2021/03/11 Meritage Homes of California, Inc. CFD No. 2021-2 of the City of Menifee (Sumac Ridge) (pending EMWD and Meritage Signatures)JOINT COMMUNITY FACILITIES AGREEMENT
relating to
Community Facilities District No. 2021-2 of the City of Menifee (Sumac Ridge)
by and among
City of Menifee, Eastern Municipal Water District and
Meritage Homes of California, Inc.
THIS JOINT COMMUNITY FACILITIES AGREEMENT (the "Agreement") is entered into
effective as of the Yd day of November, 2021, by and among CITY OF MENIFEE, a California general
law city (the "City"), EASTERN MUNICIPAL WATER DISTRICT, a public agency organized and
existing pursuant to Division 20 of the California Water Code ("EMWD"), and MERITAGE HOMES
OF CALIFORNIA, INC., a California Corporation ("Property Owner"), and relates to the formation
by -the City of a community facilities district known as "Community Facilities District No. 2021-2 of
the City of Menifee (Sumac Ridge)" (the "CFD") for the purpose of financing certain facilities to be
owned, operated or maintained by the City or EMWD from proceeds of bonds issued by the CFD and
the proceeds of special taxes levied by the CFD.
RECITALS:
A. The property ("Property") depicted in Exhibit "A" hereto, which is located in the City,
County of Riverside, State of California, constitutes the land within the boundaries of the CFD.
B. Property Owner owns the Property included in the CFD. Property Owner intends to develop
the Property for residential purposes. The Property is described in Exhibit `B" hereto.
C. The City received a petition in accordance with the Act (defined below) to form the CFD
for the purpose of financing, among other things, certain public facilities to be constructed and owned
and operated by EMWD (the "EMWD Facilities") in lieu of the payment of EMWD Fees (defined
herein) and certain water and sewer facilities to be constructed by Property Owner and acquired by
EMWD (the "Acquisition Facilities").
D. In conjunction with the issuance of permits for the construction of homes on the Property
and/or receipt of water meters for such homes, the Property Owner, or its successors or assigns, may
elect to advance EMWD Facilities costs in lieu of payment of EMWD Fees (the "Advances") before
Bond Proceeds (defined herein) are available in sufficient amounts to pay for EMWD Facilities. In
such case, the Property Owner shall be entitled to (i) reimbursement of such Advances limited to Bond
Proceeds available to EMWD, if any (the Advances being considered an interest free loan by the
Property Owner with no repayment obligation except to the extent there are Bond Proceeds received
by or made available to EMWD as described herein, all as further described in Section 5(a) below),
and (ii) credit against EMWD Fees which would otherwise be due to EMWD equal to the amount of
Bond Proceeds disbursed to EMWD or at the direction of EMWD for EMWD Facilities, all as further
described herein.
E. The City will have sole discretion and responsibility for the formation and administration
of the CFD.
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F. The City is authorized by Section 53313.5 of the Act to assist in the financing of the
acquisition and/or construction of the EMWD Facilities and/or the Acquisition Facilities. This
Agreement constitutes a joint community facilities agreement, within the meaning of Section 53316.2
of the Act, by and among EMWD, the Property Owner and the City, pursuant to which the CFD, when
and if formed, will be authorized to finance the acquisition and/or construction of all or a portion of
the EMWD Facilities and/or the Acquisition Facilities. As authorized by Section 53316.6 of the Act,
responsibility for constructing, providing for and operating the EMWD Facilities and/or the
Acquisition Facilities is delegated to EMWD.
G. The Parties (defined below) hereto find and determine that the residents residing within the
boundaries of EMWD, the City and the CFD will be benefited by the construction and/or acquisition
of the EMWD Facilities and/or the Acquisition Facilities and that this Agreement is beneficial to the
interests of such residents.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the
Parties hereto agree as follows:
1. Recitals. Each of the above recitals is incorporated herein and is true and correct.
2..Definitions. Unless the context clearly otherwise requires, the terms defined in this Section
shall, for all purposes of this Agreement, have the meanings herein specified.
(a) "Acquisition Facility(ies)" means the sewer and water facilities described as such in
Exhibit "C" hereto.
(b) "Act" means the Mello -Roos Community Facilities Act of 1982, Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government
Code.
(c) "Advance" or "Advances" means an amount advanced by Property Owner to EMWD for
EMWD Facilities in lieu of payment of EMWD Fees prior to the availability of sufficient Bond
Proceeds. Advances shall be deemed payment of EMWD Fees to the extent sufficient Bond Proceeds
are not received by or made available to EMWD.
(d) "Bond Proceeds" or "Proceeds of the Bonds" shall mean those net funds generated by
the sale of the Bonds and investment earnings thereon, net of costs of issuance, reserve fund, capitalized
interest and administrative expenses, and may include net funds generated by the levy of Special Taxes
and investment earnings thereon.
(e) "Bond Resolution" means that Resolution, Resolution Supplement, Fiscal Agent
Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance of the Bonds.
(f) "Bonds" shall mean those bonds, or other securities, issued by, or on behalf of the CFD,
in one or more series, as authorized by the qualified electors within the CFD.
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(g) "Disbursement Request" means a request for payment relating to EMWD Facilities in
the form attached hereto as Exhibit "D."
(h) "EMWD Engineer Representative" means an EMWD engineer duly authorized to act on
behalf of EMWD or his or her designee.
(i) `EMWD Fees" means water supply development fees, water backup fees, sewer backup
fees, sewer treatment capacity charges and all components thereof imposed by EMWD upon the
Property to finance EMWD Facilities.
0) "EMWD Facilities" means those sewer and water facilities listed on Exhibit "C" hereto,
which are necessary for the provision of water and sewer services to the Property and paid for with
Bond Proceeds in lieu of the payment of EMWD Fees.
(k) "Other Facilities Account of the Improvement Fund" means the fund, account or
subaccount of the CFD (regardless of its designation within the Bond Resolution) into which a portion
of the Bond Proceeds may be deposited in accordance with the Bond Resolution to finance EMWD
Facilities and/or the Acquisition Facilities and which may have subaccounts.
(1) "Party" or "Parties" shall mean any one or all of the parties to this Agreement.
(m) "Payment Request" means a request for payment relating to Acquisition Facilities in the
form attached hereto as Exhibit `E".
(n) "Rate and Method" means the Rate and Method of Apportionment of the Special Tax
authorizing the levy and collection of Special Taxes pursuant to proceedings undertaken for the
formation of the CFD pursuant to the Act.
(o) "Special Taxes" means the special taxes authorized to be levied and collected within the
CFD pursuant to the Rate and Method.
(p) "State" means the State of California.
3. Formation of the CFD. The City has undertaken to analyze the appropriateness of forming
the CFD to finance the EMWD Facilities, Acquisition Facilities, and other facilities. The City has and
will retain, at the expense of the Property Owner, the necessary consultants to analyze the formation
of the CFD.
4. Sale of Bonds and Use of Bond Proceeds. In the event that the CFD is formed and Bonds
are issued, the City and the Property Owner shall determine the amount of Bond Proceeds to be
deposited in the Other Facilities Account of the Improvement Fund and each subaccount thereof. As
Bond Proceeds are transferred to EMWD and reserved to fund EMWD Facilities, as described in
Section 5 below, the Property Owner shall receive a credit in the amount transferred against the
payment of EMWD Fees with respect to the Property. Nothing herein shall supersede the obligation of
an owner of the Property to make an Advance or pay EMWD Fees to EMWD when due. The purpose
of this Agreement is to provide a mechanism by which the CFD may issue the Bonds and levy Special
Taxes to provide a source of funds to finance EMWD Facilities and Acquisition Facilities in lieu of
the payment of EMWD Fees and provision of Acquisition Facilities. In the event that Bond Proceeds,
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including investment earnings thereon, are not available or sufficient to satisfy the obligation, then the
Property Owner shall remain obligated to make an Advance for which it will receive no reimbursement
(except to the extent Bond Proceeds later become available to EMWD), or pay EMWD Fees to EMWD
as a condition of receiving water and sewer service to the Property.
The Bonds shall be issued only if, in its sole discretion, the City Council determines that all
requirements of State and federal law and all City policies have been satisfied or have been waived by
the City. Nothing in this Agreement shall confer upon EMWD or any owner of the Property, including
Property Owner, a right to compel the issuance of the Bonds or the disbursement of Bond Proceeds to
fund EMWD Facilities and/or Acquisition Facilities except in accordance with the terms of this
Agreement.
If and when the CFD determines to issue Bonds, the CFD shall take such actions necessary in its
reasonable discretion to ensure the total effective tax rate within the CFD does not exceed two percent
(2%) at the time of Bond sale. The total effective tax rate shall be based on a method of determination
of property values reasonably acceptable to the City. CFD shall not include EMWD's name on
property owners' special tax bills within the CFD.
By entering into this Agreement and requisitioning Bond Proceeds as described herein, EMWD is not
passing upon, determining or assuming the tax-exempt status of the Bonds for federal or California
state income tax purposes.
5. Disbursements for EMWD Facilities.
(a) Upon the funding of the Other Facilities Account of the Improvement Fund with funds
reserved to fund EMWD Facilities, the Property Owner shall notify EMWD of the amount of Bond
Proceeds reserved to fund EMWD Facilities and the Property Owner and EMWD may execute and
submit a Disbursement Request for payment to the City or the CFD requesting disbursement of an
amount equal to all or a portion of Advances from the Other Facilities Account of the Improvement
Fund to the extent that Bond Proceeds are available in the Other Facilities Account of the Improvement
Fund for such purpose. Upon EMWD's receipt of funds pursuant to such Disbursement Request, the
Property Owner shall receive reimbursement of the Advances from EMWD. To facilitate EMWD's
bookkeeping, EMWD may direct in a Disbursement Request, that all or a portion of a payment be
made directly from the Other Facilities Account to the Property Owner as reimbursement for Advances
made by the Property Owner. In the event of a reimbursement to the Property Owner pursuant to the
preceding sentence, EMWD shall account for an equivalent amount of Advances previously received
from the Property Owner in accordance with Section 5(c) below.
To the extent that EMWD expends all or a portion of an Advance pending the deposit of
Bond Proceeds in the Other Facilities Account of the Improvement Fund, for purposes of Treasury
Regulations regarding investment and expenditure of Bond Proceeds and State law provisions
regarding financing of public capital facilities, the Advance shall be a considered an interest free loan
by the Property Owner, which EMWD only agrees to repay to the extent of the deposit, if any, of Bond
Proceeds in the Other Facilities Account of the Improvement Fund and EMWD's written direction as
described below to pay all or a portion of such deposit to the Property Owner as repayment of an
Advance.
(b) From time to time following the funding of the Other Facilities Account of the
Improvement Fund, the Property Owner may notify EMWD in writing and the Property Owner and
4200217 v2 9225.4 4
EMWD may jointly request a disbursement from the Other Facilities Account of the Improvement
Fund to fund EMWD Facilities by executing and submitting a Disbursement Request. Upon receipt of
such Disbursement Request completed in accordance with the terms of this Agreement, the CFD shall
wire transfer or otherwise pay to EMWD (or upon EMWD's written direction pay to the Property
Owner or an EMWD contractor) such requested funds to the extent that Bond Proceeds are available
in the Other Facilities Account of the Improvement Fund for such purpose. Upon such notice and
EMWD's receipt of such disbursement (or upon payment to the Property Owner or an EMWD
contractor in accordance with directions from EMWD relating to EMWD Facilities), the Property
Owner shall be deemed to have satisfied the applicable EMWD Fees with respect to the number of
dwelling units or lots for which the EMWD Fees would otherwise have been required in an amount
equal to such disbursement.
(c) EMWD agrees that prior to submitting a Disbursement Request requesting payment from
the CFD it shall review and approve all costs included in its request and will have already paid or
incurred such costs of EMWD Facilities from its own funds (which may include Advances from the
Property Owner) subsequent to the date of this Agreement, or will disburse such amounts to pay the
costs of EMWD Facilities following receipt of funds from the CFD. In the event that EMWD does not
disburse any Bond Proceeds (or equivalent amount of Advances repaid pursuant to the second to the
last sentence of the first paragraph of Section 5(a) above) received by it to third parties within five
banking days of receipt, it will trace and report to the CFD all earnings, if any, earned by EMWD, from
the date of receipt of such Bond Proceeds by EMWD (or the date of disbursement pursuant to the
second to the last sentence of the first paragraph of Section 5(a) above) to the date of expenditure by
EMWD for capital costs of the EMWD Facilities. Such report shall be delivered at least semiannually
until all Bond Proceeds are expended by EMWD. EMWD agrees that in processing the above
disbursements it will comply with all legal requirements for the expenditure of Bond Proceeds under
the Internal Revenue Code of 1986 and any amendments thereto.
(d) EMWD agrees to maintain adequate internal controls over its payment function and to
maintain accounting records in accordance with generally accepted accounting procedures. EMWD
will, upon request, provide the City and/or the Property Owner with access to EMWD's records related
to the EMWD Facilities and expenditure of Advances and will provide to the City its annual financial
report certified by an independent certified public accountant for purposes of assisting the City in
calculating the arbitrage rebate obligation of the CFD, if any.
(e) The City or the CFD agrees to maintain full and accurate records of all amounts, and
investment earnings, if any, expended from the Other Facilities Account of the Improvement Fund and
expenditure of Advances. The City or the CFD will, upon request, provide EMWD and/or Property
Owner with access to the City's or the CFD's records related to the Other Facilities Account of the
Improvement Fund.
(f) The City acknowledges that it is in receipt of and has reviewed the EMWD
Comprehensive Debt Policy ("Debt Policy"). At the time of formation of the CFD, the City and the
CFD are in conformance with Section 3.1 of the Debt Policy and it is expected that the City and CFD
will remain in conformance with Section 3.1 at the time of any Bond sale. However, City and EMWD
acknowledge that the City has the ultimate responsibility for issuance of the Bonds, the administration
of the CFD, and the tax-exempt status of any Bonds issued by the CFD. Accordingly, the City Council
shall have ultimate responsibility for making all decisions with respect to the issuance of any CFD
Bonds and the levy of CFD Special Taxes.
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(g) As a condition to disbursement of any proceeds of the Bonds from the Other Facilities
Account pursuant to this Agreement, EMWD agrees that it shall provide to the CFD, a certificate
confirming the representations contained in Section 5 hereof and such other matters as the CFD may
reasonably request upon which the CFD and its bond counsel may rely in connection with the issuance
of such Bonds and their conclusion that interest on such Bonds is not included in gross income for
federal income tax purposes.
6. Ownership of EMWD Facilities and Acquisition Facilities. The EMWD Facilities and
Acquisition Facilities shall be and remain the property of EMWD.
7. Acquisition Facilities. The requirements of this Section 7 shall apply to any Acquisition
Facility for which a Payment Request is submitted to EMWD pursuant to this Section 7. At this
time, the Property Owner does not expect to submit Payment Requests for any Acquisition
Facilities.
(a) Design Plans and Specifications. All plans, specifications and bid documents for the
Acquisition Facility ("Plans") constructed or to be constructed by the Property Owner shall be
prepared by the Property Owner at the Property Owner's initial expense, subject to approval by
EMWD. Costs for preparation of the Plans shall be included in the acquisition price.
Reimbursement of costs for plan revisions will be considered on a case by case basis. The Property
Owner shall not award bids for construction, or commence or cause commencement of
construction, of the Acquisition Facility until the Plans and bidding documents have been approved
by EMWD. The bid opening for the Acquisition Facility shall be coordinated with and take place
at EMWD's offices, with EMWD personnel in attendance.
(b) Construction of Acquisition Facilities. A qualified engineering firm (the "Field
Engineer") shall be employed by the Property Owner to provide all field engineering surveys
determined to be necessary by the EMWD's inspection personnel. Field Engineer shall promptly
furnish to EMWD a complete set of grade sheets listing all locations, offsets, etc., in accordance
with good engineering practices, and attendant data and reports resulting from Field Engineer's
engineering surveys and/or proposed facility design changes. EMWD shall have the right, but not
the obligation, to review, evaluate and analyze whether such results comply with applicable
specifications.
A full-time soil testing firm, approved by EMWD, shall be employed by the Property
Owner to conduct soil compaction testing and certification. The Property Owner shall promptly
furnish results of all such compaction testing to EMWD for its review, evaluation and decision as
to compliance with applicable specifications. In the event the compaction is not in compliance
with applicable specifications, the Property Owner shall be fully liable and responsible for the
costs of achieving compliance. A final report certifying all required compaction in accordance with
the specifications shall be a condition of final acceptance of the Acquisition Facility.
The costs of all surveying, testing and reports associated with the Acquisition Facility
furnished and constructed by the Property Owner's contractor(s) shall be included in the
acquisition price.
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EMWD shall not be responsible for conducting any environmental, archaeological,
biological, or cultural studies or any mitigation requirements that may be requested by appropriate
Federal, State, and/or local agencies with respect to the Acquisition Facility. Any such work shall
be paid for and conducted by the Property Owner and included in the acquisition price of the
Acquisition Facility.
(c) EMWD Public Works Requirements. In order that the Acquisition Facility may be
properly and readily acquired by EMWD, the Property Owner shall comply with all of the
following requirements with respect to the Acquisition Facility, and the Property Owner shall
provide such proof to the EMWD as EMWD may reasonably require and at such intervals and in
such form as EMWD may reasonably require, that the following requirements have been satisfied
as to the Acquisition Facility:
i. The Property Owner shall prepare a bid package for review, comment and
approval by the General Manager of EMWD or his designee (the "EMWD Representative").
ii. The Property Owner shall, after obtaining at least three sealed bids for the
construction of the Acquisition Facility in conformance with the procedures and requirements of
EMWD, submit to EMWD written evidence of such competitive bidding procedure, including
evidence of the means by which bids were solicited, a listing of all responsive bids and their
amounts, and the name or names of the contractor or contractors to whom the Property Owner
proposes to award the contracts for such construction, which shall be the lowest responsible bidder.
iii. The EMWD Representative shall attend the bid opening. If unable to attend the
bid opening, the EMWD Representative shall approve or disapprove of a contractor or contractors,
in writing, within five (5) business days after receipt from the Property Owner of the name or
names of such contractor or contractors recommended by the Property Owner. If the EMWD
Representative disapproves of any such contractor; the Property Owner shall select the next lowest
responsible bidder from the competitive bids received who is acceptable to the EMWD
Representative.
iv. The specifications and bid and contract documents shall require all such
contractors to pay prevailing wages and to otherwise comply with applicable provisions of the
Labor Code, the Government Code and the Public Contract Code relating to public works projects
and as required by the procedures and standards of EMWD with respect to the construction of its
public works projects.
v. The Property Owner shall submit faithful performance and payment bonds
conforming in all respects to the requirements set forth in EMWD's "Standard Water and/or Sewer
Facilities and Service Agreement." The following documents shall be submitted to EMWD along
with the performance and payment bonds:
(1) The original, or a certified copy, of the unrevoked appointment, power of
attorney, bylaws, or other instrument entitling or authorizing the person who executed the bond to
do so;
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(2) A certified copy of the certificate of authority of the insurer issued by the
State of California's Insurance Commissioner; and
(3) Copies of the insurer's most recent annual and quarterly statements filed
with the Department of Insurance.
vi. The Property Owner and its contractor and subcontractors shall be required to
provide proof of insurance coverage throughout the term of the construction of the Acquisition
Facility, which they will construct in conformance with EMWD's standard procedures and
requirements. EMWD's insurance requirements are set out in Section 7(n) herein.
vii. The Property Owner and all such contractors shall comply with such other
requirements relating to the construction of the Acquisition Facility which EMWD may impose
by written notification delivered to the Property Owner and each such contractor at the time either
prior to the receipt of bids by the Property Owner for the construction of such Acquisition Facility
or, to the extent required as a result of changes in applicable laws, during the progress of
construction thereof. In accordance with Section 7(f), the Property Owner shall be deemed the
awarding body and shall be solely responsible for compliance and enforcement of the provisions
of the Labor Code, Government Code, and Public Contract Code.
viii. A "Change Order" is an order from the Property Owner to a contractor
authorizing a change in the work to be performed. The Property Owner shall receive comments
from the EMWD Representative prior to the Property Owner's approval of any Change Order. The
EMWD Representative shall comment on or deny the Change Order request within five (5)
business days of receipt of all necessary information. EMWD's comments to a Change Order shall
not be unreasonably delayed, conditioned or withheld. The Property Owner shall not be entitled to
include in the acquisition price costs associated with a Change Order that have not been approved
by the EMWD Representative.
(d) Inspection; Completion of Construction. EMWD shall have primary responsibility
for inspecting the Acquisition Facility to assure that the work is being accomplished in accordance
with the Plans. Such inspection does not include inspection for compliance with safety
requirements by the Property Owner's contractor(s). EMWD's personnel shall be granted access
to each construction site at all reasonable times for the purpose of accomplishing such inspection.
Upon satisfaction of EMWD's inspectors, the Property Owner shall notify EMWD in writing that
an Acquisition Facility has been completed in accordance with the Plans.
Within three (3) business days of receipt of written notification from EMWD inspectors
that an Acquisition Facility has been completed in accordance with the Plans, the EMWD
Representative shall notify the Property Owner in writing that such Acquisition Facility has been
satisfactorily completed. Upon receiving such notification, the Property Owner shall file a Notice
of Completion with the County of Riverside Recorder's Office, pursuant to the provisions of
Section 3093 of the Civil Code. The Property Owner shall furnish to EMWD a duplicate copy of
each such Notice of Completion showing thereon the date of filing with the County of Riverside
(the "County"). EMWD will in turn file a notice with the County for acceptance.
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(e) Liens. With respect to the Acquisition Facility, upon the earlier of (i) receipt of all
applicable lien releases, or (ii) expiration of the time for the recording of claim of liens as
prescribed by Sections 3115 and 3116 of the Civil Code, the Property Owner shall provide to
EMWD such evidence or proof as EMWD shall require that all persons, firms and corporations
supplying work, labor, materials, supplies and equipment for the construction of the Acquisition
Facility have been paid, and that no claims of liens have been recorded by or on behalf of any such
person, firm or corporation.
(f) Acquisition; Acquisition Price, Source of Funds. The costs eligible to be included in
the acquisition price of the Acquisition Facility (the "Actual Costs") shall include:
i. The actual hard costs for the construction of such Acquisition Facility as
established by EMWD-approved construction contracts and approved Change Orders, including
costs of payment, performance and maintenance bonds and insurance costs, pursuant to this
Agreement;
ii. The design and engineering costs of such Acquisition Facility including, without
limitation, the costs incurred in preparing the Plans. Costs for plan revisions will be considered on
a case by case basis;
iii. The costs of environmental evaluations and public agency permits and
approvals attributable to the Acquisition Facility;
iv. Costs incurred by the Property Owner for construction management and
supervision of such Acquisition Facility, not to exceed five percent (5%) of the actual construction
cost, subject to prior approval by EMWD of any construction management or supervision contract
with respect to the Acquisition Facility;
v. Professional costs associated with the Acquisition Facility such as engineering,
inspection, construction staking, materials, testing and similar professional services; and
vi. Costs approved by EMWD of acquiring from an unrelated third party any real
property or interests therein required for the Acquisition Facility including, without limitation,
temporary construction easements, temporary by-pass road and maintenance easements.
Provided the Property Owner has complied with the requirements of this Agreement,
EMWD agrees to execute and submit to the City a Payment Request for payment of the acquisition
price of the completed Acquisition Facility to the Property Owner or its designee within thirty (30)
days after EMWD has verified or approved the Property Owner's satisfaction of the preconditions
to such payment stated herein.
As a condition to EMWD's execution of the Payment Request for the acquisition price, the
property ownership of the completed Acquisition Facility shall be transferred to EMWD by grant
deed, bill of sale or such other documentation as EMWD may require free and clear of all taxes,
liens, encumbrances, and assessments, but subject to any exceptions determined by EMWD to not
interfere with the actual or intended use of the land or interest therein (including the lien of a
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community facilities district so long as the subject property is exempt from taxation or is otherwise
not taxable by such community facilities district). Upon the transfer of property ownership of the
Acquisition Facility or any portion thereof to EMWD, EMWD shall be responsible for the
maintenance of such Acquisition Facility or the portion transferred. Notwithstanding the
foregoing, the acquisition price of an Acquisition Facility may be paid prior to transfer of property
ownership and acceptance of the Acquisition Facility if it is substantially completed at the time of
payment. The Acquisition Facility shall be considered "substantially complete" when it has been
reasonably determined by EMWD to be usable, subject to final completion of such items as the
final lift or any other items not essential to the primary use or operation of the Acquisition Facility.
For purposes of determining the acquisition price to be paid by the CFD for the acquisition
of each Acquisition Facility by EMWD, the value of such Acquisition Facility shall include the
construction costs specified in EMWD-approved contracts and EMWD-approved change orders
conforming to this Section 7, as hereinbefore specified. EMWD approval is a condition prior to
initiation of contract work. However, if EMWD reasonably determines that the additional Actual
Costs are excessive and that the value of the Acquisition Facility is less than the total amount of
such Actual Costs and such construction costs, the price to be paid for the acquisition of the
Acquisition Facility shall be the value thereof as determined by the EMWD Engineer
Representative, subject, however, to the Property Owner's right to appeal to EMWD's
Board of Directors.
Upon completion of the construction of an Acquisition Facility, the Property Owner shall
deliver or cause to be delivered to EMWD a Payment Request in substantially the form of Exhibit
"B," attached hereto, copies of the contract(s) with the contractor(s) who have constructed the
Acquisition Facility and other relevant documentation with regard to the payments made to such
contractor(s) and each of them for the construction of the Acquisition Facility, documentation
evidencing payment of prevailing wages, and shall also provide to EMWD invoices and purchase
orders with respect to all equipment, materials and labor purchased for the construction of the
Acquisition Facility. EMWD shall require the EMWD Engineer Representative to complete its
determination of the acquisition price of the Acquisition Facility as promptly as is reasonably
possible.
Notwithstanding the preceding provisions of this Section, the source of funds for the
acquisition of the Acquisition Facility or any portion thereof shall be funds on deposit in the Other
Facilities Account of the Improvement Fund. If no such funds are available, EMWD shall not be
required to acquire the Acquisition Facility from the Property Owner. In such event, the Property
Owner shall complete the design and construction and offer to EMWD property ownership of such
portions of the Acquisition Facility as are required to be constructed by the Property Owner as a
condition to recordation of subdivision maps for the Property, but need not construct any portion
of the Acquisition Facility which it is not so required to construct. Reimbursement for these
facilities would be made pursuant to the "Standard Water and/or Sewer Facilities and Service
Agreement(s)" by and between EMWD and the Property Owner.
(g) Easements and/or Fee Title Propggy Ownership Deeds. The Property Owner shall,
at the time EMWD acquires the Acquisition Facility as provided in Section 7(f) hereof, grant or
cause to be granted to EMWD, by appropriate instruments prescribed by EMWD, all easements
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across private property and/or fee title property ownership deeds which may be reasonably
necessary for the proper operation and maintenance of such Acquisition Facility, or any part
thereof.
(h) Permits. The Property Owner shall be responsible for obtaining all necessary
construction permits from the City covering construction and installation of the Acquisition
Facility. EMWD will request the City to issue an "operate and maintain permit" to EMWD, which
will become effective upon the completion of the Acquisition Facility and acceptance of property
ownership therewith by EMWD.
(i) Maintenance. Prior to the transfer of property ownership of an Acquisition Facility
by the Property Owner to EMWD, as provided in Section 7(f) hereof, the Property Owner shall be
responsible for the maintenance thereof and shall require its contractor(s) to repair all facilities
damaged by any parry, prior to acceptance by EMWD and/or make corrections determined to be
necessary by EMWD's inspection personnel.
0) Inspection of Records. EMWD shall have the right to review all books and records
of the Property Owner pertaining to the costs and expenses incurred by the Property Owner for the
design and construction of the Acquisition Facility during normal business hours by making
arrangements with the Property Owner. The Property Owner shall have the right to review all
books and records of EMWD pertaining to costs and expenses incurred by EMWD for services of
the EMWD Engineer Representative by making arrangements with EMWD.
(k) Properly Ownership of Improvements. Notwithstanding the fact that some or all of
the Acquisition Facility may be constructed in dedicated street rights -of -way or on property which
has been or will be dedicated to EMWD, each Acquisition Facility shall be and remain the property
of the Property Owner until acquired by EMWD as provided in this Agreement.
(1) Materials and Workmanship Warranty. Upon the completion of the acquisition of an
Acquisition Facility by EMWD, the performance bond related to such individual Acquisition
Facility provided by the Property Owner pursuant to Section 7(c)(v) hereof, shall be reduced by
90%, and the remaining 10% shall serve as a maintenance bond to guarantee that such Acquisition
Facility will be free from defects due to faulty workmanship or materials for a period of one year.
Release of performance and payment bonds is addressed in the Standard Water and/or Sewer
Facilities and Service Agreement, by and between EMWD and the Property Owner.
(m) Independent Contractor. In performing this Agreement with respect to the
Acquisition Facilities, the Property Owner is an independent contractor and not the agent of
EMWD. EMWD shall not have any responsibility for payment to any contractor, subcontractor or
supplier of the Property Owner. It is not intended by the Parties that this Agreement create a
partnership or joint venture among them and this Agreement shall not otherwise be construed.
(n) Insurance Requirements. Neither the Property Owner nor its contractor shall
commence work on an Acquisition Facility under this Agreement prior to obtaining all insurance
required hereunder with a company or companies acceptable to EMWD, nor shall the Property
#200217 Q 9225.4 11
Owner's contractor allow any subcontractor to commence work on its subcontract until all
insurance required of the subcontractor has been obtained.
The Property Owner shall, during the life of this Agreement, notify EMWD in writing of
any incident giving rise to any potential bodily injury or property damage claim and any resultant
settlements, whether in conjunction with this or any other project which may affect the limits of
the required coverage, as soon as is reasonable and practical.
Both the Property Owner and its contractor shall conform in every respect to the
requirements set forth in the Standard Water and/or Sewer Facilities and Service Agreement, by
and between EMWD and the Property Owner.
8. Indemnification.
(a) Indemnification by the City. The City shall assume the defense of, indemnify and save
harmless, EMWD, its officers, employees and agents, and each and every one of them, from and against
all actions, damages, claims, losses or expenses of every type and description to which they may be
subjected or put, by reason of, or resulting from, any act or omission of the City with respect to this
Agreement and the issuance of the Bonds; provided, however, that the City shall not be required to
indemnify any person or entity as to damages resulting from negligence or willful misconduct of such
person or entity or their officers, agents or employees.
(b) Indemnification by Property Owner. Property Owner shall assume the defense of,
indemnify and save harmless, the City, the CFD and EMWD, their respective officers, employees and
agents, and each and every one of them, from and against all actions, damages, claims, losses or
expenses of every type and description to which they may be subjected or put, by reason of, or resulting
from, any act or omission of Property Owner with respect to this Agreement; provided, however, that
Property Owner shall not be required to indemnify any person or entity as to damages resulting from
negligence or willful misconduct of such person or entity or their officers, agents or employees.
(c) Indemnification by EMWD. EMWD shall assume the defense of, indemnify and save
harmless, the City, the CFD and their respective officers, employees and agents, and each and every
one of them, from and against all actions, damages, claims, losses or expenses of every type and
description to which they may be subjected or put, by reason of, or resulting from, any act or omission
of EMWD with respect to this Agreement, and the design, engineering and construction of the EMWD
Facilities and the Acquisition Facilities constructed by EMWD; provided, however, that EMWD shall
not be required to indemnify any person or entity as to damages resulting from negligence or willful
misconduct of such person or entity or their officers, agents or employees.
9. Allocation of Special Taxes. The entire amount of any Special Taxes levied by the CFD to
repay Bonds, or to fund other obligations, shall be allocated to the CFD.
10. Amendment and Assignment. This Agreement may be amended at any time but only in
writing signed by each Party hereto. This Agreement may be assigned, in whole or in part, by the
Property Owner to the purchaser of any parcel of land within the Property, provided, however, such
assignment shall not be effective unless and until EMWD and the City have been notified, in writing,
of such assignment and the assignment specifies whether the Property Owner or such assignee is
authorized to execute disbursement requests.
#200217 v2 9225.4 12
11. Entire Agreement. This Agreement contains the entire agreement between the Parties with
respect to the matters provided for herein and supersedes all prior agreements and negotiations between
the Parties with respect to the subject matter of this Agreement.
12. Notices. Any notice, payment or instrument required or permitted by this Agreement to be
given or delivered to either Party shall be deemed to have been received when personally delivered or
seventy-two hours following deposit of the same in any United States Post Office in California,
registered or certified, postage prepaid, addressed as follows:
City: City of Menifee
29844 Haun Road
Menifee, CA 92586
Attention: Deputy City Manager
EMWD: Eastern Municipal Water District
P.O. Box 8300
2270 Trumble Road
Perris, CA 92572-8300
Attention: Special Funding Division
Email: specialfundingdivision@emwd.org
Property Owner: Meritage Homes of California, Inc.
5 Peters Canyon Road, Suite 310
Irvine, CA 92606
Telephone: (949) 299-3848
Attention: Aaron Talarico
Each Party may change its address for delivery of notice by delivering written notice of such change
of address to the other Parties hereto. Each such notice, statement, demand, consent, approval,
authorization, offer, designation, request or other communication hereunder shall be deemed delivered
to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by
electronic communication, whether by telex, telegram or telecopier upon the sender's receipt of written
acknowledgement from the addressee, (c) if given by registered or certified mail, return receipt
requested, deposited with the United States mail postage prepaid, 72 hours after such notice is
deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid,
24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at
the address specified in this Section.
13. Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference.
14. Attorney"s. Fees. In the event of the bringing of any action or suit by any Party against any
other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall
be entitled to recover from the losing Party all costs and expenses of suit, including reasonable
attorney's fees.
#200217 Q 9225.4 13
15. Interpretation in the event of Ambiguities or Disputes. The Parties acknowledge and agree
that each has been given the opportunity to review this Agreement with legal counsel independently,
and/or has the requisite experience and sophistication to understand, interpret, and agree to the
particular language of the provisions hereof. In the event of an ambiguity in or dispute regarding the
interpretation of same, the interpretation of this Agreement shall not be resolved by any rule of
interpretation providing for interpretation against the Party who causes the uncertainty to exist or
against the drafter.
16. Seyerability. If any part of this Agreement is held to be illegal or unenforceable by court
of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent
reasonably possible.
17. Governing Lbw. This Agreement and any dispute arising hereunder shall be governed by
interpreted in accordance with the laws of the State of California.
18. Waiver. Failure by a Parry to insist upon the strict performance of any of the provisions of
this Agreement by any other Party hereto, or the failure by a Party to exercise its rights upon the default
of any other Party, shall not constitute a waiver of such Party's right to insist and demand strict
compliance by such other Party with the terms of this Agreement thereafter.
19. No Third Party Beneficiaries. No person or entity other than the CFD, when and if formed,
shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express
or implied) is intended to confer upon any person or entity, other than EMWD, the City, the CFD and
Property Owner (and their respective successors and assigns, exclusive of individual homebuyers), any
rights, remedies, obligations or liabilities under or by reason of this Agreement.
20. Singular and Plural; Gender. As used herein, the singular of any word includes the plural,
and terms in the masculine gender shall include the feminine.
21. Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute but one instrument.
[Remainder of page intentionally left blank]
#200217 Q 9225.4 14
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year
written above.
CITY OF MENIFEE
X-,l
A nt t Manager '26cf ens 'C G `�"°�
ATTEST:
By:
jarVManwarin�g,City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF MENIFEE
C M,
T. Melchingl, qty Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.J
#200217 v2 9225.4 15
ATTEST:
Sheila Zelaya, Board Secretary
EASTERN MUNICIPAL WATER DISTRICT
Joe Mouawad, P.E., General Manager
PROPERTY OWNER
MERITAGE HOMES OF CALIFORNIA, INC., a
California Corporation
go
Aaron Talarico, Vice President
#200217 Q 9225.4 16
EXHIBIT ®A'
COMMUNITY FACILITIES DISTRICT NO. 20 !- OF THE CITY OF M£9I ££
(SUMAC RIDGE
DEPICTION OF PROPERTY
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EXHIBIT `B"
COMMUNITY FACILITIES DISTRICT NO.2021-2 OF THE CITY OF MENIFEE
(SUMAC RIDGE)
DESCRIPTION OF PROPERTY
Riverside County Assessor Parcel Number s
377-160-006, -007, -008 and -013;
372-190-003
4200217 v2 9225.4 B-1
EXHIBIT "C"
COMMUNITY FACILITIES DISTRICT NO.2021-2 OF THE CITY OF MENIFEE
(SUMAC RIDGE)
FACILITIES DESCRIPTION
1. EMWD Facilities. The type of EMWD Facilities eligible to be financed by the CFD under
the Act are as follows:
Those water and sewer facilities included in EMWD's water and sewer capacity and
connection fee programs used to finance expansion projects, exclusive of in -tract facilities contributed
by Property Owner. EMWD Facilities include, but are not limited to the following: water and sewer
transmission pipelines, sewer treatment plants, disposal ponds, pumping plants, lift stations and water
reservoirs, including all costs of site acquisition, planning, design, engineering, legal services,
materials testing, coordination, surveying, construction staking, construction, inspection and any and
all appurtenant facilities and appurtenant work relating to the foregoing.
2. Acquisition Facilities. The types of Acquisition Facilities eligible to be financed by the CFD
under the Act shall consist of sewer and water transmission lines, sewer and water pump stations and
water reservoirs, including all costs of site acquisition, planning, design, engineering, legal services,
materials testing, coordination, surveying, construction staking, construction inspection and any and
all appurtenant facilities to the foregoing required to serve the Property. The facilities listed above are
representative of the types of facilities eligible to be financed by the CFD as Acquisition Facilities.
Detailed scope and limits of specific projects will be determined by EMWD as appropriate, consistent
with the standards of the EMWD.
#200217 Q 9225.4 C-1
W14 0I I,I I " W
COMMUNITY FACILITIES DISTRICT NO.2021-2 OF THE CITY OF MENIFEE
(SUMAC RIDGE)
DISBURSEMENT REQUEST FORM
(EMWD Facilities)
1. City of Menifee Community Facilities District No. 2021-2 of the City of Menifee
(Sumac Ridge) ("CFD") is hereby requested to pay from the CFD bond proceeds ("Bond Proceeds")
to Eastern Municipal Water District ("EMWD"), as Payee, or to EMWD's designee, the sum set forth
in 3 below.
2. The undersigned certifies that the amount requested for EMWD Facilities is due and
payable, has not formed the basis of prior request or payment, and is being made with respect to the
connection of the property described below to the EMWD system.
Amount requested:
For Tract/Lot Nos:
4. The amount set forth in 3 above is authorized and payable pursuant to the terms of the
Joint Community Facilities Agreement, by and among the City of Menifee, EMWD and Meritage
Homes of California, Inc., dated , 2021 (the "Agreement"). Capitalized terms not defined
herein shall have the meaning set forth in the Agreement. EMWD shall spend the Bond Proceeds
allocated hereby in accordance with the requirements set forth in Section 5 of the Agreement.
5. By entering into the Agreement and requisitioning Bond Proceeds as described herein,
EMWD is not passing upon, determining or assuming the tax-exempt status of the Bonds for federal
or California state income tax purposes.
PROPERTY OWNER
MERITAGE HOMES OF CALIFORNIA, INC., a
California Corporation
By:
Its: Authorized Signatory
EASTERN MUNICIPAL WATER DISTRICT
By:
Name:
Title:
Date:
cc: EMWD Special Funding District
#200217 v2 9225.4 D-1
EXHIBIT "E"
CITY OF MENIFEE
COMMUNITY FACILITIES DISTRICT NO.2021-2
PAYMENT REQUEST FORM
CITY OF MENIFEE CFD NO. 2021-2 — OTHER FACILITIES ACCOUNT
OF THE IMPROVEMENT FUND
City of Menifee ("City"), Eastern Municipal Water District ("EMWD") and
("Property Owner") are parties to the Joint Community Facilities Agreement,
dated as of , 2021 (the "EMWD JCFA"). Capitalized undefined terms used herein shall
have the meanings ascribed thereto in the EMWD JCFA. Pursuant to the EMWD JCFA, Property
Owner hereby requests approval of the acquisition price of the Acquisition Facility(ies) described in
Attachment A attached hereto. In connection with this Payment Request, Property Owner hereby
represents and warrants to the EMWD as follows:
(a) The person executing this Payment Request is qualified to execute this Payment
Request on behalf of Property Owner and knowledgeable as to the matters set forth herein.
(b) The Acquisition Facility(ies) have been constructed in accordance with the Plans
therefor, and in accordance with all applicable EMWD standards and the requirements of the EMWD
JCFA.
(c) The true and correct Actual Cost of the Acquisition Facility(ies) is set forth in
Attachment A.
(d) Property Owner has submitted or submits herewith to EMWD the contracts, invoices,
receipts, worksheets and other evidence of Actual Costs which are in sufficient detail to allow the
EMWD Representative to verify the Actual Cost of the Acquisition Facility(ies) for which payment is
requested.
(e) There are no liens, rights to lien or attachment upon, or claims affecting the right to
receive the payment requested herein which has not been released or will not be released
simultaneously with the payment of such obligation, other than materialmen's or mechanics' liens
accruing by operation of law. Copies of lien releases for all work for which payment is requested
hereunder are attached hereto.
Property Owner hereby declares under penalty of perjury that the above representations and
warranties are true and correct.
[Remainder of page intentionally left blank]
#200217 v2 9225.4 E- I
Property Owner hereby requests that the acquisition price be paid to the person or persons, in
the amount set forth in Attachment B hereto.
PROPERTY OWNER
MERITAGE HOMES OF CALIFORNIA, INC.,
a California Corporation
LN
#200217 d2 9225.4 E-2
CONFIRMATION AND APPROVAL BY EMWD
EMWD has (a) confirmed that the Acquisition Facility(ies) described in Attachment A is
complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and
approved the acquisition price of such Acquisition Facility(ies). Such Acquisition Facility(ies) is/are
complete and the acquisition price therefor eligible for payment is $ The amount to be paid
and the payee(s) are described in Attachment B.
Date:
AUTHORIZED REPRESENTATIVE OF
EMWD
13v:
#200217 v2 9225.4 E-3
ATTACHMENT A
Acquisition Facility Actual Cost I Acquisition Price*
Total Acquisition Price to be Paid:
#200217 v2 9225.4 E-4
ATTACHMENT B
ACQUISITION PRICE PAYMENT INSTRUCTIONS
[Include name and address of payee and wire transfer instructions]
#200217 Q 9225.4 E-5
COMMUNITY FACILITIES DISTRICT NO. 2021-2
OF THE CITY OF MENIFEE (SUMAC RIDGE)
JOINT COMMUNITY FACILITIES AND
SCHOOL FACILITIES MITIGATION AGREEMENT
THIS JOINT COMMUNITY FACILITIES AND SCHOOL FACILITIES MITIGATION
AGREEMENT ("Agreement") is made and entered into as of the 3rd day of November, 2021, by
and among the CITY OF MENIFEE, a general law city (the "City"), the MENIFEE UNION SCHOOL
DISTRICT, a California public school district organized and operating pursuant to the applicable
provisions of the California Education Code and the California Constitution (the "School District")
and MERITAGE HOMES OF CALIFORNIA, INC., a California corporation ("Property Owner").
RECITALS:
A. Property Owner is the owner of certain real property (the "Property") located within
the boundaries of the City and School District, consisting of approximately one hundred and
seventy-five (175) lots on approximately fifty-six (56) gross acres within Tentative Tract Map
37668 (the "Project") and as more fully described in Exhibit "A" attached hereto.
B. The Project will require the payment to School District of all or a part of School
Fees (defined below) required to finance School Facilities (defined below). In lieu of the School
Fees, the Mitigation Amount (as defined below) is expected to be paid to School District, in whole
or in part, from Bond Proceeds (defined below) of the hereinafter described Community Facilities
District (the "CFD"). The City Facilities, the Water District Facilities (each as defined below) and
School Facilities are sometimes collectively referred to herein as the "Facilities."
C. Pursuant to Property Owner's request, the City Council of the City, has formed or
is in the process of forming the hereinafter described CFD pursuant to the Act to finance all or a
portion of the Facilities. The City will have responsibility for the formation and administration of
the CFD.
D. The City is authorized by Section 53313.5 of the Act to finance, by means of the
CFD, the School Facilities. This Agreement constitutes a "joint community facilities agreement"
("JCFA") within the meaning of Section 53316.2 of the Act by and among the City, School District
and Property Owner, pursuant to which the CFD will be authorized to finance the School Facilities.
Pursuant to Section 53316.2(b) of the Act, a JCFA may be approved by two or more public
agencies prior to the adoption of a resolution authorizing the issuance of bonds. As provided by
Section 53316.6 of the Act, responsibility for constructing, maintaining and operating the City
Facilities is the City's to the extent set forth herein and responsibility for constructing, providing
and operating the School Facilities is delegated to School District.
E. The provision of the City Facilities, the Water District Facilities and School Facilities
is necessitated by the Project, and the Parties hereto find and determine that the residents of the
City, School District and CFD will be benefited by the financing of the City Facilities and School
Facilities, and that this Agreement is beneficial to the interests of such residents.
# 199618 v2 9225.4
ARTICLE I
GENERAL PROVISIONS
Section 1.1 Recitals.
The above recitals are true and correct and are hereby incorporated by this reference.
Section 1.2 Definitions.
Unless the context clearly otherwise requires, the terms defined in this Section shall, for
all purposes of this Agreement, have the meanings herein specified.
(a) "Act" means the Mello -Roos Community Facilities Act of 1982, as
amended, commencing with California Government Code Section 53311, of seq.
(b) "Agreement" means this Joint Communities Facilities and School Facilities
Mitigation Agreement, and as it may be amended.
(c) "Bond Proceeds" shall mean those net funds generated by the sale of the
Bonds.
(d) "Bond Resolution" means that Resolution, Resolution Supplement, Fiscal
Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance
of the Bonds.
(e) "Bonds" shall mean those bonds, or other securities, issued by, or on behalf
of the CFD, as authorized by the qualified electors within the CFD.
(f) "Certificates of Compliance" means those certificates issued by School
District pursuant to Education Code Section 17620(b) to Property Owner certifying that Property
Owner has paid the Deposit in order to obtain a building permit.
(g) "CFD" means Community Facilities District No. 2021-2 of the City of
Menifee (Sumac Ridge).
(h) "Deposits" shall mean all amounts advanced to School District by Property
Owner prior to the issuance and sale of the Bonds, as security for the future payment, with Bond
Proceeds, of the Mitigation Amounts due in connection with Certificates of Compliance issued by
School District for lots within the Project prior to the issuance and sale of the Bonds and the
funding of the School Fee Fund.
(i) "City Facilities" means certain City facilities including, but not limited to fire
and safety facilities, street, storm, drainage and park facilities necessary to serve the Project.
Q) "Disbursement Request" means a request for payment relating to School
Facilities in the form attached hereto as Exhibit "B."
(k) "Mitigation Amount or Amounts" means for each residential unit within the
Project, 120% of School District's Level 1 or, if adopted by the School District, the Level 2 school
mitigation fee (either with a cash payment, pursuant to Section 2.5, or with Bond Proceeds) for
such residential unit. At the time of this Agreement, the District has adopted the Level 1 school
#199618 v2 9225.4 9
mitigation fee of $2.94 per square foot of assessable space which results in a Mitigation Amount
per square foot of $3.53.
(1) "Party" or "Parties" shall mean any one or all of the parties to this
Agreement and the CFD.
(m) "Rate and Method" means the individual Rate and Method of
Apportionment of the Special Tax authorizing the levy and collection of special taxes pursuant to
proceedings undertaken for the formation of the CFD pursuant to the Act.
(n) "School Facilities" means those TK-8 school sites, preschool facilities,
school facilities, including classrooms, multi -purpose facilities, administration and auxiliary space
at school facilities, athletic fields, playgrounds and recreational facilities and improvements
thereto, landscaping, access roadways, drainage, sidewalks and gutters and utility lines, furniture,
equipment and technology, including technology upgrades and mobile devices and infrastructure
therefore, with a useful life of at least five (5) years needed by School District, and also includes
costs associated with the maintenance and operation of school facilities in accordance with the
Act.
(o) "School Fee Fund" means the fund(s), account(s) or sub-account(s) of the
CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond
Proceeds may be deposited in accordance with the Bond Resolution to finance the School
Facilities.
(p) "School Fees" means those school mitigation fees pursuant to Education
Code Section 17620 and Government Code Sections 65995, 65995.5 and 65995.7 required to
finance School Facilities.
(q) "State" means the State of California.
(r) "Special Taxes" means the special taxes authorized to be levied and
collected pursuant to the Rate and Method.
ARTICLE II
FORMATION OF THE CFD AND ISSUANCE OF BONDS
Section 2.1 Formation of the CFD.
The City, pursuant to the written request of the Property Owner, initiated proceedings
pursuant to the Act for the formation of the CFD, the authorization of the Special Taxes within the
CFD and the authorization of Bonds on behalf of the CFD, with the qualified electors approving
the levy of the Special Taxes and the sale of the Bonds.
Section 2.2 Mitigation Amount Deposits.
Subsequent to the execution of this Agreement and prior to School District's receipt of
Bond Proceeds, Property Owner may obtain Certificates of Compliance for lots within the Project
by posting Deposits equivalent to the School District's then -current statutory School Fees.
Deposits posted prior to the issuance of Bonds will be held unexpended by School District
and then released to Property Owner upon the sale of Bonds to the extent the Mitigation Amounts
#199618 v2 9225.4
for such lots (based on the Mitigation Amount in effect at the time the final Certificate of
Compliance was issued for each respective lot) have been satisfied by the deposit of Bond
Proceeds in the School Fee Fund. After the issuance of the last series of Bonds (other than
Bonds issued for refunding purposes only), to the extent that all Bond Proceeds deposited into
the School Fee Fund are not sufficient to satisfy the Mitigation Amounts for all such lots, the
portion of the Mitigation Amounts not satisfied with Bond Proceeds shall be retained from the
Deposits and used by School District to construct School Facilities.
Section 2.3 Issuance and Sale of Bonds.
The City Council of the City, acting as the legislative body of the CFD, may, in its sole
discretion, in accordance with its adopted policies, adopt the Bond Resolution and issue the
Bonds. Prior to the City Council of the City adopting the Bond Resolution, Property Owner shall
notify School District of: i) the estimated issuance date for the Bonds and ii) the estimated amount
of proceeds to be deposited in the School Fee Fund.
Section 2.4 Bond Proceeds.
In the event that the CFD is formed and Bonds are issued, the City, or the CFD (as may
be applicable), and Property Owner shall determine the amount of Bond Proceeds to be deposited
into the School Fee Fund or any applicable accounts or subaccounts thereof. As Bond Proceeds
are transferred to School District and reserved to fund School Facilities, Property Owner shall
receive a credit in the amount transferred against the payment of the Mitigation Amounts. Nothing
herein shall supersede the obligation of an owner of the Property to make Deposits, pay the
statutory school fees to School District when due, or pay the Mitigation Amounts if required under
Section 3.2 herein. The purpose of this Agreement is to provide a mechanism by which the CFD
may levy Special Taxes and issue Bonds to provide a source of funds to finance School Facilities
in lieu of the payment of the Mitigation Amounts. In the event that Bond Proceeds, including
investment earnings thereon, are not available or sufficient to satisfy the obligation for the
Mitigation Amounts for all lots in the Project, then Property Owner shall remain obligated to make
Deposits or pay the Mitigation Amounts to School District as provided in Section 2.5 below.
Section 2.5 Mitigation: Ray m nt Credit Account.
(a) After being notified by Property Owner that Bond Proceeds have been
deposited into the School Fee Fund, School District will establish a credit account ("Credit Account")
in the amount of assessable square feet for which the Mitigation Amount is deemed satisfied. Such
determination shall be made by dividing (A) the difference between (i) the amount of Bond Proceeds
Deposited in the School Fee Fund and (ii) the total of the Mitigation Amounts for all lots for which
deposits have been made based on the Mitigation Amount in effect at the time such Deposit was
made, divided by (B) the then -current Mitigation Amount..
(b) Once the Credit Account has been established, Property Owner may obtain
Certificates of Compliance for lots within the Project by requesting that School District deduct from
the Credit Account the assessable square feet of the residential unit for which the Certificate of
Compliance is being sought. In the event that there is an insufficient balance in the Credit Account
to cover a request for a Certificate of Compliance, Property Owner may only obtain a Certificate of
Compliance by paying the remaining Mitigation Amount in cash.
#199618 v2 9225.4 4
Section 2.6 Disbursements for School Facilities.
(a) Bond Proceeds of the CFD designated for the funding of School Facilities
shall be held by the CFD in the School Fee Fund which shall be invested by the City and earn
and accumulate its own interest. In the event that the CFD has deposited Bond Proceeds to the
School Fee Fund, the City shall notify the School District and the Property Owner, in writing, as
to the amount of Bond Proceeds so deposited and the yield on the Bonds. All interest earnings
on amounts in the School Fee Fund shall remain in the School Fee Fund and will be available for
disbursement for the funding of School Facilities as described below.
(b) The City shall make disbursements from the School Fee Fund in
accordance with the terms of this Agreement and neither the City nor the CFD shall be responsible
to the School District for costs incurred by the School District as a result of withheld or delayed
payments.
(c) The School District agrees that it will request a disbursement of Bond
Proceeds only for costs related to the School Facilities that are eligible for financing under the
Act. The School District agrees that prior to requesting payment from the CFD it shall review and
approve all costs included in its request and will have already paid such costs of School Facilities
from its own funds or will disburse such amounts to pay the costs of the School Facilities within
five banking days of receipt of funds from the CFD. In the event that the School District does not
disburse any Bond Proceeds received for disbursement to third parties within five banking days
of receipt, it will trace and remit to the CFD from which such Bond Proceeds were received all
earnings, if any, earned by the School District in excess of the yield on the Bonds, from the date
of receipt of such Bond Proceeds by the School District to the date of expenditure by the School
District of such Bond Proceeds for capital costs of the School Facilities. Such remittance, if any,
shall occur on the earlier of the date of expenditure of such Bond Proceeds or each anniversary
date of the transfer of such Bond Proceeds from the CFD to the School District. The School
District agrees that in processing the above disbursements it will comply with all legal
requirements for the expenditure of Bond Proceeds under the Act and the Internal Revenue Code
of 1986 and any amendments thereto. As a condition to receiving any proceeds of the Bonds,
the School District agrees that it shall provide to the CFD, a certificate confirming the
representations contained in this Section 2.6 and such other matters as the CFD may reasonably
request upon which the CFD and its bond counsel may rely in connection with the issuance of
such Bonds and their conclusion that interest on such Bonds is not included in gross income for
federal income tax purposes.
(d) The School District agrees to maintain adequate internal controls over its
payment function and to maintain accounting records in accordance with generally accepted
accounting procedures. The School District will, upon request, provide to the CFD and the City
its annual financial report certified by an independent certified public accountant and any other
documents deemed necessary by the CFD and the City for purposes of calculating the CFD's
arbitrage rebate obligations. The CFD and the City shall have the right to conduct their own audit
of the School District's records related to the expenditure of the Bond Proceeds disbursed to the
School District at reasonable times during normal business hours.
(e) From time to time, the School District or Property Owner may submit a
Disbursement Request along with adequate supporting documentation to the CFD, for the exact
amount of Bond Proceeds to be disbursed to the School District. Upon receipt of an approved
Disbursement Request completed in accordance with the terms of this Agreement, the City shall
wire transfer (other otherwise pay) such portion of requested funds as are then available for
#199618 v2 9225.4
release in the School Fee Fund pursuant to the documents pursuant to which the Bonds are
issued to the School District's bank account, as directed by the School District.
(f) If five (5) years following the issuance of the Bonds, 85% or more of the
amount deposited into the School Fee Fund from proceeds of such Bonds have not been
expended for federal tax law purposes, the CFD may in its sole discretion transfer such funds to
such other account in the sole discretion of the CFD to be used to pay for the costs of eligible
public facilities or to the redemption fund to redeem Bonds; provided, however that such funds
may be retained in the School Fee Fund beyond such five year period upon the written request
of the School District, and delivery by the School District of an opinion of bond counsel that such
extension will not affect the exclusion from gross income of interest on such Bonds issued on a
tax-exempt basis. City shall provide School District with written notice at least six months prior to
making any transfer pursuant to this Section 2.6(f).
Section 2.7 Responsibility for Mitigation Amounts.
(a) The Parties hereto acknowledge and agree that the final responsibility for
the payment of the Mitigation Amounts not funded with Bond Proceeds lies with Property Owner.
(b) If the amounts derived from Bond Proceeds for School Facilities deposited
in the School Fee Fund, including investment earnings thereon, if any, are not sufficient to fund
the total cost of the Mitigation Amounts, the Parties hereto agree that all responsibility and liability
for the amount of such shortfall shall be and remain with Property Owner, and shall not lie with
the CFD, School District, or the City.
(c) School District agrees to utilize or apply funds provided to it by the CFD, in
accordance with the Act, the Local Agency Special Tax and Bond Accountability Act (described
in Section 4.1 hereof), the requirements of federal tax law compliance with which is necessary in
order for interest on the Bonds to be excluded from the gross income of the recipients for federal
income tax purposes and other applicable law, and as set forth herein.
(d) School District shall indemnify, defend, and hold harmless, the City, CFD
and Property Owner, their respective officers, employees and agents, and each and every one of
them from and against all actions, damages, claims, losses or expenses of every type and
description to which they may be subjected or put, by reason of or resulting from the violation by
School District of any of the terms of this Agreement of the design, engineering, and construction
of the School Facilities and any other facilities constructed with the proceeds of the Mitigation
Amounts.
Section 2.8 Mitigation of School Fee Obligations of Project.
Property Owner and School District agree that payment of the Mitigation Amount to School
District with respect to any residential unit within the Project, whether with CFD Bond Proceeds
or otherwise, shall constitute full mitigation of the obligations due School District in connection
with the issuance of a Certificate of Compliance with respect to such residential unit.
School District shall have no obligation, responsibility, or authority with respect to the
issuance and sale of the Bonds, the Bond Proceeds available to finance the construction of School
Facilities, the payment of the principal and interest on the Bonds, or for the levy of the Special
Taxes to provide for the payment of principal and interest thereon. The City shall have the sole
authority and responsibility for all such matters.
#199618 Q 9225.4
The Parties hereto specifically agree that, except as otherwise provided for in Section 2.4,
the liabilities of the CFD, including liabilities, if any, of the CFD pursuant to the documents
providing for the issuance of Bonds, including the Bond Resolution, shall not be or become
liabilities of School District.
Section 2.9 Waiver of State and Local Funding Credits and Right to Protest.
In consideration of School District's agreement with respect to the Project to accept the
Mitigation Amounts as full mitigation of the impact of the students generated by the Project upon
the School Facilities, and provided School District does not breach such agreement, Property
Owner agrees to waive all past, present and future credit against, or fair share reduction in,
Mitigation Amounts based upon State matching funding provided to School District or the
proceeds from a District -wide special tax or general obligation bond authorization, or School
Facilities Improvement District ("SFID") bond authorization for school facilities. In addition,
Property Owner knowingly waives its right of protest as may be afforded by Government Code
Section 66020 or any other provision of law, so long as School District is not in breach of this
Agreement.
Section 2.10 Property Owner Advance.
Property Owner has deposited with School District the amount of Fifteen Thousand Dollars
($15,000.00) to be used to advance fund School District's costs in entering into and administering
the terms of this Agreement. Such advance by Property Owner may be reimbursed, subject to
the approval of the City, from the proceeds of the sale of the Bonds, but under no circumstances
shall School District be obligated to pay Property Owner from any other source of funds. Should
this Agreement not be approved for any reason, any remaining balance of the amounts advanced
by Property Owner pursuant to this Section shall be refunded to Property Owner within ten (10)
business days after School District is notified that this Agreement will not be approved.
Section 2.11 Administration of the CFD.
The City shall have the power and duty to provide for the administration of the CFD,
subject to the terms hereof and the Bond Resolution, including employing and compensating all
consultants and providing for the various other administration duties set forth in this Agreement.
It is understood and agreed by Parties hereto that School District was not or will not be considered
a participant in the proceedings relative to formation of the CFD or the issuance of the Bonds,
other than as set forth in this Agreement.
ARTICLE III
TERM AND TERMINATION
Section 3.1 Effective Date.
This Agreement shall become effective and of full force and effect as of the date ("Effective
Date") it is approved and executed by the Governing Board of School District, by Property Owner
and the City Council of the City, to be confirmed by the execution hereof by the authorized
representatives of the Parties hereto.
#199618 v2 9225.4
Section 3.2 Termination.
If the CFD is unable to complete the sale of the first series of Bonds prior to 24 months
after the final Certificate of Compliance is issued for the Project, any obligation of the Parties, if
any, to finance all or any portion of the Mitigation Amounts with CFD Bond Proceeds pursuant to
this Agreement shall automatically terminate and be of no further force or effect unless amended
by the Parties. If this Agreement is terminated pursuant to the foregoing, School District shall
retain all Deposits in partial satisfaction of the Mitigation Amount obligations related to the lots
within the Project for which Certificates of Compliance were issued based upon the posting of
such Deposits and the Property Owner shall be required to pay to School District an amount equal
to the total Mitigation Amounts for the Project, less the amount of all Deposits previously received
by School District.
ARTICLE IV
ADDITIONAL GENERAL PROVISIONS
Section 4.1 Recordkeeping; Inspection of Records.
School District hereby agrees to keep and maintain full and accurate records of all
amounts, if any, paid to School District for Mitigation Amounts and investment earnings thereon
and the City or the CFD, or the Fiscal Agent on their behalf, hereby agrees to keep and maintain
full and accurate records of all amounts, and investment earnings, if any, disbursed to School
District from the School Fee Fund. Each Party further agrees to make such records available to
any other Party hereto, including Property Owner, during normal business hours upon reasonable
prior notice. All such records shall be kept and maintained by the appropriate Party as provided
by applicable law and their respective policies. School District and Property Owner agree that
they will cooperate with the CFD and the City in providing documentation, reports or other data
reasonably required and requested by the City or the CFD in meeting the reporting requirements
of the CFD under Sections 50075.1, 50075.3, and 50075.5 and Article 1.5 (commencing with
Section 53410) of Chapter 3 of Part 1 of Division 2 of Title 5 of, the Government Code (collectively,
the "Local Agency Special Tax and Bond Accountability Act"). School District's reporting
obligations pursuant to this Section shall be limited to providing reports or other data detailing the
following: (A) the amount of CFD funds received by School District to fund School Facilities, (B)
the amount of such CFD funds deposited in separate funds or accounts of School District
reflecting Mitigation Amounts and the number of dwelling units for which such Mitigation Amounts
apply, and (C) School Facilities that have been acquired or constructed, in whole or in part, with
CFD funds. School District's reporting obligation shall terminate when all CFD funds have been
disbursed from the School Fee Fund, or from any account or subaccount thereof that has been
allocated Bond Proceeds to finance Mitigation Amounts, and School District has provided to the
City a report for the last disbursement received by School District. If no CFD funds have been
received by School District or used to finance School Facilities since the previous report, no report
shall be required and the City may rely upon the previous reports.
Section 4.2 Partiai InvaliditV.
If any part of this Agreement is held to be illegal or unenforceable by a court of competent
jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably
possible.
#199618 v2 92254
Section 4.3 Successors and Assigns.
Property Owner may assign its rights pursuant to this Agreement to a purchaser of the
Property, or any portion thereof, and such purchaser and assignee shall assume the obligations
of Property Owner pursuant to this Agreement and to be bound thereby. This Agreement shall
be binding upon and inure to the benefit of the successors and assigns of the Parties hereto.
Section 4.4 Notice.
Any notice, payment or instrument required or permitted by this Agreement to be given or
delivered to any Party or other person shall be deemed to have been received when personally
delivered or upon deposit of the same in the United States Post Office registered or certified,
postage prepaid, addressed as follows:
City: City of Menifee
29844 Haun Road
Menifee, CA 92530
Attention: Deputy City Manager
With a copy to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, CA 92660
Attn: Brian Forbath, Esq.
School District Menifee Union School District
29775 Haun Road
Menifee, CA 92586
Attention: Assistant Superintendent, Business Services
With a copy to: Fagen Friedman & Fulfrost LLP
1525 Faraday Avenue, Suite 300
Carlsbad, CA 92008
Attention: Kelley Owens, Esq.
Property Owner: Meritage Homes of California, Inc-
5 Peters Canyon Road, Suite 310
Irvine, CA 92606
Attention: Aaron Talarico
With a copy to: O'Neil LLP
19900 MacArthur Boulevard, Suite 1050
Irvine, CA 92612
Attention: John P. Yeager, Esq.
Each Party can change its address for delivery of notice by delivering written notice of
such change or address to the other Parties within ten (10) calendar days prior to such change.
#199618 v2 9225.4
Section 4.5 Captions.
The captions to Sections used herein are for convenience purposes only and are not part
of this Agreement.
Section 4.6 Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the
State of California applicable to contracts made and performed in said State.
Section 4.7 Entire Agreement.
This Agreement contains the entire agreement between the Parties with respect to the
matters provided for herein and supersedes all prior agreements and negotiations between the
Parties with respect to the subject matter of this Agreement.
Section 4.8 Amendments.
This Agreement may be amended or modified only in writing executed by the authorized
representative(s) of each of the Parties hereto.
Section 4.9 Waiver.
The failure of any Party hereto to insist on compliance within any of the terms, covenants
or conditions of this Agreement by any other Party hereto, shall not be deemed a waiver of such
terms, covenants or conditions of this Agreement by such other Party, nor shall any waiver
constitute a relinquishment of any other right or power for all or any other times.
Section 4.10 Cooperation and Execution of Documents.
The Parties hereto agree to complete and execute any further or additional documents
which may be necessary to complete or further the terms of this Agreement.
Section 4.11 Attorneys' Fees.
In the event of the bringing of any action or suit by any Party against any other Party
arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be
entitled to recover from the losing Party all costs and expenses of suit, including reasonable
attorneys' fees.
Section 4.12 Exhibits.
The following exhibits attached hereto are incorporated into this Agreement by reference.
Exhibit Description
"A" Property Description
"B" Disbursement Request Form
Section 4.13 Signatories.
The signatories hereto represent that they have been appropriately authorized to enter
into this Agreement on behalf of the Party for whom they sign.
#199618 v2 9225.4 10
Section 4.14 Execution in Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an
original.
[Signatures on following page]
#199618 v2 9225.4 11
IN WITNESS WHEREOF, the Parties hereto have executed this Joint Community
Facilities and School Facilities Mitigation Agreement as of the day and year written above.
CITY OF MENIFEE, a political subdivision of the
State of California
By:
Ass' - t ty anager, �p�� Cci►�7oi✓
ATTEST:
APPROVED AS TO FORM:
CITY ATTORNEY OF THE CITY OF MENIFEE
In
Melching,/City Pyftorney
Property Owner: MERITAGE HOMES OF CALIFORNIA, INC., a
California corporation
Bv:
Name: Aaron Talarico
Its: Vice President
MENIFEE UNION SCHOOL DISTRICT
President of the Board of Education
of the Menifee Union School District
ATTEST:
By
Clerk of the Board of Education of
the Menifee Union School District
#199618 v2 9225.4 12
EXHIBIT "A"
PROPERTY DESCRIPTION
Real property in the City of Menifee, County of Riverside, State of California, described as follows:
Assessor Parcel Nos. (as set forth in the County of Riverside Assessor's Fiscal Year 2020-
21 Roll):
372-160-006
372-160-007
372-160-008
372-160-013
372-190-003
#199618 v2 9225.4 A-1
EXHIBIT "B"
DISBURSEMENT REQUEST FORM
1. Community Facilities District No. 2021-2 of the City of Menifee (Sumac Ridge)
("CFD No. 2021-2") is hereby requested to pay from the School Fee Fund, or any applicable
account or subaccount thereof, established by CFD No. 2021-2 in connection with its Special Tax
Bonds (the "Bonds") to Menifee Union School District ("MUSD"), as payee, the sum set forth
below:
E-5
(the "Requested Amount")
2. The Requested Amount is due and payable, has not formed the basis of any prior
request or disbursement and is being made with respect to the obligation of the Property to pay
Mitigation Amounts to MUSD.
3. The Requested Amount is authorized and payable pursuant to the terms of that
certain Joint Community Facilities and School Facilities Mitigation Agreement, dated as of
2021, by and among the City of Menifee, Menifee Union School District, Meritage
Homes of California, Inc., a California corporation, (the "JCFA").
4. Capitalized undefined terms used herein shall have the meanings ascribed to
them in the JCFA.
Date:
Date:
MERITAGE HOMES OF CALIFORNIA, INC., a
California corporation
By:
Its:
Authorized Signatory
MENIFEE UNION SCHOOL DISTRICT
#199618 v2 9225.4 B-1
EXECUTION COPY
COMMUNITY FACILITIES DISTRICT NO. 2021-2
OF THE CITY OF MENIFEE (SUMAC RIDGE)
ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT
THIS ACQUISITION, CONSTRUCTION AND FUNDING AGREEMENT (the "Agreement")
is made and entered into by and between CITY OF MENIFEE (the "City"), acting for and on behalf
of itself and COMMUNITY FACILITIES DISTRICT NO. 2021-2 OF THE CITY OF MENIFEE
(SUMAC RIDGE) (the "Community Facilities District" or "CFD") and MERITAGE HOMES OF
CALIFORNIA, INC., a California corporation (the "Developer"), each individually a "Party" and
collectively the "Parties."
WHEREAS, Developer has requested that the City consider the formation of a community
facilities district pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982,
as amended (the "Act"), and the City has undertaken proceedings for the authorization of special
taxes and issuance of bonded indebtedness for the payment of the construction and/or acquisition
of certain improvements to be owned, operated or maintained by the City, Eastern Municipal
Water District (the "Water District"), and Menifee Union School District (the "School District"), and
incidental expenses in accordance with the Act; and
WHEREAS, in order to proceed in a timely way with development of the property within
the CFD which is described in the attached Exhibit "A" (the "Developer Property"), Developer
desires to fund through the Community Facilities District (i) the City's acquisition or construction
of certain improvements that are to be owned, operated and maintained by the City or are
otherwise required for development ("City Improvements"), as more particularly set forth and
described in the Description of Cost Estimates attached hereto as Exhibit "B," (ii) improvements
included in the City's fee programs (the "City Fee Facility Improvements"), as more particularly
set forth and described in Exhibit "B," and (iii) the improvements of the Water District and the
School District described in Exhibit "C" hereto (the "Miscellaneous Improvements" and together
with the City Improvements and the City Fee Facilities Improvements, collectively the
"Improvements"); and
WHEREAS, the City is authorized by the Act to form the CFD and to issue bonds secured
by Special Taxes (as defined in Section 2.2) of the CFD (the "Bonds") to fund the Improvements;
and
WHEREAS, the City Council has adopted the City's policies and procedures concerning
the use of special district financing programs to finance the City facilities (the "Policy"); and
WHEREAS, the purpose of this Agreement is to constitute a formal understanding
between Developer and the City (pursuant to the requirements of Government Code
Section 53313.51 and other provisions of the Act and the Policy) concerning financial and other
obligations and responsibilities related to the formation of the Community Facilities District and
the Improvements to be financed by the Community Facilities District, when and if formed, to the
extent funds are available, and to set forth the conditions upon which (1) the Community Facilities
District will reimburse Developer or its designee for (a) the amounts advanced by Developer to
form the Community Facilities District and (b) the cost of the City Improvements constructed by
or on behalf of the Developer and (2) the Community Facilities District will fund the City Fee
Facility Improvements thereby satisfying corresponding City fees; and (3) the Community
Facilities District will also fund the Miscellaneous Improvements described in Exhibit "C."
#206652 v2 9225.4
4851-0985-4461 v4/200299-0004
NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:
FEASIBILITY STUDY
The City has retained, at the Developer's expense, the necessary consultants to analyze
the proposed formation of the CFD, including the special tax consultant, bond counsel, and other
consultants deemed necessary by the City. The Developer has advanced to the City a sum of
money for such costs, all or a part of which may be eligible for reimbursement from the CFD in
accordance with the Reimbursement Agreement dated as of September 1, 2021 (the
"Reimbursement Agreement") between the Developer and the City.
2. SALE OF BONDS
2.1 City Policies. The City Council has adopted the Policy, setting forth the City's
policies and procedures concerning the use of special district financing programs to finance the
Improvements. Pursuant to the Policy, the total annual amount of the special taxes to be collected
with respect to a parcel within the CFD and all other taxes and assessments which will be
collected with respect to such parcel from the secured tax roll must not exceed two percent (2%)
of the Fair Market Value (as defined in the Policy) of such parcel at the time of CFD formation.
The Parties hereby agree that, unless waived by the City, at the time of issuance of the
Bonds, the ratio of the value of all parcels of property for which the Bonds are being issued to the
amount of outstanding community facilities district or assessment district bonds attributable to
such parcels (the "Value -to -Lien Ratio") may not be less than four -to -one (4:1). Unless waived
by the City, the Fair Market Value of the property within the Community Facilities District for
purposes of determining the foregoing ratio will be determined based on the appraised value of
the property based on the appraisal made by an appraiser selected by the City with a valuation
date within three (3) months of the issuance of the Bonds, or, with respect to developed projects
(as determined in the sole discretion of the City) or issuance of refunding bonds, the assessed
value of the property, or some combination thereof. Subject to satisfaction of the Policy and the
requirements of this Agreement, the City shall use reasonable efforts to issue and sell the Bonds
in one or more series in an amount sufficient to fund the Improvements in accordance with the
schedule for development of the Developer Property. The ultimate decision as to issuance and
sizing lies in the sole legislative discretion of the City.
2.2 Security for Payment of Special Taxes.
(a) Concurrently with the issuance and sale of each series of the Bonds, the
owner of any land within the Community Facilities District which the City has determined, in its
sole discretion, to use in the sizing of such series of Bonds (the "Sizing Property"), together with
any Sizing Property owned by any affiliate (collectively, an "Account Party"), for which the
Maximum Special Taxes for the then -current fiscal year or the following fiscal year (as defined in
the Rate and Method of Apportionment of Special Tax for the Community Facilities District (the
"Rate and Method") and such Special Tax referred to herein as the "Special Tax" or "Special
Taxes"), are equal to or exceed 20% of the aggregate Maximum Special Taxes authorized to be
levied on the Sizing Property in any of such fiscal years, shall deliver to the City either (i) a
renewable irrevocable instrument of credit from a financial institution (rated "A" or better, or
otherwise approved by the City), in the form and upon the terms reasonably approved by the City,
or (ii) cash in -lieu thereof (a "Security"). The Security shall be in an amount equal to 200% of the
product of the maximum annual debt service on the Bonds proposed to be issued times a fraction
the numerator of which is the aggregate Maximum Special Taxes on the Sizing Property in the
2
4851-0985-4461v4/200299-0004
then current fiscal year or the following fiscal year (whichever is greater), applicable to the land
owned by the Account Party and the denominator of which is the total Maximum Special Taxes
applicable to all of the Sizing Property in such fiscal year (the "Stated Amount"). The Security
shall be maintained by the Account Party in each fiscal year until terminated in accordance with
Section 2.2(c) below. While the Security is still required the Stated Amount of such Security shall
be reduced as set forth in a Certificate of Reduction or Termination (as defined in Section 2.2(c)
below).
The Security shall name the Fiscal Agent (as defined in Section 2.4 below) as a
beneficiary and shall provide that the Fiscal Agent may draw an amount equal to any
delinquencies in payment of semiannual installments of the Special Taxes levied on property
owned by the Account Party in the Community Facilities District. The total amount to be drawn
under the Security shall not exceed an amount equal to the Special Taxes owed by the Account
Party with respect to property within the Community Facilities District that is delinquent at the time
the draw is made. The amount drawn on the Security shall be applied in the same manner and
for the same purposes as the delinquent Special Taxes would have been applied; provided,
however the payment of a draw under the Security will not be deemed to cure the delinquency in
payment of the Special Taxes.
If, subsequent to a draw on the Security and prior to the satisfaction of any
reimbursements due to the institution providing the Security (the "Security Provider") pursuant to
this Agreement, the City receives payment of all or a portion of the delinquent Special Taxes or
the proceeds of a sale of delinquent real property pursuant to foreclosure proceedings
("Delinquency Proceeds") for a parcel for which the Security has been drawn, the Security
Provider (or its designee, which may be the Developer) shall be reimbursed for such draws to the
extent of Delinquency Proceeds net of the City's costs of collection. The Security Provider is
intended by the Parties to be a third party beneficiary of this Section 2.2.
(b) The Security shall be renewed, or a substitute Security reasonably
satisfactory to the City (a "Substitute Security") provided, not less than thirty (30) calendar days
prior to the expiration of the Security or Substitute Security then in effect. If the Account Party
provides a Substitute Security to the City, then the Fiscal Agent shall return any existing Security
on the effective date of the Substitute Security to the Security Provider.
If the Security is not renewed within thirty (30) days prior to its expiration date and
the requirements for release or termination of the Security as set forth in Section 2.2(c) below
have not then been met, the full amount of the Security may be drawn by the Fiscal Agent and
deposited in an account established under the Indenture (as hereinafter defined) or in such
account established with a financial institution selected by the City. Thereafter, amounts in such
account shall be held as security, and if Special Taxes owed by the Account Party with respect to
property within the Community Facilities District are not paid prior to delinquency, then such
amounts in such account may be applied by the City to pay the delinquent Special Taxes owed
by the Account Party with respect to such property on the same terms and conditions applicable
hereunder to draws on the Security.
At such time as the Security is renewed, or a Substitute Security is accepted by
the Fiscal Agent, or the requirement for the Security has been terminated pursuant to this section,
the City or its designee, shall release all amounts in the Security account to the Security Provider
(or its designee, which may be the Developer) within ten (10) calendar days from the date of
renewal or acceptance.
4851-0985-4461 v4/200299-0004
(c) Following the sale or transfer by the Account Party of any property to a
person other than the Account Party, or upon the prepayment of the Special Tax obligation for a
parcel owned by the Account Party, the Account Party shall notify the Community Facilities District
of such event, in writing, and, if requested by the Account Party, the Stated Amount of the Security
shall be reduced and be recalculated in accordance with this Section 2.2; provided, however, that
any costs associated with the recalculation and reduction shall be borne by the Account Party.
Subject to Section 2.2(d) below, the Stated Amount may be reduced to an amount equal to 200%
of the product of the maximum annual debt service on the outstanding Bonds times a fraction the
numerator of which is the aggregate Maximum Special Taxes applicable to the Sizing Property
owned by the Account Party and the denominator of which is the total Maximum Special Taxes
applicable to all of the Sizing Property as of the date of calculation. The Security shall be
terminated upon the earlier of (i) when the Sizing Property owned by the Account Party is
responsible for less than 20% of the Maximum Special Taxes applicable to all of the Sizing
Property or (ii) when the Account Party has paid all Special Taxes owed by the Account Party in
the current fiscal year and the Sizing Property owned by the Account Party is expected to be
responsible for less than 20% of the Maximum Special Taxes in the next fiscal year.
Reduction or termination of a Security shall occur automatically upon submission
to the Security Provider by the Fiscal Agent of a "Certificate of Reduction or Termination" by the
City. The City shall direct that the Fiscal Agent deliver to the Security Provider such Certificate of
Reduction or Termination promptly upon receiving from the Account Party a certification which
shall be made under penalty of perjury and which shall indicate (i) the legal description of all Sizing
Property owned by the Account Party, and either (ii) a recalculation of the new Stated Amount
that the Account Party proposes be applicable to the Security or (iii) if termination of the Security
is requested, a statement that one of the requirements set forth in the preceding paragraph for
termination of the Security has been satisfied.
The Account Party shall notify the City of any events that will result in a reduction
of the Stated Amount of the Security and shall provide the City with verification of said events.
The Account Party may provide the Fiscal Agent with a Substitute Security in the reduced amount,
and the Fiscal Agent shall release and return to the Security Provider the Security then in effect.
The Parties expressly acknowledge that the Account Party's failure to so notify the City or to
reduce the Security at the times prescribed herein shall in no way effect or invalidate sale or
transfer of property, or recordation of maps on property.
(d) If any Sizing Property is sold or transferred by an Account Party with the
result that the Sizing Property owned by the transferee, together with any of its affiliates
(collectively, a "Transferee") is responsible for 20% or more of the aggregate Maximum Special
Taxes of all Sizing Property, a Security on the same terms specified in Section 2.2(a) above will
be furnished by Transferee with respect to all Sizing Property owned by such Transferee. Any
applicable purchase and sale agreement and/or escrow instructions shall notify the Transferee of
this Security requirement and obligate the Transferee to provide such Security, if applicable. The
Security of the Account Party will not be reduced to reflect the sale or transfer of such Sizing
Property until a Security is furnished by the Transferee and accepted by the Fiscal Agent. The
issuing financial institution and the form and terms of said Security will be subject to reasonable
prior approval by the City. All terms provided in this Section 2.2 are applicable to the Transferee
by replacing the term "Account Party" at each place where it occurs in each section with the term
"Transferee." Each provider of a Security for a Transferee shall be an express third party
beneficiary of the provisions of this Section 2.2.
4
4851-0985-4461 v4/200299-0004
Any costs related to holding or maintaining the Security, including any fees of a fiscal
agent, trustee or other depository shall be borne by the Account Party.
2.3 Major Landowner Initial and Continuing Disclosure. An owner of land which is
responsible for twenty percent (20%) or more of the Maximum Special Taxes applicable to the
Sizing Property in the fiscal year in which the Bonds are issued or in the fiscal year following the
fiscal year in which the Bonds are issued (a "Major Landowner') will be required to provide all
information regarding the development of its property, including the financing plan for such
development, which is necessary to ensure that the official statement for such Bonds complies
with the requirements of Rules 15c2-12 and 10b-5 of the Securities and Exchange Commission
and all other applicable federal and state securities laws. Additionally, Developer acknowledges
that, if it is a Major Landowner at the time of issuance of the Bonds, it will be necessary that
Developer enter into a continuing disclosure agreement to provide such continuing disclosure
pertaining to the development of the land owned by Developer within the CFD to assist in the
marketing of the Bonds.
2.4 Bond Issuance Parameters. The terms and conditions upon which each series of
the Bonds shall be issued and sold, the method of sale of the Bonds and the pricing of the Bonds
shall be determined solely by the City in its legislative discretion in conformance with the Act, the
Policy, and this Agreement. Each series of Bonds shall be issued with a term not to exceed 35
years from the date of issuance of the Bonds, or such longer term as is then permitted by law.
The proceeds of the Bonds shall be used in the following priority to (1) fund a reserve fund for the
payment of principal and interest with respect to the Bonds in an amount equal to the least of
(i) ten percent (10%) of the total bond issue, (ii) maximum annual debt service on Bonds, or
(iii) 125% of average annual debt service; (2) fund capitalized interest through the interest
payment date on the Bonds for which Special Taxes are not available for payment of debt service
on the Bonds or such longer period as requested by the Developer and approved by the City,
subject to the Act; (3) reimburse the Developer or its designee pursuant to Section 1 hereof for
CFD formation costs advanced by the Developer which have not already been reimbursed to the
Developer from collected Special Taxes; (4) pay for costs of issuance of the Bonds including,
without limitation, underwriter's discount, bond counsel and disclosure counsel fees, appraisal
and special tax consultant fees, printing, fiscal agent fees, and reasonable Developer legal and
financial consultant costs; (5) pay for the costs of forming the Community Facilities District; and
(6) pay for the actual costs of the Improvements. The Community Facilities District shall maintain
records relating to the disbursements of proceeds of the sale of the Bonds. The Indenture,
Resolution or Fiscal Agent Agreement (hereinafter "Indenture") for the Bonds shall establish an
acquisition and construction fund or improvement fund (herein, the "Improvement Fund") to be
held by the fiscal agent ("Fiscal Agent") into which shall be deposited initially the proceeds of the
Bonds net of the amount of proceeds required to fund items (1) through (5) in the second
preceding sentence. The Indenture shall also establish separate accounts of the Improvement
Fund designated the "City Improvements Account," "City Fee Facility Improvements Account,"
and any Miscellaneous Improvement Account(s) for the Miscellaneous Improvements described
in Exhibit "C," into which shall be deposited such portions of the Improvement Fund as agreed
by the Parties and directed by the City in writing at or subsequent to the closing of the sale of the
Bonds consistent with the following priorities:
(a) An amount sufficient to fund the reasonable, current estimated cost of the
City Fee Facility Improvements anticipated to be funded out of the Bonds being issued shall be
deposited in the City Fee Facility Improvements Account (any Special Taxes levied in the CFD
and collected by the CFD remaining after the payment of administrative expenses of the CFD and
the reimbursement of the Developer for CFD formation costs pursuant to Section 1 hereof shall
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be deposited into the City Fee Facility Improvements Account at the time of Bond issuance, unless
otherwise directed in writing by the Developer);
(b) If applicable, an amount to be agreed upon between Developer and the
CFD prior to the issuance of Bonds sufficient to fund the reasonable, current estimated costs of
the City Improvements shall be deposited, or later transferred, to the City Improvements Account;
and
(c) If applicable, an amount to be agreed upon between Developer and the
CFD prior to the issuance of Bonds sufficient to fund the reasonable, current estimated cost of
the Miscellaneous Improvements described in Exhibit "C" hereto, anticipated to be funded out
of the Bonds being issued shall be deposited, or later transferred, to the applicable Miscellaneous
Improvement Account(s).
Interest earned on moneys deposited in each of the City Fee Facility Improvements
Account, the City Improvements Account and the Miscellaneous Improvement Account(s) shall
remain in such accounts until such time as all of the Improvements have been funded.
Additionally, the Developer may direct the CFD to transfer excess moneys in any of the City Fee
Facility Improvements Account, the City Improvements Account or the Miscellaneous
Improvement Account(s) to another Account. The Indenture shall provide that amounts remaining
in the Improvement Fund after funding all proposed Improvements (such completion of funding to
be agreed by the City and the Developer) shall be deposited in the special tax fund or bond service
fund and be applied to pay debt service on the Bonds and/or to call Bonds in advance of maturity.
3. ALLOCATION OF SPECIAL TAXES
Prior to the issuance of Bonds, the City Council of the City, acting as the legislative body
of the Community Facilities District, may levy Special Taxes on all parcels classified as Developed
Property pursuant to the Rate and Method. Such Special Taxes collected by the City shall first
be applied to fund annual administrative expenses of the Community Facilities District and then
to fund Improvements in the same manner as the proceeds of Bonds as set forth herein. Upon
sale and delivery of the Bonds, the City shall annually levy the Special Tax as provided for in
documents pursuant to which the Bonds were issued. Following the issuance of the last series of
Bonds, the City shall have no obligation to levy Special Taxes to reimburse the Developer for the
costs of any Improvements not paid for from Bond proceeds. The entire amount of any Special
Tax levied by the Community Facilities District to repay the Bonds and recover costs and
expenses allowable pursuant to Government Code Section 53313.5, shall be allocated to the
Community Facilities District.
4. NOTICE OF SPECIAL TAX
Developer shall provide written notice to all potential initial purchasers of lots advising of
the special tax obligation applicable to the Developer Property in the form required by
Section 53341.5 of the Government Code.
5. DESIGN PLANS AND SPECIFICATIONS
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements that are financed
through the CFD. All plans, specifications and bid documents for the City Improvements ("Plans")
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constructed or to be constructed by the Developer shall be prepared by the Developer at the
Developer's initial expense, subject to approval by the applicable public agency. Costs for
preparation of the Plans will be eligible for reimbursement, conditioned upon the final approval of
the applicable public agency and the availability of funds. Reimbursement of costs for plan
revisions will be considered on a case by case basis. All such City Improvements shall be bid in
accordance with "public works" requirements of Sections 6 and 7 hereof to be eligible for
reimbursement. The Developer shall not award bids for construction, or commence or cause
commencement of construction, of a City Improvement until the Plans and bidding documents
have been approved by the City. The bid opening for City Improvements shall be coordinated
with the City and take place at the City's facilities, with City personnel in attendance, for any City
Improvements bid after the execution of this Agreement.
6. CONSTRUCTION OF IMPROVEMENTS
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements that are financed
through the CFD.
6.1 General. Upon the approval of Plans for a City Improvement, the Developer will
provide for construction of such City Improvement in accordance with Sections 6 and 7 of this
Agreement. Sections 6 and 7 specify the requirements for construction of the City Improvements
that the City believes are necessary to ensure that such City Improvements are constructed as if
they had been constructed under the direction and supervision, or under the authority of the City.
6.2 Construction. With respect to City Improvements, a qualified engineering firm (the
"Field Engineer") shall be employed by the Developer to provide all field engineering surveys
determined to be necessary by the City's inspection personnel. Field Engineer shall promptly
furnish to City a complete set of grade sheets listing all locations, offsets, etc., in accordance with
good engineering practices, and attendant data and reports resulting from Field Engineer's
engineering surveys and/or proposed facility design changes. City shall have the right, but not
the obligation, to review, evaluate and analyze whether such results comply with applicable
specifications.
As necessary as determined by City, a full-time soil -testing firm, approved by City, shall
be employed by the Developer to conduct soil compaction testing and certification. The
Developer shall promptly furnish results of all such compaction testing to the City for its review,
evaluation and decision as to compliance with applicable specifications. In the event the
compaction is not in compliance with applicable specifications, the Developer shall be fully liable
and responsible for the costs of achieving compliance. A final report certifying all required
compaction in accordance with the specifications shall be a condition of final approval of facilities.
The costs of all surveying, testing and reports associated with the City Improvements
furnished and constructed by the Developer's contractor(s) shall be eligible to be paid from funds
in the City Improvements Account.
The City shall not be responsible for conducting any environmental, archaeological,
biological, or cultural studies or any mitigation requirements that may be requested by appropriate
Federal, State, and/or local agencies. Any such work shall be paid for and conducted by the
Developer and reimbursed out of the City Improvements Account.
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Should the Developer notify the City that the Developer is unable to complete such City
Improvement, the City shall have the right but not the obligation to require the Developer to make
an irrevocable offer of dedication to the City of the land owned by the Developer for the City
Improvement identified in the notice and to assume responsibility for the work to be performed
thereunder. In the event the City elects to assume the responsibility for any work on a previously
awarded contract as described in the preceding sentence, the following will occur: (i) the
Developer will make an irrevocable offer of dedication to the City of the land owned by the
Developer for such City Improvement identified in the notice; (ii) to the extent permitted by law
and the applicable contract, the Developer will assign all of the contracts for the work performed
to date on the City Improvement identified in the notice to the City, if requested to do so by the
City Manager; the City will use its best efforts to complete the City Improvement within a
reasonable time frame; and upon completion of the City Improvement, to the extent there are
Special Taxes or proceeds of the Bonds available following payment to the City for the costs of
completing such City Improvement, the Developer will be reimbursed for the lesser of the cost or
value of the previously unreimbursed satisfactory work performed or paid for by the Developer.
The cost of such work will be determined by taking the unreimbursed amounts expended by the
Developer under the contract(s) taken over by the City and deducting any incremental cost
incurred by the City to complete the work under the contracts in question. Incremental cost shall
be costs in excess of the sum of the original contract cost plus change orders approved by the
City.
7. PUBLIC WORKS REQUIREMENTS
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements that are financed
through the CFD.
7.1 City Requirements. In order that the City Improvements may be properly and
readily acquired by the City, the Developer shall comply with all of the following requirements with
respect to any such City Improvements to be acquired with funds in the City Improvements
Account and the Developer shall provide such proof to the City as the City may reasonably require
and at such intervals and in such form as the City may reasonably require, that the following
requirements have been satisfied as to all such City Improvements:
(a) The Developer shall prepare a bid package for review, comment and
approval by the City Manager or his designee (the "City Representative") for any City
Improvements bid after the date of adoption by the City Council of the resolution forming the CFD.
(b) For City Improvements bid after the date of adoption by the City Council of
the resolution forming the CFD, the Developer shall, after obtaining sealed bids for the
construction of the City Improvements in conformance with the procedures and requirements of
the City, submit to the City written evidence of such competitive bidding procedure, including
evidence of the means by which bids were solicited, a listing of all responsive bids and their
amounts, and the name or names of the contractor or contractors to whom the Developer
proposes to award the contracts for such construction, which shall be the lowest responsible
bidder.
(c) The City Representative shall be invited to attend the bid opening for such
City Improvements bid after the date of adoption by the City Council of the resolution forming the
CFD. If unable to attend the bid opening, the City Representative shall approve or disapprove of
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a contractor or contractors, in writing, within five (5) business days after receipt from the Developer
of the name or names of such contractor or contractors recommended by the Developer. If the
City Representative disapproves of any such contractor; the Developer shall select the next
lowest responsible bidder from the competitive bids received who is acceptable to the City
Representative.
(d) The specifications and bid and contract documents shall require all such
contractors to pay prevailing wages and to otherwise comply with applicable provisions of the
Labor Code, the Government Code and the Public Contract Code relating to public works projects
and as required by the procedures and standards of the City with respect to the construction of
its public works projects.
(e) The Developer shall submit faithful performance and payment bonds in
form and substance reasonably acceptable to the City with respect to the City Improvements.
(f) The Developer and its contractor and subcontractors shall be required to
provide proof of insurance coverage throughout the term of the construction of the City
Improvements, which they will construct in conformance with the City's standard procedures and
requirements. The City's insurance requirements are set out in Section 20 herein.
(g) The Developer and all such contractors shall comply with such other
requirements relating to the construction of the City Improvements which the City may impose by
written notification delivered to the Developer and each such contractor at the time either prior to
the receipt of bids by the Developer for the construction of such City Improvements or, to the
extent required as a result of changes in applicable laws, during the progress of construction
thereof; provided that such other requirements shall only be imposed to the extent the City
reasonably determines they are required in order to comply with applicable law. In accordance
with Section 7, the Developer shall be deemed the awarding body and shall be solely responsible
for compliance and enforcement of the provisions of the Labor Code, Government Code, and
Public Contract Code.
(h) A "Change Order" is an order from the Developer to a contractor
authorizing a change in the work to be performed and a "Significant Change Order" is an order
from the Developer to a contractor authorizing a change in the work to be performed where such
Change Order is larger than 10% of the contract amount for such City Improvement. After the
effective date of this Agreement, the Developer shall receive comments from the City
Representative prior to the Developer's approval of any Significant Change Order. The City
Representative shall comment on or deny the Significant Change Order request within fifteen (15)
business days of receipt of all necessary information. The City's comments to a Significant
Change Order shall not be unreasonably delayed, conditioned or withheld. The Developer shall
not be entitled to be compensated for costs associated with a Significant Change Order that has
not been approved by the City Representative.
Developer shall provide proof to the City, at such intervals and in such form as the City
may reasonably require, that the foregoing requirements have been satisfied as to all of the City
Improvements which are funded through Bond proceeds.
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8. INSPECTION; COMPLETION OF CONSTRUCTION
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements.
The City shall have primary responsibility for inspecting the City Improvements to assure
that the work is being accomplished in accordance with the Plans. Such inspection does not
include inspection for compliance with safety requirements by the Developer's contractor(s). The
City's personnel shall be granted access to each construction site at all reasonable times for the
purpose of accomplishing such inspection. Upon satisfaction of the City's inspectors, the
Developer shall notify the City in writing that a City Improvement has been completed in
accordance with the Plans. Any actual costs reasonably incurred by the City for inspection not
previously paid by the Developer shall be reimbursed from funds in the City Improvements
Account.
Within three (3) business days of receipt of written notification from City inspectors that a
City Improvement has been completed in accordance with the Plans, the City Representative
shall notify the Developer in writing that such City Improvement has been satisfactorily completed.
Upon receiving such notification, the Developer shall file a Notice of Completion with the County
of Riverside Recorders Office, pursuant to the provisions of Section 3093 of the Civil Code. The
Developer shall furnish to the City a duplicate copy of each such Notice of Completion showing
thereon the date of filing with the County of Riverside (the "County"). City will in turn file a notice
with the County for acceptance.
9. LIENS
With respect to any City Improvement that was complete (as determined by the City
Council) prior to the adoption by the City Council of the resolution forming the CFD, prior to any
payment by the CFD to the Developer for such City Improvement, the Developer shall provide to
the City such evidence or proof as the City shall require that all persons, firms and corporations
supplying work, labor, materials, supplies and equipment for the construction of the City
Improvements have been paid, and that no claims of liens have been recorded by or on behalf of
any such person, firm or corporation. With respect to City Improvements, upon the earlier of
(i) receipt of all applicable lien releases, or (ii) expiration of the time for the recording of claim of
liens as prescribed by Sections 3115 and 3116 of the Civil Code the Developer shall provide to
the City such evidence or proof as the City shall require that all persons, firms and corporations
supplying work, labor, materials, supplies and equipment for the construction of the City
Improvements have been paid, and that no claims of liens have been recorded by or on behalf of
any such person, firm or corporation.
10. ACQUISITION; ACQUISITION PRICE; SOURCE OF FUNDS
The acquisition price of a City Improvement that was complete (as determined by the City
Council) prior to the adoption by the City Council of the resolution forming the CFD shall be its
fair market value, as determined by the City's Assistant General Manager or his or her designee,
as of the date of acquisition. The City shall consider input and data provided by the Developer
prior to determining the final fair market value. The Actual Cost (as defined below) of the City
Improvement shall be presumed to be its fair market value unless there is reasonable evidence
that a lower amount is the fair market value.
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The costs eligible to be included in the acquisition price of a City Improvement that is not
described in the preceding paragraph (the "Actual Costs") shall include:
(i) The actual hard costs for the construction of such City Improvement
as established by the City -approved construction contracts, Change Orders, and approved
Significant Change Orders, including costs of payment, performance and maintenance bonds and
insurance costs, pursuant to this Agreement;
(ii) The design and engineering costs of such City Improvement
including, without limitation, the costs incurred in preparing the Plans;
(iii) The costs of environmental evaluations and public agency permits
and approvals attributable to the City Improvement;
(iv) Costs incurred by the Developer for construction management and
supervision of such City Improvement, not to exceed five percent (5%) of the actual construction
cost;
(v) Professional costs associated with the City Improvement such as
engineering, inspection, construction staking, materials, testing and similar professional services;
and
(vi) Costs approved by the City in accordance with the Act of acquiring
any real property or interests therein required for the City Improvement including, without
limitation, temporary construction easements, temporary by-pass road and maintenance
easements.
Provided the Developer has complied with the requirements of this Agreement, the City
agrees to pay the acquisition price of a completed City Improvement to the Developer or its
designee within thirty (30) days after the Developer's satisfaction of the preconditions to such
payment stated herein, but only to the extent there are sufficient funds available in the City
Improvements Account. Except in the case of a City Improvement described in the first paragraph
of this Section, the acquisition price to be paid from Bond proceeds for the acquisition of a City
Improvement by the City shall be the least of (1) the value of the City Improvement; or (2) the total
of the Actual Costs of the City Improvement ("Acquisition Price"). The Actual Cost of the City
Improvement shall be presumed to be its Acquisition Price unless there is reasonable evidence
that a lower amount is the actual value.
As a condition to the payment of the Acquisition Price, the ownership of the completed
City Improvement shall be transferred to the City by grant deed, bill of sale or such other
documentation as such public agency may require free and clear of all taxes, liens,
encumbrances, and assessments, but subject to any exceptions determined by the City to not
interfere with the actual or intended use of the land or interest therein (including the lien of a
community facilities district so long as the subject property is exempt from taxation or is otherwise
not taxable by such community facilities district). Upon the transfer of ownership of City
Improvements or any portion thereof to the City, the City shall be responsible for the maintenance
of such City Improvements or the portion transferred. Notwithstanding the foregoing, the
Acquisition Price of a City Improvement may be paid prior to transfer of ownership and acceptance
of the City Improvement if it is substantially completed at the time of payment. The City
Improvement shall be considered "substantially complete" when it has been reasonably
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determined by the City to be usable, subject to final completion of such items as the final lift or
any other items not essential to the primary use or operation of the City Improvement.
For purposes of determining the Acquisition Price to be paid by the Community Facilities
District for the acquisition of the City Improvements by the City (other than City Improvements
described in the first paragraph of this Section), the value of such City Improvements shall include
the construction costs specified in the City -approved contracts, Change Orders, and City -
approved Significant Change Orders conforming to Section 7, as hereinbefore specified. City
approval is a condition prior to initiation of contract work for City Improvements bid after the
effective date of this Agreement. However, if the City reasonably determines that the additional
Actual Costs are excessive and that the value of the City Improvements is less than the total
amount of such Actual Costs and such construction costs, the price to be paid for the acquisition
of the City Improvements shall be the value thereof as determined by the Engineer, subject,
however, to the Developer's right to appeal to the City Council.
Upon completion of the construction of a City Improvement, the Developer shall deliver or
cause to be delivered to the City a Disbursement Request Form in substantially the form of
Exhibit "D," attached hereto, copies of the contract(s) with the contractor(s) who have
constructed the City Improvement and other relevant documentation with regard to the payments
made to such contractor(s) and each of them for the construction of the City Improvement,
documentation evidencing payment of prevailing wages, and shall also provide to the City
invoices and purchase orders with respect to all equipment, materials and labor purchased for
the construction of the City Improvements. The City shall require the Engineer to complete its
determination of the value of the City Improvements as promptly as is reasonably possible.
Notwithstanding the preceding provisions of this Section, the source of funds for the
acquisition of the City Improvements or any portion thereof shall be funds in the City
Improvements Account. If for any reason beyond the City's control the Bonds are not sold, the
City shall not be required to acquire the City Improvements from the Developer, except to the
extent of funds from the collection of Special Taxes. In such event, the Developer shall complete
the design and construction and offer to the City ownership of such portions of the City
Improvements as are required to be constructed by the Developer as a condition to recordation
of subdivision maps for the Developer Property (but only at such times as required by such
condition), but need not construct any portion of the City Improvements which it is not so required
to construct. Reimbursement for these facilities would be made from the collection of Special
Taxes over time.
In addition to the foregoing, the City shall have the right to withhold payment for acquisition
of a City Improvement, if:
(a) the Developer or any of its affiliates is delinquent in the payment of
any Special Taxes levied by the Community Facilities District on
properties then owned by the Developer or any of its affiliates within
the CFD, or
(b) the Developer is not then in substantial compliance with a condition or
obligation imposed upon the Developer Property by the City, including but not limited to, payment
of all applicable fees, dedication of all applicable rights -of -way or other property and construction
requirements.
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The City shall immediately provide written notice to the Developer of the decision to
withhold any such payment and shall specify the reason for such decision. If the payment is
withheld as a result of the delinquency in the payment of Special Taxes, the notice shall identify
the delinquent parcels and the amount of such delinquency. If the payment is withheld as a result
of substantial non-compliance with a condition or obligation, the notice shall specify such condition
or obligation and what action will be necessary by the Developer to substantially comply with such
condition or obligation. Upon receipt of evidence reasonably satisfactory to the City that the
Developer has paid the delinquent Special Taxes or complied with the subject condition or
obligation, the City shall forthwith make all payments which have been withheld pursuant to the
provisions of this Section.
11. EASEMENTS AND/OR FEE TITLE OWNERSHIP DEEDS
Without limiting the Developer's rights to reimbursement for such grants pursuant to
Section 9 above, the Developer shall, at the time the City acquires the City Improvements as
provided in Section 9 hereof, grant or cause to be granted to the City, by appropriate instruments
prescribed by the City, all easements across private property and/or fee title ownership deeds
which may be reasonably necessary for the proper operation and maintenance of such City
Improvements, or any part thereof, but only to the extent located within the Developer Property.
12. PERMITS
The Developer shall be responsible for obtaining all necessary construction permits from
the City and/or the County (as appropriate) covering construction and installation of the City
Improvement.
13. MAINTENANCE
Prior to the transfer of ownership of a City Improvement by the Developer to the City, as
provided in Section 9 hereof, the Developer shall be responsible for the maintenance thereof and
shall require its contractor(s) to repair all facilities damaged by any party other than the City, prior
to acceptance by the City and/or make corrections determined to be necessary by the City's
inspection personnel. The City shall not be permitted to place any City Improvement in service
prior to acceptance of the same, unless the Developer otherwise consents in writing.
14. INSPECTION OF RECORDS
The City shall have the right to review all books and records of the Developer pertaining
to the costs and expenses incurred by the Developer for the design and construction of the City
Improvements during normal business hours by making arrangements with the Developer. The
Developer shall have the right to review all books and records of the City pertaining to costs and
expenses incurred by the City for services of the Engineer by making arrangements with the City.
15. OWNERSHIP OF IMPROVEMENTS
Notwithstanding the fact that some or all of the City Improvements may be constructed in
dedicated street rights -of -way or on property which has been or will be dedicated to the City, each
City Improvement shall be and remain the property of the Developer until acquired by the City as
provided in this Agreement.
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16. MATERIALS AND WORKMANSHIP WARRANTY
The requirements of this Section shall not apply to any City Improvement that was
complete (as determined by the City Council) prior to the adoption by the City Council of the
resolution forming the CFD, but they shall apply to all other City Improvements.
Upon the completion of the acquisition of a City Improvement by the City, the performance
bond related to such individual City Improvement provided by the Developer pursuant to
Section 7.1(e) hereof, shall be reduced by 90%, and the remaining 10% shall serve as a
maintenance bond to guarantee that such City Improvement will be free from defects due to faulty
workmanship or materials for a period of one year.
17. CITY FEE FACILITY IMPROVEMENTS
The Developer may be required pursuant to the conditions of development or the fee
ordinance to pay certain City fees (the "City Fees") relating to the City Fee Facility Improvements
prior to the availability of proceeds of the Bonds to pay for such City Fee Facility Improvements.
In the event such City Fees are paid prior to the availability of Bond proceeds, the amounts paid
to the City shall be deemed to be deposits (each a "Deposit") that are subject to refund by the
City to the Developer in accordance with this Agreement. The City shall place each Deposit in a
capital facilities account(s). If the Developer has made any Deposits to the City, then following
deposit of Bond proceeds in the City Fee Facility Improvements Account, the City shall return to
the Developer, from the capital account in which the Deposits were deposited the Deposits not
previously returned, without interest or other earnings thereon. The City shall be so obligated to
return such Deposits only to the extent that an equivalent amount of the Deposits to be returned
is deposited in the City Fee Facility Improvements Account from Bond proceeds or Special Tax
collections prior to the issuance of Bonds.
Bond proceeds used to finance City Fee Facility Improvements which relate to the City
Fees shall be allocated first for return of all Deposits prior to being allocated to the payment of
City Fees not previously deposited by the Developer. Any Deposits that have not been returned
to the Developer at the time it is determined that there will be no further Bond proceeds available
(i.e. the final series of Bonds to finance the Improvements have been issued) shall be retained by
the City and may be used for the purposes for which the City Fee was required, and the
unrefunded Deposits shall constitute full and final payment for such City Fees, without any
increase of any kind.
18. MISCELLANEOUS IMPROVEMENTS
Improvements unrelated to the City Improvements and the City Fee Facility Improvements
are described in Exhibit "C" attached hereto. The amounts deposited in the applicable
Miscellaneous Improvement Account(s), if any, will be disbursed for the acquisition or construction
of Miscellaneous Improvements in accordance with the provisions in the applicable Joint
Community Facilities Agreement. Any amounts in the applicable Miscellaneous Improvement
Account(s) shall be disbursed at the written direction of the City upon Developer's submittal of a
payment request which will be based upon applicable entity's payment request form as provided
for in the applicable Joint Community Facilities Agreement. Upon receipt of such payment
request, the City shall submit a written requisition for payment of the requested amount to the
Fiscal Agent for the Bonds, who shall directly pay the amount requested to the applicable entity.
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19. INDEPENDENT CONTRACTOR
In performing this Agreement, Developer is an independent contractor and not the agent
of the City. The City shall not have any responsibility for payment to any contractor or supplier of
Developer. It is not intended by the Parties that this Agreement create a partnership or joint
venture among them and this Agreement shall not otherwise be construed.
20. INDEMNIFICATION
Developer shall assume the defense of, indemnify and save harmless, the City, its officers,
employees and agents, and the Community Facilities District, its officers, employees and agents,
from and against all actions, damages, claims, losses or expenses of every type and description
to which they may be subject or put, by reason of, or resulting from the Developer's performance
of its obligations under this Agreement and the construction of the City Improvements and the
Miscellaneous Improvements, the failure of the Developer to provide notice of the Special Tax to
be levied by the Community Facilities District pursuant to Section 53341.5 of the Act (but only if
the Developer is required by law to provide such notice), or arising out of any alleged
misstatements of fact or alleged omission of a material fact made by the Developer, its officers,
directors, employees or agents to the City, the Community Facilities District, the underwriter of
the Bonds and its counsel, the appraiser, the special tax consultant, the market absorption
consultant or bond counsel regarding the Developer, its proposed developments, its property
ownership, and any contractual arrangement it may enter into in a disclosure document describing
the Community Facilities District and the risks relating to the Bonds. No provision of this
Agreement shall in any way limit the extent of Developer's responsibility for payment of damages
resulting from the operations of Developer and its contractors; provided, however that Developer
shall not be required to assume the defense or indemnify and save harmless any person or entity
as to actions, damages, claims, losses or expenses resulting from the breach of this Agreement,
the willful misconduct of such person or entity or their officers, agents, consultants or employees.
21. INSURANCE REQUIREMENTS
For City Improvements bid after the effective date of this Agreement, neither the Developer
nor its contractor shall commence work on such City Improvement under this Agreement prior to
obtaining insurance with a company or companies acceptable to the City, nor shall the
Developer's contractor allow any subcontractor to commence work on its subcontract until all
insurance required of the subcontractor has been obtained.
The Developer shall during the life of this Agreement, notify the City in writing of any
incident giving rise to any potential bodily injury or property damage claim and any resultant
settlements, whether in conjunction with this or any other project which may affect the limits of
the required coverage, as soon as is reasonable and practical.
22. CONFLICT WITH OTHER AGREEMENTS
Except as specifically provided herein, nothing contained herein shall be construed as
releasing Developer from any condition of development or requirement imposed by any other
agreement with City. In the event of a conflicting provision, such other agreement shall prevail
unless such conflicting provision is specifically waived or modified in writing by City.
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23. TERMINATION
The provisions of this Agreement related to the acquisition and financing of the
Improvements shall terminate and be of no further force or effect if the first series of Bonds for
the CFD are not sold within ten years from the date of this Agreement unless extended by
agreement of all the Parties. If the City is unable to sell the first series of Bonds for the CFD after
diligent, commercially reasonable efforts to do so, this Agreement shall terminate and be of no
further force and effect; provided, however, in such event, any collected Special Taxes remaining
after the payment of administrative expenses of the CFD and reimbursement to the Developer of
CFD formation costs shall be used to pay for Facilities in accordance with this Agreement and
Developer shall receive a credit against City Fees otherwise payable to City in the amount so
used to pay for City Fee Facility Improvements.
24. NOTICES
Any notice, payment or instrument required or permitted by this Agreement to be given or
delivered to either Party shall be deemed to have been received when personally delivered or
seventy-two (72) hours following deposit of the same in any United States Post Office in California,
registered or certified, postage prepaid. Any notice to the Community Facilities District or the City
shall be addressed to City of Menifee, 29844 Haun Road, Menifee, CA 92530, Attention: Deputy
City Manager. Any notice to Developer shall be addressed to Meritage Homes of California, Inc.,
5 Peters Canyon Road, Suite 310, Irvine CA 92606, Attention: Aaron Talarico.
Each Party may change its address for delivery of notice by delivering written notice of
such change of address to the other Party hereto.
25. NO GIFT OR WAIVER
25.1 No Gift or Waiver for City Improvements. The Developer and the City acknowledge
that:
(a) The Developer or its predecessor may have constructed or may be
constructing City Improvements before funds that will be used to acquire them are available with
the expectation that the Developer will be reimbursed for such City Improvements to the extent
and in the manner set forth in this Agreement.
(b) The City may inspect City Improvements and process Disbursement
Request Forms even if funds from the proceeds of Bonds available at the time of such inspection
and processing do not exist or are not then sufficient to satisfy the Disbursement Request in full.
(c) The Developer may convey City Improvements to the City and the City may
accept such City Improvements even if funds from the proceeds of Bonds available at the time of
such conveyance and acceptance do not exist or are not then sufficient to satisfy the
Disbursement Request in full.
(d) If the City accepts City Improvements before a Disbursement Request is
paid in full, the unpaid balance of the Disbursement Request will be paid from time to time, in any
number of installments and irrespective of the length of time payment is deferred, as funds from
the proceeds of Bonds become available.
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(e) The Developer's conveyance or dedication of City Improvements to the City
before the availability of funds from the proceeds of Bonds to acquire the City Improvements is
not and shall not be deemed, a gift or a waiver of the Developer's right to payment of the purchase
price of such City Improvements pursuant to this Agreement.
25.2 No Gift or Waiver for City Fees. The Developer and the City acknowledge that
(a) Prior to the availability of funds from the proceeds of Bonds, the Developer
or its predecessor may have been or may be required to deposit funds to assure payment of
applicable City Fees of the City.
(b) The Developer or its predecessor has deposited or will be depositing such
funds with the expectation that the Developer will be reimbursed for these Deposits to the extent
and in the manner set forth in this Agreement.
(c) The reimbursement of such Deposits pursuant to Section 16 of this
Agreement may occur from time to time, in any number of installments and irrespective of the
length of time payment is deferred, as funds become available.
(d) The Developer's deposit of such funds to the City before the availability of
funds to reimburse the Developer is not, and shall not be deemed, a gift or a waiver of the
Developer's right to reimbursement of such Deposits pursuant to this Agreement.
26. GENERAL PROVISIONS
26.1 Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the City and the Developer and their respective heirs, executors, legal
representatives, successors, and authorized assigns.
26.2 Amendment. This Agreement may be amended at any time but only in writing
signed by each Party hereto.
26.3 Entire Agreement. This Agreement, and the agreements referenced herein,
contains the entire understanding and agreement between the Parties with respect to the matters
provided for herein and supersedes all prior agreements and negotiations between the Parties
with respect to the subject matter of this Agreement. There are no oral or written representations,
understanding, undertakings or agreements which are not contained or expressly referred to
herein, and any such representations, understandings or agreements are superseded by this
Agreement. Failure by a Party to insist upon the strict performance of any of the provisions of
this Agreement by the other Parties hereto, or the failure by a Party to exercise its rights upon the
default of another Party, shall not constitute a waiver of such Party's right to insist and demand
strict compliance by such other Parties with the terms of this Agreement thereafter. This
Agreement shall be binding upon, and enforceable by and against the Community Facilities
District upon the establishment of the Community Facilities District.
26.4 Exhibits. All exhibits attached hereto are incorporated into this Agreement by
reference.
26.5 Severabky. If any part of this Agreement is held to be illegal or unenforceable by
a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the
fullest extent reasonably possible.
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26.6 Waiver. Failure by a Party to insist upon the strict performance of any of the
provisions of this Agreement by the other Parties hereto, or the failure by a Party to exercise its
rights upon the default of another Party, shall not constitute a waiver of such Party's right to insist
and demand strict compliance by such other Parties with the terms of this Agreement thereafter.
26.7 No Third Party Beneficiaries. Except as provided explicitly in this Agreement, no
person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this
Agreement (either express or implied) is intended to confer upon any person or entity, other than
the City, the Community Facilities District, the Developer, and the Security Provider (and their
respective successors and assigns), any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
26.8 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute but one instrument.
26.9 Assignment. Developer may assign all or any of its rights pursuant to this
Agreement to a purchaser of all or any portion of the Developer Property. Such a purchaser and
assignee shall, as a condition to taking an assignment of such rights, enter into an assignment
and assumption agreement with the City and Developer, in a form reasonably acceptable to
Developer and the City, whereby such rights assigned are specified and such purchaser agrees,
except as may be otherwise specifically provided therein, to assume the obligations of Developer
pursuant to this Agreement and to be bound thereby. A company that acquires all of the assets
of the Developer, including ownership of the Developer itself, shall be deemed a successor and
shall not require an assignment or assumption agreement to be bound by, and enjoy the benefits
of, this Agreement.
26.10 Governing Law. This Agreement and any dispute arising hereunder shall be
governed by and interpreted in accordance with the laws of the State of California.
26.11 Construction of Agreement. This Agreement has been reviewed by legal counsel
for both the City and Developer and shall be deemed for all purposes to have been jointly drafted
by the City and Developer. No presumption or rule that ambiguities shall be construed against
the drafting Party shall apply to the interpretation or enforcement of this Agreement.
26.12 Attorneys' Fees. In the event of any action or proceeding, including an arbitration
or a reference pursuant to Section 638 et seq., of the Code of Civil Procedure brought by any
Party against any other under this Agreement, the prevailing Party shall be entitled to recover its
actual attorneys' fees and all fees, costs and expenses incurred for prosecution, defense,
consultation, or advice in such action or proceeding. In addition to the foregoing, the prevailing
Party shall be entitled to its actual attorneys' fees and all fees, costs and expenses incurred in
any post -judgment proceedings to collect or enforce the judgment. This provision is separate and
several and shall survive the merger of this Agreement into any judgment on this Agreement.
26.13 Venue and Forum. Any action at law or in equity arising under this Agreement
brought by any Party hereto for the purpose of enforcing, construing or determining the validity of
any provision of this Agreement shall be filed and tried in the Superior Court of the County of
Riverside, State of California, and the Parties waive all provisions of law providing for the filing
removal or change of venue to any other Court.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year written below.
DATED: November 3, 2021
ATTEST:
APPROVED AS TO FORM:
CITY ATTORNEY FOR THE CITY OF
MENIFEE
CITY OF MENIFEE, a political subdivision of
the State of California
w
By
Armando G. Villa, City Manager
MERITAGE HOMES OF CALIFORNIA, INC.,
a California corporation
By --
Name:
Title:
S-1
4851-0985-4461 v4/200299-0004
LIST OF EXHIBITS
EXHIBIT A - DESCRIPTION OF DEVELOPER PROPERTY
EXHIBIT B - DESCRIPTION OF COST ESTIMATES
EXHIBIT C - MISCELLANEOUS IMPROVEMENTS
EXHIBIT D - DISBURSEMENT REQUEST FORM
4851-0985-4461v4/200299-0004
EXHIBIT A
DESCRIPTION OF DEVELOPER PROPERTY
Real property in the City of Menifee, County of Riverside, State of California, described as
follows:
Assessor Parcel No. (as set forth in the County of Riverside Assessor's Fiscal Year 2020-21
Roll):
372-160-006
372-1 F0-007
372-160-008
372-160-013
372-190-003
A-1
4851-0985-4461v4/200299-0004
EXHIBIT B
DESCRIPTION OF COST ESTIMATES OF THE IMPROVEMENTS (1)
I. CITY FEE FACILITY IMPROVEMENTS.
Estimated Cost of the City Fee Facility Improvements
Description
Estimated Cost
Law Enforcement
$ 40,425
Fire Facilities
107,450
Circulation
817,250
Storm Drainage
400,050
General Government
178,675
Public Use Facilities
26,950
Parks — Land Acquisition
404,950
Parks — Improvements
115,675
City Projects
337,295
Total City Fees Facility Improvements
2:428.i2D
If. CITY IMPROVEMENTS.
Those facilities constructed by or on behalf of the Developer and needed by
City in order to provide services to the Developer Property, including the following:
Description Estimated Cost
Offsite Landscaping (Scott & Linderberger) $ 524,482
Offsite Streets (Scott Road) (2) 1,100,940
Park 977,027
Total City Improvements 2,602,449
M Amounts are estimates and subject to change. The Acquisition Price will be funded with
Bond proceeds.
(2) These City Improvements were bid prior to the City Council adoption of the resolution
forming the CFD.
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4851-0985-4461 v4/200299-0004
EXHIBIT C
DESCRIPTION OF THE MISCELLANEOUS IMPROVEMENT
The construction, purchase, modification, expansion, rehabilitation and/or improvement of
(i) water and sewer facilities including the acquisition of capacity in the sewer system and/or water
system of Eastern Municipal Water District which are included in Eastern Municipal Water
District's water and sewer capacity and connection fee programs (the "Water District Facilities"),
and (ii) interim and permanent school facilities of Menifee Union School District, including
classrooms, multi -purpose facilities, administration and auxiliary space at school facilities, athletic
fields, playgrounds and recreational facilities and improvements thereto, landscaping, access
roadways, drainage, sidewalks and gutters and utility lines, furniture, equipment and technology,
including technology upgrades and mobile devices and infrastructure therefore, with a useful life
of at least five (5) years at such school facilities, including such school facilities of Menifee Union
School District which are included in Menifee Union School District's school fee program (the
"School Facilities" and together, with the Water Facilities, the "Facilities"), and all appurtenances
and appurtenant work in connection with the foregoing Facilities, including the cost of engineering,
planning, designing, materials testing, coordination, construction staking, construction
management and supervision for such Facilities.
Water District Facilities included in the Water District's capacity and connection fee
programs used to finance expansion projects, exclusive of in -tract facilities constructed by a
property owner, but including and not limited to the following:
Description Estimated Cost
Sewer Financial Participation Charge $ 517,650
Sewer Treatment Plant Capacity Charge 1,054,725
Water Financial Participation Charge 977,200
Water Supply Development Fee 52,500
1" Meter Drop -In Fee 65,975
Irrigation Meter Fees 74,910
Irrigation Meter Drop -In Fee 1,461
Total Estimated Water District Facilities Fees $ 2J44 2
School Facilities included in the School District's development fee programs used to
finance School Facilities, in approximately the following amount:
Estimated Cost of the School Facilities
Description Estimated Cost
School Fees $1,632,723
C-1
4851-0985-4461 v4/200299-0004
EXHIBIT D
CFD NO. 2021-2 OF THE CITY OF MENIFEE (SUMAC RIDGE)
DISBURSEMENT REQUEST FORM
1. Community Facilities District No. 2021-2 of City of Menifee (Sumac Ridge) (the
"CFD") is hereby requested to pay from the Account, or any
applicable account or sub -account thereof, established by the CFD in connection with its 20_
Special Tax Bonds (the "Bonds") to City of Menifee (the "City") as payee, the sum set forth below:
E-j
(the Requested Amount")
2. The Requested Amount represents the payment of City Fees for _ lot(s) within
the boundaries of the CFD (the "Property").
(Tract No. , Lot Nos.
Or, City Improvements as supported by attached documentation.
3. The Requested Amount is due and payable, has not formed the basis of any prior
request or disbursement.
4. The City, as payee, is hereby directing payment of the Requested Amount be
payable to Meritage Homes of California, Inc., a California corporation (the "Developer"), pursuant
to the wiring instructions attached hereto.
5. The Requested Amount is authorized and payable pursuant to the terms of the
certain Acquisition, Construction and Funding Agreement (the "Agreement") between the City of
Menifee, acting for and on behalf of itself and the CFD and Developer.
6. Capitalized undefined terms used herein shall have the meaning ascribed to them
in the Agreement.
D-1
4851 0985-4461 v4/200299-0004
Dated: DEVELOPER:
MERITAGE HOMES OF CALIFORNIA, INC.,
a California corporation
Mr
Name:
Title:
Dated: CITY OF MENIFEE
By:
Its:
[ATTACH WIRING INSTRUCTIONS]
D-2
4851-0985-4461v4/200299-0004