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Home My WebLink AboutSA-RDA 061RESOLUTION NO. SA-RDA 061 A RESOLUTION OF THE BOARD OF DIRECTORS TO THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE CONTRACT, AN OFFICIAL STATEMENT, AN ESCROW AGREEMENT AND OTHER DOCUMENTS IN CONNECTION WITH THE SUCCESSOR AGENCY'S ISSUANCE OF TAX ALLOCATION REFUNDING (HOUSING) BONDS AND TAKING RELATED ACTIONS RECITALS: A. The former Palm Desert Redevelopment Agency (the "Former Agency") was a duly constituted redevelopment agency pursuant to provisions of the Community Redevelopment aw (the "Redevelopment Law") set forth in Section 33000 et seq. of the Health and Safety Code ("HSC") of the State of California (the "State"). B. The Former Agency undertook to redevelop four project areas (collectively, the "Project Areas"). C. The Former Agency and the City of Palm Desert (the "City") executed and delivered a Joint Exercise of Powers Agreement, dated as of January 26, 1989 (the "Joint Powers AgreemenY'), which Joint Powers Agreement created and established the Palm Desert Financing Authority (the "Authority"). D. To finance and refinance affordable housing projects, the Former Agency entered into certain loan agreements, including the following (together, the "Loan Agreements"): (i) the 2002 Housing Project Loan Agreement, dated as of August 1, 2002, by and among the Former Agency, the Authority and BNY Western Trust Company (as succeeded by U.S. Bank National Association), as trustee, pursuant to which the Former Agency incurred a loan (the "2002 Loan"); and (ii) the 2007 Housing Project Loan Agreement, dated as of February 1, 2007, by and among the Former Agency, the Authority and Wells Fargo Bank, National Association (as succeeded by U.S. Bank National Association), as trustee, pursuant to which the Former Agency incurred a loan (the "2007 Loan," and together with the 2002 Loan, the "Agency Loans"). E. To provide funding for the Agency Loans, the Authority issued two series of bonds (collectively, the "Authority Bonds"): (i) the Authority's Tax Allocation (Housing Set- Aside) Revenue Bonds, Series 2002, and (ii) the Authority's Tax Allocation (Housing Set- Aside) Refunding Revenue Bonds, Series 2007. (i vda Vcronica Tapia\N'ord Piles` S all' Repons .Successor Agcncy`.Dcbt ReFunding'Pslm Uesert SA - 2017 refunding - SA reso appro ing housing YOS PA. Rec Ib I-16 docs RESOLUTION NO. sA-xDA 061 F. As of the date of this resolution, a portion of the principal amount of each Agency Loan (and, correspondingly, an equivalent portion of the principal amount of each series of the Authority Bonds) remains outstanding. G. Pursuant to AB X1 26 (enacted in June 2011), and the State Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231 (2011), the Former Agency was dissolved as of February 1, 2012, the Successor Agency of the Palm Desert Redevelopment Agency (the "Successor Agency") was constituted, and the Oversight Board to the Successor Agency (the "Oversight Board") was established. H. Pursuant to HSC Section 34177.5(a), the Successor Agency is authorized to issue bonds (the "Refunding Bonds") to refund the Agency Loans, to provide savings to the Successor Agency, provided that: (i) the total interest cost to maturity on the Refunding Bonds plus the principal amount of the Refunding Bonds shall not exceed the total remaining interest cost to maturity on the refunded Agency Loans, plus the remaining principal of the refunded Agency Loans; and (ii) the principal amount of the Refunding Bonds shall not exceed the amount required to defease the refunded Agency Loans, to establish customary debt service reserves and pay related costs of issuance. I. The Successor Agency desires to issue Refunding Bonds to refund the outstanding Agency Loans to achieve debt service savings. J. The Refunding Bonds will be issued under the authority of HSC Section 34177.5 and Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Refunding Bond Law"). K. The Board of Directors previously adopted Resolution No. SA-RDA-059, on October 13, 2016 (the "SA Bond Approval Resolution"), approving the issuance of the Refunding Bonds an Indenture (the "Indenture"), by and between the Successor Agency and U.S. Bank National Association, as trustee, in substantially the form attached to the SA Bond Approval Resolution. L. Pursuant to HSC Sections 34177.5(fl and 34180, the issuance of the Refunding Bonds is subject to the Oversight Board's prior approval. M. The Oversight Board adopted Resolution No. OB-153 on October 17, 2016 (the "Oversight Board Resolution"), approving the issuance of the Refunding Bonds. N. The State Department of Finance ("DOF") issued its letter, dated December 1, 2016, providing the DOF's approval of the Oversight Board Resolution. 2 G'�rda�Vcronica Tapia��4brd Files`SiafT Repons•Successor Agrncy`�Dcbt Refundin�SJ'alm Deun SA -_017 rc(unding - SA rew approving housing POS BP.4 Rcv 12-I-16 docx RESOLUTION NO. sa-xnA o61 '� � O. The Refunding Bonds will be issued in one or more series, and will consist of a combination of tax-exempt bonds (the "Tax-Exempt Bonds") and taxable bonds (the '� ` "Taxable Bonds"). NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. Refundinq Bonds. This Board of Directors hereby confirms its approval of the issuance of the Refunding Bonds in an aggregate principal amount not to exceed $60,000,000 pursuant to the SA Bond Approval Resolution. Section 3. Bond Purchase Contract. The sale of the Refunding Bonds pursuant to a Bond Purchase Contract (the "Bond Purchase Contract"), by and between the Successor Agency and Stifel, Nicolaus & Company, Incorporated ( the "Underwriter") is hereby approved; rovided, that such sale shall be subject to the following parameters: (i) the terms of the Refunding Bonds shall be in compliance with the savings parameters set forth in clauses (A) and (B) of the Recital H of this Resolution, (ii) the true interest cost of the Tax-Exempt Bonds shall not exceed 4.00 percent, (iii) the true interest cost of the Taxable Bonds not exceed 4.25 percent; and (iv) the Underwriter's compensation (i.e., underwriter's discount), exclusive of any original issue discount, for the Refunding Bonds shall not exceed 0.5 percent of the aggregate principal amount of the Refunding Bonds. The Bond Purchase Contract, in the form on file with the Secretary of the Successor Agency, is hereby approved. Subject to the parameters set forth above, each of the Chair of this Board, the Vice Chair of this Board, the Executive Director and the Finance Officer of Successor Agency (the "Authorized Officers," each an "Authorized Officer"), acting individually, is authorized, for and in the name and on behalf of the Successor Agency, to execute and deliver the Bond Purchase Contract, with changes therein as the Authorized Officer executing the same may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof). Section 4. Escrow Agreement. The Housing Bonds Escrow Agreement (the "Escrow Agreement") relating to the refunding and defeasance of the Agency Loans and the Authority Bonds, substantially in the form on file in the office of the Secretary of the Successor Agency, is hereby approved. Each Authorized Officer, acting individually, is hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to execute and deliver the Escrow Agreement, in substantially such form, with changes therein as the Authorized Officer executing the same may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof). Section 5. Preliminary Official Statement. The Preliminary Official Statement (the "Preliminary Official Statement") relating to the Refunding Bonds, substantially in the form on file in the office of the Secretary of the Successor Agency, is hereby approved. Each Authorized Officer, acting individually, is hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to cause the Preliminary Official 3 C:\Users\gsanchez�AppData�LocaNNicroso&\Windows\Temporary IntemM Files\Cortrnt.Outlook�9XHLIHFC�PaIm Dese�t SA - 2017 rcCunding - SA reso approving housing POS BPA Rev 12-1-16.docx RESOLUTION NO. SA-RDA 061 Statement in substantially said form, with such additions or changes therein as such '"'"�' Authorized Officer may approve, to be deemed final for the purposes of Rule 15c2-12 � promulgated under the Securities and Exchange Act of 1934, as amended (the "Rule"). The Underwriter is hereby authorized to distribute copies of the Preliminary Official Statement to persons who may be interested in the purchase of the Refunding Bonds. Section 6. Officiat Statement. Each Authorized Officer, acting individually, is hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to cause the Preliminary Official Statement to be brought into the form of a final Official Statement and to execute the final Official Statement and such additional documents prior to or concurrently with the signing of the final Official Statement as such Authorized O�cer may deem necessary or appropriate to verify the accuracy thereof. The distribution and use of the Official Statement by the Undennrriter in connection with the sale of the Refunding Bonds are hereby approved. Section 7. Continuing Disclosure Ce�tificate. The Continuing Disclosure Certificate (the "Continuing Disclosure Certificate") with respect to the Refunding Bonds, substantially in the form attached as an appendix to the draft Preliminary Official Statement on file in the office of the Successor Agency Secretary, is hereby approved. Each Authorized Officer, acting individually, is hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to execute and deliver the Continuing Disclosure Certificate in substantially such form, with changes therein as the Authorized Officer executing the same may require or approve (such approval to be conclusively � evidenced by the execution and delivery thereof). The appointment of Willdan Financial Services as the initial Dissemination Agent under the Continuing Disclosure Certificate is � hereby approved. Section 8. Authorization to Proceed with Refundinq in Part. In the event that the Executive Director and the Financial Officer, in consultation with the Successor Agency's municipal advisor, determine that a portion of the Agency Loans (the "Uneconomic Portion") cannot be refunded concurrently with the other portion, because refunding the Uneconomic Portion would not be in compliance with requirements of Health and Safety Code Section 34177.5(a) and the parameters set forth herein, the Executive Director is hereby authorized to direct the continuation of the refunding transaction without the Uneconomic Portion. The Authorized Officers are authorized to execute, on behalf and in the name of the Successor Agency, the Indenture and each of the documents authorized hereby, with the applicable modifications to exclude the Uneconomic Portion Section 9. Continuinq Disclosure Compliance Procedures. Reference is hereby made to Resolution No. 2016-91 (the "City Resolution") adopted by the City Councif of the City on December 8, 2016, pursuant to which the Continuing Disclosure Compliance Procedures (the °Continuing Disclosure Compliance Procedures") were adopted. It is hereby affirmed that the Successor Agency adopts such Continuing Disclosure Compliance Procedures. With respect to the Successor Agency's continuing disclosure undertakings, each reference in the Continuing Disclosure Compliance Procedures to the City, the City Manager and the Finance Director shall be read as, """'� C:\Usas�gsaocha�AppDetsU.ocaNNicrosoft\Windows\Temporary Intertxt Filea\Contrnt.putbok�97�iI,1 HFG1PsIm Desat SA - 2017 mfunding - SA reso appmviog housing ppS BPA Rev � 12-1-16.docx RESOLUTION NO. sa-xDa o61 Agency's Finance Officer. The Executive Director, consultation with bond counsel, is authorized to amend the Compliance Procedures from time to time Section 10. Tax-Advantaged Bonds Post-Issuance Compliance Procedures. Reference is hereby made to the Tax-Advantaged Bonds Post-Issuance Compliance Procedures (the "Post-Issuance Tax Compliance Procedures") also adopted pursuant to the City Resolution. It is hereby affirmed that such Post-Issuance Tax Compliance Procedures will be applicable to the Tax-Exempt Bonds. The Executive Director, consultation with bond counsel, is authorized to amend the Post-Issuance Tax Compliance Procedures from time to time. Section 11. Other Acts. The members of this Board, the Chair, the Vice Chair, the Executive Director, the Finance Officer and all other officers of the Successor Agency, are hereby authorized, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things (including, but not limited to, obtaining bond insurance or other types of credit enhancement, engagement of a verification agent for the defeasance escrows) which they may deem necessary or proper to effectuate the purposes of this Resolution. Any such previous action taken by such officers are hereby ratified and confirmed. APPROVED and ADOPTED this 8th day of December, 2016. AYES: Jot�tn�x, KELLY, NESTANDE, idEBER, and HARNIR NOES: Norr� ABESENT: xot� ABSTAIN: xor� ' .� ��1-�'-ti`t ,��i Z � �C' � JAN C. RARNIR, CAAIR �_, ATTEST: R HELLE D. KLASSE , SECRETARY SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY G rdn �'eiunica 1'apia' N'ord I�iles.Siaff RepnnsSuccessoi Agenc�� 1)ebt Re(unAing�Palm Desen ti:1 - 2017 rc(unding - SA reso approving housing POS BI'A Re�� 13- I� I6 du:x RESOLUTION NO. SA-RDA 061 [This page has intentionally been left blank.] RESOLUTION NO. SA-RDA 061 DraJl Jor Drscussiun Purposes Only Strudlrng Yoccu Car/son & Ruuih $ $ SUCCESSOR AGENCY TO THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS TAXABLF. TAX ALLOCATION 2017 SERIES H-A REFUNDING BONDS 2017 SERIES H-B BOND PURCHASE CONTRACT , 201 Successor Agency to the Palm Desert Redevelopment Agency 73510 Fred Waring Drive Yalm Ucsert, California 9226b Attention: Executive Director Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the "Underwriter") offers to enter into this Bond Purchase Contract (this '`Purehase Contract") with the Successor Agency to the Palm Desert Redevelopment Agency (the "Agency"). This offer is made subject to the Agency's acceptance by execution of this Purchase Contract and delivery of the same to the Underwriter on or before 1 1:59 p.m., CaliFornia time, on the date hereof; and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Agency at any time prior to such acceptance. Upon the Agency's acceptance hereof; the Purchase Contract wil) be binding upon the Agency and the Underwriter. Capitalized terms that are used in this Purchase Contract and not otherwise defined have the respective meanings given to such terms in the Indenture (as such term is defined herein). Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations set forth in this Purchase Contract, the Underwriter agrees to purchase from the Agency, and the Agency agrees to sell and deliver to the Underwriter, all (but not less than all) of: (i) the $ Successor Agency to the Palm Desert Redevelopment Agency "['ax Allocation Rcfunding Bonds 2017 Series H-/1 (thc "Series H-A Bonds") at a purchase price of $ (being an amount equal to the principal amount of thc Scrics Ii-A Bonds plus/less a net original issue premium/discount of $ and (ess an Underwriter's discount of $_�; and (ii) the $ Successor �gency to the Palm Desert Redevelopment Agency Taxable Tax /�Ilocation Refunding Bonds 2017 Series F�-B (the '`Series H-B Bonds" and, togcther with the Series H-A Bonds, the "Bonds") at a purchase price of $ (being an amount equal to the principal amount of the Series f�-Q [ionds plus/less a net original issue premium/discount of $ and less an Underwriter's discount of $__). [The Agency acknowledges that the Undcrwriter will at Closing (as such term is defined herein), cm behalf of the Agency, wire a portion of the purchase price in the amounts of: (a) $ as the premium for the Policy (as such term is defined herein); and (b) $ , as the premium tor the Reserve Policy (as such term is defined herein), directly to the (nsurer (as such term is defined herein). J RESOLUTION NO. SA-RDA 061 (c) By all necessary official action, the Agency has: (i) duly authorized the preparation and delivery of the Preliminary Official Statement and the preparation, execution and delivery of the Offtcial Statement; (ii) duly authorized and approved the execution and delivery of, and the performance of its obligations under, the Bonds and the Agency Agreements; and (iii) duly authorized the consummation by the Agency of all other transactions contemplated by the Agency Resolution, the Agency Agreements, the Preliminary Official Statement and the Official Statement. When executed and delivered, the Agency Agreements (assuming due authorization, execution and delivery by and enforceability against the other parties thereto) will be in full force and effect and each will constitute legal, valid and binding agreements or obligations of the Agency, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles rclating to or limiting creditors' rights generally, the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State. (d) At the time of the Agency's acceptance hereof and at ell times subsequent thereto up to and including the time of the Closing, the information and statements in the Official Statement do not and will not contain any untrue statement of a material fact or omit to state a material fact that is required to be stated therein or necessary ro make the statements therein, in the light of the circumstances under which they were made, not misleading (except that no representation is made with respect to information relating to DTC (as such term is defined herein), DTC's book-entry system)[, the Policy, the Reserve Policy or the Insurer]). (e) As of the date hereof, except as described in the Preliminary Official Statement, there is no action, suit, proceeding or investiga[ion before or by any court, public board or body tha[ is pending against, and notice of which has been served on and received by, the Agency, or, to the best knowledge of the Agency, threatened, wherein an unfavorable decision, ruting or finding would: (i) affect the creation, organization, existence or powers of the Agency, or the titles of its members or officers; (ii) in any way question or affect the validity or enforceability of the Agency Agreements, the Bonds or the exclusion of the interest on the Series H-A Bonds from federa) taxation or of the interest on the Bonds from State taxation; or (iii) in any way question or affect the Purchase Contract or the Iransactions contemplated by the Purchase Contract, the Official Statement, or any other agreement or instrument to which the Agency is a party relating to the Bonds. (� There is no consent, approval, authorization or other order of, filing or registration with, or certification by, any regulatory authority that has jurisdic[ion over the Agency that is required for the execution and delivery of this Purchase Contract and the other Agency Agreements or the consummation by the Agency of the other transactions that are contemplated by the Official Statement or the Agency Agreements. (g) Any certificate that is signed by any official of the Agency who is authorized to do so shatl be deemed a representation and warranty by the Agency to the Underwriter as to the statements made therein. (h) The Agency is not in default, and at no time has the Agency defaulted in any material respect, on any bond, note or other obligation for borrowed money or any agreement under which any such obligation is or was outstanding. (i) If any event occurs of which the Agency has knowledge between the date of this Purchase Contract and the date of the Closing that might or would cause the Official Statemer►t, as 4 RESOLUTION NO. SA-RDA 061 then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact that is required ro be stated therein or necessary to make the statements therein, in the light of the circumstanceti under which they were made, not misleading, the Agency will notify the Underwriter and if, in the opinion of the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Agency will cooperate with the Underwriter in causing the Official Statement to be amended or supplemented in a form and in a manner that is approved by the Underwriter. All cxpenses that are thereby incurred will be paid by the Agency, and the Underwriter will file, or cause to be filed, the amended or supplemented Ofticial Statement with the MSRB's Electronic Municipal Market Access database ("EMMA"). (j) The Agency wil! furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order: (i) to qualify the Bondti for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions. The Agency will not be required to execute a general or special consent to service of proces� or to qualify to do business in connection with any such qualification or determination in any jurisdiction. (k) The Agency is not in any material respect in breach of or default under: (i) any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either; (ii) any applicable judgment or decree; or (iii) any loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Agency is a party, which breach or default has or may have an adverse effect on the ability of the Agency to perform its obligations under the Agency Agreements, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitutc such a default or event of default undcr any such instrument; and the adoption, execution and delivery of the Agency Agreements, if applicable, and compliance with the provisions on the Agency's part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administra[ive regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Agency is a party, nor will any such execution, delivery, adoption or compliance result in the creation or impvsition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Agency or under the terms of a�y such taw, regulation or instrument, except as may be provided by the Age�icy A�reements. (t) Except as set forth in the Ofticial Statement under the caption ["CONTINUING DISCLOSURE,]" the Agency has complied in all material respects with its continuing disclosure undertakings in the pas[ five years. (m) The financial statements relating to the reccipts, expenditures and cash balances of the Agency as of June 30, 201[5j attached as an appendix to the Official Statement fairly represcnt the receipts, expenditures and cash balances of the Agency as of tiuch date. Except as disclosed in the Ofiicial Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the Agency or in its operations since June 30, 201[5) and there has been no occurrence, circumstance or combination thereof that is reasonably expected to result in any such materially adverse change. 5 RESOLUTION NO. SA-RDA 061 (n) The Agency will refrain from taking any action, or permitting any action to be taken, with regard to which the Agency may exercise control, that results in the loss of the tax-exempt status of the interest on the Series H-A Bonds under federal law or of the interest on the Bonds under State law. Section 6. The Closing. (a) At 8:00 A.M., California time, on _, 2017, or on such earlier or later time or date as may be agreed upon by the Underwriter and the Agency (the "Closing"), the Agency shall deliver, or cause to be delivered, to the Trustee the Bonds in definitive form, registered in the name of Cede & Co., as the nominee of 1'he Depository Trust Company, New York, New York ("DTC") (so that the Bonds may be authenticated by the Trustee and credited to the account that is specified by the Underwriter under DTC's FAST procedures). Prior to the Closing, the Agency shall deliver, at the offices of Richards, Watson & Gershon, A Professional Corporation ("Bond Counsel") in Los Angeles, California, or at such other place as is mutually agreed upon by the Underwriter and the Agency, the other documents that are described in this Purchase Contract. On the date of the Closing, the Underwriter shall pay the purchase price of the Bonds as set forth in Section 1 of this Purchase Contract in immediately available funds to the order of the Trustee. (b) The Bonds shall be issued in fully registered form and shall be prepared and delivered as one Sond for each maturity registered in the name of a nominee of DTC. It is anticipated that CUSIP identification numbers will be inserted on the Bonds, but neither the failure to provide such numbers nor any error with respect thereto shall constitute a cause for failure or refusal by the Underwriter to accept delivery of the Bonds in accordance with the terms of this Purchase Contract. Section 7. Conditions to Underwriter's Obligations. The Underwriter has entered into this Purchase Contract in reliance upon the representations and warranties of the Agency contained herein and to be contained in the documents and instruments to be delivered on the date of the Closing, and upon the performance by the Agency of its obligations to be performed hereunder and under such documents and instruments to be delivered at or prior to the date of the Closing. The Underwriter's obligations under this Purchase Contract are and shall also be subject to the following conditions: (a) The representations and warranties of the Agency that are contained in this Purchase Contract shall be true and correct in all material respects on the date of this Purchase Contract and on and as of the date of the Ciosing as if made on the date of the Closing. (b) As of the date of the Closing, the Official Statement shall not have been amended, modified or supplemenied, except in any case as may have been agreed to by the Underwriter. (c) (i) As of the date of the Closing, the Agency Resolution and the Agency Agreements shall be in full force and effect, and shail not have been amended, modified or supplemented, except as may have been agreed to by the Agency and the Underwriter; and (ii) the Agency shall perform or shall hdve perforrned a(1 of its vbligations that are required under or specified in the Agency Resolu[ion and the Agency Agreements to be performed at or prior to the date of the Closing. (d) As of the date of the Closing, all necessary official action of the Agency relating to the Agency Agreements, the Agency Resolution and the Official Statement shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect. � RESOLUTION NO. SA-RDA 061 (e) Subsequent ro the date of this Purchase Contract, up to and including the date of the Closing, there shall not have occurred any change in the tinancial affairs of the Agency, as described in the Official Statement, which in the reasonable professionai judgment of the Underwriter materially impairs the investment quality of the Bonds. (� As of or prior to the date of the Closing, the Underwriter shall have received each of the following documcnts: (A) Certitied copies of the Agency Resolution. (B) Duly executed copies of the Agency Agreements. (C) The Preliminary Officiai Statement and the Official Statement, with the Official Statement duly executed on bchalf of the Agency_ (D) An approving opinion of Bond Counsel, dated the date of the Closing, as to the validity of the Bonds and the exclusion of interest on the Series H-A Bonds from federal taxation and of interest on the Bonds from State income taxation, addressed to the Agency, substantially in the form attached as an appendix to the Official Statement, and a reliance letter with respect thereto addressed to the Underwriter. (E) A supp(emental opinion or opinions of Bond Counsel, dated the date of the C1o5ing, addressed to the Underwriter, to the effect that: (I) The Purchase Contract has been duly executed and delivered by the Agency and (assuming due authorization, execution and delivery by and enforceability against the Underwriter) is valid and binding upon the Agency, subject to laws relating to bankruptcy, insolvency, rcorganization or creditors' rights generally and to the application of equitable principles; (2) The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (3) Thc s[atements contained in the OFficial Statement on the cover and under the captions ["INTRODUCTION," "REFUNDING PLAN," "THE BONDS" (excluding therefrom the statements pertaining to DTC), "SECURITY FOR THE BONDS" and "TAX MATTERS," and in Appendices A and B], excluding any material [hat may be treated as included under such captions by cross-referenee, insofar as such statements expressly summarize certain provisions of the Bonds, the Agency Agreemenls and lhe form and content of Bond Counsel's final approving opinion, are accurate in all material respectti; and (4) The Authority's Tax Allocation (Housing Set-Aside) Revenue Bonds, Series 2002 and Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds, Series 2007 of the lndenture have been defeased in accordance with the provisions of the instruments pursuant ro which they were issued. (F) An opinion of the Agency's General Counsel, dated thc date of the Closing, addressed to the Agency and the Underwriter, substantially in the form attached hereto as Exhibit D. 7 RESOLUTION NO. SA-RDA 061 (G) An executed Rule 15c2-12 certificate of the Agency, dated the date of the Preliminary Official Statement, substantially in the form attached hereto as Exhibit B. (H) An executed closing certificate of the Agency, dated the date oi the Closing, substantially in the form attached hereto as Exhibit C. (I) The opinion of counsel to the Trustee, addressed to the Agency and the Underwriter, substantially to the effect that: (1) The Trustee is a national banking association that is duly organized, validly existing and in good standing under the laws of the United States of America, having full powers and authority and being qualified to enter into, accept and administer the trust created under the Indenture and to enter into the Indenture; and (2) The Indenture has been duly authorized, executed and delivered by the Trustee, and, assuming due authorization, execution and delivery by the Agency, the Indenturc constitutes the legal, valid and binding agreements of the Trustee, enforceable in accordance with its terms, subject to laws relating in bankruptcy, insolvency or other laws affecting the enforeement of creditors' rights generally and the application of equitable principles if equitable remedies are sought. (J) The opinion or opinions of counsel to the Escrow Agent, addressed to the Agency and the Underwriter, substantially to the effect that: (1) The Escrow Agent is a national banking association that is duly organized, validly existing and in good standing under the laws of the United States of America, having full powers and authority and being qualified to enter into, accept and administer the trust created under the Escrow Agreement and to enter into the Escrow Agreement; and (2) The Escrow Agreement has been duly authorized, executed and delivered by the Escrow Agent and, assuming due authorization, execution and delivery by the Agency, the Escrow Agreement constitutes the legal, valid and binding agreements of the Escrow Agent, enforceable in accordance with its terms, subject to laws relating in bankruptcy, insolvency or other laws affec[ing the enforcement of creditors' rights generally and the application of equitable principles if equitable remedies are sought. (K) A certificate, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel, of an authorized ofticer of officers of the Trustee to the effect that the Trustee is duly authorized to enter into the Indenture, has accepted the duties imposed by the Indenture and is authorized to carry out such duties, and that the Trustee has duly authenticated the Bonds. (L) A certificate or certificates, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel, of an authorized officer of officers of the Escrow Agent to the effect that the Escrow Agent is duly authorized to enter into the Escrow Agreement, has accepted the duties imposed by the Escrow Agreement and is authorized to carry out such dutics. (M) A certificate, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel, of an authorized officer of officers of the Authority to the E:3 RESOLUTION NO. SA-RDA 061 effect that: (1) the Authority is duly authorized to enter into the Escrow Agreement; (2) the Escrow Agreement (assuming due execution and delivery by the other parties thereto) constitutes the valid and binding obligation of the Authority; and (3) the execution and deiivery of the Escrow Agreement and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any applicable law, decision, administrative rule or regulation of the State of California, the Uni[ed States, any department, division, agency or instrumentality of either thereof or any applicable court, or under any instrument to which the Authority is a party or is otherwise subject or bound in a manner that would materially adversely affect the Authority's performance thereunder. (N) Evidence of required filings with the California Debt and Investment Advisory Commission. (0) A copy of the executed Blanket Issuer L,etter of Representations by and bctween the Agency and DTC relating to the book-entry system. (P) An executed verification report relating to Authority's Tax Allocation (Housing Set-Aside} Revenue Bonds, Series 2002 and Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds, Series 2007, among other matters. (Q) Evidence that the ratings that have been assigned to the Bonds as of the date of the Closing are as set forth in the Official Statement. (R) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officerti of the Trustee, which resolution authori�es the execution and delivery of the Indenture and the authentication and delivery oti the Bonds by the Trustee. (S) A certified copy of the general resolution of the Escrow Agent authorizing the execution and delivery of certain documents by certain officers of the Escrow Agent, which resolution authorizes the execution and delivery of [he Escrow Agreement. (T) An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, counsel to the Underwriter, addressed to the Underwriter and in form and substance satisfactory to the Underwriter. (U) A rcport of Lumesis as to compliance by the Agency and related entities with their respective continuing disciosure undertakings. (V) A Tax Cerlificate with respect to maintaining the tax-exempt status of thc Series H-A Bonds, duly executed by the Agency, together with Form 8038-G, duly executed by the Agency. (W) An letter of Best Best & Krieger LLP, as Disclosure Counsel, ro the effert that, based upon an examination that they have made, and without having undertaken to determine independently ar assuming any responsibility for the accuracy or completeness or fairness of the statements contained in the Official Statement, as a matter of fact and not opinion, such counsel advises that, in its capacity as Disclosure Counsel, no facts came to the attention of the attorneys in such tirm rcndering legal services in connection with sueh representation that caused such counsel to believe that the Official Statement as of its date and as of the Closing (except for. (1) the expressions 9 RESOLUTION NO. SA-RDA 061 of opinion, the assumptions, the projections, the financial statements, or other financial, numerical, economic, demographic or statistical data contained in the Official Statement; (2) any CUS[P numbers or information relating [hereto; (3) any information with respect to DTC and DTC's book- entry system; [and (4) any information with respect to the Poli�y, the Reserve Poiicy and the Insurer]) contained or contains any untrue statement of a material fact or omitted or omits to state any material fact nccessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (X) A letter from the State Department of Finance approving the issuance of the Bonds. (Y) A certified copy of the resolution of the Agency's Oversight Board approving the issuance of the Bonds_ (Z) A certificate of Keyser, Marston & Associates, the Agency's fiscal consultant, relating to the information provided by such party in [he Official S[atement, in form and substance satisfactory to the Underwriter and Bond Counsel. (AA) [ADD CERTIFICATION BY UTHER PARTY TO CDA, AS NEEDED] (BB) [Evidence satisfactory to the Underwriter of the issuance of the Policy and the Reserve Policy by the Insurer. (CC) Evidence satisfactory to the Underwriter that the Trustee shall have received the Reserve Policy from the Insurer, which Reserve Policy constitutes a Qualified Reserve Account Credit Instrument under and as defined in the Indenture. (DD) An opinion of counsel to the Insurer, in form and substance satisfactory to the Underwriter and Bond Counsel, with respect to, among other matters, the Policy and the Reserve Policy, and disclosures relating thereto and to the Insurer in the Official Statement. (EE) A certificate of the Insurer, in form and substance satisfactory to the Underwriter and Bond Coun�el, with respect to, among other matters, the Policy and the Reserve Policy.] (FF) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence compliance by the Agency with legal requirements, the wth and accuracy, as of the date of the Closing, of the representations of the Agency contained herein and of the Official Statement and the due performance or satisfaction by the Agency at or prior to �uch time of all agreements then to be performed and all conditions then to be satisfied by the Agency. All of the opinions, letters, certificates, instruments and other documents that are mentioned in this Purchase Contract shall be deemed to be in compliance with the provisions of this Purchase Contract if, but only if, they are in form and substance satisfactory to the Underwriter. [f the Agency is unabte to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the f [I] RESOLUTION NO. SA-RDA 061 Underwriter nor the Agency shall be under any further obligations hereunder, except that the respective obligations of the Agency and the Underwriter [hat are set forth in Section I 1 of this Purchase Contract shall continuc in full force and effect. Section 8. Conditions to Agency's Obligations. The performance by the Agency of its obligations under this Purchase Contract is conditioned upon: (i) the performance by the Underwriter of its obligations hereunder; and (ii) receipt by the Agency of opinions addressed to the Agency, receipt by the Underwriter of opinions addressed to the Underwriter and the delivery of certificates on thc date of the Closing by persons and entities other than the Agency. Section 9. Termination Events. The Underwriter shall have the right to terminate the Underwriter's obligations under this Purchase Contract to purchase, accept delivery of and pay for the Bonds by notifying the Agency of its election to do so if, after the execution hereof and prior [o the Closing, any of the following events occurs: (a) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially and adversely affected by any decision that is issued by a court of the United States (including the United States Tax Court) or of the State, by any ruling or regulation (final, temporary or proposed) that is issued by or on behalf of the Department of the Treasury of the United States, the Internal Revenue Scrvice, or other governmental agency of thc United States, or any governmental agency of the State, or by a tentative decision or announcement by any member of the House Ways and Means Committee, the Senate Finance Committee, or the Conference Committee with respect to contemplated legislation or by legislation enacted by, pending in, or favorably reported to either the House of Representatives or either House of the Legislature of the State, or formally proposed to the Congress of the United States by the President of the United States or to the Legislature of the State by the Governor of the State in an executive communication, affecting the tax status of the Agency or the City of Palm Desert, their property or income, their debt or contractual obligations (including the Bonds) or the interest thereon or any tax exemption granted or authorized by thc [nternal Revenue Codc of 1986, as amendcd; (b) thc United States becomes engaged in hostilities that result in a declaration of war or a national emergency, or any other outbreak of hostilities occurs, or a local, national or international calamity or crisis occurs, financial or otherwise, the effect of such outbreak, calamity or crisis being such as, in the reasonable opinion of the Underwriter, would affect materially and adversely the ability of the Underwritcr to market the Bonds; (c) there occurs a general suspension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by the United States, New York or State authorities; (d) a stop order, ruling, regulation or official statement by, or on behalf of, the SEC is issued or made to the effect that the issuance, offering or sale of the Bonds or obligations similar ro the Bonds is or would be in violation of any provision of the Securities Act of 1933, as then in effect, the Securities Exchange Act of 1934, as then in effect, or the Trust Indenture Act of ] 939, as then in effect; (e) legislation is enacted by the House of Representatives or the Senate of the Congress of the United States of America, a decision by a court of the United States of America is rendered or a ruling or regulation by or on behalf of the SEC or other government�l agency having m RESOLUTION NO. SA-RDA 061 jurisdiction of the subject matter is made or proposed to the effect that the Bonds are not exempt from registration, qualification or other similar requirements of the Securities Act of 1933, as then in effect, or of the Trust Indenture Act of 1939, as then in effect; (f� in the reasonable judgment of the Underwriter, the market price of the Bonds, or the market price of obligations of the general character of the Bonds, might be materially and adversely affected because additional material restrictions that are not in force as of the date hereof are imposed upon trading in securities generally by any governmentat authority or by any national securities exchange; (g) the Office of the Comptrolter of the Currency, The New York Stock Exchange, or other national securities exchange, or any governmental authority, imposes, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increases materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, or financial responsibility requirements of the Underwriter; (h) a general banking moratorium is established by federal, New York or State authorities; (i) any legislation, ordinance, rule or regulation is introduced in or enacted by any governmental body, department or agency in the State or a decision of a court of competent jurisdiction within the State is rendered, which, in the reasonable opinion of the Underwriter, after consultation with the Agency, materially adversely affects the market price of the Bonds; (j} any federal or State court, authority or regulatory body takes action that materially and adversely affects the collection of revenues that are pledged under the [ndenture; (k} any rating of the Bonds or the Insurer is downgraded, suspended, withdrawn or placed on credit watch or similar status by a national rating service, which, in the reasonable opinion of the Underwriter, materially adversely affects the marketability or market price of the Bonds; (t) an evcnt occurs which in the reasonable opinion of the Underwri[er requires a supplement or amendment to the Official Statement and: (i) the Agency refuses to prepare and furnish such supplement or amendment; or (ii) in the reasonable judgment of the Underwriter, the occurrence of such event materially and adversely affec[s the marketability of the Bonds or renders the enforcement of the sale contracts of the Bonds impracticable; (m) an order, decree or injunction that is issued by any court of competent jurisdiction, or order, ruling, regulation (final, temporary or proposed), official statement or other form of notice or communication that is issued or made by or on behalf of the SEC, or any other governmentai authority having jurisdiction of the subject matter, to the effect that: (i) obligations of the genera) character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualitication under the Trust indenture Act of 1939, as amended; or (ii) the issuance, offering or sa4e of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect; 12 RESOLUTION NO. SA-RDA 061 (n) additional material restrictions that are not in force as of the date hereof shall have bcen imposed upon trading in securities generally by any dome�tic governmental authority or by any domestic national securities exchange, which are material to the marketability of the Bonds; or (o) the commencement of any action, suit or proceeding described in Section 5(c). Section 10. Changes in Off'icial Statement. After the Closing, the Agency will not adopt any amendmen[ of or supplement to the Official Statement to which the Underwriter shall reasonably object in writing. Within 90 days after the Closing or within 25 days following the "end of the underwriting period" (as such term is defined beiow), whichever occurs first, if any event relating to or affecting the Bonds, the Trustee or the Agency occurs as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Ufficial Statement not misleading in any material respect in the light of the circumstances existing at the time that it is delivered to a purchaser, the Agency will forthwith prepare and furnish to the Underwriter an amendment or supplement that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumst�nces existing at the time that thc Official Statement is delivered to a purchaser, not misleading. Thc Agency will coopera[e with the Underwriter in the filing by the Underwriter of such amendment or supplement to the Official Statement with the MSRB. As used herein, the term "end of the underwriting period" means the later of such timc as: (i) the Agency delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, direcdy or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. No[withstanding the foregoing, unless the Underwriter gives notice to the contrary, the "end of the underwriting period" will be the date of the Closing. Any notice that is delivered pursuant to this provision will be written notice dclivered to the Agency at or prior to the date of the Closing and will specify a date (other than thc date of the Closing) to be deemed the "end of the underwriting period." Section 11. Payment of Expenses. (a) The Underwriter shall bc under no obligation to pay, and the Agency shall pay the following expcnses incident to the performance of the Agency's obligations hereunder: (i) the fees and disbursements of Bond Counsel; (ii) the cost of printing and delivering the Bonds, the Preliminary Official Statement and the Official Statement (and any amendment or supplement that is prepared pursuant to Scction 10 of this Purchase Contract); (iii) the fees and disbursements of accountants, advisors and any other experts or consultants retained by the Agency, including the Agency's general counsel; and (iv) any other expenses and costs of the Agency that are incident to the performance of its obligations in connection with the authorization, issuance and sate of the Bonds, including out-of-pocket expenses and regulatory expenses, reimbursement to the Underwriter for any meals and travel for Agency empioyees or officers that were paid for by the Underwriter, costs 13 RESOLUTION NO. SA-RDA 061 relating to the issuance of the Policy and the Reserve Policy and any other expenses agreed to by the parties. (b) The Underwriter shall pay all expenses incurred by it in connection with the public offering and distribution of the Bonds including, but not limited to: (i) all advertising expenses in connection with the offering of the Bonds; and (ii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds (including, without limitation, the fees and expenses of its counsel and MSRB, CUSIP Bureau, California Debt and Investment Advisory Commission and California Public Securities Association fees, if any), except as provided in clause (a) above or as otherwise agreed to by the Underwriter and ihe Agency. Section 12. Notices. Any notice or other communication to be given to the Agency under this Purchase Contract may be given by delivering the same in writing ro the Agency at the address that is set forth on the first page of this Purchase Contract, and any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to: Stifel, Nicolaus & Company, Incorporated One Montgomery Street, 35th F7oor San Francisco, California 94104 Attention: Jim Cervantes Section 13. Survival of Representations, Warranties, Agreements. All of the Agency's representations, warranties and agreements that are contained in this Purchase Contract shall remain operative and in full force and effect regardless of: (a) any investigations made by or on behalf of the Underwriter; or (b) delivery of and payment for the Bonds pursuant to this Purchase Contract. The agreements contained in this Section and in Section 1 l shall survive the termination of this Purchase Contract. Section 14. Bene�t; No Assignment. This Purchase Contract is made solely for the benefit of the Agency and the Underwriter (including their successors and assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. The rights and obligations created by this Purchase Contract are not subject to assignment by the Underwriter or the Agency without the prior written consent of the other parties hereto. Section 15. Severability. In the event that any provision of this Purchase Contract is held to be invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Purchase Contract. Section 16. Counterparts. This Purchase Contract may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute the Purchase Contract by signing any such counterpart. Section 17. Governing Law. This Purchase Contract shall be governed by the laws of the State. 14 RESOLUTION NO. SA-RDA 061 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] l5 RESOLUTION NO. SA-RDA 061 Section 18. Effectiveness. This Purchase Contract shall become effective upon the execution of the acceptance hereof by an authorized officer of the Agency, and shall be va(id and enforceable as of the time of such acceptance. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Title: Authorized Officer Accepted: SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By: Title: Executive Director Time of Execution: California Time � RESOLUTION NO. SA-RDA 061 MATURITY SCHEDULE EXHIB[T A $ SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REF'UNDING BONDS 2017 SERIES H-A Prrncipal Payment Date (October 1) Principal $ Coupon c�. Yield �Ic * Tcrm Bond. �`' Priced tc� tirst optiunal rcdcmption date of l. 20_ at par. I:QI Price RESOLUTION NO. SA-RA 061 Principal Payment Date (October 1) $ SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAXABLE TAX ALLOCATION REFUNDING BONDS 2017 SERIES H-B Principal Coupon Yietd Price $ % �]c * Term Bond. "' Priced to firsl optional rcdcmption date of 1, 20_ at par. A-2 RESOLUTION NO. SA-RDA 061 EXHIBIT B RULE 15c2-12 CERTIFICATE $ * SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS 2017 SERIES H-A $ * SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAXABLE TAX ALLOCATION REFUNDING BONDS 2017 SERIES H-B The undersigned hereby certifies and represents that the undersigned is the duly appointed and acting representative of the Successor Agency to the Palm Desert Redevelopment Agency (the "Agency"), and as such is duly authorized to execute and deliver this Certificate on behalf of thc Agency, and further hereby certifies and reconiirms on behalf of the Agency as follows: (1) This Certificate is delivered in connection with the offering and sale of the above captioned bonds (the "Bonds") in order to enable the underwriter of the Bonds to comply with Securities and Exchange Commission Rule ISc2-12 promulgated under the Securities Exchange Act of 1934 (the "Rule"). (2) In connection with the offering and sale of the Bonds, there ha� been prepared a Preliminary Official Statement, setting forth information concerning the Bonds and the Agency (the "Preliminary Official Statement"). (3) As used herein, "Permitted Omissions" means 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 Bondti. (4) The Preliminary Official Statement is> except for the Permitted Omissions, deemed final within the meaning of the Rule, and the information therein is accurate and complete except for the Permitted Omissions. Dated: _, 201 _ * Prelimi�:un; s«Gject to chuitge. SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By: Title: Executive Director : I RESOLUTION NO. SA-RDA 061 EXHIBIT C CLOSING CERTIFICATE OF THE AGENCY $ SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS 2017 SERIES H-A $ SUCCESSOR AGENCY TO THE PAI.M DESERT REDEVELOPMENT AGENCY TAXABLE TAX ALLOCATION REFUNDING BONDS 2017 SERIES H-B The undersigned hereby certifies and represents that the undersigned is the duly appointed and acting representative of the Successor Agency to the Palm Desert Redevelopment Agency (the "Agency"), and is duly authorized to execute and deliver this Certificate and further hereby certifies and reconfirms on behalf of the Agency as follows: (i) The representations, warranties and covenants of the Agency that are contained in the Bond Purchase Contract, dated ^,, 201_ (the "Purchase Contract"), by and between the Agency and Stifel, Nicolaus & Company, Incorporated, as underwriter, are true and correct and in all material respects on and as of the date of the Clo�ing, with the same effect as if made on the date of the Closing. (ii) The Agency Resolution is in full force and effect at the date of the Closing and has not been amended, modified or supplemented, except as agreed to by the Agency and the Underwriter. (iii) The Agency has complied with all of the agreements and satisfied al( of the conditions on its part to be performed or satisfied on or prior to the date of the Closing. (iv) The statements and descriptions in the Official Statement that pertain to the Agency do not contain any untrue or misleading statement of a material fact and do not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. Capitalized terms used but not defined herein have the meanings given to such terms in the Purchase Contract. Dated: _, 201 _ SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By: Title: Executive Director C- ] RESOLUTION NO. SA-RDA 061 EXHIBIT D OPINION OF GENERAI, COUNSEL _, 201 _ Successor Agency to the Stifel, Nicolaus & Company, Incorporat�d Palm Desert Redevelopment Agency One Montgomery Street, �i5th F7oor 7�i510 Frcd Waring Drive San Francisco, California 94104 Palm Desert, California 92260 $ SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT ACENCY TAX ALLOCATION REFUNDING BONDS 2017 SERIES H-A $ SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAXABLE TAX ALLOCATION REFUNDING BONDS 2017 SERIES H-B Ladies and Gentlemen: In my capacity as the General Counsel to the Successor Agency to the Palm Desert Rcdeveiopment Agency (the "Agency"), in connection with the issuance by the Agency of the above-referenced bonds (the "Bonds"), I have examined 1uch documents, certificateti and records as I have deemed relevant and necessary as the basis for [he opinion set forth herein. Capitalized terms that arc used and not otherwise defined herein have the same meanings as assigned to them in the Bond Purchasc Contract, dated _, 201_ (the "Purchase Contract"), by and bctween Stifel, Nicolaus & Company, Incorporated, as underwriter, and the Agency. Relying on my examination described above and pertinent law and subject to the limitations and qualifications set forth hereinafter, 1 am of thc following opinion: l. The Agency is a redevelopment succes�or agency that is duly organized and existing under the laws of the State of California, and has all necessary power and authority ro adopt the Agency Resolution and to enter into and perform its duties under the Agency Agreements. 2. Resolution Nos. and of the Agency (collectively, the "Agency Resolutiod') have bcen duly adopted at meetings of the Board of Directors of the Agcncy that were duly called and held on October 13, 2016 and _, 201_ pursuant ta law, with all required pubiic notice and at which a quorum was present and acting throughout. The Agency Retiolution is in full force and effect and has not been amended or repealed. 3. Thc Agency has duly authorized, executed and delivered the Agency Agreements. Assuming due authorization, execu[ion and delivery by the other parties thereto, as necessary, the Agency Agreements constitute legal, valid and binding agreements of the Agency enforceable � RESOLUTION NO. SA-RDA 061 against the Agency in accordancc with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, debt adjustment, fraudulent conveyance or transfer, moratorium, reorganization or other laws affecting the enforcement of creditors' rights generally and equitable remedies if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and limitations on remedies against public agencies. 4. Except as disclosed in the Official Statement, there is no action, suit or proceeding before or by any court, public bodrd or body pending (with service of process having been accomplished on the Agency) or, to the best of my knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the Agency or the titles of its officers to their respective offices; (b) in any way question or affect the vatidity or enforceability of the Agency Agreements or the Bonds; (c) render illegal, invalid or unenforceable the Agency Agreements or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the Agency is a party; or (d) have � material adverse effect on the ability of the Agency to make payments of principal of and interest on the Bonds when due. 5. The execution and delivery of the Agency Agreements and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the Agency is a party or is otherwise subject or bound in a manner that would materiatly adversely affect the Agency's performance under the Agency Agreements. The opinion is based on such examination of the laws of the State of California as I have deemed relevant for the purposes of this opinivn. [ have not considered the effect, if any, of the laws of any other jurisdiction upon matters covered by this opinion. I have assumed the genuineness of all documents and signatures, presented to me. I have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. I express no opinion as to the status of the Bonds, the interest thereon or the Agency Agreements under any federal securities laws or any state securitics or "Blue Sky" law or any federal, state or local tax law. Without limiting any of the foregoing, I express no opinion as to any matter other than as expressly set forth above. I am furnishing this opinion as General Counsel to the Agency. Except for the Agency, no attorney-client relationship has existed or exists between me and the addressees hereof in connection with the Bonds or by virtue of this opinion. This opinion is rendered solely in connection with the financing described herein, and may not be relied upon by you for any other purpose. I disclaim any obligation to update this opinion. This opinion shall not extend to, and may not be used, quoted, referred to, or relied upon by any other person, firm, corporation or other entity without my prior written consent. Respectfully submitted, D-2 RESOLUTION NO. SA-RDA 061 HOUSING BONDS ESCROW AGREEMENT by and among PALM DESERT FINANCING AUTHORITY, SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGEl�1CY and U.S. BAIVK NATIONAL ASSOCIATION, as Trustee and Escrow Agent Dated as of January 1, 2017 Relating to Defeasance of: Palm Desert Financing Authority Tax Allocation (Housing Set-Aside) Revenue Bonds, Series 2002, and Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds, Series 2007 (and corresponding prepaymcnt of loans under Loan Agreements, by and among the Authority, the forrner Palm Desert Redevelopment Agency and thc trustee thereunder) iz812-UW?\1992060v4.doc RWG DRAFI': 11/28/2016 RESOLUTION NO. SA-RDA 061 TABLE OF CONTENTS Pa�e Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section I5. Section 16. Section l7. Section 18. Section 19. Section 20. Section 21. Section 22. Section 23. Section 24. Definitions: ........................................................................................................... 3 Escrow Agent's Acceptance of Duties . ................................................................4 Incorporation of Prior Indentures . ........................................................................4 EscrowFunds Deposits .........................................................................................4 Maintenance of Escrow Funds .............................................................................. 5 Payment of Refunding Requirements ................................................................... 6 Verification........................................................................................................... 6 Compliance with Prior Indentures and this Agreement ........................................6 TaxCovenant .....................................�---..................................----�--......................6 Defeasance and Redemption Notices . ..................................................................7 Defeasance of Refunded Bonds ............................................................................7 Discharge of 2002 Loan and 2007 Loan ...............................................................7 Natureof Lien ....................................................................................................... 7 Amendments. ........................................................................................................ 7 Compensation of Escrow Agent . .......................................................................... 8 Resignation or Removal of Escrow Agent; Appointment of Successor . ............ 8 Limitation of Powers and Duties . ....................................................................... 10 Indemnification. .................................................................................................. 10 Limitation of I.iability . ....................................................................................... 10 Closing of Escrow Funds; Termination of Agreement ....................................... l l GoverningLaw . .................................................................................................. 1 1 Severability. ........................................................................................................ 11 Successor Deemed Included in References to Predecessors . ............................. 12 Counterparts........................................................................................................ 12 Appendix A — Refunding Requirements Appendix B — Escrow Securities Appendix C— Form of Defeasance Notice (2007 Bonds) 12812-0003\ I992U60v4.Joc RESOLUTION NO. SA-RDA 061 ESCROW AGREEMENT This Escrow Agreement (this "Agreement"), dated as of , 2016, is by and among the Palm Desert Financing Authority, a joint exercise of powers agency duly organizcd and existing pursuant to the laws of the State of California (the "Authority"), the Successor Agency to the Palm Desert Rcdevelopment Agency, a public entity existing under the laws of thc Statc of California (the "City"), and U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, as trustee under the Prior Indentures and Loan Agreements describcd below and escrow agent hereunder (the "Escrow Agent"). RECITALS: A. The former Palm Deser[ Redevelopment Agency (the "Former Agency") was a duly constituted redevelopment agency pursuant to provisions of the Community Redevelopment Law set forth in Section 33000 et seq. of the Nealth and Safety Code ("HSC") of the St�tc of California (the "State"). B. The Former Agency undertook a program to redevelop four project areas (the "Projcct Areas"). C. The Former Agency and the City of Palm Desert (the "City") executed and delivered a Joint Exercise of Powers Agreement, dated as of January 26, 1989 (the "Joint Powers Agreement"), which Joint Powers Agreement created and established the Authority. D. To finance and refnance affordable housing projects, the Former Agency entered into the loan agreements, including the following (together, the "Loan Agreementti"): (i) the 2002 Housing Project Loan Agreement, dated as of August l, 2002, by and among the Former Agency, the Authority and B1VY Western Trust Company (as succeeded by U.S. Bank N�tional Association), as trustee, pursuant to which the Former Agency incurred a loan (the "2002 Loan"); and (ii) the 2007 Housing Project Loan Agreement, dated as of February 1, 2007, by and among the Former Agency, the Authority and Wells Fargo Bank, National Association (as succeeded by U.S. Bank National Association), as trustee, pursuant to which the Former Agency incurred a loan (the "2007 Loan," and together with the 2002 l.oan, the "Agency Loans"). bonds: E. To provide funding for the Agency Loans, the Authority issued two series of� (i) Authority's Tax Allocadon (Housing Set-Aside) Revenue Bonds, Series 2002, in the original principal amount of $12,400,000 (the "2002 Bonds"), pursuant to the Indcnture of Trust, datcd as of August 1, 2002 (the "2002 Indenture"), by and between the Authority and BNY Western Trust Company (as succ;eeded by U.S. Bank National Association), as trustee; t �R t 2-ocx�3v yyzu�o.a.do� RESOLUTION NO. SA-RDA 061 (ii) The Authority's Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds, Series 2007, in the original principal amount of $86,155,000 (the "2007 Bonds," and together with the 2002 Bonds, the "Prior Bonds"), pursuant to the Indenture of Trust, dated as of February 1, 2007 (the "2007 Indenture," and together with the 2002 lndenture, the "Prior Indentures"), by and between the Authority and Wells Fargo Bank, 1Vational Association (as succeeded by U.S. Bank National Association), as trustee. F. Pursuant to the Prior indentures, the Prior Bonds are secured by "Revenues," consisting of amounts repaid by the Former Agency (as succeeded by the Successor Agency") for the Agency Loans. G. Pursuant to AB X 1 26 (enacted in June 2011), and the State Supreme Court's decision in Californiu Redevelopment Assocratinn, et crl. v. Ana Matnsnntos, et nl., 53 Cal. 4th 231 (2011), the Former Agency was dissolved as of February 1, 2012, the Successor Agency was constituted. H. The Successor Agency has determined to issue its Tax Allocation Refunding Bonds, 2017 Series H-A, in the aggregate principal amount of $ (the "2017H-A Bonds"), pursuant to an Indenture, dated as of January 1, 2017 (the "2017 Indenture"), by and between the Successor Agency and U.S. Bank National Association, as trustee. I. The 2017A Bonds are being issued to effect a refunding of all of the outstanding 2002 Bonds and the concurrent discharge of the 2002 Loan. J. The Successor Agency has determined to issue its Taxable Tax Allocation Refunding Bonds, 2017 Series H-B, in the aggregate principal amount of $ (the "2017H-B Bonds" and, together with the 2017H-A Bonds, the "2017 Bonds"), pursuant to the 2017 Indenture. K. The 2017H-B Bonds are being issued to effect a refunding of all of the outstanding 2007 Bonds and the concurrent discharge of the 2007 Loan. L. Pursuant to the 2017 Indenture and this Agreement, the Successor Agency will also cause to be transferred to the Escrow Agent, a portion of the sale proceeds of 2017 Bonds, together with other money�, for the deposit into the escrow funds (the "Escrow Funds") to be established under this Agreement, to effect the defeasance of the outstanding 2002 Bonds and the 2007 Bonds (and the concurrent discharge of the 2002 Loan and the 2007 Loan). M. Pursuant, and subject, to the terms of the Prior Indentures, if therc has been deposited with the Escrow Agent, to be held in escrow, cash or qualified securities (or a combination thereo� which shall provide sufficient moneys to pay and redeem any portion of the outstanding Prior Bonds through maturity or a designated redemption date, then the Authority's obliga[ions with respect to such Prior Bonds shall be discharged and the lien with respect to such Prior Bonds under the Prior Indentures shall cease (except for the payment thereot from the moneys held in escrow by the Escrow Agent) and such Prior Bonds shall be defeased. N. The Authority and the Successor Agency are entering into this Agreement in order to provide for the proper and timely application of the proceeds from the 2017 Bonds and 2 128! 2-(KX13\199�U6Qv4.doc RESOLUTION NO. SA-RDA 061 other moncys toward the defeasance and the payment and redemption of the 2002 Bonds and the 2007 Bonds. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows: Section 1. Definitions. Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa. Unless the context clearly requires otherwise, capitalized terms used in this Agreement shall have the meanings ascribed to them in the introductory paragraph and the Recitals hereof. ln addition, as used herein, the followina terms shail have the following meanings: "2002 Bond Redemption Date" means April 1, 2017. "2002 Refunding Requirement" means an amount sufticient to pay the principal, interest and the redemption premium (if any) with respect to the Refundcd 2002 Bonds on the 2002 Bond Redemption Date as set forth in Appendix A. "2007 Bond Redemption Date" means October 1, 2017. "2007 Refunding Requirement" means an amount sufficient to pay the principal, inlerest and the redemption premium (if any) with respect to the Refunded 2007 Bonds on the 2007 Bond Redemption Date as set forth in Appendix A. "2017H-A Escrow Fund" means the fund by that name established by the Escrow A�ent pursuant to Section 4. "2017H-B Escrow Fund" means the fund by that name established by the Escrow Agent pursuant to Section 4. "Bond Counsel" mcans Richards, Watson & Gershon, A Professional Corporation, or such other attorney or firm of attorneys of nationally recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Code sclected by the Authority and the Successor Agency. issued. "Closing Date" means _, 2016, the date on which the 2017 Bonds are being "Codc" means the Internal Revenue Code of 1986, as amended. "Escrow Funds" means, collectively, the 2017H-A Escrow Fund and the 2017H-B Escrow Fund. "Escrow Securities" means the Investment Securitieti described in Appendix B to be deposited in the Escrow Funds. "Investment Securities" means noncallable direct obligations of the United State� ol' America, or bonds or other obligations which are noncallable and the payment of principal and 3 1281�-QQ03\199?060v4.doc RESOLUTION NO. SA-RA 061 interest of which are unconditionally and fully guaranteed by the United States of America, to mature or be withdrawable, as the case may be, not later ihan the time when needed for the payment and redemption of the Refunded Bonds in order to discharge the pledge and lien securing the Refunded Bonds. "Redemption Dates" means, together, the 2002 Bond Redemption Date and the 2007 Bond Redemption Date. "Refunded 2002 Bonds" means the 2002 Bonds to be defeased, paid and redeemed, pursuant to this Agreement, as further described in Appendix A. "Refunded 2007 Bonds" means the 2007 Bonds to be defeased, paid and redeemed, pursuant to this Agreement, as further described in Appendix A. "Refunded Bonds" means, together, the Refunded 2002 Bonds and the Refunded 2007 Bonds. "Refunding Requirements" means, together, the 2002 Refunding Requirement and 2007 Refunding Requirement. Section 2. Escrow Ag,ent's Acceptance of Duties. The Escrow Agent hereby accepts the duties and obligations expressly provided in this Agreement and agrees that the irrevocable instructions to the Escrow Agent contained herein are in a form satisfactory to it. Section 3. Incorporation of Prior Indentures. The applicable and necessary provisions of the Prior Indentures, including redemption provisions and defeasance provisions set forth in Articles N and XII of the 2002 Indenture and Articles N and XII of the 2007 Indenture, are incorporated herein by reference. Section 4. Escrow Funds De�„osits. (a) There is hereby created and established with the Escrow Agent, a special and irrevocable trust fund designated the "2017H-A Escrow Fund," to be held by the Escrow Agent separate and apart from all other funds of the Authority, the Successor Agency or the Escrow Agent and used only for the purposes and in the manner provided in this Agreement. The 2017H-A Escrow Fund constitutes a special and irrevocable trust fund for purposes of effecting the concurrent defeasance of the Refunded 2002 Bonds and the discharge of the 2002 Loan. �n the Closing Date, there shal( be transferred and deposited into the 2017H-A Escrow Fund the following amounts (the sum of which shall be $ ): (i) The Authority shall cause to be transferred to the Escrow Agent a portion of the proceeds of the 2017A Bonds for deposit in the 2017H-A Escrow Fund, in the amount of $ ; (ii) The Escrow Agent shall also release and transfer $ from the Revenue Fund established under the 2002 Indenture to the 2017H-A Escrow Fund; and 4 1 ?8 I 2-0(M)'�\ 19920GOv4.duc RESOLUTION NO. SA-RDA 061 (iii) The Escrow Agent shall also release and transfer � from the Reserve Fund established under the 2002 Indenture to the 2017H-A Escrow Fund. (b) There is hereby created and established with the Escrow Agent, a special and irrevocable trust fund designated the "2017H-B Escrow Fund," to be held by the Escrow Agent separate and apart from all other funds of the Authority, the Successor Agency or the Escrow Agem and used only for the purposes and in the manner provided in this Agreement. The 2017H-B Escrow Fund constitutes a special and irrevocable trust fund for purposes of effecting the concurrent defeasance of the Refunded 2007 Bonds and the discharge of the 2007 Lnan. On the Closing Date, there shall be transferred and deposited into the 2017H-B Escrow Fund the following amounts (the sum of which shall be � ): (i) The Authority shall cause to be transferred to the Escrow Agent a portion of the proceeds of the 2017 Bonds for deposit in the 2017H-B Escrow Fund, in the amount of $ ; (ii) The Escrow Agent shall also release and transfer $ from the Revenuc Fund established under the 2007 Indenture to the 2017H-B Escrow Fund; and (iii) The 6scrow Agent shall also release and transfer � from the Reserve Fund established undcr the 2006 Trust Agreement to the 2017H-B Escrow Fund. Section 5. Maintenance of Escrow Funds. (a) The Escrow Agent, upon receipt of the moneys described in Section 4(a), shall immediately: (i) invest $ of such moneys in the Escrow Securities set forth in A�c�endix B, (ii) deposit such securities in the 2017H-A Escrow Fund, and (iii) hold the remaining S as cash in the 2017H-A Escrow Fund. (b) The Escrow Agent, upon receipt of the moneys described in Section 4(b), shall immediately: (i) invest � of such moneys in the Escrow Securities set forth in A_ppendix B, (ii) deposit such securities in the 2017H-B Escrow Fund, and (iii) hold the remaining $ as cash in the 2017H-B Escrow Fund. (c) All pracecds received upon the maturity of the Escrow Securities, including interest earnings thereon, shall be retained in the related Escrow Fund. The Escrow Agent is hereby authorized and empowered to deposit uninvested monies held hereunder from time to time in a demand deposit account, without payment of interest thereon as provided hereunder, established at commercial banks that are corporate affiliates of the Escrow Agent. (d) Notwithstanding the foregoing or any other provision of this Agreement to the contrary, at the written request of the Successor Agency and upon compliance with the conditions hereinafter set forth, the Escrow Agent sfiall have the power to sell, transfer, request the redemption of or otherwise dispose of some or all of the Escrow Securities in a Escrow Fund and to substitute Investment Securities. The foregoing may be effected only if: (i) thc tiubstitution of Investment Securities for the substituted Escrow Securities occurs simultaneously; (ii) the amounts of and dates on which the anticipated moneys from such Escrow Fund to be available for the paymcnt or redemption of the related Refunded Bonds on each payment or 5 i� x i z-ouo�� i 99�obo� a�io� RESOLUTION NO. SA-RDA 061 redemption date identified in Appendix A will not be diminished or postponed thereby, as shown in the certification (described below) of an independent certified public accountant; (iii) the Escrow Agent shall receive the unqualified opinion of counsel to the effect that the Successor Agency has the right and pawer to effect such disposition and substitution; and (iv) the Escrow Agent shall receive from an independent certified public accountant a certification that, immediately after such transaction, the principal of and interest on the Investment Securities in such Escrow Fund will, together with other moneys available for such purpose, be sufficient to pay the Refunding Requirement. Any cash received from the disposition and substitution of Escrow Securities pursuant to this Section to the extent that, as shown in such certification, such cash will not be required, in accordance with the 2017 Indenture and this Agreement, at any time for the payment when due as provided in Section 6, shall be transferred to the Successor Agency. Section 6. Payment of Refunding Requirements. (a) The 2002 Bond Redemption Date shall be April l, 2017. However, because the 2002 Bond Redemption Date falls on a Saturday, the payment of redemption price to Owners of the Refunded 2002 Bonds will be made on the immediately following Business Day (the "2002 Redemption Payment Date"). On the 2002 Redemption Payment Date, the Escrow Agent shall disburse the amount indicated on A�pendix A for application toward the payment and redemption of the Refunded 2002 Bonds for the equal and ratable benefit of the owners of the Refunded 2002 Bonds. (b) The 2007 Bond Redemption Date shall be October 1, 2017. However, because the 2007 Bond Redemption Date fall� on a Saturday, the payment of redemption price to Owners of the Refunded 2007 Bonds will bc made on the immediately following Business Day (the "2007 Redemption Payment Date"). On the Apri1 l, 2017 interest payment date and on the 2007 Bond Redemption Date respectively, the Escrow Agent shall disburse the amount indicated on Appendix A for application toward the payment or redemption of the Refunded 2007 Bonds for the equal and ratable benefit of the owners of the Refunded 2007 Bonds. Section 7. Verification. The Successor Agency has caused schedules to be prepared relating to the suffciency of the funds deposited in the Escrow Funds to pay the Refunding Requirements. The Successor Agency shall furnish the Escrow Agent with the report of Grant Thornton, LLP, verifying the mathematical accuracy of the computations contained in such schedules. Section 8. Compliance with Prior Indentures and this A�reement. The Escrow Agent hereby agrees that the Escrow Agent will take all the actions required to be taken by it hereunder, including the timely transfer of moneys for the payment of principal, interest and redemption premium (if any) with respect to the Refunded Bonds, in order to effectuate this Agreement. The liability of the Escrow Agent for the payment of the Refunding Requirements, pursuant to this Section and under the Prior Indentures, shall be limited to the application, in accordance with this Agreement, of moneys in the Escrow Fundti (including the Escrow Securities and interest earnings thereon, if any) available for the purposes of and in accordance with this Agrcement. Section 9. Tax Covenant. Notwithstanding any other provision of this Agreement, the Authority and the Successor Agency hereby covenant that no part of the proceeds of 6 I 2K 12-0003\ 19920GOv4.J�x RESOLUTION NO. SA-RDA 061 2017H-A Bonds or of the moncys or funds hcld by thc Escrow Agent hereunder shall be uscd, and that thc Authority and the Successor Agency shall not direct the Escrow Agent to use any of such moneys or funds at any time, directly or indirectly, in a manner that would cause any of the 2017H-A Bonds to be an "arbitrage bond" under Section 148 of the Code and the regulations of the Treasury Department thereunder proposed or in effec[ at the time of such use and applicable to obligations issued on the date of execution and delivery of the 2017H-A Bonds. 1�1one of the Authority, the Successor Agency nor the Escrow Agent shall transfer or otherwise dispose of moneys and securities held in the EScrow Fund except as set forth in this Agreement; provided that the Escrow Agent may effectuate the transfer of such moneys to a successor Escrow Agent in accordance with the provisions of Section l6 relating to the transfer of rights and property to successor Escrow Agents. Section 10. Defeasance and Redemption Notices. As soon as practicable upon the Escrow Agent's receipt of moneys for deposit in the Escrow Funds pursuant to Section 4, the Escrow Agent shall tiend notices of defeasance to the registered owners of the Refunded Bonds and each bond insurer of the Refunded Bonds (as indentified in the Prior Indentures), substantially in the form set forth in Appendix C. No later than the 30 days (but not more than 60 days) before each Redemption Date, the Escrow Agent shall also send notices of redemption for the applicable Refunded Bonds in accordance with the Indentures, with copies to the applicable bond insurers. Section 1 l. Defeasance of Refunded Bonds. Concurrently with the deposit of the moneys in the Escrow Funds pursuant to Section 4 of this Agreement, the Refunded Bonds shall no longer be deemed to be "Outstanding" and unpaid within the meaning and with the effect cxpressed in the Prior lndentures. Section 12. Discharge of 2002 Loan and 2007 Loan. (a) Concurrently with the deposit of the moncys in the 2017H-A Escrow Fund pursuant to Section 4(a) of this Agrecment, the 2002 Loan shall be deemed discharged pursuant to Section 1 1.03 of the 2002 Loan Agreement. (b} Concurrently with the deposit of the moneys in the 2017H-B Escrow Fund pursuant to Section 4(b) of this Agreement, the 2007 Loan shall be discharged pursuant to Scciion l 1.03 of thc 2007 Loan Agreement. Section 13. Nature of Lien. The trusts hereby created shall be irrevocable. The owners of the Refunded 2002 Bonds shall have an express lien on all of the moneys (including any securities) in the 2017H-A Escrow Fund, including the earnings thereon, until paid out, used and applied in accordance with this Agreement. The owners of the Refunded 2007 Bonds shall have an express lien on all of the moneys (including any securities) in the 2017H-B Escrow Fund, including the earnings thereon, until paid out, used and appiied in accordance with this Agreement. Section 14. Amendments. This Agreement shall not be repealed, revoked, altered, amcnded without the written consent of all of the registered owners of the unpaid Refunded Bonds and the written consent of the Escrow Agent, the Successor Agency and the Authority; 7 12812-OOOi\ I9921160c4. doc RESOLUTION NO. SA-RDA 061 Qrovided, however, that the Authority, the Successor Agency and the Escrow Agent may, without the consent of or notice to, such registered owners, enter inio tiuch amendment to this Agreement, if such amendment shall not materially adversely affect the rights of such registered owners and shall not be inconsistent with the terms and provisions of thi5 Agreement, for any one or more of the following purposes: (a) To cure any ambiguity or formal defect or omission in this Agreement; (b) To grant to, or confer upon, the Escrow Agent for the benefit of the owners of the Refunded Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the Escrow Agent; (c) To transfer to the Escrow Agent and make subject to this Agreement, additional funds securities or properties; (d) To conform the Agreement to ihe provisions of any iaw or regulations governing the tax-exempt status of the Refunded Bonds, as applicable, and the 2017H-A Bonds in order to maintain their tax-exempt status; and (e) To make any other change determined by the Successor Agency to be nol materially adverse to the owners of the Refunded Bonds. The Escrow Agent shatl be entitled to rely exclusively upon an opinion of Bond Counsel with respect to compliance with this Section, including the extent, if any, to which any change, modification or addition affects the rights of the owners of the Refunded Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section. Section 15. Compensation of Escrow A ent. ln consideration of the services rendered by the Escrow Agent under this Agreement, the Successor Agency agrees to and shall pay to the Escrow Agent its proper fees and expenses in aecordance with the agreement therefor reached by the Escrow Agent and the Successor Agency, including all reasonable expenses, charges, counsel fees and other disbursements incurred by it or by its attorneys, agents and employees in and about the performance of their powers and duties hereunder, from any moneys of the Successor Agency and the Authority lawfully available therefor and the Escrow Agent shall have no lien whatsoever upon any of the moneys in the Escrow Funds (inciuding any securities therein) for the payment of such proper fees and expenses. Section 16. ResiQna[ion or Removal of Escrow A eng t• Appointment of Successor. The Escrow Agent at the time acting hereunder may at any time resign and be discharged fram the trusts hereby created by giving written notice to the Authority and the Successor Agency specifying the date when such resignation will [ake effect, but no such resignation shall [ake effect unless a successor Escrow Agent shall have been appointed by the owners of the Refunded Bonds or by the Successor Agency as hereinafter provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. The Escrow Agent may be removed at any time by an instrument or concurrent inslruments in writing, delivered to the Authority and the Successor Agency and signed by the 8 12812-OOQ3\ 1992060v4.da RESOLUTION NO. SA-RDA 061 registered owners of a majority in principal amount of the Refunded Bonds. The Escrow Agent may also be removed at any time by the Authority and the Successor Agency with not less than 30 days' written no[ice to the Escrow Agent and thc registered owners of the Refunded Bonds. In the event the Escrow Agent hereunder shall resign or be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case the Escrow Agent shall be taken under the control of any public officer or officers, or a receiver appointed by a court, a successor Escrow Agent may be appointed by the owners of a majority in principal amount of the Refunded Bonds, by an instrument or concurrent instruments in writing, signed by such owners, or by their attorneys in fact duly authorized in writing; provided, nevertheless, that in any such event, the Successor Agency shall appoint a temporary Escrow Agent to fill such vacancy until a successor Escrow Agent shall be appointed by the owners of a majority in principal amount of the Refunded Bonds, and any such temporary Escrow Agent so appointed by the Successor Agency shall immediate(y, and without further act, be superseded by the Escrow Agent so appointed by such owners. In the event that no appointment of a successor Escrow Agent, or a temporary successor Escrow Agent, shall have been made by such owners or the Authority, pursuant to the foregoing provisions of this Section, within 30 days after written notice of the removal or resignation of the Escrow Agent has been given to the Authority and the Successor Agency, the owner of any of the Refunded BondS, or any retiring Escrow Agent may apply to any court of competent jurisdiction for the appointment of a successor Escrow Agent, and such court may thereupon, atter such notice, if any, as it Shall deem proper, appoint a successor Escrow Agent. No successor Escrow Agent shall be appointed unless such successor Escrow Agent shall be a national banking association or a corporation with trust powers organized under the banking laws of the United States or any state, and shall have at the time of appointment capital and surplus of not less than $75,000,000. Every successor Escrow Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Authority and the Successor A;ency, an instrument in writing accepting such appointment hereunder and thereupon such successor Escrow Agent without any further act, deed or conveyance, shall become fully vested with all the rights, immunities, powers, trusts, duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of such successor Escrow Agent, the Authority or the Successor Agency, execute and deliver an instrument transferring to such successor Escrow Agent all the estates, properties, rights, powers and trus[s of such predecessor hereunder; �nd every predecessor Escrow Agent shall deliver all moneys held by it to its successor. Should any transfer, assignment or instrument in writing from the Authority or the Successor Agency be required by any sucecssor Escrow Agent for more fully and certainly vesting in such successor Escrow Agent the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor Escrow Agent, any such transfer, assignment and instrument in writing shall, on request, be executed, acknowledged and delivered by the Authority or the Successor Agency. Any entity into which the Escrow Agent, or any successor to it in the trusts created by this Agreement, may be merged or converted or with which it or any successor to it may be consolidated, or any entity resulting from any merger, conversion, consolidation or tax-free 9 1 �81'_-W(13119920bOv4.duc RESOLUTION NO. SA-RDA 061 reorganization to which the Escrow Agent or any successor to it shall be a party, shall, if it meets the qualifications set forth in the fifth paragraph of this Section, and if it is otherwise satisfactory to the Authority and the Successor Agency, be the successor Escrow Agent under this Agreement without the execution or filing of any paper or any other act on the part of any of the parties here[o, anything herein to the contrary notwithstanding. Section 17. Limitation of Powers and Duties. The Escrow Agent shall have no power or duty to invest any funds held under this Agreement except as provided in Section 5. Thc E�crow Agent shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Agreement. Section 18. Indemnification. To the extent permitted by law, the Authority and the Successor Agency hereby assume liability for, and hereby agree (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its agents, employees and servants, from and againtit, any and all liabilities, obligations, losses, damages, penaltieti, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time (whether or not also indemnified against the same by the Authority, the Successor Agency or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the estabtishment hereunder of the Escrow Funds, the acceptance of the moneys and any securities deposited therein, transfer or other application of moneys by the Escrow Agent in accordance with the provisions of this Agreement; provided, however, that the Authority and the Successor Agency shall not be required to indemnify the Escrow Agent against the Escrow Agent's own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent'S agents, employees or servants. In no event shall the Successor Agency, the Authority or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Agreement and removal or resignation of the Escrow Agent. Section 19. Limitation of Liabilitv. The Escrow Agent and its agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Funds, the acceptance of the moneys or securities deposited therein, the sufficiency of the moneys or any securities held hereunder to accomplish the payment and redemption of the Refunded Bonds, or any payment, transfer or other application of moneys or any securities by the Escrow Agent in accordance with the provisions of this Agreement or by reason of any non- negligent act, non-negligent omission or non-negligent error of the Escrow Agent made in good faith in the conduct of its duties. The Escrow Agent shall incur no liability for losses arising from any investment made in accordance with this Agreement. The recitals of fact contained in the Recitals of this Agreement, shall be taken as the statements of the Authority and the Successor Agency, and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the sufficiency of any securities purchased pursuant hereto, and any moneys to accomplish the payment and redemption of the Refunded Bonds, pursuant to the Prior Inden[ures or to the validity of this Agreement as to the Authority or the Successor Agency and, except as otherwise provided herein, the Escrow Agent shall incur no 10 12R 12•QW3\199206Qv4.doc RESOLUTION NO. SA-RDA 061 liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Agreement, except for its own negligence or willful misconduct, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Agreement. Anything in this Agreement notwithslanding, the Escrow Agent �hall not be liable for any consequential (i.e., special or indirect) losses or damages in performing its duties or in exercising its rights or power pursuant to this Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the Succes�or Agency or the Authority. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of nationally recognized bond counsel) may be deemed to be conclusively established by a written certification of the Authority or the Successor Agency. Whenever the Escrow Agent deems it necessary or desirable, that a matter specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of nationally recognized bond counsel be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only by such a certiiicate or such an opinion. IVo provision of this Agreement shall require the Escrow Agent to expend or risk ils own funds or otherwise incur any financial liability in the performance or exercise of any of its duties in accordance with this Agreement, or in the exercise of its rights or powers. Section 20. Closing of Escrow Funds; Termination of Ag,reement. (a) Upon completion of disbursements from the 2017H-A Escrow Fund to redeem and pay the Refunded 2002 Bonds on the 2002 Bond Redemption Date pursuant to Section 6(a) of this Agreement, all moneys (if any) remaining in the 2017H-A Escrow Fund shall be transferred to the Debt Service Fund established under the 2017 Indenture. Thereafter, the 2017H-A Escrow Fund shall close. (b) Upon completion of disbursements from the 2017H-B Escrow Fund to redecm and pay the Refunded 2007 Bonds on the 2007 Bond Redemption Date pursuant to Section 6(b) of this Agreement, all moneys (if any) remaining in the 2017H-B Escrow Fund shall be trantiferred to the Deht Service Fund established under the 2017 Indenture. Thereafter, thc 2017H-B Escrow Fund shall closc. (c) This Agreement shall terminate upon the closing of the 2017H-B Escrow Fund. Section 21. Governint Law. This Agreement shall be governed by the law of the State of California. Section 22. Severability. If any one or more of the covenants or agrecments provided in this Agreement on the part of the Authority, the Successor Agency, or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed, and construed to be severable from, thc remaining covenants and agreements contained herein and shall in no way affect the validity �f the remaining provisions of this Agreement. ll � 2s� �-�xx�3��yy�o�,u�a.a�� RESOLUTION NO. SA-RDA 061 Section 23. Successor Deemed Included in References to Predecessors. All the covenants, promises and agreements contained in this Agreement by, or on behalf of, the Authority, the Successor Agency or the Escrow Agent shall bind and inure to the benefi[ of their respective successors and assigns, whethcr so expressed or not. Section 24. Counterparts. This Agreement may be executed in several counte�parts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. 12 i �s� z-ot�3�►�zubo�a a�� RESOLUTION NO. SA-RDA 061 (Housing Bonds Esern�ti� AKreenient) 1N WITNESS WHEREOF, the parties hereto have each caused thi� Agreement to be executed by their duly authorized officers as of the date frst written above. PALM DESERT FINANCING AUTHORITY : Chief Administrative Officer SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY : Executive Director U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent : Authorized Officer I 2812-1HX13\ 199�060va.ao� RESOLUTION NO. SA-RDA 061 APPENDIX A REFUNDING REQUIREMENTS I. Refunded 2002 Bonds: Redemption Redemption Date Principal Interest Premium April 1, 2017 $ 8,095,000* $198, l 39.38 -- * Consis�s of the following Refunded 2W2 Bonds to be paid or redeemeJ c�n thc 2002 Redemption Daie: Mawrity Date Interest Redemption (October I ) Principal Ratc Pricc 2017 $375.W0 4.400'7c l W�/r 2018 395.W0 4.500'7c 100 2019 415,000 4.6259 ]00 2020 435,000 4.700'% 1O0 2021 455,(�0 4.R00�/� lOQ 2022 475,W0 4_9U0''l� 100 2031 5,545,000 5.000`7� ] 00 II. Refunded 2007 Bonds: Payment or Redemption Redemption Date Principal Interest Premium April 1, 2017 $1,041,218.75 -- October 1, 2017 $44,070,000* $ l ,041,218.75 -- * Consist� of the fulluwing Re(unJed 2W7 BonJs to he paid or rcdeemed on thr 2O07 Redemption Date: Mawrity Date Interest Redemption (October I ) Principal Rare Price 2Q17 $6.395.W0 5.(xH)"/� 100�I 2018 6,72U,000 5.000 100 20 l 9 7,065.000 5 AOU 100 2020 2,525,(HX) 5.000 lU0 2021 2.650.000 4.125 100 2U22 2,760,OW 5.000 100 2023 2,905,000 5.000 100 2024 3,055,000 4.250 100 2025 3,190.U(xl 4.250 100 2026 3,330,000 4.250 t UU 2027 �i,475,000 4.25U IOU Disbursement $8,293,139.38 Disbursement $1,041,218.75 45,1 1 1,218.75 1281 �-000�11 �Z(Xi0e4.doc RESOLUTION NO. SA-RDA 061 APPENDIX B ESCROW SECURITIES I. 2017H-A Escrow Fund: On the Closing Date, thc Escrow Agent shall use $ of the moneys deposited to purchase the Escrow Securities identified below and hold the remaining $ as cash. The expected receipt at maturity of such Escrow Securities, plus the uninvested cash, will be suft7cient to satisfy the related Refunding Requirement of $8,293,139.38 Securities Type Maturity Principal Amount Coupon Il. 2017H-B Escrow Fund: Expected Receipt at Maturity (including principal and interest) On the Closing Date, the Escrow Agent shall use � of the moneys depositcd to purchase the Escrow Securities identified below and hotd the remaining $ as cash. The expected receipt at maturity of such Escrow Securities, plus the uninvested rash, will be sufficient to satisfy the required disbursement of: (i) $1,041,218.75 on April 1, 2017, and (ii) $45> L 11,2 l 8J5 on October 1, 2017. Securities Type Maturity Principal Amount Coupon Expected Receipt at Maturity (including principal and interest) I ?812-0003\ I 992(MOv4.doc RESOLUTION NO. SA-RDA 061 APPENDIX C Form of NOTICE OF DEFEASANCE with reference to PALM DESERT FINAtYCING AUTHORITY Tax Altocation (Housing Set-Aside) Revenue Bonds, Series 2002, and Tax Altocatiort (Housing Set-Aside) Refunding Revenue Bonds, Series 2007, as described herein This Notice is being given on behalf of [he Palm Desert Financing Authority (the "Authority") to the owners of the bonds identified in Exhibit 1(the "Bonds"), issued pursuant to two indentures of Trust (the "Indentures"), each by and between the Authority and U.S. Bank National Association, as successor trustee (the "Trustee"). Pursuant to the Indentures, the lien with respect to the Bonds under the Indentures has been discharged through the irrevocable deposit of cash and certain securities (consisting of non- callable United States Treasury Obligations) in escrow funds (the "Escrow Funds"), and held pursuant to a Housing Bonds Escrow Agreement, dated as of January l, 2017 (the "Escrow Agreement"), by and among the Authority, the Successor Agency to the Palm Desert Redevelopment Agency and the Trustee. Such deposit into the Escrow Funds has been calculated to provide sufficient moneys to pay the outstanding principal and unpaid accrued interest due on the Bonds to (and including) their respective final payment or redemption dates, as identified in Exhibit I. As a result of the deposit into the Escrow Funds, the Bonds are deemed to have been paid and defeased in accordance with the respective indentures. Obligations of the Authority to the owners of the defeased Bonds are hereafter limited to the application of moneys in the Escrow Funds for the principal and interest payment (including redemption price, as applicable) on the Bonds as the same become duc and payable as described above. Dated: , 2017 U.S. BANK NATIONAL ASSOCIATION, as Trustee izsi�-uoo��»vzobo�� aa� RESOLUTION NO. SA-RDA 061 EXHIBIT I (to Notice of Defeasance) 1. Tax Allocation (Housing Set-Aside) Revenue Bonds, Series 2002, issued under Indenture af 'I'rust, dated as of August l, 2002 CUSIP* Date on which Remaining (Base: Principal will be Maturity Datc Principal Interest Ratc 696617) Redeemed 10/1/2017 $375,000 4.4QO�Ic KY4 4/1/2017 10/1/2018 395,000 4.500�� KZI 4/1/2017 10/1/2019 415,000 4.625�'Ic LAS 4/1/2017 10/ 1/2020 435,000 4.700�I� LB3 4/ I/2017 10/ 1/2021 455,000 4.800°�c LC 1 4/ i/20 I 7 I 0/ 1/2022 475,000 4.900�; LD9 4/ 1/2017 10/ 1/2031 5,545,000 S.00O�I� LE7 4/ 1/2017 2. Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds, Series 2007, issued under Indenture of Trust, dated as of February 1, 2007 CUSIP* Datc on which Rcmaining (Base: Principal will be Maturity Date Pnincipal Interest Rate 696617) Paid or Redeemed 10/1/2017 $6,395,000 5.000�� XN4 10/1/2017 10/ 1/2018 6,720,OQ0 5.000 XP9 10/ 1/2017 ] 0/ 1/20 l 9 7,065,000 5.000 XQ7 10/ 1/2017 10/1/2020 2,525,000 5.000 XRS 10/I/2017 10/ 1/202 l 2,650,000 4.125 XS 3 10/ 1/2017 10/ I/2022 2,76O,000 5.000 XT l 10/ 1/20I 7 10/1/2023 2,905,000 5.000 XU8 10/1/2017 10/1/2024 3,055,000 4.250 XV6 10/1/2017 ] 0/ 1/2025 3,190,000 4.250 X W4 10/ 1/2017 ] 0/ ]/2026 3,330,000 4.250 XX2 10/ i/2017 10/I/2027 3,475,000 4.250 XYO 10/1/2017 I?K I'_'-Ofxl3\199'_060v4.doc � ; _� 3 - r: �� r� � N � � �� >,� s' ..� >. =� :, , >.� c �" s ! �` J � ! .: V .,. j � :� 'T c, �s � 'J �� «�. �� '} � � a. _ � -�r .c � _ :i C � 5 u c a" C r c.� c' :1 r � � :i '" � e � , -r'. :? r. � �� , ` .�—� 3 y ,J = � r � y.- �= i .. RESOLUTION NO. SA-RDA 061 YRELII�II�ARY OFI�ICIAI. S'I'A'1T,MENT DATED _, Z016 hTEW ISSUE - BOOK-ENTRY RATINGS Insured Bonds Rating: S&P: " " Uninsured Boads and Undertyiag Rating: S&P: " " (See "CONCLUDING INFORMATION - Ratings on the Bonds") In the o�inion of Richarcfs, Watson & Grrshun, A Profrssiunal Corporatiai, Bond Counse(, under ezisting dax: (i) assuming continuing cnmpliance K��th certain cavenunts and the accurac} af certairt reprrsentutians, interest on the 20I7 Serie.r H-A Bands is ezcluded front gross income jor federul rncome tax purposes uru! is rtat an itrm of t�x preferenee fi�r purp��ses of the fedrrul akernutire mininrum taz imposed on individuals aral corporationa, a�ul (ii) interest on the Bnnds rs exempt fiom Statr of Cafijornia persorw! income taxes. /nterest on the ?0/7 Szries H-A Bonds mat be subjrct ta certnin fedrra! tazes impnsed nn certain corporatinns. inetuding the corporate a(rerrsatitie mrnimum tus on u portion of that interesr. Bond Counse! exprrsses no opinion as to anc other taz consrqurncrs regarding rhe Bonds. !,'VTEREST ON TNE 2017 SERIES K-B BONDS IS NOT EXCLUDED FROM GROSS INCO,NE FOR FEDERAL /NCO,tIE Ti1X PURPOSES. For a morr complrte discussinn of thr ta.c aspeets, ser "LEGAL MA7TERS Ta.r Mcrners. " SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS $ � Taac Allocation Refunding Bonds 2017 Series H-A Dated: Date of Delivery $ Taxable Tax Allocation Refunding Bonds 2017 Series A-B Due: October 1 as shown on the inside cover pages Proceeds from the sale of the Successor Ageney to the Palm Desert Redevelopme�t Agency (the "Successor Agency") Tax Allocation Refunding Bonds, 2017 Series H-A Bonds (the "2017 Series H-A Bonds") and Ta�cable Taz Allocation Refunding Bonds, 2017 Series H-B Bonds (the "2017 Series H-B Bonds," and together with the 2017 Series H-A Bonds, the "Bonds"), w�ll be used to refin�mce certain outstanding housing obligations of the former Palm Desert Redevelopment Agency (the "Farmer Agency"j. The Bonds will be issued under an[ndenture dated as of January 1, 2017 (the "Indenture"), by and between the Successor Agency and [I.S. Bank National Association, as trustee (the `"Trustee"). The Bonds aze special obligations of the Successor Agency and are payable sole]y from and secured by a pledge of Pledged Tax Revenues, which aze defined under the Indenture as the portion of the Tau Revenues required to be deposited by the County Auditor-Controller into the RPTTF that is equal to the doilaz amount that the Former Agency would have been �equired to deposit in the L.ow and Moderate Income Housing Fund pursuant to Sections 33334.2 and 333343 of the taw, and a pledge af amounts in certain funds and accounts establishzd under the Indenture (see "SECURITY FOR THE BONDS" and "RISK FACTORS"). Interest on the Bonds is payabie semiannually on each April 1 and Octotxr i, commenci�g April i, 2017, until mamrity (see "THti BONDS - General Provisions"). The Bonds are subject to optional redemption and mandatory sinking account redemption prior ko maturity. See "THE BONDS - Redemption." The Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depositor} Trust Company, New York, New York ("DTC"). Purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Payments of the princiQal of, premium, if any, and interest on the Bonds will be made to DTC, which is obligated in turn ro remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the Bonds. The Bonds du not constitute a debt or liability of the City of Palm Desert, the Counry of Riverside, the State of Califomia or of any of its political subdivisions, other than the Successor Agency. The Successor Agency shal( only be obligated to pay the principal of the Bonds, or related interest, fmm the funds described in the Official Statement, and neither the faith and credit nor the taacing power of the City of Palm I?esert, the County of Riverside, the State of California or any of its political subdi�7sions is pledged to the payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power. The 5uccessor Agency has applied for a municipal bond insurance policy and a debt service reserve insurance policy to satisfy che Reserve Requirement for the Bonds and will decide whether to purchase either of such policies in connecdon with the offering of the Bonds. Such inform�tion Kill be included in the Official Statemenc. The cover page contains certain information for quick teference oniy. It is not a summary of the issues. Potential investors must read the entire Official Statement to obtain ittformadon essential to the making of an informed investment decision. See "RISK FACTORS" for a discussion of special risk facto�s that should be considered in evaluating the investment quality of the Bonds. The Bonds are being offered when, as and if issued, subject ro the approval as to their legality by Richards, Watson & Gershon, A Professional Corporation, i.os Mgeles, Califomia. Certain tegal matters will also be passed on for the Successor Agency hy Sest Best & Krieger LLP, Riverside, Califomia, as Disclosure Counsel, and by Richards, Wacson & Ge�shon, a Professional CocporaRon, Los Angetes, Califomia, as General Counsel to the Successor Agency. Certain tega► matters will be passed on for the Underwriter by its caunsel, Stradling Yocca Carlson & Rauth, A Professional Corporation, Newport Beach. California. It is anticipated that the Bonds will be availabie for delivery through ihe facilities of The Depository Trust Company on or about January _, 2017. STIFEL Dated: , 20 ( 7. ' Preliminary, subject to change. RESOLUTION NO. SA-RDA 061 Maturity Date (October 1) SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS $ % Tax Allocation Refunding Bonds 201'7 Series H-A MATUR[TY SCHEDULE Principal Amount Interest Rate Yield Price �/ Term Bond Maturing , 2Q_ Yield $ Taxable Tax Allocation Refunding Bonds 2017 Series H-B Maturity Date Principal (October 1) Amount Interest Rate Yield �Ic Term Bond Maturing , 20_ Yield CUSlPt` �k. Pricc: . CUS[Pt': Price CUSIP°{ �k, Pricc: . CUSIPt': _ � Prcliminary, subject to change. 'y Copyright 2017, Amcrican Bankcrs Association. CUSIPO is a registered trademark of thc Amcrican Bankcrs Astiociation. CUSiP data contained in the Official Statement is pravidcd by CUSIP Glohal Services Bureau, operated by Standard & Poc�r's. This data is not intended to create a database and docs not servc in any way as a substiwte fur CUSIP Global Services. CUS1P numhers have bccn assigned by an indcpendent company not affiliated with the Succcssor Agency and arc included solely for the convenience of the holders of the Bonds. Nonc of the Successor Agency, the Financial Advisor or the Underwriter takes any responsibility for th� selcction <�r uses of these CUSIP numbers, and no representation is made as to their carrcetncss on the Bonds or as included in the Official Statement. The CUS1P numher for a specific mawrity is subject to being changed after the issuance of the Bonds as a result oC various subseyuent actions including, but not limited to, a refunding in wholc or in part or as a result of the procurcment of seccmdary market portfolio insurance o� c�thcr similar enhancement by investors that is applieable to all or a portion o1� ecrtain mawrities of the Bcmds. RESOLUTION NO. SA-RDA 061 SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS CITY COUNCIL AND SUCCESSOR AGENCY GOVERNING BOARD Jan Harnik, Mayor' Sabby Jonathan, Mayor Pro Tem" Kathleen Kelly, Council Member-elect Gina Nestande, Council Member-elect Susan Marie Weber, Council Member SUCCESSOR AGENCY/CITY STAFF Lauri Aylaian, Executive Director/City Manager Janet Moore, Finance Officer/Finance Director Veronica Tapia, Senior Management Analyst Rachelle D. Klassen, Secretary/City Clerk PROFESSIONAL SERVICES Bond Counsel Richards, Watson & Gershon, A Professional Corporation Los Angeles, California Disclosure Counsel Bcst Best & Krieger LLP Riverside, California Municipal Advisor Del Rio Advisors, LLC Modesto, California Fiscal Consultant Keyser Marston Associates, Inc. Los Angeles, California Trustee and Escrow Agent U.S. Bank National Association Los Angeles, CaliFornia VeriPcation Agent Grant Thornton LLP Minneapolis, Minnesota ' Suhjeet tc� City Couocil reorganization after election certification on December 8, 2U 16. RESOLUTION NO. SA-RDA 061 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT 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 rcpresentations with respect to the Bonds other than as contained in this Official Statcment, and if given or made, such other information or representation must not be relied upon as havin� been authorized. Nn Unlawful Offers or Solicitations. This Of'ficial Statement does not cons[itute an offer to sell or the solicitation of an offer to buy in any state in which such offcr or solicitation is not authorized or in which the person makin� such offer or solicitation is not qualificd to do so or to any persnn to whom it is unlawful to makc s�ch offcr or solicitation. Effective Date. This Official Statement speaks only as of its datc and the information and expressions of opinion contained in this Ofticial Statemcnt are suhject to change without notice. Neither the delivery of this Official Stetement nor any sale of the Bonds will, under any circumstances, create any implication that thcre has been no change in the affairs of the Successor Agency or the Redevclopmcnt Projcct since the date of this Official Statement. Use of this Officia! Statement. This OfCicial Statement is submitted in connection with the salc of the Bonds nferred to in this Ofticial Statement and may not bc reproduced or used, in whole or in part, far any other purpose. This Officia) 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 ubtained from sources that are believed to bc reliablc, but this information is not guarantecd as to accuracy or completeness. The information and expressions of opinions in the OfCicial Statement are subject ro change without notice and ncithcr the dclivery of this Official Statement nor any sale of Bonds shall, under any circumstances, create any implication that there has been no change in the af(airs of the Successor Agency since its date. This Official Statement is submitted in connection with the sale of the Bonds and may not be reproduced or uscd, in whole or in part, for any other purpose, unless authorized in writing by the Successor Agency. All summaries of the Bonds, the lndenture and other documents, are made subject to the provisions of such ducuments and do not purport to bc complete statements of any or all of such provisic�ns. Rcference is hereby made to such documents on file with thc Succcssar Agency for further informatiun. See "[NTRODUCT[ON - Summary Not Dcfinitive;." The Underwriter has provided the following sentence for inclusion in this Official StatemenL• The Underwritcr has reviewed thc information in this Official Statement in accordance with, and as part of, its responsibilitics to investors under the 1'ederal securities laws as applied to the facts and circumstances of this transaction, but the Undcrwriter does not guarantee the accuracy or completeness of such information. Stabitiuition of and Chareges to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Bonds at levels above that which might otherwise prevail in the open markct. If commenced, the Underwritcr may discontinue such market stabilizatiun at any time. The Underwriter may offer and scll the Bonds to certain dcalers, dcaler banks and banks acting as agent at prices lower than the puhlic offering prices stated on the inside cover pages of this Official Statement, and those public offering prices may bc changed from time to time by the Underwriter. Bonds are Exempt from Securities Laws Regislration. The Bonds have not bcen registered under the Securitics Act of 1933, as amended, or the Securities Exchange Act af 1934, as amcnded, in reliance upon exemptions for the issuance and sale of municipal sccurities provided undcr Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 19:i4. Estimates and Projections. Certain statcments included or incorporated by reference in this Officiat Statement constiwtc "forward-looking statements" within thc mcaning of the United States Private Securities Liti=ation Reform Act of 1995, Section 21 E of thc United States Securities Exchange Act of 19:i4, as amendcd, 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," "estimatc," "budget" or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED 1N 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. WHILE THE SUCCESSOR AGENCY HAS AGREED TO PROVIDE CERTAIN ON-GOING FINANCIAL AND OTHER DATA PURSUANT TO A CONTINUINC DISCLOSURE CERTIFICATE (SEE "CONCLUDINC INFORMATION — Continuing Disclosure"). THE SUCCESSOR AGENCY 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 WNICH SUCH STATEMENTS ARE BASED OCCUR. We6site. The Ciry oi Palm Dcsert maintains an Internet website, but the information on the website is not incorporated in this Ofticial Statemcnt. RESOLUTION NO. SA-RDA 061 TABLE OF CONTENTS INTRODUCTION .................................................. 1 The Successor Agency and the Former Agency......................................................... I TheCity ............................................................. 2 Authority and Purpotie ....................................... 2 Tax Allocation Financing Under [he Dissolution Act ............................................ 2 The Redevelopment Project Areas .................... 3 Security for the Bonds ....................................... 3 Municipal Bond Insurance ................................ 4 LegalMatters .................................................... 5 Professional Services ........................................ 5 Offering of the Bonds ........................................ 5 Summary Not Definitive ................................... 5 THE FINANCING PLAN ...................................... 6 The Refunding Plan ........................................... 6 Estimated Sources and Uses of Funds .............. 7 THEBONDS .......................................................... 8 General Provisions ............................................ 8 Redemption....................................................... 9 Scheduled Debt Service on the Bonds ............ 12 SECURITY FOR THE BONDS .......................... 13 Tax Allocation Financing ................................ 13 Tax Revenues .................................................. 13 Pledged Tax Revenues .................................... 14 Redevelopment Property Tax Trust Fund........................................................... 14 Recognized Obligation Payment Schedules................................................... I 6 Rescrve Account ............................................. 18 No Additional Dcbt Other Than Refunding Bonds ....................................... 18 PROP�RTY TAXATION IN CALIFORNIA ......................................... 18 TH� SUCCESSOR AGEIVCY ............................. 21 Government Organization ............................... 21 Successor Agency Powers ............................... 22 Dissolution Act Milestones ............................. 22 Successor Agency Accounting Records and Financial Statements ........................... 22 Stipulation Agreement .................................... 23 Plan Limitations .............................................. 23 THE PROJECT AREAS ...................................... 24 Description of the Project Area1 ..................... 24 LandUsc ......................................................... 25 Assessed Valuations and Tax Revenues ......... 26 Major Taxpayers ............................................. 27 AssessiT�ent Appeals ........................................ 28 Pass-Through Agreements .............................. 28 Statutory Tax Sharing Paymen[s ..................... 29 Outstanding Indebtedness ....................... TAX REVEIVUES AND DEBT SERVICE CO V ER AG E . ... . . . .. .. .... .. .... .. .. .... .. . .. . RiSK FACTURS ......................................... Factors Which May Affect Pledged Tax Revenues........................................... LEGAL MATTERS ..................................... Enforceability of Remedies .................... Approval of Legal Proceedings .............. TaxMatters ............................................. I�io Litigation .......................................... CONCLUDING 1NFORMATION .............. Ratings on the Bonds .............................. The Municipal Advisor ........................... Continuing Disclosure ............................ Underwriting ........................................... Additional Information ........................... References ...........:.................................. Execution................................................ APPENDIX A- SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE .................................. APPENDIX B- CiTY OF PALM DESERT INFORMATION ............................. APPENDIX C - FISCAL CONSULTANT'S REPORT.......................................... APPENDIX D- CITY OF PALM UESERT AUDITED FINAIVCIAL STATEMENTS FOR THE FISCAL YEAR EIVDED JUNE 30, 2015............D-1 APPENDIX E- FORM OF CONTINUING DISCLOSURE CERTIFICATE............ E-1 APPENDIX F- PROPOSED FORMS 0[-� BOND COUNSEL OPINiONS ..............F-I APPENDIX G - THE BOOK-ENTRY SYSTEM............................................... G- I ... 29 ...... 30 ...... 34 ........ 34 ........ 38 ........ 38 ........ 39 ........ �i9 ........44 ........ 44 ........ 44 ........44 ........ 44 ........ 45 ........45 ........45 ........ 46 ... A-1 �I C- I � RESOLUTION NO. SA-RDA 061 REGIONAL MAP [TO COMEj RESOLUTION NO. SA-RDA 061 MAP OF PROJECT AREAS [TO COME] RESOLUTION NO. SA-RDA 061 OFFICIAL STATEMENT SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS $ ` $ Tax Allocation Refunding Bonds Taxable Tax Allocation Refunding Bonds 2017 Series N-A 2017 Series H-B This Official Statement, which includes the cover page, inside cover pages and appendices (the "Official Statement"), is provided to furnish certain informa[ion concerning the sale of the Successor Agency to the Palm Desert Redevelopment Agency Tax Allocation Refunding Bonds, Series 2017 A(Tax-Exempt) ("2017 Series H- A Bonds") and Taxable Tax Allocation Refunding Bonds, 2017 Series H-B Bonds (Federally Taxable) ("2017 Series H-B Bonds," and together with the 2017 Series H-A Bonds, the "Bonds"). INTRODUCTION This /ntroduction contains nnly a brief description of this issue unc! does not purport to be complete. The Introduction is subject in all respects to mnre complete information in the entire O�ciul Statement and the offering of the Bonds to potential investors is made only by means of the entire O�c•ial Statement ancl the documents summarized in the Official Statement. Potential investars must read the entire Off ciul Statement to obtain information essential to the making nf an infnrmed investment decision (see "RISK FACTORS"). Fnr definitions of certain cupitalizecl terms used in the Official Statement and not otherw�ise deftned, und the terms relatinR to the Boncls, see the summary incicrded in APPENDIX A-"SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE. " The Successor Agency and the Former Agency The Palm Desert Redevelopment Agency (the "Former Agency") was established in 1974 by the City Council (the "City Council") of the City of Palm Desert (the "City") pursuant to the Community Redevelopment Law (the "Redevelopment Law"), constituting Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California (the "State"). In June 2011, Assembly Bill No. 26 ("AB X] 26") was enacted as Chapter 5, Statutes of 2011, together with a companion bill, Assembly Bill No. 27 ("AB X1 27"). A lawsuit was brought in the California Supreme Court, California Redevelopment Association, et al. v. Matosantos, et al., 53 Cal. 4th 231 (Cal. 2011), challenging the constitutionality of AB X 1 26 and AB X 1 27. In its December 29, 201 1 decision, the California Supreme Court largely upheld AB X 1 26, invalidated AB X 1 27, and held that AB X 1 26 may be severed from AB X 1 27 and enforced independently. As a result of AB X 1 26 and the decision of the California Supreme Court in the California Redevelopment Association case, as of February 1, 2012, all redevelopment agencies in the State were dissolved, including the Former Agency, and successor agencies were designated as successor entities to the former redevelopment agencies to expeditiously wind down the affairs of the former redevelopment agencies. The primary provisions enacted by AB X 1 26 relating to the dissolution and wind down of former redevelopment agency affairs are Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code of the State. There have been multiple amendments to Parts 1.85 since its original enactment, including those pursuan[ to Assembly Bill No. 1484 ("AB 1484"), enacted in June 2012 as Chapter 26, Statutes of 2012, and Senate Bill No. 107 ("SB 107") enacted in September 2015, as Chapter 325, Statutes of 2015. The provisions of Parts l.8 and 1.85 as amended, is referred to in this Official Statement as the "Dissolution Act." The Redevelopment Law, as amended by the Dissolution Act, is sometimes referred to in the Official Statement as the "Law." " Preliminary, subjcct tu changc. RESOLUTION NO. SA-RDA 061 Pursuant to Section 34173 of the Dissolution Act, the Ciry Council adopted Resolution No. 201 I-76 on � August 25, 2011, electing for the City to serve as the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency"). Upon the February l, 2012 dissolution of the Former Agency, the Successor Agency was established. The Successor Agency is governed by a five-member Board of Directors consisting of the Mayor and the members of the City Council. The Mayor acts as the chair of the Successor Agency. See "THE SUCCESSOR AGENCY." Section 34173(g) of [he Dissolution Act expressly affirms that the Successor Agency is a separate public entity from the City, that the two entities shall not merge, and that the liabilities of the Former Agency will not be transferred to the City nor will the assets of the Former Agency become assets of the City. See "THE SUCCESSOR AGENCY." Thc City The City of Palm Desert (the "City") is located in the County of Riverside (the "County") within the area known as the Coachella Valley. The City is situated approximately midway between the cities of Indio and Palm Springs, 117 miles east of Los Angeles, 118 miles northeast of San Diego and 515 miles southeast of San Francisco. According to the State Department of Finance, the City population as of January l, 2016 was approximately 49,355. The Bonds are not an obligation of the City. For certain information with respect to the City, see APPENDIX B—"CITY OF PALM DESERT INFORMATION," Authority and Purpose The Bondt are being issued pursuant to the Consiitution and laws of the State, including Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State (the "Refunding Law"), the Law and an Indenture dated as of ]anuary 1, 2017 (the "Indenture") by and between the Successor Agency and U.S. Bank National Association, as trustee (the "Trustee"). The Former Agency entered into certain loan agreements with the Palm Desert Financing Authority (the "Authority") to finance and refinance redevelopment projects, including affordable housing projects, of the Former Agency. The Authority issued bonds to fund such loans. The 2017 Series H-A Bonds and the 2017 Series H-B Bonds are being issued to prepay the loans (the "Prior Loans") incurced by the Former Agency and cause a corretponding defeasance of the following bonds issued by the Authority (collectively, the "Refunded Bonds"): • $ I 2,100,000 Tax Allocation (Housing Set-Aside) Revenue Bond, Series 2002(the "2017 Series H-A Refunded Bonds"), which are outstanding in the principal amount of $8,095,000; and the �86,155,000 Tax Allocation (Housing Set-Aside) Refunding Revenue Bonds, Series 2007 (the "2017 Series H-B Refunded Bonds," which are outstanding in the principal amount of $44,070,000. See "THE FINANCING PLAN." Additionally, certain pass-through payments pursuant to negotiated tax sharing agreements and tax sharing statutes are payable on a senior basis to the Bonds. See "THE PROJECT AREAS — Pass-Through." Tax Alloeation Financing Under the Dissolution Act Prior to the enactment of AB X 1 26, the Redevelopment Law authorized the financing of redevelopment projects through the use of tax increment revenues. This method provided that the taxable valuation of the property within a redevelopment project area on the property tax roll last equalized prior ro the effective date of the ordinance which adopted the redevelopment plan (or with respect to a later added component area of a project area, the effective date of the ordinance adopting the amendment to thc redevelopment plan) hecame the basc year valuation. Assuming the taxable valuation never drops below the base year level, the Taxing Agencies, as defined in the Official Statement, thereafter received that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency was aliocated the remaining portion produced by applying then current tax rates to the increase in valuation over the base year. Such RESOLUTION NO. SA-RDA 061 incremental tax revenues atlocated to a redevelopment agency were authorized to be pledged to the payment of agency obligations. Under the Dissolution Act, moneys will be deposited from time to time in a Redevelopmen[ Property Tax Trust Fund (the "Redevelopment Property Tax Trust Fund" or "RPTTF") held by a county auditor- contcoller with respect to a successor agency, which are equivalent to the tax increment revenues that were formerly allocated under the Redevelopment Law to the redevelopment agency and formerly authorized under the Redevelopment Law to be used for the financing of redevelopment projects using cunent assessed values on the last equalized roll on August 20 each year. See "SECURITY FOR THE BONDS - Tax Allocation Financing" for additional information. The Dissolution Act provides that any bonds to be issued by the Successor Agency will be considered indebtedness incurred by the Former Agency, with the same legal effect as if the bonds had been issued prior to the effective date of AB X1 26, in full conformity with the applicable provision of the Redevelopment Law that existed prior to that date, and will be included in the Successor Agency's Recognized Obligation Payment Schedules (each a"Recognized Obligation Payment Schedule" or "ROPS") in accordance with the requirements of the Dissolution Act. See "SECURITY FOR THE BONDS Recognized Obligation Payment Schedules." The Redevetopment Project Areas There are four redevelopment project areas within the City which are identified below: • Project Area No. 1, as Amended ("PA 1" or "Project Area No. 1") • Project Area No. 2("PA 2" or "Project Area No. 2") • Project Area No. 3("PA 3" or "Project Area No. 3") • Project Area No. 4("PA 4" or "Project Area No. 4") PA l, PA 2, PA 3 and PA 4 are collectively hereinafter refeRed to as the "Project Areas," or each individually a"Project Area." The Project Areas contain approximately 11,771 acres, which comprises approximately 68% of the total acres in the City. See "THE PROJECT AREAS" and "THE SUCCESSOR AGENCY" for additional information. Security for the Bonds For the security of the Bonds, the Successor Agency grants a pledge of and lien on all of the Pledged Tax Revenues. Before dissolution, a redevelopment agency was generally required to establish and maintain a Low and Moderate lncome Housing Fund (the "Housing Fund") and deposit not less than 20 percent of the tax increment allocated to such redevelopment agency (the "Housing Set-Aside") into the Housing Fund. (The remaining 80 percent of tax increment not required to be deposited into Housing Fund is referred to in this Official Statement as the "80 Percent PoRion.") The redevelopment agency was to use moneys deposited into the Housing Fund for authorized low and moderate income housing purposes. The Refunded Bonds were issued to finance and refinance low and moderate income housing projects, and secured by a pledge of the Housing Set-Aside. The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of moneys deposited from time to time in the RPTTF. The Dissolution Act has eliminated the Housing Fund and the requirement to deposit the Housing Set-Aside into such fund. The moneys deposited into the RPTTF now include the property tax revenues which would have been the 80 Percent Portion and the Housing Set-Aside. The Pledged Tax Revenues pledged to pay the Bonds consist of a portion of the amounts deposited from time to time in the RPTTF, equal to the amount which would have been the Housing Set-Aside. On or about the same RESOLUTION NO. SA-RDA 061 time that the Bonds will be issued, the Successor Agency plans to issue two other series of bonds (the "2017 1Von-Housing Refunding Bonds") to refund certain other outstanding debt incurred by the Former Agency. The 2017 Non-Housing Refunding Bonds, upon issuance, will be secured by a lien and pledge on moneys deposited into the RPTTF, letis the portion pledged for the Bonds and less certain other amounts. "Tax Revenues" are defined under the Indenture as: (a) All propeRy taxes deposited from time to time inro the RPTTF (consisting of all property tax revenues that would have been allocated to the Former Agency pursuant to subdivision (b) of Section 16 of Article XVI of the Constitution of the State and that are deposited and administered in accordance with the provisions of the Dissolution Act). (b) ln the event that the provisions of the Dissolution Act are invalidated because of a final judicial decision or a change in law, such that property tax revenues described above are no longer deposited into the RPTTF, then Tax Revenues shall mean all revenues derived from taxes levied on properties that would havc been allocated to the Former Agency pursuant to Section 16(b) of Article XVI of the California Constitution. "Pledged Tax Revenues" are defined under the lndenture as the portion of the Tax Revenues required to be deposited by the County Auditor-Controller into the RPTTF that is equal to the dollar amount that the Former Agency would have been required to deposit in the Housing Fund pursuant to Sections 333342 and 33334.3 of the Law, if the Former Agency had not been dissolved and such provisions were applicable in each fiscal year that the Bonds remain Outstanding. Although the amount of the Pledge Tax Revenues are calculated without regard to payments required pursuant to Pass-Through Agreements and Statutory Tax Sharing payments, any amounts due thereunder will be paid prior to the payment of debt service on the Bonds; provided, however, if there are insufficient Pledged Tax Revenues to make a debt service payment on the Bonds, amounts due under subordinate Pass-Through Agreements shall not be made prior to the payment of debt service on the Bonds. DISCUSSIONS HEREIN REGARDING PLEDGED TAX REVENUES NOW REFER TO THOSE MONEYS DEPOSITED BY THE COUNTY AUDITOR-CONTROLLER INTO THE REDEVELOPMENT PROP�RTY TAX TRUST FUND EQUAL TO SUCH PLEDGED TAX REVENUES. See "PROPERTY TAXATION 1N CALIFORNIA" and "THE PROJECT AREAS - Pass-Throubh Agreements" and "- Statutory Tax Sharing Payments." The Successor Agency may not issue additional bonds payable on a basis senior to the Bonds. The Successor Agency may issue additional bonds payable from Pledged Tax Revenues on parity with the Bonds ("Parity Obligations"), but solely to refinance the Bonds if certain conditions are satisfied. See "SECURITY FOR THE BONDS No Additional Debt Other Than Refunding Bonds." The Successor Agency has covenanted to include in each ROPS the amounts required for debt service payments for the Bonds in the manner prescribed in the Indenture, and ro transfer Pledged Tax Revenues to the Trustee for deposit into the Debt Service Fund at the times required by the Indenture. Sec "SECURITY FOR THE BONllS." The Bonds do not constitute a debt or liability of the City, the County of Riverside (the "County"), the State or of any of its political subdivision, other than the Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds, or related interest, from the funds described in the Official Statement, and neither the faith and credit nor the taxing power of the City, the County or the State pledged to the payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power. Municipal Bond Insurance The Successor Agency has applied for a municipal bond insurance policy and will decide whether to purchase such policy in connection with the offering of the Bonds. Such information will be included in the Ufficial Statemeni. 4 RESOLUTION NO. SA-RDA 061 Legal Matters The Bonds are being offered when, as and if issued, subject to the approval as to their legality by Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, as Bond Counsel. Bond Counsel's proposed approving opinions, and certain tax consequences incident to the ownership of the Bonds, including certain exceptions to the tax treatment of interest, are described more fully under the heading "LEGAL MATTERS:' Certain legal matters will be passed on for the Successor Agency by Best Best & Krieger LLP, as Disclosure Counsel, by Richards, Watson & Gershon, A Professionai Corporation, Los Angeles, California, as General Counsel to the Successor Agency, and for the Underwriter by their Counsel, Stradling Yocca Carlson & Rauth, A Professional Corporation, Newport Beach, California. Professional Services U.S. Bank National Association will act as Trustee with respect to the Bonds. Dei Rio Advisors, LLC, Modesto, California (the "Municipal Advisor") advised the Successor Agency as to the financial structure and certain other financial matters reiating to the Bonds. Stradling Yocca Carlson & Rauth, A Professional Corporation, Newport Beach, California serves as Underwriter's Council. Offering of the Bonds Authority for tssuance. The Bonds are to be issued and secured pursuant to the lndenture, as authorized by Resolution No. SA-RDA-59 of the Successor Agency adopted on October 13, 2016, respectively, the Refunding Law and the Law. The Successor Agency's Oversight Board (the "Oversight Board") approved the action taken by the Successor Agency to refinance the Refunded Bonds on October 17, 2016. The State Department of Finance approved the Oversight Board action by letter dated December 1, 2016. Summary Not De�nitive The summaries and references contained in the Official Statement with respect to the Indenture, the Bonds and other statutes or documents do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute, and references to the Bonds are qualified in their entirety by reference to the form thereof included in the Indenture. Copies of the documents described in the Ofiicial Statement are available for inspection during the period of initial offering of the Bonds at the offices of the Financial Advisor, Del Rio Advisors, LLC, 1325 Country Club Drive, Modesto, CA 95356, telephone (209) 543-8704. Copies of these documents may be obtained after delivery of the Bonds from the Successor Agency at 73510 Fred Waring Drive, Palm Desert, California 92260. RESOLUTION NO. SA-RDA 061 THE FINANCING PLAN The Refunding Plan Redemption of Refunded Bonds. On the Closing Date, a portion of the proc;eeds of each series of the Bonds will be transferred to the Trutitee, as prior trustee, for the Refunded Bonds (the "Prior Trustee") fc�r deposit into separate escrow accounts (together, the "Escrow Accoun[s") as provided for each series of Refunded Bonds, under a ceRain Housing Bonds Escrow Agreement> dated as of January 1, 2017 (the "Fscrow Agreement") delivered by and among the Successor Agency, the Authoriry and the Prior Truuee. Most or all of the amount deposited in the Escrow Account for the 2017 Series H-A Refunded Bonds, together with other available moneys, will be invested in Escrow Securi[ies as set forth in the Fscrow Agreement. The moneys (including those derived from the Escrow Securities) in such Escrow Account are irrevocably pledged for the payment of the $8,095,000 out�tanding 2017 Series H-A Refunded Bonds to be redeemed in full on Apri[ l, 2017 at a redemption price equal to 100% of ihe principal amount of the 2017 Series H-A Refunded Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium. Most or al( of the amount deposited in the Escrow Account for the 2017 Series H-B Refunded Bonds, together with other available moneys, will be invested in Escrow Securities as set forth in the Escrow Agreement. The moneys (including those derived from the Escrow Securities) in such Escrow Account are and irrevocably pledged for the payment of the �44,070,000 outstanding 2017 Series H-B Refunded Bonds through to October I, 2017, on which date, all of 2017 Series H-B Refunded Bonds will be paid or redeemed in full at a redemption price equal to 100�/c of the principal amount of the 2017 Series H-B Refunded Bonds to be rcdeemed together with accrued interest thereon to the date fixed for redemption, without premium. The sufficiency of the amounts deposited in the Escrow Accounts for such purpose witl be veritied by the Verification Agent as described below. The lien of the Refunded Bonds will be discharged, terminated and of no further force and effect upon the deposit with ihe Prior Trustee of the amounts required pursuant to the Escrow Agreement. The amounts held by the Prior Trustee for the respective Refunded Bonds in the Escrow Accounts are pledged solely to the payment of amounts due and payable by the Successor Agency with respect to the Refunded Bonds. The funds deposited in the Escrow Accounts for the Refunded Bonds will not be available for the payment of debt service on the Bonds. Verifications oJ Mathematica[ Computations. Grant Thornton LLP will verify from the information provided to them the mathematical accuracy as of the date of the closing on [he Bonds of (1) the computations contained in the provided schedules to determine that the cash listed in the schedules prepared by the Underwriter, to be held in the Escrow Accounts, will be sufficient to pay, when due, the principal, redemption premium and interest requirements of the Refunded Bonds, and (2) the computation of yield on the 2017 Series H-A Bonds contained in the provided schedules used by Bond Counsel in its determination that the interest with respect to the 2017 Series H-A Bonds is exempt from federal taxation. 6 RESOLUTION NO. SA-RDA 061 Estimated Sources and Uses of Funds The following is a summary of the anticipated sources and uses of funds relating to the Bonds: Sources of Funds: Par Amount of Bonds Net Original Issue Premium/(Original Issue Discount) Underwriter's Discount Funds Held for thc Rcfundcd Bonds TOTAL SOURCES OF FUNDS: Uscs of Funds: Transfcr to Escrow Accounts Costs of Issuancc' �' TOTAL USES (.)F FUNDS: Series H-A Series H-B Total $ $ $ 5 $ $ $ $ $ $ � $ ��' Costs of issuance inciude fees and expenses of Bond Counsel, the Municipal Advisor, Disclosure Counsel, Verification Agent, Trustee and Escrow Agent, premium for bond insurance (if any), premium for debt service reser��e insurance policy (if any), costs of printing the Of[icial Statement, rating fee and other costs of issuance of the Bonds. RESOLUTION NO. SA-RDA 061 THE BONDS General Provisions Repayment of the Bonds. The $onds of each series shall be delivered in fully registered form, numbered from one upwards in consecutive numerical order, and shall be executed and delivered in integral multiples of $5,000 and will be dated as of the date of delivery (the "Closing Date"). Interest on the Bondti is payable at the rates per annum set forth on the inside cover page of the Official Statement. Interest on the Bond� will be computed on the basis of a year consisting of 360 days and twelve 30-day months. Interest on the Bonds will be payable on each April 1 and October l, commencing April 1, 2017 (each an "Interest Paymen[ Date"). The Bonds shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after the 1 Sth calendar day of the month preceding an lnterest Payment Date (a "Record Date") and on or before the following Interest Payment Date, in which event it shall bear interest from such interest Payment Date, or (b) it is authenticated on or prior to the Record Date for the first Interest Payment Date, in which event it shall bear interest from the Closing Uate; provided, however, that if, at the time of authentication of any Bond, interest with respect to such Bond is in default, such Bond shall bear interest from the Interest Payment Date to which interest has been paid or made available for payment with respect to such Bond. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Indenture, by the person in whose name it is registered, in person or by that person's duly authorized a[torney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer. Whenever any Bond or Bonds is surrendered for transfer, the Successor Agency shali execute and the Trustee shall authenticate and deliver a new Bond or Bonds of the same Series H-And like tenor, maturity and total maturity amount. The cost of printing any Bonds and any services rendered or expenses incurred by the Trustee in connection with any such transfer shall be paid by the Successor Agency, except that [he Trustee shall require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. The Trustee shall no[ be required to register the transfer or exchange of any Bond during the 1.5 days preceding any date established by the Trustee for selection of Bonds for redemption or any Bonds which have matured or been selected for redemption. Bonds may be exchanged at the Trust Office for the same aggregate principal amount of the Bond of the sume maturity of other authorized denominations. The cost of printing any Bonds and any services rendcred or expenses incurred by the Trustee in connection with any such exchange shall be paid by the Successor Agency, except that the Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. No such exchange shall be required to be made during the 15 days preceding any date established by the Trustee for selection of Bonds for redemption or any Bonds which have maturcd or been selectcd for redemption. The foregoing provisions regarding the transfer and exchange of the Bonds app[y only ij the bonk- entry system is discoretinued. So long as the Bonds are in the book-entry system of The Depository Trust Company ("DTC") as described below, the rules of DTC will apply for the transfer and exchange of Bonds. Book-Entry System. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's pactnership nominee) or such other name as may be requested by an authorized representative of DTC. Intcrest on and principa) of the Bonds will be payable when due by wire of the Trustee to DTC which will in tum remit such interest and principal to DTC Participants, which will in turn remit such interest and principal to Beneficial Owners of the Bonds (see APPENDIX G-"THE BOOK-ENTRY SYSTEM."). As long as DTC is the registered owner of ihe Bonds and DTC's hook-entry method is used for the Bonds, the Truuee will send any notices [o Bond Owners only to DTC. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Successor Agency or the Trustee. Under such circumstances, if a 8 RESOLUTION NO. SA-RDA 061 successor securities depository is not obtained, Bonds are required to be printed and delivered as described in the Indenture. The Successor Agency may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Bonds will be printed and delivered as described in the Indenture. Redemption Optional Redemption oj the Bonds. The 2017 Series H-A Bonds maturing on or before October 1, 20_ shall not be subject to optional redemption prior to their maturity. The 2017 Series H-A Bonds maturing on or after October 1, 20_ shall be subject to redemption as a whole or in part from such maturities as the Successor Agency shall designate, prior to their maturity at the option of the Successor Agency on any date on or after October 1, 20_, from funds derived by the Successor Agency from any source, at a redemption price equal to [ 100] percent of the principal amount of the 2017 Series H-A Bonds to be redeemed, together with interest accrued thereon to the date fixed for redemption, without premium. The 2017 Series H-B Bonds maturing on or before October I, 20_ shall not be subject to optional redemption prior to their maturity. The 2017 Series H-B Bonds maturing on or after October 1, 20_ shall be subject to redemption as a whole or in part from such maturities as the Successor Agency shall designate prior to the redemption date, or such shorter period as agreed to by the Trustee in its discretion), prior to their maturity at the option of the Successor Agency on any date on or after October 1, 20_, from funds derived by the Successor Agency from any source, at a redemption price equal to [ 100] percent of the principal amount of the 2017 Series H-B Bonds to be redeemed, together with interest accrued thereon to the date fixed for redemption, without premium. Mandatory Sinking Account Redemption. The 2017 Series H-A Bonds maturing on October 1, 20, and October 1, 20_ are also subject to redemption prior to their stated maturity, in part by lot, from Sinking Account Installments deposited in the Sinking Account on October 1 of each year commencing October 1, 20.^ and October 1, 20_, respectively, at the principal amount thereof and interest accrued thereon to the date fixed for redemption, without premium, according to the following schedules: 2017 Series H-A Bonds maturinE October 1, 20 Redemption Date Sinking Account (October 1) Installment 20_ (Maturity) 2017 Series H-A Bonds maturin� October 1, 20 Redemption Date Sinking Account SOctober 1,� Installment 20_ (Matunty) 0 RESOLUTION NO. SA-RDA 061 The 2017 Series H-B Bonds maturing on October 1, 20_ and October l, 20_ are also subject to redemption prior to their stated maturity, in part by lot, from Sinking Account Installments deposited in the Sinking Account on October 1 of each year commencing October 1, 20_ and October l, 20_, respectively, at the principal amount thereof and interest accrued thereon to the date �xed for redemption, without premium, according to the following schedules: 2017 Series H-B Bonds maturing October 1 20 Redemption Date Sinking Account (October 1) Installment 20_ (Maturity) 2017 Series H-B Bonds maturine October 1 20 Redemption Date Sinking Account (October 1) Installment 20, (Maturity) In lieu of redemption of any Term Bond, upon the Successor Agency's written request, the Trustee may apply amounts on deposit in the Debt Service Fund or the Sinking Account at any time, for the purchase of such Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding acerued interest, which is payable from the Interest Account) as the Successor Agency may determine in its discretion, but not in excess of the principal amount thereof. No Bonds shall be tio purchased by the Trustee with a settlement date more than 60 days prior to the redemption date. The principal amount of any Term Bonds so purchased by the Trustee in any 12 month period ending 30 days prior to any Principal Payment Date in any year will be credited towards and will reduce the principal amount of such Term Bonds required to be redeemed on such Principal Payment Date in such year. Selectinn vf Bonds J'or Redemption. With respect to the redemption of Outstanding Bonds of a series, whenever less than all of the Outstanding Bonds of a maturity are called for redemption at any one time, thc Trustee will select the Bonds to be redeemed, from the Outs[anding Bonds of such maturity not previously selected for redemption, by lot; provided, that if less than all of the Outstanding Term Bonds of any maturity are called for optional redemption, each future Sinking Account Installment with respect to such Term Bonds will be reduced on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, so that the total amount of Sinking Account Installment payments (with respect to such Term Bonds) to be made after the optional redemption wil) be reduced by an amount eyual to the principal amount of the Term Bonds �o redeemed, as will be designated by the Successor Agency to the Trustee in writing. Notice of Redemntion; Cancellation of Rede�tion. The Trustee, on behalf of the Successor Agency, will send notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the bond registration books of the Trustee, to the Securities Depository and the Municipal Securities Rulemaking Board (via the Electronic Municipal Market Access System), not more than 60 days and not less than 30 days prior to the date fixed for redemption; provided that neither the failure of any Owner to receive any redemption notice sent to such Owner nor any defect in the notice so sent will not affect the sufficiency of the proceedings for redemption. The Successor Agency will have the right to rescind any optional redemption by written notiee of rescission. Any notice of optional redemption will be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds thcn called for redemption. 10 RESOLUTION NO. SA-RDA 061 Neither such cancellation nor lack of available funds will constitute an even[ of default under the lndenture. The Trustee will send notice of rescission of such redemption in the same manner as the original notice of redemption was sent. So long as DTC is the sole registered owner of the Bonds, notices of redemption (and notices of cancellation of redemption) wi}I be sent to DTC and not to any beneficial owners. See "Book-Entry Only System." �ect of R�demption. From and af[er the date fixed for redemption, if notice of such redemption will have been duly given and funds available for the payment of such redemption price of the Bonds so called for redemption will have been duly provided, no interest will accrue on such Bonds from and after the redemption date specified in such notice. Such Bonds, or parts thereof redeemed, will cease to be entitled to any lien, benefit or security under the Indenture. I1 RESOLUTION NO. SA-RDA 061 � � .� � � 'I. � � � O F h � ti � m � t +.+ C O u u .� v � � a C 'C � '' "O a � V � C � a. E � -o u � :� c 0 ca 0 � i. C�Y � O C CA C .� � % "l, 7 'l. � � M� W Q� � i O � u .� L Q) � � � 0 � � � c cs � � 'J � � L V "l. � s 'l. �3 O � a� s �"" d u .� � � f L ti '� � � � m m � v .� � v � c N �I°. a C .` G v v .; 4 v f L C �o e O C' Q z = � v � 0 N �I � � � m .` C .` a z =- �.. yi o } °C e � c Q� � 3 v � L F v :J � c% v; N RESOLUTION NO. SA-RDA 061 SECURITY FOR THE BONDS Tax Allocation Financing Prior to the enactment of the Dissolution Act, the Redevelopment Law authorized the financing of redevelopment projects through the use of tax increment revenues. First, the assessed valuation of the taxable property in a project area (or, if applicable, a later added component area), as last equalized prior to adoption of the redevelopment plan (or, as applicable, the adoption of the amendment to the redevelopment plan adding such component area), (or for a later added component area of a project area, the adoption of the redevelopment plan amendment adding such component area), was established and became the base roll. Thereafter, except for any period during which the assessed valuation drops below the base year level, the Taxing Agencies (defined below), on behalf of which taxes are levied on property within the project area, receive the taxes produced by the levy of the then current tax rate upon the base roll. Taxes collected upon any increase in the assessed valuation of the taxable propeRy in a project area over the levy upon the base roll couid be pledged by a redevelopment agency to the repayment of any indebtedness incurred in financing the redevelopment project. Redevelopment agencies themselves had no authority to levy taxes on property. The Dissolution Act now requires the County Auditor-Controller to determine the amount of property taxes that would have been allocated to the Former Agency had the Former Agency not been dissolved using current assessed values on the iast equalized roll on August 20, and to deposit that amount in the RPTTF for the Successor Agency established and held by the County Auditor-Controller pursuant to the Dissolution Act. Such funds, or portions thereof distributed to the Successor Agency, are deposited by the Successor Agency in its Recognized Obligation Retirement Fund (the "Recognized Obligation Retirement Fund"). The Dissolution Act provides that any bonds authorized to be issued by the Successor Agency pursuant to its terms will be eonsidered indebtedness incurred by the dissolved Former Agency, with the same legal effect as if the bonds had been issued prior to effective date of AB X 1 26, in full conformity with the applicable provision of the Redevelopment Law that existed prior to [hat date, and will be included in the Successor Agency's ROPS. Successor agencies have no power to levy property taxes but must receive an allocation of taxes as described above. See "RISK FACTORS." Tax Revenues As provided in the redevelopment plans for the Project Areas (each a"Redevelopment Plan") and pursuant to Article 6 of Chapter 6 of the Redevelopment Law, and Section 16 of Article XVI of the Constitution of the State, taxes levied upon taxable property in the Project Areas each year by or for the benefit of the State, for cities, counties, districts or other public corporations (collectively, the "Taxing Agencies" and each individually a"Taxing Agency") for fiscal years beginning after the effective date of the ordinance approving the Redevelopment Plan, will be divided as follows: (a) To Taxin�Agencies: That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the Taxing Agencies upon the total sum of the assessed value of the taxable property in a Project Areas as shown upon the assessment roll used in connection with the taxation of such property by such Taxing Agency last equalized prior to the effective date of the ordinance adopting a Project Areas' Redevelopment Plan, or the respective effective dates of ordinances approving amendments to such Redevelopment Plan that added territory, as applicable (each, a"base year valuation"), will be allocated to, and when collected will be paid into, the funds of the respective Taxing Agencies as taxes by or for the Taxing Agencies on all other property are paid; and (b) To the Former AgencylSuccessor A�ency: Except for that portion of the taxes in excess of the amount identified in (a) above which are attributable to a tax rate levied by a Taxing Agency for the purpose of producing revenues in an amount suf�cient to make annual repayments of the principal of and the interest on, any bonded indebtedness approved by the voters of the Taxing Agency on or after January 1, 1989 for the acquisition or improvement of real property, which portion shall be allocated to, 13 RESOLUTION NO. SA-RDA 061 and when coliected shall be p�id into, the fund of that Taxing Agency, that portion of the levied taxes each year in excess of such amount, annually allocated within the redevelopment plan limit, when coltected will be paid into a special fund of the Former Agency/Successor Agency. Section 34183 of the Dissolution Act effectively eliminates the January 1, 1989 date from this paragraph. Additionally, the language clarifed that cffective September 22, 2015, debt service oveRide revenues approved by the voters for the purpose of supporting pension programs, capital projects, or programs related to the State Water Project, which are not pledged to or needed for debt service on successor agency obligations are allocated and paid to the entity that levies the override and will not bc deposited into the RPTTF. Tax revenues generated as set forth under (b) above and allocated to the Successor Agency constitute a portion of the Pledged Tax Revenues, as [hat term is used in the Official Statement. The Tax Revenues do not include any override revenues. Pledged Tax Revenues "Pledged Tax Revenues" are defined under the Indenture as the portion of the Tax Revenues required to be deposited by the County Auditor-Controller into the RPTTF that is equal to the dollar amount that the Former Agency would have been required to deposit in the Housing Fund pursuant to Sections 333342 and 33334.3 of the Law, if the Former Agency had not been dissolved and such provisions were applicable in each fiscal year that thc Bonds remain Outstanding. DISCUSSIONS HEREIN REGARDING PLEDGED TAX REVENUES NOW REFER TO THOSE MONEYS DEPOSITED BY THE COUNTY AUDITOR-CONTROLLER INTO THE REDEVELOPMENT PROPERTY TAX TRUST FUND EQUAL TO SUCH PLEDGED TAX REVENUES. Although the amount of the Pledge Tax Revenues are calculated without regard to payments required pursuant to Pass-Through Agreements and Statutory Tax Sharing payments, any amounts due thercunder will be paid prior to the payment of debt service on the Bonds; provided, however, if there are insufficient Pledged Tax Revenues to make a debt service payment on the Bonds, amounts due under subordinate Pass-Through Agreements shall not be made prior to the payment of debt service on the Bonds. See "Redevelopment Property Tax Trust Fund — Disbur.sement from Redevel��pment Properh- Tux Trust Funcl." The Bonds are special obligations of the Successor Agency. The Bonds do not constitute a debt or liability of the City, the County, the State or of its political subdivision, other than the Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds, or the interest thereon, from the funds described in the Official Statement, and neither the faith and credit nor the taxing power of the City, the County, the State or any of its political subdivisions is pledged to the payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power. The State Legislature has amended the Dissolution Act several times. The Successor Agency expects, but cannot guarantee, that the processes for funding of enforceable obligations prescribed by any new legislative change in the Dissolution Act will not interfere with its administering of the Tax Revenues in accordance with the Indenture and will effectively result in adequate Pledged Tax Revenues for the timely payment of principal of and interest on the Bonds when due. Redevelopment Property Tax Trust Fund Deposits to the Redevelopment Property Tax Trust Fund. Section 34172 of the Dissolution Act provides that, for purposes of Section 16 of Article XVI of the State Constitution, the RPTTF shall be deemed to be a special fund of the Succe�sor Agency to pay the debt service on indebtedness incurred by the Former Agency or [he Successor Agency to finance or refinance the redevelopment projects of the Former Agency. Disbursements from the Redevelopment Property Tax Trust Fund. The Redevelopment Law authorized redevelopment agencies to make payments to Taxing Agencies to alleviate any �nancial burden or detriments to such Taxing Agencies caused by a redevelopment project. The Former Agency entered into agreements with the Taxing Agencies for this purpose ("Pass-Through Agreements"). Additionally, because of amendments to the redevelopment plans, there are Statutory Tax Sharing payments with respect to each Project Area_ See "THE PROJECT AREAS - Pass-Through Agreements" and "- Statutory Tax Sharing Payments"). l4 RESOLUTION NO. SA-RDA 061 Typically, under the RPTTF distribution provisions of the Dissolution Act, a county auditor-controller is to distribute funds for each six-month period in the fotlowing order specified in Section 34183 of the Dissolution Act: (i) first, subject to certain adjustments (as described below) for subordinations to the extent permitted under the Dissolution Act (if any, as described below under "THE PROJECT AREAS - Pass- Through Agreements" and "- Statutory Tax Sharing Payments") and no later than each January 2 and June 1, to each local taxing agency and school entity, to the extent applicable, amounts required for pass-through payments such entity would have received under provisions of the Redevelopment Law, as those provisions read on January l, 2011, including negotiated pass-through agreements and statutory pass-through obligations; (ii) second, on each January 2 and June 1, to the successor agency for payments listed in its ROPS, with debt service payments (and amounts required to replenish the related reserve funds, if any) scheduled to be made for tax allocation bonds having the highest priority over payments scheduled for other debts and obligations listed on the Recognized Obligation Payment Schedule; (iii) third, on each January 2 and June 1, to the successor agency for the administrative cost allowance, as defined in the Dissolution Act; and (iv) fourth, on each January 2 and June ], to taxing entities any moneys remaining in the RPTTF after the payments and transfers authorized by clauses (i) through (iii), in an amount proportionate to such taxing entity's share of property tax revenues in the tax rate area in that fiscal year (without giving effect to any pass-through obligations that were established under the Redevelopment Law). The Dissolution Act requires county auditor-controllers to distribute from the RPTTF amounts required to be distributed under the Pass-Through Agreements and Statutory Pass-Through to the taxing entities on each January 2 and June 1 before amounts are distributed by the County Auditor-Controller from the RPTTF to the Successor Agency's Redevelopment Obligation Retirement Fund, unless: (i) pass-through payment obligations have been made subordinate to debt service payments for the bonded indebtedness of the Former Agency, as succeeded to by the Successor Agency; (ii) the Successor Agency has reported, no later than the September 1 and June 1 preceding the applicable January 2 and June 1 distribution date, that the total amount available to the Successor Agency from the RPTTF allocation to the Successor Agency's Redevelopment Obligation Retirement Fund, from other funds transferced from the Former Agency and from funds that have or will become available through asset sales and all redevelopment operations is insufficient to fund the Successor Agency's enforceable obtigations, pass-through payments and the Agency's administrative cost allowance for the applicable ROPS period; and (iii) the State Controller has concurred with the Successor Agency that there are insufficicnt fundr for such purposes. If the requirements set forth in clauses (i) through (iii) of the farcgoing paragraph have been met, the Dissolution Act provides for certain modifications in the distributions otherwise calculated to be distributed on the applicable January 2 or June l property tax distribution date (as adjusted for weekends and holidays). To provide for calculated shortages to be paid to the Successor Agency for enforceable obligations, the amount of the deficiency will first be deducted from the residual amount otherwise calculated to be distributed to the taxing entities under the Dissolution Act after payment of the Successor Agency's enforceable ob{igations, pass- through payments and the Successor Agency's administrative cost allowance. If such residual amount is exhausted, the amount of the remaining deficiency will be deducted from amounts available for distribution to the Successor Agency for administrative costs for the applicable ROPS period in order to fund the enforceable obligations. Finally, funds required for servicing bond debt may be deducted from the amounts to be distributed under subordinated Pass-Through Agreements, in order to be paid to the Successor Agency for enforceable obligations, but only after the amounts described in the previous two sentences have been exhausted. The Dissolution Act provides for a procedure by which [he Successor Agency may make statutory pass-through payments subordinate to the Bonds. The Successor Agency has not undertaken any procedures to obtain such subordination of the statutory pass-through payments and, therefore, statutory pass-through payments are senior 15 RESOLUTION NO. SA-RDA 061 to the Bonds as described below. The Successor Agency cannot guarantee that this process prescribed by the , Dissolution Act of administering the Tax Revenues and the subordinations provided in the Pass-Through Agreements will effectively result in adequate Pledged Tax Revenues for the payment of principal and interest on the Bonds when due. See the captions "THE PROJECT AREAS - Pass-Through Agreements" and "- Statutory Tax Sharing Payments" and "R1SK FACTORS - Recognized Obligation Payment Schedule." Recognized Obligation Payment Schedules Enforceable Obligations. The Dissolution Act requires successor agencies to prepare and approve, and submit to the successor agency's oversight board and the State Department of Finance for approval, a ROPS for each prescribed period pursuant to which enforceable obligations (as defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for each enforceable obligation. As de�ned in the Dissolution Act, "enforceable obligation" includes bonds, including the required debt service, reserve set-asides, and any other payments required under the indenture or similar documents governing thc issuance of the outstanding bonds of the former redevelopment agency, as well as other obligations such as loans, judgments or settlements against the former redevelopment agency, any legally binding and enforccable agreement that is not otherwise void as violating the debt limit or public policy, contracts necessary for the administration or operation of the successor agency, and amounts borrowed from the Low and Moderate Income Housing Fund and from the city. A reserve may be included on the ROPS and held by the successor agency when required by the bond indenture or when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bond for the next payment due in the following haif of the calendar year (see APPENDIX A—"SUMMARY OF CERTAIN PROVISIONS OF THE 1NDENTURE"). The Successor Agency has covenanted to request such reserves as described below. Under the Dissolution Act, the categories of sources of payments for enforceable obligations listed on a ROPS are the followin i the Low and Moderate Income Housing Fund (however, as discussed undcr ""�"` g� ��) "INTRODUCTION — Security for the Bonds," the Low and Moderate Income Housing Fund was eliminated under the Dissolution Act), (ii) bond proceeds, (iii) reserve balances, (iv) administrative cost allowance, (v) the RPTTF (but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation or otherwise required under the Dissolution Act), or (vi) o[her revenue sources (including rents, concessions, asset sale proceeds, interest earnings, and any other revenues derived from the former redevelopment agency, as approved by the oversight board). Other than amounts deposited in the RPTTF allocable to the Project Areas and amounts held in funds and accounts under the Indenture, the Successor Agency does not expect to have any other funds available to pay the Bonds. The Dissolution Act provides that only those payments listed in the ROPS may be madc by the Successor Agency from the funds specified in the ROPS. Required Approvals. As provided in SB 107, the ROPS with respect to each Fiscal Year (which is segregated into six-month periods beginning July 1 and lanuary 1(each, a"ROPS Payment Period"), must bc submitted by the Successor Agency, after approval by the Oversight Board, to the County Auditor-Contmlfer, the State Department of Finance, and the State Controller by each February 1(unless a Last and Final ROPS has been approved as described below). For information regarding procedures under the Dissolution Act relating to late ROPS and implications thereof on the Bonds, see "RISK FACTORS Recognized Obligation Payment Schedule." Pursuant to SB 107, commencing on January 1, 2016, successor agencies that have received a Fi�ding of Completion and the concurrence of the Department of Finance as to the items that qualify for payment, among other conditions, may at their option, file a"Last and Final" ROPS schedule (the "Last and Final ROPS"). If approved by the State Department of Finance, the Last and Final ROPS will be binding on all parties, and the Successor Agency will no longer submit a ROPS to the Department of Finance or the Oversight Board. The county auditor-controller will remit the authorized funds to the Successor Agency in accordance with the approved Last and Final ROPS until each remaining enforceable obligation has been fully paid. A successor agency may submit no more than two requests to amend an approved Last and Finat ROPS. The 16 RESOLUTION NO. SA-RDA 061 Successor Agency plans to evaluate its outstanding obligations from time to time, to determine whether (and if so, when) it would file a Last and Final ROPS. Debt Service. The Successor Agency has made a covenant in the Indenture to include in each ROPS to be submitted after the effective date of the Indenture a request for the County Auditor-Controller to disburse from the RPTTF to the Successor Agency on each RPTTF Disbursement Date, the following amounts: (i) the interest payment coming due with respect to the Outstanding Bonds and Parity Obligations (if any) during such ROPS Payment Period; (ii) for any ROPS Payment Period which covers payments from January through June of a calendar year, at least one-half (but, at the discretion of the Successor Agency, may be up to all) of the principal amount (including maturing principal and any Sinking Account Installment) coming due with respect to the Bonds and Parity Obligations (if any) on October ] of such calendar year (the "Principal Reserve"); (iii} for any ROPS Payment Period which covers payments from July through December of a calendar year, an amount equal to the principal amount (including maturing principal and any Sinking Account Installment) coming due with respect to the Bonds and Parity Obligations (if any) on October 1 of such calendar year, less the Principal Reserve already received in connection with the immediately prior ROPS Payment Period and deposited with the Trustee; and (iv) amounts, if any, required to replenish the Reserve Account (including payments to the provider of any Qualified Reserve Credii Instrument for draws on such Qualified Reserve Credit Instrumen[), as required pursuant to the Indenture, and to replenish the reserve accounts of any Parity Obligations (if any). The Successor Agency shall also include on the periodic ROPS for approval by the Oversight Board and State Department of Finance, to the extent necessary and permitted under the Dissolution Act, the amounts to be held as a reserve until the next ROPS Payment Period, as contemplated by California Health and Safety Code Section 34171(d)(])(A), if the next property tax allocation is projected to be insufficient to pay all obligations due under this Indenture during that next ROPS Payment Period. To that end, whenever the Successor Agency is preparing a ROPS, the Successor Agency shall, based on information obtained from the County Auditor- Controller, review the amount of dollars deposited in the RPTTF on the two immediately prior RPTTF Disbursement Dates. For the purposes of complying with this paragraph (i.e., projecting whether the next property tax allocation will be sufficient to pay all obligations due under this Indenture during the next ROPS Period), the Successor Agency shall assume that the property tax revenue collection (and thus, the dollar amount to be deposited in the RPTTF) will be consistent with the pattern shown during the last two ROPS Payment Periods, but without any assumed increase to the assessed value of the taxable properties in the Project Areas. Upon the Successor Agency's receipt of Tax Revenues on each RPTTF Disbursement Date, the Successor Agency shall apply the Pledged Tax Revenues pursuant to the ROPS (as approved by the State Department of Finance) and deposit the Pledged Tax Revenues received for the payment of debt service of the Bonds and any Parity Obligations and any replenishment of the Reserve Account and Parity Reserve Accounts into the Special Fund established and held by the Successor Agency. During each Bond Year, the Successor Agency shall deposit such moneys in the Special Fund until such time as the amount so deposited in a fund designated the "Special Fund" is at least equal to the sum of (i) the aggregate amount required to be transferred to the Trustee pursuant to the Indenture for such Bond Year, and (ii) the aggregate amount required by the governing documents of the Parity Obligations to be transferred for the debt service payment and replenishment of the Parity Reserves. In addition to the foregoing, from the moneys received by the Successor Agency as part of the January 2, 2017 RPTTF disbursement, the Successor Agency shall promptly deposit $ into the Special Fund for application toward debt service on the $onds. Such amount represents moneys received by the 17 RESOLUTION NO. SA-RDA 061 Successor Agency pursuant to a listing on the ROPS for the "ROPS 16-17B" period (i.e., the ROPS Payment Perioci covering January 2017 through June 2017) that would have been used for debt service for the Prior Loans if the Prior Loans were not refunded. The Successor Agency has no powcr to levy and colicct taxes, and various factors bcyond its control could affect the amount of Pledged Tax Revenues available in any six-month period (or otherwise) to pay the principal of and interest on [he Bonds. See "RISK FACTORS." Reserve Account A Reserve Account has been established under the Indenture to be held by the Trustee to further secure the timely payment of principal of and interest on the Bonds. Within the Reserve Account, a separate subaccount (each a"Reserve Subaccount") has been established for each series of Bonds. The Reserve Requirement for each Reserve Subaccount is equal to the least of (i) ten percent of the sum of the original stated principal amounts of the Bonds of sueh series at issuance, (ii) 12.5 percent of Average Annual Debt Service of the Outstanding Bonds of such series or (iii) Maxi►num Annual Debt Service of the Outstanding Bonds of such serics. Moneys in (or available to) each Reserve Subaccount will be used and withdrawn by the Trustee solely for the purpose of (i) replenishing the Interest Account, the Principal Account or the Sinking Account in such order, in the event of any deficiency at any time in any of such accounts or for [he purpose of paying the interest on or principal of the related series of Bonds in the event that no other money in the Special Fund or the Debt Service Fund is lawfully available therefor, or (ii) making the final payments of principal of and interest on the related scries of Bonds. Each Reserve Subaccount secures only the Bonds of the related series, and will not secure any other series of Parity Obligations that may be issued pursuant to the terms of the Indenture (see "No Additional Deb[ Other Than Refunding Bonds" below). The Indenture provides that in lieu of a cash deposit, the Successor Agency may satisfy ail or a portion of the Reserve Requirement for a series of Bonds by means of a Qualified Reserve Account Credit Instrument (see APPENDIX A-"SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE"). The Successor Agency has applied for a debi service reserve insurance policy to satisfy such requirement. The Successor Agency will decide whether to purchase such policy in connection with the offering of the Bonds. No Additional Debt Other Than Refunding Bonds The Successor Agency covenants that it will not incur any additional obligations payable, either as to principal or interest, from the Pledged Tax Revenues, ihat will have any lien upon the Pledged Tax Revenues on a parity with or superior to the lien under the Indenture for the Bonds; except that the Successor Agency may: (a) incur Parity Obligations to refund then outstanding Bonds (or Parity Obligations issued after the Closing Date pursuant to the Indenture), if (i) aggregate debt service on such proposed Parity Obligations will be lower than the aggregate debt service on the Bonds (or Parity Obligations) being refunded; (ii) the scheduled final maturity date of such proposed Parity Obligations will not be later than the scheduled final maturi[y date of [he Bonds or other Parity Obligations being refunded; and (iii) the issuance of such Parity Obligations shall be in comptiance with California Health and Safety Code Section 34177.5 (but only to the extent that such provision of the Dissolution Act is applicable and then in effect); or (b) incur Obligations which will have a lien on Pledged Tax Revenues junior to the Bonds; or (c) incur Obligations that will be payable in whole or in part from sources other than the Pledged Tax Revenues pledged under the Indenture. PROPERTY TAXATION IN CALIFORN[A Manner in Whieh Property Valuations and Assessments are Determined (Article XI!). On June 6, }� 1978, California voten approved an amendmen[ (commonly known as both Proposition 13 and thc Jarvis-Gann Initiative) to the State Constitution which imposes certain limitations on taxes that may be levied against real property. This amendment, which added Article XIIIA to the State Constitution, among other things, defines full cash value of property to mean "the county assessor's valuation of real property as shown on the 1975/76 tax 18 RESOLUTION NO. SA-RDA 061 bill under `full cash value,' or, thereafter, the appraised value of rea] property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." This full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or any reduction in the consumer price index or comparable local data, or any reduction in the event of declining property value caused by substantial damage, destruction or ather factors. The amendment further limits the amount of any ad valorem tax on real property to I% of the full cash value of that property, except that additional taxes may be levied to pay debt service on indebtedness approved by the voters prior to July l, 1978 and on any bonded indebtedness for the acquisition or improvement of real property which is approved after Ju1y 1, 1978 by two-thirds of the votes cast by voters voting on such indebtedness. See "SECURITY FOR THE $ONDS - Tax Revenues," "Property Tax Rate" below and "RISK FACTORS - Factors Which May Affect Tax Revenues - Reduction in Inflationary Rate." In the general election held November 4, 1986, voters in the State approved two measures, Propositions 58 and 60, which further amend the terms "purchase" and "change of ownership," for purposes of determining full cash value of property under Article XIIIA, to not include the purchase or transfer of (1) reai property between spouses and (2) the principal residence and the first $1,00U,000 of other property between parents and children. Proposition 60 amends Article XIIIA to permit the Legislature to allow persons over age 55 who sell their residence and buy or build another of equal or lesser value within two years in the same county (or in ceRain cases, another county), to transfer the old residence's assessed value to the new residence. Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based on Proposition 8 do not establish new base year values, and the property may be reassessed as of the following lien date up to the lower of the then-current fair market value or the factored base year value. The State Board of Equalization has approved this reassessment formula and such formuta has been used by county assessors statewide, and such methodology has been upheld by the California courts. During the recent recession, the County made signi�cant blanket assessed value redoctions throughout the County pursuant to Proposition S from the maximum amount that could be assessed on propeRy. Unsecured and Secured Property. In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other propeRy owned by the taxpayer. Every tax which becomes a lien on secured property, arising pursuant to State law, has priority over all o[her liens on the secured property, regardless of the time of the creation of the other liens. Property in the Project Areas are assessed by the Riverside County Assessor except for public utility property which is assessed by the State Bourd of Equalization. The valuation of secured property is determined as of January 1 each year for taxes owed with respect to the succeeding Fiscal Year. The tax rate is equalized during the following September of each year, at which time the tax rate is determined. Secured and unsecured propeRy is entered on separate parts of the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classiiications of property. PropeRy taxes on the secured roIl are due in two installmcnts, on November 1 and February ] of the fiscal year. If unpaid, such taxes become delinquent on September 10 and April 10, respect'svely, and a lO�Ic penalty attaches to any delinquent payment in addition to a$38.63 cost on the second installment, which is the cost for fiscal year 2016/17. On July 1 of each iiscal year any property which is delinquent will become defaulted. Such propeRy may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty of 1.5% per month to the time of redemption, together with any other charges permitted by law. If taxes are unpaid for a period of five years or more, [he property is subject to sale by the County Tax Collector. The exclusive means of enforcing the payment of delinquent taxes with respect to l9 RESOLUTION NO. SA-RDA 061 property on the secured roll is the sale of the property securing the taxes for [he amount of [axes which are delinquent. The County utilizes a mechanism for the distribution of tax increment revenue to the former redevelopment agencies that has a similar effect on the Agency's tax incremen[ revenues as the device known as the Teeter Plan (Section 4701 et seq. of the California Revenue and Taxation Code). The Teeter Plan allows counties to distribute secured property tax revenue to participating jurisdictions without regard to delinquencies by maintaining a reserve fund to cover delinquencies and allocating revenue based on the original secured roll, retaining alt delinquent tax payments and penalties. Under the mechanism used by the County to distribute tax increment revenue to the former redevelopment agencies, the County pays one-half of the taxes from the net taxable assessed valuation appearing on the equalized roll to each agency's RPTTF on January 2 and the other one-half on June 1; delinquencies are not deducted from the RPTTF revenue, and delinquent tax payments and defaulted tax redemptions, penalties and interest are not added to RPTTF revenue. Consequently, the Successor Agency is not affected by delinquent tax payments. Properiy taxes on the unsecured roll become delinquent, if unp:�id on August 31. A lO�Ic penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of 1.5% per month begins to accrue on November 1 of the fiscal year. The County has four ways of collecting delinquent unsecured personal property taxes: (1) a civil action against the taxpayer, (2) filing a certificate in the office of the County Clerk specifying ceRain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) tiling a certifieate of delinquency for record in the County Recorder's Of�ce, in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. Supplementa! Assessments. Legislation ddopted in 1984 (Section 75, et seq. of the Revenue and Taxation Code of the Sta[e of California) provides for the supplemental assessment and taxation of property at its full cash value as of the date of a change of ownership or [he date of completion of new construction (the "Supplemental Assessments"). To determine the amount of the Supplemental Assessment the County Auditor- Controller applies the current year's tax rate to the supplemental assessment roll and computes the amount of taxes that would be due for the full year. The taxes due are then adjusted by a proration factor to retlect the portion of the tax year remaining as determined by the date on which the change in ownership occurred or the new construction was completed. Supplemental Assessments become a lien against the real property on the date of the change of ownership or completion of new construction. Unitary Property. Commencing in the 1988/89 Fiscal Year, the Revenue and Taxation Code of the State of California changed the method of allocating property tax revenues derived from state assessed utility properties. It provides for the distribution of state assessed values to tax rate areas by a county-wide mathematical formula rather than assignment of state assessed value according to the location of those values in individual tax rate areas. Commencing with the 1988/89 Fiscal Year, each county has established one county-wide tax rate area. The assessed value of all unitary property in the county has been assigned to this tax rate area and one tax rate is levied against all such property ("Unitary Revenues"). The property tax revenue derived from the assessed value assigned to the county-wide tax rate area shall be allocated as follows: ( I) each jurisdiction will be allocated up to 2�Ic of the inerease in Unitary Revenues on a pro rata basis county-wide; and (2) any decrease in Unitary Revenues or increases less than 2�/c, or any increase in Unitary Revenues above 2�Ic will be allocated among jurisdictions in the same proportion of each jurisdiction's Unitary Revenues received in the prior year to the total Unitary Revenues county-wide. Legislation adopted in 2006 (SB 1317, Chapter 872) provides that, commencing with Fiscal Year 2007/08, certain property related to new electrical facilities shall be allocated entirely to the county in which such property is located and property tax revenues derived from such property sfiall be allocated to such county and certain Taxing Agencies with such county. 20 RESOLUTION NO. SA-RDA 061 Property Tax Rate. The difference between the $1.00 general tax levy provided under Article XIIiA tax rate and those actually levied (referred to as the "tax override rate") represents the tax levied by overlapping entities to pay debt service on bonded indebtedness approved by the voters. Section 34183 of the Dissolution Act effectively eliminated the tax override rate from the calculation of Tax Revenues with respect to tax override rates authorized by voters for the purpose of repaying bonded indebtedness for the acquisition or improvement of real property. Future Tax Revenues have been projected by applying a tax rate of $ I.00 per $100 of taxable value general levy to incremental taxable values. Administrative Costs. In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local government jurisdictions on a prorated basis. SB 1559 (Chapter 697, Statutes of 1992) explicitly includes redevelopment agencies among the jurisdictions which are subject to such charges. In addition, Sections 34182(e) and 34183(a) of the Dissolution Act allow administrative costs of the County Auditor-Controller for the cost of administering the provisions of the Dissolution Act, as well as the foregoing SB 1559 amounts, to be deducted from property tax revenues before moneys are deposited into the RPTTF. For Fiscal Year 2016/17, the County administrative fees charged to the Project Areas inciuding administration of the RPTTF were $1,013,000. In total, the fees represent approximately 1.10�Ic of gross Tax Revenues. THE SUCCESSOR AGENCY Gavernment Organization The Former Agency was established by the City Council in 1974 pursuant to the Redevelopment Law. In June 2011, AB Xl 26 was enacted, together with a companion bill, AB XI 27. A lawsuit was brought in the California Supreme Court, California Redevelopment Association, et al. v. Matosantos, et al., 53 Cal. 4th 231 (Cal. Dec. 29, 2011), challenging the constitutionality of AB X 1 26 and AB X 1 27. In its December 29, 2011 decision, the California Supreme Court largely upheld AB X 1 26, invalidated AB X 1 27, and held that AB X 1 26 may be severed from AB X 1 27 and enforced independently. As a result of AB X 1 26 and the decision of the California Supreme Court in the California Redevelopment Association case, as of February 1, 2012, all redevelopment agencies in the State were dissolved, including the Former Agency, and successor agencies were designated as successor entities to the former redevelopment agencies to expeditiously wind down the affairs of the former redevelopment agencies. Section 34173(g) of the Dissolution Ac[ expressly affirms that the Successor Agency is a separate public entity from the City, that the two entities shall not merge, and that the liabilities of the Former Agency will not be transferred to the City nor will the assets of the Former Agency become assets of the Ciry. Successor AQencv Board Members Jan Harnik, Chuir` Sabby Jonathan, Vice-Chair Kathleen Kelly, Director-elecr Gina Nestande, Director-elect Susan Marie Weber, Director Term Expires November 2018* November 2018* Novembcr [2020) November [2020] November [2020] The City Manager serves as the Suecessor Agency's Executive Direc[or, the City'ti Finance Director serves as the Successor Agency's Finance Officer and the City Clerk serves as the Successor Agency Secretary. The costs of such functions, as well as additional services performed by City staff are allocated annually to the Suecessor Agency, within eertain limitations established by the Dissol�tion Act. Such reimbursement is subordinate to payment on any outstanding bonds of the Successor Agency. ' Subjcct to City Council reorganization after election certi�cation on Decemher 8, 2016. 21 RESOLUTION NO. SA-RDA 061 Successor Agency Powers Pursuant to the Dissolution Act, the Successor Agency is a separate public body from the City and succeeds to the organizational status of the Former Agency but without any legal authority to participate in redevelopment activities, except to compiete any work related to an approved enforceable obligation. The Suceessor Agency is tasked with expeditiously winding down the affairs of the Former Agency, pursuant to the procedures and provisions of the Dissolution Act. Under the Dissolution Act, many Successor Agency actions are subject to approval by the Oversight Board, as well as review by the State Department of Finance. Califomia has strict laws regarding public meetings (known as the Ralph M. Brown Act) which generally make all Successor Agency Board and Uversight Board meetings open to the publie in similar manner as City Council meetings. Dissolution Act Milestones Section 34179.5 of the Dissolution Act established a due diligence review process for determining the unobligated balances that redevelopment agencies had available as of June 30, 2012 to remit to their respective county auditor-controllers for distribution to affected Taxing Agencies within project areas of the former redevelopment agencies. The Successor Agency has remitted to the County Auditor-Controller all of the unobligated balances as determined by the State Department Finance. On May 15, 2013, the Successor Agency received its Finding of Completion from the State Department of Finance. Receipt of the Finding of Completion allows the Successor Agency to do several things, among them, developing a Long Range Property Management Plan (Described below) and spending proceeds of bonds issued prior to December 31, 2010, all requiring approval of the Oversight $oard. After receiving the finding of completion, each successor agency is required to submit a Long Range Property Management Plan (a "Long Range Property Management Plan") detailing what it intends to do with its inventory of real property interests. Permissible uses include: sale of the property, use of the property to fulfill an enforceable obligation, retention of the property for future redevelopment, and retention of the property for governmental use. The State Department of Finance approved the Successor Agency's Long Range Property Management Plan on June 2, 2014 and an amendment to the Long Range Property Management Plan on Deccmber 9, 2015. Successor Agency Accounting Records and Financial Statements The activities of the Successor Agency are reported as a iiduciary trust fund, which is in accordance with guidance issued by the State Department of Finance on September 19, 2012 and available on its website relating to redevelopment dissolution (www.dof.ca.gov/redevelopment) under the category of "Common RDA Dissolution Questions and Answers," interpreting Section 34177(n) of the Law conceming certain successor agency postaudit obliga[ions. The State Department of Finance's website is not in any way incorporated into this Official Statement, and the Successor Agency cannot take any responsibility for, nor make any representation whatsoever as to, the continued accuracy of the Internet address or the accuracy, completeness, or timeliness of information posted there. In addition, from time to time, the State Department of Finance changes its guidance without notice. The City's financial statements for the Fiscal Year ended June 30, 2015, which include information regarding the Successor Agency, are attached as "APPENDiX D" to this Official Statement and have been audited by White Nelson Diehl Evans LLP, Irvine, California. The City's audited financial statements are public documents and are inciuded within this Official Statement without the prior approval of the auditor. White Nelson Diehl Evans LLP has not been engaged to pe�form, and has not perforined, since the date of its report included in the Official Statement, any procedures on the fenaneial statements addressed in that report. White Nelson Dieh! Evans LLP a[so has not performed any procedures relating to this Offcial Statement. 22 RESOLUTION NO. SA-RDA 061 Stipulation Agreement On May 15, 1991, the Riverside County Superior Court entered a final judgment incorporating the terms of a Stipulation for Entry of Judgment ("Original Stipulation") in Case No. 51124 and a Stipulation for Entry of Judgment pursuant to Settlement Agreement and Mutual Release ("Settlement Agreement") in Case No. 51124, among the Former Agency, the City, the Western Center on Law and Poverty, Inc., California Rural Legal Assistance, and others. On June 18, 1997 and on September 20, 2002, the Riverside County Superior Court amended the judgment, incorporating Stipulations Amending Stipulation for Entry of Judgment. The judgment, as amended (the "Judgment"), generally required the Former Agency to use 20�I� of its tax increment revenues, and additional tax increment revenues if necessary, to develop, rehabilitate, or otherwise financially assist affordable housing units and to meet certain housing needs of the City. Before dissolution, the Former Agency used its Housing Set-Aside (see "INTRODUCTiO1V — Security for the Bonds") to ful�ll its obligations under the Judgment. The Refunded Bonds were used to finance and refinance affordable housing projects that satisfied the requirements of both the Judgment and the Redevelopment Law provisions relating to the Housing Set-Aside. Accordingly, the Former Agency pledged, and used, the Housing Set-Aside for the repayment of the Prior Loans relating to the Refunded Bonds. Under the terms of the Judgment, the Former Agency was permitted to incur indebtedness and pledge tax increment revenues to refinance its obligations, so long as: (i) [he total amount of debt service payable in connection with such refinancing is less than the total amount of debt service remaining to be paid on the refunded obligations, or (ii) the total amount of debt service payable in connection with such refinancing reflects a present value savings when compared with the totat amount of debt service remaining to be paid on the refunded obligations. While the Dissolution Act has eliminated the Housing Fund and the reyuirement to deposit the Housing Set-Aside into such fund, the Successor Agency continues to recognize the Judgment as its enforceable obligation. On its ROPS, the Successor Agency has included line items designated as "Stipulation Judgment Case No. 51124," listing the amounts necessary to fuliill its obligations under the Judgment (after taking into account the amounts already listed for the repayment of the Refunded Bonds). While the DOF originally approved such line items, the DOF changed its position beginning with ROPS 14-15A (i.e., covering the period commencing July l, 2014}. On August ]4, 2014, the Successor Agency filed an action, Successor Agency to the Palm Desert Redevelopment Agency v. Michael Cohen, Sacramento Superior Court Case No. 34-2014-00167698 (thc "Successor Agency Lawsuit"), seeking to compel the DOF to permit payment of the affordable housing obligations mandated by the Judgment. Subsequently, in view of the fact that there were similar cases pending in the California Third District Court of Appeal, the Successor Agency took action to have the Successor Agency Lawsuit dismissed without prejudice, pending resolution of those similar cases. Under the Indenture, Pledged Tax Revenues is defined as the portion of property tax revenues required to be deposited into the RPTTF that is equal to the amount that the Former Agency would have been required to deposit into the Housing Fund, if the Former Agency had not been dissolved. The amount of Pledged Tax Revenues available to repay the Bonds will not depend on the outcome of the Successor Agency's dispute with the DOF regarding the Judgment. Plan Limitations [n accordance with the Redevelopment Law, redevelopment plans were required to include eertain limits on the �nancing of redevelopment projects. These limits could include a time limit on the life of the redevelopment plan, a time limit to incur debt, a time limit on the receipt of Tax Revenues and the repayment of debt, and a limit on the amount of bonded indebtedness outstanding at any time. SB ]07 clarifies that the former tax increment limits in redevelopment plans no longer apply for pucposes of paying approved enforceable obligations such as the Bonds. 23 RESOLUTION NO. SA-RDA 061 THE PROJECT AREAS Description of thc Project Areas As described in the Official Statement, there are four Project Areas totaling 11,771 acres and encompasses 68�Ic of the total acres in the City. The following table provides information on assessed and incremental value of each Project Area. Proiect Areas Projc�t Nu. 1 Project No. 1 1982 Addcd Area Projcct No. 2 Project Na � Projcct No. 4 Total All Projcct Arcas TABLE 1 BY PROJECT AREA LAND USE BY ASSESSED VALUE (2016/17) 2016-17 Acreaee Assessed Value I.ess Rase Value 580 $ I.OS8.238.219 S 27.485.8�6 5,240 S,27R.508,068 656,06_S,OS9 2,927 l .h86.8U3,512 102.157,4�7 764 564,$55,842 149.523,2iS 2 26(? I.990.188,034 SR7.192.21R 510,578,593,675 S1,i22,423,815 2016-17 Incremental Assessed Value $ I .030.752.38 3 4,622,413,009 1,584,646.OGS 415332.SA7 1.402.995.R 16 S9,OS6.169,860 9� of Incremental Value 11.38�k S 1.O�1 17.50 4.59 I 5.49 I (A1.OQ�h So�rcc: Fiscal Consultant's Rcport. Specific information about each Project Area and its redevelopment plan is set forth below. Project Area No. l. The Project Area No. I was formally established with the adoption by the City Council of a redevelopment plan (the "Original Plan") for approximately 580 acres (the "Original Area") pursuant to Ordinance 1Vo. 80, adopted on July 16, 1975. Approximately 5,240 acres (the "Added Territory") were added to the Original Area pursuant to amendments to the Original Plan approved and adopted by the City Council by Ordinance No. 275, adopted on November 25, 1981 and Ordinance No. 324, adopted on October 13, 1983 (collectively, the "Amendments"). The Original Plan, as amended by the Amendments, is referred to as the "PA 1 Redevelopment Plan." The Project Area No. I includes approximately 5,820 acres, comprising approximately 12,825 parcels, zoned for residential, office, commercial, industrial, public and open spaee uses. The Project Area incorporates an approximately 70-acre Civic Center campus; a Sheriffs dispatch center; County Library facilities; multifamily rental, townhouse and single-family developments; the Canyons at Bighorn, a 275-unit luxury custom home development; and over two million square feet of retail space, including three major retail malls. The Westficld Shoppingtown (locatcd in the Original Area) was expanded in January 2003 to add two parking garages totaling 1,000 parking spaces, the expansion of Macy's, and an additional 40,000 square feet of retail space, including Barnes & Noble. The Project Area also includes the Gardens on EI Paseo, EI Paseo Village and the Shops on EI Paseo which include over 200,000 square feet of luxury retai) space. Luxury retail brands within the EI Paseo are include, Apple, Saks Fifth Avenue, TUMI, Kate Spade, Eileen Fisher and Louis Vuitton. Project Area No. 2. On July 1 S, 1987, the Redevelopment Plan for Project Area No. 2 was adopted by the City of Palm Desert pursuant to the adoption of Ordinance No. 509. Project Area No. 2 encompass�s approximately 2,927 acres (68,230 parcels including timeshare parcels) of residential, hotel/resort, office and undeveloped uses. Project Area No. 2 is generally bounded by the Palm Desert City limits and lnterstate l0 to the north, Gerald Ford Drive to the east, Country Club Drive and Hovley Lane to the south and PoRola and Monterey Avenues to the west. Project Area No. 3. The Redevelopmcnt Plan for Projcct Area No. 3 was adopted by the City on July 17, 1991 pursuant to the adoption of Ordinance No. 652. Project Area No. 3 is located in the City and includes approximately 'I64 acres, comprising 1,531 parcels, zoned for residential, office, commercial, industrial, public and open space uses. Project Area No. 3 is generally bounded by Ponola Avenue and Ccx�k Street to the west, 24 RESOLUTION NO. SA-RDA 061 and Carlo[ta Drive to the east, Hovley Lane and Running Springs Drive to the north and the Whitewater River Channel to the south. The Portola Country Club is not within Project Area No. 3. Project Area No. 4. The Redevelopment Plan for Project Area No. 4 was adopted by the City on July 19, 1993 pursuant to the adoption of Ordinance No. 724. Project Area No. 4 includes approximately 2,260 acres, comprising 10,556 parcels, zoned for residential, office, commercial, industrial, public and open space uses. Project Area No. 4 is generally bounded by Eldorado Drive to the west, running southward to the boundary of the City of Indian Wells, then eastward to the corner boundary between the county line and the City of Indian Wells. The western boundary follows this line southward to Fred Waring Drive, which is also the southem boundary of the City limits. The eastern boundary of Project Area No. 4 is Washington Street and the northern boundary is County Club Drive. Land Use Land use within the Project Areas is predominantly residential, encompassing 73.62�Ic of all uses by assessed value. The following table shows land use among all Project Areas by assessed value. TABLE 2 ALL PROJECT AREAS LAND USE BY ASSESSED VALUE (2016/17) Number of Assessed % of Land Use Parcels Value Total Residential: Single Family 9,674 $ 4,949,379,078 46.79% Condominium 9,543 2,333,5 l 1,057 22.06 Multi Family 387 296,411,443 2.80 Other 1,893 208,772,900 1.97 Commercial: Retail 306 $ 989,963,416 9.36�% Office 365 345,358,835 3.26 Hotcl/Motcl 22 226,270,8U5 2.14 Othcr 533 246,939,701 2.33 Timeshares 69,397 $ 408,890,790 3.87 Industrial 185 177,114,542 I .67 Miscellaneous 255 146,350,978 1.38 Public 502 - 0.00 Unsecured 1,476 249.630.130 2.36 Totals 94,S:i8 $10,578,593,675 100.00% Sourcc: Fiscal Consultant's Rcport. 25 RESOLUTION NO. SA-RDA 061 Assessed Valuations and Tax Revenues Total assessed value of the Project Areas, together with assessed values of the constituent areas comprising the Project Areas between fiscal years 2007/08 and 2016/17 are shown in the tables below. TABLE 3 ALL PROJECT AREAS CURRENT AND HISTORICAL VALUATIOIVS 2005/06 through 2016/17 FY 2007-U8 20U8-09 2009-10 2010-11 2U11-12 2012-13 2013-14 2014-15 2015-16 2p16-17 Src�red Value $ 9.652.979.213 10, I 17,R66,i65 9.709.(kiS,177 9,214,357,136 A.Ri3,49 I ,405 8.839.633,215 9.Q90.410.899 9,5y7.498.735 I 0.070.986.68 I 10.326.335.572 Sourcr. I=i�cal Consultant's Rcport. Unsecured Value $305.989.337 343,(k34,906 327,469,966 319,Ga4.91 I 3U3.821.693 248.989.726 291,714,523 2S7,R 17,RR2 261,573,498 252.258.103 Total Value 9,958,968,550 10.460.91 1.471 10.03h.S 15.143 9,533,962,047 9,157,3 I 3,U68 9,ORA,622,941 9,382,125.422 9,855.31 G.617 10.332,560,170 I O.S7R,591,675 Less Base Value $1.522.423.815 I ,522,423,R 1 i I ,522,423,R I 5 1.522,423,R 1 i I.S22,42�,R 15 I .522,423,R I S I.S22.423.815 1,522,42i,815 I,S22,423,8I 5 I ,522,423.81 S Increment $8,426,5�,735 8,938,487.656 R,.514,(� I ,328 8.O1 1.538.232 7.634.889.283 7,566,199, I 26 7.859.701.607 8.332.892.A02 8.8 ] 0.136.355 9,OSh, I 69,860 Percentage Chan�e 5.97c -4.7 -S.9 -4.7 -0.9 3.9 h.0 S.7 2.8 For a detailed description of current and historical assessed value in each Project Area see APPENDIX C — "FISCAL CONSULTANT'S REPORT." Actual Tax Revenues paid to the Former Agency or available to the Successor Agency from the Projert Areas for fiscal year1 201 1/12 through 2015/16 are shown below. TABLE 4 ALL PROJECT AREAS HISTORIC TAX REVEIVUES RECEiPT f� � IV Kcportcd Asscssed Value"' Sccured Unsecurcd Tvtal Project Va1uc l.css Basc Ycar Value Total Incrcmcntal Value Tax Rate tu CompWc Tax Increment Ca�nputed Gross Tas Incrcmcnt Unitary Tax To1al Computrd lx�y Tax Allocauon: Allocatrd Tax Incrcmcnt'" Unitary Tax Total Tax Bascd on Collcctions Variancc From Computcd Lecy 7r Collcctions �xr Cuunry zo�i-iz $8.8Si,q91,4QS 303,l321 693 9.157.313,(�8 1,5Z2.42 i,81 S 7.634.8R9.2R3 i.o�x» 76.350,94() I,OS5.4�(! 77.4U6370 76,395.366 -- ---.I 0$5 g30 77.450.796 43,42i iix� i� 2012-13 S8.R39,633,215 24R,989,726 9.08R.62?.941 1.522.423.815 7.566.199.I2G 1.000`k 75,666.465 _. . 1,017.138 76.6Ai.fiOi 75,6CiG,4GS 1.017.13t3 7G.G8?.603 0 i oo.o�r, 2Q13-14 59,090.410.R99 291.714523 9.382.125.422 I .522.423,81 S 7,SSy,7U 1.607 I.0(N)7r 78,597,016 1.(Xi7.949 79.664.965 78.5y7A 16 I .(K,7.949 79.664.965 0 i c�.o�� 2014-IS 59,597,4y8,735 257,fi17,RA2 9.855.31b.617 1,522,42�,RIS R.332.892.R02 I.00U'k x�,�3a,o�x I.(�.I,101 8-1.425.179 83,3i4.078 1,091,101 --}i4.4?5,179 0 i ou.o� 2015_16 510.07U.�)86.68 I 261.573 4�9 I O,i32,560.170 I .522 �23 tf I S fi.fi I 0, I 7(�,15 i 1.Q(N1�% 88.1 U8.75y 1.15�,(�J R9,260.852 xx, ! U2i,75y 1. I 52.09�3 89,_'60,85? Q i W.o�r, '�' Amuunts shown are as reported hy thc Co�nty Auditor-Controller in August of cach fiscal year. ''' Amuunls represent Ihe annual L�x incn�ment revenucs apportioned to the Agency and dn not ezclude County aJministrativc charges, intercct camings, supplrmenlal laxes, set asiJes or �ax sharing allocations. The County aUocates tax incrcmcnt rcvenucs on a Tecter Plan bascd on ad.justed computed le�y. Source: Fiscal Consult:uu's Rcport. 26 RESOLUTION NO. SA-RDA 061 r �o , , e �v o E �� t�� fI s y N v 7IN `� �D �+'. � v. � V V�I �C f C C N O .'.: O C U V � ~ i; e3 � � � O N � � w 0 � M N � C � N G. � �. a~i >, :� a x � � � � L±� � a. � � C ±: N � F-' � � Q U � O a � 3 a`'i T C� n. x � � � � N S 'l. 3 O s � CJ CC a+ y t-. bA ¢ h �3 u � O .� � � a a � � Fx y �' �.,. ir 0 � � A � � � > � W Q� �L' a ti Q� X N � � F � �ti�� W �'a�� Q U �a� � � �1 � n � ' � 7S �L" t� E�`� � �!�c) c N �� rn iv a r r�. r. tv O x c+. v: o? a a a rn v, a v, v c-�. N c Q�— —ci o 00 o co oc S N U F � � � ~a�l��G C N N � �, � � d v � � �la o v > �. N � � 65 'fl � v � �. a�, d) v, � ° v; [� Cd 1!; � x � v' x C � N � y �v C p �.I u o 0 z �a- � � � » C V V � :. u t., �... z��; � N n r .c � �, V � �. � �r �, N N �. � �. � � n r�. V• S. V �'� t�. � � 00 �- �c x � �, rx — �,v �vv�,^ r o u ti � °� v�-,, : v $ a �O, o�o .c :�-. �`. .D �C r oo ��, ?a e+�. o� '"` O N t+-, O+ �O N O .J — .^..Q: N �0-p- �Cv';^ ^ T K � � V V h[� V", ��^ � .- x v�, O G �/' O O+ U d C y� -- � � � � � � � > > _, � � � � N � � � � � N v v� �c r. � u y N - v U 00 !'�'. C� lC y v � � � �. y9 i�� ^C�� N N -- � � N �+'. r x — rr. ct c� o �� O ca � ovx � �� N � � N C O C Q'� �O � ".T N �--� "J. ^ v; �C^ �p a O 'J�� C V � a� v: C h,-• V�! r � N N v'; w «� x > > � � .� =7 iy y , O _ � � � � � �I N > > > > > � � � � > > � � v � � � �n � v � j n j tu.. y L i �" c v n � tr. -- N F. T— O a <C y r a — � v�� +r�, v: � N O J � _ � ^ r �, • � Q �V V y � � p � �? C C N N N � �JG . . v: ry ..-. _. � fy •.-• �. fV N N c�: E� ��^ •0 V u W L N y.N u V L CUi J OVJ U C OG Q� G, Q'o 'o 'c'� � c 'o o 'o 'o '� c L c n z a`. ia°�Q� �d i �fi'ia � ��-.ox � � �� c y u u 4 2 � OC � °' E L E E y c .� c o U F- U U �, .. c c T t � � U C C ,C � y n` v C �I ° E = � � - c e�U� �,� [�` «r .� L s .0 3 C � '`'.' � � u°�,. G' v�� 3�3° _ C o c a `� pS.c�. c � U u Q � ��>3� c u E;s us � w � � — C C C O U 7 7 � ` A" v �� v �' a � h � `�0.u' � o .°', y•`y > > > R y E E E �v c ai .� �::' � �.o ��uu ce�i�ax� y ; ; �O 'J �C �; v-. v^. C� - - � N N N �v ti c c c � m ' CVJ y �! G � � V C C C � . _ :J :J J ,.'n r F V �' r C � z a .` .` w c,j `w �. Q 'U J J.--. � � 3 ,� � U � 3 3 � r c :n c p �' bu � F � ;� �v C�� c � T T T U � O � E �� G , L[] ^.J •L L rJ = U 7 � C � J � �3 '�]. � Q�• �• � c �u �ac� _r � p �.�.a�- :n i. J � Q E"' J 4' .^�r -c m�o � E d cs r � 'nU TTQ� �. � u � > � � L c � � � � � _ _ _ :i 3 ici h»'tiiU � � N RESOLUTION NO. SA-RDA 061 Assessment Appeals As of October 1 2016, there were a total 189 pending appeals filed in the last 6 years by property owners in the Project Areas as shown below. The total value of property under appeal for ali years is $1,36:i,543,560. Some appeals have been filed for multiple years for the same property. A summary of all pending appeals is shown below. TABLE 6 ALL PROJECT AREAS SECURED ASSESSMENT APPEALS FISCAL YEAR 2009/10 through 2015/16��' Total No. of Appeals 2009-10 to 2015-16 2,506 Fiscal Year Endina June 30 2016 2015 2014 2013 2012 2011 2U10 Total No. of Successful Appeals 2009-10 to 2015-16 359 Average Assessed Est. No. of Valuation No. of Pending Pending Appeals Reduction Aaaeals Ailowed 15.77�/� 189 30 Number of Combined Value Under Appeals PendinE Appeals 121 $ 623,7:i2,885 40 402.209,739 23 33U,065,U62 3 7,253,306 � 0 2 2,2R2,S68 0 p 189 $1,365,543,560 "� Includcs securcd ass�sscd valuations only. Source: Fiscal Consultant'S Rcport. Estimated Reduction on Pending Appeals (FY 2017-18 AV) $15,236.000 9,826.000 8A63,0()0 0 0 55.000 0 $33,357,000 There are appeals pending for three of the largest property owners included in TABLE 4-"TEN LARGEST TAXPAYERS." The Successor Agency cannot predict the outcome of any pending appeals. For Fiscal Years 2009/10 to 2015/16, 14.39'c of all appeal filings were reduced or stipulated, 78.1 �lo of the appeals were withdrawn or denied and 7.5% of the appeals remain open. For the period reviewed by the Fiscal Consultant, properties that were the subject of assessment appeal filings resulted in an overall averdge reduction in assessed value of 15.77�I�. This average reduction is incorporated by the Fiscal Consultant in the projections of Tax Revenues. See APPENDIX C—"Fiscal Consultant's Report." Pass-Through Agreements Pursuant to prior Section 33401(b) of the Redcvclopment Law, a redevelopment agency was authorizcd to enter into an agreement to pay Tax Revenues to any Taxing Agency that has territory located within a Project Area to alleviate any financial burden or detriment caused by the Project Area. These agreements are commonly referred to as "tax sharing agreements" or "pass-through agreements." Any payments made by the Successor Agency to a Taxing Agency pursuant to a pass-through agreement shall be paid prior to the payment of debt service on the Bonds; provided, however, payments on subordinated pass-through agreements shall not be made prior to the payment of debt service on the Bonds if there are insufficient Tax Revenues to pay debt service on the Bonds. In addition, pnrsuant to former Section 33676 of the Redevelopment Law, any affected taxing agency that had not entered into a tax sharing agreement with the redevelopment agency prior to the adoption of a redevelopment plan could elect, by resolution adopted prior to the adoption of a redevelopment plan, to receive the portion of Tax Revenues attributed to one or both of the following: No. of Resolved Appeals 2009-10 to 2015-16 2,317 28 RESOLUTION NO. SA-RDA 061 (a) Increases in the rate of tax imposed for the benefit of the taxing agency which levy occurs after the tax year in which the ordinance adopting the redevelopment plan becomes effective; and (b) increases in the assessed value of the taxable property in the redevelopment project area, as the assessed value is established by the assessment roll last equalized prior to the effective date of the ordinance adopting the redevelopment plan pursuant to subdivision (a) of Section 33670, which are, or otherwise would be, calculated annually pursuant to subdivision (� of Section 110.1 of the Revenue and Taxation Code. Payments due under Section 33676(b) are referred to in the Official Statement as "inflationary growth." For a description of the Former Agency's Pass-Through Agreements, See APPENDIX C"Fiscal Consultant's Report." Since dissolution, the County Auditor-Controller calculates and pays directly to the Taxing Agency any amounts due under a Pass-Through Agreement. Statutory Tax Sharing Payments Certain provisions were added to the Redevelopment Law by the adoption of AB 1290 in 1994. If a new redevelopment project was formed by a redevelopment plan adopted on or after January 1, 1994 or if new territory was added to a redevelopment project on or after January 1, 1994, under Section 33607.5 of the Redeve1opment Law, any affected taxing endty, including the City, wo�ld share in the Tax Revenues gcnerated by such added area pursuant to a statutory formula ("Statutory Tax Sharing"). In addition, a redevelopment agency, on or after January 1, 1994 amended a redevelopment plant to delete the time limit to incur indebtedness in a redevelopment project (pursuant to Section 33333.6(e) of the Redevelopment Law, as amended pursuant to SB 211) or increased the total amount of Tax Revenues to be allocated to the project area or increased the duration of the Redevelopment Plan and the period for receipt of tax incremeni, Statutory Tax Sharing is required under Section 33607_7 of the Redevelopment Law with a11 affected Taxing Agencies not already a party to a tax sharing agreement, once the original limi[ations were reached. The Successor Agency has not taken any proceedings to subordinate the payment of Statutory Tax Sharing Amounts to the Bonds. With respect to moneys deposited in the RPTTF, the payment of Statutory Tax Sharing amounts shall be made prior to the payment of debt service on the Bonds. Since dissolution, the County Auditor-Controller calculates and pays directly to the taxing entities the Statutory Tax Sharing amounts. Outstanding Indebtedness Following the issuance of the Bonds, there will be no indebtedness of the Authority or the Successor Agency outstanding and payable from Pledged Tax Revenues on a senior basis to the Bonds. CeRain obligations of the Successor Agency under tax sharing agreements are payable on a senior basis to the Bonds. See "THE PROJECT AREAS — Pass-Through Agreements" and "Statutory Tax Sharing Payments." Concurrently with the issuance of the Bonds, the Successor Agency will be issuing its Tax Allocation Refunding Bonds 2017 Series A, in the principal amount of � (the "2017 Series A Bonds") and Taxable Tax Allocation Refunding Bonds 2017 Series B, in the principal amount of $ (the "2017 Series B Bonds," and together with the 2017 Series A Bonds, the "2017 Non-Housing Bonds") to refund certain outstanding non- housing obligations of the Successor Agency. Under the indenture for the 2017 Non-Housing Bonds, the pledge securing the 2017 Non-Housing Bonds includes money deposited in the RP'ITF, less: (i) ihe administrative costs of the County Auditor-Controller deducted as required by Health and Safety Code Section 34183(a); (ii) amounts payable to affected taxing entities pursuant to the Law (including payments under HSC Sections 33676, 33607.5 or 33607.7 and the Pass-Through Agreements), except to the extent such payment to a taxing entity has been subordinated to the 29 RESOLUTION NO. SA-RDA 061 2017 Non-Housing Bonds, (iii) the Housing Portion (defined below), and (iv) amounts repayable by the Successor Agency with respect to certain loan incurred by the Successor Agency (including any reimbursement [o the bond insurer for draws on the related bond insurance policy and the debt service reserve surety bond), which loan was related to the Authority's Tax Allocation Revenue Bonds (Project Area No. l, As Amended), 2007 Seriet A. "Housing Portion" refers to the portion of the property tax revenues required to be deposited by the County Auditor- Controllcr into the RPTTF that is equal to the dollar amount that the Former Agency would have been reyuired ta deposit into the Low and Moderate Income Housing Fund pursuant to Sections 33334.2 and 33334.3 of the Law, if the Former Agency had not been dissolved. In other words, Housing Portion is the same as the "Pledged Revenucs" pledged for the Bonds under the Indenture. See APPENDIX C—"REPORT OF FISCAL CONSULTANT." TAX REVENUES AND DEBT SERVICE COVERAGE As shown in Table 7 and 8, the actual amounts received by the Successor Agency depends on the realization of certain assumptions relating to the Pledged Tax Revenues. The Fiscal Consultant has projected taxable valuation and Tax Revenues in the Project Areas. Table 7 reflects taxable value and Pledged Tax Revenues assuming no growth on the tax base. Table 8 includes certain tax base growth assumpiions as presented below. The Successor Agency believes the assumptions upon which the projections are based are reasonable; however, some assumptions may not materialize and unanticipated events and circumstances may occur (see "RISK FACTORS"). Therefore, the actual Tax Revenues received during the forecast period may vary from the projections and the variations may be material and could affect the Successor Agency's ability to timely pay principal of and interest on the Bonds. Following is a discussion of assumptions used in the projection of Tax Revenues: Baseline Assumption (a) The values of unsecured personal property and state assessed utility property and the amount of unitary revenues have been maintained throughout the projections at their 2016/17 levels. (b) A tax rate of $1.00 per $100 of assessed value applied to the taxable property in the Project Areas has becn used to determine Tax Revenues. (c) Projected Pledged Tax Revenues do not include a deduction for property tax collection administrative costs charged by County. (d) Projected Pledged Tax Revenues do not ref7ect delinquencies. (e) Projected Pledged Tax Revenoes do not reflect any polential future Proposition 8 adjustments. (� Projected Pledged Tax Revenues do not reflect any potential decreases resulting from pending assessment appeals. Sec "THE PROIECT AREAS - Assessment Appeals." (g) Projected Pledged Tax Revenues do not include supplemental property taxes. (h) Projected gross Tax Revenues do not include a deduction for payments due to Taxing Agencies under the Pass-Through Agreements and Tax Sharing Statutes, including subordinate payments. Growth Assumption for Table 8 (a) The secured roll is assumed to increase 2�I� annually for inflation. See "Property Taxation in California - Manner in Which Property Valuations and Assessments are Determined (ARicle XIIIA)." (b) For the purposes of the projections, it is assumed that there will not be any value added to the tax rolls as a result of new construction or changes in property ownership. 30 RESOLUTION NO. SA-RDA 061 VI W � � Qr_, �r_, W w Q� a E.r 'fl 3° �wFC�� QOC�F � yy EI O 1�1 U Z `'' �� Q O f�G a �_ C CIv..-..-.�.___.__�_.-.�____�_.____�_ y, C r �. _ _. .-. � �.. .� � � � ._ � � � ... .--� � � � �. ... ..-. �. � 'i ` N Y^. f�'. t+'. f^. !+', t+; t^. C'. f"� N'. l^, t". tr. F. f�'. f+'. fr. f�'. f�'. f�: t�: f�'. C'. 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L e u � � n " > U � L V v � v U n T � � � U, � � C L N � d _ L L � � > > ti � >. �� s C � J � � L L � n C J X1 C � x L � J � = � ; �� _ a� � �: � G �,�_', v. . .J C = � C � C fE ° � � � - K� U V _ V � L � �F ¢ G ` °� G r � � �C 'C G L � e'C�I C.�p � � .. � L L U -J � C '� p, � 7 � � v L c � � � T i :l � n1 G ` C . . � � ` � t c Q c c - 2 J "-' v u � .�i c y � c � > avi �' � � x e C i� � t � i c c 5 �F'�z ' x v 7 � � s � f°�. �C '7 C+ F L � r� `a .c. n 1 c � — a °01 u v � `o °' u C o � U � � V � � f 1 v u = '.. ... � ]" V 1. ... � � v r. Aau, VGi u J � 'J _ _ _ _ _ ci �; N �, RESOLUTION NO. SA-RDA 061 Z d � 3 � ° c � •^ �„ C � 'v` J S° N d � � 3 a� � > �v ,a U ° Z �I F W,1� V Q a � > 0 U Gt7 V o� � � � aW � � QF E� � W � 0 G:7 F� U W � O a a x x �b a`+ c �� 0 N a x n d� �L C fx r c N w � '� U F �� y 3 'd ca y �: a F+ > 'v °� a � N � .C+ 'b S y V 6i F > :' °" a z L. .0 � c � u ?� % c y Q ti :.i 7 V; � 0 'l. /: � C.J U � � N � f"' � � � F" U Q w � � a a� a� � 3 0 a� .a '� � 4 V v. y � � a� .� �� y cs > > y s � u � � � � ��, 'i� 0.3 y � �'-' 7 c � � � a:'S y x � o E-^ .a -� :� v �� 3 � O � s v. � �: � v � v C O N � > d � � � t X "' :C � F" „C "D N � U bA C -o a� � a � � � U � � _ � y a z7 a� � �O a T U C W � Q M, tr; RESOLUTION NO. SA-RDA 061 RISK FACTORS The purciluse uf �he Bonds involves investment risk. If a risk f'actor materializes to u se�cient �leXree, it coc�ld clelu�• or prevent puyment of principa! of ancUor in[erest on the Bonds. Such risk fucturs inclucle, but are not timitecf to, the,follo►rinK murters einc! shoulcl be considered, ulong with other information in this Officicil Sturement, b�• potentiul inve.stor.s. Factors Which May Affect Pledged Tax Revenues The ability of the Successor Agency to pay principal of and interest on the Bonds clepends on the timely receipt of Pledged Tax Revenues as projecied in the Official Statement (see "TAX REVENUES AND DEBT SERVICE COVERAGE"). Projections of Pledged Tax Revenues are based on the underlying assumptions relating to Tax Revenues of the Project Areas. Tax Revenues allocated to the Successor Agency (which constitute the ultimate source of payment of principal of and interest on the Bonds, as discussed in the Official Statement) are determined by the amount of incremental valuation of taxable property in the Project Areas, taxed at a rate of $1.00 per $100 of assessed value (l%) and the percentage of taxes cotlected in the Yroject Areas, adjusted to reflect prior claims on the Tax Revenues. A number of factors which may affect Tax Revenues, and conseyuently result in a reduction in Pledged Tax Revenues, are outlined below. Reductions in Assessed Value. Tax Revenues allocated to the RPTTF are determined by the amount of incremental taxable value in the Project Areas taxed at a rate of $1.00 per $100 of assessed value (1 �/� ). The reduction of taxable values of property in the Project Areas caused by economic factors beyond the Successor Agency's control, such as relocation out of the Project Areas by one or more major property owners, sale of property to a non-profit corporation exempt from property taxation, or the eomplete or partial destruction of such property caused by, among other eventualities, earthquake or other natural disaster, could cause a reduction in the Pledged Tax Revenues that provide for the repayment of and secure the Bonds. Such reduction of Pledged Tax Revenues could have an adverse effect on the Successor Agency's ability to make timely payments of principal of and interest on the Bonds. Article X[IIA. Pursuant to the California voter initiative process, on June 6, 1978, California vo[ers approved Proposition 13 which added Article XIIIA to the California Cons[itution. This amendment imposed certain limitations on taxes that may be levied against real property to 1% of the full cash value of the property, adjusted annually for inFlation at a rate not exceeding 2�I� annually. Full cash value is determined as of the 1975/76 assessment year, upon change in ownership (acquisition) or when newly contitructed (see "- Proper[y Taxation in California" for a more complete discussion of Article XIIIA). Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by substantial damage, destruction or other factors, and to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a ditiaster and in other special circumstances. Reduction in In,flationary Rate. The annual inflationary adjustment, while limited to 2�Ic, is determined annually and may not exceed the percentage change in the California Consumer Price Index (CCPI). 34 RESOLUTION NO. SA-RDA 061 Because the Revenue and Taxation Code does not distinguish between positive and negative changes in the CCPI used for purposes of the inflation factor, there was a decrease of 0.237% in 2009/10 — applied to the 2010/11 tax roll — reflecting the actual change in the CCP1, as reported by the State Department of Finance. For each fiscal year since Article XIIIA has become effective (the 1978/79 fiscal year), the annual increase for inflation has been at least 2�/o except in nine fiscal years as shown below: Tax Roll Percentage I 981 /82 1.000% 1945l46 1.190 1996/97 1.110 1998/99 1.853 2004/OS 1.867 2010/11 (0.237) 2011/12 0.753 2014/15 0.454 2015/16 1.998 2016/17 1.525 Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based on Proposition 8 do not establish new base year values, and the property may be reassessed as of the following lien date up to the lower of the then-current fair market value or the factored base year value. The State Board of Equalization has approved this reassessment formula and such formula has been used by county assessors statewide. This methodology has been approved by the Fourth District Court of Appeals in a case in which the California Supreme Court declined further review. See "PROPERTY TAXATION IN CALIFORNIA." If Proposition 8 adjustments are made by the County Assessor in future years because of declines in the fair market value of properties caused by the lack of real estate development in the area generally, Pledged Tax Revenues may be adversely affected and as a possible consequence may have an adverse effect on the Successor Agency's ability to pay debt service on the Bonds. Assessment Appeals. Assessment appeals may be �led by propeRy owners seeking a reduction in the assessed value of their property. After the property owner files an appeal, the County's Appeals Board will hear the appeal and make a determination as to whether or not there should be a reduction in assessed value for a particular property and the amount of the reduction, if any. To the extent that any reductions are made to the assessed valuation of such properties with appeals currently pending, or appeals subsequently filed, Tax Revenues, and conespondingly, Pledged Tax Revenues will be reduced. Such reductions may have an adverse effect on the Successor Agency's ability to pay debt service on the Bonds. As of October 2016, there were 189 pending appeals filed within the last five years by property owners within the Project Areas relating to $1,365,543,560 of current year or prior years' assessed value (see "THE PROJECT AREAS - Assessment Appeals"). To the extent these appeals are resolved in favor of the property owaer, Pledged Tax Revenues will be reduced. Earthquake, Flood and Other Risks. Any natural disaster or other physical calamity, including earthquake, may have the effect of teducing Pledged Tax Revenues through reduction in the aggregate assessed valuation within the boundaries of the Project Areas. Wildiires. The City is located in area where wildiires are a common occurrence. While there have not been any wildfires in the City, the occurrence of any naturaf disaster or physical calamity, including wildfires, floods, landslides and earthquakes, could result in damage within the Project Areas. The occurrence of such events could adversely impact the value of real propeny in the Project Areas, Pledged Tax Revenues, the economy of the City, and, accocdingly, the ability of the Redevelopment Agency to make timcly payments of principal of and interest on the Bonds. 35 RESOLUTION NO. SA-RDA 061 Floodin�. Flood zones are identified by the Federal Emergency Management Agency ("FEMA"). FEMA designates land located in a low- to modcrate-risk flood zone (i.e. not in a floodplain) as being within a Non-Special Flood Hazard Area (a "IVSFHA"). FEMA defines an NSFHA as an area that is in a low- to moderate-risk flood zone (i.e. not in a floodplain) and has less than a 1�lc chance of flooding each year. The City is located within a NSFHA and severe, concentrated rainfall could result in localized tlooding and river overflows. The City has adopted a Drainageway, Floodway, and Watercourse Ordinance that regulates development in flood prone areas by preventing construction in such areas. Development is permitted in these areas once floodflow hazards are eliminated. Areas in the City that have received flood control improvements are those subject to potentially destructive floods. Significant capital investments have been made in the community where these threats occur. The City can make no representation that future maps will not be revised to include the City within an area deemed subjeet to tlooding. The occurrence of flooding in the Project Areas could result in a reduction in Pledged Tax Revenues. Such a reduction of Pledged Tax Revenues could have an adverse effect on the ability of the Successor Agency ability to make timely payments of principal and interest on the Bonds. Seismic Factors. Generally, seismic activity occurs on a regular basis in the State. Periodically, the magnitude of a single seismic event can cause significant ground shaking and potential damage to property located at or near the centec of such seismic activity. The occurrence of severe seismic activity in the City could result in damage to roads, infrastructure and other property within the Project Areas. The occurrence of such a severe seismic could have a negative impact on assessed values of taxable values of property in the Project Areas and could result in a reduction in Pledged Tax Revenues. Such a reduction of Pledged Tax Revenues could have an adverse effect on the ability of the Successor Agency ability to make timely payments of principal and interest on the Bonds. Hazardous Substances. An additional environmental condition that may result in the reduction in the assessed value of parcels would be the discovery of a hazardous substance that would limit the beneficial use of a property within the Project Areas. In general, the owners and operators of a property may be reyuired by law to remedy conditions of the property relating to releases or threatened releascs of hazardous substances. The owner (or operator) may be required 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 property within the Project Areas be affected by a hazardous substance would be to reduce the marke[ability and value of the property, perhaps by an amount in excess of the costs of remedying the condition. The Successor Agency can give no assurance that future development will not be limited by these conditions. Certain Bankruptcy Risks. The enforceability of the rights and remedies of the Owners of the Bonds and the obligations of the Successor Agency may become subject to the following: the federal bankruptcy code and applicable bankrup[cy, insolvency, reorgxnization, moratorium, or similar laws relating to or affecting thc enforcement of creditors' rights generally, now or hereafter in effect; usual equitable principles which may limit the specit`ic enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of servicing a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights. Limited Obligations. The Successor Agency has no power to levy and collect property taxes, and any property tax limitation, legislative measure, voter initiative or provision of additional sources of income to Taxing Agencies having the effect of reducing the property tax rate must necessarily reduce the amount of Tax Revenues, and consequently, Pledged Tax Revenues that would otherwise be available to pay the principal of, and interest on the Bonds. 36 RESOLUTION NO. SA-RDA 061 Interpretation of and Future Changes in the Law; Voter Initiatives. The Redevelopment Law and the Dissolution Act are complex bodies of law and their application to the Successor Agency, the Redevelopment Plan and the Project Areas may be subject to different interpretations by the Successor Agency, the Department of Finance, the County Auditor-Controller, Taxing Agencies and other interested parties, including with respect to Pass-Through Agreements and Statutory Tax Sharing obligations and enforceable obligations. Since the effectiveness of the Dissolution Act, the State Department of Finance and various successor agencies have from time to time disagreed about the interpretation of different language contained in the Dissolution Act, as well as whether or not the State DepaRment of Finance has exceeded its authority in rejecting items from ROPS submitted by successor agencies, as evidenced by numerous lawsuits. While the Successor Agency has covenanted in the Indenture to preserve and protect the security of the Bonds and the rights of the Bondholders (see APPENDiX A—"SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE"), any such action taken by the Successor Agency could incur substantial time and cost that may have a detrimental effect on the Successor Agency's ability to timely pay debt service on the Bonds. Moreover, the Successor Agency cannot guarantee the outcome of any such action taken by the Successor Agency to preserve and protect the security of the Bonds and the rights of the Bondholders. In addition to the existing limitations on Tax Revenues described in this Official Statement under "PROPERTY TAXATION IN CALIFORNIA," the California electorate or Legislature could adopt future limitations with the effect of reducing Pledged Tax Revenues payable to the Successor Agency. Real Estate and General Economic Risks. Tax Revenues available for payment of any indebtedness of the Successor Agency are based upon the latest actual assessed values for the 2016/17 Fiscal Year. Redevelopment of reaf property within the Project Areas by the City, as well as private development in the Project Areas, may be adversely affected by changes in general economic conditions, fluctuations in the real estate markets and interest rates, unexpected increases in development costs, changes in or new governmentai policies including governmen[al policies to restriet or control certain kinds of development and by other similar factors. If development and redevelopment activities in the Project Areas encounters significant obstacles of the kind described in the Official Statement or other impediments, the economy of the area in and around the Project Areas could be adversely affected, causing reduced taxable valuation of property in the Project Areas a reduction of the Tax Revenues and a consequent reduction in Pledged Tax Revenues available to repay the Bonds. Due to the decline in the general economy of the region, owners of property within the Project Areas may be less able or less willing to make timely payments of property taxes, causing a delay or reduction of Tax Revenues and consequently a reduction in Pledged Tax Revenues available to repay the Bonds. Recognized Obligation Payment Schedule. The Dissolution Act provides that only those payments listed in the ROPS may be made by the Successor Agency from the funds specified in the ROPS. The Dissolution Act requires successor agencies to prepare and approve, and submit to the successor agency's oversight board and the State Department of Finance for approval, a ROPS pursuant to which enforceable obligations (as defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for each enforceable obligation. Tax Revenues will not be distributed from the RPTTF by [he County Audiror-Controller to the Successor Agency's Redevelopment Obligation Retirement Fund without a duly approved and effective ROPS obtained in sufficient time prior to the January 2 or June 1 distribution dates, as applicable. See "SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules." In the event the Successor Agency were to fail to file a ROPS with respect to any six-month period, the availability of Pledged Tax Revenues to the Successor Agency could be adversely affected for such period. The Successor Agency has covenanted to take all actions required under the Dissolution Act to include scheduled debt service on the Bonds as well as any amount required under the Indenture to replenish the Reserve Account of the Debt Service Fund, in ROPS for each six-month period of a Fiscal Year and to enable the County Auditor-Controller to distribute from the RPTTF to the Successor Agency's Redevelopment Obligation Retirement Fund on each January 2 and June 1 amounts required for the Successor Agency to pay principal of, and interest on, the Bonds coming due in the respective six-month period of a Fiscal Year, including Iisting a reserve on the ROPS to the extent required by the Indenture or when the next property tax allocation is projected to be insufficient to pay all obligations due under the provisions of the Bonds for the next 37 RESOLUTION NO. SA-RDA 061 payment due in the following six-month period (see APPENDIX A—"SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE"). The Dissolution Act also contains certain penalties in the event the Successor Agency does not timely submit a Recognized Obligation Payment Schedule for a Fiscal Year. Specifically, a ROPS must be submitted by the Successor Agency, after approval by the Oversight Board, the County Auditor-Controller, the State Uepartment of Finance, and the State Controller no later than February 1 of each year. If the Successor Agency does not tiubmit an Oversight Board-approved ROPS by such deadlines, the City will be subject to a civil penalty equal to $10,000 per day for every day the schedule is not submitted to the State Department of Finance. Additionally, the Successor Agency's administrative cost allowance is reduced by 25�1e if the Successor Agency does not submit an Oversight Board-approved ROPS by the IOth day after the February 1 deadline with respect to a ROPS for the subsequent annual period. The Successor Agency has submitted all ROPS, duly approved by the Oversight Board, in a timely manner. 2017 Series H-A Bonds Loss of Tax Exemption. As discussed under the caption "LEGAL MATTERS - Tax Matters," interest on the 2017 Series H-A Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the 2017 Series H-A Bonds were executed and delivered as a result of future acts or omissions of the Successor Agency in violation of its covenants contained in the Indenture. Should such an event of taxability occur, the 2017 Series H-A Bonds are not subject to special redemption or any increase in interest rate and will remain outstanding until maturity. In addition, Congress has considered in the past, is currently considering and may consider in the future, legislative proposals, including some that carry retroactive effective dates, that, if enacted, would alter or eliminate the exclusion from gross income for federal income tax purposes of interest on municipal bonds, such as the 2017 Series H-A Bonds. Prospective purchasers of the 2417 Series H-A Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. The Successor Agency can provide no assurance that federal tax law will not change while the 2017 Series H-A Bonds are outstanding or that any such changes will not adversely affect the exclusion of the interest on the 2017 Series H-A Bonds from gross income for federal income tax purposes. If the exclusion of the interest on the 2017 Series H-A Bonds from gross income for federal income tax purposes were amended or eliminated, it is likely that the market price for the 2017 Series H-A Bonds would be adversely impac[ed. IRS Audit of Tax-Exempt Bond Issues. The Internal Revenue Scrvice has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the 2017 Series H-A Bonds will be selected for audit by the Internal Revenue Service. It is also possible that the market value of the 2017 Series H-A Bonds might be affected as a result of such an audit of the 2017 Series H-A Bonds (or by an audit of similar bonds). Secondary Market. There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price. LEGAL MATTERS Enforceability of Remedies The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the Indenture or any other document described in the Official Statement are in many respects dependent upon regulatory and judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions, the remedies provided for under such documents may not be readily available or may be limited. The 38 RESOLUTION NO. SA-RDA 061 various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the extent that the enforceability of certain legal rights related to the Bonds and the Indenture are subject to limitations imposed by bankruptcy, reorganization, insolvency or other similaz laws affecting the rights of creditors generally and by equitable remedies and proceedings generally. Approval of Legal Proceedings Richards, Watson & Gershon, A Professional Corporation, as Bond Counsel, will render opinions with respect to the Bonds which state that the Indenture is a valid and binding obligation of the Successor Agency and enforceable in accordance with its terms. The legal opinions of Bond Counsel will be subject to the effect of any applicable bankruptcy, insolvency, debt adjustment, fraudulent conveyance or transfer, moratorium, reorganization or other similar laws affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public entities in the State. See "APPENDIX F' for the proposed forms of Bond Counsel's opinions with respect to the Bonds. The Successor Agency has no knowledge of any fact or other information which would indicate that the lndenture is not so enforceable against the Successor Agency, except to the extent such enforcement is limited by principles of equity and by state and federal laws relating to bankruptcy, reorganizatian, moratorium or creditors' rights generally. Certain legal matters will be passed on for the Successor Agency by Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, as Successor Agency Counsei. Best Best & Krieger LLP, Riverside, California, will also pass on certain legal matters for the Successor Agency as Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by its counsel, Stradling Yocca Carlson & Ra�th, A Professional Corporation, Newport Beach, California. Fees payable to Bond Co�nsel, Disclosure Counsel and Underwriter's Counsel are contingent upon the sale and delivery of the Bonds. Tax Matters 2017 Series H-A Bonds The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain requirements which must be met subsequent to the issuance and delivery of the 2017 Series H-A Bonds for interest thereon to be and remain excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause interest on the 2017 Series H-A Bonds to be included in gross income for federal income tax purposes retroactive to their date of issue. These requirements include, but are not limited to, provisians which limit how the proceeds of the 2017 Series H-A Bonds may be spent and invested, and generally require that certain investment earnings be rebated on a periodic basis to the United States of America. The Successor Agency has made certifications and representations and has covenanted to maintain the exclusion of the interest on the 2017 Series H-A Bonds from gross income for federal income tax purposes pursuant to Section 103(a) of the Code. In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under existing law and assuming the accuracy of such certifications and representations by the Successor Agency and compliance with such covenants, (i) interest on the 2017 Series H-A Bonds is excluded From gross income for federal income tax purposes under Section 103 of the Code, and (ii) the 2017 Series H-A Bonds are not "specified private aetivity bonds" within the meaning of Section 57(a)(5) of the Code and, therefore, interest on the 2017 Series H-A Bonds is not a preference item for purposes of computing the alternative minimum tax imposcd by Section 55 of the Code. Bond Counsel is also of the opinion that interest on the 201? Series H-A Bonds is exempt from State of California personal income taxes. Bond counsel expresses no opinion as to any other tax consequences regarding the 2017 Series H-A Bonds. Under the Code, a portion of the interest on the 2017 Series H-A Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the 2017 Series H-A Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in 39 RESOLUTION NO. SA-RDA 061 the United States and to a federal tax imposed on excess net passive income oF certain S corporations. The exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of incomc, deduction or credit for certain taxpayers, including financial institutions, ceRain insurance companies, recipients of Social Security and Railroad Retirement benefits, those decmed to incur or continue indebtedness to acquire or carry tax-exempt obiigations, and individuals eligible for the earned income tax credit. Bond Counsel will express no opinion regarding these and other such consequences. Bond Counsel has not undertaken to advise in the future whether any circumstances or events occurring after the date of issuance of the 2017 Series H-A Bonds may affect the tax status of interest on the 2017 Series H-A Bonds. Legislation affecting tax-exempt obligationti is regularly considered by the United States Congress and may also be considered by the State legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the 2017 Series N-A Bonds. No assurance can be given that legislation enacted or proposed, or actions by a court, after the date of issuance of the 2017 Series H-A Bonds, will not contain provisions which could eliminate, or directly or indirectly reduce the benefit of the exclusion of interest on the 2017 Series H-A Bonds from gross income for federal income tax purposes, or have an adverse effect on the market value or marketability of the 2017 Series H-A Bonds. For example, recent presidential and legislative proposals would eliminate, reduce or otherwise alter the tax benefits currently provided to certain owners of state and local government bonds, including proposals that would result in additional federal income tax on taxpayers that own tax-exempt obliga[ions if their incomes exceed certain thresholds. lnvestors in the 2017 Series H-A Bonds should be aware that any such future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the 2017 Series H-A Bonds for federal income tax purposes for all or certain taxpayers. In such event, the market value of the 2017 Series H-A Bonds may be adversely affected and the ability of holders to sell their 2017 Serics H-A Bonds in the secondary market may be reduced. The 2017 Scries H-A Bonds are not subject to special mandatory redemption, and the interest rates on the 2017 Series H-A Bonds are not subject to adjustment, in the event of any such change. Investors should consult their own financial and tax advisors to analyze the importance of these ritiks. Certain requirements and procedures contained or referred to in relevant documents may be changed and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in such documents, upon the advice or with the approving opinion of nationally recognized bond counsel. Bond Counsel expresses no opinion as to any 2017 Series H-A Bond, or the interest thereon, if any such change occurs or action is taken upon the advice or approval of bond counsel other than Richards, Watson & Gershon, A Professional Corporation. If the issue price of a 2017 Series H-A Bond (the first price at which a substantial amount of the bonds of a maturity are to be sold to the public) is less than the stated redemption price at maturity of such 2017 Series H-A Bond, [he difference eonstitutes original issue discount, the accrual of which is excluded from gross income for federal income tax purposes to the same extent as interest on the 2017 Series H-A Bonds. Further, such original issue discount accrues actuarially on a constant yield method over the term of each such 2017 Series H A Bond and the basis of each 2017 Series H-A Bond acquired at such initial offering price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount. The accrual of original issue discount may be taken into account as an increase in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such 2017 Series H-A Bonds. Purchasers who acquire 2017 Series H-A Bonds with original issue discount are advised that they should consult with their own independent tax advisors with respeet to the state and local tax consequences of owning such 2017 Series H-A Bonds. If the issue price of a 2017 Series H-A Bond is greater than the stated redemption price at maturity of such 2017 Series H-A Bond, the difference constitutes original issue premium, the amortization of which is not deductible from gross income for federal income tax purposes. Origina) issue premium is amortized over the period to maturity of such 2017 Scries H-A Bond based on the yield to maturity of that Bond (or, in the case of a 40 RESOLUTION NO. SA-RDA 061 2017 Series H-A Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that 2017 Series H-A Bond), compounded semiannually. For purposes of determining gain or loss on the sale or other disposition of such 2017 Series H-A Bond, the purchaser is required to decrease such purchaser's adjusted basis in such 2017 Series H-A Bond by the amount of premium that has amortized to the date of such sale or other disposition. As a result, a purchaser may realize taxable gain for federal income tax purposes from the sale or other disposition of such 2017 Series H-A Bond for an amount equal to or less than the amount paid by the purchaser for that 2017 Series H-A Bond. A purchaser of that 2017 Series H-A Bond in the initial public offering at the issue price for that 2017 Series H-A Bond who hofds it to maturity (or, in the case of a callable 2017 Series H-A Bond, to its earlier call date that results in the lowest yield on that 2017 Series H-A Bond) will realize no gain or loss upon its retirement. Payments of interest on tax-exempt obligations, including the 2017 Series H-A Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If an owner of a 2017 Series H-A Bond is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes. Prospective purchasers of the 2017 Series H-A Bonds should consult their own independent tax advisers regarding pending or proposed federal and state tax legislation and court proceedings, and prospective purchasers of the 2017 Series H-A Bonds at other than their original issuance at the respective prices indicated on the inside front cover of this Official Statement should also consult their own tax advisers regarding other tax considerations such as the consequences of market discount, as to all of which $ond Counsel expresses no opinion. Bond Counsel's engagement with respect to the 2017 Series H-A Bonds ends with the issuance of the 2017 Series H-A Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Successor Agency or the owners of the 2017 Series H-A Bonds regarding the tax status of interest thereon in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the 2017 Series H-A Bonds, under current IRS procedures, the IRS will treat the Successor Agency as the taxpayer and the beneficial owners of the 2017 Series H-A Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the 2017 Series H-A Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market value of the 2017 Series H-A Bonds. 2017 Series H-B Bonds In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under existing law, interest on the 2017 Series H-B Bonds is exempt from State of Califomia personal income taxes. Bond Counsel expresses no opinion as to any other tax consequences regarding the 2017 Series H-B Bonds. Interest on the 2017 Series H-B Bonds is not excluded from gross income for federal income tax purposes. The legal defeasance of the 2017 Series H-B Bonds may result in a deemed sale or exchange of the 2017 Series H-B Bonds under certain circumstances; owners of the 2017 Series H-B Bonds should consult their own tax advisors as to the federal income tax consequences of such an event. Prospective purchasers of the 2017 Series H-B Bonds should also consult with their own tax advisors as to the federal, state and local, and foreign tax consequences oJ their acquisition, ownership and disposition of the 2017 Series H-B Bonds. If a beneficial owner of a 2017 Series H-B Bond fails to provide its taxpayer identification number or fails to report all interest on its federal income tax returns, payments of principal and interest made on the 2017 Series H-B Bond will be subject to backup withholding. Beneficial owners of the 2017 Series H-B Bonds should consult their tax advisors with respect to this and other tax consequences of ownership of the 2017 Series H-B Bonds. The following discussion is generally limited to "U.S. owners," meaning beneficial owners of 2017 Series H-B Bonds that for United States federal income tax purposes are individual citizens or residents of the 41 RESOLUTION NO. SA-RDA 061 United States, corporations or other entities taxable as corporations created or organized in or under the laws of the United States or any state thercof (including the District of Columbia), and certain estates or trusts with specific connections to the United States. Partnerships holding 2017 Series H-B Bonds, and partners in such partnerships, should consult their own tax advisors regarding the tax consequences of an investment in the 2017 Seriet H-B Bonds (including their status as U.S. owners). Certain of the 2017 Series H-B Bonds (Discount Bonds) may be offered and sold to the public at an original issue discount (OID). OID is the excess of the stated redemption price at maturity (the principal amount) over the "issue price" of such bonds, provided that excess equals or exceeds a statutory de minimis amount (one-quarter of one percent of the bond's stated redemption price at maturity multiplied by the number of complete years to its maturity, or if required by applicable Treasury Regulations, to an earlier call date). The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity are sold pursuant to that offering. For federal income tax parposes, O1D accrues to the owner of a Discoun[ Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shoner permitted compounding interval selected by the owner). The portion of O1D that accrues during the time a U.S. owner owns a Discount Bond (i) constitutes interest includable in the U.S. owner's gross income for federal income tax purposes and (ii) is added to the U.S. owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale, or other disposition of the Discount Bond. The effect of OID is to accelerate the recognition of taxable income during the term of the Discount Bond. Certain of the 2017 Series H-B Bonds (Premium Bonds) may be offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. If a U.S. owner purchaties a Premium Bond, that owner will be considered to have purchased such a Premium Bond with "amortizable bond premium" equal in amount to such excess. The U.S. owner may elect (and that election will apply to all securities purchased at a premium by such U.S. Owner), in accordance with the applicable provisions of Section 171 of the Code, to amortize that premium as an offset to the interest payments on the Premium Bond using a constant yield to maturity method over the remaining term of the Premium Bond (or, if required by applicable Treasury Regulations, to an earlier call date). Pursuant to Section 67(b)(1 1) of the Code, the amortizativn of that premium is not considered a miscellaneous itemized deduction. Any amortization of bond premium will reduce the basis of the Premium Bond pursuant to Section 1016(a)(5) of the Code. Ownen of Discount or Premium Bonds (or book entry interests in them) should consult their own tax advisers as to the determination for federal tax purposes of the amount of OID or amortizable bond premium properly accruable in any period with respect to the Discount or Premium Bonds and as to other federal tax consequences and the [reatment of O1D and amortizable bond premium for purposes of state or local taxes on (or based on) incomc. General information reporting requirements will apply to payments of principal and interest made on 2017 Series H-B Bonds and the proceeds of the sale of 2017 Series H-B Bonds to non-corporate owners, and "backup withholding" at a rate of 287c will apply to such payments if the owner fails to provide an accurate taxpayer identi�cation number in the manner required or fails to report all interest required to be shown on its federal income tax returns. A bene�cial owner of 2017 Series H-B Bonds that is a U.S. owner generally can obtain complete exemption from backup withholding by providing a properly completed 1RS Form W-9 (Request for Taxpayer ldentification Number and Certification). Eor taxable years beginning after December 31, 2012, a U.S. owner that is an individual or estate, or a trust not included in a special class of trust that is exempt from such tax, is subject to a 3.8 pereent Medicare tax on the lesser of (i) the U.S. owner's "net investment income" for the taxable year, and (ii) the excess of the U.S. owner's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and $250,000, depending on the individual's circumstances). A U.S. owner's net investment income generally includeti interest income on, and net gains from the disposition of, 2017 Series H-B Bonds, unless such interest income or net gains are derived in [he ordi�ary course of a trader business 42 RESOLUTION NO. SA-RDA 061 (other than a trader business that consists of certain passive or trading activities). A U.S. owner that is an individual, estate, or trust, should consult its [ax advisor regarding the applicability of the Medicare tax. 2017 Series H-B Bonds — Non-U.S. Owners Under [he Code, interest and OID on any 2017 Series H-B Bond whose beneficial ownec is not a U.S. owner are generally not subject to United States income tax or withholding tax (including backup withholding) if the non-U.S. owner provides the payor of interest on the 2017 Series H-B Bonds with an appropriate statement as to its status as a non-U.S. owner. This statement can be made on IRS Form W-8BEN or a successor form. If, however, the non-U.S. owner conducts a trade or business in the United States and the interest or OID on the 2017 Series H-B Bonds held by the non-U.S. owner is effectively connected with such trade or business, that interest or OID will be subject to United States income tax but will generally not be subject to United States withholding tax (including backup withholding). The foregoing is a brief summary of certain federal income tax consequenczs to a non-U.S. owner. Non-U.S. owners should consult their own tax advisors regarding the tax consequences of an investment in the 2017 Series H-B Bonds. 2017 Series H-B Bonds — Foreign Account Tax Compliance Act The Foreign Account Tax Compliance Act ("FATCA") generally imposes a 30 percent withholding tax on interest payments and proceeds from the sale of interest-bearing obligations for payments made after the relevant effective date to (i) certain foreign financial institutions that fail to certify their FATCA status, and (ii) investment funds and non-financial foreign entities if certain disclosure requirements related to direct and indirect United States shareholders and/or United States account holders are not satisfied) Under applicable Treasury Regulations, the FATCA withholding tax of 30 percent will generally be imposed, subject to certain exceptions, on payments of (i) interest on 2017 Series H-B Bonds on or after July I, 2014, and (ii) gross proceeds from the sale or other disposition of other 2017 Series H-B Bonds on or after January l, 2017, where such payments are made to persons described in the preceding paragraph.) ln the case of payments made to a"foreign financial institution" (generally including an investment fund), as a beneficial owner or as its intermedi�-y, the FATCA withholding tax generally will be imposed, subject to certain exceptions, unless such institution (i) enters into (or is otherwise subject to) and complies with an agreement with the United States government (a "FATCA Agreement"), or (ii) is required by and complies with applicable foreign law enacted in connection with an intergovernmental agreement between the United States and a foreign jurisdiction (an "IGA"), in either case to, among other things, collect and provide to the United States or other relevant tax authorities certain information regarding United St�tes account holders of such institution. ln the case of payments made to a foreign entity that is not a financial institution (as a beneficial owner), the FATCA withholding tax generally will be imposed, subject to certain exceptions, unless sueh entity either provides the withholding agent with a certification that it does not have any "substantial" United States owner (generally, in a specified United States person that directly or indirectly owns more than a specified percentage of such entity) or identifies its "substantial" United States owners. If 2017 Series H-B Bonds are held through a foreign financial institution that enters into (or is otherwise subject to) a FATCA Agreement, such foreign financial institution (or, in ceRain cases, a person paying amounts to such foreign financial institutions) generally will be required, subject to certain exceptions, to withhold the 30 percent FATCA tax on payments of dividends or the items described above made to (i) a person (including an individual) that fails to comply with certain information requests, or to relies (ii) a foreign financial institution that has no[ entercd into (and is not otherwise subject to) a FATCA Agreement and that is not required to comply with FATCA pursuant to applicable foreign law enacted in connection with an IGA. Coordinating rules may limit duplicative withholding in cases where the withholding described above in "Non-U.S. Owners" or back-up withholding described above also applies. If any amount of, or in respect of, United States withholding tax were to be deducted or withheld from payments on 2017 Series H-B Bonds as a result of a failure by an investor (or by an institution through which an investor holds the 2017 Series H-B Bonds) to comply with FATCA, none of the Saccessor Agency, the Trustee, 43 RESOLUTION NO. SA-RDA 061 any paying agent or bond registrar nor any other person would, pursuant to the [erms of the 2017 Serics H-B Bonds, be required to pay additional amounts with respect to any 2017 Series H-B Bond as a result of the deduction or withholding of such tax. Non-U.S. Owners should consult their tax advisors regarding the application of FATCA to the ownership and disposition of 2017 Series H-B Bonds. Form of Bond Counse[ Opinions A copy of each of the proposed focros of Bond Counsel's final approving opinions with respect to the 20I7 Series H-A Bonds and the 2017 Series H-B Bonds are attached hereto as Appendix F. No Litigation There is no action, suit or proceeding known to the Successor Agency to be pending and notice of which has been served upon and received by the Successor Agency, or threatened, restraining or enjoining the execution or delivery of the Bonds or the lndenture or in any way contesting or affecting the validity of the foregoing or any proceedings of the Suceessor Agency taken with respect to any of the foregoing. CONCLUDING INFORMATION Ratings on the Bonds S&P Global Ratings has assigned an uninsured rating of "_" to the Bonds. Such rating reflect only the views of S&P Global Ratings, and any desired explanation of the significance of such ratings may be obtained from such rating agency at the following address: S&P Global Ratines, 55 Water Street, New York, New York 10041, (212) 438-2000. Generally, a rating agency bases its rating on the information and materials furni�hed to it and on investigations, studies and assumptions of its own. There is no assurance such ratings wil! continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Bonds. Except as otherwise required in the Continuing Disclosure Certificate, the Successor Agency undertakes no responsibility either to bring to the attention of the owners of any Bonds any downward revision or withdrawal of any rating obtained or to oppose any such revision or withdrawal. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. The Municipal Advisor The Successor Agency has retained Del Rio Advisors, LLC of Modesto, California, as municipal advisor (the "Municipal Advisor") in connection with the offering of the Bonds. All financial and other information presented in this Official Statement has been provided by the Successor Agency and others from their records. Unless otherwise footnoted, the Municipal Advisor takes no responsibility for the accuracy or completeness of the data provided by the Successor Agency or others and has not undertaken to make an independent verification or does not assume responsibility ior the accuracy, completeness, or faimess of the information contained in this Official Statement. The Municipal Advisor has assisted the Successor Agency with the structure, timing and terms for the sale of the Bonds. T'he Municipal Advisor provides municipal advisory services only and does not engage in the underwriting, marketing, or trading of municipal securities or other negotiable instruments. The fee of the Municipal Advisor is not contingent upon the successful closing of the Bonds. Continuing Disclosure The Successor Agency wil) provide annually certain financial information and data relating to the Bonds by not later than April 1 in each year commencing April l, 2018 (the "Annual Report"), and to provide notices of the occurrence of certain other listed events. Willdan Group, Inc. will act as Dissemination Agent. The 44 RESOLUTION NO. SA-RDA 061 specific nature of the information to be contained in the Annual Report or the notices of listed events and certain other terms of the continuing disclosure obligation are found in the form of the Successor Agency's Disetosure Certificate attached in APPENDIX E—"FORM OF CONTINUING DISCLOSURE CERTIFICATE." The Successor Agency entered into previous continuing disclosure undertakings with respect to its bond obligations. [A review of compliance with continuing disclosure undertakings for filings required by the Successor Agency and its related entities within the past five years indicates that the Successor Agency and its related entities failed to [imely disclose one rating change in 2013. The Successor Agency is currently in compliance with its continuing disclosure obligations. The Successor Agency has adopted continuing disclosure compliance policies.] Underwriting The Bonds were sold to Stifel, Nicolaus & Company, Incorporated (the "Underwriter"), who is offering the Bonds at the prices set forth on the inside cover pages hereof. The initial offering prices may be changed from time to time and concessions from the offering prices may be allowed to dealers, banks and others. The Underwriter has purchased the 2017 Series H-A Bonds at a price equal to $ , which amount represents the principal amount of the 2017 Series H-A Bonds plus a net original issue premium of $ , less an Underwriter's discount of $ . The Underwriter has purchased the 2017 Series H-B Bonds at a price equal to $ , which amount represents the principal amount of the 2017 Series H-B Bonds less an original issue discount of $ , less an Underwriter's discount of $ . The Underwriter will pay certain of its expenses relating to the offering from the Underwriter's discount. Additional I nform ation The summaries and references contained in the Official Statement with respect to the Indenture, the Bonds, statutes and other documents, do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute and references to the Bonds are yualified in their entirety by reference to the form hereof included in the Indenture. Copies of this document may be obtained after delivery of the Bonds from the Successor Agency at 73510 Fred Waring Drive, Palm Desert, California 92260. References All statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Successor Agency and the purchasers or Owners of any of the Bonds. 45 RESOLUTION NO. SA-RDA 061 Execution The execution and delivery of this Official Statement by the Executive Director of the Successor Agency has been duly authorized by the Successor Agency. SUCCESSOR AGENCY TO THE PALM UE:SERT REDEVELOPMENT AGENCY : Lauri Aylaian, Executive Director 46 RESOLUTION NO. SA-RDA 061 APPENDIX A SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE A-1 RESOLUTION NO. SA-RDA 061 APPEiYUIX B CITY OF PALM DESERT INFORMATION GENERAL ECONOMIC DATA CONCERN[NG TNE CI1'Y OF 1'ALM DESERT AIYD THE COUNTY OF RIVERSIUE The fo!lowin�> infonnation concerning !he City oJPulm Desert, the Cvernty of Riverside and surrnz�r�ding a��eas is included only, fa• !he purpose of stspplying generU! information regardinh� !he community. O��erview "I'he City of Palm Desert (the "City'), incorporated in November 26, 1973 as a general law city, became a charter city through the adoption of Ordinanee 858 by the City Council on January 8, 1998. The City is (ocated in the Coachella Valley and is approximately mid-way between the cities of Indio and E'alm Springs, 1 17 miles east of I.os Angeles, 1 18 miles northeast of San Uiego and 515 miles southeast of San Francisco. 7'he City occupies an area of approximately 26 square miles. F.levation of the City is 243 feet and thc mean tcmperature is 73.1 degrees. Fxcept in summer, the weather is mild and annual average rainfall is 3.38 inches. According to the State Uepartment of Finance, the City population as of January 1, 2016 was approximately 49,35�. Govcrnment "I'he City Council is comprised of tive members, elected at large for four-year staggered terms every tti�o years. "I'he general municipal election is conducted in November of even-numbered years, consolidated with the Statewide General F,Icction and councilmembers are sworn in and take offce at the �rst meeting in December t��llo�ving cach elcction. The City Council selects one of its tnembers to serve as Mayor for a one-year term and appoints a City Manager to conduct the day to day busincss of the City and the City Clerk. The City llttorncy is appointed by City Council. The City operates as "Contract City" utilizing, primarily, agrecmcnts with other governmental entities, private companies and individuals to provide services. Contracted services include police and fire protection provided through the County, animal control, health services, Icgal services and landscape maintenancc. Tablc B-1 CITY OF PALM DESERT CITY COUNCII, MEMBERS Namc Office Jan Harnik Mayor' Sabby Jonatl�an Mayor Pro 'I'cm� Kathlecn Kelly Council Membcr-elect Gina Nestande Council Member-elect Susan Marie Webcr Council Membcr Population Betwecn 2010 and 2016, the city's population inereased by a total of 890 or approximately 1.83%. In addition to permanent residents, the city has approximatcly 32,000 scasonal residential residents who live thrcc ' Subject to City Council reorganization after election certification on December 8, 2016. B-1 RESOLUTION NO. SA-RDA 061 to six months in the City, primarily during the winter months. Table B-2 illustrates the popuiation of the City, the County and the State for 1990, 2000, and 2010 through 2016. Table B-2 CITY OF PALM DESERT POPULATION ESTIMATES The State of California, County of Riverside and the City of Palm Desert (As of January 1 of Each Year) Year (January 1) 1990"' 2000` �' 2010�" 2011 2012 2013 2014 2015 2016 City of Palm DeseM 23,252 41,155 48,445 48,957 48,924 48,282 48,494 48,835 49,335 Riverside Countv 1,170,413 1,545,387 2,189,641 2,212,874 2,239,715 2,266,549 2,291,093 2,317,924 2,347,828 State of California 29,758,213 33,873,086 37,253,956 37,536,835 37,881,357 38,239,207 38,567,459 38,907,642 39,255,883 �� AsoCApril l. Sources: United Statcs Department of Commerce, Bureau of the Census for 2010 and State of California Department of Finance for remaining years. Labor Force and Employment The main sources of revenue in the City are derived from tourism and sales tax. Historically, the unemployment rate in the City has been lower than that for the County and the State. B-2 RESOLUTION NO. SA-RDA 061 Table B-3 table represents the labor patterns in the City, the County, the State, and the United States from 2012 through 2016. Table B-3 CITY OF PALM DESERT, RIVERSIDE COUNTY, STATE OF CALIFORNIA AND UNITED STATES CIVILIAN LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Unemployment Year and Area Labor Force Ematoyment Unemplovment Rate 2012 City 21,800 20,000 1,800 8.4 I �I� County 988,600 873,600 1 I 5,100 11.6 State 18,551,400 16,627,800 1,183,200 I 0.4 United States 154,975,000 142,469,000 12,506,000 8.1 2013 City 22,200 20,600 1,600 7.1 County 998,800 899,900 98,900 9.9 State I 8,670,100 17,001,000 1,669,000 8.9 United States 155,389,000 143,929,000 I 1,460,000 7.4 2014 City 22,600 21,300 1,300 5.8 County 1,017,000 933,800 83,200 8.2 State 18,827,900 17,418,000 1,409,900 7.5 United States 155,922,000 146,300,000 9,617,000 6.2 2015 City 23,200 22,000 1,100 4.8 County 1,035,200 965,000 69,600 6.7 State 18,981,800 17,798,600 I,183,200 62 United States 157,130,000 148,834,000 8,296,000 5.3 2016 City''`' 23,500 22,400 1,100 4.9 County`'' 1,051,100 978,900 72,200 6.9 Statc''' 19,357,900 18,281,600 I,076,�i00 5.6 United States"' 159,907,000 151,968,000 7,939,000 5.0 �� As of Septemher. �z� As of August. Sourccs: Statc of California Employmcnt Dcvclopmcnt Dcpartment and U.S. Dcpartmcnt uf Labor, Burcau c�f Labur Statistics. � RESOLUTION NO. SA-RDA 061 Table B-4 CITY OF PALM DESERT MAJOR EMPLOYERS (As of October 2015) l. 2, 3. 4. 5. 6. 7. 8. 9. 10 Companv JW Marriott — Dcscrt Springs Resort & DS Villas Univcrsal Protection Services Securitas — Security Service USA Avida Caregivers — P. Desert Sunshinc Landscape Walmart Macys CVWD Bighorn Golf Club COSICU ProducdService Commercial Hotel, Timeshare & Retail Security Scrvices Security Scrvices Home Healthcarc Gardcning/Landscaping Scrvicc Rctail/Store Rctail/Store Municipal Watcr District Golf Course/Country Club Retail Warehouse Number of Emalovees 2,304 1,500 7UU 550 500 350 350 325 250 250 Sources: City of Palm Desert Comprehensive Annual Financial Report for Fiscal Ycar ended June 30, 2015. Commercial Activity A sales tax is imposed on retail sale or consumption of personal propeny. Sales tax revenues are determined by the total taxable transactions within a jurisdiction and distributed by the State Board of Equalization to the jurisdiction where the sale took place. Sales taxes collected from merchants with no permanent place of business (i.e., manufacturers, construction contractors, etc.) are accumulated to a Countywide or State-wide (out-of-state businesses) pool and distributed ro cities and counties in proportion to their collection from all sales taxpayers. The value and volume of these taxable transactions are dependent on economic conditions and o[her factors. Such factors included the level of inflation affecting the price of goods and services subject to the sales tax, the rate of population growth in the general area, the characteristics of retail developments, such as the relative size of market service areati, the sensitivity of the types of businesses within the City to changes in the economy, and competing retail establishments outside the City. A deterioration of economic conditions and other factors influencing taxable sales generated in the City, may reduce the City's sales tax revenues. The table below summarizes taxable transactions in the City for calendar years 2010 through 2014. � RESOLUTION NO. SA-RDA 061 Table B-5 CITY OF PALM DESERT TAXABLE RETAIL SALES DATA Calendar Years 2010 to 2014 ($ in 000's) Retail and Food Services Mc�tor Vchicic and Parts Dcalers Home Furnishings and Appliance Stores Bldg. Matrl. and Gardcn Equip. and Supplics Fuud and Bcvcrage Stores Gasolinc Stations Cluthing and Clothing Accessorics Stons General Merchandise Stores Food Scrviccs and Drinking Places Other Retail Group Total Rctail and Food Services All Other Outicts Total All Outlets "' Last year available. Sourccs: State Board of Equalization. Utilities 201U $ 17,472 95,561 63,999 47.242 70,51 Z 172.869 �40,762 I 50,093 I 32,54$ � I ,091,059 175 775 $1.266.834 2011 $ 19,1IS 9 I ,246 68,214 48,002 90,43 t 193,087 366.913 162,864 ] 42,704 $1,182.576 201.633 $1,384.208 2012 6 20.�09 95,997 76.241 48,776 92,684 202,706 379,856 174.101 1 S 2,229 � l ,242,899 $ 228,083 $ I ,470.982 2013 3 22,9SS 95,108 77,7I4 56,448 93,064 2l 1,465 382,224 188,056 I 56,276 $1.283.310 � 247.203 $ I .53O,S l 2 2014�" $ 22.78() ioa,5�x 80,577 6R,i7R 2i7,049 25�,187 3S6,i66 I 97, 374 168,455 $1.338.7�4 $ 256.020 $1.594,753 Water, sewage treatment and wastewater disposal are provided by the Coachella Valley Water District. Southern California Gas Company supplies natural gas to the City and electric power is provided by the Southern California Edison Company_ Telephone service is available through Frontier. Cable television service is provided by Spectrum. Transportation Inter-City transporta[ion is provided by Sunline Bus System which provides service throughout [he entire Coachella Valley. The City's central highways are California Highway 11 l and 74 which connect to US Interstate 10 and to California Highway 62 and 86. Shipping is provided by numerous truck carriers which have overnight service to Los Angeles, San Francisco, San Diego and Phoenix. Rail transportation is provided by the Southern Pacific Railroad located in Indio, 10 miles eatit of the City, and by Amtrak, which has two stations located in Coachella Valley. A ful) service airport is located in Palm Springs, 12 miles northwest of the City, with approximately seven carriers providing service. The airport has an 8,500 foot runway and general aviation facilities. Thcre is also a private airport in Bermuda Dunes, eight miles northeast of the City. Community Services The City of Palm Desert provides both police and fire protection through contrac[s with the County of Riverside. The Riverside County Public Library System provides library se�vices to the City. The CitylCounty also operates a 43,000 square foot public library on the College of the Desert campus which is jointly used by the public and the Collcge of the Desert. B-5 RESOLUTION NO. SA-RDA 061 Income The following table shows per capita income for the City, County, and State for calendar years 2006 through 20I5. Table B-6 CITY OF PALM DESERT PER CAPITA PERSONAL INCOME�� County of Riversidc and Statc of California Year 2006 2007 2008 2009 2010 2U11 2012 2013 2014 20i5 City of Palm Desert $42,339 42,867 47,9 i 9 48,069 48,286 51,940 52,336 52,61:i 52,906 53,031 County of Riverside $3 l ,203 31,586 31,497 29.869 29,753 31,()73 31,879 32.503 33,590 n/a California $41,693 43,182 43,786 41,588 42,411 44,852 47,614 48, l 25 49,985 n/a Saurce: City of Palm Desert Comprchensive Annual Financial Report for Fiscal Year ended lune 30, 2015; L'.S. Department of Commerce Burcau of Economic Analysis. Education, Culture and Recreation Public school education is provided by the Desert Sands Unified School District (the "School District"). The School District provides preschool through grade 12 education to students living in the City and the communities of Indian Wells, Indio, La Quinta, Rancho Mirage and Bermuda Dunes. The School District and operates seven elementary schools, six middle schools, three comprehensive high schools, one independent study alternative school and a continuation high school. The College of the Desert, the Coachella Valley Community College is located in the Ciry. A satellite campus of California State University, San Bemardino ("CSUSB") is located approximately five miles northeast of City Hall. In 2002, the first building on the campus, the Mary Stuart Rogers Gateway Building, was constructed and occupied. In 2005 two additional buildings were constructed and occupied which included a three story classroom building and the Indian Wells Theater, a 300-seat performing arts center. The University of California, Riverside has also established a campus in the City. The UCR Palm Desert Graduate Center opened as a permanent satellite campus in 2005, when conswction was completed on the approximately 21,200 square foot Richard J. Heckmann International Center for Entrepreneuria] Management and an approximately 23,600 square foot educational facility. Cultural facilities in the City include the 1,127 seat McCallum Theater for the Performing Arts iocated in Bob Hope Cultural Center, the 1,200 acre Living Desert Zoo and Gardens, the Palm Springs Art Museum which includes a 8,400 syuare foot exhibit building and a 250,000 square foot sculpture garden and the Art in Public Places (a museum without walls featuring more than 130 works of art throughout the City). Recreation programs for residents of the City and other neighboring communities are offered through the Coachella Valley Recreation and Park District (the "Park District"). The Park District provides recreational activities and programs ranging from tiny tots programs, kids clubs and summer day camp, to dance, health and �tness and music instruction, to the senior gamcs. I: . RESOLUTION NO. SA-RDA 061 The Desert Willow Golf ResoR, two champion�hip 18-hole, public golf course, is located on approximately 540 acres in the northcrn area of the City. This golf course also features a 33,000 square foot clubhouse with restaurant, dining and banquet facilities. The City also is home to iive other public golf courses and resorts and 20 private or semi-private golf clubs and resorts. B-7 RESOLUTION NO. SA-RDA 061 APPENDIX C FISCAL C0IVSULTANT'S REPORT C-1 RESOLUTION NO. SA-RDA 061 APPENDIX D CITY OF PALM DESERT AUDITED FINANC[AL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 �� RESOLUTION NO. SA-RDA 061 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE This CONTINUING DISCLOSURE CERTIFICATE (the "Disclosure Certificate") is executed and delivered by the Successor Agency to the Palm Desert Redevelopment Agency (the "issuer') in connection with the issuance of its Tax Allocation Refunding Bonds, 2017 Series H-A and Taxable Tax Allocation Refunding Bonds, 2017 Series H-B (the "Bonds"). The Bonds are being issued pursuant to an Indenture, dated as of 1, 2017, by and between U.S. Bank National Association, as trustee (the "Trustee") and the Issuer (the "Indenture"). The Issuer covenants and agrees as follows: Section 1. Purpose of this Disclosure Certificate. This Disclosure Certiiicate is being executed and delivered by the Issuer for the benefit of the Beneficial Owners and bondholders in order to assist the Participating Underwriter in complying with Securities and Exchange Commission Rule 15c2�12. Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure CeRificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annuul RepurP' shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial OK�ner" 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. "Disseminution Agent" shall mean Willdan Group, Inc., or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. In the absence of such a designation, the Issuer shall act as the Dissemination Agent. "EMMA" or "Electronic Municipa! Market Access" means the centralized on-line repository system located at www.emma.msrb.org for documents filed with the MSRB pursuant to the Rule, such as official statements and disclosure information relating to municipal bonds, notes and other securities as issued by state and local governments. "Listed Events" shall mean any of the events listed in Section 5(a) and (b) of this Disclosure Certificate. "MSRB" means the Municipa! Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as [he sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information which may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. "Participating Under-�vriter" shall mean Stifel, Nicolaus & Company, Incorporated, or any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Stute" shall mean the State of California. "State Repository" shall mean any public or private repository or entity designated by the State as a state repository for the purpose of the Rule. As of the date of this Certificate, there is no State Repository. E-1 RESOLUTION NO. SA-RDA 061 Section 3. Provision of Annual RepoRs. (a) Delivery of Annual Report to MSRB. The Issuer shail, or shall cause the Dissemination Agent to, not later than April 1 in each year, commencing April 1, 2018 and to file with EMMA, in a readable PDF or other electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate; provided however, that the first Annual Report due on April 1, 2018 shall consist solely of a copy of the Official Statement. 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 Certificate; provided, that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. (b) Chunge of Fiscul Year. If the lssuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(d). (c) Delivery of Annual Repnrt to Dissemination Agent. Not later than five days prior to [he date specified in subsection (a) for providing the Annual Report to EMMA, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall notify the Issuer. (d) Report of'Non-Compliance. If the Issuer is unable to provide an Annual Report by the date required in subsection (a), the Dissemination Agent shall send a notice to EMMA in a timely manner in an electronic format prescribed by the MSRB. (e) Ani�uul Compliunce Certification. The Dissemination Agent shall, if the Dissemination Agent is other than the Issuer, file a report with the Issuec certifying that the Annual Report has bccn provided pursuant to this Disclosure Certificate, sta[ing the date it was provided. Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate hy reference the following: (a) A�dited financial statements of the Issuer for the preceding fiscal year, prepared in accordance with the laws of the State and including all statements and information prescribed for inclusion therein by the Controller of the State. If the Issuer's audited financial statements are not available by the time the Annual RepoR is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual RepoR when they become available. The audited Financial Statements of the Issuer may be included in the City of Palm Desert's Comprehensive Annual Financial Report if no separatc Financial Statement is prepared for the Issuer. (b) To the cxtent not includcd in the audited final statement of the Issuer, the Annual Report shall also include the foilowing information for the prior fiscal year, insofar as available from public rccords: (i) Table No. 3- Historical Assessed Valuations; (ii) Table No. 4- Ten Largest Taxpayers; (iii) Table No. 6— Projected Tax Revenues with regard to current riscal year revenue;and (iv) Table No. 8- Debt Service Coverage with regard to current fiscal year revenue. E-2 RESOLUTION NO. SA-RDA 061 (c) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which are avaiiable to the public on the MSRB's Internet web site or filed with [he Securities and Exchange Commission. The Issuer shall clearly identify each such other document so included by reference. lf the document included by reference is a final official st�tement, it must be available from EMMA. (d) In addition to any of the information expressly required to be provided under paragraph (b) of this Section 4, the Issuer shall provide such further information, if any, as may be necessary to make [he specifically required statements or information (as set forth herein), in the light of the circumstances under which they are made, not misleading. Section 5. Reportin�of Significant Events. (a) Repnrtahle Events. The Issuer shatl, or shall cause the Dissemination (if not the Agency) to, give notice of the occurrence of any of the following events with respect to the Bonds (in accordance with (e) below): (1) Principal and interest payment delinquencies. (2) Unscheduled draws on debt service reserves reflecting �nancial difficulties. (3) Unscheduled draws on credit enhancements reflecting financial difficulties. (4) Substitution of credit or liquidity providers, or their failure to perform. (5) Defeasances. (6) Rating changes. (7) Tender offers. (8) Bankruptcy, insolvency, receivership or similar event of the obligated person. (9) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or iinal determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (b) Muteriul Reportuble Events. The Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) Non-payment related defaults. (2) Modifications to rights of security holders. (3) Bond calls. (4) The relcasc, substimtion, or sale of property securing repayment of thc securities. (5) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such E-3 RESOLUTION NO. SA-RDA 061 an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms. (6) Appointment of a successor or additional trustee, or the change of name of a iCUSICC. (c) Determination of Muteriali►}� of Listed 6vents. Whenever the Issuer obtains knowledge of the occurrence of a Listed Event listed under Section 5(b), the Issuer shall as soon as possible determine if such event would be material under applicable federal securities laws. (d) Notice tv Disseminution Agent. If the Issuer has occurrence of a Listed Event listed under Section 5(b) would bE securities laws, the Issuer shall promptly notify the Dissemination writing. Such notice shall instruct the Dissemination Agent to subsection (d). determined that knowledgc of the � material under applicable federal Agent (if other than the Issuer) in report the occurrence pursuant to (e) Notice of Listed Event,s. The Issuer tihall file, or cause the Dissemination Agent ta file, a notice of the occurrence of a Listed Event listed in Section 5(a), and, listed in Section 5(b), if material, with EMMA, in a readable PDF or other electronic format as prescribed by the MSRB, in a timely manner not in excess of ten (10) business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(5) and (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Owners of affected Bonds. Section 6. Identifyin� Informa[ion for Filin�s with EMMA. All documents provided to �MMA under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB. Section 7. Termination of Reportin� Obli a� tion. The lssuer's obligations under this Disclosure Certificate shall terminate upon the defeasance, prior redemption or payment in full of all of [he Bonds. Sertion 8. Dissemination A ent. (a) Appointment of Dissemination Agent. The initial Disscmination Agent shall be Willdan Group, Inc. The Issuer may, from time to time, appoint or engage a different Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor Dissemination Agent. 1f the Dissemination Agent is not the Issuer, the Dissemination Agent shall not be responsible in any manner for the content of any notice or rcpvrt prepared by the Issuer pursuant to this Uisclosure Certiiicate. (b) Compensutinn of Disseminution Agent. The Dissemination Agent, if not the Issuer, shalf be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule of fees as agrced to between the Dissemination Agent and the Issuer from time to time and all expenses, Iegal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the Issuer, Owners or Beneficial Owners, or any other party. The Dissemination Agent may rely and shall be protected in acting or cefraining from acting upon any direction from the Issuer or an opinion of nationally recognized bond counsel. The Dissemination Agent may at any time resign by giving written notice of such resignation to the Issuer. Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate (and the Uissemination Agcnt shall agree to any `$' amendment so requested by the [ssucr that does not impose any greater duties or risk of liability on the Dissemination Agent), and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: E-4 RESOLUTION NO. SA-RDA 061 (a) Change in Circumstances. If the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) Compliance as of Isscre Dute. The undertaking, as amended or taking into account such waiver, would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) Consent of Ow•ners; Non-impairment Opinion. The amendment or waiver either (i) is approved by the Owners in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners. If this Disclosure Certificate is amended or any provision of this Disclosure Certificate is waived, the Issuer shall describe such amendment or waiver in the next following Annual Report and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presen[ed by the Issuer. in addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(d), and (ii) the Annual Report for the year in which the change is made should present a comparison (in nanative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate 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 Certificate. If the lssuer 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 Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Bondholder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by couR order, to cause the lssuer to comply with its obligations under this Disclosure Certificate. The sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certifieate shall be an action to compel performance. Section 12. Duties, Immunities and Liabilities of Dissemination A e�nt. The Dissemination Agent shall have only such duties as are specificaliy set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of [he disclosure of information pursuant to the Disclosure Certificate or arising out of or in the exercise of performance of its powers and duties hereunder, including the costs and expenses (including attomeys' 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 have no duty of obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary eapacity for the Issuer, the owner of a Bond, or any other party. The Trustee shal) have no liability to any party for any monetary damages or other financial liability of any kind whatsoever related to or arising from any breach of this Disclosure Certificate. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dissemination Agent may rely and shall be protected in acting E-5 RESOLUTION NO. SA-RDA 061 or refraining from acting upon any written direction from the Issuer or an opinion of Special Counsel. The obligations of the tssuer under this Section shall survive resignation or removal of the Dissemination Agent or the Trustee and payment of the Bonds. Section 13. Beneficiaries. This Uisclosure Certificate shall inure solely to the benefit of the Issuer, the Uissemination Agent, the Participating Underwriter and Owners and Beneficial Uwners from time to time of thc Bonds, and shall create no rights in any other person or entity. Dated: , 2017 SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY : ACCEPTED BY DISSEM1NATiON AGENT By: _ Tide: Lauri Aylaian, Executive Director E-6 RESOLUTION NO. SA-RDA 061 APPENDIX F PROPOSED FORMS OF BOND COUNSEL OPINIONS F-1 RESOLUTION NO. SA-RDA 061 APPENDIX G THF, BOUK-ENTRY SYSTEM The following descriplion of the Depository Trust Company ("DTC"), the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on thc foregoing information with respect [o such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be. Neither the issuer of the Bonds (the "Issuer") nor [he trustee, fiscal agent or paying agent appointed with respcct to the Bonds (the "Agent") take any responsibility for the information contained in this Appendix. No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other coniirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as [he registered owner of the Bonds, or that they will so do on a timcly basis, or that DTC, DTC Participants or DTC [ndirect Participants will act in thc manner described in this Appendix. 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. 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securi�ies registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 mitlion of prineipal amount, and an additional certi�cate will be issued with respect to any remaining principal amount of such issue. 2. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, u"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"c(earing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's paRicipants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, thro�gh electronic computerized book-entry transfers and pledges between Direct Participants' aecounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is � wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DT'C system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and cicaring corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC G-1 RESOLUTION NO. SA-RDA 061 can be found at www.dtcc.com. The information contained on such Internet site is not incorporated herein by reference. 3. Purchases of Securities under the DTC system must be made by or [hrough Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("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. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of [heir holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC �re registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. 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 Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by loi [he amoun[ of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MM[ Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Bene�cial Owners will be governed by standing instroctions 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, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend G-2 RESOLUTION NO. SA-RDA 061 payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payment� to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirec[ Participants. 9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required ro be printed and delivered. 10. Issuer may decide to discontinue use of the system of book-entry transfers through UTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 1 1. The information in this section concerning DTC and DTC's book-entry system has been obtained from sourceti that Issuer believe� to be reliable, but Issuer takes no responsibility for the accuracy thereof. G-3