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Home My WebLink AboutRDA 82-11RESOLUTION NO. RDA 82-11 RESOLUTION OF THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY PROVIDING FOR THE SALE OF NOT TO EXCEED $8,500,000 PRINCIPAL AMOUNT OF TUSTIN COMMUNITY REDEVELOPMENT AGENCY, TOWN CENTER AREA REDEVELOPMENT 'PROJECT, TAX ALLOCATION BONDS, SERIES 1982. RECITALS: A. The Tustin Community Redevelopment Agency (the "Agency") is a redevelopment agency, a public body, corporate and politic, duly created, established and authorized to transact busi- ness and exercise its powers, all under and pursuant to the Community Redevelopment Law, California Health and Safety Code Sections 33000 et seq. and the powers of the Agency include the power to issue bonds for any of its corporate purposes. B. The Agency has heretofore adopted a resolution entitled: "Resolution of the Tustin Community Redevelopment Agency Authorizing the Issuance of $8,500,000 principal amount of Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1982" (the "Bond Resolution"). C. The Agency deems it necessary to sell at this time $8,500,000 principal amount of Bonds as authorized by the Bond Resolution. NOW, THEREFORE, THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. Sale Authorized. The sale by the Agency of $8,500,000 TUSTIN COMMUNITY REDEVELOPMENT AGENCY, TOWN CENTER AREA REDEVELOPMENT PROJECT, TAX ALLOCATION BONDS, SERIES 1982 (the "Bonds"), on an all or none basis and in accordance with law, is hereby authorized. The principal amount of the Bonds may change in accordance with the municipal bond insurance made available in con- nection with the Bonds, as further described under the caption "Municipal Bond Insurance" in the Notice Inviting Bids authorized in Section 2 of this Resolution. Section 2. Notice Inviting Bids. The invitation for bids for the purchase of the Bonds is hereby authorized, such invitation to be substantially in accordance with the Notice Inviting Bids attached hereto, marked "Exhibit A" and by this reference incorpo- rated herein. Such Notice Inviting Bids and the Bid Form, including the memorandum of interest cost, attached hereto and marked "Exhibit B" and by this reference incorporated herein, are hereby approved. Section 3. Publication of Notice Inviting Bids. The Secretary of the Agency shall cause to be published in the manner provided by law, such Notice Inviting Bids. Section 4. Terms and Conditions of Sale. The terms and conditions of the offering and the sale of the Bonds shall be as specified in such Notice Inviting Bids. Section 5. Preliminary Official Statement Approved. The Agency hereby approves the Preliminary Official Statement, substan- tially in the form of the draft, copy attached hereto as Exhibit C, to be distributed to prospective bidders for the Bonds. The Executive Director, upon the advice of the Financial Consultant or Co-Bond Counsel, or both, is hereby authorized and directed, prior to final preparation for distribution, to make such changes in such Preliminary Official Statement as are necessary or desirable to cor- rect errors or clarify or expand upon the meaning of parts thereof. A copy of the Preliminary Official Statement, as distributed, shall be filed in the office of the Secretary of the Agency. Section 6. Official Statement Furnished. The Secretary and the Financial Consultant are hereby authorized and directed to cause to be furnished to prospective bidders reasonable numbers of copies.of the Notice Inviting Bids, the Bid Form, and the Preliminary Official Statement. Section 7. Opening of Bids. The Financial Consultant is hereby authorized and directed to open the bids at the time and place specified in such Notice Inviting Bids and to present the same to the Agency. The Financial Consultant is hereby authorized and directed, in addition to taking the above actions, to receive and record the receipt of all bids made pursuant to such Notice Inviting Bids, to cause such bids to be examined for compliance with such Notice Inviting Bids, to cause computations to be made as to which bidder has bid the lowest net interest cost to the Agency and to present such bids to the Agency as provided in such Notice Inviting Bids, along with a report as to the foregoing and any other matters deemed pertinent to the award of the Bonds and the proceedings for the issu- ance thereof. Section 8. General Authorization. The members of the Agency, and its officers, deputy officers, employees, consultants and counsel, are hereby authorized to do all acts and things necessary or desirable in carrying out the financing contemplated by the Bond Resolution and this Resolution. Section 9. Effective Date. effect upon its adoption. This Resolution shall take PASSED, APPROVED AND ADOPTED this 20th day of October, 1982. ATTEST: Ch a i r ma~n~~ ~cretary ~--- (SEAL) JOB NO. 97576B002 ST: 97576A JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oet-82 0~55 SEQ NO: 1 TUSTIN COMMUNITY REDEVELOPMENT AGENCY (a public body, corporate and politic, of the State of California1 NOTICE INVITING BIDS NOT TO EXCEED $8,500,000* TUSTIN COMMUNITY REDEVELOP.%iENT AGENCY TOWN CENTER AREA REDEVELOP.MENT PROJECT TAX ALLOCATION BONDS SERIES 1982 NOTICE IS HEREBY GIVEN that sealed proposals for the purchase of Eight Million Five Hundred Thousand Dollars ($8,500.000) principal amount* of tax allocation bonds of the Tustin Community Redevelopment Agency (hereinafter referred to as the "Agency") will be received by the Agency up to the time and at the place specified: TIME: November !, 1982 11:00 o'clock A.M. Pacific Standard Time PLACE: Mudge Rose Guthrie & Alexander Tower One, Suite 3166 333 South Grand Avenue Los Angeles. California 90071 OPENING OF BIDS: The bids will be received at the above time and place, will be opened by the Financial Consultant and will be presented to the Agency at its meeting to be held later that day. ISSUE:* Eight Million Five Hundred Thousand Dollars ($8.500.000)* designated "Tustin Commu- nity Redevelopment Agency Town Center Area Redevelopment Project. Tax Allocation Bonds. Series 1982" (the "Bonds"). consisting of 1,700 bonds, numbered I to 1,700, both inclusive, of the denomination of five thousand dollars ($5,000) each, dated as of November 1, 1982; provided that the total principal amount of Bonds (and, consequently, thc number of bonds) may be established in a lesser amount as shall be determined prior to the opening of bids as set forth under "Municipal Bond Insurance" herein. MATURITIES:* The Bonds will mature on November 1 in each of the years, and in the amounts, shown below: Y~rof Maturi~ 1983 ..................................................... 1984 ..................................................... 1985 ..................................................... 1986 ..................................................... 1987 ..................................................... 1988 ..................................................... 1989 ..................................................... 1990 ..................................................... Principal Year of P~i~l Amount* Matufi~ Amount* $ 85,000 1991 ..................................................... $ 190,000 95,000 1992 ..................................................... 215,000 I00,000 1993 ..................................................... 235,000 !15,000 1994 ..................................................... 260.000 125,000 1995 ..................................................... 290,000 140,000 1996 ..................................................... 325,000 155,000 1997 ..................................................... 360,000 175,000 2006 ..................................................... 5,635,000 MANDATORY REDEMPTION:* The Bonds maturing on November I. 2006 shall be retired by redemption at 100~Tr., without premium, through operation of the Sinking Account established by the * The aggregate principal amount, maturity amounts and mandatory redemption amounts of the Bonds are subject to change prior to the opening of bids in accordance with the provisions of a policy of insurance on the Bonds as further explained under the caption "Municipal Bond Insurance." 013441 047670 JOB NO. 97576B002 ST: 97576A JEFFRIES BANKNOTE CO. (213) 742-8800 20-Octo82 02:55 SEQ NO: 2 resolution of the Agency authorizing the issuance of the Bonds (the "Resolution"). prior to their maturity, commencing on November I. 1998 and on November I each year thereafter, by deposit into the Sinking Account of the amounts specified hereafter: Minimum Year Sinking Ending Account November ! Payments* 1998 ....................................................... $400.000 ! 999 ....................................................... 440.000 2000 ....................................................... 490.000 2001 ....................................................... 545.000 2002 ....................................................... 605.000 Minimum Year Sinking Ending Account No*ember ! Payments* 2003 ...................................................... $670,000 2004 ...................................................... 745,000 2005 ...................................................... 825,000 2006 ...................................................... 915,000 OPTIONAL REDEMPTION: The Bonds maturing on or after November 1, 1993 are subject to redemption prior to their respective stated maturities, at the option of the Agency, as a whole, or in part in inverse order of maturities, and by lot within any such maturity if less than all of the Bonds of such maturity be redeemed, from any source of available funds, on any interest payment date on or after November l, 1992. at the respective redemption prices (expressed as percentages of the principal amount of the Bonds or portions thereof to be redeemed) set forth below, in each case together with accrued interest to the redemption date: Redemptou Dates Redemption Price November 1, 992 and May 1. 1993 ..................................................................... 102!.~.,r/c November 1, 993 and May I, 1994 ..................................................................... 102 November 1, 994 and May 1, 1995 ..................................................................... 101 ?2 November 1. 995 and May' i, 1996 ..................................................................... 101 November I, 996 and May 1, 1997 ..................................................................... 100!/2 November 1. 997 and thereafter .......................................................................... I00 INTEREST: The Bonds will bear interest from November 1, 1982 at a rate to be fixed upon the sale thereof, but not to exceed twelve percent (12%) per annum, payable commencing on May 1, 1983 and semiannually thereafter on November 1st and May 1st in each year. PAYMENTS: The Bonds and the interest thereon and any premiums upon the redemption thereof prior to maturity are payable in lawful money of the United States of America and (except for interest on Fully Registered Bonds, which is payable by mailed check or draft) are payable at the principal office of the Fiscal Agent for the Agency in Los Angeles, California, or, at the option of the holder, at thc office of any Paying Agent of the Agency in Chicago. Illinois or New York, New York. REGISTRATION: Two forms of Bonds have been provided: (i) those which shall be initially issued and which are in negotiable form, payable to bearer with negotiable coupons ("Bearer Bonds"), and (ii) those which are issued to facilitate registration and so are issued as fully registered bonds payable to the registered owner ("Full)' Registered Bonds"). The Bearer Bonds are not rcgistrable by endorsement and, to facilitate their registration, they may be exchanged for Full)' Registered Bonds as provided in the Resolution. A Bearer Bond oh' Bearer Bonds may be registered by exchanging the same for a Fully Registered Bond or Fully Registered Bonds. as the case ma)' be. A Bearer Bond or Bearer Bonds and Full)' Registered Bond or Fully Registered Bonds may be exchanged for a Fully Registered Bond or Fully Registered Bonds. A Fully Registered Bond may be exchanged in whole for a Bcarer Bond or Bearer Bonds or in part for such Bearer Bond or Bearer Bonds and the balance for a Fully Registered Bond or Fully * The aggregate principal amount, maturity amounts and mandatory redemption amounts of the Bonds are subject to change prior to the opening of bids in accordance with the provisions of a policy of insurance on the Bonds as further explained under the caption "Municipal Bond Insurance." · 006435 163546 JOB :.fO. 97576B002 ST: 97576A JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 02:55 SEQ NO: 3 ! ~ Registered Bonds. Transfer of ownership of a Full)' Registered Bond or Fully Registered Bonds shall be made by exchanging the same for a new Fully Registered Bond or Fully Registered Bonds. All of such exchanges shall be made in such manner and upon such reasonable terms and conditions as may from time to time be determined and prescribed by the Agency; provided, however, no such exchange shall be made between the fifteenth (15th) da)' preceding an)' interest payment date and such interest payment date. Such exchanges shall be free of any costs or charges to the person, firm, or corporation requesting such exchange, except for an)' tax or governmental charge that ma)' be imposed in connection therewith. Each Bearer'Bond issued pursuant to the Resolution shall be of the denomination of five thousand dollars ($5.000). Each Fully Registered Bond issued pursuant to the Resolution shall be of a denomination which is five thousand dollars ($5,000) or an)' whole multiple thereof. PURPOSE OF ISSUE: The Bonds are to be issued by the Agency under and pursuant to the Community Redevelopment Law of the State of California (Part I of Division 24 of the Health and Safety Code) in order to aid in the financing of a redevelopment project in the City of Tustin, California, known as the Town Center Area Redevelopment Project, pursuant to the Resolution. SECURITY: The Bonds are payable, as to both principal and interest, from Tax Revenues (as defined in the Resolution) and interest earnings. The Bonds are not obligations of the City of Tustin, the State of California or any of its political subdivisions and do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. TERMS OF SALE INTEREST RATE: The interest rate bid ma)' not exceed twelve percent (12~) per annum. The Bonds will bear interest from November 1, 1982, payable commencing Ma)' I. 1983. and semiannually thereafter on November 1st and May 1st in each year. Bidders may specify any number of separate interest rates, and any rate may be repeated as often as desired; provided, however, that (i) the difference between the highest and lowest coupon rates specified in any bid shall not exceed two percent (2%): (ii) each interest rate specified must be in a multiple of !~-~, of 1~,'%, and a zero rate of interest cannot be specified; (iii~ no Bond shall bear more than one rate of interest, no interest payment shall be evidenced by more than one coupon and supplemental coupons are not permitted: (iv) each bond shall bear interest from its date to its stated maturity date at the interest rate specified in the bid; (v) all bonds of the same maturity date shall bear the same interest; and (vi) any premium must be paid in bank funds as part of the purchase price, and no bid will be accepted which provides for the cancellation and surrender of an)' interest coupon or for the waiver of interest or other concession by the bidder as a substitute for payment in full of the purchase price in bank funds. Bids which do not conform to the terms of this paragraph will be rejected. PURCHASE PRICE: The Bonds shall be sold for cash only. Ail bids must be for not less than all of the Bonds and each bid shall state the purchase price {not less than ninety-seven percent (97%) of the principal amount of the Bonds, plus accrued interest to the date of delivery) at which the bidder offers to buy the Bonds. Each bidder shall state in his bid the total net interest cost in dollars and the average net interest rate determined thereby, which shall be considered informative only and not a part of the bid. HIGHEST BID: The Bonds will be awarded to the highest responsible bidder for Bonds maturing in accordance with the Maturity Schedule, assuming that the Bonds maturing on November I, 2006 are retired in accordance with the provisions for the mandatory redemption thereof as explained herein under "Mandatory Redemption." As noted, the Maturity Schedule will be as set forth herein under "Maturities." subject to change as further explained herein under "Municipal Bond Insurance." With respect to all bids submitted for Bonds maturing in ac~/ordance with the Maturity Schedule, the highest bid will be determined by deducting the amount of the premium bid (if any) from, and adding the amount of the discount bid (if any) to, the total amount of interest which would be required to be paid on all Bonds from November 1, 1982 to their respective maturity dates (except that for purposes of such determination with respect to Bonds maturing November I, 2006 an assumption shall be made that during the years 1998 through 2006 an amount of such Bonds shall be retired annually on November I in accordance with the schedule for minimum sinking account payments as set forth herein under "Mandatory Redemption") at the applicable 140355 122336 JOB NO. 97576B002 ST: 97576A JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 02:55 SEQ NO: 4 interest rate or rates specified in the bid. and the award will be made on the basis of the lowest net interest cost. The purchaser must pay accrued interest, computed on a 360-day year basis, from the date of the Bonds to the date of delivery. The cost of printing the 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 Bonds or rejecting all bids not later than twenty-six (26) hours after the time herein prescribed for the receipt of bids; 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 bid. CUSIP: CUSIP identification numbers may be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds and no liability shall hereafter be attached to the Agency or any of the officers or agents thereof because of or on account of said numbers. Any error or omission with respect to said numbers shall not constitute cause for refusal by the successful bidder to accept delivery of and pay for the Bonds. DELIVERY AND PAYMENT: Delivery of the Bonds will be made to the successful bidder at Jeffries Banknote Company, 1330 West Pico Boulevard, Los Angeles. California, or at such other place as may be agreed upon by the successful bidder and the officer of the Agency making delivery. Payment for the Bonds must be made in funds immediately available to the Agency in Los Angeles, California. PROMPT DELIVERY; CANCELLATION FOR LATE DELIVERY: The Bonds will be delivered to the successful bidder on or about November 16, 1982. and such prompt delivery time is of the essence of the contract to be made hereunder for the sale of the Bonds. The :\gency, at its sole option, shall have the right to delay the delivery of the Bonds beyond said date; provided, however, that the successful bidder shall have the right, at its option, to cancel the contract of purchase if the Agency shall fail to execute the Bonds and tender them for delivery within sixty (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 proceeds of the check accompanying its bid. 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 "Bid for Tax Allocation Bonds Series 1982 of the Tustin Community Redevelopment Agency." Each bid must be unconditional and in accordance with the terms and conditions set forth herein, or permitted herein, and must be submitted on, or in substantial accordance with the bid form provided by the Agency. BID CHECK: A certified or cashier's check drawn on a responsible bank or trust company in the amount of Eighty-five Thousand Dollars ($85,000), payable to the order of the Agency, must accompany each bid as a guaranty that the bidder, if successful, will accept and pay for the Bonds in accordance with the terms of his bid. The check accompanying any accepted bid shall be cashed and the proceeds thereof applied to the purchase price. If such bid is accepted but not performed, unless such failure of performance shall be caused by any act or omission of the Agency, the proceeds of the check accompanying any accepted bid shall be retained by the Agency. The check accompanying each unaccepted bid will be returned promptly. CHANGE IN TAX EXEMPT STATUS: At any time before the Bonds are tendered for delivery, the successful bidder may disaffirm and withdraw the bid if the interest received by private holders from bonds of the same type and character shall be declared to be taxable income 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 by the terms of any federal income tax law enacted subsequent to the date of this notice. LEGAL OPINION: The opinion of Mudge Rose Guthrie & Alexander, Los Angeles, California and Rourke & Woodruff. Santa Aha, California. Co-Bond Counsel, approving the legality of the Bonds and stating that interest on the Bonds is exempt from Federal income taxes and from State of California personal income taxes under existing statutes, regulations, rulings and court decisions, will be furnished the successful bidder at or prior to the time of deliver.v of the Bonds at the expense ol; the Agency. A copy of 056234 165452 JOB "40. 97576B002 ST: 97576A JEFFRIES BANKNOTE CO. (213~ 742-8800 20-Oet-82 03:27 SEQ NO: 5 such opinion, cert;fied by an officer of the Agency by his facsimile signature, will be printed on the back of each definitive Bond. No charge will be made to the purchaser for such printing or certification. MUNICIPAL BOND INSURANCE: The Agency has applied for a policy of insurance on the Bonds from the Municipal Bond Insurance Association ("MBIA"). If the Agency receives a commitment from MBIA to issue such a policy, said policy of insurance would guarantee the payment, when due. of the principal of and interest on the Bonds. The policy does not insure against nonpayment caused by the insolvency or negligence of any paying agent or the fiscal agent of MBIA. or nonpayment of redemption premiums, and does not provide for any accelerated payments in the event that bonds insured thereunder are declared due and payable prior to maturity. Such a policy would be non-cancellable and the premium would be fully paid at the time of the delivery of the Bonds. The Agency anticipates that MBIA will make its decision whether or not to provide such insurance by October 29, 1982. Should MBIA commit to insure an amount less than $8,500,000, the aggregate principal amount of the Bonds will be reduced to equal the amount of insurance coverage so provided and the maturity schedule will be adjusted in accordance with the terms of the commitment. Should MBIA not issue a commitment by October 29, 1982, the bid date will be postponed. Information with respect to whether, in light of the MBIA decision, there is a change in the bid date or in the principal amount of Bonds to be issued will be available over the "Munifacts" wire by or before October 29, 1982. OFFICIAL STATEMENT: Upon the determination of the successful bidder, the Agency will prepare its final Official Statement (the "Official Statement") with respect to the Bonds. The Agency will furnish to the successful bidder, at no charge, such number of copies of the Official Statement (and any amendment or supplement thereto) as the successful bidder may reasonably request (but not to exceed 200) for use in connection with any resale of the Bonds. BLUE SKY LAWS: The successful bidder will be responsible for the clearance or exemption with respect to the status of the Bonds for sale under the securities or "Blue Sky" laws of the several states and the preparation of any surveys or memoranda in connection therewith. CLOSING DOCUMENTS: In addition to the opinion of Co-Bond Counsel referred to above, at the time of payment for and delivery of the Bonds, the Agency will furnish the successful bidder the following documents all to be dated as of the date of delivery: 1. No Litigation Certificate -- A certificate of the General Counsel to the Agency certifying that there is no direct litigation pending affecting the validity of the Bonds. 2. Signature Certificate -- A certificate of the appropriate officers of the Agency indicating that they have signed the Bonds by manual or facsimile signature and that they were duly authorized to execute the same. 3. Fiscal Agent's and Treasurer's Receipts -- The receipts of the Fiscal Agent and the Treasurer of the Agency showing that the purchase price of the Bonds, including accrued interest to the date of delivery, has been received by the Agency and the Fiscal Agent. respectively, and the distribution of the funds to be made. 4. Certificate Concerning Official Statement -- A certificate of an appropriate officer of the Agency to the effect that to the best of such officer's knowledge and belief, and after reasonable investigation, (a) neither the Official Statement nor any amendment or supplement thereto contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made. not misleading; (b) since the date of the Official Statement, no event has occurred which should have been set forth in an amendment or supplement to the Official Statement which has not been set forth in such an amendment or supplement; and (c) there has not been any material adverse change in the operations or financial affairs of the Agency since the date of the Official Statement. I 163744 127362 JOB NO. 97576B002 ST: 97576A JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 02:55 SEQ NO: 6 5. Opinion of the General Counsel to Agency -- An opinion of the General Counsel to the Agency that the activation and certain subsequent procedures of the Agency (exclusive of the issuance and sale of the Bonds) have been taken in accordance with all applicable laws. 6. Arbitrage Certificate -- A certificate of a responsible officer of the Agency certif.ving that. on the basis of the facts, estimates and circumstances in effect at the time of deliver)' of the Bonds. it is not expected that the proceeds of the Bonds will be used in a manner that will cause the Bonds to be arbitrage bonds. INFORMATION AVAILABLE: Requests for copies of the Resolution and the Official Statement, or for other information concerning the Agency, should be addressed to the Financial Consultant to the Agency: Miller & Schroeder Municipals. Inc., 505 Lomas Santa Fe Drive. Suite 200, Solana Beach, CA 92075. Attention: Michael Whipple or Pamela Wiget. Telephone (714) 481-5894. GIVEN by order of the Agency adopted on October 20, 1982. /s/ Mary E. Wynn Secretary of the Tustin Community Redevelopment Agency 142765 124153 JOB NO. 97576B002 ST: 97576A aEFFRIES BANKNOTE CO. (2131 742-8800 20-Oct-82 02:55 SEQ NO: 7 BID FOR THE PURCHASE OF TUSTIN COMMUNITf REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT TAX ALLOCATION BONDS SERIES 1982 NOT TO EXCEED $8,500,000 Tustin Community Redevelopment Agency City of Tustin, California On behalf of a group which we have formed, consisting of ................... 1982 !0 and pursuant to the Notice Inviting Bids hereinafter mentioned, we offer to purchase the Bonds designated as "Tustin Community Redevelopment Agency Town Center Area Redevelopment Project. Tax Allocation Bonds, Series 1982" in total principal amount pursuant to the Maturity Schedule as follows: Maturity Schedule Not to Exceed $8.500.000 Aggregate Principal Amount Mamfi~ Date Novem~r ! 983 ........................................................... $ 984 ........................................................... 989 ........................................................... 1997 ........................................................... 2006 ........................................................... Prtnci~l Interest Ammmt Rate 85.000 % 95.000 100.000 115.000 125,000 140,000 155,000 175,000 190,000 215,000 235,000 260,000 290.000 320,000 360,000 5.635.000 and to pay therefor the aggregate sum of $ ........................... * plus interest accrued on the Bonds to the date of delivery thereof. This bid is made subject to all the terms and conditions of the Notice Inviting Bids heretofore published, all of which terms and conditions are made a part hereof as fully as though set forth in full in this bid. * Principal amount of thc Bonds plus premium or less discount, if any (discount not to exceed three percent (Y~)). 005252 044311 JOB NO. 97576B002 ST: 97576A JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 02:55 SEQ NO: 8 As specified in the Notice Inviting Bids, this bid is subje~.t to acceptance not later than twenty-six (26) hours after the expiration of the time for the receipt of bids, and the opinion of Co-Bond Counsel firms Mudge Rose Guthrie & Alexander. Los Angeles. California. and Rourke & Woodruff, Santa Aha. California. approving the validity of the Bonds. will be furnished us (if we are the successful bidder) at the time of delivery of the Bonds at the expense of the Agency. There is enclosed herewith a .................. ** check in the amount of Eighty-five Thousand Dollars ($85.000), payable to the order of the Agency. There is submitted herewith a memorandum (which shall not constitute a part of this bid) stating the total net interest cost in dollars on the Bonds during the life of the issue (deducting the amount of any premium or adding the amount of any discount), and the average net interest rate determined thereby. Respectfully submitted, Name (Account Manager) By: Address City State . MEMORANDUM OF INTEREST COST The total net interest cost on the Bonds during the life of the issue to November 1. 2006 (deducting'the amount of any premium or adding the amount of an3' discount), under thc above bid is $ ................................. .... and the average net interest rate determined thereby is .................. %. Such net interest cost is computed in accordance with the requirements stated under "Highest Bid" in the Notice Inviting Bids. ** Insert "certified" or "cashier's". / 160467 023067 JOB NO. 97576X002 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 09:03 SEQ NO: 1 PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 20, 1982 NEW ISSUE Rating: (See "Bond Rating" herein) In the opinion of Co-Bond Counsel, interest on the Bonds is exempt from Federal income taxes and from State of California personal income taxes under existing statutes, regulations, rulings, and court decisions. $8,500,000* TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT TAX ALLOCATION BONDS, SERIES 1982 Dated: November 1, 1982 Due: November 1, as shown below mm Interest on the Bonds is payable on May 1, 1983 and semi-annually thereafter on each May I and November I of each year until maturity. The Bonds will be initially issued as Bearer Bonds, in the denomination of $5,000, or as Fully Registered Bonds, in the denomination of $5,000 or any whole multiple thereof. Principal of and interest on the Bonds will be payable at the principal office of Security Pacific National Bank, the Fiscal Agent for the Agency in Los Angeles, or, at the option of the holder, at the office of the paying agents in Chicago, Illinois or New York, New York. Thc Bonds maturing November 1, 2006 arc subject to redemption from thc Sinking Account in part by lot on November 1, 1998 and on each November I thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption. The Bonds are subject to optional redemption prior to maturity, in whole or in part, on November 1, 1992 and on each interest payment date thereafter at the redemption prices and as otherwise described herein. MATURITY SCHEDULE* Pri~i~l Mamri~ Cmapon Primi~i Matuti~ C~poa Ammmt N~em~r ! Rate Yi~d Am~mt Nov~mbr I Rate $ 85,000 ................... 1983 % % $190,000 .................. 1991 % 95,000 ................... 1984 215,000 .................. 1992 100,000 ................... 1985 235,000 .................. 1993 115,000 ................... 1986 260,000 .................. 1994 125,000 ................... 1987 290,000 .................. 1995 140,000 ................... 1988 325,000 .................. 1996 155,000 ................... 1989 360,000 .................. 1997 175,000 ................... 1990 $5,635,000 .... % Term Bonds duc November 1, 2006 -- Yield ..... % (Plus accrued interest from November I, 1982) Thc interest on and principal of the Bonds are payable from and secured by tax revenues generated by increased taxable valuation of property in the Town Center Area Redevelopment Project over and above its assessed valuation last equalized before the adoption of the Town Center Area Redevelopment Plan. Such tax revenues shall be delivered to thc Agency to be deposited in thc Special Fund administered by the Fiscal Agent for thc payment of interest on and principal of the Bonds. Attention is hereby directed to certain Risk Factors. including legislation and constitutional amendments, more fully described herein. THE BONDS ARE NOT A DEBT OF THE CITY OF TUSTIN, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS, AND NEITHER SAID CITY, SAID STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE THEREFOR. The Bonds are offered, when, as and if issued, subject to the approval of legality by Mudge Rose Guthrie & Alexander. Los Angeles, California and Rourke & Woodru~. Santa AAa. California, Co-Bond Counsel. It is anticipated that the Bonds will be available for delivery in Los Angeles. California on or about November 16. 1982. Yk4d The date of this Official Statement is November ..... 1982. * Preliminary, subject to change. 031604 17fl207 JOB NO. 97576X002 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:03 SEQ NO: 2 TUSTIN COMMUNITY REDEVELOPMENT AGENCY TUSTIN, CALIFORNIA MEMBERS Richard B. Edgar, Chairman Ursula E. Kennedy, Vice Chairman Ronald B. Hocsterey Donald J. Saltarelli Frank H. Greinke William A. Huston, Executive Director Ronaid A. Nault, Teasurer Mary E. Wynn, Secretary Michael Brotemarkle, Community Development Director R. Kenneth Fleagle, Consultant James G. Rourke, General Counsel CITY OF TUSTIN MAYOR AND CITY COUNCIL Richard B. Edgar, Mayor Ursula E. Kennedy, Mayor Pro Tern Ronald B. Hoesterey Donald J. Saitarelli Frank H. Greinke William A. Huston, City Manager Ronald A. Nault, Director of Finance James G. Rourke, City Attorney SPECIAL SERVICES Co-Bond Counsel Mudge Rose Guthrie & Alexander Los Angeles, California and Rourk¢ & Woodruff, A Professional Corporation Santa Aha, California Financial Consultant Miller & Schrocder Municipals, Inc. Solana Beach, California Fiscal Consultant Katz, Hollis, Coren & Associates, Inc. Los Angeles, California Fiscal Agent Security Pacific National Bank Los Angeles, California '1. 5~J2~2 04.7 ~.~04 JOB NO. 97576X002 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 09:03 SEQ NO: 3 ] [ TABLE OF CONTENTS Introductory Statement ......................................................................................................................... 1 The Bonds ......................................................................................................................... i ..................... 2 Authority for Issuance ....................................................................................................................... 2 Description of the Bonds ................................................................................................................... 2 Registration ........................................................................................................................................ 2 Redemption ......................................................................................................................................... 2 Security for the Bonds .......................................................................................................................... Sources and Uses of Funds ........ ~ .......................................................................................................... 4 The Agency ............................................................................................................................................ 4 General ................................................................................................................................................ Members, Officers and Staff ............................................................................................................. Agency Powers ................................................................................................................................... 5 The Town Center Area Redevelopment Project ................................................................................. 6 General History .................................................................................................................................. 6 Redevelopment Goals and Objectives ............................................................................................... 6 Recent and Proposed Development .................................................................................................. 6 Proposed Development and Use of Bond Proc~ds .........................................................................7 Tax Revenues ......................................................................................................................................... 8 Historic Tax Revenues ...................................................................................................................... 8 Projected Tax Revenue ...................................................................................................................... 8 Coverage ............................................................................................................................................. 9 Major Property Owners ..................................................................................................................... 9 Annual Debt Service .......................................................................................................................... 10 Risk Factors ........................................................................................................................................... I 1 Reduction of Tax Revenues .............................................................................................................. I l Constitutional Amendment XllI A/Property Tax Rate ................................................................ 11 Business Inventory Subvention .......................................................................................................... 11 Constitutional Amendment XIII B/Government Spending Limitation ......................................... 12 Serrano Decision ................................................................................................................................ i 3 Summary of the Resolution .................................................................................................................. 13 Funds -- Allocation of Bond Proceeds ............................................................................................ 13 Flow of Funds .................................................................................................................................... 14 Deposit and Investment of Moneys in Funds .................................................................................. Issuance of Additional Bonds and Agency Indebtedness ............................................................... 16 Other Covenants of the Agency ....................................................................................................... 17 Events of Default and Remedies ...................................................................................................... 19 Concluding Information ......................................................................................................................... 20 Financial Consultant .......................................................................................................................... 20 Legal Opinion ..................................................................................................................................... 20 Tax Exempt Status ............................................................................................................................ 21 Legality for Investment in California .............................................................................................. 21 Municipal Bond Insurance ................................................................................................................ 21 Bond Rating ....................................................................................................................................... 22 Audited Financial Statements ........................................................................................................... 22 Fiscal Consultant ................................................................................................................................ 22 Miscellaneous ...................................................................................................................................... 22 Supplemental Information on the City of Tustin ...................................................................... Appendix A Katz, Hollis, Coren & Associates, Inc. Report to the Agency ................................................. Appendix B Auditor's Report and Financial Statements of the Agency ....................................................... Appendix C In connection with this offering, the underwriters may overallocate or effect transactions which stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. 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. The information and expressions of opinion stated herein are subject to change without notice. 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, the City or the Town Center Area.Redevelopment Project since the date hereof. 'ii 144154 124531 JOB NO. 97576X005 ST: 97576X oEFFRIES BANKNOTE CO. (213) 742-o800 20-0ct-82 09:04 SEQ NO: 1 ] ] $8,500,000* TUSTIN COMMUNITY REDEVELOPMENT AGENCY TOWN CENTER AREA REDEVELOPMENT PROJECT TAX ALLOCATION BONDS, SERIES 1982 INTRODUCTORY STATEMENT This Official Statement, including thc cover page and appendices hereto, is provided to furnish information in connection with the sale by the Tustin Community Redevelopment Agency (the "Agency"), of $8,500,000* principal amount Town Center Area Redevelopment Project, Tax Allocation Bonds, Series 1982 (the "Bonds"). The Bonds are being issued pursuant to the Constitution and the laws of the State of California (the "State"), including the Community Redevelopment Law (Part 1, Division 24, commencing with Section 33000 of the Health and Safety Code of the State of California) (the "Law"), Resolution No. ......... adopted by the Agency on October 20, 1982 and a First Supplemental Resolution (Resolution No. ..... ) adopted by the Agency on November ..... 1982 (together, the "Resolution"). The City of Tustin (the "City") is located in Orange County (the "County"). Incorporated on September 21, 1927, the City encompasses an area of approximately 11.2 square miles. The Agency was established pursuant to the Law and an ordinance of the City Council of the City, enacted on October 4, 1976. The Agency is charged with the authority and responsibility of redeveloping and upgrading blighted areas of the City. The five members of the City Council serve as the governing body of the Agency, and exercise all rights, powers and privileges of the Agency. The Redevelopment Plan for the Town Center Area Redevelopment Project (the "Project Area") was approved by Ordinance No. 701 enacted by the City Council on November 22, 1976, as amended by Ordinance No. 855. enacted by the City Council on September 8, 1981, (the "Redevelopment Plan".) The Law authorizes the financing of redevelopment projects by the Agency through the use of tax allocation revenues. This method provides that the taxable valuation of the property within a defined redevelopment project area on the assessment role that was last equalized prior to the effective date of the enabling ordinance which adopts the redevelopment plan becomes the "base" valuation. Any increase in taxable valuation in subsequent years over that established as the base year becomes the incremental taxable valuation upon which taxes are levied by or on behalf of other taxing entities and the resulting tax revenues are allocated to the Agency. All taxes, subject to the limitation contained in the Redevelopment Plan for the Project Area, thereafter collected by the County upon the increase in taxable valuation above the base valuation in the Project Area are available to the Agency for the payment of debt and such moneys may be pledged to the payment of debt service on obligations issued to finance the Agency's redevelopment activities in the Project Area. The Redevelopment Plan for the Project Area limits the amount of Tax Revenues which may be allocated to the Agency for the Project Area to $3,000,000 per year and limits the amount of -outstanding indebtedness payable from Tax Revenues to $20,000,000; however, such limitations may be increased by amendment of the Redevelopment Plan for the Project Area. The projections of future Tax Revenues contained in this Official Statement are based on current and projected taxable valuations within the Project Area and on the current and projected tax rates applicable to the taxable property in the Project Area. (See Appendix B, Katz Hollis Coren and Associates, Inc. Report to the Agency.) Any decrease in the taxable valuation or in the applicable tax rates may reduce the Tax Revenues allocated to thc Agency and correspondingly would have an adverse impact on the ability of the Agency to pay debt service on the Bonds. * Preliminary, subject to change. JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 2 The Agency intends to utilize approximately $ ........... . ....... of Bond proceeds for property acquisition, utilities undergrounding, parking, water system improvements in the Project Area. In addition, the Agency will use $1,125,000 to repay its debt to the City. (See the section herein entitled "TOWN CENTER AREA REDEVELOPMENT PROJECT -- Proposed Development and Use of Bond Proceeds".) Brief descriptions of the Bonds, the Resolution, the Agency, and the City are included in this Official Statement, as are the financial statements of the Agency for the fiscal year ended June 30, 1982. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Resolution, the Law, the Constitution and the laws of the State and the proceedings of the Agency and the City are qualified in their entirety by reference to such documents and laws. References herein to the Bonds are qualified in their entirety by reference to the form thereof included in the Resolution and the provisions thereof included therein, copies of which are all available for inspection at the offices of the Agency. During the period of the offering of the Bonds, copies of the forms of all documents are available at the office of the Financial Consultant, Miller & Schroeder Municipals, Inc., 505 Lomas Santa Fe Drive, Suite 200, Solana Beach, California. THE BONDS Authority for Issuance The Bonds, in the principal amount of $8,500,000, were authorized for issuance pursuant to the Resolution adopted by the Agency on October 20, 1982. The Bonds are being issued in accordance with the Law and other applicable laws and the Constitution of the State· Description of the Bonds The Bonds shall be issued in the principal amount of $8,500,000* in the form of Bearer Bonds in the denomination of $5,000 each, or as Fully Registered Bonds, in the denomination of $5,000 or any whole multiple thereof. The Bonds are dated November 1, 1982 and mature on November I in the years and amounts shown on the cover page of this Official Statement. Registration Two forms of Bonds have been provided as contained in the Resolution: (1) those which shall be initially issued and which are in negotiable form, payable to bearer with negotiable coupons ("Bearer Bonds"); and (2) those which are issued to facilitate registration and so are issued as non-negotiable Fully Registered Bonds payable to the registered owner ("Fully Registered Bonds"). The Bearer Bonds are not registrable by endorsement, but may be exchanged for Fully Registered Bonds as provided in the Resolu- tion. A Bearer Bond or Bearer Bonds may be registered by exchanging the same for a Fully Registered Bond or Fully Registered Bonds, as the case may be. A Bearer Bond or Bearer Bonds and a Fully Registered Bond or Fully Registered Bonds may be exchanged for a Fully Registered Bond or Fully Registered Bonds. A Fully Registered Bond may be exchanged in whole for Bearer Bonds or in part for such Bearer Bonds and the balance for Fully Registered Bonds. Transfer of ownership of a Fully Registered Bond or Fully Registered Bonds shall be made by exchanging the same for a new Fully Registered Bond or Fully Registered Bonds. All of such exchanges shall be made in such manner and upon such reasonable terms and conditions as may from time to time be determined and prescribed by the Agency; provided, however, no such exchange shall be made between the fifteenth (! 5th) day preceding any interest payment date and such interest payment date. Such exchanges shall be free of any costs or charges to the person, firm or corporation requesting such exchange, except for any tax or governmental charge that may be imposed in connection with such exchange. Each Bearer Bond issued pursuant to the Resolution shall be of the denomination of $5,000. Each Fully Registered Bond issued pursuant to the Resolution shall be of a denomination which is $5,000 or a whole multiple thereof and shall be of the same issue. Preliminary, subject to change.' 1b046] 032375 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 3 ] ] Redemption Optional Re,-~emption. Bonds maturing on or after November 1, 1993 subject to redemption are prior to their respective stated maturities, at the option of the Agency, as a whole, or in part in inverse order of maturities, and by lot within any such maturity if less than all of the Bonds of such maturity be redeemed, from any source of available funds, on any interest payment date on or after November 1, 1992, at the respective redemption prices (expressed as percentages of the principal amount of the Bonds or portions thereof to be redeemed) set forth below, in each case together with accrued interest to the redemption date: Rtniempttmt Dates Redemptioa Pric~ November 1, 1992 and May 1, 1993 .................................................................. November 1, 1993 and May 1, 1994 .................................................................. 102 November 1, 1994 and May l, 1995 .................................................................. 101lA November 1, 1995 and May 1, 1996 .................................................................. 101 .November 1, 1996 and May 1, 1997 .................................................................. 100lb November 1, 1997 and thereafter ........................................................................ 100 Sinking ,4ccount Redemption. The Resolution creates a Sinking Account to be used for thc payment and redemption of the Bonds maturing on November 1, 2006 (the "Term Bonds"). The Agency is required to deposit annually therein the amounts, if available, required to make annual Sinking Account payments on the Term Bonds to be applied each year to the redemption of the Term Bonds. Failure by the Agency to deposit such amounts in full each year is not an event of default under the Resolution, provided that the Agency shall make up any such deficiency from thc first amounts available in succeeding years. Bonds maturing November 1, 2006, shall be subject to mandatory redemption at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, from minimum sinking account payments made (to the extent of available Tax Revenues, see "Summary of the Resolution -- Flow of Funds") by the Agency under the Resolution on November I in the years and amounts as follows: Y~f 1998 .................................... 1999 .................................... 2000 .................................... 2001 .................................... 2002 .................................... Ammmt* $400,000 440,000 490,000 545,000 605,000 Year Amouat* 2003 ............................. .' ......$670,000 2004 .................................... 745,000 2005 .................................... 825,000 2006 (Maturity) ................ 915,000 Notice of Redemption. As provided in the Resolution, notice of redemption shall be given by publica- tion at least once a week for two successive weeks in a financial paper or newspaper of general circulation in Los Angeles, California, and in a financial paper or newspaper circulated in New York, New York, and printed in the English language, the first such publication to be not less than thirty nor more than sixty days before the redemption date. Notice of redemption shall also be mailed no less than thirty nor more than sixty days prior to the redemption date to the respective registered owners of any registered Bonds designated for redemption at their addresses appearing on the bond registration books, but neither failure to mail such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption. SECURITY FOR THE BONDS The Bonds arc secured by and payable from a lien upon and pledge of the Tax Revenues allocated to the Agency from property within the Project Area, and all of the moneys in the Special Fund, the Interest Account. the Principal Account, the Sinking Account and the Reserve Account created by thc Resolution. * Preliminary, subject to change. 042455 04~43~ JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 4 Tax Revenues in the Special Fend, arising as above, are pledged in their entirety to the payment of the Bonds or to the Reserve Account by transfer for that purpose, so long as any Bonds remain outstanding or unprovided for. Tax Revenues are defined to mean those taxes received by the Agency produced by that year's tax rates applied to increases in taxable valuation in excess of the taxable valuation of such property within the Project Area last equalized prior to the effective date of the ordinance approving the Redevelop- ment Plan (the "base year" assessment roll), including ali payments and reimbursements, if any, to the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations. The Redevelopment Plan provides that the amount of Tax Revenues which may be allocated to the Agency from the Project Area is $3,000,000 per year; however, such limitation may be increased by amendment of the Redevelopment Plan. The Agency has no power to levy and collect taxes, and any legislative property tax de-emphasis or provision of additional sources of income to taxing agencies having the effect of reducing the property tax rate must necessarily reduce the amount of Tax Revenues that would otherwise be available to pay the principal of and interest on the Bonds. Likewise, broadened property tax exemptions could have a similar effect. Conversely, any increase in the tax rate or taxable valuation, or any reduction or elimination of present exemptions, would necessarily increase the amount of Tax Revenues that would be available to pay principal of and interest on the Bonds. · Detailed information regarding Tax Revenues and projection of debt service coverage is contained in the section entitled "Tax Revenues," as well as in "Appendix B," the Katz, Hoilis, Coren & Associates, Inc. Report to the Agency. The Bonds are not a debt of the City of Tustin, the State of California, or any of its political subdivisions, and neither said City, said State, nor any of its political subdivisions is liable therefor. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Particular attention is directed to the section entitled "Risk Factors" herein which describes certain matters which may have an adverse effect on the payment of and security for the Bonds. SOURCES AND USES OF PROCEEDS* The anticipated sources and uses of the proceeds of the Bonds, excluding accrued interest, are as follows: Sources( 1 ) Principal Amount of Bonds ................................................................. $8,500,000 Less Bond Discount .............................................................................. 255,000(2) Net Bond Proceeds ............................................................................... $8,245,000 Uses Redevelopment Fund ............................................................................ $ Reserve Account ................................................................................... 1,020,650 Costs of Issuance .................................................................................. Bond Insurance Premium ..................................................................... Total ........................................................................................... $8,245,000 (1) Accrued interest and premium, if any, will be deposited into the Interest Account. (2) Assumes discount of 3%. * Preliminary, subject to change. l~¢hh7 117~72 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 5 ] I In THE AGENCY Geaeral The Tustin Community Redevelopment Agency was activated on October 6, 1976 by City Ordinance No. 696 pursuant to the Law. Thc City Council serves as the governing board for the Agency and the City Manager serves as thc F?xecutivc Director of thc Agency. 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 thc Redevelopment Plan. Members N~me& Office Richard B. Edgar~ Chairman Ursula E. Kennedy, Vice Chairman Ronald B. Hocsterey Donald J. Saltarelli Frank Greinke Occupatims Expir~tio~ of Term Businessman April 1984 Personnel Consultant April 1986 Businessman April 1984 Realtor April 1984 Businessman April 1986 Mr. Richard B. Edgar, Mayor, was elected to the City Council of the City in 1974 and served as Mayor in 1976-77. He was appointed to the Tustin Parks and Recreation Commission in 1968 and to the Planning Commission in 1973. He served as first chairman of the Tustin Redevelopment Agency in 1976 and is currently serving in that position. Mr. Edgar is the manager of the Electronic Standard Stock program at TRW Defense Space Systems. Mrs. Ursula Kennedy is Vice Chairman of the Agency and Mayor Pro Tern. She was the first woman elected to the City Council. in March 1978. She was reelected in April 1982. Mrs. Kennedy is a Personnel Consultant for Abigail Abbott Personnel Services and she has a freelance writing business. Mr. Ronald B. Hoesterey was elected to the City Council of the City in 1980, and served as Mayor Pro Tern during 1981. Mr. Hoesterey is the western regional manager of an energy management controls company and also serves as President of the Board of Directors for Public Agency Data Systems. Mr. Donald J. Saltarelli was first elected to the City Council of the City in 1972. He was reelected in 1976 and in 1980. Mr. Saitarelli served as Mayor in 1973-74, 1975-76 and again in 1980-81. He is currently a member of the Local Agency Formation Commission of Orange County. Mr. Saitarelli owns the Saitarelli Realty Company. Mr. Frank Greinke was elected to the City Council of the City in April 1982. He has been active in the Tustin Chamber of Commerce as Director, Chairman of numerous committees and President in 1969-70. He has worked on civic committees and commissions such as the Development Preview Committee, 'Tustin Now and Tomorrow Committee and the Park and Sewer Bond Committee. Mr. Greinke owns the Southern Counties Oil Company. Executive Director Mr. William B. Huston is City Manager of the City and Executive Director of thc Agency. Hc was appointed Tustin's first City Manager on September 1, 1981. Prior to his appointment as City Manager of Tustin, Mr. Huston was City Administrator of Milbrac, California. Mr. Huston is a graduate of thc University of Southern California. Agency Powers All powers of the Agency are vested in its governing body the members of which are the elected members of the City Council. Pursuant to the Law, the Agency is a separate public body and exercises governmental functions in planning and implementing redevelopment projects. The Agency may exercise broad governmental functions and authority to accomplish its purposes, including, but not limited to, the right of eminent domain, the right to issue bonds for authorized purposes and to expend their proceeds and the right to .acquire, sell, rehabilitate, develop, administer or lease JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 09:04 SEQ NO: 6 ] I property. 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 administers. 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 otl~er reasonable method. The Agency may not construct or develop buildings, with the exception of public buildings, and must sell or lease cleared property which it acquires within a redevelopment project area for redevelopment in conformity with a particular redevelopment plan, and may further specify a period within which such redevelopment must begin and be completed. TOWN CENTER AREA REDEVELOPMENT PROJECT General History The Redevelopment Plan for the Project Area was approved by Ordinance No. 701 on November 22, 1976, and amended by Ordinance No. 855 enacted by the City Council on September 8, 1981. The Project Area encompasses approximately 360 acres in the center of the City of Tustin, an area formerly character- ized by older and somewhat deteriorating development. The Project Area contains commercial, service- commercial and neighborhood commercial and residential land uses. The Project Area was initiated after central city merchants and the Tustin Chamber of Commerce expressed the need to revitalize and expand the City's commercial base along the El Camino Real. E! Camino Real had been the major north-south route in California since the early 1800's. By 1971 when the movement for revitalization began, the area consisted of mixed residential and commercial uses on substandard lots. Most of the commercial facilities were nonconforming uses due to lack of off-street parking and 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 Project Area includes all of the commercial properties within the central city. Three community shopping centers and two specialty commercial developments comprise the economic base of the central city. A shopping center on the southerly side of El Camino Real was built in 1961 and was becoming obsolete due to its limited access from the Santa Aha Freeway and due to its age. Other shopping centers constructed in the early 1960's had failed to capture an increase in sales commensurate with the increasing population due to their obsolescence and deterioration. The City of Tustin, with a population that had grown from 1,143 residents in 1950 to 32,000 in 1976, and a market area of 165,000 residents, was not keeping pace with the demand for goods and services. The assistance of the City government was determined to be necessary for the promotion and redevelopment of the commercial area and the renewal of the public infrastructure. Redevelopment Goals and Objections General objectives of the Redevelopment Plan adopted by the Agency are to eliminate and prevent the spread of blight in the Project Area. The Redevelopment Plan proposes to accomplish this by constructing and improving streets, utilities or other public improvements, acquiring real property, providing for participation by owners and tenants presently located in the Project Area, by the management of property under ownership and control of the Agency, and the demolition or removal of buildings. Furthermore, the Redevelopment Plan provides for the disposition of property and the redevelopment of land in accordance with the Redevelopment Plan, and the rehabilitation of structures and improvements. Recent and Proposed Development The three community shopping centers have all undergone redevelopment and revitalization since 1976. Two additional shopping centers have been constructed. Mervyn's Department Store is located in the new Courtyard Shopping complex. Packers Square on Newport Boulevard was developed by the Warmington Company to accommodate the Irvine Ranch Market, restaurants, boutique shops, and an adjoining 138 unit residential condominium project. 053350 1334§3 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0¢t-82 09:04 SEQ NO: 7 ] I In 1982 the Stevens Square office condominium complex on West l{ain Street consisting of eight Victorian office buildings with a permit value in excess of $2,000,000 was completed. Four additional office building complexes were completed in the Project Area in 1981-82. A parking structure was completed in conjunction with the Stevens Square project to accommodate 211 vehicles, of which 83 parking spaces are owned by the Agency. The Agency intends to either lease these spaces or sell them as condominiums. Plans have been approved for development by California Pacific Properties of a 10 acre site which is proposed to contain 349,000 square feet of office and commercial developments including restaurants and theaters in the Project Area. Parking requirements will be satisfied by the construction of an adjoining 900 space four story parking structure. Construction is scheduled to start on this $36,000,000 complex by April 1983. Burnett Ehline is the developer of an office building of approximately 45,000 square feet at Newport Avenue and Irvine Boulevard. Construction is scheduled to begin in fiscal year 1982-83. Public improvements completed by the Agency include the widening and beautification of Newport Avenue as a 100 foot primary arterial with a landscaped center median, traffic signal installations, storm drains, new water mains, and sanitary sewers. Most of the utilities in the Project Area have been undergrounded along lrvine Boulevard, First Street and El Camino Real. A major project, now underway and scheduled for completion in December, i 982, is the El Camino Real improvement project. This project, at a cost of $1.2 million, includes paving, street furniture, landscaping, street lighting, and design features for the El Camino Real business area. Throughout the Project Area, the Agency has assisted in making public improvements including the widening and upgrading of Newport Avenue, El Camino Real and First Street, undergrounding of utilities on those streets, the extension of Sixth Street, installation of traffic signals, water mains on El Camino Real and Sixth Street, beautification on the Newport Avenue Center islands and the Brian Street and Main Street triangle, storm drains along El Camino Real, Main Street, Sixth Street and Irvine Boulevard, and sewers along El Camino Real and C Streets. Proposed Development and Use of Bond Proceeds The Agency intends to continue its efforts to upgrade and revitalize the Project Area through the reconstruction of street improvements, alleys, sign identification, landscaping and street furniture and the development of public parking to serve the area. In addition, the Agency intends to develop the Columbus- Tus.tin Park, sink a new water well and replace inadequate pipes for the water system, and acquire property in the area for development of senior citizens housing and for resale to developers. Specific use of Bond proceeds is outlined below: Land Acquisition: The Agency plans to acquire land within the Project Area which currently is not utilized at its highest and best use. Property acquired by the Agency will be sold for private commercial development through negotiated sales, including the use of developer disposition agreements. The purpose of land acquisition is to facilitate private commercial development consistent with the goals and objectives of the Redevelopment Plan for the Project Area. Approximate cost: $2,000,000 Senior Citizen Housing: The Agency plans to acquire land for subsequent sale or lease to a private developer who will covenant to develop the site as affordable housing for senior citizens for a term fixed by the Agency. The site acquired will be located in an area which provides the public and private amenities necessary for senior citizen housing. Approximate cost: $200,000 Undergrounding of Utilities: The Agency plans to underground approximately 3,200 feet of overhead utility lines and to install street lights along the arterial highway street system. This project is adjacent to an undergrounding project recently completed by the Agency, the City and Southern California Edison Company. The location to be undergrounded is in a commercial district situated within the Project Area. Approximate cost: $750,000 Parking Facilities: Acquisition of land and construction of parking facilities is planned by the Agency in the Old Town area of the Project Area. The Agency will construct or cause to be constructed such JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 8 ] 11 13 improvements in conjunction with private development. The parking facilities may consist 6.t either or both a parking structure or surface parking as would be necessary in conjunction with such private development. Approximate cost: $2,000,000 Water System Improvements: The Agency plans to replace a water main and install a water well in the Old Town area of the Project Area. The improvements are identified in the City's water system capital improvement plan as needed to improve the reliability of the water system in the Old Town area. Approximate cost: $500,000 Repayment of General Fund Loan: The Agency plans to repay a loan made from the General Fund of the City to the Agency when it was established. The loan was made in order for the Agency to have working capital until it had sufficient annual tax increment income. Approximate cost: $1,125,000 TAX REVENUES Historic Tax Revenues The following table presents the historical taxable valuation and Tax Revenues for the Project Area: Total Taxab~ Value 1977-78 ...................................................................... $ 72,113 1978-79 ...................................................................... 90,498 1979-80 ...................................................................... 105,793 1980-81 ...................................................................... 111,230 1981-82 ...................................................................... 146,684 Taxable Value and Tax Revenues ($ooo) lncrem~tal Value Above Base Roll $ 8,375 27,172 42,493 52,744 88,198 Bmiuess Inventory Tax Subvention Revenue~ !) $ 9.2 $ 209 14.6 275 28.3 596 48.8 758 49.9 1,168 (1) Includes business inventory subvention revenues. Source: City of Tustin. Projected Tax Revenue The following table reflects projected Tax Revenues based upon new construction within the Project Area, the 2 percent annual increase in valuation permitted by Proposition 13 and replacement income for business inventories. Projection of Taxable Value and Tax Revenues(I) ($ooo) 1982-83 ......................................................................................... 1983-84 ......................................................................................... 1984-85 ......................................................................................... 1985-86 ......................................................................................... 1986-87 ......................................................................................... 1987-88 ......................................................................................... 1988-89 ......................................................................................... 1989-90 ......................................................................................... 1990-91 ......................................................................................... 1991-92 ......................................................................................... Value Total Above Base Tax Taxable Value Roll Revenues(2) $161,324 $102,838 $1,261 168,618 110,132 1,322 181,711 123,225 1,444 200,300 141,814 1,622 222,371 163,885 1,829 226,432 167,946 1,835 230.5~4 172,088 1.837 234,799 176,313 1,841 239.109 180,623 1,856 243,504 185,018 1,903 072747 ]0]04] , JOB NO. 97576X005 ST: 97576X uEFFRIES BANKNOTE CO. (213) 742-~800 20-0ct-82 09:04 SEQ NO: 9 I I 14 (I) Full projection of value and revenues is included in the Report of the Fiscal Consultant, Appendix B, (2) Includes business inventory subvention revenues of $53,000 per year. Source: Katz, Hollis, Coren & Associates, Inc. Coverage The following table presents the projected Tax Revenues based on an assumed interest rate of 11% per annum. Tax Revenues are received as projected in the preceding table. Annual Bond Debt Service Coverage 1982/83 Net Tax Increment Revenues ................................................ $1,261,000 Earnings on Reserve Account(l) ........................................... 102,000 Revenues Available for Debt Service .................................... $1,363,000 Maximum Annual Debt Service(2) ....................................... 1,020,650' Coverage .................................................................................. 1.33 Fiscal Year F'~cal Year 1983/84 1984/85 $1,322,000 $1,444,000 102,000 102,000 $1,424,000 $1,546,000 1,020,650' 1,020,650' 1.39 1.51 (1) Assumes funded Reserve Account equal to the Maximum Annual Debt Service to be invested.at 10% per annum. (2) Relates to the Bonds only. Excludes debt service on indebtedness to the City (ali of which is subordinate to the Bonds). * Estimated. Major Property Owners The following table lists the ten largest property taxpayers in the Project Area and the taxable value of their property based on 1982-83 taxable valuations. Combined, the taxable valuations of these properties equals $41,758,831, or approximately 26% of the Project Area's taxable value. Major Property Taxpayers Town Center Area Redevelopment Project Taxable Property Owner Property Value Larwin Square Ltd. (Larwin Square Shopping Center) ....................................... $14,710,522 Rreef IV, Inc. (Tustin Heights Shopping Center) ................................................ Tustin Main Associates ............................................................................................ Robert P. Warmington Co. (Packers Square) ....................................................... Sav-On Stores ........................................................................................................... Northwood Realty (Mervyn's) ................................................................................ Tustin Lanes (bowling alley) ................................................................................... John S. Grifl~th & Co. (Courtyard Square Shopping Center) ............................. El Camino Real Properties (Blanco Buildings) ..................................................... William Zappas (El Camino Plaza Shopping Center) .......................................... 6,258,553 4,598,870 3,264,209 2,742,000 2,542,906 2,263,320 2.152,651 1,813,320 1,412,480 $41,758,831 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-$2 09:04 SEQ NO: 10 I 15 Annual Debt Service Set forth below is the annual debt service for the term of the Bonds. Tustin Community Redevelopment Agency Town Center Area Redevelopment Project Tax Allocation Bonds, Series 1982 Annual Debt Service* November l 1983 ........................................................... $ 85,000 1984 ........................................................... 95,000 1985 ........................................................... 100,000 1986 ........................................................... 115,000 1987 ........................................................... 125,000 1988 ........................................................... 140,000 1989 ........................................................... 155,000 1990 ........................................................... 175,000 1991 ........................................................... 190,000 1992 ........................................................... 215,000 1993 ........................................................... 235,000 1994 ........................................................... 260,000 1995 ........................................................... 290,000 1996 ........................................................... 325,000 1997 ........................................................... 360,000 1998 ........................................................... -0-- 1999 ........................................................... -0- 2000 ........................................................... -0- 2001 ........................................................... -0- 2002 ........................................................... -0- 2003 ........................................................... -0- 2004 ........................................................... -0- 2005 ........................................................... -0- 2006 ........................................................... -0- Slaking Maturm~ Red~mptima Total .......................................... $2,865,000 -0- 0 -0- -0- 0 0 -0- -0- --0-- 0 0 -0- -0- -0--0- $ 400,000 440,000 490.000 545,000 605,000 670,000 745,000 825,000 915,000 $5,635,000 * Preliminary, subject to change. (1) Assumes 11% inter~t rate. Interest( $ 935,000 925,650 915,200 904.200 891.550 877.800 862.400 845.350 826.100 805,200 781550 755 700 727,100 695200 659 450 619,850 575,850 527,450 473,550 413,600 347,050 273,350 191,400 100,650 $15,930,200 1'omi D~bt Se~lee 1,020,000 1,020,650 1,015,200 1,019,200 1,016,550 1,017,800 1,017,400 1,020,350 1,016,100 1,020,200 !,016,550 1,015,700 1,017,100 1,020,200 1,019,450 1,019,850 1,015,850 1,017,450 1,018,550 1,018,600 1,017,050 1,018,350 1,016,400 1,015,650 $24,430,200 l0 JOB' NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 09:04 SEQ NO: 11 16 17 RISK FACTORS Reduction of Tax Revenues Tax Revenues allocated to the Agency are determined by the amount of incremental taxable value in the Project Area and the current rate at which property in the Project Area is taxed. The reduction of taxable values of taxable property in the Project Area caused by a relocation out of the Project Area by one or more major property owners, or the complete or partial destruction of such property, could result in a reduction in the Tax Revenues that secure the Bonds. In addition, any reduction in tax rates or the valuation of taxable property in the Project Area could cause a reduction in the Tax Revenues that secure the Bonds. Such reduction of Tax Revenues could have an adverse effect on the Agency's ability to make timely payments of principal of and interest on the Bonds. Constitutional Amendment XIII A/Properly Tax Rate On June 6, 1978, California voters approved Proposition 13 or the Jarvis-Gann Initiative, which added Article XIII A to the California Constitution. The principal thrust of Article XIII A is to limit the amount of ad valorem taxes on real property to 1% of "full cash value" as determined by the County Assessor. Article XIII A defines "full cash value" 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 period." Furthermore, all real property valuation may be increased to reflect the inflationary rate, as shown by the consumer price index, not to exceed 2% per year, or may be reduced. Article XII! A has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by damage, destruction or other factors, and to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster. Article Xlll A exempts from the 1% tax limitation any indebtedness incurred prior to July 1, 1978, requires a vote of two-thirds of the qualified electorate to impose special taxes, While totally precluding the imposition of any additional ad valorem, sales or transaction tax on real property. In addition, Article XIII A requires the approval of two-thirds of all members of the State Legislature to change any State tax laws resulting in increased tax revenues. On September 22, 1978, the California Supreme Court upheld the general validity of Article Xlll A against a series of challenges which attacked the Jarvis-Gann Initiative as a whole (,4mador Valle), Joint Union School District v. State Board of Equalization. 22 Cal. 3d 208 (1978)). The Court found that it was premature to rule on the claim that Article XIII A impermissibly interfered with contracts in violation of the U.S. Constitution, stating that such a challenge must come when a specific contract or obligation is impaired. The effect of Article XIII A on the Agency has been to reduce tax rates and commensurately Tax Revenues. The 1978-79 tax rate for the Project Area was approximately 52% of the tax rate for the fiscal year (1977-78) prior to the passage of Article XIII A. The Agency has no power to levy and collect taxes. Any further reduction in the tax rate or the implementation of any constitutional or legislative property tax de-emphasis could reduce Tax Revenues, and, accordingly, may have an adverse impact on the ability of the Agency to pay debt service on the Bonds. Business Inventory Subvention In 1979 the California State Legislature enacted Chapter 1150, Statutes of 1979, which eliminated the assessment and taxation of business inventory property and provided a formula for the State to reimburse local agencies for the loss of tax revenues previously generated by business inventory value. Due to a technical drafting error, redevelopment agencies were not included among the local agencies eligible for reimbursement of lost business inventory tax revenues. The error was corrected in 1980 when Section 16114 of the California Government Code was amended to provide for replacement, in part, of the tax revenues lost by redevelopment agencies. II JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 09:04 SEQ NO: 12 ] Section 16114 of the California Government Code provides for restoration of business inventory revenues through the annual addition of "artificial" taxable value to the actual taxable valuation on tax rolls of redevelopment project areas. The initial taxable value amount, that for 1980-81, was determined .by multiplying an amount equal to the assessed valuation of business inventories in the project area in the 1979- 80 fiscal year by the quotient derived by dividing four dollars ($4) by the tax rate applicable within the project area, with the resulting amount to be increased by a percentage equal to the State Reimbursement for Inventory Tax Factor. The amount of taxable value to be added in subsequent years is adjusted annually to reflect changes in population of the city or county in which the project is located and the rate of inflation. In computing this adjustment for the two years subsequent to the enactment of Section 16114 of the California Government Code the actual rate of Statewide inflation (based on CPI) was used. In adjusting between 1980-81 and 1981-82, however, the Legislature mandated an inflation adjustment of only 2.92 percent. Further, the Legislature has mandated that there will be no increase in business inventory subventions for 1982-83. The County, in implementing, has computed business inventory subvention revenues on the basis of a one percent tax rate against the "artificial" taxable value rather than the total tax rate, inclusive of override tax rates. This varies from a literal application of the Law which requires any year's project revenues to be calculated through the utilization of the current year tax rate, which includes override tax rates levied by taxing entities to repay voter-approved indebtedness. For fiscal year 1982-83, the amount of the business inventory subvention for the Project Area will be $52,979 or approximately 4.2% of the total Tax Revenues allocated to the Agency for the Project Area in fiscal year 1982-83. No assurance can be given that the State will, or will be able to, continue such reimbursement. Any reduction in the amount of State reimbursement or a change in the allocation formula may have an adverse effect on the Agency's ability to pay principal of and interest on the Bonds. Constitutional Amendment XIII B/Government Spending Limitation On November 6, 1979, California voters approved Proposition 4 or the Gann Initiative, which added Article XIII B to the California Constitution. The principal thrust of Article Xlll B is to limit the annual appropriations of the State and any city, county, city and 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, population and services rendered by the governmental entity. The "base year" for establishing such appropriations limit is the 1978-79 fiscal year and the limit is to be adjusted annually to reflect changes in population, consumer prices and ccrtain increases in the cost of services provided by these public agencies. Appropriations subject to Article XIII B include generally the proceeds of taxes levied by thc State or other entity of local government, exclusive of certain State subventions, refunds of taxes, benefit payments from retirement, unemployment insurance and disability insurance funds. "Proceeds of taxes" include, but are not limited to, all tax revenues and thc proceeds to an entity of government, from ( 1 ) regulatory licenses, user charges, and user fees (but only to thc extent such proceeds exceed the cost of providing thc service or regulation), and (2) thc investment of tax revenues. Article XIII B includes a requirement that if an cntity's revenues in any year exceed the amounts permitted to bc spent, thc excess would have to be returned by revising tax rates or fee schedules over thc subsequent two years. To thc extent such tax rates arc revised, Tax Revenues may be affected, since taxes allocated to thc Agency arc generated by taxes levied by certain taxing agencies having jurisdiction within thc Project Area. Effective September 30, 1980, the California Legislature added Section 33678 to the Law which provides that thc allocation of taxes to the a redevelopment agency for the purpose of paying principal of, or interest on, loans, advances or indebtedness shall not be deemed thc receipt by thc agency of proceeds of taxes levied by or on behalf of agency within thc meaning or for the purposes of Article Xlll B of thc California Constitution, nor shall such portion of taxes be deemed receipt of proceeds of taxes by, or an appropriation subject to the limitation of, any other public body within the meaning or for thc purposes of Article XIII B of the California Constitution or any statutory provision enacted in implementation of Article XIII B. To date, no court has addressed the question of whether.allocation of taxes to a 12 n4~nt~ la?lAn JOB. NO. 97576X005 ST: 97576X JEFFRIES'BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 13 ] 18 19 redevelopment agency are proceeds of taxes within the meaning of Article XIII B of the California Constitution. The constitutionality of Section 33678 of the Law has not been tested in the courts and the Agency can give no assurance as to the constitutionality or scope of such Section. The Agency has not adopted an appropriations limit. However, based upon an analysis of the Constitution and laws of the State of California. including Section 33678 of the Law. it is the opinion of the General Counsel to the Agency, James G. Rourke of the firm of Rourke & Woodruff, Santa Aha, California, that the Tax Revenues are not proceeds of taxes and that, accordingly, the Agency need not adopt an appropriations limit under Article XIII B. Serrano Decision On December 30, 1976, in the case ofSerrano v. Priest, 18 Cal. 3d 728 (1976), the California Supreme Court found the State's system of financing public elementary and secondary education unconstitutional under the equal protection provisions of the California Constitution and setting a period, ending September 3, 1980, for bringing such systems into constitutional compliance. The Serrano Court holding was based upon the premise that educational opportunity under the present system varies as a function of the assessed valuation per student in average daily attendance in a given school district, and that there was no compelling State interest justifying such discrimination. The State Legislature during the 1978 session made certain adjustments in the system of financing public elementary and secondary schools in an effort to meet the requirements set forth in Serrano. Thc legislation significantly increases the amount of State money supplied to public school districts having a low local property tax basis and provides for some equalization of tax moneys by redistributing some tax revenues of school districts having a high per-pupil property tax basis to school districts having a Iow per- pupil property tax basis. Whether or not these adjustments will be held by the courts to be adequate, and, if not, what system of financing public elementary and secondary schools will be chosen for enactment by the State Legislature (and whether such system will meet the applicable constitutional provisions) is open to speculation. To the extent any future decision or legislation may Ihnit the levy of property taxes for financing public elementary and secondary education, Tax Revenues may be reduced adversely affecting the security of the Bonds. The debt service coverage computations contained in this Official Statement assume that there will be no property tax de-emphasis as a result of Serrano. SUMMARY OF THE RESOLLrrlON The following is a summary of certain provisions of the Resolution and does not purport to be complete, and reference is hereby made to the Resolution for further particulars. Copies of the Resolution are available from the Agency upon request. All capitalized terms used herein, and not otherwise defined, shall have the same meaning as used in the Resolution. Funds -- Allocation of Bond Proceeds The Resolution establishes with the Treasurer of the Agency a special trust fund called the "Tustin Community Redevelopment Agency, Town Center Area Redevelopment Project. Redevelopment Fund" (the "Redevelopment Fund"). The Resolution establishes with the Fiscal Agent a special trust fund called the "Tustin Community Redevelopment Agency, Town Center Area Redevelopment Project, Special Fund" (the "Special Fund"), comprised of thc following special trust funds: the "Interest Account"; the "Principal Account"; the "Reserve Account" and the "Sinking Account". The Fiscal Agent, on behalf of the Agency, shall receive the proceeds from the sale of the Bonds, upon the delivery of the Bonds to the purchasers thereof, and shall dispose of such proceeds and moneys as follows: (1) Deposit in the Interest Account the accrued interest and premium, if any, paid by the purchasers of the Bonds; 13 142176 117222 JOB. NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 74z-8800 20-0ct-82 09:04 SEQ NO: 14 ] 20 (2) Deposit in the Reserve Account a sum equal to Maximum Annual Debt Service; (3) Pay the necessary expenses in connection with the issuance and sale of the Bonds and the fees of the Fiscal Agent and Paying Agents; and (4) After making the above deposits, the balance of the proceeds from the sale of the Bonds shall be transferred to the Treasurer of the Agency who shall place the same in the Redevelopment Fund. The moneys set aside and placed in the Redevelopment Fund shall remain 'therein until from time to time expended solely for the purpose of financing a portion of the cost of the Redevelopment Project and other costs related thereto, and also including in such costs: (1) The payment, in any year during which the Agency owns property in the Project Area, to any city, county, city and county, district or other public corporation which would have levied a tax upon such property had it not been exempt, an amount of money in lieu of taxes as authorized by Section 33401 of the Law; and (2) The cost of any lawful purpose in connection with the Redevelopment Project, including, without limitation, those purposes authorized by Section 33445 of the Law; and (3) The necessary expenses in connection with the issuance and sale of the Bonds and the fees of the Fiscal Agent and Paying Agents. Flow of Funds Thc Tax Revenues shall be deposited and accumulated in the Special Fund and shall be used in the following priority; provided, however, that to the extent that deposits have been made in any of the Accounts referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (1) Interest ,dccount. On or before the fifteenth day of each March and September, so long as Bonds remain outstanding, commencing March 1983, the Fiscal Agent will set aside from the Special Fund into the Interest Account an amount which when added to any amount in the interest Account will equal the amount of interest due and payable on the Bonds on the next interest payment date. (2) Principal ,4ccount. On or before the fifteenth day of September of each years commencing September 1983, so long as Bonds remain outstanding, the Fiscal Agent will set aside from the Special Fund into the Principal Account an amount which when added to any amount in the Principal Account will equal the amount of principal due and payable on the Serial Bonds on the next principal payment date. (3) Sinking ~4ccount. On or before the fifteenth day of September of each Bond Year, beginning September 1998, the Fiscal Agent will set aside from the Special Fund into the Sinking Account an amount which, when added to the amount then contained in the Sinking Account, will be equal to the minimum sinking account payment required to be on deposit therein in such Bond Year, as set forth in the following table: Sinking Year Eading Account November ! Payment 1998 .......................................................................................................... 5400,000 1999 .......................................................................................................... 2001 .......................................................................................................... 2002 .......................................................................................................... 2003 ............ : ............................................................................................. 2004 .......................................................................................................... 2005 .......................................................................................................... 2006 (Maturity) ....................................................................................... 440,000 490 000 545000 605 000 670 000 745 000 825 000 915 000 14 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 15 ] 21 In the event that available Tax Revenues shall in any Bond Year be insufficient to make the minimum sinking ac6ount payment established for such Bond Year, such deficiency shall be made up from the first available Tax Revenues in succeeding Bond Years, and the failure to make such payment in full shall not be deemed an event of default within the meaning of the Resolution. In the event and to the extent that, pursuant to the Sinking Account provisions of the Resolution, the Agency shall have purchased or redeemed a principal amount of Bonds of any Series and maturity for which minimum sinking account payments shall have been established in excess of the amount of minimum sinking account payments established for the period to and including the next November 1, there shall be credited (without duplica- tion) toward each such minimum sinking account payment thereafter to become due (other than the next due) an amount bearing the same ratio to such minimum sinking account payment as such excess principal amount of such minimum sinking account payments to be credited. The portion of any such minimum sinking account payment remaining after the deduction of any such amounts credited toward the same (or the original amount of any such minimum sinking account payments if no such amount shall have been credited toward the same) shall constitute the unsatisfied balance of such minimum sinking account payment for the purpose of calculation of minimum sinking account payments due on a future date. (4) Reserve Account. This account, held by the Fiscal Agent within the Special Fund, will consist of an amount equal to Maximum Annual Debt Service on all Outstanding Bonds. Initially it will be funded from Bonds proceeds. On or before November I of each year, beginning November I, 19'83, the Fiscal Agent will set aside from the Special Fund any amount of money from Tax Revenues necessary to restore the Reserve Account to the full amount of Maximum Annual Debt Service. The amounts on deposit in the Reserve Account will be used and withdrawn by the Fiscal Agent solely to replenish the Interest Account, the Principal Account or the Sinking Account in such order, in the event of a deficiency at any time in of such accounts, or for the purpose of paying the interest on or principal of or redemption premiums, if any, on the Bonds in the event no other money of the Agency is available, or to retire all the Bonds then Outstanding, except that so long as the Agency is not in default under the Resolution any amount in the Reserve Account in excess of the Maximum Annual Debt Service may be transferred to the Special Fund. (5) Surplus. If, (a) on November 2 of any year, (i) all moneys required to be set aside in the Interest Account, Principal Account, Sinking Account and Reserve Account in the immediately preceding Bond Year have been so set aside, (ii) the amount in thc Reserve Account at least equals Maximum Annual Debt Service, (iii) moneys remain in the Special Fund (excluding moneys in the Reserve Account) and (iv) the Agency shall have provided to the Fiscal Agent an opinion of an Independent Financial Consultant to the effect that Tax Revenues which will be allocated to and deposited in the Special Fund during the then current Bond Year are not less than (y) the amount (if any) required to be set aside in the Reserve Account in such Bond Year, plus (z) one and ten- hundredths (I.10) times the amount required to pay interest, principal and minimum sinking account payments in such Bond Year, then (b) the amount of moneys so remaining in the Special Fund (excluding moneys in the Reserve Account) shall be "Surplus" and shall promptly be transferred, at the direction of the Agency, to the Redevelopment Fund or to any other account of the Agency to be used for any lawful purpose of the Agency. Deposit and Investment of Moneys in Funds Subject to the provisions of the Resolution, all moneys held by the Fiscal Agent in the Special Fund, except such moneys which are at the time invested, shall be held in time or demand deposits (which may be represented by certificates of deposit) in any bank or trust company authorized to accept deposits of public funds (including the banking department of the Fiscal Agent) and shall be secured at all times by bonds or other obligations which are eligible by law as security for public.deposits, of a market value at least equal to the amount required by law. 15 024457 1370~? JOB NO. 97576X005 ST: 97576X aEFFRIES BANKNOTE CO. (213) 742-8800 20o0ct-82 09:04 SEQ NO: 16 22 Moneys in the Special Fund'may, and upon vritten request of the Agency, shall, be invested by the Fiscal Agent as provided by law only in obligations which will by their terms mature on such dates as to insure that before each interest payment date there will be in' the Special Fund, from matured obligations and other moneys already in the Special Fund, cash equal to the interest and principal payable on such date. Moneys in the Reserve Account shall be invested in obligations which will by their terms mature prior to November l, 2006. Obligations purchased as an investment of moneys in any of said Funds and Accounts shall be deemed at all times to be a part of such Fund or Account, and the interest accruing thereon and any gain realized from such investment shall be credited to such Fund or Account and any loss resulting from any such authorized investment shall be charged to such Fund or Account without liability to the Agency or the members and officers thereof or to the Fiscal Agent. Issuance of Additional Bonds (Including Refunding Bonds) and Other Agency Indebtedness Limitation on Bonded Indebtedness. The Redevelopment Plan limits the amount of outstanding indebtedness payable from Tax Revenues to Twenty Million Dollars ($20,000,000). This limitation may not be exceeded unless there is an amendment to the Redevelopment Plan. Parity Bonds. The Agency will not issue any obligation or security superior to or on a parity with the Bonds payable in whole or in part from Tax Revenues, other than Additional Bonds (including refunding bonds). If at any time the Agency determines to do so, the Agency may provide for the issuance of, and sell, Additional Bonds in such principal amounts as it determines. The issuance and sale of any Additional Bonds shall be subject to the following: (1) The Agency shall be in compliance with all covenants set forth in the Resolution. (2) The Additional Bonds shall be payable from Tax Revenues on a parity with the Bonds. (3) Tax Revenues derived based on the equalized assessment roll (as reported by the County Auditor-Controller), next preceding the issuance of Additional Bonds shall be equal to at least one and ten hundredths (1.I0) times the Maximum Annual Debt Service on all series of Bonds and Additional Bonds then outstanding and on the additional series of Bonds (after the application of the proceeds of refunding bonds issued to refund the Bonds or Additional Bonds) proposed to be issued. At the option of the Agency, there may be added to such Tax Revenues the estimated amount of additional Tax Revenues available for such computation, based on the tax rates in effect on the date on which the estimate is made, from the estimated taxable valuations of that portion of any improvements the construction of which has been completed prior to the date of issuance of Additional Bonds, but which are not yet on the tax rolls, including any increase in taxable valuation of the land underlying such improvements. Such estimates must be verified and shown in an opinion of the County Assessor or Auditor-Controller, or the Report of an Independent Real Estate Consultant or Independent Financial Consultant. (4) The Agency shall have received from an Independent Financial Consultant a certificate stating that the requirements of subsection (2) above have been complied with, or a certificate of the Auditor-Controller setting forth such taxes. (5) The Supplemental Resolution providing for the issuance of such Additional Bonds under the Resolution shall provide that: (i) Money shall be deposited in the Reserve Account from the proceeds of the sale of Additional Bonds as necessary so that the amount on deposit in the Reserve Account will equal the Maximum Annual Debt Service on the Bonds and the Additional Bonds (after application of the proceeds of any such refunding bonds); (ii) The interest payment dates for such Additional Bonds shall be May I and November 1 and the maturity dates shall be November 1; and 16 177071 137730 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 17 (iii) The proceeds of such Additional Bonds sha? be applied solely for (i) the purpose of aiding in financing the Redevelopment Project, including payment of all costs incidental to or connected with such financing, and/or (ii) the purpose of refunding any Bonds or Additional Bonds, including payment of all costs incidental to or connected with such refunding. (6) The Agency shall have received all required approvals or rulings from any governmental authority having jurisdiction over such series of bonds or their terms, including, without limitation, compliance with all requirements of the Department of the Treasury of the United States. Subordinate Lien Obligations. If and to the extent permitted by law and, if the Agency is in compliance with all covenants set forth in the Resolution, the Agency may, for any purpose, issue obligations subordinate in all respects to the security interest, pledge and assignment of the Tax Revenues, moneys, securities and funds created by the Resolution as security for the Bonds. All indebtedness of the Agency heretofore issued and remaining outstanding after the application of the proceeds of the Bonds will be payable solely from Surplus as so defined. Other Covenants of the Agency (1) Punctual Payment. The Agency will punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of the Resolution, and it will faithfully observe and perform all of the conditions, covenants and requirements of the Resolution and all Supplemental Resolutions and of the Bonds. Nothing herein contained shall prevent the Agency from making advances of its own moneys howsoever derived to any of the uses or purposes referred to in the Resolution. (2) Extension of Bonds and Coupons. The Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any Bond or any coupon appertaining to or claim for interest on any of the Bonds and will not, directly or indirectly, be a party to approve any such arrangement by purchasing or funding the Bonds, coupons or claims for interest or in any other manner. In case the maturity of any such Bond, coupon or claim for interest shall be extended or funded, whether or not with the consent of the Agency, such Bond, coupon or claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of the Resolution, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all coupons and claims for interest which shall not have been so extended or funded. (3) Against Encumbrances. The Agency will not encumber, pledge or place any charge or lien upon any of the Tax Revenues superior to or on a parity with the pledge and lien created for the benefit of the Bonds, except as permitted by the Resolution. (4) Management and Operations of Properties. The Agency will manage and operate all properties owned by the Agency and comprising any part of the Project in a sound and businesslike manner, and will keep such properties insured at all times in conformity with sound business practice. (5) Payment of Claims. The Agency will pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the Agency or upon the Tax Revenues or any part thereof, or upon any funds in the hands of the Fiscal Agent or any Paying Agent, or which might impair the security of the Bonds. Nothing contained in the Resolution shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said claims. (6) Books and Accounts; Financial Statement. The Agency will keep, or cause to be kept, prope! books of record and accounts, separate from all other records and accounts of the Agency and the City, in which complete and correct entries shall be made of all transactions relating to the Project and to the Tax Revenues. The Agency will cause to be prepared and filed with the Fiscal Agent annually, within one hundred and twenty (120) days after the close of that Fiscal Year so long as any of the Bonds are Outstanding, complete financial statements with respect to that Fiscal Year showing the Tax Revenues, all disbursements from the Tax Revenues and the financial condition of the Project, including the balances in 17 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 18 all funds and accounts relating to the Project, as of the end of such Fiscal Y~ r, which statement shall be accompanied by a certificate or opinion in writing of an Independent Certified Public Accountant. The Agency will furnish a copy of such statements to any Bondholder upon written request. (7) Protection of Security and Rights of Bondholders. The Agency will preserve and protect the security of the Bonds and the rights of the Bondholders, and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any of the Bonds by the Agency, the Bonds and coupons appertaining thereto shall be incontestable by the Agency. (8) Payments of Taxes and Other Charges. Subject to the provisions of the Resolution, the Agency will pay and discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Agency or the properties then owned by the Agency in the Project Area when the same shall become due. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said taxes, assessments or charges. The Agency will duly observe and conform with all valid requirements of any governmental authority relative to the Project or any part thereof. (9) Completion of Project. The Agency will commence, and will continue to completion, with all practicable dispatch, the Project, and the Project will be accomplished and completed in a sound and economical manner and in conformity with the redevelopment plan for the Project and the Law. (10) Taxation of Leased Property. Whenever any property in the Project Area has been redeveloped and thereafter is leased by the Agency to any person or persons (other than the City or the County) or whenever the Agency leases real property in the Project Area to any person or persons for redevelopment, the property shall be assessed and taxed in the same manner as privately owned property (in accordance with Section 33673 of the Health and Safety Code of the State), and the lease or contract shall provide (l) that the lessee shall pay taxes upon the taxable value of the entire property and not merely upon the assessed value of his or its leasehold interest, and (2) that if for any reason the taxes paid by the lessee on such property in any year during the term of the lease or contract shall be less than the taxes which would have been payable upon the taxable value of the entire property if the property were assessed and taxed in the same manner as privately owned property, the lessee shall pay such difference to the Fiscal Agent within thirty days after the taxes for such year become payable to the taxing agencies and in any event prior to the delinquency date of such taxes established by law. Ali such payments to the Fiscal Agent shall be treated as Tax Revenues and shall be deposited by the Fiscal Agent in the Special Fund. (l 1 ) Amendment of Redevelopment Plan and Disposition of Property. The Agency will not authorize the disposition of any land or real property in the Project Area to anyone which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property planned for such ownership or use by the Redevelopment Plan in effect on the date of the Resolution) so that such disposition shall, when taken together with other such dispositions, aggregate more than ten percent (10%) of the land area in the Project Area unless the Redevelopment Plan is amended with the approval of the Fiscal Agent as provided in the Resolution. If the Agency proposes to make such a disposition, it shall propose an amendment to such Redevelop- ment Plan which expressly provides for the disposition of such real property with such an effect and shall apply to the Fiscal Agent for approval of said proposed amendment. The Agency shall thereupon appoint a reputable Independent Financial Consultant and direct said consultant to report on the effect of said proposed disposition. If the Report of the Independent Financial Consultant concludes that the security of the Bonds and the rights of the Bondholders will not be materially impaired by said proposed disposition, and that taxes allocated to the Agency will not be significantly diminished by the proposed disposition, the Fiscal Agent shall approve the proposed amendment and the Agency may thereafter adopt the amendment (pursuant to all applicable provisions of the Law) and make the disposition. If said Report does not so conclude, the Fiscal Agent shall not give approval to said proposed amendment. 18 O)l?ll 107476 JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 19 ] 24 25 The Agency shall have the sole and exclusive authority to appoint said Consultant. Neit[,,',r the Fiscal Agent nor said Consultant shall be liable in connection with the performance of their duties hereunder, except for their own negligence or willful misconduct. (12) Tax Revenues. The Agency shall comply with ali requirements of the Law to insure the allocation and payment to it of the Tax Revenues, including without limitation the timely filing of any necessary statements of indebtedness with appropriate officials of the County, and shall forward information copies of each such filing to the Fiscal Ageni. (13) Eminent Domain, Sale or Lease Proceeds. Except as otherwise provided in the Resolution, the net proceeds received by the Agency from any eminent domain proceeding, sale or lease of property within the Project Area to the extent financed by the Agency through the issuance of Bonds shall be deposited by the Agency in the Special Fund. (14) Further Assurances. The Agency will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Resolution, and for the better assuring and confirming unto the Holders of the Bonds of the rights and benefits provided in the Resolution. Events of Default and Remedies Any one or more of the following events shall constitute an "event of default" under the Resolution: (1) Default in the due and punctual payment of any installment of interest on any Bond when and · as such interest installment shall become due and payable, and such default shall have continued for a period of thirty (30) days; or (2) Default in the due and punctual payment of the principal of or redemption premium (if any) on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise, and such default shall have continued for a period of thirty (30) days; or (3) Default by the Agency in the observance of any of the covenants, agreements or conditions on its part contained in the Resolution or in the Bonds, and such default shall have continued for a period of ninety (90) days; or (4) If the Aggncy files a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property. In each and every such case during the continuance of such event of default, the Fiscal Agent may, upon the notice in writing to the Agency, and shall, if so requested by the holders of not less than 60% in aggregate principal amount of the Bonds at the time outstanding (such request to be in writing to the Fiscal Agent and to the Agency) declare the principal of all of the Bonds then outstanding and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Resolution or in the Bonds to the contrary notwithstanding. Such declaration may be rescinded by the holders of not less than a majority of the Bonds then outstanding provided the Agency cures such default or defaults including the deposit with the Fiscal Agent of a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest at the rate of 12% per annum on such overdue installments of principal and, to the extent such payment of interest on interest is lawful at that time, on such overdue installments of interest, so that the Agency is currently in 9ompliance with all 19 0~0613 O~4t?l JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:04 SEQ NO: 20 payment, deposit and transfer provisions of the Resolution, and an amount sufficient to pay any expenses incurred by the Fiscal Agent in connection with such default. Discharge of Resolution If the Agency shall pay and discharge the entire indebtedness on all Bonds Outstanding in any one or more of the following ways: (1) by well and truly paying or causing to be paid the principal of and interest on all Bond~ Outstanding, as and when the same become due and payable; (2) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the accounts in the Special Fund, is fully sufficient to pay all Bonds Outstanding, including all principal, interest and redemption premiums; or (3) by depositing with the Fiscal Agent. in trust, Federal Securities or general obligation bonds of the State of California in such amount as the Fiscal Agent shall determine will, together with the interest to accrue thereon and moneys then on deposit in the accounts in the Special Fund be fully sufficient to pay and discharge the indebtedness on all Bonds Outstanding (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in the Resolution provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the Agency, and notwithstanding that any Bonds or interest coupons shall not have been surrendered for payment, the pledge of the Tax Revenues and other funds provided for in the Resolution and all other obligations of the Agency under the Resolution with respect to all Bonds Outstanding shall cease and terminate, except only the obligation of the Agency to pay or cause to be paid to the Holders of the Bonds and interest coupons not so surrendered and paid all sums due thereon; and thereafter Tax Revenues shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent and each Paying Agent. Any funds held by any Paying Agent, at the time of receipt by the Paying Agent of such notice from the Agency, which are not required for the purpose above mentioned, shall be paid over to the Fiscal Agent. Any funds, thereafter held by the Fiscal Agent, which are not required for said purpose, shall be paid over to the Agency. CONCLUDING INFORMATION Financial Consultant Miller & Schroeder Municipals, Inc. ("Miller & Schroeder") has acted as financial consultant to the Agency concerning the Bonds. As financial consultant, Miller & Schroeder will receive compensation contingent upon the sale and delivery of the Bonds. In the event Miller & Schroeder purchases the Bonds, Miller & Schrocder may resell all or a portion thereof to the public. Miller & Schroeder is not required to and does not intend to waive its financial consultant's fee if Miller & Schroeder is the winning bidder, and, in addition, will receive compensation as an underwriter. As an underwriter, Miller & Schrocder may offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) at prices lower than the public offering prices. Legal Opinion The opinion of Mudge Rose Guthrie & Alexander, Los Angeles, California and Rourke & Woodruff, Santa Ann. California, Co-Bond Counsel, will be delivered to the purchaser of the Bonds, at the expense of the Agency, upon delivery thereof, approving the validity of the Bonds and stating that interest on the Bonds is exempt from Federal income taxes and from State of California personal income taxes under existing statutes, regulations, rulings and court decisions. 20 147117 fl~4~ JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 09:46 SEQ NO: 21 27 A copy of such opinion, certified by an officer of the Agency by his facsimile signature, will be printed on the back of each definitive Bond. No charge will be made to the purchaser for such printing or certification. The legal opinion is only as to legality and is not intended to be nor is it to be interpreted or relied upon as a disclosure document or an express or implied recommendation as to the investment quality of the Bonds. Tax Exempt Status In the opinion of Co-Bond Counsel, interest on the Bonds is exempt from Federal income taxes and from State of California personal income taxes under existing statutes, regulations, rulings and court decisions. Legality for Investment in California The California Community Redevelopment Law provides that obligations authorized and issued under the Law shall be legal investments for all banks, trust companies and savings banks, insurance companies, and various other financial institutions, as well as for trust funds. The Bonds are also authorized security for public deposits under the Community Redevelopment Law. The Superintendent of Banks of the State of California has previously ruled that obligations of a redevelopment agency are eligible for savings bank investment in California. Municipal Bond Insurance The Agency has applied for a commitment from the Municipal Bond Insurance Association ("MBIA") for a policy of insurance on the Bonds. If the Agency's application is approved, then the policy uncondition- ally guarantees the payment of principal of and interest on the Bonds to the Fiscal Agent of the Bonds. The policy is non-cancellable and the premium will be fully paid at the time of the delivery of the Bonds. Upon notification of failure by the Agency to deposit full payment of principal and interest with the Fiscal Agent when the regularly scheduled date for the payment therefor has been reached, MBIA's members are obligated to deposit funds promptly with Citibank, N.A., New York, New York, as fiscal agent for MBIA, sufficient to fully cover the deficit in the Fiscal Agent's account. The insurers will be responsible for such payments, less any amounts received by the holders of the Bonds from the Agency or from any other sources other than the insurers. Normally, notice of an impending default will be received in advance of the payment date of the Bonds allowing MBIA time to make the funds available for payment on the due date. If notice on non-payment is received on or after the due date, MBIA will provide for payment on the business day following receipt of the notice. Upon payment by MBIA of any Bonds or coupons, MBIA becomes the owner thereof. The insurance companies comprising MBIA and their respective percentage liability are as follows: The Aetna Casualty and Surety Company, 33%; Fireman's Fund Insurance Company, 30%; Travelers Indemnity Company, 15%; Aetna Insurance Company, 12%; and The Continental Insurance Company, 10%. The policy is a several and not a joint insurance policy obligation of the participating insurance companies. Each company's participation is backed by its entire resources. 21 142353 34734~ JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 09:46 SEQ NO: 22 ] The following table sets forth financial information with respect to the five member companies of MBIA. The statistics are as reported by the member companies to the New York State Insurance Department. Municipal Bond Insurance Association Five Member Companies Assets and Policyholders' Surplus As of September 30, 1981 (Amounts in Thousands) Aetna Fireman's Traveler~ Aema Contincmtal Ca.~alty Fund lademaity im~raaee Imarance Total Assets ............................... $6,841,262 $3,345,366 $5,236,061 $2,289,909 $1,143,314 $18,855,712 Policyholders'Surplus ..... $1,046,920 $ 805,942 $ 968,420 $ 273,782 $ 116,162 $ 3,211,225 The MBIA companies listed above or their parent organizations have been in the insurance business from 70 to in excess of 100 years. Each MBIA company enjoys the highest policyholder rating accorded insurers (Excellent, A, or A+) by the nationally recognized insurance company rating authority, A.M. Best Company, Inc. MBIA has obtained a ruling from the Internal Revenue Service that neither the insurance protection nor payment thereunder will affect the exemption from Federal income tax of interest on bonds so insured. The Securities and Exchange Commission has issued a no-action letter stating that municipal bonds insured by MBIA ar~ not subject to registration under the Securities Act of 1933. The premium for the MBIA policy of insurance will be paid by the Agency from Bond proceeds at the time the Bonds are delivered. Bond Rating If MBIA issues its policy of insurance for the Bonds, then Standard & Poor's Corporation will assign its municipal bond rating of "AAA" to the Bonds on the understanding that the standard policy of MBIA insuring the timely payment of the principal of and interest on the Bonds will be issued by MBIA upon issuance of the Bonds. The rating reflects the views of the Standard & Poor's Corporation and an explanation can be obtained from said firm at 25 Broadway, New York, New York 10004, (212) 248-2525. There is no assurance that the rating will continue for any period of time, and it is subject to being withdrawn or revised downward. Such a revision or withdrawal may have an adverse impact on the market price of the Bonds. Supplemental Information on the City of Tustin Certain information concerning the City of Tustin is set forth in Appendix A hereto. Fiscal Consultant Katz, Hollis, Coren & Associates, Inc. has been retained by the Agency as its Fiscal Consultant. Katz, Hollis. Coren & Associates, Inc. has prepared for the Agency a projection of future Tax Revenues which is included in this Official Statement, as Appendix B. Audited Financial Statements The financial statements of the Agency for the year ended June 30, 1982 have been examined by Simonis Moreland Acccuntants, Inc., Newport Beach, California. The auditors' report, the financial statements, and the notes to the financial statements for the period July 1, 1981 to June 30, 1982 are included as Appendix C of this Official Statement. Miscellaneous Ali of the preceding summaries of the Resolution, the Law, other applicable legislation, the Redevelop- ment Plan, agreements and other documents are made subject to the provisions of such documents and laws, 22 16641fl llln4t JOB NO. 97576X005 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 09:46 SEQ NO: 23 ] respectively, and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Agency for further information in connection therewith. This O~cial Statement does not constitute a contract with the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The execution and delivery of this Of~cial Statement by its Chairman have been duly authorized by the Tustin Community Redevelopment Agency. TUSTIN COMMUNITY REDEVELOPMENT AGENCY /s/ Chairman 23 043722 162543 JOB NO. 97576X028 ST: 97576X o£FFRIES BANKNOTE CO. (213) 742-ve00 20-Oct-82 05:27 SEQ NO: 1 I I 29 APPENDIX A SUPPLEMENTAL INFORMATION ON THE CITY OF TUSTIN The following information concerning the CiO' of Tustin, the Count)' of Orange and surrounding areas is included onl)' for the purpose of supplying general information regarding the community. The Bonds are not a debt of the City of Tustin, the Count)' of Orange. the State of California. or an)' of its political subdivisions, and neither said CIO', said Count)'. said State nor an)' of its political subdivisions is liable therefor. General The City of Tustin is located in the central portion of Orange County. Tustin lies adjacent to the cities of Orange to the north, Santa Aha to the west and lrvine to the south. Tustin includes approximately 11.2 square miles at an average elevation of 356 feet above sea level. Typical of Southern California, the City has a temperate climate with a mean average temperature of 63.1 degrees and average annual rainfall of 13.25 inches. Incorporated on September 21, 1927, Tustin operates as a general law city. It has a council/manager form of government, with the five City Council members elected at large for staggered four-year terms. Thc Mayor is appointed by the City Council. Population A summary of the City's population from 1950 to 1982 is shown below. City of Tustin Population Year 1950 ............................................................................................. 1,143 1960 ............................................................................................. 2,006 1970 ............................................................................................. 21,178 1976 ............................................................................................. 31,290 1977 ............................................................................................. 32,792 1978 ............................................................................................. 32,792 1979 ............................................................................................. 33,700 1980 ............................................................................................. 36,962 1981 ............................................................................................. 37,264 1982 ............................................................................................. 38,223 Pol~dation Source: State Department of Finance. City's Taxable Valuation Taxable valuations within the City are established by the Orange County Assessor, except for utility property, which is assessed by the State Board of Equalization. Article XIII A of the State Constitution provides that. beginning with the 1978-79 fiscal year, property taxes in California are limited to one percent of full cash value, except for taxes to pay debt sen, ice on indebtedness approved by the voters prior to July i, 1978. Article XIII A defines full cash value as the County Assessor's valuation of real property as shown on the 1975-76 tax bill ("base year"), except in thc case of n6wly-constructed property or property which undergoes a change in ownership which must be valued as of the date of completion of construction or of the change in ownership. Yearly taxable value increases following the base year are limited to thc growth in the Consumer Price Index, but may not exceed two percent annually. Prior to the 1981-82 fiscal year, property was assessed at 25 percent of cash value, and therefore, Article Xlll A imposed a maximum tax rate of $4.00 per $100 of assessed valuation, except for taxes to A-I 066060 127141 JOB l~O. 97576X028 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 05:27 SEQ NO: 2 ] I meet debt service on indebtedness approved by the electorate prior to July I. 1978. Beginning in 1981-82, property is assessed at 100 percent of cash value and property tax rates are expressed in terms of their ratio to such full cash value. The taxable valuations reflect homeowner's and business inventory exemptions. Tax revenues lost as a result of the homeowner's exemption is reimbursed by the State based on the total taxes which would be due on the taxable valuation of the property qualifying for the exemptions, without allowance for delinquencies. The homeowner's exemption is $7,000 of the taxable valuation of an owner-occupied dwelling, providing the owner files for the exemption. In 1979, the California Legislature increased the business inventory exemption, beginning in 1980-81, from 50 to 100 percent of the value of such property, and reimbursed property tax revenues lost as a result of the exemption on a formula basis. The formula is based on the revenue loss resulting only from the one percent general property tax rate on business inventories, not for the revenue loss resulting from the tax rates levied for indebtedness, approved by the voters prior to July 1, 1978. Beginning in 1980-81, the reimbursement was twice the amount of the 1979-80 reimbursement (less the amount corresponding to the tax rates levied for indebtedness), increased by State Reimbursements for the Inventory Tax Factor. This factor is determined by the percent change in cost of living plus the percent change in the population of the jurisdiction. The business inventory exemption will be increased by this /'actor in subsequent years, unless the State Legislature changes the applicable law. A five year summary of the City's taxable valuations are set forth below. These figures are presented for historical comparison, with reference only to the time frame of the years shown, inasmuch as Article Xlll A of the California Constitution, discussed previously, will have an effect upon future taxable valuations of the City. City of Tustin Summary of Taxable Valuations State F'L~cal Net Net Net Reimbursed Year Secured Utility. Unsecured Exemptions 1977-78 ........ $ 145,986.800 $ 3,754.680 $ 17,803,170 $11,011,730 1979-80 ........ 169,863.840 3,638,480 26,151,550' 18,506,970 1980-81 ........ 194,344,864 4,751,170 20,987,770 7,537,310 1981-82(2)... 965,113.156 20,433,080 96,898,408 35,269,640 1982-83 ........ 1,100,836,596 22,086, 110 145,611,939 34,064,548 Total Valuations for Reveaue Purpos~ I) $ 178,556,380 218, i 60,840 227,621,114 1,117,714,234 1,302,599,193 Source: Orange County Auditor-Controller. (1) Net for revenue purposes only, before deduction of homeowner's and business inventory exemptions. (2) According to the provisions of Arti(~le XIII A of the State Constitution, taxable valuations are listed at 100 percent of cash value. Prior to fiscal year 1981-82, taxable valuations were calculated at 25 percent of cash value. The change in this procedure is the reason for the significantly larger taxable valuation figures for fiscal year 1981-82. Tax Rates Article Xlll A of the California Constitution limits the combined tax rate for all operating levies to one percent of full cash value. This limitation does not apply to tax levies for voter-approved indebtedness authorized prior to July 1. 1978. There are four tax rate areas (Tax Rate Areas 13-049, [3-050. 13-051, 13-052) located in the Project Area. Set forth below is a six year summary of the tax rates for such tax rate areas. A-2 i64620 026074 JOB 5'0. 97576X028 ST: 97576X oEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 05:27 SEQ NO: 3 I ] 31 Tax Rate Areas 13-049, 13-050, 13-051 and 13-052 Tax Rate per.S100 of Assessed Valuation 1977-78 1978-79 1979-80 1980..81 1981-82 1982-83 Tax Rate Area 13-049 $9.7772 $5.0618 $4.8817 $4.8497 $1.21425 $1.17458 Tax Rate Area 13-050 ........ 9.6612 5.0618 4.8817 4.8497 1.21425 1.17458 Tax Rate Area 13-051 ........ 9.8171 5.0618 4.8817 4.8497 1.21425 1.17458 Tax Rate Area 13-052 ........ 9.5777 5.9903 4.7899 4.8089 !.21425 1.17458 Source: Orange County Auditor-Controller. The following table presents the historical tax rates for Tax Rate Area 13-049. Tax Area 13-049 represents 89% of the total taxable valuation in the Project Area. TAX RATE AREA 13-049 Tax Rate per $100 Taxable Valuation 1977.78 1978-79 Basic levy .................................................................. $4.0000 Tustin Elementary Sch. Dist. bond ......................... 2132 Tustin H.S. Dist. E. bonds ...................................... 0844 Tustin Unified School Dist. bond ............................ 0283 Tustin Unified Sch. bldg. fund ................................ 3088 Saddleback Community College bond .................... 0337 County improvement bonds ...................................... 0032 City of Tustin bonds ................................................. 1249 Orange Co. Flood Control District ......................... 0171 East Orange Co. Water District bond .................... 0631 Metro. Water Dist-Mun. O.C. original area .......... II00 Orange Co. Sanitation Dist. --7 .............................. 0751 Total Rate on all Property ...................................... 4.9867 Rate on Land & Improvements .............................. 0751 TOTAL TAX RATE .............................................. $5.0618 1979-80 1980-81 1981-82 1982-83 $4.0000 $4.0000 $1.00000 $1.00000 .1696 .1450 .01994 .00622 .0672 .0581 .01304 .01039 .0250 .00453 .03592 .2665 .3055 .07548 .06735 .0243 .0194 .00391 .00328 .0028 .0023 .00050 .00043 .1470 .0571 .01474 .01135 .0146 .0130 .00270 .00237 .0299 .0861 .04970 .02067 .1000 .0890 .01980 .01660 .0598 .0492 .00991 4.8219 4.8050 1.20434 1.17458 · 0598 .0492 .00991 $4.8817 $4.8497 $1.21425 $I.17458 Source: Orange County Auditor-Controller. Tax Levies and Delinquencies For assessment and collection purposes, property is classified either as "secured" or "unsecured", and is listed accordingly on separate parts of the assessment roll. The "secured roll" is that part of the assessment roll containing State assessed property and property the taxes on which are a lien on real property sufficient, in the opinion of the assessor, to secure payment of the taxes. Other property is assessed on the "unsecured roll". The Orange County Tax Collector collects ad valorem property tax levies for each fiscal year representing taxes levied for such fiscal year on taxable real and personal property which is situated in the County as of the preceding March 1. Unsecured taxes are assessed and payable on March ! and become delinquent on August 31 in the next fiscal year. One-half of the secured tax levy is due November I, and becomes delinquent December 10: the second installment is due February I, and becomes delinquent April 10. A ten percent penalty is added to any late installment as of the 1982 tax roll. On June 30,'delinquent properties are sold to the State. Property owners may redeem property Ul~On payment of delinquent taxes and penalties. Properties sold to the State incur a redemption penalty of one and one-half percent per month on the tax due. Properties may be redeemed under an installment plan by paying current taxes, plus 20 percent of delinquent taxes for five years. Interest accrues at one-half percent per month on the unpaid balance. If no payments have been A-3 144104 JOB ]:0. 97576X028 ST: 97576X JEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 05:27 SEQ NO: 4 made on delinquent taxes at the end of five fiscal years, the property is deeded to the State. Such properties may thereafter be conveyed to the County Tax Collector as provided by law. Set forth below is a summary of the secured property tax levies, collections and delinquencies levied by all taxing jurisdictions within the City for the five most recent years. City of Tustin Tax Levies and Delinquencies Estimated Secured Tax Levy 1977-78 ....................................................... $1,362,269 1978-79 ....................................................... 715,761 1979-80 ....................................................... 1,109,513. 1980-81 ....................................................... 1,161,051 1981-82 ....................................................... 1,421,196 Delinquency as of Amount June 30 Collected Amount Perceut $1,339,631 $22,638 1.66% 703,604 12,157 1.67% 1,079,925 29,588 2.67% 1,123,623 37,419 3.22% 1,368,163 53,032 1.04% Source: Orange County Auditor-Controller. A-4 057651 101324 JOB NO. 97576X028 ST: 97576X oEFFRIES BANKNOTE CO. (213) 742-8800 20-Oct-82 05:27 SEQ NO: 5 I Direct and Overlapping Debt Set forth below is a statement of the City's direct and overlapping bonded debt and debt ratios as of October 4, 1982. City of Tustin Direct and O*erlapping Bonded Debt % Appllcable(I) Debt Orange County .............................................................................................. 1.813% $ 52,305 Orange County Building Authorities .......................................................... 1.813 296,402 Orange Count)' Floocl Control District ....................................................... 1.813 277,932 Metropolitan Water District ........................................................................0.356 1,716,091 Saddleback Community College District .................................................... 6.734 217,844 lrvine Unified School District ...................................................................... 0.323 117,200 Orange Unified School District ................................................................... 0.025 4,033 Santa Ana Unified School District, High School District, and School District ....................................................................................................... 0.023 Tustin Union High School District (Various issues) ................................. 9.979-10.862 Tustin School District ................................................................................... 41.059 San Joaquin School District (Various issues) ............................................ 0.134-0.151 City of Tustin ................................................................................................ 100.000 Orange County Sanitation District .=1 .......................................................0.012 Orange County Sanitation District =7 (Various issues) ........................... 9.803-15.681 East County County Water District ...........................................................32.980 lrvine Ranch Water District ........................................................................ 6.813 lrvine Water District, I.D..=2 .................................................................... 5.540 lrvine Ranch Water District, I.D. 3105 .................................................... 19.428 Municipal Water District of Orange County Water Facilities Corporation ................................................................................................ 2.337 TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT ................................................................................................. Less: MWDOC Water Facilities Corp. (100% self-supporting) ....... TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT ................................................................................................. 5,178 503,429 961,191 I 1,231 1,475,000(2) 58 649,179 2,239,342 407,076 1,487,490 7,101.905 1,827,534 $19,350,420 1,827,534 $17,522.886 (1) Based on 1981-82 valuations. (2) Excludes tax allocation bonds to be sold. Ratios to 1982-83 Assessed Valuation: Direct Debt ................................................... 0.12% Total Gross Debt .........................................1.53% Total Net Debt ............................................ 1.38% SHARE OF AUTHORIZED BONDS: Metropolitan Water District ...................................... $ 1,299,400 Tustin Union High School District ........................... $ 172,597 San Joaquin School District ...................................... $ 15,032 lrvine Ranch Water District ...................................... $ 4,714,927 lrvine Ranch Water District, I.D. =2 ...................... $ 105,592 Irvinc Ranch Water District, I.D. =105 .................. $31.034,093 STATE SCHOOL AID REPAYABLE AS OF 6/30/82: $1,206,594 Source: California Municipal Statistics, Inc. A-5 Ollll4 JOB NO. 97576X028 ST: 97576X oEFFRIES BANKNOTE CO. (213) 742-~$00 20-Oct-82 05:27 SEQ NO: 6 I I 32 Employment and Industry The following tabulation lists the largest manufacturing and non-manufacturing employers in the community area as of ................................. MANUFACTURING EMPLOYMENT Company Product Employment Basic Four Corp Small Business Computers 1,150 Steeicase Office Furniture 800 Silicon Systems Semi-conductors 247 Thiokel/Dynachem Chemicals 150 Fesco Plastics & Rubber 150 Ocean Pacific Clothing 144 Westercorp Computer Disc Controllers 140 NON-MANUFACTURING EMPLOYMENT Compauy Tustin Unified School District Tustin Community Hospital Fireman's Funds Shick Moving & Storage City of Tustin Mervyn's Sunwest Bank Coors Distributing Type of Business Employment Education 1,063 Medical Services 395 Insurance 220 Moving Company 170 Government Services 163 Retail Department Store 150 Banking 130 Distributor 116 Source: Tustin Chamber of Commerce. A-6 016651 122527 JOB NO. 97576X028 ST: 97576X oEFFRIES BANKNOTE CO. (213) 742-8800 20-0ct-82 05:27 SEQ NO: 7 ] i 33 .Regional Labor Force The City of Tustin is included in the Anaheim-Santa Ana-Garden Grove Standard Metropolitan Statistical Area, which comprises all of Orange County. The civilian labor force employment and unemploy- ment for the Anaheim-Santa Aha-Garden Grove SMSA is shown below. ORANGE COUNTY Civilian Labor Force. Employment and Unemployment Lal~r Force 1978 .................................................................... 1,002.6 953.7 1979 .................................................................... 1,063.4 1,0 ! 9.3 1980 .................................................................... 1,094.2 ! ,046.8 1981 .................................................................... 1,166.4 1,113.4 1982(1) .............................................................. 1,230.3 1,157.9 Unemployment Employment Unemployment Rate 48.9 4.9% 44.1 4.1 47.3 4.3 53.0 4.5 72.4 5.9 (I) Data recorded as of June 30, 1982. Source: State of California, Employment Development Department. The following lists the annual average number of wage and salary employees by industry within Orange County for 1977 to June, 1982. Wholesale and retail trade is the largest employer in the County with almost 25 percent of all wage and salary workers. The diversified service industry represents the second largest source of employment with approximately 22 percent of all employment. Manufacturing of durables is the third largest employer. Combined retail/wholesale, services and manufacturing of durables comprise approximately 65 percent of total non-agricultural employment in the county. ORANGE COUNTY Annual Average Employment by lndustryll~ (O00's omitted1 1977 1978 1979 1980 1981 198~2) Mining ...................................................................................... 2. l 2.2 2.2 2.3 2.7 2.4 Construction ............................................................................ 40.6 46.7 51.4 50.0 49.8 48.6 Manufacturing. Nondurables ................................................. 43.8 49.5 53.6 54.5 56.6 57.2 Manufacturing, Durables ....................................................... 131.2 148.5 162.4 166.1 167.3 168.1 Transportation & Public Util ................................................ 20.6 23.0 26.2 27.3 29.4 30.7 Wholesale Trade ..................................................................... 30.4 33.7 36.4 40.2 44.7 46.8 Retail Trade ............................................................................ 132.5 147.4 155.6 161.1 166.4 169.8 Finance, Ins. & Real Estate ..................................................39.7 46.8 52.7 57.2 61.7 64.1 Service Industries .................................................................... 132.2 147.7 162.4 172.1 182.6 193.0 Federal Government ............................................................... 9.4 9.8 10.6 12.4 12.5 ! 2.4 State & Local Government .................................................... 91.8 92.1 90.7 93.2 92.7 91.5 Total Nonagricultural ............................................................. 674.2 Agriculture, Forestry & Fisheries ......................................... 7.7 Total AIl Industries ................................................................ 681.9 747.3 804.3 836.4 866.4 884.6 8.5 7.0 7.4 7.2 7.1 755.8 811.3 843.8 873.6 891.7 Source: State of California, California Employment Development Department. (l) Employment reported by place of work excluding workers involved in labor disputes, self-employed. unpaid family and domestic workers. (2) Data recorded as of June, 1982. A-7 052062 033763 JOB NO. 97576X028 ST: 97576X oEFFRIES BANKNOTE CO. (213) 742-0800 20-Oct-82 05:27 SEQ NO: 8 I I Construction Activity. The following table shows building permit valuation for the City from 1977 through August 31, 1982. City of Tustin Building Permit Valuation (Valuation in Thousands of Dollars~ 1977 Residential New single-dwelling ................................. $ 1,971 New multi-dwelling .................................. 3.247 Additions. alterations ............................... 718 Total Residential .............................. $ 5,936 Nonresidential New commercial ...................................... $ 4,594 New industrial .......................................... 8,81 ! Other ......................................................... 3,557 Additions, alterations ...............................1,978 Total Nonresidential ......................... 18,869 Total Valuation .................................$24,805 No. of New Dwelling Units Single-dwelling ......................................... 37 Multi-dwelling .......................................... 175 Total Units ........................................ 212 1978 1979 1980 1981 1982~11 312 $ -0- $ 2,376 $ 626 $ 207 1.004 5.334 1,859 !,057 467 609 2,317 638 !,193 $ 1,783 $ 5,942 $ 6,552 $ 2,321 $1,400 $ 2,209 $ 8,542 $ 3,461 $11,212 $1,975 25,616 9,814 7,959 11,056 609 1,677 1,351 1,633 382 1,437 3,917 4,903 5,147 3,574 2,355 33,419 24,610 18,200 26,225 6,375 $35.202 $30,553 $24,752 $28,546 $7,775 9 0 8 9 3 31 241 37 23 -0- 40 241 45 32 3 35 (I) Year-to-date summary. August 31, 1982. Source: "California Construction Trends," Security Pacific National Bank and City of Tustin Building Department. Commerce The number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions is presented in the following table. City of Tustin Number of Permits and Valuation of Taxable Transactions Retail Stores Total All Outlets No. of Taxable No. of Taxable Year Permits Transactions Permits Transactions $ 87,732 891 $155,558 129,194 i.053 212,840 159,204 !,i13 281,332 179,452 1,191 301,673 202.379 1,258 330,200 51.717 1,288 88,040 1977 .................................................. 325 1978 .................................................. 392 1979 .................................................. 404 1980 .................................................. 404 1981 .................................................. 404 1982(i) ............................................. 409 (1) As of March 31, 1982. Source: California State Board of Equalization. A-8 164365 06~435 JOB NO. 97576X028 ST: 97576X JEFFRIES BANICNOTE CO. (213) 742-8800 20-0ct-82 09:07 SEQ NO: 9 Community Facilities Primary and secondary public education is provided by the Tustin Unified School District which operates 12 elementary schools, three junior high schools and three senior high schools on a regular September to June schedule. The City also has two Catholic schools, two Lutheran schools, a private Montesorri School and eight preschools. Advanced education is available at Univeristy of California at Irvine, California State University at Fullerton and Saddleback Community College District. Tustin has one general hospital with a 203 total bed capacity. Practicing in Tustin are 122 physicians/surgeons, 48 dentists, l0 optometrists, 12 chiropractors and six podiatrists. Within the City limits there are 14 churches representing a broad range of religious denominations. There is one library, one weekly newspaper and one local television station. There are I1 banks and 10 savings and loans. Transportation The Santa Aha Freeway (Interstate 5) and thc Newport Freeway (State Route 55) both pass through the City. In addition, three other major Southern California freeways are all within five miles of the City. The Orange County Transit District provides bus service to Tustin with linkages to the Los Angeles metropolitan area. Other bus facilities include the Greyhound depot and the Southern California Rapid Transit District services, all a short distance from Tustin. Santa Fe Railroad provides freight service through Tustin on eight scheduled stops daily. The nearest Amtrak passenger station is Iocfited two miles away in Santa Aha. The John Wayne Airport (formerly Orange County Airport) is only five miles from Tustin. It is served by the following airlines: Air California, Golden West, PSA, Frontier, Western and Republic. It has two lighted asphalt runways up to 5,700 feet long. Trucking service is available through 73 certified carriers including 65 which service California and intrastate points. Overnight service is available to San Diego. Los Angeles, Phoenix and the San Francisco Bay Area. Utilities The City is the primary provider of water services for its residents. The City has a maximum pumping capacity of 12.5 million gallons/day with average consumption at 9.1 million gallons per day. Sewer Service is supplied by Sanitation District No. Seven of Orange County which has a primary and secondary treatment plant and no facilities for non-recoverable industrial waste water. The Southern California Gas Company supplies natural gas, Southern California Edison provides electrical power, and Pacific Telephone and Telegraph Company provides phone service in the City. A-9 061~55 003240 KatzHollis ...... Tustin Community Redevelopment Agency 300 Centennial Way Tustin, California Attention: Mr. William A. Huston Executive Director Dear Mr. Huston: ~~ Enclosed is a tabulatio~ of proje~ed taxa~t.e~value and resulting tax revenue for th~n Center/Redevelopment Project. The projected rev~ues arebased on information supplied by Agency staff/assumptions detezqnined during our review of Project~-~ssessed value history and the property, assessment and tax apportionment procedures of Orange County. Katz Hollis Core~ & Associates. In, Financial Consultants The OwaR Building 617 South Ohve Suite 710 Los Angeles, CA 90014 (213) 629-3065 General Assumptions The tax rates used in the determination of incremental revenues are based on averaged actual tax rates since the passage of Proposition 13. The override tax rate for 1983-84 and subsequent years has been reduced by a factor approximately equal to the average annual de- cline from 1978-79 to 1982-83. The decline is allowed to continue and is assumed to stabilize at the basic $1.00 per $100.00 of taxable value rate established by Article XIIIA of the California Constitution (Proposition 1S). The reduction is an assumed reflection of the inter- play between taxable value within jurisdictions levying taxes in the Project area and the effective limit on the amount which can be levied (i.e. annual debt service on voter-approved indebtedness). In 1980, the Governor signed into law legislation (Chapter 801, Statutes of 1980) which, aznong other provisions, estab- lished a method by which taxing entities could reduce the amount of property taxes due them from within their juris- dictions. Language in the measure seems intended at insulat- ing other taxing entities and redevelopment agencies from the effects of such reductions. Because the method pre- scribed for the reduction, involves the computation of an "effective tax rate reduction," a possibility exists of a misinterpretation which could reduce the amount of tax increment revenue generated in a redevelopment project' area. KatzHollis Tustin Con~nity Redevelopment Agency PageOCt°ber/~'2 1982 It is assumed for purposes of this analysis that~any use of the reduction procedure by taxing entities in .The Pro- ject would not effect the Agency's receipt of tax-'.incre- ment revenue. The 1982-83 taxable value for the Tc~n Ccntc/Projec~in- cludes approximately $8,000 in business inventory value. Business inventory property has been exempted from tax- ation since the 1980-81 fiscal year, as discussed below. It is therefor~ assumed th~~is 1982-83 business inven- tory value~r~u~esents~r~scap~rom taxation in previous years and ~-il~ not be ~nc~d~l-d~ed in subsequent Project Area valuations. The taxable Values for Fiscal Year 1982-83 utilized in the enclosed projection of value'and resulting tax allocations are based on 1982-83 actual tax assessments. The value of state-assessed utility property has been maintained through- out the projection at its 1982-83 level. Personal property taxable value has been adjusted to reflect value which is assumed added to the tax rolls in conjunction with new real property construction. Real property taxable value is assumed to increase 2% annually, as allowed per Article XIIIA of the California Constitution (Proposition 13). .Assembly Bill (AB) 1994 In 1979 the Legislature enacted a measure, Assembly Bill 66, which eliminated the assessment and taxatiofi of business in- ventory property and provided a formula for the state to reimburse local agencies for the loss of tax revenues generated by business inventory value. Due to a technical drafting error, redevelopment agencies were not included among the local agencies eligible for reimbursement of lost business inventory tax revenue. The error was correct- ed by the Legislatur~ in 1980 through the passage of Assembly Bill 1994 which specifically provided for replacement, in. part, of the revenue lost by redevelopment agencies as a result of ~ 66. AB 1994 provides for restoration of business inventory revenue amounts through the annual addition of the tax rolls of re- development projects of "artifical" taxable value. KatzHollis ' Tustin Community Redevelopment Agency October ~, 1982 Page 3 Per AB 1994, the initial taxable value amount, that for 1980-81, was to be determined by reducing actual 1979-80 business inven- tory taxable value by a factor computed by dividing a one percent tax rate by the actual tax rate applicable within the project area. The effect of this adjustment is to have the new tax- able value yield revenues equivalent to those that would be generated if a project area has a tax of one percent of market value. The County of Orange, in implementing AB 1994, has computed business inventory subvention revenues on the basis of a one percent tax rate against the "artificial" taxable value rather than the total tax rate, inclusive of override tax rates. This varies from a literal application of the California Redevelopment Law (Chapter 29, Statutes of 1979) which requires any year's project revenues to be calculated through the utilization of the current year tax rate, which includes override tax rates levied by taxing entities to repay voter-approved indebtedness. The amount of taxable value to be added in subsequent years is adjusted annually ~o reflect changes in population of the city or county in which the project is located and the rate of inflation. In computing this adjustment for the two years subsequent to the enactment of AB 1994 the actual rate of statewide inflation (based on CPI) was used. In adjusting between 1980-81 and 1981-82, however, the Legislature mandated an inflation adjustment of only 2.92 percent. Further, the Legislature has mandated that there will be no increase in business inventory subventions for 1982-83. It is our opinion, based on conversations with persons familiar with the activities of the Legislature and the status of State fiscal affairs, that the adjustment for inflation will continue to be done at rates lower than actual CPI growth. For this reason, the projection does not include any adjustment to business inventory subvention revenue beyond the 1982-83 amount. New Construction Activity The taxable value added as a result of new construction activity is based on information provided by Agency staff and developers regarding existing and proposed developments in the Project. The value of personal property has been increased to reflect personal property taxable value which would be added to the tax rolls as a'result of new real property construction. KatzHollis Tustin Community Redevelopment Agency October ~Sg Page 4 The developments which are included are set forth in Schedule C (New Development Assumptions). The enclosed Schedule of New Development provides further detail relative to the developments themselves and the year to year addition of taxable value to the Town Center Project as these develop- ments are implemented. hope tJl.i-s'~Fforma~ useful and_m.r.~-mvailable to \ Sincerely, COREN & ASSOCIATES, INC. KatzHollis 0930S2 Schedule Aa Tustin Community Redevelopment Agency Town Center Redevelopment Project NOTES TO TAX INCREMENT PROJECTION (1) Reflects increase of 2% above prior year's total real property for valuation increases allowable under Proposition 13. See Schedules B and C' for assumptions of new development timing and valuation estimates. (3) Includes locally assessed personal property and public utility value assessed by the State Board of Equalization. (4.) Projected tax rate reflects annual average decrease since the passage of Proposition 13. Assumed to remain constant due to uncertainty of State budgetary constraints. Reflects removal of $8,160 in business inventor7 value as shown on the 1982-83 tax roll. 4? ~>° O~ 0 =- ~J q~ 0 O~ 0 ~ 0 ~ ~,0 4J 0 0 (9(90 O0 r~. ~ o 0 0 P o o KatzHollis 093082 Schedule C Tustin Community Redevelopment Agency Town Center Redevelopment ~roject NEW DEVELOPMENT ASSUMPTIONS St'evens Squ~e - 210 - 250 West Main Description: An eight building complex with 55,362 square feet of office. Development Schedule: Construction started third quarter 1981. 85% valuation March, 1982. 100% valuation March, 1983. Tenant Improvements/ Personal Property: 100% valuation March, 1983. 730 E1 Camino Description: Development Schedule: A 39,679 square foot 3-story office condominium with 132 parking spaces at ground level. Construction time projected from second quarter 1983 to fourth quarter 1983. 100% valuation March, 1984. New Value/Transfer of Ownership: 100% valuation March, 1984. 750 E1 Camino Description: Development Schedule: Fixtures/Improvements: A fourteen unit addition to an exist- ing mo tel. 100% valuation March, 1982. 100% valuation March, 1982. 11 KatzHollis Tustin Community Redevelopment Agency NEW DEVELOPMENT ASSUMPTIONS Page 2 150 E1 Camino Description: Development Schedule: Tenant Improvements/ Personal Property: A 43,056 square foot office building with surface parking of 144 spaces. Construction started third quarter 1981. 60% valuation March, 1982. 100% valuation March, 1983. 100% valuation March, 1983. 445 South "C" Street Description: Development Schedule: 2-level parking structure with 211 spaces (83 spaces to be publicly owned) Construction started first quarter 1982. 100% valuation March, 1983. 180 South Prospect Description: Development Schedule: Tenant Improvements/ Personal Property: A 15,000 square foot office building with surface parkin'g of 50 spaces. Construct.~n s_t~arted second quarter 1982. 100% valuation March, 1983. 100% valuation March, 1983. KatzHollis Tustin Co..~munity Redevelopment Agency NEW LEVELOPMENT ASSUMPTIONS Page 3 145 West Main Description: Development-Schedule: Tenant Improvements/ Personal Property: A 5,840 square foot office building with surface parking of 20 spaces. Cons~.~uction started first quarter 1982. ~ 15% valuation March, 1982. 100% valuation March, 1983. 100% valuation March, 1983. 17496 Holt Avenue Description: Development Schedule: Tenant Improvements/ Personal Property: A 6,605 square foot office building with surface parking of 22 spaces. Construct 'ected from first quar '83 quarter 1983. 15% va ation March, 1983. 100% tluation March, 1984. % valuation March, 1984. 18302 Irvine Boulevard Description: A low-rise office of 45,536 square feet with 1,708 square feet of retail with surface parking of 159 spaces. Development Schedule: Con 'ected to begin second 3. 75% valuation March, 1984. 100% valuation March, 1985. KatzHolli$ Tustin Community Redevelopment Agency NEW DEVELOPMENT ASSUMPTIONS Page 4 ~-SW of New.D~rt and Main Description: Development Schedule: A three building mid-rise development with a four-story parking structure of approximately 900 spaces. Building A - a four-story 100,000 square foot structure consisting of 80,000 square feet of office, 15,000 square feet of retail and a 5,000 square foot restaurant. Buildin~ B - a five-story 152,500 square foot structure consisting of 123,000 square feet of office, a 16,500 square foot movie theatre, an 8,000 square foot restaurant and 5,000 square feet of retail. Building C - a five-story 96,580 square foot office building. Building A projected to begin fourth quarter 1984. 20% valuation March 1, 1985. 100% valuation March 1, 1986. Building B - projected to begin second quarter 1982. ~ ~ 40% valuation March 1, 1984. 100% valuation March 1, 1985. Building C - proj~begin fourth quarter 1984. 20% valuation March 1, 1985. 100% valuation March 1, 1986 Parking structure projected to begin second quarter 1984. 20% valution March 1, 1985. 100% valuation March 1, 1986. Tenant Improvements/ ersonal Property/Fixtures: Building A - 100% valuation March. 1, 1986. Building B - 100% valuation March 1, 1985. Building C - 100% valuation March 1, 1986. -14 imonis .610 NEWPORT CENTER DR~VE. SUITE 1325 NEWPORT 8EACH. CALIFORNIA. 92660 (714! 640-1333 September 28, 19E2 The Board of Directors of the Tustin Con~unity Redevelopment Agency We have examined the balance sheet of the Tustin Community Redevelopment Agency at June 30, 1982, and the related statement of revenues, expenditures, and chanoes in fund. balance-budget and actual for the year then ended. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly the financial position of the Tustin Community Redevelopment Agency at June 30, 1982, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on basis consistent with that o'f the preceding year. Assets Cash and short-term investments Taxes receivable Interest receivable Amount to be provided for payment of long-term debt Tustin Community Redevelopment Agency ,.2..~ ~ Balance Sheet y/~'~.~ ~ ? Governmental Fund Type General Long-Term ! To~als qapital P.rojects Debt~ /(Memorandum Only) !982 1981 $2,079,672 / $2,079,672 $1,537,71 17,231 ~17,231 150,777 38,437 / 38,437 4,986 o,ooo Total Assets $2,135,340 $450,000 $2,585,340 $1,693,474 Liabilities and Fund Equity Liabilities: Accounts payable Due to City of Tustin Loans and accrued interest payable to City of Tustin (Note 2) Total Liabilities Fund Equity: Fund balance - designated for capital outlay Total Liabilities and Fund Equity $ 20,537 $ 20,537 $ 2,818 45,462 45,462 21,396 1 ~i 78,200 ] ,244,1 99 891 ~141 $2,135,340 $450~000 1 ~628,200 1 ~125,000 450,000 1,694,199 1,149,214 891,141 544,260 $450~000 $2,585,340 $1,693~474 See Accompanying Notes to Financial Statements. I Statement of Tustin Community Redevelopment Agency Revenues, Expenditures, and Changes in Fund Budget and Actual For the Year Ended June 30, 1982 Balance ~evenues: Tax increments Interest earned Other taxes Total Revenues Expenditures: Administration Capital expenditures Total Expenditures Excess of Revenues Over {Under} Expenditures Other Financing Sources: Long-term loan from City of Tustin Excess of Revenues and Other Financing Sources Over {Under} Expenditures Fund balance, beginning of year Fund balance, end of year 1982 Budqet Actual $ 921,688 $1,110,858 -1 16,000 137,232 55,000 57,627 - Over (Under) Budget $ 189,170 121,232 2,627 1981 Actual $704,507 76,144 53,204 992~6Q8 1,305,717 313,029 833~855 109,832 166,006 2~6~8,118 1,242,83Q 1,408,836 2,757,950 (1,765,262) 56,174 _(1.405.288 } (1,349,114) 1,662,143 450~000 (103,119) 450~000 44,018 765,263 809,281 24,574 (1,765,262) 346,881 2,112,143 24,574 544r260 544r26q $, 2 ~l.12.~143 $ 891,141 519,686 $544,260 See Accompanying Notes to Financial Statements. Tustin Community Redevelopment Agency Notes to Financial Statements June 30, 1982 1. Sunlnary of Significant Account. lng Policies Dejcription of Fund and Account Group The accounting records of the Agency are organized in a capital projects, fund which is used for the receipt and disbursement of monies used for financing capital expenditures. The General Long-Term Debt Account Group is used to record the outstandin'g balance of loans to the City of Tustin due beyond one year. Basis of Accounting The Agency's capital projects fund is maintained on the modified accrual basis of accounting. Cash and Short-Term Investments The Agency pools idle cash with the City of Tustin for the purpose of increasing income through investment activities. Investments are carried at cost, which approximates market value. Appropriations and Encumbrances Unexpended and unencumbered appropriations of the Agency automatically lapse at the end of the fiscal year. Budgetary Practices Each year the Agency Board adopts a budget which provides for the operations of the Agency. Budgets are prepared on the modified accrual basis of accounting. An encumbrance system is utilized to assist in controlling expenditures and enforcing revenue provisions. The Agency Board anticipated loans from the City of Tustin to finance the budgeted deficit. Administrative Charges From thJ City of Tustin The Agency was charged approximately $43,000 for administrative costs for the fiscal year ended June 30, 1982 by the City of Tustin. These charges were for salaries and supplies paid by the City for the Agency. ~__~ditionally, $53,200 intg_!~j_Q~_ej:~sY~as charged by the City to the Agency for the fiscal year ended~-- June 30, 1982 on the loans payable to the City. Tustin Community Redevelopment Agency Notes to Financial Sta'tements (Cont.} June 30, 1982 Loans and Accrued Interest Payable to City of Tustin Loans and accrued interest payable to the City of Tustin at June 30, 1982 were as follows: Included in the capital projects fund: 8% Loan Payable Accrued Interest Included in long-term debt: 12% Loan Payable $1,125,000 53,200 1,]78,200 .. 450~000 $1 ~628,200 The 8% loan is payable on demand while the 12% loan is payable '~in thr~ years. Both loans are payable from property tax increments. Itrno ~nds ? become available to repay the loans and accrued interest, the loans accrued interest are forgi, ven and need not be repaid to the City. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) MARY E. WYNN, City Clerk and Secretary Clerk of the Community Redevelopment Agency of the City of Tustin, California, does hereby certify that the whole num- ber of the members of the City Council as the Community Redevelopment Agency is five; that the above and foregoing Resolution No. RDA 82-11 was duly and regularly introduced, passed and adopted at a regular meeting of the City Council as the Community Redevelopment Agency held on the 20th day of October{ 1982 by the following vote: AYES : NOES : ABSENT: COUNCILPERSONS: COUNCILPERSONS: COUNCILPERSONS: Edgar, Kennedy, Greinke, Hoesterey, Saltarelli None None 6. k MARY E. WYNN, City.~erk/Secret&~y_ ~. -- Cler City of Tustin, California ~