2023/04/19 Pulte Home Company, LLC CFD No. 2023-2 (Cimarron Ridge) Acquisition, Construction and Funding Agreement (pending other party's signatures)COMMUNITY FACILITIES DISTRICT NO.2023-2 (CIMARRON RIDGE)
OF THE CITY OF MENIFEE
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. 2023-2 (CIMARRON
RIDGE) OF THE CITY OF MENIFEE (the "Community Facilities District" or "CFD") and PULTE
HOME COMPANY, LLC, a Michigan limited liability company (the "Developer"), each
individually a "Party" and collectively the "Parties."
WHEREAS, Developer has requested that the City consider the formation of the CFD and
the designation of Improvement Area No. 1 and Improvement Area No. 2 therein (each an
"Improvement Area" and together the "Improvement Areas") pursuant to the provisions of the
Mello -Roos Community Facilities Act of 1982, as amended (the "Act"), and undertake 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"), Romoland School District, Menifee
Union School District, and Perris Union High School District (the "Perris School District"), and
incidental expenses in accordance with the Act; and
WHEREAS, in order to proceed in a timely way with development of its 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 to
be constructed by the City ("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, the Menifee Union
School District, Romoland School District and the Perris 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 each Improvement Area 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 Improvements (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 the cost of the City Improvements constructed by or on
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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."
NOW, THEREFORE, it is mutually agreed between the respective Parties as follows:
1. 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 March 1, 2023 (the
"Reimbursement Agreement") between the Developer and the City.
2. Sale of Bonds.
2.1 Cite 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 an Improvement Area 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 for an Improvement Area the ratio of the value of all parcels of property within the
Improvement Area 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 an Improvement Area 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 for an Improvement Area 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 an Improvement Area 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 (as defined in the Rate and Method of Apportionment
of Special Tax for an Improvement Area (each a "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 such fiscal year, shall
deliver to the City either (i) a renewable irrevocable instrument of credit from a financial institution
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(rated "A" or better) and 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 for the Improvement Area proposed to be issued times a fraction the numerator of which is
the aggregate Maximum Special Taxes on the Sizing Property in the then current fiscal year
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 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 Improvement
Area. 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 Improvement Area 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 Improvement Area 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,
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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.
(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 to all of the Sizing
Property as of the date of calculation. The Security shall be terminated when the Account Party has
paid all Special Taxes 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" upon valuation of the 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 the Sizing Property is sold or transferred by an Account Party with
the result that the Sizing Property owned by the transferee or any of its affiliates ("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 land owned by such Transferee with respect to the Sizing Property. 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
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provider of a Security for a Transferee shall be an express third party beneficiary of the provisions of
this Section 2.2.
Any costs related to the 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 Special Tax levy 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 Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") 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 Improvement Area 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. 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 pursuant to the Reimbursement
Agreement which have not already been reimbursed to the Developer from collected Special Tax;
(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 or 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:
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(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
Improvement Area and collected by the CFD remaining after the payment of administrative expenses
of the CFD for the Improvement Area and the reimbursement of the Developer for CFD formation
costs pursuant to Section I hereof shall 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 for an Improvement
Area, 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 within such Improvement
Area pursuant to the Rate and Method for such Improvement Area. 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 for an Improvement Area, the City shall have no obligation to levy Special Taxes
of such Improvement Area to reimburse the Developer for the costs of any Improvements not paid
for from Bond proceeds.
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 for which the Acquisition Price is paid. All plans, specifications and bid documents
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for the City Improvements ("Plans") 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 facilities which were not
complete prior to the formation of the District, as determined by the City, shall be bid in accordance
with "public works" requirements of Section 7 to be eligible for reimbursement.
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 for which the Acquisition Price is paid.
6.1 Acquisition of City Improvements. Upon the approval of Plans for a City
Improvement, the Developer will provide for construction of such City Improvement in accordance
with Sections 6.2 and 7 of this Agreement. Sections 6.2 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 Accluisition. 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.
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
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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.
7.1 City Requirements. In order that the City Improvements for which the
Acquisition Price is paid may be properly and readily acquired by the City, the Developer shall
comply with all of the requirements in this Section 7.1 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 requirements under this Section 7.1 have been satisfied as to all
such City Improvements. Notwithstanding the foregoing, City Improvements shall only be eligible
for financing by the CFD if the City determines that the conditions under Section 53313.5 have been
satisfied with respect to such City Improvements.
(a) The Developer shall prepare a bid package for review, comment and
approval by the City Manager or his or her designee (the "City Representative") for any City
Improvements bid after the effective date of this Agreement.
(b) For any City Improvements bid after the effective date of this
Agreement, 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) For any City Improvements bid after the effective date of this
Agreement, the following provisions apply: the City Representative shall attend the bid opening for
such City Improvements. If unable to attend the bid opening, the City Representative shall approve
or disapprove of 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.
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(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 21 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.
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 for which the Acquisition Price is paid.
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
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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 City 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.
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;
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(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 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 (subject to the next sentence), Change
Orders, and City -approved Significant Change Orders conforming to Section 6, 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.
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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.
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 10 above, the Developer shall, at the time
the City acquires the City Improvements as provided in Section 10 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
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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 10 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.
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
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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.
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 such
person's or entity'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.
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21. Insurance Requirements. For City Improvements bid after the effective date of this
Agreement for which the Acquisition Price is paid, the Developer shall not 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 allow any contractor or subcontractor to commence
work on their respective contracts until all insurance required by this Agreement have been obtained.
The required insurance, endorsements and policy limits shall be as follows:
A. GENERAL LIABILITY
Developer shall obtain and maintain Commercial General Liability Insurance covering all
operations by or on behalf of Contractor or their subcontractors providing insurance for bodily injury
liability and property damage liability for the limits of liability indicated below and including
coverage for:
• Premises and Operations
• Products and Completed Operations
• Contractual Liability
• Explosion, collapse and Underground Hazards, including subsidence and any other form
of earth movement (if applicable)
• Personal Injury Liability
• Independent Contractors
NOTE: Claims -made or Modified Occurrence Policy are NOT ACCEPTABLE.
LIMITS —Limits of liability shall be no less than:
a. Each Occurrence $2,000,000
b. Personal & Advertising Injury $2,000,000
c. Products/Completed Operations Aggregate $4,000,000
d. General Aggregate $4,000,000
2. ENDORSEMENTS —Endorsements MUST be attached to certificate and added to
your policy:
a. Additional Insured endorsement naming City as additional insureds.
b. Primary and non-contributory wording endorsement stating that the
Contractor's insurance is primary and any insurance maintained by the
additional insureds is non-contributory.
c. A Waiver of Subrogation or Waiver of Transfer of Rights of Recovery
Against Others To Us shall be issued in favor of those additional insureds
named in A.2.a. above.
B. WORKERS COMPENSATION
Workers' Compensation insurance shall be provided with statutory limits as required by
applicable state law of regulation. If the Contractor is self -insured, it must provide proof of that fact.
LIMITS —Employer's Liability Limits shall be no less than:
a. Each Accident for Bodily Injury by Accident $1,000,000
b. Each Employee for Bodily Injury by Disease $1,000,000
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c. Policy Limit for Bodily Injury by Disease $1,000,000
2. ENDORSEMENTS —Endorsements MUST be attached to certificate and added to
your policy:
a. WAIVER OF SUBROGATION —A Waiver of Subrogation or Waiver of
Transfer of Rights of Recovery Against Others to Us shall be issued in
favor of those additional insureds named in A.2.a. above.
C. AUTOMOBILE
Automobile Liability insurance shall include coverage for all owned (if any), hired and
non -owned automobiles.
LIMITS —Limits of Liability shall be no less than:
a. Combined Single Limit $1,000,000
or
b. Bodily Injury Each Person Limit $1,000,000
c. Bodily Injury Per Occurrence Limit $1,000,000
d. Property Damage Per Occurrence Limit $1,000,000
2. ENDORSEMENTS —Endorsements MUST be attached to certificate and added to
your policy:
a. Additional Insureds as provided in ISO form CA 00 01 or its equivalent
naming those additional insureds named in A.2.a. above.
b. Primary and non-contributory wording endorsement stating that the
contractor's insurance is primary and any insurance maintained by the
additional insureds is non-contributory.
c. Waiver of Subrogation as provided in ISO form CA 00 01 or its
equivalent in favor of those additional insureds named in A.2.a. above.
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.
23. 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:
Assistant City Manager. Any notice to Developer shall be addressed to Pulte Home Company, LLC,
27401 Los Altos, Suite 400, Mission Viejo, CA 92691, Attention: Steve Ford.
Each Party may change its address for delivery of notice by delivering written notice of such
change of address to the other Party hereto.
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24. No Gift or Waiver.
24.1 No Gift or Waiver I'M- 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.
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.
(b) 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.
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.
(c) 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.
24.2 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.
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.
(b) The reimbursement of such Deposits pursuant to Section 17 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.
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.
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25. General Provisions.
25.1 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.
Amendment. This Agreement may be amended at any time but only in writing
signed by each Party hereto.
25.2 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.
Exhibits. All exhibits attached hereto are incorporated into this Agreement by
reference.
25.3 Severability. 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.
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.
25.4 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.
25.5 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.
25.6 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
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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.
25.7 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.
25.8 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.
25.9 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 Improvements 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.
25.10 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.
25.11 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: , 2023
CITY OF MENIFEE, a political subdivision of
the State of California n
By: W I r
Armando G. Villa, City Manager
ATTEST:
By:
A. Kay i cting City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY FOR THE CITY OF
Ml:
S-1
4893-1119-4714v4/200299-0016
PULTE HOME COMPANY, LLC,
a Michigan limited liability company
Name:
Title:
S-2
4893-1119-4714v4/200299-0016
LIST OF EXHIBITS
EXHIBIT A - DESCRIPTION OF DEVELOPER PROPERTY
EXHIBIT B - DESCRIPTION OF COST ESTIMATES
EXHIBIT C - MISCELLANEOUS IMPROVEMENTS
EXHIBIT D - DISBURSEMENT REQUEST FORM
4893-1119-4714v4/200299-0016
EXHIBIT A
DESCRIPTION OF DEVELOPER PROPERTY
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4893-1119-4714v4/200299-0016
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4893-1119-4714v4/200299-0016
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4893-1119-4714v4/200299-0016
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 (2)
Law Enforcement $ 1,050,840 Fire Facilities 489,132
Circulation 5,360,040
Storm Drainage (Area F—A) 105,084
General Government 889,056
Public Use Facilities 116,424
Parks - Improvements 1,302,588
Total City Fees Facility Improvements $9.313,164
II. 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:
Estimated Cost of the City Improvements Description(3)
Street/Segment/Intersection
Estimated Cost
City Traffic Signals
$1,292,870
Street Improvements (4)
1,138,721
Park Improvements
2,434,493
Design, Planning, & Engineering
364,739
Total City Improvements
5 23 822
(1) Amounts are estimates and subject to change.
(2) Amounts are estimates and subject to change and do not reflect anticipated DIF credits for street, traffic signal,
and park Improvements. Any capital improvement fee imposed by the City's capital improvement program is
eligible including any fair share or in -lieu fees.
(3) The description of the City Improvements are preliminary and general and may be subject to change through
supplement to this Exhibit B approved by the Developer and City Manager. The City Improvements may be
funded with the proceeds of Special Taxes and Bonds of either or both Improvement Areas regardless of their
location.
(4) Represents estimated costs for public street improvements to be dedicated to the City, including, but not limited
to Byers Road, McLaughlin Road, Valley Blvd, Goetz Road, and other public and intract street improvements.
C-1
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EXHIBIT C
DESCRIPTION OF THE MISCELLANEOUS IMPROVEMENT
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
$2,563,596
Sewer Treatment Plant Capacity Charge
4,859,568
Water Financial Participation Charge
5,469,660
Water Supply Development Fee
296,352
1" Meter Drop -In Fees
285,012
Landscape Meter Connection Fees
199,962
Less: Estimated EMWD CFD Funding
(11,396,492)
Total Estimated Water District Facilities
$2,277.kH
Fees
Those facilities constructed by or on behalf of the Developer and needed by the Water
District in order to provide services to the Developer Property and also include any of the following:
Estimated Cost of the Water District Improvements
Description
Water Tank Improvements
Design, Planning, & Engineering (15%)
Total EMWD Improvements
Estimated Cost
$3,208,704
481,306
3.69
The Romoland School District, Menifee Union School District, and Perris School District
improvements to be financed include the following amounts:
Estimated Cost of the School Facilities
Description Estimated Cost
Perris Union High School District Fees $2,159,588
Menifee Union School District Fees 1,155,966
Romoland School District Fees 660,408
Total School District Fees $3.975.262
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4893-1119-4714v4/200299-0016
EXHIBIT D
CFD NO.2023-2 (CIMARRON RIDGE) OF THE CITY OF MENIFEE
DISBURSEMENT REQUEST FORM
1. Community Facilities District No. 2023-2 (Cimarron Ridge) of the City of Menifee
(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
Improvement Area No. _ 20_ Special Tax Bonds (the "Bonds") to City of Menifee (the "City") as
payee, the sum set forth below:
$_ (the Requested Amount")
2. The Requested Amount represents the payment of City Fees for lot(s) within the
boundaries of Improvement Area No. _ (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 Pulte Home Company, LLC, a Michigan limited liability company (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.
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4893-1119-4714v4/200299-0016
Dated:
Dated:
DEVELOPER:
PULTE HOME COMPANY, LLC, A Michigan
limited liability company
By:_
Name:
Title:
CITY OF MENIFEE
By:
Its:
[ATTACH WIRING INSTRUCTIONS]]
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4893-1119-4714v4/200299-0016