Loading...
HomeMy WebLinkAbout03 PUBLIC HEARING - RED HILL LUTHERAN CHURCH• Agenda Item 3 -~~ ~ AGENDA REPORT Reviewed: ,~_ Finance Director MEETING DATE: DECEMBER 7, 2010 TO: HONORABLE MAYOR AND COUNCIL MEMBERS VIA: DAVID C. BIGGS, CITY MANAGER FROM: CHRISTINE SHINGLETON, ASSISTANT CITY MANAGER SUBJECT: PUBLIC HEARING TO CONSIDER ISSUANCE BY CALIFORNIA MUNICIPAL FINANCING AUTHORITY OF CONDUIT FINANCING FOR RED HILL LUTHERAN CHURCH WITHIN THE CITY OF TUSTIN SUMMARY A public hearing under the Tax and Equity Fiscal Responsibility Act ("TEFRA") has been noticed to consider a request by the California Municipal Finance Authority ("CMFA"), a joint exercise of powers authority and public entity of the State of California, to issue one or more series of refunding revenue bonds in an amount not to exceed $6,000,000, (the "Bonds" or "Loan Transaction"), for the purpose of refinancing the acquisition, renovation, improvement and equipping of educational facilities (the "Project") located on Red Hill Lutheran Church at its campus at 13200 Red Hill Avenue, also identified as Assessor Parcel Nos. 103-472-14, 103-472-11 and 103-472-21 (the "Properties"). In order to permit CMFA to provide such financing within the City of Tustin corporate boundaries, a resolution is provided for approval for the City to become a member of the CMFA and to approve of the issuance of the Bonds for the financing of the Project by the CMFA. RECOMMENDATION It is recommended that the City Council: 1. Adopt Resolution No.10-111 authorizing the City Manager or his designee thereof to execute the Joint Exercise of Powers Agreement with the California Municipal Financing Authority. 2. Conduct the public hearing under the requirements of TEFRA and the Internal Revenue Code of 1986, as amended (the "Code"). City Council Report December 7, 2010 Public Hearing- Conduit Financing for Red Hill Lutheran Church. Page 2 3. Adopt Resolution No. 10-110 approving the issuance of the Bonds and a Loan Transaction by the CMFA for the benefit of Red Hill Evangelical Lutheran Church of Tustin (the "Borrower"), to provide for the financing of the Project, such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and the California Government Code Section 6500 (and following), and authorizing the City Manager or his designee to execute any implementing documents or agreements as may be necessary. FISCAL IMPACT The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the "Foundation"), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City of Tustin, it is expected that 25% of the issuance fee will be granted by the CMFA to the general fund of the City. Such grant may be used for any lawful purpose of the City. The Borrower will be the beneficiary of CMFA's charitable donation through a 25% reduction in issuance fees. BACKGROUND Red Hill Lutheran Church (the "Borrower") has requested that the CMFA serve as the municipal issuer of tax-exempt revenue bonds (the "Bonds" or the "Loan Transaction") in an aggregate principal amount not to exceed $6,000,000. The Borrower will use the proceeds to (a) refinance certain outstanding indebtedness of the Borrower incurred for the cost of the construction, acquisition, installation, renovation, rehabilitation and improvement of real property, facilities, equipment and improvements of the Borrower's educational facilities located at 13200 Red Hill Avenue, including but not limited to demolition and replacement of an existing approx. 7,000 square foot, single-story building with the construction of an approx. 24,000 square foot two-story building with full basement (3 complete floors), and extensive upgrade and remodeling of all existing school classrooms, and related ancillary costs (collectively, the "Facilities" or the "Project"); (b) pay capitalized interest on the Loan; (c) fund one or more reserve funds with respect to the Loan; and (d) pay certain costs of issuance of the Loan. The Facilities are owned and operated by the Borrower. In order for all or a portion of the Bonds to qualify as tax-exempt bonds, the City of Tustin must conduct a public hearing (the "TEFRA Hearing") providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt Bonds for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA City Council Report December 7, 2010 Public Hearing- Conduit Financing for Red Hill Lutheran Church. Page 3 Hearing, the elected representatives of the jurisdiction that the Project is located in must provide its approval of the issuance of the Bonds for the financing of the Project. The City has had an on-going code enforcement issue with one of the Properties that will be subject to the Bonds and Loan Transaction. In the proposed approval resolution, staff are recommending that the applicant enter into a recordable Supplemental Regulatory Agreement as a condition to the City's approval of the tax exempt financing and that the Borrower agree to a schedule for complying with the Tustin City Code and other standard conditions that have been uniformly applied to other tax exempt bond measures elsewhere in the City. The applicant has agreed to these conditions. California Municipal Finance Authority The CMFA was created on January 1, 2004 pursuant to a joint exercise of powers agreement ("JPA") to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 100 municipalities have become members of CMFA. A list of current members of the JPA is attached. The CMFA was formed to assist local governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA's representatives and its Board of Directors have considerable experience in bond financings. Execution of the Joint Exercise of Powers Agreement In order for the CMFA to have the authority to serve as the issuer of the Bonds for the Project, it is .necessary for the City of Tustin to become a member of the CMFA. Attached to this report is a copy of the Joint Exercise of Powers Agreement to be reviewed and approved by the City Council, and executed by a designated signatory of the City. The Joint Exercise of Powers Agreement provides that the CMFA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and obligations of the CMFA do not constitute debts, liabilities or obligations of the members executing such agreement. The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not obligations of the City or the State of California, but are to be paid for solely from funds provided by the Borrower. City Council Report December 7, 2010 Public Hearing- Conduit Financing for Red Hill Lutheran Church. Page 4 There are no costs associated with membership in the CMFA and the City will in no way become exposed to any financial liability by reason of its membership in the CMFA. In addition, participation by the City in the CMFA will not impact the City's appropriations limits and will not constitute any type of indebtedness by the City. Outside of holding the TEFRA hearing, adopting the required resolution and executing the Joint Exercise of Powers Agreement of the CMFA, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds will be required. The Joint Exercise of Powers Agreement expressly provides that any member may withdraw from such agreement upon written notice to the Board of Directors of the CMFA. In the case of the proposed bond financing for the Borrower, the City following its execution of the Joint Exercise of Powers Agreement, could, at any time following the issuance of the Bonds, withdraw from the CMFA by providing written notice to the Board of Directors of the CMFA. Summary In light of the foregoing, and in order to support the Borrower, staff recommends that the City Council authorize the execution of the Joint Exercise of Powers Agreement of the CMFA, ,conduct the TEFRA Hearing, and adopt the resolution in favor of the issuance of the Bonds by the CMFA. Approved for Forwarding By: ~:' /? Christine A. Shingle Assistant City Mana er David C. Biggs City Manager Attachments: List of CMFA members Resolution No. 10-111 & Joint Exercise of Powers Authority Resolution No. 10-110 & Exhibit A Supplemental Regulatory Agreement California Municipal Finance Authority Tax-Exempt Financing Throughout California 2111 Palomar Airport Road, Suite 320 • Carlsbad, CA 92011 • (760) 930-1221 • Fax (760) 683-3390 MEMBERSHIP LIST CITIES & TOWNS COUNTIES Alameda Oxnard Alameda Anaheim Palm Springs Contra Costa Azusa Palmdale Fresno Bakersfield Palo Alto Imperial Blythe Petaluma Kings Calexico Pomona Marin Calipatria Poway Monterey Calistoga Rancho Cordova Orange Carlsbad Rancho Cucamonga Riverside Claremont Rancho Santa Margarita Sacramento Clovis Red Bluff San Bernardino Colton Redding San Diego Commerce Riverside San Francisco Corona Salinas San Joaquin Culver City San Buenaventura San Mateo Daly City San Francisco Santa Barbara EI Cajon San Jacinto Santa Clara EI Centro San Joaquin Santa Cruz EI Monte San Jose Shasta EI Segundo San Luis Obispo Solano Fairfax Santa Ana Sonoma Fairfield Santa Barbara Tulare Fillmore Santa Clarita Ventura Fresno Santa Monica Garden Grove Santa Paula Grass Valley Santa Rosa Imperial Beach Santee Industry Saratoga Inglewood Shafter Kerman South San Francisco La Mirada Stockton La Quinta Torrance La Verne Union City SPECIAL DISTRICTS Long Beach Vacaville East Valley Water Los Angeles Vallejo Marin Municipal Water Marina Vernon Northern Inyo County Local Hospital Menlo Park Victorville Otay Water Milpitas Wasco San Diego County Water Authority Modesto Watsonville San Ramon Valley Unified School Montclair West Hollywood Sierra Kings Health Care Napa Windsor South Coast Water Newport Beach Winters Trinity Public Utilities Oakdale Yountville Tulare Local Health Care Oakland Washington Township Healthcare 11/16/2010 RESOLUTION NO. 10-111 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN APPROVING, AUTHORIZING, AND DIRECTING EXECUTION OF A JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY The City Council of the City of Tustin finds: A. Pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act"), certain public agencies (the "Members") have entered into a Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement") in order to form the California Municipal Finance Authority (the "Authority"), for the purpose of promoting economic, cultural and community development, and in order to exercise any powers common to the Members, including the issuance of bonds, notes or other evidences of indebtedness; and B. The City of Tustin, California (the "City") has determined that it is in the public interest and for the public benefit that the City become a Member of the Authority in order to facilitate the promotion of economic, cultural and community development activities in the City, including the financing of projects therefor by the Authority; and C. There is now before this City Council (the "City Council") the form of the Agreement attached as Exhibit A; D. The Agreement has been filed with the City, and the members of the City Council with the assistance of its staff and City Attorney, have reviewed said documents; and NOW THEREFORE, the City Council of the City of Tustin resolves: Section 1. The Agreement is hereby approved as shown in Exhibit A and the City Manager or designee thereof is hereby authorized and directed to execute said document, and the City Clerk or such Clerk's designee is hereby authorized and directed to attest thereto. Section 2. The City Clerk of the City shall forward a certified copy of this Resolution and an originally executed Agreement to the Authority in care of its counsel: Harriet M. Welch, Esq. Squire, Sanders & Dempsey LLP. 555 South Flower St., Suite 3100 Los Angeles, CA 90071-2300 Section 3. This Resolution shall take effect immediately upon its passage. PASSED AND ADOPTED by the City Council on this 7t" day of December, 2010. Mayor ATTEST: PAMELA STOKER CITY CLERK STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF TUSTIN ) PAMELA STOKER, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 10-111 was duly ~assed and adopted at a regular meeting of the Tustin City Council, held on the 7t day of December, 2010, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: PAMELA STOKER, CITY CLERK RESOLUTION 10-111 EXHIBIT A JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY <ATTACHED> JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY THIS AGREEMENT, dated as of January 1, 2004, among the parties executing this Agreement (all such parties, except those which have withdrawn as provided herein, are referred to as the "Members" and those parties initially executing this Agreement are referred to as the "Initial Members"): WITNESSETH WHEREAS, pursuant to Title 1, Division 7, Chapter 5 of the California Government Code (in effect as of the date hereof and as the same may from time to time be amended or supplemented, the "Joint Exercise of Powers Act"), two or more public agencies may by agreement jointly exercise any power common to the contracting parties; and WHEREAS, each of the Members is a "public agency" as that term is defined in Section 6500 of the Joint Exercise of Powers Act; and WHEREAS, each of the Members is empowered by law to promote economic, cultural and community development, including, without limitation, the promotion of opportunities for the creation or retention of employment, the stimulation of economic activity, the increase of the tax base, and the promotion of opportunities for education, cultural improvement and public health, safety and general welfare; and WHEREAS, each of the Members may accomplish the purposes and objectives described in the preceding preamble by various means, including through making grants, loans or providing other financial assistance to governmental and nonprofit organizations; and WHEREAS, each Member is also empowered by law to acquire and dispose of real property for a public purpose; and WHEREAS, the Joint Exercise of Powers Act authorizes the Members to create a joint exercise of powers entity with the authority to exercise any powers common to the Members, as specified in this Agreement and to exercise the additional powers granted to it in the Joint Exercise of Powers Act and any other applicable provisions of the laws of the State of California; and WHEREAS, a public entity established pursuant to the Joint Exercise of Powers Act is empowered to issue or execute bonds, notes, commercial paper or any other evidences of indebtedness, including leases or installment sale agreements or certificates of participation therein (herein "Bonds"), and to otherwise undertake financing programs under the Joint Exercise of Powers Act or other applicable provisions of the laws of the State of California to accomplish its public purposes; and WHEREAS, the Members have determined to specifically authorize a public entity authorized pursuant to the Joint Exercise of Powers Act to issue Bonds pursuant to the Joint Exercise of Powers Act or other applicable provisions of the laws of the State of California; and WHEREAS, it is the desire of the Members to use a public entity established pursuant to the Joint Exercise of Powers Act to undertake the financing and/or refinancing of projects of any nature, including, but not limited to, capital or working capital projects, insurance, liability or retirement programs or facilitating Members use of existing or new financial instruments and mechanisms; and WHEREAS, it is further the intention of the Members that the projects undertaken will result in significant public benefits to the inhabitants of the jurisdictions of the Members; and WHEREAS, by this Agreement, each Member desires to create and establish the "California Municipal Finance Authority" for the purposes set forth herein and to exercise the powers provided herein; NOW, THEREFORE, the Members, for and in consideration of the mutual promises and agreements herein contained, do agree as follows: Section 1. Purpose. This Agreement is made pursuant to the provisions of the Joint Exercise of Powers Act. The purpose of this Agreement is to establish a public entity for the joint exercise of powers common to the Members and for the exercise of additional powers given to a joint powers entity under the Joint Powers Act or any other applicable law, including, but not limited to, the issuance of Bonds for any purpose or activity permitted under the Joint Exercise of Powers Act or any other applicable law. Such purpose will be accomplished and said power exercised in the manner hereinafter set forth. Section 2. Term. This Agreement shall become effective in accordance with Section 17 as of the date hereof and shall continue in full force and effect until such time as it is terminated in writing by all the Members; provided, however, that this Agreement shall not terminate or be terminated until all Bonds issued or caused to be issued by the Authority (defined below) shall no longer be outstanding under the terms of the indenture, trust agreement or other instrument pursuant to which such Bonds are issued, or unless a successor to the Authority assumes all of the Authority's debts, liabilities and obligastions. Section 3. Authority. A. CREATION AND POWERS OF AUTHORITY. Pursuant to the Joint Exercise of Powers Act, there is hereby created a public entity to be known as the "California Municipal Finance Authority" (the "Authority"), and said Authority shall be a public entity separate and apart from the Members. Its debts, liabilities and obligations do not constitute debts, liabilities or obligations of any Members. B. BOARD. The Authority shall be administered by the Board of Directors (the "Board," or the "Directors" and each a "Director") of the California Foundation for Stronger Communities, a nonprofit public benefit corporation organized under the laws of the State of California (the "Foundation"), with each such Director serving in his or her individual capacity as a Director of the Board. The Board shall be the administering agency of this Agreement and, as such, shall be vested with the powers set forth herein, and shall administer this Agreement in accordance with the purposes and functions provided herein. The number of Directors, the appointment of Directors, alternates and successors, their respective terms of office, and all other provisions relating to the qualification and office of the Directors shall be as provided in the Articles and Bylaws of the Foundation, or by resolution of the Board adopted in accordance with the Bylaws of the Foundation. All references in this Agreement to any Director shall be deemed to refer to and include the applicable alternate Director, if any, when so acting in place of a regularly appointed Director. Directors may receive reasonable compensation for serving as such, and shall be entitled to reimbursement for any expenses actually incurred in connection with serving as a Director, if the Board shall determine that such expenses shall be reimbursed and there are unencumbered funds available for such purpose. The Foundation may be removed as administering agent hereunder and replaced at any time by amendment of this Agreement approved as provided in Section 16; provided that a successor administering agent of this Agreement has been appointed and accepted its duties and responsibilities under this Agreement. C. OFFICERS; DUTIES; OFFICIAL BONDS. The officers of the Authority shall be the Chair, Vice-Chair, Secretary and Treasurer (defined below). The Board, in its capacity as administering agent of this Agreement, shall elect aChair, aVice-Chair, and a Secretary of the Authority from among Directors to serve until such officer is re-elected or a successor to such office is elected by the Board. The Board shall appoint one or more of its officers or employees to serve as treasurer, auditor, and controller of the Authority (the "Treasurer") pursuant to Section 6505.6 of the Joint Exercise of Powers Act to serve until such officer is re-elected or a successor to such office is elected by the Board. Subject to the applicable provisions of any resolution, indenture, trust agreement or other instrument or proceeding authorizing or securing Bonds (each such resolution, indenture, trust agreement, instrument and proceeding being herein referred to as an "Indenture") providing for a trustee or other fiscal agent, and except as may otherwise be specified by resolution of the Board, the Treasurer is designated as the depositary of the Authority to have custody of all money of the Authority, from whatever source derived and shall have the powers, duties and responsibilities specified in Sections 6505, 6505.5 and 6509.5 of the Joint Exercise of Powers Act. The Treasurer of the Authority is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond with the Secretary of the Authority in the amount specified by resolution of the Board but in no event less than $1,000. The Board shall have the power to appoint such other officers and employees as it may deem necessary and to retain independent counsel, consultants and accountants. The Board shall have the power, by resolution, to the extent permitted by the Joint Exercise of Power Act or any other applicable law, to delegate any of its functions to one or more of the Directors or officers, employees or agents of the Authority and to cause any of said Directors, officers, employees or agents to take any actions and execute any documents or instruments for and in the name and on behalf of the Board or the Authority. D. MEETINGS OF THE BOARD. (1) Ralph M. Brown Act. All meetings of the Board, including, without limitation, regular, adjourned regular, special, and adjourned special meetings shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (commencing with Section 54950 of the Government Code of the State of California), or any successor legislation hereinafter enacted (the "Brown Act"). (2) Regular Meetings. The Board shall provide for its regular meetings; provided, however, it shall hold at least one regular meeting each year. The date, hour and place of the holding of the regular meetings shall be fixed by resolution of the Board. To the extent permitted by the Brown Act, such meetings may be held by telephone conference. (3) Special Meetings. Special meetings of the Board may be called in accordance with the provisions of Section 54956 of the Government Code of the State of California. To the extent permitted by the Brown Act, such meetings may be held by telephone conference. (4) Minutes. The Secretary of the Authority shall cause to be kept minutes of the regular, adjourned regular, special, and adjourned special meetings of the Board and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each Director. (5) uorum. A majority of the Board shall constitute a quorum for the transaction of business. No action may be taken by the Board except upon the affirmative vote of a majority of the Directors constituting a quorum, except that less than a quorum may adjourn a meeting to another time and place. E. RULES AND REGULATIONS. The Authority may adopt, from time to time, by resolution of the Board such rules and regulations for the conduct of its meetings and affairs as may be required. Section 4. Powers. The Authority shall have the power, in its own name, to exercise the common powers of the Members and to exercise all additional powers given to a joint powers entity under any of the laws of the State of California, including, but not limited to, the Joint Exercise of Powers Act, for any purpose authorized under this Agreement. Such powers shall include the common powers specified in this Agreement and may be exercised in the manner and according to the method provided in this Agreement. The Authority is hereby authorized to do all acts necessary for the exercise of such power, including, but not limited to, any of all of the following: to make and enter into contracts; to employ agents and employees; to acquire, construct, provide for maintenance and operation of, or maintain and operate, any buildings, works or improvements; to acquire, hold or dispose of property wherever located; to incur debts, liabilities or obligations; to receive gifts, contributions and donations of property, funds, services, and other forms of assistance from person, firms, corporations and any governmental entity; to sue and be sued in its own name; to make grants, loans or provide other financial assistance to governmental and nonprofit organizations (e.g., the Members or the Foundation) to accomplish any of its purposes; and generally to do any and all things necessary or convenient to accomplish its purposes. Without limiting the generality of the foregoing, the Authority may issue or cause to be issued Bonds, and pledge any property or revenues as security to the extent permitted under the Joint Exercise of Powers Act, or any other applicable provision of law; provided, however, the Authority shall not issue Bonds with respect to any project located in the jurisdiction of one or more Members unless the governing body of any such Member, or its duly authorized representative, shall approve, conditionally or unconditionally, the project, including the issuance of Bonds therefor. Such approval may be evidenced by resolution, certificate, order, report or such other means of written approval of such project as may be selected by the Member (or its authorized representative) whose approval is required. No such approval shall be required in connection with Bonds that refund Bonds previously issued by the Authority and approved by the governing board of a Member. The manner in which the Authority shall exercise its powers and perform its duties is and shall be subject to the restrictions upon the manner in which a California general law city could exercise such powers and perform such duties. The manner in which the Authority shall exercise its powers and perform its duties shall not be subject to any restrictions applicable to the manner in which any other public agency could exercise such powers or perform such duties, whether such agency is a party to this Agreement or not. Section 5. Fiscal Year. For the purposes of this Agreement, the term "Fiscal Year" shall mean the fiscal year as established from time to time by resolution of the Board, being, at the date of this Agreement, the period from July 1 to and including the following June 30, except for the first Fiscal Year which shall be the period from the date of this Agreement to June 30, 2004. Section 6. Disposition of Assets. At the end of the term hereof or upon the earlier termination of this Agreement as set forth in Section 2, after payment of all expenses and liabilities of the Authority, all property of the Authority both real and personal shall automatically vest in the Members in the manner and amount determined by the Board in its sole discretion and shall thereafter remain the sole property of the Members; provided, however, that any surplus money on hand shall be returned in proportion to the contributions made by the Members. Section 7. Bonds. From time to time the Authority shall issue Bonds, in one or more series, for the purpose of exercising its powers and raising the funds necessary to carry out its purposes under this Agreement. The services of bond counsel, financing consultants and other consultants and advisors working on the projects andlor their financing shall be used by the Authority. The expenses of the Board shall be paid from the proceeds of the Bonds or any other unencumbered funds of the Authority available for such purpose. Section 8. Bonds Only Limited and Special Obligations of Authority. The Bonds, together with the interest and premium, if any, thereon, shall not be deemed to constitute a debt of any Member or pledge of the faith and credit of the Members or the Authority. The Bonds shall be only special obligations of the Authority, and the Authority shall under no circumstances be obligated to pay the Bonds except from revenues and other funds pledged therefor. Neither the Members nor the Authority shall be obligated to pay the principal of, premium, if any, or interest on the Bonds, or other costs incidental thereto, except from the revenues and funds pledged therefor, and neither the faith and credit nor the taxing power of the Members nor the faith and credit of the Authority shall be pledged to the payment of the principal of, premium, if any, or interest on the Bonds nor shall the Members or the Authority in any manner be obligated to make any appropriation for such payment. No covenant or agreement contained in any Bond or related document shall be deemed to be a covenant or agreement of any Director, or any officer, employee or agent of the Authority in his or her individual capacity and neither the Board of the Authority nor any Director or officer thereof executing the Bonds shall be liable personally on any Bond or be subject to any personal liability or accountability by reason of the issuance of any Bonds. Section 9. Accounts and Reports. All funds of the Authority shall be strictly accounted for. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice and by any provision of any Indenture (to the extent such duties are not assigned to a trustee of Bonds). The books and records of the Authority shall be open to inspection at all reasonable times by each Member. The Treasurer of the Authority shall cause an independent audit to be made of the books of accounts and financial records of the Authority by a certified public accountant or public accountant in compliance with the provisions of Section 6505 of the Joint Exercise of Powers Act. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the Government Code of the State of California and shall conform to generally accepted auditing standards. When such an audit of accounts and records is made by a certified public accountant or public accountant, a report thereof shall be filed as a public record with each Member and also with the county auditor of each county in which a Member is located; provided, however, that to the extent permitted by law, the Authority may, instead of filing such report with each Member and such county auditor, elect to post such report as a public record electronically on a website designated by the Authority. Such report if made shall be filed within 12 months of the end of the Fiscal Year or Years under examination. The Treasurer is hereby directed to report in writing on the first day of July, October, January, and April of each year to the Board and the Members which report shall describe the amount of money held by the Treasurer for the Authority, the amount of receipts since the last such report, and the amount paid out since the last such report (which may exclude amounts held by a trustee or other fiduciary in connection with any Bonds to the extent that such trustee or other fiduciary provided regular reports covering such amounts.) Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants in making an audit pursuant to this Section, shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for that purpose. In any Fiscal Year the Board may, by resolution adopted by unanimous vote, replace the annual special audit with an audit covering atwo-year period. Section 10. Funds. Subject to the applicable provisions of any Indenture, which may provide for a trustee or other fiduciary to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall receive, have the custody of and disburse Authority funds pursuant to the accounting procedures developed under Sections 3.C and 9, and shall make the disbursements required by this Agreement or otherwise necessary to carry out any of the provisions of purposes of this Agreement. Section 11. Notices. Notices and other communications hereunder to the Members shall be sufficient if delivered to the clerk of the governing body of each Member; provided, however, that to the extent permitted by law, the Authority may, provide notices and other communications and postings electronically (including, without limitation, through email or by posting to a website). Section 12. Additional Members/Withdrawal of Members. Qualifying public agencies may be added as parties to this Agreement and become Members upon: (1) the filing by such public agency with the Authority of an executed counterpart of this Agreement, together with a copy of the resolution of the governing body of such public agency approving this Agreement and the execution and delivery hereof; and (2) adoption of a resolution of the Board approving the addition of such public agency as a Member. Upon satisfaction of such conditions, the Board shall file such executed counterpart of this Agreement as an amendment hereto, effective upon such filing. A Member may withdraw from this Agreement upon written notice to the Board; provided, however, that no such withdrawal shall result in the dissolution of the Authority so long as any Bonds remain outstanding. Any such withdrawal shall be effective only upon receipt of the notice of withdrawal by the Board which shall acknowledge receipt of such notice of withdrawal in writing and shall file such notice as an amendment to this Agreement effective upon such filing. Section 13. Indemnification. To the full extent permitted by law, the Board may authorize indemnification by the Authority of any person who is or was a Director or an officer, employee of other agent of the Authority, and who was or is a party or is threatened to be made a party to a proceeding by reason of the fact that such person is or was such a Director or an officer, employee or other agent of the Authority, against expenses, including attorneys fees, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, if such person acted in good faith in a manner such person reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful and, in the case of an action by or in the right of the Authority, acted with such care, including reasonable inquiry, as an ordinarily prudent person in alike position would use under similar circumstances. Section 14. Contributions and Advances. Contributions or advances of public funds and of the use of personnel, equipment or property may be made to the Authority by the Members for any of the purposes of this Agreement. Payment of public funds may be made to defray the cost of any such contribution or advance. Any such advance may be made subject to repayment, and in such case shall be repaid, in the manner agreed upon by the Authority and the Member making such advance at the time of such advance. It is mutually understood and agreed to that no Member has any obligation to make advances or contributions to the Authority to provide for the costs and expenses of administration of the Authority, even though any Member may do so. The Members understand and agree that a portion of the funds of the Authority that otherwise may be allocated or distributed to the Members may instead be used to make grants, loans or provide other financial assistance to governmental units and nonprofit organizations (e.g., the Foundation) to accomplish any of the governmental unit's or nonprofit organization's purposes. Section 15. Immunities. All of the privileges and immunities from liabilities, exemptions from laws, ordinances and rules, and other benefits which apply to the activity of officers, agents or employees of Members when performing their respective functions within the territorial limits of their respective public agencies, shall apply to the same degree and extent to the Directors, officers, employees, agents or other representatives of the Authority while engaged in the performance of any of their functions or duties under the provisions of this Agreement. Section 16. Amendments. Except as provided in Section 12 above, this Agreement shall not be amended, modified, or altered, unless the negative consent of each of the Members is obtained. To obtain the negative consent of each of the Members, the following negative consent procedure shall be followed: (a) the Authority shall provide each Member with a notice at least sixty (60) days prior to the date such proposed amendment is to become effective explaining the nature of such proposed amendment and this negative consent procedure; (b) the Authority shall provide each Member who did not respond a reminder notice with a notice at least thirty (30) days prior to the date such proposed amendment is to become effective; and (c) if no Member objects to the proposed amendment in writing within sixty (60) days after the initial notice, the proposed amendment shall become effective with respect to all Members. Section 17. Effectiveness. This Agreement shall become effective and be in full force and effect and a legal, valid and binding obligation of each of the Members on the date that the Board shall have received from two of the Initial Members an executed counterpart of this Agreement, together with a certified copy of a resolution of the governing body of each such Initial Member approving this Agreement and the execution and delivery hereof. Section 18. Partial Invalidity. If any one or more of the terms, provisions, promises, covenants or conditions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Agreement shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law. Section 19. Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of the parties hereto. Except to the extent expressly provided herein, no Member may assign any right or obligation hereunder without the consent of the other Members. Section 20. Miscellaneous. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The section headings herein arc for convenience only and are not to be construed as modifying or governing the language in the section referred to. Wherever in this Agreement any consent or approval is required, the same shall not be unreasonably withheld. This Agreement shall be governed under the laws of the State of California. This Agreement is the complete and exclusive statement of the agreement among the Members, which supercedes and merges all prior proposals, understandings, and other agreements, whether oral, written, or implied in conduct, between and among the Members relating to the subject matter of this Agreement. IN WITNESS WHEREOF, the City of Tustin has caused this Agreement to be executed and attested by its duly authorized representatives as of the day of , 2010. ATTEST: Member: CITY OF TUSTIN By - Name: Title: Clerk RESOLUTION NO. 10-110 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN APPROVING THE ISSUANCE OF BONDS, OR EXECUTION OF A LOAN TRANSACTION, BY THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY FOR THE BENEFIT OF RED HILL EVANGELICAL LUTHERAN CHURCH OF TUSTIN IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $6,000,000 FOR THE PURPOSE OF REFINANCING THE ACQUISITION, RENOVATION, IMPROVEMENT AND EQUIPPING OF EDUCATIONAL FACILITIES AND CERTAIN OTHER MATTERS RELATING THERETO The City Council of the City of Tustin finds: A. The California Municipal Finance Authority (the "Authority") is authorized by the laws of the State of California ("Laws") to issue and sell revenue bonds for the purpose, among others, of financing or refinancing the construction of capital projects and for the purpose of promoting economic, cultural and community development; and B. Red Hill Evangelical Lutheran Church of Tustin (the "Borrower"), is a nonprofit religious corporation duly organized and existing under the laws of the State of California (the "State") and has requested that the Authority sell and issue one or more series of its tax-exempt or taxable revenue bonds or enter into a loan transaction (such issuance of bonds or loan transaction of the Authority referred to as the "Loan"), and lend the proceeds thereof to the Borrower under a loan agreement (the "Loan Agreement") pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State (commencing with Section 6500) (the "Act") to (a) refinance certain outstanding indebtedness of the Borrower incurred for the cost of the construction, acquisition, installation, renovation, rehabilitation and improvement of real property, facilities, equipment and improvements of the Borrower's educational facilities (the "School") located on its campus at 13200 Red Hill Avenue, Tustin, California 92780 (Assessor Parcel Nos. 103-472-14, 103-472-11, and 103-472-21, collectively the "Properties"), including but not limited to demolition and replacement of an existing approx. 7,000 square foot, single-story building with the construction of an approx. 24,000 square foot two-story building with full basement (3 complete floors), and extensive upgrade and remodeling of all existing school classrooms, and related ancillary costs (collectively, the "Facilities" or "Project"), such Facilities and Project located within the City; (b) pay capitalized interest on the Loan; (c) fund one or more reserve funds with respect to the Loan; and (d) pay certain costs of issuance of the Loan (collectively, the "Project"); and C. Pursuant to Section 147(f) of the Internal Revenue Code of 1986 (the "Code"), the Loan must be approved by the City because the Facilities are or are to be located within the territorial limits of the City; and D. The City Council is the elected legislative body of the City and is one of the applicable elected representatives required to approve the Loan under Section 147(f) of the Code; and E. The Authority has requested that the City Council approve the Loan in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Agreement; and F. Pursuant to Section 147(f) of the Code, the City Council has, following notice duly given, held a public hearing regarding the Loan, and now desires to approve the Loan; and G. It is in the public interest and for the public benefit that the City Council approve the Loan for the aforesaid purposes; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Tustin as follows: Section 1. The City Council hereby approves the Authority's Loan in an aggregate principal amount not to exceed $6,000,000 for the Project, including the refinancing of the Facilities, and the lending of the proceeds of the Loan to the Borrower pursuant to the Loan Agreement; provided that the such approval is expressly conditioned upon the requirement that the Borrower prior to receipt of any Loan proceeds from the Authority first enter into a Supplemental City Regulatory Agreement with the City of Tustin executed in connection with the issuance of the Bonds which include compliance with all City required conditions identified in the Supplemental City Regulatory Agreement attached as Exhibit A incorporated herein. It is the purpose and intent of the City Council that this resolution constitute approval of the Authority's Loan (a) by the "applicable elected representative" of the governmental unit having jurisdiction over the area in which the Facilities are or are to be located in accordance with Section 147(f) of the Code and (b) by the City Council in accordance with Section 4 of the Agreement. Section 2. The Loan shall be subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City shall have no obligation whatsoever to pay any principal, interest, fees or any other costs associated with the Authority's Loan for the Facilities of the Borrower in the City. Section 3. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire or construct the Facilities or any refinancing of the Facilities; (ii) make any contribution or advance any funds whatsoever to the Authority; or (iii) take any further action with respect to the Authority or its membership therein. Section 4. The executing officers, the City Clerk and all other proper officers and officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates, and to perform such other acts and deeds, as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein authorized. Section 5. The Clerk shall forward a certified copy of this Resolution to the Authority in care of its counsel: Harriet M. Welch, Esq. Squire, Sanders & Dempsey LLP. 555 South Flower St., Suite 3100 Los Angeles, CA 90071-2300 Section 6. This Resolution shall take effect immediately upon its passage. PASSED AND ADOPTED by the City Council on this 7th day of December, 2010. Mayor PAMELA STOKER CITY CLERK STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF TUSTIN ) PAMELA STOKER, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 10-110 was duly ~assed and adopted at a regular meeting of the Tustin City Council, held on the 7t day of December, 2010, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: PAMELA STOKER, CITY CLERK RESOLUTION NO. 10-111 EXHIBIT A SUPPLEMENTAL CITY REGULATORY AGREEMENT CITY OF TUSTIN OFFICIAL BUSINESS REQUEST DOCUMENT TO BE RECORDED AND TO BE EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE 6103 AND 27383. Recording requested by and when recorded mail to: Tustin City Clerk and Assistant City Manager The City of Tustin 300 Centennial Way Tustin, CA 92780 (space above for recorder's use) SUPPLEMENTAL REGULATORY AGREEMENT REDHILL EVANGELICAL LUTHERAN CHURCH OF Tustin This Supplemental City Regulatory Agreement ("Supplemental City Regulatory Agreement") is made and entered into as of December , 2010 by and between the City of Tustin, a municipal corporation and public body corporate and politic of the State of California ("City"), and Red Hill Evangelical Lutheran Church of Tustin, anon-profit California corporation (`Borrower"). A. The Tustin City Council at a regular meeting on December 7, 2010 adopted Resolution No. 10-110 approving the issuance of, or execution of a Loan Transaction by the California Municipal Finance Authority (the "Authority") for the purpose of refinancing the acquisition, renovation, improvement and equipping of educational facilities and certain other matters relating thereto (the "Project") through the sell and issuance of one or more series of tax exempt or taxable revenue bonds or the entering into of a loan transaction (such issuance of bonds or loan transaction of the Authority referred to as the "Bonds" or "Loan") by Red Hill Evangelical Lutheran Church of Tustin located on a portion of its campus at 13200 Red Hill Avenue, Tustin, California 92780 and also as identified as Assessor Parcel Numbers 103-472-14, 103-472-11 and 103-472-21 ("the Properties"), as more particularly legally described in Exhibit A, attached hereto and incorporated herein by reference. Page 2 B. Borrower is required to obtain certain City of Tustin approvals as required by the Tustin City Code for the purpose of certain of its acquisition, renovation and improvements anticipated as a result of any Bond proceeds or Loan transaction proceeds to be obtained from the Authority. NOW THEREFORE, in consideration of the City's agreement to support the Approval of the issuance of bonds, or execution of a Loan Transaction by the Authority for the benefit of Red Hill Evangelical Lutheran Church pursuant to City Council Resolution No. 10-111 and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Borrower hereby agree as follows: Section 1. Project Compliance with City Entitlements. Borrower shall comply with the following City conditions for any Project component that requires City of Tustin approvals pursuant to the Tustin City Code: "The Borrower shall abate all on-site code violations and request a compliance inspection for all Properties to be encumbered by the Loan as identified in Tustin City Council Resolution No. 10-110 by January 31, 2011. The borrower shall submit entitlement applications, including General Plan Amendment, Zone Change, Parcel Map and Conditional Use Permit, as may be applicable and as determined necessary by the City of Tustin Community Development Department to address interim and long term on site issues which require review and approval by the Planning Commission and City Council. Applicable applications shall be submitted and shall be determined complete by the City of Tustin by no later than March 1, 2011." Any Agreement to be executed between the Authority and the Borrower shall not supersede, alter, or modify any applicable requirements that the City has placed on the Project as included herein. Section 2. Payment of Administrative Reimbursement and Tax Equivalent Pa.. nib A. To the extent the Project and Properties encumbered by the Loan are fully or partially exempt from property tax levies, the Borrower shall pay an annual administrative reimbursement payment to the City of Tustin in an amount equal to the City's share of property taxes for the Project, if there was any property tax levy exemption or exemptions that were not applicable to the Project or Properties prior to approval by the City of any Authority. The administrative reimbursement payment shall be the amount that would have otherwise been due to the City of Tustin from property taxes assessed against the applicable Properties and shall be calculated at Thirteen Percent (13%) of the One Percent (1%) Basic Levy Rate and shall commence on the second tax year subsequent to issuance of the Loan for the Project commencing and due on April 30, 2012 and shall remain in effect for the term of the Loan or until such time as the City Council determines in its sole discretion that such administrative reimbursement pa}nnent is no longer fair or equitable. Page 3 Each year thereafter on the anniversary of the first administrative reimbursement payment due, Borrower shall pay to the City of Tustin an administrative reimbursement payment equal to the prior year's payment, plus an additional Two Percent (2%). B. The administrative reimbursement payment shall be payable to the City of Tustin, c/o the Office of the City of Tustin Finance Director, at 300 Centennial Way, Tustin, California 92780, or at such other place or places as the City from time to time may designate by written notice to Borrower. C. The administrative reimbursement payment shall be due as specified in this Supplemental City Regulatory Agreement. A ten percent (10%) default penalty shall be added to any late payment, together with interest from the date such payment was due at the rate of eight (8%) per annum until paid. Section 3. Remedies and Priorities. Upon any default by the Borrower, the City may seek specific performance of this Supplemental City Regulatory Agreement or enjoin acts which maybe in violation of this Supplemental City Regulatory Agreement or unlawful, provided that no obligation of the Borrower under this Supplemental City Regulatory Agreement shall be secured by or in any manner constitute a lien on, or security interest in, the Project, whether in favor of the City or any other person, and all such obligations shall be subordinate in priority, in right to payment, and in all other respects to the obligations, liens, rights (including, without limitation, the right to payment), and interests arising or created under the Loan for the Project. Section 4. Notices. Notice required to be given under the terms of this Supplemental City Regulatory Agreement or any law applicable thereto must be either personally delivered or placed in a sealed envelope, postage prepaid, addressed to the person on whom it is to be served with return receipt requested, and deposited in the United States mail. Personal service shall be deemed complete upon delivery and service by mail shall be deemed complete upon receipt as reflected by the return receipt. The address to be used for any notice serviced by mail upon the parties shall be as follows, unless the parties are informed otherwise in writing: Page 4 TO BORROWER: Red Hill Evangelical Lutheran Church of Tustin 13200 Red Hill Avenue Tustin, CA 92780 Attention: Joel Kelly TO CITY: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: Assistant City Manager (714) 573-3107 Attention: City Clerk Section 6. Counterparts. This Supplemental City Regulatory Agreement may be executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to an original. Section 7. Term. The term of this Supplemental City Regulatory Agreement shall remain in effect as long as any Loan issued by the Authority for the Project or encumbering the Properties remain outstanding, or for the term of any other Agreement between the Authority and the Borrower for the Project or encumbering the Properties, whichever is greater. Section 8. List of Exhibits. A. Legal Description of Properties IN WITNESS WHEREOF, the City and Borrower have executed this Supplemental City Regulatory Agreement by duly authorized representative, all as of the date first written above. Dated: "CITY" CITY OF TUSTIN By: APPROVED AS TO FORM By: Doug Holland, City Attorney Page 5 David C. Biggs, City Manager "BORROWER" RED HILL EVANGELICAL LUTHERAN CHURCH By: Title: < ATTACH NOTARY> Page 6 EXHIBIT "A" LEGAL DESCRIPTION SEE ATTACHED EXHIBIT "A" ~~ Locate Na.: CAFNT0972-0972=0051-0725115320 IXHIBIT "A" PARCEL is THE SOUTHWESTERLY HALF OF THE SOUTHWESTERLY HALF OF THE NORTHWESTERLY HALF OF LOT 3 IN BLOCK 12 OF THE IRVINE'S SUBDMSION, IN THE CITY OF TUSTIN, AS SHOWN ON MAP RECORDED IN BOOK 1, PAGE(S) 88, OF MISCELLANEOUS MAPS, IN THE OFTiCE OF THE CAUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA. EXCEPTING THEREFROM A STRIP OF LAND 33 FEET WIDE OF THE NORTHWEST SIDE. APN: 103-472-14 PARCEL 2: THAT PORTION OF THE NORTHEASTERLY HALF OF THE NORTHWESTERLY HALF OF THE NORTHWESTERLY HALF OF LOT 3 BLOCK 12 OF THE IRVINE'S SUBDNISION, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 1, PAGE BB, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, C1{I..IFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID LOT 3, DISTANT SOUTH 40°00'00" WEST 280.11 FEET FROM THE MOST NORTHERLY CORNER OF SAID NORTHEASTERLY HALF OF THE SOUTHWEST HALF OF THE NORTHWESTERLY HALF OF THE SOUTHWESTERLY HALF, OF T1iE NORTHWESTERLY HALF OF LOT 3 SAID POINT BEING THE INTERSECTION OF SAID NORTHWESTERLY LINE WITH THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF THE LAND DESCRIBED IN A DEED TO WOODROW C. COOPER, RECORDED DECEMBER 21, 1954 IN BOOK 2901, PAGE 590 OF OFFICIAL RECORDS. THENCE SOUTH 50°00'00" EAST ALONG SAID PROLONGATION AND SAID SOUTHWESTERLY LINE OF SAID LAND OF COOPER, 175.00 FEET TO THE NORTHWESTERLY LINE OF TRACT N0. 3715, AS SHOWN ON A MAP RECORDED IN 800K 130, PAGES 49 AND 50 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. THENCE SOUTH 40°00`00" WEST ALONG SAID NORTHWESTERLY LINE OF TRACT 3715, A DISTANCE OF 50.12 FEET TO THE SOUTHWESTERLY LINE OF SAID NORTHEASTERLY HALF. THENCE NORTH 50°00'00" WEST ALONG SAID SOUTHWESTERLY LINE 175.00 FEET TO SAID NORTHWESTERLY LINE OF LOT 3; THENCE NORTH 40°00`00" EAST ALONG SAID NORTHWESTERLY LINE OF LOT 3, A DISTANCE OF 50.12 FEET TO THE POINT OF BEGINNING. APN; 103-472-11 PARCEL 3; THE NORTHEASTERLY 30.00 FEET OF THE NORTH QUARTER OF LOT 14, BLOCK 12 OF IRVINE'S SUBDIVISION, IN THE CTiY OF TUSTIN, AS SHOWN ON A MAP RECORDED IN BOOK 1, PAGE 86 OF MISCELLANEOUS MAPS, TN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA. EXCEPT THEREFROM THAT PORTION LYING WFTHIN RED HILL AVENUE ALONG THE LINE BETWEEN LOTS 14 ANb 15 OF SAID BLOCK 12 AS DESCRIBED IN A DEED RECORDED JULY 29, 1974 IN BOOK 11206, PAGE 481 indemnity Agreement Locate No.: CAFNTO972-a47z-oo~l-onsiis~zo OF OFFICIAL RECORDS OF SAID ORANGE COUNTY. AL50 EXCEPT THEREFROM THAT PORTION DEEDED TO THE ORANGE COUNTY FLOOD CONTROL DISTRICT, A BODY CORPORATE AND POLITIC, BY DEED REGARDED MARCH 15~ 1989 AS INSTRUMENT N0.84-134548 OF OFFICIAL RECORDS. APN: iO3-472-21