The URL can be used to link to this page

Home My WebLink AboutRDA 91-11TUSTIN COMMUNITY REDEVELOPMENT AGENCY RESOLUTION NO. RDA 91-11, ADOPTED MAY 20, 1991 RESOLUTION OF THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY AUTHORIZING THE INVITATION OF BIDS FOR THE PURCHASE OF TOWN CENTER AREA REDEVELOPMENT PROJECT TAX ALLOCATION BONDS, SERIES 1991 OF SAID AGENCY; APPROVING THE NOTICE OF INTENTION TO SELL BONDS, THE PRELIMINARY OFFICIAL STATEMENT, THE NOTICE INVITING BIDS AND OFFICIAL FORM OF BID; AND AUTHORIZING THE PUBLICATION OF THE NOTICE OF INTENTION TO SELL BONDS WHEREAS, the Tustin Community Redevelopment Agency (the "Agency") deems it necessary and proper that bids be invited for the purchase of the Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1991 (the "Series 1991 Bonds") of the Agency and that the Series 1991 Bonds be sold in the manner and at the time and place hereinafter set forth; NOW, THEREFORE, BE IT RESOLVED by the Tustin Community Redevelopment Agency as follows: Section 1. Sealed bids for the purchase of the Series 1991 Bonds shall be received by the Executive Director of the Agency or his designee at the time and place hereinafter set forth in the Notice of Intention to Sell Bonds and the Notice Inviting Bids as hereinafter approved. Section 2. The Executive Director is hereby authorized and directed to cause a Notice of Intention to Sell Bonds, substantially in the form annexed hereto as "Exhibit All and hereby approved by this Agency, to be published by one insertion in The Tustin News, a newspaper of general circulation published in the City of Tustin and said publication to be at least five (5) days prior to the date of receiving bids (as determined in accordance with Section 1 hereof). Section 3. The Executive Director is further authorized and directed to cause said Notice of Intention to Sell Bonds to be published by one insertion in The Bond Buyer, a financial publication generally circulated throughout California, said publication to be at least 15 days prior to the date of receiving bids (as determined in accordance with Section 1 hereof). Section 4. The Agency hereby approves the Preliminary Official Statement substantially in the form on file with the Secretary, a copy of which has been presented to the Agency, with c:\6056\94691.1\Resor Doc such changes therein as the Executive Director may determine necessary, to be furnished to prospective bidders for the Series 1991 Bonds as provided in Section 6 hereof. The Agency deems the Preliminary Official Statement to be final within the meaning of Security and Exchange Commission Rule 15c2-12, subject to completion of those items permitted by said Rule. The Agency directs the Secretary to file the Preliminary Official Statement in her office and to identify it as being the Preliminary Official Statement so approved hereby, by an endorsement thereon to that effect over her signature. The Executive Director or his designee is authorized and directed to execute and deliver a final Official Statement in substantially the form of the Preliminary Official Statement hereby approved, with such additions thereto and changes therein as are consistent with this Resolution and recommended or approved by Bond Counsel to the Agency and approved by such officer, such approval to be conclusively evidenced by the execution and delivery thereof. Section S. The Executive Director is authorized and directed to cause to be furnished to prospective bidders, upon their request, a reasonable number of copies of the form of resolution (to be adopted following the sale of the Series 1991 Bonds) authorizing the issuance of the Series 1991 Bonds, and the Preliminary Official Statement. The Executive Director is authorized and directed to cause to be furnished to prospective bidders, upon their request, a reasonable number of copies of the Notice Inviting Bids and Official Form of Bid substantially in the forms annexed hereto as "Exhibit B" and "Exhibit C", respectively, and hereby approved by the Agency. The Executive Director is further authorized and directed, after any bid for the purchase of the Series 1991 Bonds has been accepted, and after the final Official Statement has been prepared, to cause to be furnished to the successful bidder, for use in connection with the resale of the Series 1991 Bonds, such number of copies of the final Official Statement as may be reasonably required. PASSED, APPROVED AND ADOPTED this 20th day of May, 1991. [SEAL] ATTEST: Charles E. Puckett, Chairman City Cl t c:\6056\94691.1\Rceo7.Doc 2 EXHIBIT A NOTICE OF INTENTION TO SELL BONDS $13,800,000 TUSTIN COMMUNITY REDEVELOPMENT AGENCY, TUSTIN, CALIFORNIA Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1991 The Tustin Community Redevelopment Agency intends to receive sealed bids until 10:00 a.m., Pacific Daylight Savings Time, on Monday, July 15, 1991 at the offices of Mudge Rose Guthrie Alexander & Ferdon, 333 South Grand Avenue, Suite 2020, Los Angeles, California, for the above Series 1991 Bonds dated July 1, 1991 and maturing in varying amounts on November 1 of the years 1992 to 2016, inclusive. Bid security in the amount of $100,000 in the form of a certified or cashier's check will be required. Copies of the complete Notice Inviting Bids, together with copies of the Preliminary Official Statement to be issued in connection with the sale of the Series 1991 Bonds, Official Form of Bid, and Bond Resolution may be obtained from the Secretary of the Agency, 15222 Del Amo, Tustin, California 92680, or from the office of the Agency's financial advisor, Stone & Youngberg, 15260 Ventura Blvd., Suite 310, Sherman Oaks, California 91403. WILLIAM A. HUSTON Executive Director Tustin Community Redevelopment Agency c:\6056\94691.1\Reso7.Doc A-1 T, - ---- ---- . . EXHIBIT B NOTICE INVITING BIDS $13,800,000 TUSTIN COMMUNITY REDEVELOPMENT AGENCY Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1991 NOTICE IS HEREBY GIVEN that sealed proposals for the purchase of $13,800,000 par value bonds entitled "Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1991" (the "Series 1991 Bonds") of the Tustin Community Redevelopment Agency (the "Agency") will be received by said Agency at the place and up to the time specified below. TIME: Monday, July 15, 1991 10:00 a.m., Pacific Daylight Savings Time PLACE: Law Offices of Mudge Rose Guthrie Alexander & Ferdon 333 South Grand Avenue Suite 2020 Los Angeles, California 90071 MAILED BIDS: Mailed bids should be addressed to: City Clerk of the City of Tustin c/o Mudge Rose Guthrie Alexander & Ferdon 333 South Grand Avenue Suite 2020 Los Angeles, California 90071 OPENING OF BIDS: The bids will be publicly opened and read at the above address at the time and place shown above and will be presented to the Agency at its meeting to be held later on the same date in the City Hall Council Chambers, 300 Centennial Way, Tustin, California. If no acceptable bids are received at the time shown above, the Agency will again offer the Series 1991 Bonds on July 22, 1991 and on each successive Monday thereafter at 10:00 a.m. at the place indicated above, until the Series 1991 Bonds are sold or this notice is withdrawn by the Agency. ISSUE: $13,800,000 designated "Town Center Area Redevelop- ment Project Tax Allocation Bonds, Series 1991." The Series 1991 Bonds will be fully registered, will be in the denomination of $5,000 or any integral multiple thereof and will be dated July 1, 1991, with respect to the Series 1991 Current Interest Bonds, and c:\6056\94691.1\Reoo7.Doc B-1 will be in the denomination of $5,000 per final maturity and will be dated the delivery date thereof, with respect to the Series 1991 Capital Appreciation Bonds. PRINCIPAL PAYMENTS: Principal of the Series 1991 Bonds will be payable on November 1 in the amounts for each of the several years as follows: Principal Year Amount Year 1992 $ 2005 1993 2006 1994 2007* 1995 2008* 1996 2009* 1997 2010* 1998 2011* 1999 2012* 2000 2013* 2001 2014* 2002 2015* 2003 2016* 2004 Principal Amount INTEREST: The Series 1991 Current Interest Bonds shall bear interest from July 1, 1991 at a rate or rates to be fixed upon the sale thereof but not to exceed 12% per annum, payable semiannually on May 1 and November 1, commencing May 1, 1992. The Series 1991 Capital Appreciation Bonds will accrete interest from their dated date compounded semiannually on each May 1 and November 1, commencing May 1, 1992. PAYMENT: Interest on the Series 1991 Current Interest Bonds will be payable by check or draft of Security Pacific National Bank (the "Fiscal Agent") , mailed to the registered owners thereof as of the fifteenth day of the calendar month immediately preceding the Interest Payment Date. Principal and premium, if any, and accreted value, in the case of the Series 1991 Capital Appreciation Bonds, will be paid upon presentation and surrender of the Series 1991 Bonds at the principal corporate trust office of the Fiscal Agent in Los Angeles, California. *To be designated by the winning bidder as either a maturity date or a sinking fund payment date with respect to term Series 1991 Bonds. See "Terms of Sale." c:\6056\94691.1\Reso7.Doc B-2 REDEMPTION: Optional Redemption. The Series 1991 Bonds maturing on or prior to November 1, 2001, are not subject to optional before their maturity. Series 1991 Bonds maturing on and after November 1, 2002, are subject to optional redemption in whole or in part on any Interest Payment Date on or after November 1, 2001, in inverse order of maturity and by lot within a maturity, upon notice at the option of the Agency from any available source of funds, at a redemption price equal to the principal amount of accreted value thereof to be redeemed, together with accrued interest thereon to the redemption date, plus a premium (expressed as a percentage of the principal amount or accreted value of Series 1991 Bonds to be redeemed) as follows: Redemption Dates November 1, 2001 through May 1, 2002 November 1, 2002 through May 1, 2003 November 1, 2003 and thereafter Sinking Fund Redemption. Any Series the winning bidder as term Series 199 mandatory call and redemption in part at pa 1 in the years prior to their maturity d event prior to November 1, 2007. Premiums 102 $ 101 $ 100 $ 1991 Bonds designated by 1 Bonds are subject to r and by lot on November ate or dates, but in no PURPOSE AND AUTHORIZATION: The Series 1991 Bonds are being issued to finance a portion of the costs of the Town Center Area Redevelopment Project. The Series 1991 Bonds are to be issued pursuant to the Community Redevelopment Law (Part 1 of Division 24 of the California Health and Safety Code) and pursuant to the resolution (to be adopted by the Agency following the award of the Series 1991 Bonds, authorizing the issuance of the Series 1991 Bonds (the "Resolution"). SECURITY: The Series 1991 Bonds are payable from and secured solely by the Pledged Revenues (as defined in the Resolution) and certain funds and accounts created under the Resolution and do not constitute a debt of the City of Tustin or of the State of California or any of its political subdivisions (other than the Agency). The Series 1991 Bonds will rank on a parity with the outstanding Town Center Area Redevelopment Project Tax Allocation Refunding Bonds, Series 1987 and any additional parity bonds which may be issued in the future in accordance with the Resolution. TERMS OF SALE Interest Rate. The maximum rate bid may annum payable semiannually. Each rate bid must or 1/20 of 1%. No Series 1991 Bond shall interest rate, and all Series 1991 Bonds of the bear the same rate. Each Series 1991 Bond must rate specified in the bid from its date to its cA6056%%01. nPm7. Doe B-3 y not exceed 12% per be a multiple of 1/8 bear more than one same maturity shall bear interest at the fixed maturity date. only one interest rate will be assigned to each Series 1991 Bond for each installment of interest thereon, and bids providing for additional or supplemental interest rates will be rejected. The interest rate on any maturity or group of maturities shall not be more than 2% higher than the interest rate on any other maturity or group of maturities. The interest rate on any maturity shall not be lower than the interest rate on any earlier maturity. Purchase Price: Premium or Discount. Bidders may specify a premium or discount, but the discount shall not exceed 2% of the par value of the Series 1991 Bonds. The Series 1991 Bonds shall be sold for cash only. All bids must be for not less than all of the Series 1991 Bonds hereby offered for sale and each bid shall state that the bidder offers accrued interest to the date of delivery, the purchase price, which shall not be less than 98% of par, and the interest rate or rates not to exceed that specified herein, at which the bidder offers to buy the Series 1991 Bonds. Each bidder shall state in its bid the true interest cost (expressed as a percentage), which shall be considered informative only and not a part of the bid. Maturity/Mandatory Call Schedule. Each bidder shall designate each of the years 2007 to and including 2016 (as shown above under the caption "PRINCIPAL PAYMENTS") as either a serial Series 1991 Bond maturity date, a term Series 1991 Bond maturity date, or a sinking fund payment date with respect to a term Series 1991 Bond maturity. Insurance. has issued a commitment for municipal bond insurance relating to the Series 1991 Bonds. All bids may be conditioned upon the issuance effective as of the date on which the Series 1991 Bonds are issued, of a policy of insurance by , insuring the payment when due of principal of and interest or accreted value on the Series 1991 Bonds. Each Series 1991 Bond will bear a legend referring to the insurance. The purchaser, holder or owner is not authorized to make any statements concerning the insurance beyond those set out here and in the bond legend without the approval of Best Bidder. The Series 1991 Bonds will be awarded to the best responsible bidder or bidders, considering the interest rate or rates specified and the premium or discount offered, if any. The best bid will be determined by doubling the semiannual interest rate (compounded semiannually) necessary to discount the debt service payment from the payment dates to the date of the Series 1991 Bonds and to the price bid, excluding accrued interest. Such true interest cost calculation shall be made to the eighth decimal place. The purchaser must pay accrued interest (computed on a 360 -day year basis) from the date of the Series 1991 Bonds to the c:\6056\94691.1\Pm7.Doc B-4 date of delivery. The cost of printing the Series 1991 Bonds will be borne by the Agency. Right of Rejection. The Agency reserves the right, in its discretion, to reject any and all bids and to the extent not prohibited by law to waive any irregularity or informality in any bid. Prompt Award. The Agency will take action awarding the Series 1991 Bonds or rejecting all bids not later than 26 hours after the time herein provided for the receipt of proposals; provided that the award may be made after the expiration of the specified time if the bidder shall not have given to the Agency notice in writing of the withdrawal of such proposal. Place of Closing; Place of Delivery and Funds for Payment. The closing will take place at the offices of Mudge Rose Guthrie Alexander & Ferdon, 333 South Grand Avenue, Los Angeles, California, or at such other place as may be agreed upon by the successful bidder and the Agency. Payment for the Series 1991 Bonds shall be made in Federal Reserve Bank funds or other funds immediately available to the Agency. Any expense of providing immediately available funds, whether by transfer of Federal Reserve Bank funds or otherwise, shall be borne by the purchaser. Prompt Delivery; Cancellation for Late Delivery. It is expected that the Series 1991 Bonds will be delivered to the successful bidder approximately three weeks after the bid is accepted. The successful bidder shall have the right, at its option, to cancel the contract of purchase if the Agency shall fail to execute the Series 1991 Bonds and tender them for delivery within 60 days from the date herein fixed for the receipt of bids, and in such event the successful bidder shall be entitled to the return of the check accompanying its bid. The Agency expects to make such delivery in the form of definitive bonds, but reserves the right to make such delivery in the form of temporary bonds, exchangeable for definitive bonds at no cost to the purchaser. Form of Bid. Each bid, together with the bid check, must be in a sealed envelope, addressed to the Agency, with the envelope and bid clearly marked "Proposal for Tax Allocation Bonds." Each bid must be in accordance with the terms and conditions set forth herein, or permitted herein, and must be submitted on, or in substantial accordance with, the Official Bid Form provided by the Agency. Bid Check. A certified or cashier's check on a responsible bank or trust company in the amount of $100,000, payable to the order of the Agency, must accompany each proposal to secure the c:\6056\%01. I \Rm7. Dm B-5 Agency from any loss resulting from the failure of the bidder to comply with the terms of its bid. No interest will be paid upon the deposit made by any bidder. The check accompanying each unaccepted proposal will be returned promptly. The deposit of the successful bidder shall become the property of the Agency and shall be cashed by the Agency, and the amount of said deposit shall be credited toward the purchase price of the Series 1991 Bonds. If the purchase price is not so paid upon the tender of the Series 1991 Bonds, the successful bidder shall have no right in or to the Series 1991 Bonds or to the recovery of said deposit, unless it shall appear that the Series 1991 Bonds cannot be validly issued in the form and manner proposed. Change in Tax Exempt Status. At any time before the Series 1991 Bonds are tendered for delivery, the successful bidder may disaffirm and withdraw the proposal if the interest received by private holders from bonds of the same type and character shall be declared to be no longer excluded from gross income of such holders under present federal income tax laws, either by a ruling of the Internal Revenue Service or by a decision of any federal court, or shall be declared taxable or be required to be taken into account in computing any federal income taxes (except to the extent presently taken into account in calculating book income and current earnings for purposes of calculating corporate alternative minimum taxable income), by the terms of any federal income tax law enacted subsequent to the date of this notice. Reoffering Price. Simultaneously with or before delivery of the Series 1991 Bonds, the successful bidder shall furnish to the Agency a written statement in form and substance acceptable to bond counsel: (a) stating the initial reoffering prices on each maturity of the Series 1991 Bonds to the general public and the reoffering prices of each maturity of the Series 1991 Bonds, if any, reoffered to institutional or other investors with concessions or at discounts from the reoffering prices to the general public; (b) certifying that a bona fide offering of the Series 1991 Bonds has by such date been made to the public (excluding bond houses, brokers, and other intermediaries); and (c) stating the price at which each Series 1991 Bond was sold, or will be sold, to institutional or other investors with concessions or at a discount from the prices at which Series 1991 Bonds were, or will be, sold to the general public (excluding bond houses, brokers, and other intermediaries) prior to the sale of any Series 1991 Bonds of each maturity at other prices. California Debt Advisory Commission. The Agency has duly notified the California Debt Advisory Commission of the proposed sale of the Series 1991 Bonds. Payment of all fees to the California Debt Advisory Commission in connection with the execution, sale and delivery of the Series 1991 Bonds shall be the c: \6056\94691.1 \Rcw7. Doc B-6 T sole responsibility of the successful bidder, and not of the Agency. Closing Papers; Legal Opinion. Each proposal will be understood to be conditioned upon the Agency furnishing to the purchaser, without charge, concurrently with payment for and delivery of the Series 1991 Bonds, the following closing papers, each dated the date of delivery: (a) Legal Opinion - The opinion of Mudge Rose Guthrie Alexander & Ferdon, Los Angeles, California, and Rourke & Woodruff, A Professional Corporation, Orange, California, co -bond counsel, approving the validity of the Series 1991 Bonds and stating that interest on the Series 1991 Bonds is excluded from gross income of the holders under present federal income tax laws, and that such interest is also exempt from personal income taxes of the State of California under present state income tax laws; (b) Nonarbitrage Certificate - A certificate of the Agency certifying that on the basis of the facts, estimates and circumstances in existence on the date of issue, it is expected that the proceeds of the Series 1991 Bonds will not be used in a manner that would cause the Series 1991 Bonds to be arbitrage bonds; (c) Signature and No -Litigation Certificate - A certificate of the Agency signed by officers of the Agency certifying the following: (1) that said officers have signed the Series 1991 Bonds, whether by facsimile or manual signature, and that they were respectively duly authorized to execute the same; and (2) that there is no litigation threatened or pending affecting the validity of the Series 1991 Bonds; (d) Receipt - The receipt of the Agency showing that the purchase price of the Series 1991 Bonds, including interest accrued to the date of delivery thereof, has been received by the Agency; and (e) Certificate re Official Statement - A certificate of an officer of the Agency, acting in such person's official and not personal capacity, to the effect that at the time of the sale of the Series 1991 Bonds and at all times subsequent thereto up to and including the time of delivery of the Series 1991 Bonds, the Official Statement relating to the Series 1991 Bonds did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, c:%6056%%691.1 %Rew7. Doc B-7 in light of the circumstances under which they were made, not misleading. Official Statement. The Preliminary Official Statement dated , 1991 is in a form "deemed final" by the Agency, except for certain pricing information, for the purpose of Rule 15c2-12 (b)(1) of the Securities and Exchange Commission but is subject to revision, amendment and completion in a final Official Statement. The Agency will furnish to the successful bidder or bidders within seven business days following award of the Series 1991 Bonds as many copies of the final Official Statement as the bidder or bidders shall request in their Official Form of Bid. No charge will be made to the successful bidder for the first copies of the final Official Statement. CUSIP Numbers. It is anticipated that CUSIP numbers will be printed on the Series 1991 Bonds, but neither the failure to print such numbers on any Series 1991 Bond nor error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Series 1991 Bonds in accordance with the terms of the bid. All expenses of printing CUSIP numbers on the Series 1991 Bonds shall be paid by the Agency, but the CUSIP Service Bureau charge for the assignment of said numbers shall be paid by the purchaser. INFORMATION AVAILABLE. Requests for information concerning the Agency or additional copies of this Notice Inviting Bids, the Official Bid Form and the Preliminary Official Statement should be addressed to: Stone & Youngberg 15260 Ventura Boulevard Suite 310 Sherman Oaks, California 91403 818-906-0315 GIVEN by order of the Tustin Community Redevelopment Agency, adopted May 20, 1991. WILLIAM A. HUSTON Executive Director Tustin Community Redevelopment Agency c:%6056%%691. I%PwO. Doc B-8 EXHIBIT C OFFICIAL BID FORM $13,800,000 TUSTIN COMMUNITY REDEVELOPMENT AGENCY Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1991 , 1991 Tustin Community Redevelopment Agency Ladies and Gentlemen: On behalf of a group which we have formed, consisting of the firms hereinafter named, and pursuant to the Notice Inviting Bids dated , 1991, we offer to purchase $13,800,000 principal amount, all or none, of the bonds of the Agency designated as "Town Center Area Redevelopment Project Tax Allocation Bonds, Series 199111, particularly described in said Notice, with interest as set forth in the following schedule, entitled "Schedule of Interest Rates", and to pay therefor the principal amount thereof [plus a premium of $ ] [ less a discount of $ ] making a total sum of $ plus interest accrued on such bonds to the date of delivery thereof. c:\6056\94691.1\Reso7.Doc C-3. SCHEDULE OF INTEREST RATES Principal Year Amount 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Rate For the years 2007 through 2016, indicate whether serial bond maturity, term bond maturity or sinking fund payment. This bid is made subject to all of the terms and conditions of the Notice Inviting Bids dated , 1991, all of which terms and conditions are made a part hereof as fully as though set forth in this bid. There is enclosed herewith a certified or cashier's check for $100,000 payable to the order of the Agency. If this bid is accepted and the Series 1991 Bonds are awarded to us, the amount of the check will be credited toward the purchase price of the Series 1991 Bonds. If this bid is unsuccessful, the check will be returned promptly to the undersigned. There is submitted herewith a "Memorandum of Interest Cost" (which shall not constitute a part of this bid), stating the total interest and the true interest cost determined thereby. c: \6056\94691.1 \Reso7. Doc C-2 We hereby request that copies of the Official Statement be furnished to us in accordance with the Notice Inviting Bids. Very truly yours, By: Address: Phone: LIST OF SYNDICATE MEMBERS (subject to Change prior to Delivery of Series 1991 Bonds) cA6056\%0J.I\R O.Doc C-3 MEMORANDUM OF INTEREST COST The purchase price of the Series 1991 Bonds and the true interest cost is determined as follows: PRINCIPAL AMOUNT OF SERIES 1991 BONDS $ LESS DISCOUNT OR PLUS PREMIUM TOTAL PURCHASE PRICE $ (excluding accrued interest) TRUE INTEREST COST* $ * Please calculate to eight (8) decimal places. c:\6056\94691.1 \Pwo7. Doc C-4 NEW ISE 5/12/91 In the opinion of Co -Bond Counsel, under existing law, the interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the tax covenant described herein, is excluded from gross income for Federal income tax purposes and is not a specific preference item for purposes of the Federal alternative minimum tax. See, however, "TAX EXEMPTION" herein regarding certain other tax considerations. $13,800,000 R e C VE I) TUST I N CONMIUN ITT REDEVELOPMENT AGENCY I iA 1 4 1991 TOWN (ENTER AREA REDEVELOPMENT PROJECT TAX ALLOCATION BONDS, SERIES 1991 FINANCE DEPT Current Interest Bonds dated: July 1, 1991 Due: November 1 as shown below Capital Appreciation Bonds dated: Delivery Date Interest on the Series 1991 Current Interest Bonds is payable on May 1 1992 and semiannually thereafter on May 1 and November 1 (each an "Interest Payment Date") of each year until maturity. The Series 1991 Capital Appreciation Bonds will accrue interest from their dated date compounded semiannually on each May 1 and November 1, commencing May 1, 1992, payable only at maturity or earlier redemption as a component of their Accreted Value. The Series 1991 Bonds will be issued and delivered as fully registered bonds only and, when issued and delivered, will be registered in the name of CEDE & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to ultimate purchasers ("Beneficial Owners") in the denomination of $5,000 or any integral multiple thereof with respect to Series 1991 Current Interest Bonds and $5,000 per final maturity amount or any integral multiple thereof in the case of Series 1991 Capital Appreciation Bonds, under the book -entry system maintained by DTC, only through brokers and dealers who are, or who act through, Participants. Beneficial Owners will not be entitled to receive delivery of the Series 1991 Bonds. Principal, Accreted Value, premium, if any, and interest are payable directly to DTC by the Fiscal Agent. So long as DTC or its nominee remains the registered Owner of the Series 1991 Bonds, disbursement of such payments to Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of Participants. See "TIiE SERIES 1991 BONDS - Book -Entry System" herein. The Series 1991 Bonds are subject to optional and mandatory redemption as described herein. The Series 1991 Bonds are being issued for the purpose of funding certain activities of the Tustin Community Redevelopment Agency (the "Agency") pursuant to the Redevelopment Law as more fully described herein. The proceeds from the sale of the Series 1991 Bonds will be used to provide financing for the purposes more fuly described herein and permitted under the Redevelopment Law, to fund a reserve account and to pay the costs of issuance of the Series 1991 Bonds. The Series 1991 Bonds are limited obligations of the Agency payable from and secured by Tax Revenues (as hereafter defined) to be derived from the Town Center Redevelopment Project of the Agency (the "Project Area") and from interest earnings on the funds and accounts on deposit with the Fiscal Agent. Taxes levied on the property within the Project Area on that portion of the assessed valuation over and above the assessed valuation of the base year for the Project Area, shall be delivered to the Agency to be deposited in the Special Fund administered by the Fiscal Agent for the payment of interest, principal and premium, if any, on the Series 1991 Bonds. The receipt of Tax Revenues is subject to certain risks which are described under "BONDOWNERS' RISKS" herein. THE SERIES 1991 BONDS ARE NOT A DEBT OF THE CITY OF TUSTIN, THE STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS OTHER THAN THE AGENCY, AND NEITHER SAID CITY, SAID STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS OTIIER THAN THE AGENCY IS LIABLE THEREFOR. THE INTEREST, PRINCIPAL AND ACCRETED VALUE OF AND PREMIUM, IF ANY, ON THE SERIES 1991 BONDS ARE PAYABLE SOLELY FROM TAX REVENUES ALLOCATED TO THE AGENCY FROM THE PROJECT AREA. THE SERIES 1991 BONDS DO NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE MEMBERS OF THE AGENCY, THE CITY, NOR ANY PERSONS EXECUTING THE SERIES 1991 BONDS ARE LIABLE PERSONALLY ON THE SERIES 1991 BONDS BY REASON OF THEIR ISSUANCE. MATURITY SCHEDULE $ Series 1991 Current Interest Serial Bonds Maturity Date Principal Interest Maturity Date Principal Interest November 1 Amount Rate Price November 1 Amount Rate Price 1992 $ 1993 1994 1995 1996 1997 1998 1999 % 2000 2001 2002 2002 2003 2004 2005 2006 $ % Series 1991 Capital Appreciation Term Bonds due November 1, 2015 Series 1991 Current Interest Term Bonds due November 1, 2016 Price: (Plus Accrued interest from the Dated Date) The Series 1991 Bonds are offered, when, as and if issued, subject to approval as to legality by Mudge Rose Guthrie Alexander & Ferdon, Los Angeles, California, and Rourke & Woodruff, a Professional Corporation, Orange, California, Co -Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the Agency by its General Counsel. It is anticipated that the Series 1991 Bonds in definitive form will be available for delivery in New York on or about July — , 1991. No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Agency or the Financial Advisor. Statements contained in this Official Statement which involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representation of fact. The information and expressions of opinion stated herein are subject to change without notice. The information set forth herein has been obtained from sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as a representation of such by the Agency or the Financial Advisor. The delivery of this Official Statement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Agency since the date hereof. This Official Statement has been "deemed final" by the Agency pursuant to Rule 15c2-12 of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934, as amended, except for information which is permitted to be excluded from this Official Statement under said Rule 15c2-12. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 1991 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. Summaries and references to statutes, resolutions and other documents referred to herein do not purport to be comprehensive or definitive, and are qualified in their entirety to each of said statutesm resolutions and documents. 3I= THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY TUSTIN, CALIFORNIA CITY COUNCIL AND MEMBERS OF THE AGENCY Charles E. Puckett, Mayor and Chairman Leslie Anne Pontious, Mayor Pro Tem and Vice Chairman Jim Potts Earle J. Prescott Richard B. Edgar CITY AND AGENCY STAFF William A. Huston, City Manager and Executive Director Ronald A. Nault, Director of Finance and Treasurer Christine A. Shingleton, Assistant City Manager and Director of Community Development James G. Rourke, City Attorney and Agency General Counsel PROFESSIONAL SERVICES Co -Bond Counsel Mudge Rose Guthrie Alexander & Ferdon Los Angeles, California and Rourke & Woodruff, A Professional Corporation Orange, California Fiscal Agent [To Come] Los Angeles, California Fiscal Consultant Katz Hollis, Inc. Los Angeles, California Financial Advisor Stone & Youngberg Los Angeles, California TABLE OF CONTENTS Introduction............................................................. The Series 1991 Bonds ................................................... Description.......................................................... Book -Entry System .................................................... Optional Redemption .................................................. Sinking Account Redemption ........................................... Notice of Redemption ................................................. Purchase of Outstanding Bonds ........................................ Transfer and Exchange ................................................ Sources and Uses of Funds ............................................ Debt Service Schedule ................................................ Security for the Bonds ................................................... Pledge of Tax Revenues ............................................... Series 1991 Bonds Parity Debt ....................................... Reserve Account ...................................................... Subordinate Obligations .............................................. Bondowners' Risks ........................................................ Property Tax Increment Revenues ...................................... Reduction in Tax Revenues ............................................ Book -Entry System .................................................... Limitations on Tax Revenues .............................................. Property Tax Rate Limitations - Article XIIIA ........................ Appropriation Limitations - Article XIIIB ............................ Low and Moderate Income Housing Requirements ......................... Property Tax Collection Procedures ................................... Unitary Property ..................................................... Business Inventory and Supplemental Revenues ......................... Tax Revenues and Debt Service ............................................ Property Tax Increment ............................................... Historical Taxable Values ............................................ Projected Revenues and Debt Service .................................. Debt Service and Estimated Coverage .................................. TheAgency............................................................... General.............................................................. AgencyPowers........................................................ AgencyMembers....................................................... AgencyStaff......................................................... Agency Financial Statements .......................................... Town Center Redevelopment Project ........................................ Background........................................................... Controls, Land Use and Building Restrictions ......................... Major Development Activities in the Project Area ..................... Application of Bond Proceeds ......................................... TaxExemption............................................................ Approval of Legal Proceedings ............................................ Litigation............................................................... Legality for Investment .................................................. Ratings.................................................................. Underwriting............................................................. Miscellaneous............................................................ Appendix A - Definitions ................................................. A-1 Appendix B - The Resolution .............................................. B-1 Appendix C - Supplemental Information On The City Of Tustin .............. C -.l Appendix D - Opinion of Bond Counsel ..................................... D-1 Appendix E - Agency Financial Information ................................ E-1 Appendix F - Fiscal Consultant's Report .................................. F-1 Appendix C - Accreted Value Table for Capital Appreciation Bonds ......... C-1 �, le, K 1: R N C L' N T Y Lancaster Pon \0 Sim: Valley I Thousand Oaks San Fernando Burbank B -y Glendale Sam Ilillonica PASADENA 10 LOS .Iry M~an Beach fl ANGElLi'i Redondo Beach G;e Hesperia Whinier Norwalk La Hal)ra 01 Lake Arrowheac LOW KACH Al Big Bear Lake SAN BERNARDINO S. SANTA ANA RIVER!!��,� Redlands waiew 04 -h, Irvine SANTA CATALINA ISLAND Lawrie Beach'.* C' 0 1' N'T Y Banning ke La $1 nore Hemet Olaf of PALM SPRINGS Rancho Cal,!orn,a Cattied'a- City Carlsbad 0 Indio ryi Poway le 0 corm6 471V i ;A* National City, S- hiew Beach Tiluan COUNTY GREATER SOUTHERN CALIFORNIA AREA $13,800,000 TUSTIN COMMUNITY REDEVELOPMENT AGENCY TONIN CENTER AREA REDEVELOPMENT PROJECT TAX ALLOCATION BONDS, SERIFS 1991 INTRODUCTION This Official Statement, including the cover page, Table of Contents and appendices hereto, is provided to furnish information in connection with the sale by the Tustin Community Redevelopment Agency (the "Agency") of its $13,800,000 aggregate principal amount of Redevelopment Project Tax Allocation Bonds, Series 1991 (the "Series 1991 Bonds"). The Series 1991 Bonds are being issued by the Agency under the authority and in accordance with the Constitution and the laws of the State of California (the "State") including the Community Redevelopment Law of the State of California (the "State"), constituting Part 1 of Division 24 (commencing with Section 33000) of the California Health and Safety Code, as amended (the "Redevelopment Law"). The Series 1991 Bonds will be issued pursuant to and will be secured by the terms of Resolution No. 91-10, adopted by the Agency on May 20, 1991 (the "Series 1991 Resolution"), Resolution No. RDA 87-8, adopted by the Agency on August 3, 1987, the "Series 1987 Resolution" and together with the Series 1991 Resolution (the "Resolution"). The Agency has appointed , Los Angeles, California, to act as Fiscal Agent (the "Fiscal Agent") for the Bonds pursuant to the Resolution. The Series 1991 Bonds will be issued on a parity with the Agency's $8,060,000 aggregate principal amount of the Tustin Community Redevelopment Project Tax'Allocation Refunding Bonds, Series 1987 (the "Series 1987 Bonds"), of which $7,510,000 aggregate principal amount are currently outstanding. The Series 1991 Bonds and the Series 1987 Bonds are referred to herein collectively as the "Bonds." The Resolution permits under certain circumstances the issuance of additional series of bonds payable from and secured by the Tax Revenues (as hereafter defined) and secured by a lien and charge upon Tax Revenues equal to the lien and charge securing the Bonds theretofore issued under the Series 1987 Resolution. See "APPENDIX B: THE RESOLUTION -- Additional Bonds." The net proceeds of the Series 1991 Bonds will provide financing for certain purposes permitted under the Redevelopment Law (as discussed in "TOWN CENTER AREA REDEVELOPMENT PROJECT -- Application of Bond Proceeds"), to fund a reserve account and to pay the costs of issuance incurred in connection with the issuance of the Series 1991 Bonds. The City of Tustin ( the "City") is located in the County of Orange ( the "County"), California. Incorporated in 1927 as a general law city, the City encompasses an area of approximately 10.8 square miles. The City Council activated the Agency through Ordinance No. 696-A adopted on October 20, 1976. The City Council at the same time declared itself to be the governing body of the Agency. 1 The Agency adopted a redevelopment plan (the "Redevelopment Plan") pursuant to which it established the Town Center Redevelopment Project Area (the "Project Area") on November 22, 1976 by Ordinance No. 701. On September 8, 1981 the Agency adopted Ordinance No. 855 amending the Redevelopment Plan (the "First Amendment") to increase the limitation on the average yearly tax increment which could be collected and allocated to projects and programs from $600,000 to $3,000,000 per year and to increase the limitation on bonded indebtedness from $6,500,000 to $20,000,000. On March 20, 1989 by Ordinance No. 1021 (the "Second Amendment"), the Agency further amended the Redevelopment Plan to expand the list of eligible projects within the Project Area and to (i) convert the yearly tax increment limit from $3,000,000 per year to a cummulative total of $90,000,000 and (ii) to increase the amount of bonded indebtedness to be repaid with tax increment revenues that may be outstanding at any one time from $20,000,000 to $35,000,000. The First Amendment also permitted the Agency to issue bonds or incur obligations which may extend beyond the November 22, 2006 termination date of the Redevelopment Plan. The Redevelopment Law provides a means for financing redevelopment projects based upon an allocation of taxes collected within a project area. The taxable valuation of a project area last equalized prior to the effective date of the ordinance adopting the redevelopment plan, or base roll (the "Base Year"), is established and, except for any period during which the taxable valuation drops below the Base Year level, the taxing agencies thereafter receive the taxes produced by the levy of the then current tax rate upon the Base Year. Taxes collected upon any increase in taxable valuation over the Base Year are allocated to a redevelopment agency and may be pledged by a redevelopment agency to the repayment of any indebtedness incurred in financing or refinancing a redevelopment project. In addition, the State pays to certain redevelopment agencies,' including the Agency, a special subvention which replaces a portion of the tax increment revenues previously available to redevelopment agencies from tax levies on business inventories. Under current State law, the Agency does not have the authority to pledge these special subventions to the repayment of bonds. See "LIMITATIONS ON TAX REVENUES -Business Inventory and Supplemental Revenues" herein. Redevelopment agencies themselves have no authority to levy property- taxes and must look specifically to the allocation of taxes produced as previously described. The Bonds are payable solely from Tax Revenues allocated to the Agency from the Project Area. See "SECURITY FOR THE BONDS" herein. The Agency has pledged for the repayment of the Series 1991 Bonds, taxes (including all payments, reimbursements and subventions, if any, specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations) eligible for allocation to the Agency pursuant to the Redevelopment Law and pledgable by the Agency (but excluding amounts required by the Redevelopment Law to be set aside for certain housing purposes in the Housing Fund, provided, however, that such amounts shall not be excluded if and to the extent that the Agency delivers to the Fiscal Agent an opinion of counsel experienced in redevelopment law that such amounts may be lawfully made available as Tax Revenues and the Agency makes such amounts available as Tax Revenues) (collectively, the "Tax Revenues"). See "SECURITY FOR THE BONDS," "BONDOWNERS' RISKS" and "LIMITATIONS ON TAX REVENUES" herein. N As a result of redevelopment activities which have taken place to date, the Orange County Auditor -Controller reports that the 1990/91 tax assessment roll for the Project Area shows an increase in assessed valuations of $221,597,302 over the Base Year. This increase in assessed valuation will result in estimated tax increment revenues allocated to the Project Area of approximately $2,307,000 for fiscal year 1990/91. Tax increment revenues allocated to the Project Area totaled $2,045,686 (excluding supplemental revenue and redemption payments) for the 1989/90 fiscal year. Maximum Annual Debt Service for the Bonds would be initially covered approximately 1.25 times based upon the Project's estimated fiscal year 1990/91 'Tax Revenues. The projections of Tax Revenues contained in this Official Statement (See "TAX REVENUES AND DEBT SERVICE") are based on current assessed valuations within the Project Area and on the current tax rates applicable to the taxable property in the Project Area. Any future decrease in the receipt of taxes, the assessed valuation of the Project Area, the applicable tax rates or the economic stability of the Project Area would reduce the Tax Revenues allocated to the Agency and correspondingly would have an adverse impact on the ability of the Agency to pay debt service on the Bonds. See "BONDOWNERS' RISKS" and "LIMITATIONS ON TAX REVENUES" herein. Definitions of certain terms used in this Official Statement are set forth in Appendix A - "DEFINITIONS" hereto. This Official Statement contains brief descriptions of, among other things, the Series 1991 Bonds, the Resolution, the Agency and the Project Area. Such descriptions do not purport to be comprehensive or definitive. All references in this Official Statement to documents are qualified in their entirety by reference to such documents, and references to the Series 1991 Bonds are qualified in their entirety by reference to the form of Series 1991 Bond included in the Resolution. Copies of the Resolution and other documents described in this Official Statement may be obtained from the Fiscal Agent. 3 T.. __.._. ..._ THE SERIES 1991 BONDS Description The Series 1991 Bonds will be issued in the aggregate amount of $13,800,000. The Series 1991 Current Interest Bonds will be issued as fully registered bonds in the denomination of $5,000 each or any integral multiple thereof. The Series 1991 Capital Appreciation Bonds will be issued as fully registered bonds in the denominations which will produce $5,000 of Accreted Value at maturity, or any integral multiple thereof. The Series 1991 Bonds will bear or accrete, as applicable, interest at the rates and mature on the dates and in the amounts set forth on the cover page of this Official Statement. The Fiscal Agent shall maintain at its office books for the registration, exchange and transfer of Series 1991 Bonds. The Series 1991 Current Interest Bonds are dated July 1, 1991 and the Series 1991 Capital Appreciation Bonds are dated as of their date of delivery. Interest on the Series 1991 Current Interest Bonds will be payable semiannually on May 1 and November 1 of each year (each an "Interest Payment Date"), commencing May 1, 1992 and will be calculated on the basis of a 360 -day year comprised of twelve 30 -day months. The Series 1991 Current Interest Bonds shall bear interest from the Interest Payment Date next preceding the date of registration thereof, unless such date of registration is an Interest Payment Date, in which event they shall bear interest from such Interest Payment Date, or unless such date of registration is prior to the first Interest Payment Date, in which event they shall bear interest from July 1, 1991; provided, however, that if at the time of registration of ani• Series 1991 Current Interest Bond interest is then in default on the Outstanding Bonds, such Series 1991 Current Interest Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Series 1991 Bonds. Interest on the Series 1991 Capital Appreciation Bonds shall accrue from the date thereof compounded semiannually on each May 1 and November 1, commencing May 1, 1992, and shall be payable only at maturity or upon the prior redemption thereof as part of the Accreted Value thereof. Interest on the Series 1991 Current Interest Bonds shall be paid by check or draft mailed on the Interest Payment Date to the address of the registered owner appearing on the Series 1991 Bond register of the Fiscal Agent (an "Owner") on the Record Date preceding any Interest Payment Date or by wire transfer in immediately available funds to an account within the continental United States upon the instructions of an% - owner of $1,000,000 or more in aggregate principal amount of Series 1991 Bonds. Principal and Accreted Value of, premium (if any), and interest on the Series 1991 Bonds are payable in lawful money of the United States of America upon surrender of the Series 1991 Bond at maturity or redemption at the office of the Fiscal Agent in Los Angeles, California. A Table setting forth the Accreted Value per $5,000 due at maturity for the Series 1991 Capital Appreciation Bonds is set forth in Appendix G. BoQk-Entry System The Depository Trust Company, New York, New York ("UTC") will act as Securities Depository (the "Securities Depository") for the Series 1991 Bonds. One fully registered Series 1991 Bond for each maturity as set forth 4 on the cover page, each in the aggregate principal amount of or Accreted Value due at such maturity, will be registered in the name of CEDE & Co., as nominee for DTC (the "Nominee"). DTC is a limited -purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold securities of its participants (the "Participants") and to facilitate the clearance and settlement of securities transactions among Participants in such securities through electronic book -entry changes in accounts of the Participants, thereby eliminating the need of physical movement of securities certificates. Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of which (and/or their representatives) have ownership interests in DTC. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant either directly or indirectly. Ownership interests in the Series 1991 Bonds may be purchased by or through the records of a Participant or an indirect participant. Each Participant will receive a credit balance on the records of DTC. Individual purchases will be made in the denomination of $5,000 for Series 1991 Current Interest Bonds and $5,000 due at maturity for Series 1991 Capital Appreciation Bonds or an integral multiple thereof. Owners are expected to receive a written confirmation of their purchase providing details of the Series 1991 Bonds acquired. Each such person for whom a Participant has an interest in the Series 1991 Bonds, may desire to make arrangements with such Participant to receive a credit balance in the records of such Participant, and may desire to make arrangements with such Participant to have all notices of redemption or other communications of the Agency or the Fiscal Agent to DTC, which may affect such persons, forwarded in writing by such Participant and to receive notification of all interest payments. NEITHER TILL• AGENCY NOR THE FISCAL AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION, INCLUDING ANY OBLIGATION FOR THE PAYMENT OF PRINCIPAL, ACCRETED VALUE, INTEREST OR PREMIUM, IF ANY, REPRESENTED BY THE SERIES 1991 BONDS AND THE PROVISIONS OF NOTICE WITH RESPECT TO THE SERIES 1991 BONDS, TO SUCH PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE SERIES 1991 BONDS. SO LONG AS CEDE & CO., OR A SUCCESSOR AS NOMINEE, IS THE REGISTERED OWNER OF THE SERIES 1991 BONDS, REFERENCES HEREIN TO THE SERIES 1991 BONDS OR THE REGISTERED OWNERS OF THE SERIES 1991 BONDS SHALL MEAN THE NOMINEE AND NOT THE BENEFICIAL OWNERS OF THE SERIES 1991 BONDS. For the purposes of this Official Statement, the term "Beneficial Owner" shall refer to the person for whom the Participant acquires an interest in the Series 1991 Bonds. DTC will receive payments from the Fiscal Agent to be remitted to the Participants for subsequent disbursement to the Owners. The ownership interest of each Owner in the Series 1991 Bonds will be recorded through the records of the Participants, whose ownership interest will be recorded on a computerized book -entry system operated by DTC. The interests of the Owners will not be recorded on the registration books for the Series 1991 Bonds maintained by the Fiscal Agent. 5 When reference is made to any action which is required or permitted to be taken by the Owners, such reference shall only relate to those permitted to act (by statute, regulation or otherwise) on behalf of such Owners for such purposes. When notices are given, they shall be sent by the Fiscal Agent to DTC. DTC shall forward (or cause to be forwarded) the notices to the Participants so that such participants may forward (or cause to be forwarded) the notices to the Owners. Owners will receive a written confirmation of their purchase detailing the terms of the Series 1991 Bonds acquired. Transfer of ownership interests in the Series 1991 Bonds will be accomplished by book entries made by DTC and the Participants who act on behalf of the Owners. Owners will not receive physical certificates representing their ownership interest in the Series 1991 Bonds, except as specifically provided in the Resolution. Interest, premium, if any, and principal or Accreted Value with respect to the Series 1991 Bonds will be paid when due by the Fiscal Agent to DTC, then paid by UTC to the Participants and thereafter paid by the Participants to the Owners. UNLESS OTHERWISE NOTED, THE INFORMATION CONTAINED IN THE PRECEDING PARAGRAPHS OF THIS SUBSECTION 'BOOK -ENTRY SYSTEM" HAVE BEEN EXTRACTED FROM A REPORT PREPARED BY DTC ENTITLED "BOOK -ENTRY -ONLY MUNICIPALS." THE AGENCY MAKES NO REPRESENTATION AS TO THE COMPLEI'ENESS OR THE ACCURACY OF SUCH INFORMATION OR AS TO THE ABSENSE OF MATERIAL ADVERSE CHANGES IN SUCH INFORMATION SUBSEQUENT TO THE DATE HEREOF. DTC may discontinue providing its services with respect to the Series 1991 Bonds at any time by giving notice to the Agency and the Fiscal Agent and discharging its responsibilities with respect thereto under applicable law. In the event (i) DTC determines not to continue to act as Securities Depository for the Series 1991 Bonds, or (ii) the Agency determines that UTC shall no longer so act, then the Agency will discontinue the book -entry system with DTC. If the Agency fails to identify another qualified Securities Depository to replace DTC, the Series 1991 Bonds shall no longer be restricted to being registered in the registration books kept by the Fiscal Agent in the name of the Nominee, but shall be registered in whatever name or names Owners of Series 1991 Bonds transferring or exchanging Series 1991 Bonds shall designate, in accordance with the Resolution. tional Redemption Series 1991 Bonds maturing on or before November 1, 2001 are not subject to optional redemption before their maturity. Series 1991 Bonds maturing on or after November 1, 2002, are subject to optional redemption in whole or in part on any Interest Payment Date on or after November 1, 2001, in inverse order of maturity and by lot within a maturity, upon notice as described below, at the option of the Agency from any available source of funds, at a redemption price equal to the principal amount or Accreted Value thereof to be redeemed, together with accrued interest thereon to the redemption date, plus a premium (expressed as a percentage of the principal amount or Accreted Value of Series 1991 Bonds to be redeemed) as follows: Redemption Dates Redemption Price November 1, 2001 and May 1, 2002 .............................. 102% November 1, 2002 and May 1, 2003 .............................. 101% November 1, 2003 and thereafter ............................... 100% N Sinking Account Redcn91.jim Series 1991 Bonds maturing on November 1, 2015 (the "2015 Capital Appreciation Term Bonds") are subject to mandatory redemption in part by lot prior to maturity from Sinking Account Installments made on November 1, 2007 and on each November 1 thereafter to and including November 1, 2015 (each a "Sinking Account Payment Date") at a redemption price equal to 100% of the Accreted Value thereof plus accrued interest, if any, to the redemption date. The 2016 Current Interest Term Bonds and the 2015 Capital Appreciation Term Bonds are referred to herein collectively as the "Term Bonds." Tile following Sinking Account Installments are calculated to be sufficient to redeem the principal amount of 2015 Capital Appreciation Term Bonds: Redemption Date November 1 _ PCinc ijga l Amgwp t 2007 $ 2008 2009 2010 2011 2012 2013 2014 2015 (Maturity) Series 1991 Bonds maturing on November 1, 2016 (the "2016 Current Interest Term Bonds") are subject to mandatory redemption in part by lot prior to maturity from sinking account payments (the "Sinking Account Installments") made on November 1, 2007 and on each November 1 thereafter to and including November 1, 2016 (each a "Sinking Account Payment Date") at a redemption price equal to 100% of the principal amount thereof plus accrued interest, if any, to the redemption date. The following Sinking Account Installments are calculated to be sufficient to redeem the principal amount of 2016 Current Interest Term Bonds: Redemption Date November 1 Principal Amount 2007 $ 2008 2009 2010 2011 2012 2013 2014 2015 2016 (Maturity) 7 T --- In lieu of such mandatory redemption, the Agency may elect to purchase, or instruct the Fiscal Agent to purchase, Term Bonds at public or private sale at such prices as the Agency or the Fiscal Agent may in their discretion determine; provided that, unless otherwise authorized by the Redevelopment Law, the purchase price thereof shall not exceed the Accreted Value thereof (in the case of Series 1991 Capital Appreciation Bonds) or the principal amount thereof plus accrued interest to the purchase. date (in the case of Series 1991 Current Interest Bonds). The principal amount or Accreted Value of any Term Bonds so purchased by the Fiscal Agent, or by the Agency and tendered to the Fiscal Agent, in any twelve month period ending 60 days prior to any Principal Payment Date shall be credited towards and shall reduce the principal amount or Accreted Value of such Term Bonds required to be redeemed on such Principal Payment Date. K1: igt--Qf Redewnt ion As provided in the Resolution, notice of redemption shall be mailed by the Fiscal Agent by first class mail, postage prepaid, (except if mailed to the owner of at least $1,000,000 in aggregate principal amount of Series 1991 Current Interest Bonds, in which case, by certified mail with return receipt) no less than 30 nor more than 60 days prior to any redemption date to the respective registered Owners of the Series 1991 Bonds designated for redemption at their addresses appearing on the registration books of the Fiscal Agent and, [so long as the Bond Insurance Policy is in full force and effect, to , and] further notice shall be given to certain other information services and securities depositories. Neither failure to mail such further notice nor any defect in such further notice so mailed shall affect the sufficiency of the proceedings for redemption of such Series 1991 Bonds or the cessation of interest on the redemption date. Whenever less than all outstanding Series 1991 Bonds maturing on any one date are called for redemption at any one time, the Fiscal Agent shall select the Series 1991 Bonds to be redeemed from the outstanding Series 1991 Bonds maturing on such date not previously selected for redemption, by lot in any manner which the Fiscal Agent deems fair; provided, however, that if less than all the outstanding Term Bonds of any maturity are called for redemption at any one time, the Fiscal Agent shall specify a reduction in any Sinking Account Installments required to be made with respect to such Term Bonds (in an amount equal to the amount of outstanding Term Bonds to be redeemed) which, to the extent practicable, results in approximately equal annual debt service on the Series 1991 Bonds outstanding following such redemption. For purposes of selecting Series 1991 Bonds for redemption, Series 1991 Current Interest Bonds shall be deemed to be composed of $5,000 portions, and Series 1991 Capital Appreciation Bonds shall be deemed to be composed of portions equal to their respective Accreted Values as of the redemption date, and any such portions may be separately redeemed. Purchases of Outstanding, Bonds The Fiscal Agent may purchase Series 1991 Bonds on the open market, with monies on deposit in the Special Fund, at a price not to exceed the greater of par plus accrued interest or the price at which the Series 1991 Bonds may be called for redemption, except as otherwise permitted under the Redevelopment Law. Any Series 1991 Bonds purchased by the Agency or by the Fiscal Agent on behalf of the Agency shall be cancelled. 8 Transftr and Exchange The Series 1991 Bonds may be transferred or exchanged at the principal corporate trust office of the Fiscal Agent in Los Angeles, California, provided that the Fiscal Agent shall not be required to register the 'transfer of any Series 1991 Bond 15 days before any Interest Payment Date or any redemption date for Series 1991 Bonds which have been selected for redemption. The Fiscal Agent, under certain circumstances, shall replace Series 1991 Bonds which have been mutilated, lost, destroyed or stolen. The Fiscal Agent shall require the payment by the Owner requesting the transfer or replacement of any Series 1991 Bond of any tax or other governmental charge required to be paid with respect to such transfer or replacement. The proceeds from the sale of the Series 1991 Bonds are estimated to be as follows: Sources and Uses of Funds Sources: Principal Amount of Series 1991 Bonds $13,800,000 Accrued Interest Less Underwriter's Discount Total Sources Uses: Reserve Account of the Special Fund Interest Account of the Special Fund (1) Redevelopment Fund (2) Total Uses (1) Amounts deposited in the Special Fund will consist of $ of accrued interest on the Series 1991 Current Interest Bonds. [Verify that tax increment will be adequate for May 1, 1992 interest payment.] (2) Amounts on deposit in the Redevelopment Fund may be used to pay costs of issuance of the Series 1991 Bonds, including Bond Counsel, Fiscal Consultant and Fiscal Agent fees, and printing. 9 .1. - .. .. Debt Service Schedule TABLE I 7USTIN COMl1MITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT Tax Allocation Bonds, Series 1991 Annual Debt Service Due Accreted Current Annual November 1 Principal lnIem -t Inumu-t Value Total 1992 $ $ $ $ $ 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 10 SECURITY FOR THE SERIES 1991 BONDS Pledge of Tax Revenues The Series 1991 Bonds are secured by and payable from the Tax Revenues derived from taxes assessed on property within the Project Area. As provided in the 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 of California (the "State"), taxes levied upon taxable property in the Project Area each year by or for the benefit of the State, any agency, county, city and county, district or other public corporation (collectively, the "Taxing Agencies") for fiscal years beginning after the effective date of the ordinances adopting the Redevelopment Plan for the Project Area shall be divided as follows: 1. To Taxing Agencies: The portion equal to the amount of those taxes which would have been produced by the then current tax rate applied to the assessed valuation of such property within the Project Area as last equalized prior to the effective date of the ordinance approving the Redevelopment Fund, shall be allocated to and when collected shall be paid into the funds of the respective Taxing Agencies as taxes by or for said Taxing Agencies; and 2. To the Agency: Except for taxes which are attributable to a tax rate levy by a Taxing Agency for the purpose of producing revenues to repay bonded indebtedness approved by the voters of the Taxing Agency on or after January 1, 1989 which shall be allocated to and when collected shall be paid to the respective Taxing Agency, that portion of the taxes levied in each year in excess of the amount set forth in paragraph 1 above shall be allocated to, and when collected, shall be paid to the Agency for deposit in the Special Fund established under the Resolution to the extent necessary to pay the principal and Accreted Value of, premium (if any) and interest on, and to replenish the Reserve Account for, the Bonds. The Bonds are secured by a pledge of and lien on all of the Tax Revenues and a pledge of all of the monies in the Special Fund created pursuant to the Resolution, including the Interest Account, the Principal Account, the Term Bonds Sinking Account and the Reserve Account therein. The Tax Revenues are allocated by the Resolution in their entirety to the payment of the principal and Accreted Value of, premium, if any, and interest on the Bonds and any Additional Bonds issued on a parity with the Bonds and the transfer of amounts to the Reserve Account for the Bonds. If the Reserve Requirement is fully funded, excess Tax Revenues may be applied by the Agency for any lawful purpose in accordance with the Resolution. See "THE RESOLUTION - Application of Tax Revenues" in Appendix B. The Agency has no power to levy and collect taxes, and any property tax limitation, legislative measure, voter initiative or provisions of additional sources of income to Taxing Agencies having the effect of reducing the property tax rate, or the value of property subject to ad valorem taxations, must necessarily reduce the amount of Tax Revenues that would otherwise be 11 available to pay the principal and Accreted Value of, premium, if any, and interest on, the Bonds. Likewise, broadened property tax exemptions or successful appeals of assessed valuations could have a similar effect. See 'BONDOWNkRS' RISKS" and "LIMITATIONS ON TAX REVENUES" herein. The Bonds are not a debt of the City, the State or any of its political subdivisions, and neither the City, the State, nor any of its political subdivisions, is liable therefor. The principal and Accreted Value of, premium (if any) and interest on the Bonds are payable solely from the Tax Revenues allocated to the Agency from the Project Area. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limit or restriction. 5-trigu 1991 Bonds Parity Debt The Series 1991 Bonds are secured on a parity with the Series 1987 Bonds, of which $7,510,000 aggregate principal amount is currently outstanding. The Agency will certify on the date the Series 1991 Bonds are sold to the original purchaser thereof that it has satisfied each of the conditions required for the issuance of Additional Bonds. In addition to the Series 1991 Bonds, the Resolution permits the Agency to issue additional Series of bonds in the future secured by a lien and charge upon Tax Revenues equal to the lien and charge securing the Bonds. See "APPENDIX A: THE RESOLUTION - Additional Bonds" in Appendix B. Current State law, however, restricts the Agency's ability to pledge the portion of the Tax Revenues which constitute State Special Subventions. See "LIMITATIONS ON TAX REVENUES --Business Inventory and Special Subventions" herein. Reserve Account The Fiscal Agent is required upon delivery of the Series 1991 Bonds to deposit in the Reserve Account from Series 1991 Bond proceeds an amount which, when added to the amounts already on deposit in the Reserve Account, is sufficient to bring the balance on deposit in the Reserve Account to an amount equal to Maximum Annual Debt Service on the Bonds (the "Reserve Requirement"). Moneys in the Reserve Account will be used solely for the purpose of paying the principal and Accreted Value of, premium, if any, and interest on the Bonds in the event that no other money of the Agency is lawfully available therefor, or for replenishing the Interest Account, the Principal Account or the Term Bonds Sinking Account in the event of any deficiency at any time in such accounts. The Series 1987 Resolution requires the provision of a cash funded Reserve Fund. While the Series 1987 Bonds are outstanding the Agency may, provided consent of the Series 1987 Bondowners is received, elect to maintain the Reserve Requirement by obtaining a letter of credit, a surety bond, a police of insurance or any other security device (in each case rated in the highest two rating categories by each Rating Agency which rates the Series 1991 Bonds 12 at such time), in any amount which, together with any funds on deposit in the Reserve Account, will guarantee to the Agency the full amount of the Reserve Requirement at such times as all or any portion of the Reserve Requirement is needed for transfer to the Interest Account and/or Principal Account. Subordinate Obligations As of 1991, the Agency reports that there are no subordinate obligations to the Bonds. 13 SERIES 1991 BONDOIINERS' R I SKS Property Txx— venues RCvcnues Tax Revenues allocated to the Agency, other than amounts representing State Supplemental Subventions, are determined by the amount of increased assessed value of property in the Project Area, the current rate or rates at which property in the Project Area is taxed and the percentage of taxes collected in the Project Area. The Agency does not have taxing power, nor does the Agency have the power to affect the rate at which property is taxed. At least three types of events which are beyond the control of the Agency could occur and cause a reduction in this portion of Tax Revenues thereby imparting the ability of the Agency to make payments of principal, Accreted Value, interest and premium, if any, when due on the Series 1991 Bonds. First, a reduction of taxable values of property in the Project Area caused by economic factors beyond the Agency's control, such as a relocation out of the Project Area by one or more major property owners, successful appeals by property owners for a reduction in a property's assessed value or the destruction of property caused by natural or other disasters, could occur, thereby causing a reduction in the Tax Revenues that secure the Series 1991 Bonds. Second, there are many Constitutional and statutory limitations on the ability of the Agency to collect and receive tax increment revenues. In addition to the existing limitations on Tax Revenues described herein under "LIMITATIONS ON TAX REVENUES," the California electorate or Legislature could adopt further limitations with the effect of reducing Tax Revenues payable to the Agency. Finally, delinquencies in the payment of property taxes by the owners of land in the Project Area could have an adverse effect on the Agency's ability to make timely debt service payments. Reduction in Tax Revenues Any reduction in Tax Revenues, whether for any of the foregoing reasons or - any other reason, could have an adverse effect on the Agency's ability to make timely payments of principal and Accreted Value of, premium, if any, and interest on the Series 1991 Bonds, which are secured by such Tax Revenues. To estimate the total Tax Revenues available to pay debt service on the Series 1991 Bonds, the Agency has made certain assumptions with regard to the assessed valuation in the Project Area, future tax rates, the percentage of taxes collected, the amount of funds available for investment and the interest rate at which those funds will be invested. The Agency believes these assumptions to be reasonable, but to the extent that the assessed valuation, the tax rates or, the percentage of taxes collected are less than the Agency's assumptions, the total Tax Revenues available to pay debt service on the Bonds may be less than those projected herein. See "TAX REVENUES AND DEBT SERVICE" herein. Bk–Entry Syste Owners of the Series 1991 Bonds may experience some delay in their receipt of distributions of principal or Accreted Value of and interest on the Series 1991 Bonds since such distributions will be forwarded 14 by the Fiscal Agent to DTC and DTC will credit such distributions to the accounts of the DTC Participants which will thereafter credit them to the accounts of the Owners either directly or indirectly through indirect participants. See "THE SERIES 1991 BONDS - Book -Entry Only System. Issuance of the Series 1991 Bonds in book -entry form may reduce the liquidity of the Series 1991 Bonds in the secondary trading market since investors may be unwilling to purchase Series 1991 Bonds for which they cannot obtain physical certificates. In addition, since transactions in the Series 1991 Bonds can be effected only through DTC, Participants, indirect participants and certain banks, the ability of a Owner to pledge Series 1991. Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Series 1991 Bonds, may be limited due to lack of a physical certificate. Owners will not be recognized by the Fiscal Agent as registered Owners for purposes of the Resolution, and Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See "THE SERIES 1991 BONDS- Book -Entry System." 15 LIMITATIONS ON TAX REVENUES Propel Tax Ratc Limitations - Articic XIIIA California voters, on June 6, 1978, approved an amendment (commonly known as both Proposition 13 and the Jarvis -Gann Initiative) to the California Constitution which imposes limitations on taxes that may be levied against real property. This amendment, which added Article XIIIA to the California Constitution, among other things, affects the valuations of real property for purposes of taxation. It defines full cash value of property to mean the county assessor's valuation of real property as shown on the 1975/76 tax bill under 'full cash value' or, thereafter, the appraised value of real 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 two percent 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 damage, common destruction or other factors. The amendment further limits the amount of any ad valorem tax on real property to one percent of the full cash value, except that additional taxes may be levied to pay debt service on general obligation bonds and certain other indebtedness approved by the voters prior to July 1, 1978 and on any bonded indebtedness for the acquisition or improvement of real property which is approved after July 1, 1978 by two-thirds of the voters voting on such indebtedness. ApprQpriations Limitations: Article XIIIB On November 6, 1979, California voters approved Proposition 4, known as the Gann -Initiative, which added Article XIIIB to the California Constitution. Propositions 98 and 111, approved by the California voters in 1988 and 1990, respectively, substantially modify Article XIIIB. "file principal effect of Article XIIIB is to limit the annual appropriations of the State and any city, county, school district, authority, or other political subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living and population. The initial version of Article XIIIB provided that the "base year" for establishing an appropriations limit was the 1978/79 fiscal year, which was then adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by these public agencies. Proposition 111 revised the method for making annual adjustments to the appropriations limit by redefining changes in the cost of living and in population. It also required that beginning in fiscal year 1990/91, each appropriations limit must be recalculated using the actual 1986/87 appropriations limit and making the applicable annual adjustments as if the provisions of Proposition 111 had been in effect. Appropriations subject to limitation of a local government under Article XIIIB include generally any authorization to expend during a fiscal year the proceeds of taxes levied by or for that entity and the proceeds of certain State subventions to that entity, exclusive of refunds of taxes. 16 Proceeds of taxes include, but are not limited to, all tax revenues plus the proceeds to an entity of government from (1) regulatory licenses, user charges and user fees (but only to the extent such proceeds exceed the cost of providing the service or regulation), (2) the investment of tax revenues, and (3) certain subventions received from the State. As amended by Proposition 111, Article XIIIB provides for testing of appropriations limits over consecutive two-year periods. If an entity's revenues in any two-year period exceed the amounts permitted to be spent over such period, the excess has to be returned by revising tax rates or fee schedules over the subsequent two years. As amended by Proposition 98, Article XIIIB provides for the payment of a portion of any excess revenues to a fund established to assist in financing certain school needs. Effective September 30, 1980, the California Legislature added Section 33678 to the Redevelopment Law which provides that the allocation of taxes to a redevelopment agency for the purpose of paying principal of, or interest on, loans, advances, or indebtedness shall not be deemed the receipt by such agency of proceeds of taxes levied by or on behalf of such agency within the meaning of Article XIIIB, nor shall such portion of taxes be deemed receipt of the proceeds of taxes by, or an appropriation subject to the limitation of, any other public body within the meaning or for the purpose of the Constitution and laws of the State, including Section 33678 of the Law. Tlie constitutionality of Section 33678 has been upheld in two California appellate court decisions, Brown v. Community Redevelopment Agency of theCity of Santa An,a and Bell Communi y Redevelopment Agency v. Wooslev. The plaintiff in Brown v. Community Redevelopment Agency of the Cid of aa-nta Ana petitioned the California Supreme Court for a hearing of this case. The California Supreme Court formally denied the petition and therefore the earlier court decisions are now final and binding. On the basis of these decisions, the Agency has not adopted an appropriations limit. Ww and Moderate Inco®e Rousing Re�c�irements. Sections 33334.2 and 33334.3 of the Redevelopment Law require redevelopment agencies to set aside 20% of gross tax increment revenues derived from redevelopment project areas established after December 31, 1976 in a low and moderate income housing fund. Section 33334.2, as amended in 1987 by the California Legislature (Chapter 1111, Statutes of 1987), provides that this low and moderate income housing requirement can be reduced or eliminated if a redevelopment agency finds annually by resolution, consistent with the housing element of the community's general plan: (1) that no need exists in the community to improve or increase the supply of low and moderate income housing; (2) that some stated percentage less than 20% of the tax increment is sufficient to meet the housing needs of the community and is consistent with the housing element of the community's general plan; or (3) that the community is making substantial efforts, consisting of direct financial contributions of funds from state, local, and federal sources for low and moderate income housing of equivalent impact, to meet its existing and projected housing needs (including its share of regional housing needs.) Chapter 1135, Statutes of 1985, amended Section 33334.3 and added Section 33334.6 to the Redevelopment Law, extending the requirement for redevelopment agencies to set aside into a low and moderate income housing 17 fund 20% of tax increment revenues allocated to redevelopment project areas established prior to January 1, 1977, beginning with fiscal year 1985/86 revenues. A redevelopment agency may make the same findings described above to reduce or eliminate the low and moderate income housing requirement for such areas. Additionally, as provided in Section 33334.6, as amended by Chapter 1111, for project areas (or portions thereof) established prior to January 1, 1977, a redevelopment agency may defer its low and moderate income housing deposit requirements in any fiscal year that the agency finds that the deferral is necessary to make payments on "existing obligations," and, for fiscal years through 1995/96 only, to fund the orderly and timely completion of "public and private projects, programs or activities." Existing obligations include any loan, advance or indebtedness (whether funded, refunded, assumed or otherwise) incurred by a redevelopment agency to finance or refinance, in whole or in part, any redevelopment project existing on, and created prior to January 1, 1986, and contained on a statement of existing obligations of the agency filed with the State. The Project Area, for which the Redevelopment Plan was adopted prior to January 1, 1977, is subject to the requirements of Section 33334.6. The Agency adopted a statement of programs and existing obligations prior to September 1, 1986 and has deferred the full 20% set-aside requirement for low and moderate income housing. As of June 30, 1990, the amount of deferred 20% Set-Aside approximated $2 million. The Agency is currently making efforts to develop a housing plan to remedy its deferred 20% Set-Aside requirement. Property Tax Collection Procedures 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 sufficient, in the opinion of the county assessor, to secure payment of the taxes. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State law on the secured property, regardless of the time of the creation of the other liens. A tax levied on unsecured property does not become a lien against the unsecured property, but may become a lien on certain other property owned by the taxpayer. Secured and unsecured property are 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 classifications cif' property. The taxing authority has four ways of collecting unsecured personal property taxes in the absence of timely payment by the taxpayer: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the county recorder's office, 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 taxable to the assessee. The exclusive means of enforcing the payment of delinquent taxes in respect of property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes which are delinquent. 18 Current tax payment practices by the County provide for payment to the Agency of approximately 45% of the secured tax increment revenues in December, with the balance of any additional first installment tax collections made in January. By April, the County advances approximately 8.5% of the adjusted secured tax levy to the Agency. It apportions the balance, if any, of collected taxes from the second installment of tax levies in May. After the close of each fiscal year, the County determines and allocates final tax revenues due to the Agency and allocates them in July. Unsecured tax revenues are allocated to redevelopment agencies in three payments, beginning with an 80% payment in September. The Agency receives subsequent payments of unsecured tax collections generally in January and June. At the present time, unitary revenues are disbursed separately in equal installments in February and March of each year. In addition, supplemental tax increment revenues are disbursed to the Agency as collected by the County on a monthly basis. A 10% penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, property on the secure(] roll on which taxes are delinquent is sold to the State on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1 1/2% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A 10% penalty also applies to delinquent. taxes on property on the unsecured roll, and further, an additional penalty of 1 1/2% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. Except for property assessed by the State, the valuation of property is determined as of March 1 each year and equal installments of taxes levied upon secured property become delinquent on the following December 10 and April 10. Taxes on unsecured property are due March 1 and become delinquent November 31, and such taxes are levied at the prior year's secured tax rate. The evaluation of State -assessed property is determined on January 1. of each year. Legislation enacted in 1983, SB 813 (Statutes of 1983, Chapter 498), provides for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Previously, California Law enabled the assessment of such changes only as of the next March 1 tax lien date following the change and thus delayed the realization of increased property taxes from the new assessments for up to 14 months. Collection of taxes based on supplemental assessments will occur throughout the year. Taxes due wi 1 1 be pro rated according to the amount of time remaining in the tax year, with the exception of tax bills dated March 1, through May 31, which will be calculated on the basis of the remainder of the current fiscal year and the full twelve months of the next fiscal year. 19 Unit i ar�Proyc1AY AB 2890 (Statutes of 1986, Chapter 1457) provides that, commencing with the 1988/1989 Fiscal Year, assessed value derived from State -assessed unitary property county -wide is to be allocated as follows: (1) each tax rate area will receive the same amount from each assessed utility received in the previous fiscal year unless the applicable county -wide values are insufficient to do so, in which case values will be allocated to each tax rate area on a pro -rata basis; and (2) if values to be allocated are greater than in the previous fiscal year, each tax rate area will receive a pro -rata share of the increase from each assessed utility according to a specified formula. Additionally, the lien date on State -assessed utility according to a specified formula. Additionally, the lien date on State -assessed property was changed from March 1 to January 1. AB 454 (Statutes of 1987, Chapter 921) further modifies Chapter 1457 regarding the distribution of tax revenues derived from property assessed by the State Board of Equalization. Chapter 921 provides for the consolidation of operating unitary State -assessed property, except for regulated railroad property, into a single tax rate area in each county. Chapter 921 further provides for a new method of establishing tax rates on State -assessed property and distribution of property tax revenues derived from State -assessed property to taxing jurisdictions within each county in accordance with a new formula. Railroads will continue to be assessed and revenues allocated to all tax rate areas where railroad property -is sited. The intent of Chapters 1457 and 921 is to provide redevelopment agencies with their appropriate share of revenue generated from the property assessed by the State Board of Equalization. The County Auditor -Controller's office implemented the procedures specified in Chapter 921 for redevelopment agencies for 1988/89 and subsequent fiscal years by: (i) reducing the base year value for all redevelopment project areas by the amount of State -assessed unitary property present in the base year valuation totals; and (ii) calculating the revenue due from unitary property based on a project area's Fiscal Year 1987/88 incremental assessed value for unitary property. In Fiscal Year 1990/91, County records indicate the Agency will receive $40,043 as unitary revenue for the Project Area. For purposes of analysis of the ability of the Agency to meet its obligations under the Bonds. Table 4 "Projections of Tax Revenues" includes unitary revenues held constant at the Fiscal Year 1990/91 amount as reported by the County. Business Inventory and Supplemental Revenue. Under prior State law, tax revenues generated by the value of business inventories were based on the actual assessed value of inventories located in a jurisdiction. The revenues generated, which were provided through taxpayer payments and state subventions (50% each), were distributed to local taxing entities and to redevelopment agencies. In 1979, the Legislature enacted AB 66 (Statutes of 1979, Chapter 1150), eliminating the assessment and taxation of business inventory property and providing for replacement revenue, in part, for local agencies, except redevelopment agencies. In 1980, the Legislature enacted AB 1994 (Statutes of 1980, Chapter 610), providing replacement revenue, in part, for the loss of business inventory revenues by redevelopment agencies. 20 The Legislature's enactment of SB 794 (Statutes of 1984, Chapter 447) repealed the provision for State replacement revenue provided in AB 66 and AB 1994 for local agencies. This measure holds redevelopment agencies harmless from the loss of business inventory replacement revenues through State payments (the "State Special Subventions"). The State Special Subventions would be in amounts equal to the difference between the previously received business inventory replacement revenue and revenue derived by virtue of supplemental assessments. Under current law, if redevelopment agencies do not receive sufficient tax revenue generated from the new supplemental roll, the State pays a State Special Subvention to restore such agencies to the difference between the level of business inventory subventions which were to be paid under prior law and the amount of revenue received from taxes on the supplemental roll. As a result of these changes, redevelopment agencies typically have received either from supplemental assessments or State Special Subventions approximately the same amount of revenue as they received in 1983/84 when business inventory subventions had not yet been terminated. Approximately 1.7% of the Tax Revenues consist of State Special Subventions. According to the Fiscal Consultant, the majority of the Project Area's State Special Subvention entitlement has historically been comprised of supplemental assessments. See "APPENDIX F - FISCAL CONSULTANT'S REPORT -- Business Inventory Replacement Revenue/Special Subvention". Effective July 31, 1990, the California Legislature enacted Section 16112.7 of the California Government Code which modifies the computation formula applicable to redevelopment agencies in determining the applicable special subventions for fiscal year 1990/91. The reduced subvention payments will equal only about 75% of the State Special Subventions each redevelopment agency otherwise would have received in fiscal year 1990/91 absent Section 16112.7. Section 16112.7 also changes the subvention payment schedule to require two payments, one on December 31 and the other on July 1 of each year. In addition to reducing subvention revenues for Fiscal Year 1990/91, Section 16112.7 also prohibits a redevelopment agency from pledging State Special Subventions as security for the payment of principal and interest of bonds issued after July 31, 1990. For purposes of analyzing the ability of the Agency to meet its payment obligations on the Series 1991 Bonds, Projected Tax Revenues in Table 4 excludes State Special Subventions. 21 TAX REVENUES AND DEBT SERVICE Prpperl ► T x_I��re�ent As discussed in the subsection "LIMITATIONS ON TAX REVENUES - Property Tax Rate Limitations - Article XIIIA", the property tax rate applicable within the Project Area is limited by the State Constitution to 1% of taxable property value plus the rate necessary to service certain indebtedness approved by the voters. The table below presents a summary of the secured tax rate for 1990/91 for the tax rate area corresponding to the Project Area. Tax Revenues are calculated by using the current year's secured tax rates for secured property and the previous year's secured tax rates for unsecured property. TABLE 2 TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPKENT PROJECT Secured Tax Rate, Fiscal Year 1990/91 (1) Basic Tax Rate 1.00000 Tustin High School District Tustin Elementary School Bond 0.00234 Saddleback Community College District County Improvement Bonds 0.00016 Orange County Flood Control District 0.00082 Tustin City Basic Area Bonds 0.00401 Metro Water District 0.00970 East Orange County, Water District Q_00341 TOTAL Tax Rate 1.02044 Source: Auditor -Controller, County of Orange and Katz Hollis, Inc. (1) Represents the secured tax rate for over 99% of total 1990/91 Project value. 22 Historical Taxable Values The following table shows Project Area Taxable Valuations and tax increment revenues for fiscal years 1986/87 through 1990/91. Tab 1 e 3 TUSTIN COMMUNITY REDEVELOPMENT AMCY TORN CIFNM AREA REDEVELOPIdE(tiT PROJECT Historic Tax Increment Revenues Computed Tax Revenue (4) Tax Receipts (5) $1,535,034 $1,489,693 $1,800,450 $1,716,333 $2,019,276 $1,997,178 $2,164,245 $2,045,686 Percentage Receipts 97.0% 95.3% 98.9% 94.5% $2,306,617 $1,324,121 Notes (1) Pursuant to AB 454 (Chapter 921, Statutes of 1986), commencing with Fiscal Year 1988/89, the State changed the manner utility revenues are allocated. See "APPENDIX F --THE FISCAL CONSULTANT'S REPORT --Unitary Property". The decline in assessed value of State -assessed property in Fiscal Year 1988/89 and later reflects the implementation of AB 454. (2) Amounts as annually reported by the Orange County Auditor -Controller. (3) The base year decline reflected in 1988-89 and thereafter reflects adjustments made by the Orange County Auditor -Controller in the implementation of AB 454. In addition, Base Year values may vary from year to year as Orange County automatically adjusts the base year to reflect property acquisitions, if any, by public entities. (4) Initial tax increment levies, as annually reported as by Orange County. (5) Tax Receipts are based upon reported allocations made by the County Auditor -Controller. Amounts shown are net of prior year redemption payments, any refunds/impounds and County collection charges. Receipts shown for Fiscal Year 1990/91 represent collections through February 1991 only. Source: Katz Hollis, Inc. 23 57.4% 1986/87 1987/88 1988/89 1989/90 1990/91 Secured $175,680,714 $197,083,529 $210,793,317 $219,810,476 $238,436,816 Stats -assessed (1) 4,118,830 4,220,210 88,206 88,158 88,240 Unsecured 26,047,978 33,157,608 38,686,167 40,792,459 40,355,017 Total value (2) ----------- $205,847,522 ----------- $234,461,347 ----------- $249,567,690 ----------- $260,691,093 ----------- $278,880,073 Less base year value (3) 58,387,540 58,387,540 ----------- 57,430,344 ----------- 57,430,344 ----------- 57,282,771 Incremental value ----------- $147,459,982 $176,073,807 $192,137,346 $203,260,749 ----------- $221,597,302 Computed Tax Revenue (4) Tax Receipts (5) $1,535,034 $1,489,693 $1,800,450 $1,716,333 $2,019,276 $1,997,178 $2,164,245 $2,045,686 Percentage Receipts 97.0% 95.3% 98.9% 94.5% $2,306,617 $1,324,121 Notes (1) Pursuant to AB 454 (Chapter 921, Statutes of 1986), commencing with Fiscal Year 1988/89, the State changed the manner utility revenues are allocated. See "APPENDIX F --THE FISCAL CONSULTANT'S REPORT --Unitary Property". The decline in assessed value of State -assessed property in Fiscal Year 1988/89 and later reflects the implementation of AB 454. (2) Amounts as annually reported by the Orange County Auditor -Controller. (3) The base year decline reflected in 1988-89 and thereafter reflects adjustments made by the Orange County Auditor -Controller in the implementation of AB 454. In addition, Base Year values may vary from year to year as Orange County automatically adjusts the base year to reflect property acquisitions, if any, by public entities. (4) Initial tax increment levies, as annually reported as by Orange County. (5) Tax Receipts are based upon reported allocations made by the County Auditor -Controller. Amounts shown are net of prior year redemption payments, any refunds/impounds and County collection charges. Receipts shown for Fiscal Year 1990/91 represent collections through February 1991 only. Source: Katz Hollis, Inc. 23 57.4% Proiected Revenues and Debt Setrvice Table 4 on the following page shows the projected tax increment revenue for the Project Area through 1999/2000 as prepared by the Agency's Fiscal Consultant. The projections of Tax Revenues are generally based on the assumption that the real property values will increase 6% annually, which is consistent with the historical rate of growth in the Project Area (when adjusted to deduct major new developments which have occurred since 1985.) The Fiscal Consultant has also prepated an alternative tax increment revenue projection incorporating growth from moderate near term new development and a 2% annual increase for inflation, as allowed by Article XIIIA of the California Constitution. The 6% projection has been incorporated herein because while no significant new development activity has been identified, numerous modest near term development and rehabilitation projects are anticipated to occur which suggests that the Project Area will continue to be revitalized in the same fashion as has contributed to prior years' assessed value growth. See APPENDIX F - Fiscal Consultant's Report" for a full discussion of assumptions and qualifications utilized to project future tax revenues. The projections of Tax Revenues are also based on the following assumptions: (a) Tax rates used in the determination of Tax Revenues each year are reduced from the prior year's rate by an amount approximately equal to the average annual drop in the rates experienced between fiscal years 1985/86 and 1990/91. The decline, which is due to the gradual redemption of general obligation debt, is allowed to continue until the rate stabilizes at the rate of $1.00 per $100 of taxable value as established by Article XIIIA of the California Constitution; (b) The revenue attributable state assessed utility property is assumed to remain constant at its 1989/90 level. See "LIMITATIONS ON TAX REVENUES - Business Inventory and Supplemental Revenues" herein. 24 g o 0 0 o n " N ao 91 aC t; � a0 0o tr� Otf� N N 07 K K Q O OO O O N O N a> �tN�pOp �to INg0n n vMi O t0 t0 n 00 O OD 00 N N toN cl401*N O O Mm O O M N O N W M N O N rD .4 O O .r rel O N iQ d' CA .n n h n n n i° N M M to ti tMD N N M V) N + ° 0 N O N M O e° O t- Cb �y ttpp ct N Q M 1-4 M 00 N N n .-� � p � .5 o i° � n h n n v N C; O to O 00 co N LO r - N N N N to O M K K Cf) M M N b LO h O O n N O N O h to O a O o -W .t O ti pp O _ V IT h n "t Q h Oo W coto N N 46 H iNrt Dt •� A 40 00 co �p &OD g�k C4 00 COV N to to C4 N K bt N N M N to � M M .nye O O n N O N O t� Lo wn O n O n C� 00 O OD n n tD N a IM '"i 23 eq O i O h n N 00 N O a lw 45, � yy� C LO N N M N +' .r z 10 N N N Q.t � CQ o wN N a to o n00No N o N t- r " a ' - n v, h h .r oo M `r 0 10 Lo G � � � N .r .. O to pp' to tD to n N N N ori b v m N N v 1C N O N K H K 7Q W N N N a � *K O N O N O h h 0 N O n sO O' d - n h 00 N C Po9 •[ •j? vi f! oh ji a WX O tOD 00 cl) t00 N N N V3,w , q 'd X. tjH N w N N C C e y y Ooo N :Qv) w m O S m y LO < ` �w} 4 v E m91 O 7 r G 10 •� \ & �' oma. ; p d' c CO eq co �� Nom• <z<F <zF F 5 v� F z Debt Service and Estimated Coverage Table 5 sets forth the debt service and estimated coverage on the Bonds during the next five fiscal years. Estimated total revenues are based on the following assumptions: 1. The Agency's projections of net Tax Revenues as set forth in Table 4 are realized through fiscal year 1995/96. 2. The debt service is based on the maturity schedule and interest rates for the Bonds as set forth on the cover page hereof. The estimates in Table 5 are based on the assumption that the Agency will not incur parity debt for the Project Area during the next five years. However, it is likely the Agency will incur such parity debt as its Tax Revenues increase, although it is difficult to predict the timing or amount of any such debt. See "APPENDIX B -- THE RESOLUTION - Additional Bonds". Table 5 TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT Projections of Tax Revenues PROJECTED REVENUES (1) DEBT SaVIC.E (2) 1987 1991 Bonds Bonds Fiscal Tax Increment Less Housing Total Tax Debt Debt Coverage Year Revenues(3) Set -Aside (3) Revenues Svc.— Svc_ Ratio 1990/91 $2,307 $ $ 2,307 $803.6 -- 2.87 1991/92 2,352 2,352 803.7 1,039 1.28 1992/93 2,497 2,497 802.6 1,039 1.36 1993/94 2,649 2,649 804.6 1,039 1.44 1994/95 2,809 2,809 804.9 1,039 1.52 1995/96 2,992 2,992 802.8 1,039 1.62 1996/97 3,186 637 2,549 803.8 1,039 1.38 1997/98 3,392 678 2,714 802.0 1,039 1.47 1998/99 3,611 722 2,888 802.3 1,039 1.57 1999/00 3,842 768 3,074 805.0 1,039 1.67 (1) Source: Katz Hollis, Inc. See Table 1 in "FISCAL CONSULTANT'S REPORT" in Exhibit F. (2) Source: Stone & Youngberg. (3) Totals reflect no deduction for the housing set-aside requirement until the 1996/97 Fiscal Year. Any such amounts which must be set aside will not be available to pay debt service on the Bonds. See "LIMITATIONS ON TAX REVENUES - Low and Moderate Income Housing Requirements" herein. 26 THE AGENCY General The Tustin Community Redevelopment Agency was established on October 20, 1976 by Ordinance No. 696—A of the Tustin City Council pursuant to the Redevelopment Law. The members of the City Council serve as the board of directors (the "Board") of the Agency and The City Manager serves as the Agency's Executive Director. The Agency is a separate public body, charged with the authority and responsibility of redeveloping and upgrading blighted areas of the City. City staff provides technical services connected with redevelopment projects, including fiscal planning, engineering, planning, and other functions necessary for implementation of the Redevelopment Plan. The Agency has adopted two Redevelopment Plans: the Town Center Area Redevelopment Plan and the South Central Redevelopment Plan. Agency Poweu. Power in the Agency is vested in the Board, under the Redevelopment Law. The Agency exercises broad governmental functions in executing duly adopted redevelopment projects. As such, the Agency has authority to accomplish its purposes, including, but not limited to, the power of eminent domain, the right to accept financial assistance from any source, the power to issue bonds for authorized purposes and to expend such bond proceeds, and the authority to acquire, sell, rehabilitate, develop, administer, or lease property as a building site. The Agency may demolish buildings, clear land, and cause to be constructed certain improvements including streets sidewalks, and utilities, and can further prepare for use as a building site any real property which it owns or acquires. The Agency does not have the power to levy taxes. The Agency may, from any funds made available to it for such purposes, pay for all or part of the value of land and the cost of buildings, facilities, or other improvements to be publicly owned and operated, provided that such improvements are of benefit to a redevelopment project area and cannot be financed by any other reasonable method. The Agency may not construct or develop buildings, with the exception of certain housing and publicly owned buildings or structures, and must sell or lease cleared property which it acquires within a redevelopment project area for redevelopment in conformity with a particular redevelopment plan. The Agency may further specify a period within which such redevelopment must begin and be completed. 27 .r .. - - ---. Ageny Members The City Council serves as the Board. The following are brief descriptions of the Board Members: Mr. Charles E. Puckett, Mayor, was appointed to the City Planning Commission in 1982. lie remained on the Commission until 1988, serving one year as Chairman and one year as Vice Chairman. Mr. Puckett was elected to the City Council in April, 1990 and was subsequently elected Mayor Pro Tem. Employed by Beatrice/Hunt Wesson, Inc., he is currently serving as District Sales Manager of the Foodservice Division for Southern California, Arizona and Las Vegas. His current term expires in April, 1994. Ms. Leslie Anne Pontious, Mayor Pro Tem, was elected to the City Council in 1990 and serves on several committees and public agencies such as the County Sanitation District 14, the East Tustin Plan, and Santa Ana Flood Control District. Prior to running for the office of City Council, she served as a Planning Commissioner and a member of the Tustin Water Board. She was also elected to the Airport Land Use Committee in 1991. Ms. Pontious is the owner of Ancient Mariner Travel Agency in Tustin. Her current term expires in April, 1994. Mr. Jim Potts was elected to the City Council in April, 1990. In his capacity as councilmember, Mr. Potts has been appointed as the City representative to the Foothill/Eastern Transportation Corridor Agency, the League of California Cities, the Santa Ana/Tustin Joint Powers Agency. Since 1977, he has been employed with the City of Irvine Police Department. In addition, Mr. Potts is co-owner of a large manufacturing corporation. His current term expires April, 1992. Mr. Earl C. Prescott has served on the City Council since 1986. He currently represents the City to the League of Cities and the Santa Ana Flood Control District. Mr. Prescott is a fourth-generation resident of the County and is involved in real estate and family business management and development. His current term expires in April, 1992. Mr. Richard B. Edgar, was first elected to the City Council in 1974 and served as Mayor in 1976 and 1990. He has since served on the City Council at various times and also served as Mayor in 1982 and 1987. In addition to his service on the City Council, Mr. Edgar was appointed to the Tustin Parks and Recreation Commission in 1968 and to the Planning Commission in 1973. Mr. Edgar was recently elected to the Orange County Transportation Authority. Ile also served as first chairman of the Tustin Redevelopment Agency in 1976 and is currently serving in that position. His current term expires in April, 1992. Agency Staff Mr. William A. Huston, City Manager and Executive Director of the Agency, was appointed as the City's first City Manager on September 1, 1981. Prior to that appointment, Mr. Huston served as City Manager of Milbrae, California. He is a graduate of the University of Southern California with a Masters Degree in Public Administration. 28 Mr. Ronald A. Nault, Director of Finance, is a graduate of California State College at Fullerton, and prior to joining the City in November, 1980, was Assistant Finance Director of the City of Laguna Beach. As the Director of Finance and City Treasurer, lie is responsible for all investments for the City and the preparation of both the Comprehensive Annual Financial Report and the Program and Financial Plan (Budget) for each fiscal year. Mrs. Mary E. Wynn, Secretary, has worked for the City as chief deputy city clerk from 1979 to 1989, a full-time City staff position which involves City record keeping and taking the minutes of City Council meetings. She is completing her third four-year term as elected city clerk. Mrs. Wynn's responsibilities include the filing, city records, preparation of City Council agendas and administration of local elections. Ms. Christine A. Shingleton, Director of Community Development, has worked in the planning realm for the past eighteen years. She was recently appointed to the position of Assistant City Manager while continuing in her role as Director of Community Development. She earned her masters degree in public policy from California State University, Long Beach. Prior to joining the City in 1986, Ms. Shingleton started as an intern with the City of Pasadena, spent several years as a regional planner with the County of Los Angeles and worked for the cities of Monterey Park and Signal Hill where she spent five years as Community Development Director. Mr. James G. Rourke, City Attorney and General Counsel of the Agency, was admitted to the bar in 1954. His background includes service as a member of the League of California Cities, City Attorneys Department, and the Panel of Arbitrators, American Arbitration Association. He served as Judge Pro Tempore from 1960 through 1964 to the Orange County Superior Court. Mr. Rourke has been a member of the Orange County City Attorneys Association where lie served as President in 1980. He has been the City Attorney since 1960. Aged Financial Statements Included in Appendix E are the Agency's audited financial statements for the fiscal year ended June 30, 1990. 29 BXIIIIIT I J! Map of Redevelopment J Project Area As Adopted by the Tustin City Council and Community Redevelopment Agency November 22, 1976 L LEGEND RESIDENTIAL SINGLE FAMILY RESIDENTIAL MULTIPLE FAMILY RESIDENTIAL MOBIL HOME PROFESSIONAL COMMERCIAL INDUSTRIAL M .j. PUBLIC a INSTITUTIONAL L r WAT all TOWN CENTER AREA REDEVELOPMENT PROJECT Background The Redevelopment Plan for the Project Area was approved by Ordinance No. 701 and amended through the adoption of Ordinance No. 855 on September 8, 1981 and Ordinance No. 1021 on March 20, 1989. The Project Area includes approximately 360 acres in the center of the City, an area which includes the historic "old town" and civic center and a majority of the commercial properties within the central portion of the City. The Project Area contains commercial, service -commercial, neighborhood commercial, and residential land uses. Although a precise breakdown of land uses is not available, the predominant land use in the Project Area is commercial, which is estimated to approximate 90% of the total area. Residential and public/institutional uses account for approximately 5% each of the Project Area's land. Residential uses are mostly multi -family with a very small proportion of the Project Area containing single-family and mobile Dome uses. Public institutional uses include two parks (Columbus -Tustin and Peppertree), the Civic Center, the Tustin School District administrative offices, Columbus -Tustin Intermediate School, and the Tustin Post Office. The Project Area is generally bounded by portions of Beneta Avenue and Irvine Boulevard on the north, Interstate Highway 5 (Santa Ana Freeway) on the south, portions of Prospect Avenue and "B" Street on the west, and portions of Newport Avenue and Main Street on the east. The Agency initiated proceedings to establish the Project Area in 1971 after central -city merchants and the Tustin Chamber of Commerce requested its help in revitalizing and expanding the E1 Camino Real commercial area in central Tustin. In the early 1970's, the El Camino Real area consisted of mixed residential and commercial uses on substandard lots. Most of the commercial facilities lacked off-street parking. Some of the businesses dated back to the early 1900's; only one new structure had been built in the area during the previous decade. The general objectives of the Redevelopment Plan are the elimination and prevention of blight in the Project Area. The Redevelopment Plan calls for constructing and improving streets, utilities or other public improvements; acquiring, disposing of and redeveloping real property; participation of owners and tenants in the Project Area; management of property- under Agency ownership and control; and demolition, rehabilitation or removal of buildings. In the Project Area particularly, the Agency's goal was to eliminate existing blight and prevent the spread of blight and deterioration by: • Providing for participation by owners and residents of the Project Area by extending the them preferences to remain or relocate within the redeveloped areas should their present structures be suffering from deterioration requiring assistance; • Rehabilitate structures and improvements by present owners, their successors, or the Agency; 31 • Redevelop land by private enterprise or public agencies for uses in accordance with the Redevelopment Plan; • Install, construct or reconstruct streets, utilities and other public improvements such as center islands, street trees and landscaping; • Acquire certain real property for public improvements or to help expedite private development; • Provide relocation assistance to displaced residential and non-residential occupants; • Demolish or remove certain buildings and improvements; • Manage any property acquired under the ownership and control of the Agency; • Dispose of any property acquired by the Agency for uses in accordance with the Redevelopment Plan. CQntrols, Land Use and Building Restrictions All real property in the Project Area is subject to the controls and restrictions of the Redevelopment Plan. The Redevelopment Plan requires that new construction shall comply with all applicable State statutes and local laws in effect, including City zoning ordinances and City codes for building, electrical, heating, ventilating and plumbing. The Redevelopment Plan further provides that no existing building shall be substantially modified, altered, repaired or rehabilitated, except in accordance with architectural, landscape and site plans submitted and approved by the Agency. The Redevelopment Plan allows for commercial, industrial, residential, and public uses within the Project Area, but specifies the particular area in which each of these uses is permitted. The Agency may permit an existing but nonconforming use to remain so long as the existing building is in good condition and is generally compatible with other surrounding development uses. The owner of any property with a nonconforming use must be willing to enter into a participation agreement with the Agency and agree to the imposition of such reasonable restrictions as are necessary to protect the development and use of the Project Area. Within the limits, restrictions and controls established in the Redevelopment Plan, the Agency is authorized to establish land coverage, setback requirements, design criteria, and other development and design controls necessary for proper development of both private and public segments within the Project Area. Under certain circumstances, the Agency is authorized to permit a variation from the limits, restrictions and controls established by the Redevelopment Plan. However, no variation shall be granted which changes the basic land use or which permits other than a minor departure from the 32 Redevelopment Plan provisions. In permitting a variation, the Agency shall impose such conditions as are necessary to protect the public health, safety and welfare and to assure compliance with the purposes of the Redevelopment Plan. Any variation permitted by the Agency shall not supersede any other approval required under City codes and ordinances. Major DevelODment Activities in the Project Area At the time the Redevelopment Plan was adopted, the City recognized that a number of problems existed in the Project Area, including scattered physical deterioration; limited renovation or new construction; lack of major street attractions; inadequate parking and amenities; increased business competition in surrounding areas; and the absence of a central shopping and commercial district for the City's town center. Developments in the area included a small strip commercial shopping center adjacent to a railroad right-of-way and a chemical storage facility. Under the Redevelopment Plan, the Agency acquired the shopping center and storage facility property as well as the railroad right-of-way. The Agency has participated in over $9.5 million of public improvements, with redevelopment resources accounting for approximately $6.8 million of the total costs for such improvements. The public projects completed to date include: undergrounding of utilities; widening 17th Street; new storm drains; the reconstruction of streets and alleys; new traffic signals; landscaping; parking facilities; civic center improvements; improvments to public open spaces including Columbus -Tustin Park, and numerous landscaping programs. Development in the Project Area since adoption of the Redevelopment Plan includes shopping and commercial centers and a parking structure. Tustin Plaza on Newport Avenue is an office and commercial center containing about 85,500 square feet of retail space, 45,700 square feet of office space, and an anticipated 5,000 -square -foot freestanding restaurant. The office and retail development was completed in 1986, and the restaurant was completed in 1988. The Agency assisted financially in the costs of constructing public improvements for the project. The La Fayette Plaza Shopping Area, also on Newport Avenue, is a 44,000 -square -foot retail center, which was completed in 1987. An adjoining theme restaurant, Newport Square, containing approximately 9,000 square feet was recently completed. The Agency was involved in land acquisition and assistance in constructing public improvements for the project. A 247 -space downtown parking structure has been completed on C Street to provide additional parking for adjacent commercial and office developments. The Agency assisted in the costs of construction, and has a financial interest in spaces defined for public parking use. Additional private construction has occurred in the Project Area, including over 250,000 square feet of office space and support retail facilities. Public investment by the Agency was used for street and signal improvement within the Project Area and a public plaza adjacent to the parking structure. 33 For additional discussion regarding new development activity within the Project Area, see APPENDIX F - "FISCAL CONSULTANT'S REPORT". The following table shows the assessed valuations of the property held bi the ten major assessees located in the Project Area. Table 6 TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT Assessed Valuations Secured Property Held by Ten Major Taxpayers Fiscal Year 1990/91 Source: Katz Hollis, Inc. (1) Secured Taxable value only. (2) An appeal is currently outstanding on this assessment. For purposes of projecting Tax Revenues as shown in Table 4, the Fiscal Consultant has reduced this assessment's real property value by approximately $8.7 million in Fiscal Year 1991/92 to account for the potential effect of the valuation appeal. See "APPENDIX F - FISCAL CONSULTANT'S REPORT -- Assessment Appeals." Application of Bond Proceeds The Agency is issuing the Series 1991 Bonds to pay for a portion of the costs associated with the completion of the Redevelopment Plan. These projects include the expansion of the City's Civic Center, improvements to Columbus -Tustin Park, provision for various new water wells and other public improvements. 34 1990/91 Local Percent of Assessed Secured Taxpayer Tyne of Business Value (1) Value 1. Arthur E. Bartlett (2) Retail/Neighborhood/ $26,004,874 10.91°x, Commercial (Larwin Square) 2. Newport Avenue Partners Shopping Center 15,235,771 6.39 (Tustin Plaza) 3. RREEF-IV, Inc. Neighborhood/ 9,212,787 3.86 Commercial 4. McCombs Properties Specialty Retail/ 7,663,191 3.21 Commercial 5. David Gaon Garden Office 6,838,398 2.87 6. Burnett-Ehline Properties Retail/Restaurant 6,729,232 2.82 (Lafayette Plaza) 7. The Courtyard Retail Shopping Center 5,228,876 2.19 8. Raymond Larson Office/Bank 5,024,385 2.11 9. Price Edward Evans Small Office 4,032,588 1.69 10. Orange Pacific Limited Banks -j-6-5-4—.9 13 J.53 TOTAL VALUE $89,625,015 37.58° Source: Katz Hollis, Inc. (1) Secured Taxable value only. (2) An appeal is currently outstanding on this assessment. For purposes of projecting Tax Revenues as shown in Table 4, the Fiscal Consultant has reduced this assessment's real property value by approximately $8.7 million in Fiscal Year 1991/92 to account for the potential effect of the valuation appeal. See "APPENDIX F - FISCAL CONSULTANT'S REPORT -- Assessment Appeals." Application of Bond Proceeds The Agency is issuing the Series 1991 Bonds to pay for a portion of the costs associated with the completion of the Redevelopment Plan. These projects include the expansion of the City's Civic Center, improvements to Columbus -Tustin Park, provision for various new water wells and other public improvements. 34 TAX EXEMPTION The Internal Revenue Code of 1986 (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from gross income for Federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income for Federal income tax purposes retroactive to the date of issue of the Bonds. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Bonds are to be invested and require, under certain circumstances, that certain investment earnings on the foregoing be rebated on a periodic basis to the Treasury Department of the United States of America. The City has covenanted in the Resolution to maintain the exclusion of the interest on the Bonds from gross income for Federal income tax purposes pursuant to section 103(x) of the Code. In the opinion of Mudge Rose Guthrie Alexander & Ferdon, and Rourke & Woodruff, Co -Bond Counsel, under existing law, interest on the Bonds is exempt from personal income taxation of the State- of California and, assuming compliance with the aforementioned covenant, interest on the Bonds is excluded from gross income for Federal income tax purposes. Co -Bond Counsel is also of the opinion that the Bonds are not "specified private activity bonds" within the meaning of Section 57(a)(5) of the Code and, therefore, the interest on the Bonds will not be treated as a preference item for purposes of computing the alternative minimum tax imposed by Section 55 of the Code. Interest on the Bonds owned by corporations will, however, be taken into account: (1) in determining the alternative minimum tax imposed by Section 55 of the Code on 75 percent of adjusted current earnings over alternative minimum taxable income (determined without regard to this adjustment and the alternative tax net operating loss deduction) (2) in calculating the environmental tax equal to 0.12% of the Corporation's modified alternative mininum taxable income in excess of a certain amount (generally $2 million) imposed by Section 59A of the Code; and (3) in determining the foreign branch profits tax imposed on the effectively connected earnings and profits (with adjustments) of United States branches of foreign corporations by Section 88A of the Code. Co -Bond Counsel is further of the opinion that the difference between the principal amount of the Bonds maturing on (the "Discount Bonds") and the initial offering price to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Discount Bonds of the same maturity was sold constitutes original issue discount which is excluded from gross income for Federal income tax purposes to the same extent as interest on the Discount Bonds. Further, such original issue discount accrues actuarilly on a constant interest rate basis over the term of each Discount Bond and the basis of each Discount Bonds acquired at such initial offering price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount. 35 Co -Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Bonds may affect the tax status of interest on the Bonds. No assurance can be given that future legislation, or amendments to the Code, if enacted into law, will not contain provisions which could directly or indirectly reduce the benefit of the exclusion of the interest on the Bonds from gross income for Federal income tax purposes. Certain requirements and procedures contained or referred to in the Resolution and other 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. Co -Bond Counsel expresses no opinion as to any Bond, or the interest thereon, if any such change occurs or action is taken upon the advice or approval of bond counsel other than Mudge Rose Guthrie Alexander & Ferdon and Rourke & Woodruff. Although Co -Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for Federal income tax purposes, a Bondholder's Federal tax liability may otherwise be affected by the ownership or disposition of the Bonds. The nature and extent of these other tax consequences will depend upon the Bondholder's other items of income or deduction. Without limiting the generality of foregoing, prospective purchasers of the Bonds should be aware that (i) Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of a holder's interest expense allocated to interest on the Bonds, (ii) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Bonds, (iii) interest on the Bonds earned by some corporations could be subject to the environmental tax imposed by Section 59A of the Code, (iv) interest on the Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code, (v) passive investment income, including interest on the Bonds, may be subject to Federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter corporation is passive investment income and (vi) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Bonds. Co -Bond Counsel has expressed no opinion regarding any such other tax consequences. APPROVAL OF LEGAL PROCEEDINGS The legality of the issuance of the Series 1991 Bonds is subject to the approval of Mudge Rose Guthrie Alexander & Ferdon, Los Angeles, California, and Rourke & Woodruff, a Professional Corporation, Orange, California acting as Co -Bond Counsel. Certain legal matters will be passed upon for the Agency by James G. Rourke as Agency General Counsel. 36 LITIGATION There is no litigation pending or, to the Agency's knowledge, threatened in any way to restrain or enjoin the issuance, execution or delivery of the Series 1991 Bonds, to contest the validity of the Series 1991 Bonds, the Resolution or any proceeding of the Agency with respect thereto. In the opinion of the Agency and its counsel, there are no lawsuits or claims pending against the Agency which will materially affect the Agency's finances so as to impair its ability to pay principal of and interest on the Series 1991 Bonds when due. LEGALITY FOR INVESTMENT The Redevelopment Law provides generally that the State and its municipal corporations, political subdivisions and public bodies, as well as banks, trust companies, savings banks, insurance companies and various other financial institutions and fiduciaries within the State may legally invest funds within their control in Series 1991 Bonds or other obligations issued by redevelopment agencies. Such Series 1991 Bonds and other obligations arc also security for public deposits within the State. RATINGS [To be Added] UNDERWRITING The Series 1991 Bonds are to be purchased following receipt of competitive bids by (the "Underwriter"). The Underwriter has agreed, subject to certain terms and conditions set forth in the Notice of Sale and the Preliminary Official Statement, to purchase the Series 1991 Bonds at a price of $ plus accrued interest. The Underwriter will purchase all the Series 1991 Bonds if any are purchased. The Series 1991 Bonds may be offered and sold to certain dealers (including dealers depositing said Series 1991 Bonds into investment trusts) and others at prices lower than the initial public offering price, and the public offering may be changed from time to time by the Underwriter. FINANCIAL ADVISOR Stone & Youngberg served as Financial Advisor to the Agency with respect to the sale of the Series 1991 Bonds. The Financial Advisor has assisted the Agency in the preparation of this Preliminary Official Statement and in other matters relating to the planning, structuring, and issuance of the Series 1991 Bonds. MISCELLANEOUS All the preceding summaries of the Resolution, applicable legislation, agreements and other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or 37 3 all of such provisions. Reference is hereby made to such documents on file with the Agency for further information in connection therewith. Insofar as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of such statements made will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the Owners of the Series 1991 Bonds. . The execution and delivery of this Official Statement has been duly authorized by the Agency. TUSTIN COMMUNITY REDEVELOPMENT AGENCY U-�---- By 7 Chairman 38 City of Tustin REDEVELUPMENT AGENCY RESOLUTION CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) RESOLUTION NO. RDA 91-11 MARY E. WYNN, City Clerk and Recording Secretary of the Community Redevelopment Agency of the City of Tustin, California, does hereby certify that the whole number of the members of the Community Redevelopment Agency of the City of Tustin is five; that the'above and foregoing Resolution No. RDA 91-11 was duly and regularly introduced, passed and adopted at a regular meeting of the Community Redevelopment Agency held on the 20th day of May, 1991, by the following vote: AGENCY MEMBER AYES: Puckett, Pontious, Edgar, Potts, Prescott AGENCY MEMBER NOES: None AGENCY MEMBER ABSTAINED: None AGENCY MEMBER ABSENT: None snn, �7, 0 t311.1— Mary E. Wynn, cording 6ecretary