (iii) Default by the City or the District in the observance of any of the agreements, conditions or covenants on its part in the Fiscal Agent Agreement or in the Bonds contained (other than a payment default referred to in subparagraph (A) and (B) above), and the continuation of such default for a period of 60 days after the City and the District shall have been given notice in writing of such default by the Fiscal Agent or by the Owners of25% aggregate principal amount of Bonds Outstanding, provided that if within 60 days the City or the District, as applicable, has commenced curing of the default and diligently pursues elimination thereof; such period shall be extended to permit such default to be eliminated. Remedies of Owners Following the occurrence of an event of default, any Owner shall have the right for the equal benefit and protection of all Owners similarly situated: (i) By mandamus or other suit or proceeding at law or in equity to enforce his or her rights against the City or the District and any of the members, officers and employees of the City or the District, and to compel the City or District, as applicable, or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in the Fiscal Agent Agreement; (ii) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (iii) By a suit in equity to require the City or the District, as applicable, and its members, officers and employees to account as the trustee of an express trust. Nothing in this article or in any other provision of the Fiscal Agent Agreement, or in the Bonds, shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as therein provided, out of the Special Tax Revenues pledged for such payment, or affect or impair the right of action, RVPUBIKSNOw\722!13.! C-24 P679 which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in the Fiscal Agent Agreement. A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Act or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the City, the District and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. No remedy therein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given under the Fiscal Agent Agreement, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. The Fiscal Agent shall not be obligated to take any action on behalf of the Owners if the City or the District defaults under the Fiscal Agent Agreement. RVPUBIKSNOw\722!!3.! C-25 P680 APPENDIX D BOOK-ENTRY ONLY SYSTEM The information in this section concerning DTC and DTC 's book-entry only system has been obtained from DTC. The City takes no responsibility for the accuracy thereof The City cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest or principal with respect to the Bonds, (b) certificates representing ownership interest in or other corifirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. DTC in New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered initially in the name of Cede & Co. (DTC's partnership nominee). One fully-registered bond certificate will be issued for each maturity of the Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking law, a "banking organization" within the meaning of the New York Banking law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New '(ork Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of Bonds (a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive physical certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. . To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC' s partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf 01 their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Bqteficial Owners will be RVPUB\KSNOW\722113.1 D-I P681 governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. While Bonds are in the book-entry only system, redemption notices shall be sent to Cede & Co. Ifless than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participation in such maturity to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on a payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer fomi or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Fiscal Agent, or the City, subject to any statutory or regulatory requirements as may be in effect form time to time. Payment of principal and interest to DTC is the responsibility of the Fiscal Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Fiscal Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. Procedures If Book-Entry-Only System Is Discontinued If the book-entry-only system should be discontinued, the interest on, principal of and redemption premium (if any) on the Bonds would be payable at the principal corporate trust office of the Fiscal Agent. The interest due on or before maturity or redemption would be payable only to the person whose name appears as registered owner in the registration books required to be kept by the Fiscal Agent at the close of business as of the 15th day of the month next preceding each interest payment date. Interest would be paid by check mailed by first class mail to such registered owner at his or her address as it appears on such books, except that a registered owner of $1,000,000 or more in aggregate principal amount of Bonds then outstanding may request with 15 days' prior notice that payment be made by wire transfer on each such interest payment date. The principal of and redemption premium, if any, on the Bonds would be payable only to the person whose name appears in such registration books as the registered owner, such principal and redemption premium, if any, to be paid only on the surrender of each Bond to the Fiscal Agent at maturity or on redemption prior to maturity. If the book-entry-only system should be discontinued, the Bonds will be delivered in certificated form to the registered owners. Thereafter, any Bond may, in accordance with its terms, be transferred or exchanged on such books by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon payment by the bondholder requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange and upon surrender of such Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer of exchange in a form acceptable to the Fiscal Agent. Neither the City nor the Fiscal Agent is required (i) to transfer or exchange any Bonds during the IS-day period prior to the selection of any Bonds for redemption, or (ii) to transfer or exchange any Bond that has been selected for redemption in whole or in part, except the unredeemed portion of such Bond selected for redemption in part, from and after the day that such Bond has been selected for redemption. RVPUB\KSNOW\722113.1 D-2 P682 APPENDIX E FORMS OF CONTINUING DISCLOSURE AGREEMENTS CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) 2007 SPECIAL TAX BONDS CITY CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement") is executed and delivered by City of Rancho Cucamonga, for itself and on behalf of the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) (the "Issuer"), and Wells Fargo Bank, National Association, a national banking association duly organized and existing under the laws of the United States of America (the "Dissemination Agent") in connection with the issuance of the $ City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds (the "Bonds"). The Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of December I, 2006 (the "Fiscal Agent Agreement") between the Issuer and Wells Fargo Bank, National Association, as Fiscal Agent (the "Fiscal Agent"). The Issuer and the Dissemination Agent covenant and agree as follows: Section I. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer for the benefit of the Owners of the Bonds and in order to assist the Participating Underwriters (as defined herein) in complying with S.E.C. Rule 15c2-l2(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Reports provided by the Issuer pursuant to, and as described in, Sections 3 and 4 ofthis Disclosure Agreement. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of any Bonds for federal income tax purposes. "District" shall mean the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66). "Disclosure Representative" shall mean the Finance Director of the Issuer or his or her designee, or such other officer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to time. "Dissemination Agent" shall mean Wells Fargo Bank, National Association, acting in its capacity as Dissemination Agent, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Fiscal Year" shall mean the twelve month period beginning on July I of each year and ending on June 30 ofthe following year. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "National Repository" shall mean any Nationally Recognized Municipal Securities Repository for purposes of the Rule. The Nationally Recognized Municipal Securities Information Repository for purposes of the Rule are identified in the Securities and Exchange Commission website located at http://www.sec.gov/consumer/nrmsir.htrn. RVPUB\KSNOW\722113.1 E-I P683 "Participating Underwriters" shall mean Stone & Youngberg LLC whose address is: One Ferry Building, San Francisco, California 94111. "Repository" shall mean each National Repository and each State Repository. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" shall mean any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule. As of the date of this Disclosure Agreement, there is no State Repository. "Tax-exempt" shall mean that interest on the Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax. Section 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than February I of each year, commencing February I, 2007, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement; provided, however, that the Annual Report due on February 1,2008, shall consist solely of the Official Statement. Not later than fifteen (IS) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross- reference other information as provided in -Section 4 of this Disclosure Agreement. The information contained or incorporated in each Annual Report shall be for the Fiscal Year which ended on the preceding June 30. The Issuer shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certifications of the Issuer and shall have no duty or obligation to review any such Annual Report. (b) If the Dissemination Agent is unable to verifY that an Annual Report has been provided to the Repositories by the date specified in subsection (a), the Dissemination Agent shall send a notice to each Repository in substantially the form attached as Attachment A. (c) The Dissemination Agent shall: I. determine each year prior to the date for providing the Annual Report the name and address of each National Repository and each State Repository, if any; and 2. to the extent it can confirm such filing of the Annual Report, file a report with the Issuer certifYing that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided and listing all the Repositories to which it was provided. (d) Notwithstanding any statement to the contrary, any filing under this agreement may be made solely by transmitting such filing to the Texas Municipal Advisory Council (the "MAC"), or any other central post office approved by the Securities and Exchange Commission as provided at htto://www.disclosureusa.org unless the United States Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7, 2004. . (e) The Issuer shall, or if received by the Dissemination Agent, the Dissemination Agent shall, deliver a copy of each Annual Report to the Participating Underwriter at the time the Annual Report is provided to the Repositories in accordance with this section. RVPUB\KSNOW\722!!3.! E-2 P684 Section 4. Content of Annual Reoorts. The Annual Report shall contain or incorporate by reference the information set forth in Exhibit B, any or all of which may be included by specific reference to other documents, including official statements of debt issuances of the City, the District or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so incorporated by reference. Audited financial statements of the Issuer shall be audited by such auditor as shall then be required or permitted by the laws of the State of California or the Fiscal Agent Agreement. Audited financial statements, if prepared by the Issuer, shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Issuer may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the Issuer shall modify the basis upon which its financial statements are prepared, the Issuer shall provide a notice of such modification to each Repository, including the reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. Section 5. Reoorting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Issuer shall give or cause to be given, notice of the occurrence of any of the following events: I. Delinquency in payment when due of any principal of or interest on the Bonds. 2. Occurrence of any default under the Fiscal Agent Agreement (other than as described in clause (I ) above). 3. Amendment to or modification of the Fiscal Agent Agreement or this Disclosure Agreement modifying the rights of the Owners of the Bonds. 4. Giving of a notice of optional or unscheduled redemption of any of the Bonds. 5. Defeasance of the Bonds or any portion thereof. 6. Any change in any rating on the Bonds. 7. Adverse tax opinions or events affecting the Tax-exempt status of the Bonds. 8. difficulties. Any unscheduled draw on the Reserve Fund or any account therein reflecting financial 9. Unscheduled draws on credit enhancements reflecting financial difficulties. 10. Substitution of credit or liquidity providers, or their failure to perform. II. The release, substitution or sale of property securing repayment of the Bonds (including property leased, mortgaged or pledged as such security). (b) The Dissemination Agent shall, within one (I) Business Day of obtaining actual Imowledge of the occurrence of any of the Listed Events (except events listed in clauses (a)(l), (4) or (5)), or as soon as is RVPUB\KSNOW\722113.1 E-3 P685 reasonably possible, with no obligation to determine the materiality. thereof, contact the Disclosure Representative, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (t). For the purpose of this Disclosure Agreement "actual knowledge" means actual knowledge at the corporate trust office of the Dissemination Agent by an officer of the Dissemination Agent with responsibility for matters related to the administration of the Fiscal Agent Agreement. (c) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, whether because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the Issuer shall as soon as possible determine if such event would constitute material information for Owners of the Bonds under applicable Federal securities law, provided that any event under subsection (a) (6) will always be deemed to be material. (d) If the Issuer has determined that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Issuer shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (t). (e) If in response to a request under subsection (b), the Issuer determines that the Listed Event would not be material, the Issuer shall so notify .the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (t). (t) If the Dissemination Agent has been instructed by the Issuer to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the Municipal Securities Rulemaking Board and each State Repository. Notwithstanding the foregoing: 1. Notice of the occurrence of a Listed Event described in subsections (a)(l), (4) or (5) shall be given by the Dissemination Agent unless the Issuer gives the Dissemination Agent affirmative instructions not to disclose such occurrence; and 2. Notice of Listed Events described in subsections (a)(4) and (5) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Owners of the affected Bonds pursuant to the Fiscal Agent Agreement. Section 6. Termination of Reoorting Obligation. The Issuer's obligations under this Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be Wells Fargo Bank, National Association. The Dissemination Agent may resign by providing thirty (30) days written notice to the Issuer and the Fiscal Agent. If at any time there is no designated Dissemination Agent appointed by the Issuer, or if the Dissemination Agent so appointed is unwilling or unable to perform the duties of the Dissemination Agent hereunder, the Issuer shall be the Dissemination Agent and undertake or assume its obligations hereunder. Section 8. Amendment: Waiver. Notwithstanding any other proVlslOn of this Disclosure Agreement, the Issuer may amend this Disclosure Agreement (and the Dissemination Agent shall agree to any amendment requested by the Issuer, provided the Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations), and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in Federal securities law, acceptable to both the Issuer and the Dissemination Agent, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. RVPUB\KSNOW\722113.! E-4 P686 Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Agreement, any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an event of default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties. Immunities and Liabilities of the Dissemination Agent. Section 7.2 of the Fiscal Agent Agreement is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Fiscal Agent Agreement. The Dissemination Agent shall be entitled to the protections and limitations afforded to the Fiscal Agent under said Section 7.2. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule of fees as amended from time to time and shall be reimbursed by the Issuer for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder but solely from amOunts in the Administrative Expense Fund established under the Fiscal Agent Agreement. Neither the Dissemination Agent nor the Fiscal Agent shall have any duty or obligation to review any information provided to it hereunder or shall be deemed to be acting in any' fiduciary capacity for the Issuer, the Owners of the Bonds or any other party. The obligations of the Issuer under this section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Any company succeeding to all or substantially all of the Dissemination Agent's corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any document or any further act. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and the Owners from time to time of the Bonds, and shall create no rights in any other person or entity. RVPUB\KSNOw\722113.l E-5 P687 Section 13. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Dated: January I, 2007 City of Rancho Cucamonga, for itself and on behalf of City of Rancho Cucamonga Community Facilities District 2006-02 (Amador on Route 66) By: City Manager Wells Fargo Bank, National Association, as Dissemination Agent By: Authorized Signatory RVPUBIKSNOw\722113.1 E-6 P688 ATTACHMENT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name ofIssuer: City of Rancho Cucamonga Name of Bond Issue: CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) 2007 Special Tax Bonds Date ofIssuance: January -' 2007 NOTICE IS HEREBY GIVEN that the Issuer of has not provided an Annual Report with respect to the above-referenced Bonds as required by the Continuing Disclosure Agreement dated as of January I, 2007 between the Issuer and Wells Fargo Bank, National Association, as Fiscal Agent. The Issuer anticipates that the Annual Report will be filed by Dated: Wells Fargo Bank, National Association, as Dissemination Agent on Behalf of the Issuer By: Authorized Signatory RVPUBIKSNOw\722113.1 E-7 P689. EXIllBIT B ISSUER ANNUAL REPORT City Of Rancho Cncamonga Commnnity Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds . This Annual Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate dated as of January I, 2007 executed by the undersigned (the "District") in connection with the issuance by the District of the above-captioned bonds. (a) Financial Statements. Attached to this Annual Report are (i) audited financial statements of the District and the City prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time.to time by the Governmental Accounting Standards Board, or (ii) unaudited financial statements of the District and the City (because the audited financial statements were not available by the Report Date), and the audited financial statements will be filed in the same manner as this Annual Report when they become available. (b) . Yearly Report Provided to CDIAC. Attached to this Annual Report is copy of the most recent Yearly Fiscal Status Report required to be filed by the District with the California Debt and Investment Advisory Commission pursuant to the Act. The report includes the following information as of the close of the most recent fiscal year: I. The current minimum balance in the Reserve Fund. 2. The outstanding principal amount of the Bonds. 3. Balances in the Reserve Fund, Improvement Fund, and Bond Fund. 4. Assessed value of all parcels in the District subject to the Special Tax. 5. Total amount of Special Taxes due and total amount uncollected from properties within the District. 6. Total number of delinquent parcels within the District, total amount of Special Taxes due on delinquent parcels within the District, and information on foreclosure against delinquent parcels within the District. (c) Maturity and Redemption Schedule. Below is the maturity schedule for the outstanding Bonds and a listing of Bonds redeemed prior to maturity. RVPUBIKSNOW\722113.1 E-8 Principal Payment Date (September I) 2007 . 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 P690 Maturity Schedule of the Bonds Principal Amount Interest Rate Early Redemption Date Price Yield (d) Special Tax Prepayments. Below is a listing of all parcels within the District for which the Special Tax obligation was fully or partially prepaid for the prior fiscal year, along with the Special Tax prepayment amount. RVPUBIKSNOW\722113.1 Parcel APN Full or Partial Prepayment Prepayment Amount E-9 P691 (e) Additional Delinquency Information. I. Below is a listing of all parcels within the District that were delinquent in the payment of the Special Taxes, as applicable, in the aggregate of $4,000 or more for the prior fiscal year: Parcel APN Delinquency Amount Length of Delinquency Total: 2. Below is a listing of all parcels within the District that are under common ownership and were delinquent in the payment of the Special Taxes, as applicable, in the aggregate of $20,000 or more during the prior fiscal year: Parcel APN Delinquency Amount Length of Delinquency Total: 3. If the total delinquencies within the District as of the prior June I exceed 5% of the total Special Tax levied for the prior fiscal year, below is a listing of all parcels that were delinquent in the payment of the Special Taxes: Parcel APN Delinquency Amount Length of Delinquency Total: RVPUBIKSNOw\722113.! E-1O P692 (t) Property Ownership. Below is a listing of all property owners responsible for more than 5% of the Special Taxes levied within the District as shown on the San Bernardino County Assessor's last equalized tax roll prior to the September next preceding the Report Date, and each owner's percentage share of the Special Taxes. Parcel APN Property Owner Share of Special Taxes (g) Value to Debt Ratio. Attached is an updated version of Table 5 in the final Official Statement showing the value-to-debt calculation for the property in the District, but substituting assessed property values for the appraised values of such property. (h) Rate and Method. Below is a statement of any changes to the Rate and Method of Apportionment of Special Tax for the District during the prior fiscal year. Dated: CITY OF RANCHO CUCAMONGA, acting for and on behalf of COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) By: Title: RVPUB\KSNOW\722113.! E-ll P693 CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02, (AMADOR ON ROUTE 66) 2007 SPECIAL TAX BONDS DEVELOPER CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (the "Continuing Disclosure Agreement") is executed and delivered by William Lyon Homes, Inc., a California corporation (the "Developer"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (the "Fiscal Agent" and "Dissemination Agent") in connection with the issuance by the City of Rancho Cucamonga (the "Issuer") of the $ aggregate principal amount Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds (the "Bonds"). The Bonds are being issued pursuant to a . Fiscal Agent Agreement dated as of December I, 2006, between the Issuer and Wells Fargo Bank, National Association, as Fiscal Agent (the "Fiscal Agent Agreement"). The Dissemination Agent, the Fiscal Agent and the Developer hereby covenant and agree as follows: Section I. Puroose of the Continuing Disclosure Agreement. This Continuing Disclosure Agreement is being executed and delivered by the Dissemination Agent, the Fiscal Agent and the Developer for the benefit of the owners of the Bonds and in order to assist the Participating Underwriters (as defined herein) in complying with S.E.C. Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized term used in this Continuing Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Disclosure Representative" shall mean the officers executing this Continuing Disclosure Agreement or such other officer or employee as the Developer shall designate in writing to the Dissemination Agent and the Fiscal Agent from time to time. "Dissemination Agent" shall mean Wells Fargo Bank, National Association, acting in its capacity as the Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Dissemination Agent or the Fiscal Agent a written acceptance of such designation. "District" shall mean Community Facilities District No. 2006-02 (Amador on Route 66). "Fiscal Agent Agreement" shall mean the Fiscal Agent Agreement referred to in the initial paragraph of this Continuing Disclosure Agreement. "Fiscal Year" shall mean the 12-month period commencing on July I of any year and ending on June 30 of the following year. "Issuer" shall mean City of Rancho Cucamonga for and on behalf of the District. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Currently, the following are National Repositories: RVPUBIKSNOw\722113.1 E-12 P694 Bloomberg Municipal Repository P. O. Box 840 Princeton, NJ 08542-0840 (609) 279-3200 FAX (609) 279-5962 Internet address: Munis@Bloomberg.com Kenny Information Services, Inc. The Repository 65 Broadway, 16th Floor New York, NY 10006 Attn: Kenny Repository Service (212) 770-4595 FAX (212) 797-7994 DPC Data Inc. One Executive Drive Fort Lee, NJ 07024 (201) 346-0701 FAX (201) 947-0107 Internet address: nrmsir@dpcdata.com Thomson NRMSIR Attn: Municipal Disclosure 395 Hudson Street, 3d Floor NewYork,NY 10014 (212) 807-5001 or (800) 689-8466 FAX (212) 989-2078 Internet address: Disclosure@Muller.com "Participating Underwriters" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. The Participating Underwriter is Stone & Youngberg LLC whose address is: One Ferry Building, San Francisco, CA 94111. "Repositorv" shall mean each National Repository and each State Repository. "Rule" shall mean Rule l5c2-l2(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Semi-Annual Report" shall mean any Semi-Annual Report certified by the Developer pursuant to, and as described in, Sections 3 and 4 ofthis Continuing Disclosure Agreement. "Special Taxes" shall mean the Special Taxes levied by the Issuer on property in the District to pay debt service on outstanding Bonds. "State Repositorv" shall mean any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule and recognized as such by the Securities Exchange Commission. As of the date of this Continuing Disclosure Agreement, there is no State Repository. RVPUBIKSNOW\722113.1 E-13 P695 Section 3. Provision of Semi-Annual Reoorts. (a) The Dissemination Agent shall, not later than April 30 and October 31 of each year, commencing on April 30, 2007, provide to each Repository a Semi-Annual Report which is consistent with the requirements of Section 4 of this Continuing Disclosure Agreement. Not later than fifteen (15) calendar days prior to said date, the Developer shall provide the Semi-Annual Report to the Dissemination Agent and the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent). In each case, the Semi-Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Continuing Disclosure Agreement. The Developer shall provide a written certification with each Semi- Annual Report furnished to the Dissemination Agent and the Fiscal Agent to the effect that such Semi- Annual Report constitutes the Semi-Annual Report required to be furnished by the Developer hereunder. The Dissemination Agent and the Fiscal Agent may conclusively rely upon such certifications of the Developer and shall have no duty or obligation to review such Semi-Annual Report. The information contained or incorporated in the Semi-Annual Reports due on April 30 shall be for the six-month period from September I of the preceding calendar year to February 28 of the current calendar year, and the information contained or incorporated in the Semi-Annual Reports due on October 31 shall be for the six month period from March I to August 30 of the current calendar year. (b) Ifby fifteen (15) calendar days prior to the date specified in subsection (a) for providing a Semi-Annual Report to the Repositories, the Dissemination Agent has not received a copy of the Semi- Annual Report, the Dissemination Agent shall contact the Developer to determine if the Developer is in compliance with subsection (a). (c) If the Dissemination Agent is unable to verify that a Semi-Annual Report has been provided to the Repositories by the date required in subsection (a), the Dissemination Agent shall send a notice to the Municipal Securities Rulemaking Board in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall: (i) determine each year prior to the date for providing each Semi-Annual Report the name and address of each National Repository and each State Repository, if any; (ii) file with the Repositories any Semi-Annual Report that it receives from the Developer; and (iii) file a report with the Developer, the Issuer and (if the Dissemination Agent is not the Fiscal Agent) the Fiscal Agent certifying that the Semi-Annual Report has been provided pursuant to this Continuing Disclosure Agreement, stating the date it was provided and listing all the Repositories to which it was provided. (e) The Developer shall, or if received by the Dissemination Agent, the Dissemination Agent shall, deliver a copy of each Semi-Annual Report to the Participating Underwriter at the time the Semi- Annual Report is provided to the Repositories in accordance with this section. Section 4. Content of Semi-Annual Reoorts. The Semi-Annual Report shall contain or incorporate by reference the following: I. A statement summarizing the current status of construction and financing of the development of property owned by the Developer in the District presented in the same general format as the information in the Official Statement in the section entitled "THE DEVELOPER AND THE PROPOSED DEVELOPMENT WITHIN THE DISTRICT - General," "- The Developer and the Housing Project," and "- The Proposed Housing Development;" RVPUBIKSNOw\722 I 13.1 E-14 P696 2. The total number of subdivided lots in the District sold by the Developer in the preceding Fiscal Year to homeowners and the number of subdivided lots and/or the acreage of any parcels of property sold by the Developer in such Fiscal Year to a purchaser other than a homeowner and the identification of each such purchaser; 3. The total number of parcels and the total acreage of property in the District which were owned by the Developer at the end of the preceding calendar year; 4. For Semi-Annual Reports due on April 30, any audited financial statements of the Developer, if such statements are prepared for the Developer in the ordinary course of business; 5. Information regarding a failure by the Developer pay any real property taxes (including the Special Taxes) levied on a parcel of property in the District which is owned by the Developer; 6. Information regarding any material default by the Developer on any commercial loan with respect to the construction or permanent financing of the improvements which are necessary to the development of property then owned by the Developer in the District; 7. Information regarding any material default by the Developer on any commercial loan secured by property within the District then owned by the Developer; 8. Information regarding any uncured payment default by the Developer on any commercial loan as to which the Developer is a borrower or guarantor (whether or not such loan is secured by property in the District) and' as to which the lender has recourse against the Developer; 9. Information regarding the filing by the Developer a petition in bankruptcy or any determination by a court that the Developer is unable to pay its debts as they become due; 10. Information regarding the filing of any lawsuit with claim for damages in excess of $1,000,000 against the Developer which may adversely affect the completion of the development of property then owned by the Developer within the District; and II. Any event that would constitute an Event of Default under the Purchase and Sale Agreement between Lewis Investment Company, LLC and William Lyon Homes, Inc. dated as of November 30, 2004. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission or any offering statement of any securities offering of the Developer or any related or affiliated entity of the Developer. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. Section 5. Termination of Reporting Obligation: Reporting Obligation of Transferees. The Developer's obligations under this Continuing Disclosure Agreement, unless sooner terminated as provided below, shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. The Developer shall have no further obligation under this Continuing Disclosure Agreement when the Developer and any owner of a 25% or greater interest in the Developer or a subsidiary or affiliated entity of the Developer no longer owns Undeveloped Property (as defined in the Rate and Method of Apportionment of Special Tax) in the District which is responsible for payment of 10% or more of the Special Taxes levied on property in the District. In such event, the Developer shall provide RVPUBIKSNOW\7221l3.1 E-15 P697 written notice to the Fiscal Agent that the Developer has no further obligation under this Continuing Disclosure Agreement. Section 6. Amendment. (a) This Continuing Disclosure Agreement may be amended, by written agreement of the parties, without the consent of the owners of the Bonds, if all of the following conditions are satisfied: (1) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of the Developer or the type of business conducted by the Developer, (2) this Continuing Disclosure Agreement as so amended would have complied with the requirements of the Rule as of the date of this Continuing Disclosure Agreement, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, (3) the Issuer or Developer shall have delivered to the Fiscal Agent an opinion of nationally recognized bond counselor counsel expert in federal securities law, addressed to the Issuer and the Fiscal Agent, to the same effect as set forth in clause (2) above, (4) the Issuer shall have delivered to the Dissemination Agent an opinion of nationally recognized bond counsel or counsel expert in federal securities law, addressed to the Issuer and the Fiscal Agent, to the effect that the amendment does not materially impair the interests of the owners of the Bonds, and (5) the Issuer or the Developer shall have delivered copies of such opinion and amendment to each Repository. (b) This Continuing Disclosure Agreement may be amended, by written agreement of the parties, upon obtaining consent of the owners of at least 25% of the outstanding Bonds. (c) To the extent any amendment to this Continuing Disclosure Agreement results in a change in the type of financial information or operating data provided pursuant to this Continuing Disclosure Agreement, the first Semi-Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the effect of the change. (d) If an amendment is made to the basis on which financial statements are prepared, the Semi-Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent feasible, qualitative discussion of the differences in the accounting principles and the effect of the change in the accounting principles on the presentation ofthe financial information. Section 7. Additional Information. Nothing in this Continuing Disclosure Agreement shall be deemed to prevent the Issuer or the Developer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Agreement or any other means of communication, or including any other information in any Semi-Annual Report, in addition to that which is required by this Continuing Disclosure Agreement. If the Issuer or the Developer chooses to include any information in any Semi-Annual Report in addition to that which is specifically required by this Continuing Disclosure Agreement, the Issuer or the Developer shall have no obligation under this Continuing Disclosure Agreement to update such information or include it in any future Semi-Annual Report. Section 8. Default. In the event of a failure of the Developer to comply with any provision of this Continuing Disclosure Agreement, any beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Developer to comply with its obligations under this Continuing Disclosure Agreement. A default under this Continuing Disclosure Agreement shall not be deemed a default under the Fiscal Agent Agreement and the sole remedy under this Continuing Disclosure Agreement in the event of any failure of the Developer to comply with this Continuing Disclosure Agreement shall be an action to compel performance. RVPUBIKSNOWl722113.1 E-16 P698 Section 9. Duties. Immunities and Liabilities of Fiscal Agent and Dissemination Agent: Compensation. Article VII of the Fiscal Agent Agreement is hereby made applicable to this Continuing Disclosure Agreement as if this Continuing Disclosure Agreement were (solely for this purpose) contained in the Fiscal Agent Agreement. The Dissemination Agent and the Fiscal Agent shall have only such duties as are specifically set forth in this Continuing Disclosure Agreement. The Developer agrees to indemnify and save the Dissemination Agent, the Fiscal Agent, their officers, directors, employees and agents, harmless (each an "Indemnified Party") against any loss, expense and liabilities which it may incur to the extent arising out of the negligence or willful misconduct of the Developer in the performance of its obligations hereunder, including the costs and expenses (including reasonable attorney's fees of counsel acceptable to the Developer) of defending against any claim of such liability, but excluding losses, expenses and liabilities, in any event, to the extent due to the negligence or willful misconduct of an Indemnified Party. The Dissemination Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule of fees as amended from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. Neither the Dissemination Agent nor the Fiscal Agent shall have any duty or obligation to review any information provided to it hereunder or shall be deemed to be acting in any fiduciary capacity for the Issuer, the District the owners of the Bonds, or any other party. The obligations of the Developer under this section shall survive resignation or removal of the Dissemination Agent or the Fiscal Agent and payment of the Bonds. Section 10. Resignation or Termination. The Dissemination Agent may resign upon 30 days' notice. Upon the Dissemination Agent's resignation, the Developer and the Issuer shall appoint a successor Dissemination Agent. Section II. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows: If to the Issuer If to the Fiscal Agent: If to the Developer: City of Rancho Cucamonga 10500 Civic Center Drive Rancho Cucamonga, CA 91730 Attention: Deputy City Manager Telephone: (909) 477-2700 Telecopier: (909) 477-2846 Wells Fargo Bank, National Association 707 Wilshire Boulevard, 17m Floor Los Angeles, CA 90071 Telephone: (213) 614-3353 Telecopier: (213) 614-3355 William Lyon Homes 4490 Von Karman Avenue Newport Beach, CA 92660-2008 Telephone: (949) 476-5467 Telecopier: (949) 252-2566 Section 12. Beneficiaries. This Continuing Disclosure Agreement shall inure solely to the benefit of the Issuer, the Developer, the Fiscal Agent, the Dissemination Agent, the Participating Underwriters and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. RVPUBIKSNOW\722113.1 E-17 P699 Section 13. Counterparts. This Continuing Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Dated: January 1,2007 Date: January 1,2007 RVPUBIKSNOW\722113.1 WILLIAM LYON HOMES, INC., a California corporation By: Name: Title: By: Name: Title: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Dissemination Agent and Fiscal Agent By: Authorized Officer E-18 P700 EXillBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE SEMI-ANNUAL REPORT Name of Issuer: CITY OF RANCHO CUCAMONGA Name of Bond Issue: COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) 2007 Special Tax Bonds Date ofIssuance: January _, 2007 NOTICE IS HEREBY GIVEN that (the "Developer") has not provided an Semi-Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement dated as of January I, 2007 between the Developer and Wells Fargo Bank, National Association, as Dissemination Agent. The Developer anticipates that the Semi-Annual Report will be filed by Dated: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Dissemination Agent on behalf of the Merchant Builder cc: Issuer By: Authorized Officer RVPUBIKSNOW\722113.1 E-19 P701 APPENDIX F FORM OF OPINION OF BOND COUNSEL ,2006 Mayor and City Council City of Rancho Cucamonga 10500 Civic Center Drive P.O. Box 807 Rancho Cucamonga, CA 91730 BOND OPINION $ CITY OF RANCHO CUCAMONGA COMMUNITY FACILITIES DISTRICT NO. 2006-02 (AMADOR ON ROUTE 66) 2007 SPECIAL TAX BONDS Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the City of Rancho Cucamonga (the "City") for and on behalf of Community Facilities District No. 2006-02 (Amador on Route 66) (the "District") situated in and formed by the City, of $ aggregate principal amount of the City of Rancho Cucamonga Community Facilities District No. 2006-02 (Amador on Route 66) 2007 Special Tax Bonds (the "Bonds"). The Bonds are issued pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part I of Division 2 of Title 5 of the Government Code of the State of California (the "Act"), a resolution adopted by the City Council on December 6, 2006 (the "Resolution"), and a Fiscal Agent Agreement, dated as of December I, 2006 (the "Fiscal. Agent Agreement"), between the City and Wells Fargo, National Association, as fiscal agent (the "Fiscal Agent"). We have examined the Act, the Resolution, the Fiscal Agent Agreement and certified copies of the proceedings taken for the issuance and sale of the Bonds. As to questions of fact which are material to our opinion, we have relied upon the representations of the City without having undertaken to verifY the accuracy of any such representations by independent investigation. . Based upon such examination, we are of the opinion, as of the date hereof, that the proceedings referred to above have been taken in accordance with the laws and the Constitution of the State of California, and that the Bonds, having been issued in duly authorized form and executed by the proper officials and delivered to and paid for by the purchaser thereof, and the Fiscal Agent Agreement having been duly authorized and executed by the proper official, constitute the legally valid and binding obligations of the City, for and on behalf of the District, enforceable in accordance with their terms subject to the qualifications specified below. Except where funds are otherwise available, as may be permitted by law, the Bonds are payable, as to both principal and interest, solely from certain special taxes to be levied and collected within the District and other funds available therefor held under the Fiscal Agent Agreement. The Internal Revenue Code of 1986, as amended (the "Code"), sets forth certain investment, rebate and related requirements which must be met subsequent to the issuance and delivery of the Bonds for the interest on the Bonds to be and remain exempt from federal income taxation. Noncompliance with such requirements could cause the interest on the Bonds to be subject to federal income taxation retroactive to the date of issuance of the Bonds. Pursuant to the Fiscal Agent Agreement, the City has covenanted to comply with the requirements of the Code and applicable regulations promulgated thereunder. RVPUBIKSNOw\722113.1 F-l P702 We are of the opInIOn that, under existing statutes, regulations, rulings and court decisions, and assuming compliance by the District with the aforementioned covenant, the interest on the Bonds is excluded from gross income for purposes of federal income taxation and is exempt from personal income taxation imposed by the State of California. Weare further of the opinion that interest on the Bonds is not a specific preference item for purposes of the alternative minimum tax provisions of the Code. However, interest on the Bonds received by corporations will be included in corporate adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of the same maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount, and the amount of original issue discount that accrues to the owner of the Bond is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and is exempt from State of California personal income tax. Although interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these tax consequences will depend on the recipient's particular tax status or other items of income or deduction. We express no opinion regarding any such consequences. The opinions expressed herein may be affected by actions which may be taken (or not taken) or events which may occur (or not occur) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or occur or are not taken or do not occur. The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted, and their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Respectfully submitted, RVPUBIKSNOw\722113.1 F-2 APPENDIX G P703 GENERAL INFORMATION ABOUT THE CITY OF RANCHO CUCAMONGA General The City of Rancho Cucamonga (the "City") is located in the foothills of the Los Angeles-San Bernardino Basin in the western portion of San Bernardino County, approximately 40 miles east of the City of Los Angeles and 18 miles west of the City of San Bernardino. The City covers approximately 40.2 square miles and is bordered by Ontario on the south, Upland on the west and Fontana to the east; to the north are Cucamonga Peak and Mount Baldy. Municipal Government The City was incorporated on November 30, 1977, as a general law city operating under. the council- manager form of government. It is governed by a five-member City Council (the "Council"), which includes a Mayor who is elected at large for a four year term, and four Council Members are elected at large for staggered four year terms. The Council appoints the City Manager and City Attorney. The City Manager is responsible for the daily administration of City affairs and for implementing Council policy and program decisions. The current Council members are as follows: Donald J. Kurth, M.D., Mayor Diane Williams, Mayor Pro Tern Rex Gutierrez, Councilmember L. Dennis Michael, Councilmember Sam Spagnolo, Councilmember The City's General Plan provides a coordinated policy of development planning, balancing residential, commercial, and industrial expansion. Coordinated transportation planning with the Southern California Regional Association of Governments and the County of San Bernardino is being provided by a traffic model that sets forth the optimum size of streets and timing necessary to accommodate traffic on both existing and future streets. . Population Prior to incorporation, the area generally within the corporate boundaries of the City experienced a rapid growth in population. Population figures for the City, the County and the State for the last six years along with population figures for 1980, 1990 and 2000 are shown in the following table. CITY OF RANCHO CUCAMONGA Population Estimates City of County of Year Raucho Cucamonl!a San Bernardino 1980 55,250 895,016 1990 98,500 1,418,380 2000 125,585 1,689,281 2001 130,842 1,741,137 2002 137,119 1,783,656 2003 147,462 1,842,904 2004 155,723 1,897,950 2005 161,830 1,946,202 2006 170,479 1,991,829 Source: State Department of Finance estimates (as of January 1). RVPUBIKSNOw\722113.1 G-l State of California 23,782,000 29,758,213 34,336,091 35,037,000 35,301,000 35,691,442 36,271,091 36,810,358 37,172,015 P704 Employment The City is included in the Riverside-San Bernardino Metropolitan Statistical Area ("MSA"). The unemployment rate in the Riverside-San Bernardino MSA was an estimated 4.6% during May 2005. This compares to the unadjusted unemployment rates of 5.5% for Los Angeles County and 5.3% for California for the same month. . The following table summarizes the civilian labor force, employment and unemployment in the County for the calendar years 200 I through 2005. These figures are CountYwide statistics and may not necessarily accurately reflect employment trends in the City. RIVERSIDE-SAN BERNARDINO-ONTARIO METROPOLITAN STATISTICAL AREA Civilian Labor Force, Employment and Unemployment (Annual Averages) . 2001 2002 2003 2004 2005 Civilian Labor Force(1) 1,504,400 1,566,400 1,618,400 1,688,800 1,711,800 Civilian Employment 1,423,000 1,472,700 1,529,400 1,586,200 1,625,500 Civilian Unemployment 81,500 93,700 89,000 82,600 86,300 Civilian Unemployment Rate 5.4% 5.0% 5.5% 5.0% 5.0% (2) Wa!!e and Salary EmDlovment: Total AlIlndustries 1,072,900 1,114,900 1,152,400 1,190,300 1,235,400 Total Farm 21,200 19,900 18,700 18,400 18,000 Total Nonfarm 1,051,700 1,095,000 1,\33,700 1,171,900 1,217,100 Natural Resources and Mining 1,200 1,300 1,200 1,200 1,300 Construction 89,600 93,900 103,400 115,000 122,200 Manufacturing 114,900 115,600 118,500 119,600 120,200 Trade Transportation & Utilities 227,700 238,200 249,900 262,300 273,900 Wholesale Trade 40,100 42,900 43,100 45,200 49,200 Retail Trade 140,500 146,000 154,400 160,800 165,000 lnformation 14,700 14,000 \3,900 13,600 14,400 Financial Activities 38,800 40,600 44,400 45,800 48,700 Professional and Business Services 102,500 111,800 121,600 126,800 132,500 Educational and Health Services 109,900 116,000 118,100 117,800 120,000 Leisure and Hospitality 106,000 109,500 113,200 116,600 122,400 Government 208,800 216,200 211,300 214,800 220,400 Source: State of California Employment Development Department. (I) Annual labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. The total number of nonfarm jobs in Riverside and San Bernardino counties increased by \39,100jobs between 2001 and 2005 to reach 1,217,100 jobs. Construction employment grew by 30,400 jobs. The professional and business services industry division also added 27,600 jobs. Trade, transportation and utilities grew by 38,000 jobs. Other industry divisions with year-over job gains between 2001 and 2005 include: manufacturing (up 6,400 jobs); wholesale trade (up 5,300 jobs); retail trade (up 22,400 jobs); financial activities (up 8,400 jobs); educational-and health services (up 9,700 jobs), leisure and hospitality (up 10,500 jobs), professional government (up 10,400 jobs). RVPUBIKSNOWl722113.1 G-2 Major Employers P705 The following table lists the major manufacturing and non-manufacturing employers within the City of Rancho Cucamonga and their estimated number of employees as of August 2005. CITY OF RANCHO CUCAMONGA Major Employers As of August 2005 Employer Chaffey Community College Etiwanda School District Alta Loma School District Frito-Lay Inc. C.W. Construction Mission Foods Central School District Target Southern California Edison Mercury Insurance Company Wal-Mart Stores, Inc. City of Rancho Cucamonga Costco Wholesale Corp. Tamco The Cheesecake Factory Albertson's J C Penney Corp., Inc. Cucamonga School District Safetran Systems Corporation Proficient Food Company General Motors Robinson's May PAC-Rancho, Inc. Wickes Furniture Lucille's Smokehouse BBQ Number of Employees 1,100 1,015 920 600 600 573 500 475 450 437 427 410 375 300 300 278 270 265 250 225 205 200 196 182 180 Source: Rancho Cuc.monga Redevelopment Agency. RVPUBIKSNOW\722113.1 G-3 Type of Business Education Education Education Snack Food Manufacturer Special Trades Nondurable Wholesale! Food Mfg. Education General Merchandise Electric, Gas, Sanitation Insurance General Merchandise Government General Merchandise Metal Manufacturer Restaurant Food Stores Department Stores Education Electronic equipment Wholesale Service and Parts Operations Department Stores Metal Manufacturer Special Warehousing & Storage Restaurant Commercial Activity P706 In the calendar year 2005, total taxable transactions in the City were $ or approximately 33% greater than total taxable transactions of $ that occurred in the City in calendar year 200 I. A summary of historic taxable sales within the City during the past five years is shown in the following table. CITY OF RANCHO CUCAMONGA Taxable Transactions (figures in thousands) Retail Stores 2001 2002 2003 2004 2005 Apparel Stores $22,735 $19,553 $16,216 $42,400 General Merchandise 238,841 529 298,154 380,401 Food Stores 76,026 097 82,154 80,083 Eat and Drink 130,229 138,880 155,903 181,973 Furniture 19,448 22,202 39,702 99,573 Building Materials 125,897 142,899 162,629 200,152 Automotive 17 ,397 18,865 19,678 23,681 Service Station 72,899 67,778 89,451 105,112 Other Retail Stores 176.164 164.431 173.072 209.422 Total Retail $879,636 $912,234 $1,037,000 $1,322,813 Non-Store $329.102 $380.386 $375.665 $425.309 TOTAL OUTLETS $1,208,738 $1,292,620 $1,412,665 $1,748,122 Source: State Board of Equalization. (1) Drug stores have been merged with general merchandise stores and packaged liquor stores have been merged with other retail stores. Construction Activity Building activity for the past ten fiscal years in the City is shown in the following table. CITY OF RANCHO CUCAMONGA Construction Activity Number of Permits Issued Fiscal Year 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Source: City of Rancho Cucamonga Comprehensive Annual Financial Report FY 2005-06. RVPUBIKSNOw\722113.1 3,336 3,330 3,465 3,841 4,050 4,549 5,229 5,327 5,364 4,790 G-4 Building Permit Valuation 138,045,375 185,119,239 259,593,466 370,105,582 454,882,923 498,964,341 532,582,019 754,911,074 711,730,564 558,062,563 P707 Public Utilities and Services Police protection is contracted from the San Bernardino County Sheriffs Department. A Sheriffs substation is located within the City limits. Fire protection and rescue service are provided by the City-managed Fire Protection District, which covers an area of approximately 53 square miles. Southern California Edison Company furnishes electricity and Southern California Gas Company furnishes natural gas to the City. Industrial waste and sewer services are provided by the Inland Empire Utilities Agency (formerly, the Chino Basin Municipal Water District), and water is furnished to the City by the Cucamonga Valley Water District. Community Facilities The City of Rancho Cucamonga currently has 26 parks and 7 community centers for residents. Library services are provided by the City. Rancho Cucamonga Quakes baseball club (an Anaheim Angels minor league affiliate) currently plays its home games at the City's sports complex, the Epicenter. Education Six. school districts serve the residents of the City providing local educational opportunities from kindergarten through junior college. Major colleges and universities are located within commuting distance to the City providing residents with both public and private educational opportunities in most of the major professions. Transportation Two interstate highways traverse the area. Interstate 10 is located south of the City's boundary and runs east and west, Interstate 210 is located north of the City's boundary and also runs east and west and Interstate 15 in the eastern section of the city runs north and south. Through these highways the City is linked by interstate highways to all areas of the State and to other states to the east. Three transcontinental railroads provide freight service to the City: Union Pacific Railroad, Southern Pacific Railroad, and the Atchison, Topeka and Santa Fe Railroad. Amtrak and Metrolink provide passenger service to the City. Several truck terminals are located nearby. Airline service from Ontario International Airport, which is adjacent to the City's southern boundary, is provided to approximately 50 cities in the United States. The airport has the capacity to serve wide-bodied jet airplanes and has recently undergone an expansion. Los Angeles International Airport is located approximately 40 miles to the west of the City. The Port of Los Angeles is located approximately 45 miles to the west and the Port of Long Beach is located approximately 75 miles to the southwest. Greyhound and Continental Trailways provide transcontinental bus service. The Southern California Rapid Transit District .and Omnitrans furnish intercounty and local bus service. RVPUBIKSNOw\722113.1 G-5 P708 APPENDIX H SUMMARY ABSORPTION STUDY RVPUBIKSNOw\722113 1 H-l P709 STAFF REpORT ~.".~:~~ I!c~;' RANCHO CUGAMONGA ClTI MANAGER'S OFFICE Date: December 20, 2006 To: Mayor and Members of the City Council From: Jack Lam, Cit Pamela S. E \ . Subject: APPOINTMENTS TO CITY COUNCIL SUBCOMMITTEES AND LOCAL/REGIONAL AGENCY BOARDS AND AFFILIATIONS Recommendation The City Council review the list of existing Council Subcommittees and consider staff recommendations related to changes in certain Subcommittees. Also make appointments to Council Subcommittees as well as designate representatives to represent to the City on local/regional agency boards and commissions. Backqround After each City Council election, the Council takes the opportunity to review existing Council Subcommittees as well as make appointments to the Council Subcommittees and local and regional boards and affiliations. The recent change in the composition of the Council also has resulted in vacancies on some of the Council subcommittees and local/regional agency boards and commissions. Staff has reviewed the existing Council Subcommittees and makes the following recommendations: . Appoint a Mobile Home Accord Review Ad Hoc Council Subcommittee The City's existing Accord with the eight mobile home parks in Rancho Cucamonga is in effect until 2009. Therefore, in anticipation of this, it wili be necessary to begin discussions with the park property owners and residents in 2007. Therefore, an Ad Hoc Committee is being requested to work with staff. After the completion of the Mobile Home Accord, this Ad Hoc Subcommittee would then sunset. . Eliminate the Public Safety Council Subcommittee and the Animal Services Ad Hoc Council Subcommittee The Council has previously indicated their interest, due to the importance of public safety (police, fire and emergency services) and animal services matters, in discussing these matters as an entire Council group, and not to delegate to a Council Subcommittee. Therefore, in view of this discussion, it is recommended that the Council consider eliminating these Subcommittees. In the future, if the need arises that the Council would like to have several Council Members look at a specific public safety/animal services item or matter, the Council could consider the appointment of an Ad Hoc Subcommittee to look at that item or matter by a specific date. P710 APPOINTMENTS TO CITY COUNCIL SUBCOMMITTEES AND LOCAL/REGIONAL AGENCY BOARDS AND AFFILIATIONS DECEMBER 20, 2006 PAGE 2 . Sunset the Fire District Personnel Committee The role of the Personnel Committee is to review employment eligibility lists prior to certifications and other related personnel matters, in accordance with Fire District Rules and Regulations. The Fire District staff is currently in the final phases of developing new Personnel Rules and Regulations that would not require this Committee to review eligibility lists or related personnel matters. Therefore, upon formal adoption of the new Personnel Rules by the Fire District Board, this Committee would "sunset" and no longer be in place. Cc: Department Heads City Clerk's Office City Manager's Office Administrative staff P711 City of Rancho Cucamonga City Council Subcommittees and Appointments to Local and Regional Agency Boards and Affiliations (Note: This list is current as of December 2006.) City Council Subcommittees The following are committees on which two Council Members serve to consider assigned areas of City programs/functions, provide feedback to staff, and make recommendations to the full City Council on related policy matters and CommissionIFoundation appointments. These committees meet on an as-needed basis throughout the year. Telecommunications Subcommittee Area of Responsibility: Cable television franchises, wireless communications, fiber optics, Internet, oversight to RCTV-3, and changes in telecommunication laws Current Committee members: Michael and Spagnolo Community Services Subcommittee Area of Responsibility: Park and Recreation Commission and Community Foundation appointments, Quake Stadium usage, construction of park and recreation facilities, and programs. Current Committee members: Williams and Spagnolo Fire District Personnel Committee Area of Responsibility: Review employment eligibility lists prior to certification and other related personnel matters, in accordance with Fire Department Rules and Regulations. Current Committee members: Michael and Spagnolo Housing Set Aside Subcommittee Area of Responsibility: Reviews affordable housing needs and develops strategy and programs for Redevelopment Agency set-aside money. Current Committee members: Gutierrez and Michael 12/14/2006 - 1 - P712 City Council Committees and Appointments Updated: December 2006 Library Subcommittee Area of Responsibility: Library and Library Foundation programs and services as well as Library Board of Trustees and Library Foundation appointments. Current Committee members: Gutierrez and Vacant Mobile Home Accord Review Ad Hoc Committee Area of Responsibility: This proposed new committee would review the renewal process of the Mobile Home Accords between the residents and the property owners of the eight mobile home parks located in the City. The existing Accord is current through 2009. Therefore, staff will want to begin work on the Accord in 2007. Current Committee members: This Ad Hoc Committee is being proposed. Therefore, there are no existing members. Planning/Historic Preservation Subcommittee Area of Responsibility: PlanninglHistoric Preservation Commission appointments and Rails to Trails Plan implementation. Current Committee members: Williams and Vacant Public Works Subcommittee Area of Responsibility: Traffic and public works projects. Current Committee members: Williams and Michael Redevelopment Marketing Subcommittee Area of Responsibility: Marketing of the City and review of the Redevelopment Agency marketing budget. Current Committee members: Gutierrez and Williams 12/1412006 - 2- P713 City Council Committees and Appointments Updated: December 2006 Appointments to Community Ore:anizations and Ree:ional Ae:encies These appointments involve Council Members representing the City to community organizations and regional agencies. Several of the organizations ask for the designation of both a Delegate and .an Alternate. Rancho Cucamonga Chamber of Commerce Area of Responsibility: Provides liaison between the Rancho Cucamonga Chamber of Commerce and the City of Rancho Cucamonga in coordinating projects and items of mutual interest. Current Delegate: Michael North Etiwanda Preserve Area of Responsibility: Responsible for overseeing use and conservation of the North Etiwanda Habitat Preserve. This committee includes representatives from the City of Rancho Cucamonga, .County Board of Supervisors, State Department ofFish and Game, U.S. Department of Fish and Wildlife as well as at-large representatives of adjacent property owners. The Commission is currently working to complete the hiking trail through the Preserve, closing off access for motorized vehicles along the southern boundary, and continuing to work with developers to expand the Preserve. The meetings are held quarterly on the fourth Thursday of the month at 3 :00 p.m. Current Delegate: Gutierrez Route 210 Freeway Corridor Design Joint Powers Authority Area of Responsibility: Addresses Route 210 Freeway items for San Bernardino and Los Angeles Counties. Current Delegate: Williams Current Alternate: Vacant Omnitrans Area of Responsibility: Omnitrans is a Joint Powers Agency that coordinates the public transit services of the County of San Bernardino and its 15 member cities. . A 20 member Board of Directors governs Omnitrans, which includes the five County Board of Supervisors and representatives from the member cities. There are no specific terms to serve on the Board; it is at the discretion of each City as to who represents the City on the Omnitrans Board of Directors as Delegate and Alternate. Current Delegate: Gutierrez Current Alternate: Williams 12/14/2006 - 3 - P714 City Council Committees and Appointments Updated: December 2006 San Bernardino Associated Governments (SANBAG) Area of Responsibility: The San Bernardino Associated Governments (SANBAG) is the sub regional transportation planning authority and Council of Governments for San Bernardino County. The SANBAG Board has 29 members, including representatives from each of the 24 cities and the five members of the County Board of Supervisors. The Board meets monthly in San Bernardino, in addition to a number of SANBAG committees that also meet on a monthly basis. The SANBAG Bylaws state that each City will appoint a delegate and alternate to the SANBAG Board. These two representatives continue to represent that City on the SANBAG Board until successors are appointed by the City. The SANBAG Board of Directors also appoints, from time to time, members of the Board to serve on intercounty agency boards. Mayor Pro Tem Williams has been appointed .by SANBAG to serve as an alternate to the two members that represent SANBAG on the Metrolink Board. She also serves as an Alternate Member on the Metro Gold line Phase II Joint Powers Authority. Current Delegate: Williams Current Alternate: Gutierrez City Selection Committee Area of Respousibility: The City Selection Committee is a committee, established by California Government Code 50275, which meets in even years to appoint Mayors and Council members to represent the city perspective on regional organizations, such as San Bernardino County Local Agency Formation Commission (LAFCO) and the CAL-ID Remote Access Network Board. The City Selection Committee consists of the Mayor of each City in the County. In San Bernardino County, the City Selection Committee meets every two years or more frequently if required to make a selection for one of the organizations. The Committee met last in March 2006 and will not meet again until 2008, unless necessary. Required Delegate: Kurth California Housing Opportunities Agency (CHOA) Area of Respousibility: CHOA operates a lease-to-purchase housing program in which the City of Rancho Cucamonga participates along with the City of Upland and San Bernardino County. Each of the three jurisdictional members of the Agency appoints one of its members to serve on the Board of Directors. A representative from the Council serves as the primary member, with staff serving as the alternate. The Board of Directors currently meets quarterly, usually by telephone conference call. Current Representative: Vacant Current Alternate: Linda Daniels 12114/2006 - 4 - P715 City Council Committees and Appointments Updated: December 2006 California Cities Homeownership Authority (CCHOA) Area of Responsibility: This is a housing program in which the City participates along with thirteen other cities in Southern California. The City serves on the Board of Directors, with the Bylaws stating that both the primary and alternative will be Mayors or Council members. Although the funding under this program has been depleted, there are ongoing legal and administrative activities that require action by the Board. The Board meets several times a year, often by telephone conference call, during the day. Cnrrent Representative: Vacant Current Alternate: Vacant 12/14/2006 - 5 - P716 City Council Committees and Appointments Updated: December 2006 Other Appointments From time to time, there are opportunities to serve on regional or statewide CommitteeslBoards, which do not involve the City Council making an appointment. Several of our Council Members are currently serving on these types of Boards. These include the following: Local Agency Formation Commission (LAFCO) Area of Responsibility: LAFCO is responsible for approving municipal and district boundaries that discourage urban sprawls and encourage orderly government boundaries based upon local circumstances and condition. Each County in the State of California has its own LAFCO. The Commission membership consists of two city members and alternate selected by the City Selection Committee, two County Supervisors, two representatives of independent special districts and one public member. The members of the Commission serve staggered, four-year terms. Mayor Pro Tern Diane Williams serves as the Alternate City Member on LAFCO, with her current term expiring in 2010. League of California Cities Area of Responsibility: The League of California Cities is an association of California city officials who work together to enhance their knowledge and skills, exchange information, and combine resources so that they may influence policy decisions that affect cities. At the Statewide level, there are opportunities for city officials to serve on various policy and other ad hoc. Appointments are made through Division Presidents as well as the League President. Council Member Dennis Michael has been appointed to serve as Vice Chair of the League Employee Relations Policy Committee for 2006-2007. The League is also subdivided into regional divisions that hold regular meetings, have a Board of Directors, and work on legislative matters with the cities in that division. The City of Rancho Cucamonga is in the Inland Empire League Division. Mayor Pro Tern Diane Williams currently sits on the Inland Empire Division Board of Directors, due to her recent service as Past President of the Division. 12/1412006 - 6 -