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HomeMy WebLinkAboutRes 2016-08 - Special Tax Bonds - CFD 2005-1 - Unvrsty PrkCITY OF PALM DESERT STAFF REPORT Finance Department REQUEST: REQUEST FOR THE CITY COUNCIL TO AUTHORIZE THE USE OF UNSPENT PROJECT FUND MONIES TO OPTIONALLY REDEEM OUTSTANDING SPECIAL TAX BONDS OF THE COMMUNITY FACILITIES DISTRICT 2005-1 (UNIVERSITY PARK) SUBMITTED BY: PAUL S. GIBSON, FINANCE DIRECTOR DATE: JANUARY 14, 2016 CONTENTS: RESOLUTION NO. 2016- 08 Recommendation By Minute motion, that the City Council adopt the following: Resolution No. 2016- 08 , a resolution of the City Council of the City of Palm Desert, as legislative body of the City of Palm Desert Community Facilities District No. 2005-1 (University Park), authorizing the use of unspent project fund monies to optionally redeem outstanding special tax bonds of the Community Facilities District. Executive Summary On May 9, 2006, the City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "University Park CFD") issued its Special Tax Bonds, Series 2006A (the "2006A Bonds"), in an aggregate initial principal amount of $50,000,000. On May 23, 2007, the University Park CFD issued its Special Tax Bonds, Series 2007 (the "2007 Bonds", and together with the 2006A Bonds, the "Bonds"), in an aggregate initial principal amount of $17,915,000. The Bonds were issued pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act") to finance public facilities authorized under the Act and by the formation proceedings for the University Park CFD. The repayment of the Bonds is secured by and payable from the Mello -Roos special taxes levied and received by the University Park CFD. Due to the country's economic downturn in 2008 and ensuing protracted recession in the City, certain residential projects within the University Park CFD reasonably expected at the issuance of the 2006A Bonds and the 2007 Bonds to be developed have been delayed significantly, and certain public improvements authorized to be financed by the University Park CFD and associated with such residential projects have not yet been constructed. Staff Report Res. 2016- 08 - Authorize unspent funds for bond redemption for CFD 2005-1 (University Park) January 16, 2016 Page 2 of 3 Moreover, although residential property values have been recovering within the City over the past few years, the proposed development of the remaining residential real property within the University Park CFD recently has been additionally complicated by new challenges due to factors beyond the control of the residential developers, the City and the University Park CFD — in particular the enactment of new laws in the State of California which dissolved the former Palm Desert Redevelopment Agency and now require the Successor Agency to the Palm Desert Redevelopment Agency to dispose of, and sell for the benefit of other taxing entities, undeveloped real property adjacent to the University Park CFD which otherwise was intended by the City to be developed for complementary, and not competing, uses to the planned residential development within the University Park CFD. Therefore, staff recommends that the City Council, as legislative body of the University Park CFD, adopt the attached resolution to authorize the optional redemption, on March 1, 2016, of a portion of the outstanding 2006A Bonds and all of the outstanding 2007 Bonds from remaining unspent project fund monies. Background At the request by petition dated October 12, 2005 of five real estate developer -owners of real property in the City, including Palm Desert Funding Company, LP ("PDFC"), the City Council on January 12, 2006 formed the University Park CFD and caused the University Park CFD to issue the 2006A Bonds and the 2007 Bonds. The purpose of the University Park CFD is to finance public capital improvements to serve the property within the CFD. Presently, $38,045,000 in aggregate principal amount of 2006A Bonds are outstanding, and $13,970,000 in aggregate principal amount of 2007 Bonds are outstanding. As noted above, due to the country's economic downturn in 2008 and ensuing protracted recession in the City, certain residential projects within the University Park CFD reasonably expected at the issuance of the 2006A Bonds and the 2007 Bonds to be developed have been delayed significantly. As a result, approximately $21,363,420 in project fund monies held under the Indenture remain unspent, approximately $6,452,482 of which derive from the 2006A Bonds (the "Unspent 2006A Project Fund Monies") and approximately $14,910,938 of which derive from the 2007 Bonds (the "Unspent 2007 Project Fund Monies"). Moreover, although residential property values have been recovering within the City over the past few years, the proposed development of the remaining residential real property within the University Park CFD recently has been additionally complicated by the enactment of new laws which dissolved the former Palm Desert Redevelopment Agency and now require the Successor Agency to the Palm Desert Redevelopment Agency to dispose of, and sell for the benefit of other taxing entities, undeveloped real property adjacent to the University Park CFD which otherwise was intended by the City to be developed for complementary, and not competing, uses to the planned residential development within the University Park CFD. Staff, in consultation with bond counsel, has met with the present residential developers, including PDFC which still owns a significant portion of undeveloped real property within Staff Report Res. 2016- 08 - Authorize unspent funds for bond redemption for CFD 2005-1 (University Park) January 16, 2016 Page 3 of 3 the University Park CFD. As the optional redemption of a portion of outstanding 2006A Bonds and all of the outstanding 2007 Bonds from the Unspent Project Fund Monies will reduce the outstanding bonded debt of the University Park CFD, the proposed optional redemption will result in a corresponding reduction in the Mello -Roos special taxes to be levied on properties within the University Park CFD commencing Fiscal Year 2016-17. Therefore, staff recommends that the City Council, as legislative body of the University Park CFD, authorize the Unspent 2006A Project Fund Monies and the Unspent 2007 Project Fund Monies to be applied to optionally redeem (i.e., prepay) on March 1, 2016, respectively, of a portion of the outstanding 2006A Bonds and all of the outstanding 2007 Bonds. Fiscal Impact Approval of this resolution will result in the prepayment of a portion of outstanding 2006 Bonds and all outstanding 2007 Bonds. Submitted by: i`, C_'/� Paul S. Gibson City Treasurer / Director of Finance Approval: M. Wohlmuth Manager RESOLUTION NO. 2016- 08 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, AS LEGISLATIVE BODY OF THE CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK), AUTHORIZING THE USE OF UNSPENT PROJECT FUND MONIES TO OPTIONALLY REDEEM OUTSTANDING SPECIAL TAX BONDS OF THE COMMUNITY FACILITIES DISTRICT RECITALS WHEREAS, the City Council (the "City Council") of the City of Palm Desert (the "City"), located in Riverside County, California (hereinafter sometimes referred to as the "legislative body of the District"), has heretofore pursuant to Resolution No. 06-6 adopted on January 12, 2006, formed the City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act'), to finance certain public facilities which the District is authorized to finance; and WHEREAS, pursuant to Resolution Nos. 06-8 and 06-9 adopted by the legislative body of the District on January 12, 2006, certain bond propositions and a proposition to levy a special tax within the District, among other things, were submitted to the qualified electors within the District, and were approved by more than two-thirds of the votes cast at the elections held within the District on January 12, 2006; and WHEREAS, based upon Resolution Nos. 06-8 and 06-9 and the elections and in accordance with Section 53340 of the Act, the legislative body of the District adopted Ordinance No. 1107 on February 9, 2006, authorizing the levy of a special tax (the "Special Tax") on the taxable property within the District at the maximum rates described therein; and WHEREAS, based upon Resolution Nos. 06-8 and 06-9 and the elections, and pursuant to Resolution No. 06-33, adopted by the legislative body of the District on March 23, 2006, and Resolution No. 07-13, adopted by the legislative body of the District on March 8, 2007, the District issued, respectively, its Special Tax Bonds, Series 2006A (the "2006A Bonds"), in an aggregate initial principal amount of $50,000,000, and its Special Tax Bonds, Series 2007 (the "2007 Bonds", and together with the 2006A Bonds, the "Bonds"), in an aggregate initial principal amount of $17,915,000, pursuant to the Act to finance authorized public facilities, the repayment of which is secured by the net Special Tax received by the District, as further described in the indenture with respect to the Bonds (as heretofore amended and supplemented, the "Indenture"); and WHEREAS, $38,045,000 in aggregate principal amount of 2006A Bonds are presently outstanding, and $13,970,000 in aggregate principal amount of 2007 Bonds are presently outstanding; and Resolution No. 2016- 08 WHEREAS, due to the country's economic downturn in 2008 and ensuing protracted recession in the City, certain residential projects within the District reasonably expected at the issuance of the 2006A Bonds and the 2007 Bonds to be developed have been delayed significantly, and certain public improvements authorized to be financed by the District and associated with such residential projects have not yet been constructed; and WHEREAS, as a result, approximately $21,363,420 in project fund monies held under the Indenture remain unspent (the "Unspent Project Fund Monies"), approximately $6,452,482 of which derive from the 2006A Bonds (the "Unspent 2006A Project Fund Monies") and approximately $14,910,938 of which derive from the 2007 Bonds (the "Unspent 2007 Project Fund Monies"); and WHEREAS, although residential property values have been recovering within the City over the past few years, the proposed development of the remaining residential real property within the District recently has been additionally complicated by new challenges due to factors beyond the control of the residential developers, the City and the District — in particular the enactment of new laws in the State of California which dissolved the former Palm Desert Redevelopment Agency and now require the Successor Agency to the Palm Desert Redevelopment Agency to dispose of, and sell for the benefit of other taxing entities, undeveloped real property adjacent to the District which otherwise was intended by the City to be developed for complementary, and not competing, uses to the planned residential development within the District; and WHEREAS, therefore, the District and the City desire to authorize the optional redemption, on March 1, 2016, of (i) a portion of the outstanding 2006A Bonds from the Unspent 2006A Project Fund Monies and related funds to be released from the Reserve Account of the Special Tax Fund held under the Indenture in connection with such optional redemption, and (ii) all of the outstanding 2007 Bonds from the Unspent 2007 Project Fund Monies and related funds to be released from the Reserve Account of the Special Tax Fund held under the Indenture in connection with such optional redemption; and WHEREAS, the optional redemption of a portion of outstanding 2006A Bonds and all of the outstanding 2007 Bonds from the Unspent Project Fund Monies will result in a corresponding reduction in the Special Tax to be levied on properties within the District commencing Fiscal Year 2016-17. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT ACTING AS THE LEGISLATIVE BODY OF CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Each of the above recitals is true and correct. Section 2. The City Council, acting in its capacity of legislative body of the District and on its own behalf, hereby authorizes the optional redemption, on March -2- Resolution No. 2016- 08 1, 2016, of (i) a portion of outstanding 2006A Bonds from the Unspent 2006A Project Fund Monies and related funds to be released from the Reserve Account of the Special Tax Fund held under the Indenture in connection with such optional redemption, and (ii) all of the outstanding 2007 Bonds from the Unspent 2007 Project Fund Monies and related funds to be released from the Reserve Account of the Special Tax Fund held under the Indenture in connection with such optional redemption (together, the "March 1, 2016 Optional Redemption"). Section 3. All actions heretofore taken by the officers and agents of the City and the District with respect to the March 1, 2016 Optional Redemption are hereby approved, confirmed, and ratified. Each of the Mayor of the City, the City Manager of the City, and the Finance Director/Treasurer of the City and the officers and staff of the City and the District responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions, and execute and deliver any and all documents as are necessary to accomplish the March 1, 2016 Optional Redemption. Section 4. This Resolution shall take effect upon its adoption. The City Clerk of the City shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions. PASSED, APPROVED, AND ADOPTED this 14th day of January, 2016, by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA ROBERT A. SPIEGEL, MAYOR -3- I I I Y Of PRIM 0ESERi 73-510 FRED WARING DRIVE, PALM DESERT, CALIFORNIA 92260-2578 TEL:76o 346—o6tt FAX: 760 341-4564 info@paJm-desert.org January 14, 2016 Attn: Mr. Robert Schneider, Vice President Wells Fargo Bank, National Association 333 S. Grand Avenue Fifth Floor, Suite 5A Los Angeles, California 90071 Re: $6,900,000 in aggregate principal amount of City of Palm Desert Community Facilities District No. 2005-1 (University Park) Special Tax Bonds, Series 2006A, maturing on September 1, 2021 and thereafter through September 1, 2036 (the "2006A Bonds") City of Palm Desert Community Facilities District No. 2005-1 (University Park) Special Tax Bonds, Series 2007, maturing on September 1, 2016 and thereafter through September 1, 2037 (the "2007 Bonds") Dear Mr. Schneider: The above -referenced 2006A Bonds were issued pursuant to a Bond Indenture, dated as of May 1, 2006 (the "Master Indenture"), by and between the City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District') and Wells Fargo Bank, National Association, as trustee (the "Trustee"). The above -referenced 2007 Bonds were issued pursuant to the Master Indenture, as amended and supplemented by a First Supplemental Indenture, dated as of May 1, 2007 (the "First Supplemental Indenture"), by and between the District and the Trustee. As heretofore amended and supplemented, including but not limited to by the First Supplemental Indenture, the Master Indenture is referred to herein as the "Indenture." Capitalized terms used but not defined herein have the respective meanings ascribed to such terms in the Indenture. With reference to the above -referenced 2006A Bonds, the District hereby requests the Trustee, on behalf of and at the expense of the District, to send no earlier than January 16, 2016 and no later than January 29, 2016, a notice of optional redemption in substantially the form appended hereto as Exhibit A to the Depository, the respective registered Owners of the 2006A Bonds, at their respective addresses appearing on the Bond Register maintained by the Trustee, and Stinson Securities, LLC, as original purchaser of the 2006A Bonds, and to be filed on the Electronic Municipal Market Access System ("EMMA"), a facility of the Municipal Securities Rulemaking Board (the "MSRB"), in an electronic format accompanied by identifying information as prescribed by the MSRB, all pursuant to Section 4.3 of the Master Indenture, for redemption on March 1, 2016. CjMManow " Mr. Robert Schneider January 14, 2016 Page 2 of 2 2007 Bonds With reference to the above -referenced 2007 Bonds, the District hereby requests the Trustee, on behalf of and at the expense of the District, to send no earlier than January 16, 2016 and no later than January 29, 2016, a notice of optional redemption in substantially the form appended hereto as Exhibit B to the Depository, the respective registered Owners of the 2007 Bonds, at their respective addresses appearing on the Bond Register maintained by the Trustee, and Stinson Securities, LLC, as original purchaser of the 2007 Bonds, and to be filed on EMMA, a facility of the MSRB, in an electronic format accompanied by identifying information as prescribed by the MSRB, all pursuant to Section 4.3 of the Master Indenture, for redemption on March 1, 2016. I note that Kinsell, Newcomb & De Dios, Inc., which also was an original purchaser of the 2006A Bonds and the 2007 Bonds, is now defunct and no longer in business. In consideration of the Trustee's agreement to issue the notices of optional redemption, the District agrees to indemnify and hold the Trustee harmless against any and all adverse claims, expenses and costs (except for any such claims, expenses and costs arising out of the negligence or misconduct of the Trustee) associated with the Trustee's issuance of such notices of optional redemption. Please call if you have any questions with the notices of optional redemption and this instruction letter. Sincerely, Paul S. Gibson Finance Director/Treasurer, City of Palm Desert as an Authorized Representative of the District I I I Y 01 P 0 1 M 01SIRI CJ rcianar afnmo++�!x Exhibit A Form of Notice of Optional Redemption — 2006A Bonds [see attached] A-1 NOTICE OF OPTIONAL REDEMPTION CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) SPECIAL TAX BONDS, SERIES 2006A NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds, dated May 9, 2006 (the "Bonds"), of the City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District") in accordance with that certain Bond Indenture, dated as of May 1, 2006 (as heretofore amended and supplemented, the "Indenture"), by and between the District and Wells Fargo Bank, National Association (the "Trustee"), pursuant to which such Bonds were originally issued on May 9, 2006, that a portion of the outstanding Bonds in the aggregate principal amount of $6,900,000 have been called for redemption on March 1, 2016 (the "Redemption Date"), subject to the provisions of the succeeding paragraphs of this notice, and pursuant to the provisions of the Indenture. The Bonds called for redemption have the stated maturity dates, principal amounts, stated interest rates, and CUSIP numbers as set forth below: Maturity Bond (September 1) Principal Amount Interest Rate No. CUSIP 2021 $1,130,000 5.000% R-10 696627 BV9 2026 1,450,000 5.250 R-11 696627 CA4 2032 1,205,000 5.300 R-12 696627 CF3 2032 1,115,000 5.450 R-13 696627 CG1 2036 2,000,000 5.500 R-14 696627 CLO Pursuant to the Indenture, on the Redemption Date, the principal, at 101 % (which includes 1 % redemption premium), and interest accrued to the Redemption Date on such Bonds (collectively, the "Redemption Price"), shall become due and payable, and from and after the Redemption Date, interest on the Bonds shall cease to accrue and be payable. Owners of the Bonds should surrender said Bonds on the Redemption Date at the following addresses: First Class/Registered/Certified Air Courier In Person Wells Fargo Bank. N.A. Wells Fargo Bank. N.A. Wells Fargo Bank. N.A. Corporate Trust Operations Corporate Trust Operations Northstar East Building P.O. Box 1517 N9303-121 608 2nd Ave. So., 12th FI. Minneapolis, MN 55480-1517 6th & Marquette Avenue Minneapolis, MN Minneapolis, MN 55479 For Bonds surrendered by mail, the use of registered or certified mail is suggested. IMPORTANT NOTICE: ALL HOLDERS SUBMITTING THEIR BONDS MUST ALSO SUBMIT A FORM W-9. FAILURE TO PROVIDE A COMPLETED FORM W-9 MAY RESULT IN THE TWENTY-EIGHT PERCENT (2891.) BACK UP WITHHOLDING PURSUANT TO THE JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003 AND BROKER REPORTING REQUIREMENTS. THE FORM W-9 MAY BE OBTAINED FROM THE INTERNAL REVENUE SERVICE. Neither the District nor the Trustee shall be held responsible for the selection or use of the CUSIP number, nor is any representation made as to its correctness indicated in this Notice of Optional Redemption. It is included solely for convenience of the owners of the Bonds. Any error in the CUSIP number shall not affect the validity of the proceedings for redemption of the Bonds. DATED: January 14, 2016 WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee on behalf of the City of Palm Desert Community Facilities District No. 2005-1 (University Park) Exhibit B Form of Notice of Optional Redemption — 2007 Bonds [see attached] B-1 NOTICE OF OPTIONAL REDEMPTION CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) SPECIAL TAX BONDS, SERIES 2007 NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds, dated May 23, 2007 (the "Bonds"), of the City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District") in accordance with that certain Bond Indenture, dated as of May 1, 2006 (as heretofore amended and supplemented, the "Indenture"), by and between the District and Wells Fargo Bank, National Association (the "Trustee"), pursuant to which such Bonds were originally issued on May 23, 2007, that all of the outstanding Bonds in the aggregate principal amount of $13,970,000 have been called for redemption on March 1, 2016 (the "Redemption Date"), subject to the provisions of the succeeding paragraphs of this notice, and pursuant to the provisions of the Indenture. The Bonds called for redemption have the stated maturity dates, principal amounts, stated interest rates, and CUSIP numbers as set forth below: Maturity Bond (September 1) Principal Amount Interest Rate No. CUSIP 2016 $ 365,000 4.550% R-8 696627 CUO 2017 385,000 4.650 R-9 696627 CV8 2018 400,000 4.700 R-10 696627 CW6 2019 420,000 4.750 R-11 696627 CX4 2022 1,375,000 4.800 R-12 696627 DA3 2027 2,795,000 5.150 R-13 696627 DF2 2037 8,230,000 5.200 R-14 696627 DR6 Pursuant to the Indenture, on the Redemption Date, the principal, at 102% (which includes 2% redemption premium), and interest accrued to the Redemption Date on such Bonds (collectively, the "Redemption Price"), shall become due and payable, and from and after the Redemption Date, interest on the Bonds shall cease to accrue and be payable. Owners of the Bonds should surrender said Bonds on the Redemption Date at the following addresses: First Class/Registered/Certified Wells Fargo Bank. N.A. Corporate Trust Operations P.O. Box 1517 Minneapolis, MN 55480-1517 Air Courier Wells Fargo Bank. N.A. Corporate Trust Operations N9303-121 6th & Marquette Avenue Minneapolis, MN 55479 In Person Wells Fargo Bank. N.A. Northstar East Building 608 2nd Ave. So., 1211 FI. Minneapolis, MN For Bonds surrendered by mail, the use of registered or certified mail is suggested. IMPORTANT NOTICE: ALL HOLDERS SUBMITTING THEIR BONDS MUST ALSO SUBMIT A FORM W-9. FAILURE TO PROVIDE A COMPLETED FORM W-9 MAY RESULT IN THE TWENTY-EIGHT PERCENT (28%) BACK UP WITHHOLDING PURSUANT TO THE JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003 AND BROKER REPORTING REQUIREMENTS. THE FORM W-9 MAY BE OBTAINED FROM THE INTERNAL REVENUE SERVICE. Neither the District nor the Trustee shall be held responsible for the selection or use of the CUSIP number, nor is any representation made as to its correctness indicated in this Notice of Optional Redemption. It is included solely for convenience of the owners of the Bonds. Any error in the CUSIP number shall not affect the validity of the proceedings for redemption of the Bonds. DATED: January 14, 2016 WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee on behalf of the City of Palm Desert Community Facilities District No. 2005-1 (University Park) CERTIFICATE OF THE DISTRICT REQUESTING TRANSFER OF MONIES FROM FACILITIES FUNDS AND RESERVE ACCOUNT TO REDEMPTION ACCOUNT OF THE SPECIAL TAX FUND CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) In connection with an optional redemption on March 1, 2016 of $6,900,000 in principal amount of Series 2006A Bonds and all of the remaining Series 2007 Bonds, currently outstanding in principal amount of $13,970,000, Wells Fargo Bank, National Association, as Trustee, is hereby requested to transfer monies between the accounts of the City of Palm Desert Community Facilities District No. 2005-1 (University Park) (the "District"), established by the Bond Indenture dated as of May 1, 2006 (as heretofore amended and supplemented, the "Indenture"), between the Trustee and the District, as follows: TRANSFER THE RESPECTIVE AMOUNTS INDICATED BELOW FROM THE FOLLOWING ACCOUNTS OR SUBACCOUNTS: (a) $1,434,789.08 from the Backbone Infrastructure Account of the City Facilities Fund; (b) $1,527,774.97 from the Gerald Ford (South) Landscaping Subaccount of the Backbone Infrastructure Account of the City Facilities Fund; (c) $33,254.11 from the Cook Street Pedestrian Bridge Subaccount of the Backbone Infrastructure Account of the City Facilities Fund; (d) $1,660,498.45 from the PDFC Subaccount (City Facilities) of the Other Facilities Account of the City Facilities Fund; (e) $321.08 from the Shaw Subaccount (City Facilities) of the Other Facilities Account of the City Facilities Fund; (f) $776,077.25 from the Backbone Infrastructure Account of the CVWD Facilities Fund; (g) $13,695,147.56 from the PDFC Subaccount (CVWD Facilities) of the Other Facilities Account of the CVWD Facilities Fund; (h) $92,087.33 from the UV Subaccount (CVWD Facilities) of the Other Facilities Account of the CVWD Facilities Fund; (i) $0.73 from the Shaw Subaccount (CVWD Facilities) of the Other Facilities Account of the CVWD Facilities Fund; (j) $91.59 from the S&C Subaccount (CVWD Facilities) of the Other Facilities Account of the CVWD Facilities Fund; (k) $291,474.94 from the John Laing Homes Subaccount of the PDFC Subaccount (City Facilities) of the Other Facilities Account of the City Facilities Fund; (1) $59,921.54 from the John Laing Homes Subaccount of the PDFC Subaccount (CVWD Facilities) of the Other Facilities Account of the CVWD Facilities Fund; (m)$532,387.36 from the 2006A Bonds Subaccount of the Reserve Account of the Special Tax Fund; and (n) $1,116,788.44 from the 2007 Bonds Subaccount of the Reserve Account of the Special Tax Fund. TO: the Redemption Account of the Special Tax Fund. The conditions for the transfer of the foregoing amounts to the Redemption Account of the Special Tax Fund, including those conditions in Sections 3.6(c), 3.9(h) and 3.10(e) of the Indenture, as applicable, have been satisfied. Without limiting the foregoing, the undersigned hereby states that the respective amounts in the subaccounts and accounts of the City Facilities Fund and the CVWD Facilities Fund specified in lines (a) through (1) above are no longer needed to pay Project Costs. Pursuant to Section 4.1(a) of the Indenture, the Series 2006A Bonds selected by the District for optional redemption on March 1, 2016 are as follows: Maturity (September 1) Principal Amount Interest Rate 2021 $1,130, 000 5.000% 2026 1,450,000 5.250 2032 1,205,000 5.300 2032 1,115,000 5.450 2036 2,000,000 5.500 Capitalized terms used but not defined herein shall have the respective meanings given to such terms in the Indenture. 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