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CC Resolution 2024-001 Land-Secured Financing District PolicyRESOLUTION NO. 2024 — 001 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, ADOPTING A POLICY FOR FORMATION OF LAND -SECURED FINANCING DISTRICTS WHEREAS, the Mello -Roos Community Facilities Act of 1982, the Improvement Act of 1911, the Municipal Improvement Act of 1913, and the Improvement Bond Act of 1915 allow for the use of certain types of debt financing secured by land values, when the proceeds of such debt are utilized for projects that address a public need and provide a public benefit; and WHEREAS, California Government Code Section 53312.7 requires that a local agency adopt local policies concerning the use of the Mello -Roos Community Facilities Act; and WHEREAS, a land -secured financing policy provides transparency to citizens and developers who may wish to initiate proceedings to establish a Community Facilities Districts and/or Assessment District; and WHEREAS, a land -secured financing policy provides a guideline to city employees for consideration of, and subsequent formation of, Community Facilities Districts and/or Assessment Districts. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of La Quinta, California, as follows: SECTION 1. Resolution No. 1999-24 adopted on February 2, 1999, is hereby repealed, and this Resolution supersedes all prior land -secured financing district policies adopted by Council. SECTION 2. The land -secured financing district policy attached hereto as Exhibit A and incorporated herein by this reference shall govern the establishment of Community Facilities Districts and Assessment Districts. SECTION 3. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. SECTION 5. This Resolution shall become effective upon adoption. The Formation of Land -Secured Financing Districts Policy adopted by this Resolution shall go into effect immediately. Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 2 of 14 PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta City Council held on this 16th day of January 2024 by the following vote: AYES: Councilmember Fitzpatrick, McGarrey, Sanchez, and Mayor Pro Tem Pena NOES: None ABSENT: Mayor Evans ABSTAIN: None ATTEST: MONIKARADEVA, Ci Clerk City of La Quinta, California APPROVED AS TO FORM: WILLIAM H. IHRKE, City Attorney City of La Quinta, California — nol-1) JOH ENA, q4or Pro Tem City of La Quinta, California Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 3 of 14 EXHIBIT A POLICY FOR FORMATION OF LAND -SECURED FINANCING DISTRICTS INTRODUCTION This Policy for Formation of Land -Secured Financing Districts (the "Policy") contained herein provides guidance and conditions for the conduct by the City of La Qunita (the "City") of proceedings for, and the issuance of bonds secured by special taxes and assessments levied in, a community facilities district ("CFD") or assessment district ("AD"). CFDs and ADS together are referred to as "Districts" in the plural or "District" in the singular. Pursuant to Sections 53311 et seq., of the Government Code and Mello - Roos Community Facilities Act of 1982 (the "CFD Act"), the City is authorized to form a CFD. Pursuant to the Streets and Highways Code under Sections 5000 et seq. and the Municipal Improvement Act of 1911, Sections 8500 et seq. and the Improvement Bond Act of 1915, and Sections 10000 et seq. and the Municipal Improvement Act of 1913 (collectively the "AD Acts"), the City is authorized to form an AD. Any portion of the Policy may be supplemented or amended or deviated from upon a determination by the City Council that such supplement, amendment, or deviation is necessary or desirable. It is the City's goal to support projects that address a public need and provide a public benefit. Proposed projects requesting special assessment or community facility district debt financing will be evaluated to determine if such financing is financially viable and in the best interest of the City as well as current and future City and project residents. The City will consider developer or property owner -initiated applications requesting the formation of CFDs or ADS and the issuance of bonds to finance eligible public facilities necessary to serve newly developing residential, commercial, or industrial projects. The types of public facilities eligible to be financed include, but are not limited to: streets, roads, utility facilities, drainage facilities, or regional public facilities. Parks and library facilities may be financed on a case-by-case basis. Additionally, the City may finance any one or more of the types of services specified in Section 53313 of the CFD Act. Facilities and services will be financed in accordance with the provisions of the CFD Act and AD Acts. Existing residential neighborhoods may apply to the City for the use of the assessment financing to fund local or neighborhood -serving facilities, such as undergrounding utilities, storm drains, streets, alleys, and sidewalk improvements, in accordance with the AD Acts. The City shall make the determination as to whether a proposed District shall proceed under the provisions of the AD Acts or the CFD Act. The City may confer with other District consultants and the applicant to learn of any unique District requirements, such as regional serving facilities or long-term development phasing, prior to making any final determination. All City and consultant costs incurred in the evaluation of new development, District applications and the establishment of Districts will be paid by the applicant(s) by advance Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 4 of 14 deposits in those instances where a proposed District has been initiated by a party or parties other than the City. The City may incur expenses for analyzing proposed assessment or community facilities districts where the City is the principal proponent of the formation or financing of the District. Expenses not legally reimbursable by the District shall be borne by the applicant. OVERVIEW OF APPLICATION PROCESS Early communication with the City is encouraged to assist applicants in evaluating the feasibility of available financing programs and to discuss program procedures. The following details a typical District application review and approval process. A. Pre -application Conference: Applicant meets with representatives of any potentially affected City departments, which may include the Design & Development Director, Business Unit/Housing Director, the Finance Director, and/or their designee(s) to discuss the proposed project and application procedures. B. Pre -application Submission: Applicant submits a pre -application with a $50,000 deposit. C. Project Review: The City Staff and/or consultants will meet to discuss the pre- application, including any issues raised and further information that might be required. If necessary, applicant submits revised pre - application. Once the District's application is accepted by City Staff, it will be reviewed by a City assessment and financing team consisting of, but not limited to, the City Manager, Design & Development Director, Business Unit/Housing Director, Finance Director, City Attorney, and/or their designee(s), based on the needs of the project. If the project is denied, a letter will be sent advising the applicant of the denial. If the project is to be considered, an application packet will be sent to the applicant. D. Application Processing: Upon City Staff's determination that the application package is complete, City Staff prepares a report to the City Manager, or the Manager's designee, who will then forward the application for district formation and project financing, along with the City Manager's recommendation of additional financing team members or consultants, to the City Council for further action. If the City Manager determines that the project does not meet the community's social or economic needs, the deposit, less incurred expenses, will be refunded to the applicant. If the applicant retracts their application, the deposit may be refunded less incurred expenses. E. City Council Consideration: The City Council approves or denies the application. If approval is granted, the City Council directs the City Manager, or the designee, to engage additional consultants, which may Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 5 of 14 include, but not be limited to; a certified appraiser, price point consultant, market absorption study consultant, special tax consultant, municipal advisor, underwriter, bond counsel, disclosure counsel, fiscal agent, trustee, and assessment engineer. This includes issuance of Requests for Proposals, negotiation of necessary contracts, and the collection of additional developer deposits as may be necessary. F. Project Initiation: City Staff submits contracts, reimbursement agreements, bonddocuments, and other pertinent items for consideration to the City Council, as required. G. Project Implementation: Applicant, City Staff, and consultants meet to determine preliminary project schedule and begin work necessary to complete District formation and financing. PROGRAM REQUIREMENTS A. District Size: In general, the City will not forma CFD, or improvement areas within a CFD, and issue bonds for projects with less than 100 units for reasons of cost effectiveness and default risk mitigation. The District formation of smaller CFDs, or improvement areas within a CFD, will be considered on a case-by-case basis. Please refer to Section IV for "Alternative Financing Mechanisms". B. Eligible Public Facilities and Services: Facilities to be financed must be public facilities ("Public Facilities") for which the City, or a public agency as determined appropriate by the City, will be the owner or will have normal operating and maintenance responsibility. The financing of Public Facilities to be owned and operated by public agencies other than the City shall be considered on a case-by- case basis (see Section IV. A for a discussion of JCFAs). The types of Public Facilities eligible to be financed include, but are not limited to: Streets and Roads. 2. Utilities and Drainage Facilities. 3. Regional Public Facilities (as permitted under the CFD Act). Parks and library facilities may be financed on a case-by-case basis. The City has final determination as to any facility's eligibility for financing, as well as the prioritization of Public Facilities to be included within a District financing. Use of bond proceeds for grading and right-of-way acquisition will be reviewed by the City and bond counsel on a case-by-case basis. Additionally, the City may finance any one or more of the types of services specified in Section 53313 of the CFD Act. Priority for CFD financing shall be given to services provided by or directly benefiting the City and, if multiple services are Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 6 of 14 to be financed, with no service having priority over another service; provided, however, the City has final determination as to any service's eligibility for financing. The City shall not finance services on behalf of other public agencies. C. Use of Consultants: The City shall either select or have the right of refusal over all consultants necessary for the formation of the District and the issuance of Bonds, including the underwriter(s), application analysis consultants, bond counsel, disclosure counsel, fiscal agent, trustee, municipal advisor, assessment engineer, appraiser, market absorption and/or price point consultant, and the special tax consultant. The appraiser should be credentialed by the State of California Office of Real Estate Appraisers and be a Member of the Appraisal Institute (MAI) and the appraisal shall be conducted in accordance with criteria, standards and assumptions in accordance with the California Debt and Investment Advisory Commission (CDIAC) Appraisal Standards for Land -Secured Financings and reflect the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. City Staff may confer with the applicant, but consent of the applicant is not required in the determination by the City of the consulting and financing team. The need for district consultants and the scope of their services shall be determined by City Staff on a case-by-case basis with consideration given to market conditions and the nature of the District and financing(s). D. District Cost Deposits and Reimbursements: All City and consultant costs incurred in the evaluation of District applications and the establishment of Districts shall be paid by the applicant through advance deposits. The City shall not incur any expenses for processing and administering ADS or CFDs. Expenses not chargeable to the District shall be directly borne by the applicant. Each pre -application for the formation of an AD or CFD shall be accompanied by a $50,000 initial deposit to fund consultant and staff costs associated with district review and implementation. If the costs incurred or projected will cause the balance of the deposit to fall below $5,000, the City shall make written demand upon the applicant for such funds sufficient to cover such costs and the applicant shall comply with the demand within fourteen (14) calendar days of receipt of such notice. If the applicant fails to make any deposit of additional funds for the proceedings, the City may, as its sole option, suspend all proceedings until receipt of such additional deposit. The deposits shall be used by the City to pay costs and expenses incurred by the City incident to the proceedings, including, but not limited to, legal, engineering, appraisal, special tax consultant, application analysis consultants and financial advisory fees and expenses; administrative costs and expenses; required notifications; and printing and publication of legal matters. The District shall refund any unexpended portion of the deposits upon the following Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 7 of 14 conditions: 1. The District is not formed; 2. The proceedings for formation of the District or issuance of Bonds is disapproved by the City; or 3. The proceedings for formation of the District or issuance of Bonds is abandoned in writing by the applicant. Pursuant to the adoption of a reimbursement resolution, and in accordance with any and all applicable laws and regulations, the applicant shall be entitled to reimbursement from Bond proceeds for all reasonable costs and expenses incident to the proceedings and construction of the Public Facilities as provided under the CFD Act or AD Acts. All such costs and expenses will be limited to those District -related consultants hiredby the City and invoices shall be verified by the City as a condition of reimbursement. The applicant or property owner shall not be entitled to reimbursement from Bond proceeds for any of the expenses specified as follows: In-house administrative and overhead expenses incurred by the applicant; 2 Interest expense incurred by the applicant on moneys advanced or expended during the proceedings and construction of public facilities; and 3. Any other costs and expenses incurred by the applicant which are not otherwise authorized for reimbursement under the CFD Act, the AD Acts, or any other applicable laws and regulations. Under no circumstances shall the City accrue or pay any interest on any portion of the deposit. Neither the City nor the District shall be required to reimburse the applicant or property owner from any funds other than the proceeds of Bonds issued by the District. E. Developer Support: In the instance of multiple owners, the applicant shall be required to produce letters evidencing support by the other property owners for the scope and establishment of the district as an attachment to the District application. Formation of the district may require concurrence of 100% of the other property owners to be included in the proposed district, unless there is an overriding need for the Public Facilities, or the applicant is willing to separately fund the Public Facilities on the non -participating property(s). Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 8 of 14 The minimum amount of requested financing that will be considered by the City is three million dollars ($3,000,000) net bond proceeds with no more than 10% for engineering and design costs. Please refer to Section IV for "Alternative Financing Mechanisms". F. Property Owner Support - Existing Neighborhoods: In the instance of multiple property owners, the applicant shall be required to produce letters evidencing support by the other property owners for the scope and establishment of the District as an attachment to the District application. Formation of the District will require proof of overwhelming support of the other property owners to be included in the proposed District, unless there is an overriding need for the Public facilities, or the applicant is willing to separately fund the Public Facilities on the non -participating property(s). G. Land Use Approvals: The City will accept applications for the formation of ADS and/or CFDs only when properties to be included within a proposed district have City site plan and other applicable zoning approval. H. Security: For new development, the applicant or property owner must demonstrate its financial plan and ability to pay all assessments and/or special taxes before full build -out has taken place. Additional security such as credit enhancement may be required by the City in certain instances. If the City requires letters of credit or other security, the credit enhancement shall be insured by an institution in a form and upon terms and conditions satisfactory to the City. All fees payable on the letter of credit or other security shall be the sole responsibility of the applicant or developer, not the City or the District. Any security required to be provided by the applicant shall be discharged by the City upon the opinion of a certified appraiser retained by the City, that a value -to -lien ratio of 4.0 to 1 (as described further herein) has been attained. Prior to the City Council's approval of District formation, any property owner that will be responsible for more than twenty percent (20%) of the aggregate special taxes or assessment installments within the District will, at City Staff's request, provide detailed information regarding the following: 1. Legal structure of the title -holding entity, and the legal structure of the owners or partners thereof; 2. Detailed, externally prepared financial statements of the property - owning entity and, if the owning entity is a subsidiary or affiliate of another entity, detailed audited financial statements of such parent or affiliate are required; 3. A list of bank, credit or investment references who the City may Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 9 of 14 contact; 4. A list of other cities or agencies in which the developer or its parent or affiliate company have participated in financing district formation and bond sales; and 5. A comprehensive property development financial pro forma detailing development costs and funding sources, whether from equity, bank, investor or bond proceeds sources. The pro forma must clearly identify the timing and amount of private funds required to develop the project and pay the installments or taxes pending project completion and sale. The developer will be expected to demonstrate the level of certainty of obtaining and the sources of such private funds. The City will use the above information in assessing whether or not to proceed with formation of the District. Disclosure to Purchasers: The applicant or property owner will be required to disclose this and any other special tax, assessment or other liens on individual parcels to existing and future property owners. In addition to all requirements of law, the City may require the applicant to provide disclosure of such information to the purchasers of property within the District and the terms and conditions of Bonds issued on behalf of the District. Such disclosure requirement may include notifications to potential property purchasers, as well as methods to notify subsequent property purchasers. J. Value -To -Lien Ratio: The District (or improvement area) property value -to -lien ratio should be at least 4.0 to 1 after including in an appraisal the value of the financed Public Facilities to be installed and including as part of the lien any prior or pending special taxes or improvement liens. Individual properties within the boundaries of the proposed District must also meet a minimum value -to -lien test of 3.0 to 1 on a parcel -by -parcel basis. The value -to -lien ratio shall be determined based upon an independent certified appraisal of the proposed District. The appraisal shall be coordinated by and under the direction of the City. All costs associated with the preparation of the appraisal report shall be paid by the applicant through the advance deposit mechanism. The appraisal shall be conducted in accordance with criteria established by the City. In every case, the appraisal shall employ either a discounted cash flow analysis or use bulk sale comparables. Upon receiving an appraisal and determining the value -to -lien ratio, the City shall apply the following criteria: If the value -to -lien ratio is 4.0 to 1 or greater, the City will not require Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 10 of 14 a letter of credit or other security to secure payment of the special taxes or assessments to be levied annually on properties within the District. However, letters of credit or other security may be required for individual parcels within the District that have a value -to -lien of less than 3.0 to 1. 2. If the value -to -lien ratio is less than 4.0 to 1, the City shall require letters of credit or other security to secure payment of the special taxes or assessments on properties within the District or may elect to abandon the District. K. Special Taxes: Special taxes shall be levied according to the respective Rate and Method of Apportionment, however special tax formulas for CFDs shall provide for minimum special tax levels which satisfy the following obligations of all CFDs: (a) at least 110 percent (110%) of debt service on all CFD bonds due each year, (b) the reasonable and necessary administrative expenses of the CFD, and (c) amounts equal to the differences between expected earnings on any escrow fund and the interest payments due on bonds of the CFD. The special tax formula shall be reasonable and equitable in allocating public facilities' costs to parcels within the CFD. The maximum special tax authorized to be levied on any parcel to finance the acquisition or construction of public facilities shall not escalate more than two percent (2%) per year. The annual administrative expenses may also escalate up to two percent (2%) per year. The maximum special tax authorized to be levied on any parcel, whether authorized to be used for residential or non-residential purposes, to finance maintenance, rehabilitation or services may be subject to annual escalation as provided for in the rate and method of apportionment of such special taxes to compensate for inflationary increases in the costs of providing such maintenance and services. The increase in the special tax authorized to be levied on any parcel within a CFD as a consequence of delinquency or default by the owner of any other parcel may not exceed the maximum tax, if any, specified in the CFD Act. The City does allow the levying of the special tax for pay-as-you-go (PayGo) purposes before CFD bonds are issued. After the last bond sale and the lien closes, the City will levy only enough special taxes to meet the requirements outlined in the first paragraph of this section. The City will limit special tax rates for Districts to a reasonable level to protect ratepayers. 1. The total cumulative burden of all applicable special district overlapping taxes applied to a property (the "effective tax rate") will be at or below two percent (2%) at the time the District is formed and at the time of debt Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 11 of 14 issuance; 2. The effective tax rate will be evaluated no earlier than 90 days prior to the pricing of any proposed debt issuance. If the effective tax rate is above two percent (2%) at the time of evaluation, the size of the proposed debt issuance will be adjusted to bring the effective tax rate within compliance of the two percent (2%) effective tax rate policy requirement; and 3. The property developer/seller shall provide a written notice of the special tax to the homebuyer prior to close of escrow. The City may require the property developer to provide documentation and certification of compliance with special tax disclosure obligation prior to the issuance of debt. L. Terms and Conditions of Bonds: All terms and conditions of the bonds shall be established by the City. The City will control, manage and invest all District issued Bond proceeds. Unless otherwise authorized by the City, the following shall serve as Bond requirements: 1. In most cases, a reserve fund equal to the lesser of (i) 10% of the original proceeds of the bond issue, (ii) the maximum annual debt service on the bonds, or (iii) 125% of the average annual debt service on the bonds will be required. A smaller reserve fund may be required by the City for bond issues where development thresholds identified by the City have been met. A reserve fund may not be required for direct placements. 2. The special taxes or annual assessments shall be levied for the first fiscal year following sale of the Bonds for which they may be levied. Interest shall not be funded (capitalized) beyond the earliest interest payment date for which sufficient special tax revenues or annual assessment will be available for payment of interest. 3. The repayment of principal shall begin on the earliest date for which sufficient special tax revenues or annual assessments can be made available. 4. Beginning with commencement of the repayment of principal, annual debt service shall be level. 5. The maximum special tax shall be established to assure that the annual revenueproduced by levy of the maximum special tax shall be equal to at least 110% of the average annual debt service. 6. In instances where multiple series of Bonds are to be issued, the City shall make a final determination as to which Public Facilities are of the Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 12 of 14 highest priority and those Public Facilities will be financed first and will be subject to the earliest or most senior lien. 7. The City may require that each new District bond financing refund any prior liens, if they exist on properties included in the District in order to avoid subordinated liens. Instances where prior liens may not require refunding are: (1) where refunding prior liens will result in higher interest cost, (2) where there can be assurance that prior liens may pose no marketing problems for the new District Bonds, or (3) where refunding prior liens may present future administrative difficulties to the City or other affected public entities. ALTERNATIVE FINANCING MECHANISMS A. Joint Community Facilities Agreements: The funding of public facilities to be owned and operated by public agencies other than the City shall be considered on a case-by-case basis. If the City implements a special district program involving facilities to be ultimately owned and operated by the City and certain other fees and/or facilities to be owned and operated by another entity, the City will be the lead agency and after entering into a Joint Community Facilities Agreement (JCFA) with the other agency(ies), priority of funds will be established, with the City's cost for facilities and fees being the first priority. A minimum of 50% of the public improvements must be dedicated to the City. For JCFAs where the City is not the lead agency, the City will consider entering into a JCFA only if the applicable lead agency agrees that (i) if and when the lead agency determines to issue bonds, the lead agency shall take such actions necessary in its reasonable discretion to ensure the total effective tax rate within the applicable District does not exceed two percent (2%) at the time of bond sale, and (ii) lead agency shall not include the City's name on property owners' special tax bills within the lead agency CFD. JCFAs must be entered into prior to, or at the time of, formation of the District or not later than first bond sale. B. Enhanced Infrastructure Financing Districts (EIFDs): California Government Code Sections 53398.50-53398.88 ("EIFD Law") enables cities and counties in the state of California to form enhanced infrastructure financing districts ("EIFDs") as a means of funding public improvements that provide community wide benefit. An EIFD may finance the purchase, construction, expansion, or improvement of projects with a useful life of 15 years or longer, as well as ongoing capitalized maintenance of such projects. To fund such improvements, the EIFD Law provides that an EIFD may issue bonds payable from or utilize pay-as-you-go revenue generated from, property tax increment and certain other revenues of participating forming entities. The net effect is that in EIFD areas, the City will realize tax revenues on a portion of the taxes generated in an EIFD area including: Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 13 of 14 1) on the "frozen" tax base; and 2) on the remaining portion of increment, after the City Council approved percentage of increment has been allocated to the EIFD. EIFDs can be used instead of CFDs, or in conjunction if structured so that the tax increment generated from the project under the EIFD will be sufficient to cover the debt service on the CFD bonds. Generally, because tax increment revenue is the result of increases in assessed value within the district, an EIFD will be most effective in areas with significant portions of undeveloped or underdeveloped land. The City does not prohibit the establishment of EIFDs. Formation of a new EIFD and debt issued for an EIFD will be considered on a case-by-case basis, upon evaluating feasibility, cost benefit, and a review of financing tools to complement an EIFD measure. C. Alternative Financing Programs: The City recognizes alternative financing programs such as: (i) the Statewide Community Infrastructure Program (SCIP) offered through California Statewide Communities Development Authority (CSCDA); (ii) the Bond Opportunities for Land Development (BOLD) program offered through California Municipal Finance Authority (CMFA); and (iii) the Bonds Assisting New Development (BAND) program offered through California Enterprise Development Authority (CEDA). If such a program has not already been approved by the City, the City does not prohibit such programs to apply for CFD formation and financing. If the proposed CFD or improvement areas within a CFD is comprised of more than 100 units and/or more than three million ($3,000,000) in amount of requested net bond proceeds, the City will be the lead agency (in the absence of a JCFA). If the proposed CFD or improvement areas within a CFD is comprised of less than 100 units and/or less than three million ($3,000,000) in amount of requested net bond proceeds, the alternative financing programs described in this section may apply. Disclosure The City shall determine, in its sole judgment after consultation with attorneys and experts, what financial and development information provided by the developer will be disclosed in the Official Statement for the bonds. The City intends to generally follow the procedures and recommendations set forth in the California Debt Advisory Commission's publication Disclosure Guidelines for Land -Based Securities. The developer will be required to review such disclosure, and to sign a certificate that the disclosure is complete and accurate, and that it does not fail to include material facts. The City will also determine, in its sole judgement, after consultation with attorneys and experts, what financial and development information provided by the developer will be included in annual secondary market disclosure materials required by Securities and Exchange Commission Rule 15c2-12. The developer will execute an agreement with the City pledging to provide the required data according to a given schedule. Generally, the developer's obligation to provide continuing disclosure data will terminate when the developer's share of total debt service revenues falls below a threshold of 20%. Resolution No. 2024 — 001 Formation of Land -Secured Financing Districts Policy Adopted: January 16, 2024 Page 14 of 14 The City will make its best efforts not to disclose any information in the initial offering not reviewed and approved by the developer(s). Applicants should be aware that, absent such review and approval, the City may not issue any bonds. Acquisition Provisions The City generally will provide for acquisition Districts. The City shall have final determination as to whether and to what extent it will allow the financing of Public Facilities through acquisition. In the event the acquisition provisions of the AD Acts or CFD Act are used, the City and the applicant or property owner shall mutually agree upon Public Facilities to be acquired and the method of determining reasonable acquisition cost. A funding and acquisition agreement shall be required and approved by the City Council on or prior to the adoption of the resolution of intention to form the District. Exceptions to these Policies The City may find in limited and exceptional instances that a waiver to any of the above stated policies is warranted given identified special City benefits to be derived from such waiver. Such waivers are granted only by action of the City Council and based upon specific public purpose, economic and/or health and safety findings.