2020-11-05 OB RIVCO - LQ Bonds Refi Staff ReportSUBMITTAL TO THE COUNTYWIDE OVERSIGHT
BOARD OF COUNTY OF RIVERSIDE
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MEETING DATE: November 5, 2020
FROM: SUCCESSOR AGENCY TO THE CITY OF LA QUINTA REDEVELOPMENT AGENCY
SUBJECT: Resolution No. 20__-___ A Resolution of the Countywide Oversight Board for the
County of Riverside Approving the Issuance of Refunding Bonds, the
Defeasance of Certain Outstanding Bonds of Successor Agency to the La Quinta
Redevelopment Agency, Making Certain Determinations with Respect to the
Refunding Bonds and Providing Other Matters Relating Thereto
RECOMMENDED MOTION: That the Countywide Oversight Board:
1. Adopt Resolution No. 20__-___ A Resolution of the Countywide Oversight Board for the
County of Riverside Approving the Issuance of Refunding Bonds, the Defeasance of
Certain Outstanding Bonds of Successor Agency to the La Quinta Redevelopment
Agency, Making Certain Determinations with Respect to the Refunding Bonds and
Providing Other Matters Relating Thereto; and
2. Direct City of La Quinta staff to submit Resolution No. 20__-___to the Department of
Finance for review and approval pursuant to Section 34179(h) of the Health and Safety
Code, as applicable.
____________________________________________________________________________
MINUTES OF THE COUNTYWIDE OVERSIGHT BOARD
SUBMITTAL TO THE COUNTYWIDE OVERSIGHT BOARD FOR COUNTY OF RIVERSIDE
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BACKGROUND:
The former Redevelopment Agency for the City of La Quinta ("Former Agency")
Pursuant to Assembly Bill No. 1X 26, as modified by Assembly Bill No. 1484 and as further
modified by Senate Bill No. 107, which added Parts 1.8 and 1.85 to Division 24 of the Health
and Safety Code ("Dissolution Act"), the Agency was dissolved on February 1, 2012 and the
Successor agency to the Redevelopment Agency for the City of La Quinta ("Successor
Agency") was vested with all authority, rights, powers, duties and obligations of the Agency,
including the previously issued $97,190,000 aggregate principal amount of the Successor
Agency to the La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area Nos.
1 and 2, Subordinate Tax Allocation Refunding Bonds, 2013 Series A (the “2013 Series A
Bonds”); and previously issued $23,055,000 aggregate principal amount of the Successor
Agency to the La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area Nos.
1 and 2, Subordinate Tax Allocation Refunding Bonds, 2013 Taxable Series B (the “2013
Series B Bonds”). Collectively the 2013 Series A and 2013 Series B Bonds.
The Successor Agency may refinance outstanding bonds and other obligations of the RDA as
long as certain conditions are met, primarily a reduction of annual debt service. The City’s
financial advisors have determined that today’s lower bond interest rates would produce such
debt service savings.
On December 17, 2013 the Successor Agency issued subordinate tax allocation refunding
bonds in the amount of $97,190,000 Series A Bonds and $23,055,000 Taxable Series B Bonds
to refinance outstanding long-term obligations previously issued by the former Redevelopment
Agency. Interest rates on the 2013 Series A tax allocation bonds range from 3% to 5% while
interest rates on the 2013 Taxable Series B tax allocation bonds range from 4.89% to 5.82%.
In the current bond market, an opportunity exists to further reduce annual debt service by
refinancing the 2013 Bonds. Interest rates for the 2021 refunding bonds are estimated to range
from .82% to 2.25% will be issued on a taxable basis. The 2013 Series Bonds have interest
rates ranging from 3% to 5.82%.
The proposed refinancing was presented to the Former Agency on October 6, 2020. Key
aspects on the refinancing, requirements, costs, anticipated savings, and the proposed timeline
were discussed. Afterwards, the Former Agency's Governing Board by adoption of Resolution
No. SA 2020-001, A Resolution of the Successor Agency to La Quinta Redevelopment Agency
Authorizing the Issuance and Sale of Subordinate Tax Allocation Refunding Bonds Approving
the Form of a Third Supplemental Indenture of Trust, Official Statement, Bond Purchase
Contract, Continuing Disclosure Agreement, Form of Escrow Agreement, and Related
Documents and Authorizing Certain Other Actions in Connection Therewith (Attachment 2)
approved the refinancing.
SUBMITTAL TO THE COUNTYWIDE OVERSIGHT BOARD FOR COUNTY OF RIVERSIDE
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Under the anticipated Financing Schedule, the Bond refinancing would close on or around
February 17, 2021. After the Bonds are closed the City would proceed with a first amendment to
the last and final ROPS.
Successor Agency staff recommends adoption of Resolution No. 20__-___, A Resolution of the
Countywide Oversight Board for the County of Riverside Approving the Issuance of Refunding
Bonds, the Defeasance of Certain Outstanding Bonds of Successor Agency to the La Quinta
Redevelopment Agency, Making Certain Determinations with Respect to the Refunding Bonds
and Providing Other Matters Relating Thereto.
If approved by the County Oversight Board, Former Agency staff will submit Resolution No.
20__-___to the Department of Finance for review and approval pursuant to Section 34179(h) of
the Health and Safety Code.
IMPACT ON TAXING ENTITIES
By refinancing the 2013 Bonds, debt service payments will be reduced by an average of
$524,800 or estimated $6.822 million over the thirteen-year term of the 2021 Bonds. The 2021
Bonds would be issued as fixed rate Bonds paying interest semi-annually on the same dates
with the same maturity as the existing 2013A Bonds on September 1, 2032.
This would free up property tax revenue for distribution to other taxing agencies and the City,
with savings of approximately $4,264,200 to schools districts, $1,513,300 to Riverside County,
$491,900 to the Coachella Valley Water District, $361,000 to the City, and $192,400 to parks
and recreation over the remaining 13 year amortization period.
Attachment:
1. Resolution No. 20__-___
2. Preliminary Official Statement
3. Escrow Agreement
4. Summary of 2021 Refinancing
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ATTACHMENT 1
COUNTYWIDE OVERSIGHT BOARD
FOR THE COUNTY OF RIVERSIDE
RESOLUTION NO. _____
RESOLUTION OF THE COUNTYWIDE OVERSIGHT BOARD FOR THE
COUNTY OF RIVERSIDE APPROVING THE ISSUANCE OF
REFUNDING BONDS, THE DEFEASANCE OF CERTAIN
OUTSTANDING BONDS OF SUCCESSOR AGENCY TO THE LA QUINTA
REDEVELOPMENT
AGENCY, MAKING CERTAIN
DETERMINATIONS WITH RESPECT TO THE REFUNDING BONDS
AND PROVIDING OTHER MATTERS RELATING THERETO
WHEREAS, the California state legislature enacted Assembly Bill 1x 26, as modified by
Assembly Bill No. 1484, as further modified by Senate Bill No. 107, as such may be further
amended (collectively, the “Dissolution Act”), adding or amending Parts 1.8 and 1.85 to Division
24 of the Health and Safety Code, to dissolve redevelopment agencies formed under the
Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of
the Health and Safety Code of the State (the “Law”);
WHEREAS, pursuant to Section 34172(a) of the California Health and Safety Code
(unless otherwise noted, all Section references hereinafter being to such Code), the Redevelopment
Agency for the City of La Quinta (the “Prior Agency”) has been dissolved and no longer exists ,
and pursuant to Section 34173, effective February 1, 2012, the Successor Agency to the La Quinta
Redevelopment Agency (the “Successor Agency”), a separate legal entity, was formed to and
charged with paying the enforceable obligations, disposing of the properties and other assets, and
unwinding the affairs of the dissolved Former Agency;
WHEREAS, upon dissolution of the Former Agency, all authority, rights, powers, duties
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and obligations previously vested with the Former Agency (except for the Former Agency’s
housing assets and functions) under the Law vested in the Successor Agency;
WHEREAS, Health and Safety Code Section 34179 provides for the appointment of a
countywide oversight board (the “Countywide Oversight Board”) with specific duties to approve
certain Successor Agency actions pursuant to Health and Safety Code section 34180 and to direct
the Successor Agency in certain other actions pursuant to Health and Safety Code section 34181;
WHEREAS, the Countywide Oversight Board is informed that a Redevelopment Plan for
a redevelopment project known and designated as the “La Quinta Redevelopment Project Area
No. 1” has been adopted and approved by Ordinance No. 43 of the City of La Quinta on November
29, 1983, and all requirements of the Law for and precedent to the adoption and approval of the
Project Area No. 1 Redevelopment Plan, as amended, have been duly complied with; and
WHEREAS, the Countywide Oversight Board is informed that a Redevelopment Plan for
a redevelopment project known and designated as the “La Quinta Redevelopment Project No. Area
2” has been adopted and approved by Ordinance No. 139 of the City of La Quinta on May 16,
1989, and all requirements of the Law for and precedent to the adoption and approval of the Project
Area No. 2 Redevelopment Plan, as amended, have been duly complied with; and
WHEREAS, the Countywide Oversight Board is informed that the Successor Agency
previously issued $97,190,000 aggregate principal amount of the Successor Agency to the La
Quinta Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Subordinate Tax Allocation Refunding Bonds, 2013 Series A (the “2013 Series A Bonds”); and
WHEREAS, the Countywide Oversight Board is informed that the Successor Agency
previously issued $23,055,000 aggregate principal amount of the Successor Agency to the La
Quinta Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Subordinate Tax Allocation Refunding Bonds, 2013 Taxable Series B (the “2013 Series B
Bonds”); and
WHEREAS, the Countywide Oversight Board is informed that the Successor Agency
determined it necessary and proper to issue taxable tax allocation refunding bonds to refund and
defease the 2013 Series A Bonds and the 2013 Series B Bonds (the “Refunded Bonds”); and
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WHEREAS, Section 34177.5 authorizes the Successor Agency to issue refunding bonds
pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of
Title 5 of the Government Code (the “Refunding Law”) for the purpose of achieving debt service
savings within the parameters set forth in Section 34177.5(a)(1) (the “Savings Parameters”);
WHEREAS, to determine compliance with the Savings Parameters for purposes of the
issuance by the Successor Agency, the Successor Agency has caused its underwriter, Hilltop
Securities Inc. (the “Underwriter”), to prepare an analysis of the potential savings that will accrue
to the Successor Agency and to applicable taxing entities as a result of the use of the proceeds to
refund and defease the Refunded Bonds (the “Debt Service Savings Analysis”);
WHEREAS, pursuant to Resolution No. 2020-001, adopted on October 6, 2020 (the
“Successor Agency Resolution”), the Successor Agency approved the issuance of the Successor
Agency to the La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1
and 2, Subordinate Tax Allocation Refunding Bonds, 2021 Taxable Series A (the “Refunding
Bonds”) authorized the execution and delivery of the Third Supplemental Indenture of Trust, by
and between the Successor Agency and U.S. Bank National Association, as trustee, providing for
the issuance of the Refunding Bonds (the “Third Supplemental Indenture”);
WHEREAS, in the Successor Agency Resolution, the Successor Agency has determined
to sell the Refunding Bonds to Hilltop Securities Inc. (the “Original Purchaser”) pursuant to the
terms of a Bond Purchase Agreement to be entered into by and among the Successor Agency, the
Authority and the Original Purchaser;
WHEREAS, following approval by the Oversight Board of the issuance of the Refunding
Bonds by the Successor Agency and upon submission of the Oversight Board’s resolution
providing such approvals to the California Department of Finance the Successor Agency will, with
the assistance of their Disclosure Counsel, the Municipal Advisor and the Underwriter, cause to
be prepared a form of Official Statement for the Refunding Bonds and containing material
information relating to the Successor Agency, and the Refunding Bonds, the preliminary form of
which will be submitted to the Successor Agency for approval for distribution by the Original
Purchaser to persons and institutions interested in purchasing the Refunding Bonds;
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WHEREAS, the accompanying staff report, attached hereto and incorporated herein by
this reference, provides supporting information upon which the actions set forth in this Resolution
are based; and
WHEREAS, the Countywide Oversight Board has completed its review of the defeasance
and refunding proceedings and the Debt Service Savings Analysis and wishes at this time to give
its approval to the foregoing.
NOW, THEREFORE, BE IT RESOLVED, FOUND, DETERMINED AND
ORDERED by the Countywide Oversight Board, in regular meeting assembled on November 5,
2020, in Riverside, California, as follows:
Section 1. Recitals. The Recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
Section 2. Determination of Savings. The Countywide Oversight Board has
determined that there are significant potential savings available to the Successor Agency and to
applicable taxing entities in compliance with the Savings Parameters by the issuance by the
Successor Agency of the Refunding Bonds to refund and defease the Refunded Bonds, all as
evidenced by the Debt Service Savings Analysis on file with the Secretary of the Oversight Board,
which Debt Service Savings Analysis is hereby approved.
Section 3. Approval of Issuance of the Bonds. As authorized by Section 34177.5(f)
and Section 34180, the Countywide Oversight Board hereby directs and approves the issuance by
the Successor Agency of the following:
(a) the Refunding Bonds pursuant to Section 34177.5(a)(1) and under other applicable
provisions of the Law and the Refunding Law and as provided in the Successor Agency
Resolution and the Third Supplemental Indenture in the aggregate principal amount of not to
exceed $100,000,000, on a taxable basis for federal tax purposes, provided that the principal and
interest payable with respect to the Refunding Bonds complies in all respects with the
requirements of the Savings Parameters with respect thereto, as shall be certified to by the
Municipal Advisor upon delivery of the Refunding Bonds or any part thereof.
Section 4. Sale and Delivery of Refunding Bonds in Whole or in Part. The Oversight
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Board hereby approves the sale and delivery of the Refunding Bonds in whole, provided that there
is compliance with the Savings Parameters. However, if such Savings Parameters cannot be met
with respect to the whole of the Refunding Bonds, or for any other reason the Refunding Bonds
cannot be issued in whole, then the Oversight Board approves the sale and delivery of the
Refunding Bonds from time to time in part. In the event the Refunding Bonds are initially sold in
part, the Successor Agency is hereby authorized to sell and deliver additional parts of the
Refunding Bonds without the prior approval of the Countywide Oversight Board provided that in
each such instance the Refunding Bonds so sold and delivered in part are in compliance with the
Savings Parameters.
Section 5. Determinations by the Oversight Board. As requested by the Successor
Agency, the Oversight Board makes the following determinations upon which the Successor
Agency shall rely in undertaking the refunding proceedings and the issuance of the Refunding
Bonds:
(a) The Successor Agency is authorized, as provided in Section 34177.5(f), to recover
its costs related to the issuance of each of the Refunding Bonds from the proceeds of the
Refunding Bonds, including the costs to accomplish the defeasance of the Refunded Bonds and
the cost of reimbursing its administrative staff for time spent with respect to the authorization,
issuance, sale and delivery of such Refunding Bonds;
(b) The Successor Agency shall be entitled to receive its full Administrative Cost
Allowance under Section 34181(a)(3) without any deductions with respect to continuing costs
related to each of the Refunding Bonds, such as trustee’s fees, auditing and fiscal consultant fees
and continuing disclosure and rating agency costs (collectively, “Continuing Costs of Issuance”),
and such Continuing Costs of Issuance shall be payable from property tax revenues pursuant to
Section 34183. In addition and as provided by Section 34177.5(f), if the Successor Agency is
unable to complete the issuance of any of the Refunding Bonds, or defeasance of the Refunded
Bonds, in each case for any reason, the Successor Agency shall, nevertheless, be entitled to
recover its costs incurred with respect to the refunding and defeasance proceedings with respect to
the Refunding Bonds, and the 2013 Bonds from such property tax revenues pursuant to
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Section 34183 without reduction in its Administrative Cost Allowance.
Section 6. Effective Date. Pursuant to Health and Safety Code Section 34177(f) and
Section 34179(h), this Resolution shall be effective five (5) business days after proper notification
hereof is given to the California Department of Finance unless the California Department of
Finance requests a review of the actions taken in this Resolution, in which case this Resolution
will be effective upon approval by the California Department of Finance.
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PASSED, APPROVED, AND ADOPTED by the Oversight Board for the County of
Riverside on _________, 2020.
I hereby certify the forgoing to be a true copy of a resolution passed and adopted by the
Countywide Oversight Board for the County of Riverside at a regular meeting thereof held on
_________, 2020, by the following vote:
AYES: BOARD MEMBERS:
NOES: BOARD MEMBERS:
ABSTAIN: BOARD MEMBERS:
ABSENT: BOARD MEMBERS:
Chairperson, Countywide Oversight Board
ATTEST:
Clerk of the Countywide Oversight Board
APPROVED AS TO FORM:
Countywide Oversight Board Legal Counsel
By:
Attachments incorporated by reference:
A. Successor Agency Resolution No. 2020-001_____
RESOLUTION NO. SA 2020 - 001
A RESOLUTION OF THE SUCCESSOR AGENCY TO
LA QUINTA REDEVELOPMENT AGENCY
AUTHORIZING THE ISSUANCE AND SALE OF
SUBORDINATE TAX ALLOCATION REFUNDING
BONDS APPROVING THE FORM OF A THIRD
SUPPLEMENTAL INDENTURE OF TRUST,
OFFICIAL STATEMENT, BOND PURCHASE
CONTRACT, CONTINUING DISCLOSURE
AGREEMENT, FORM OF ESCROW AGREEMENT,
AND RELATED DOCUMENTS AND AUTHORIZING
CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the La Quinta Redevelopment Agency (the “Prior Agency”)
was a public body, corporate and politic, duly created, established and
authorized to transact business and exercise its powers under and pursuant
to the provisions of the Community Redevelopment Law (Part 1 (commencing
with Section 33000) of Division 24 of the Health and Safety Code of the State
of California( (the “Law”), and the powers of the Prior Agency included the
power to issue Bonds for any of its corporate purposes; and
WHEREAS, a Redevelopment Plan for a redevelopment project known
and designated as the “La Quinta Redevelopment Project Area No. 1” has been
adopted and approved by Ordinance No. 43 of the City of La Quinta on
November 29, 1983, and all requirements of the Law for and precedent to the
adoption and approval of the Project Area No. 1 Redevelopment Plan, as
amended, have been duly complied with; and
WHEREAS, a Redevelopment Plan for a redevelopment project known
and designated as the “La Quinta Redevelopment Project Area No. 2” has been
adopted and approved by Ordinance No. 139 of the City of La Quinta on May
16, 1989, and all requirements of the Law for and precedent to the adoption
and approval of the Project Area No. 2 Redevelopment Plan, as amended, have
been duly complied with; and
WHEREAS, the Successor Agency previously issued $97,190,000
aggregate principal amount of the Successor Agency to the La Quinta
Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Subordinate Tax Allocation Refunding Bonds, 2013 Series A (the “2013 Series
A Bonds”) pursuant to an Indenture of Trust and a First Supplemental
Indenture of Trust each dated as of December 1, 2013 (collectively the
“Original Indenture”) ; and
ATTACHMENT A
Resolution No. SA 2020 – 001
RDA 2021 Tax Allocation Refunding Bonds Refinance
Adopted: October 6, 2020
Page 2 of 9
WHEREAS, the Successor Agency previously issued $23,055,000
aggregate principal amount of the Successor Agency to the La Quinta
Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Subordinate Tax Allocation Refunding Bonds, 2013 Taxable Series B (the
“2013 Series B Bonds”) pursuant to the Original Indenture; and
WHEREAS, the Successor Agency previously issued $65,600,000
aggregate principal amount of the Successor Agency to the La Quinta
Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Tax Allocation Refunding Bonds, 2014 Series A (the “Senior Bonds”) pursuant
to an Indenture of Trust dated as of June 1, 2014 (the “Senior Indenture”);
and
WHEREAS, the Successor Agency previously issued $35,055,000
aggregate principal amount of the Successor Agency to the La Quinta
Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Subordinate Tax Allocation Refunding Bonds, 2016 Taxable Series A (the
“2016 Bonds”) pursuant to the Original Indenture and a Second Supplemental
Indenture of Trust dated as of October 1, 2016; and
WHEREAS, the Successor Agency has determined that it is cost
effective and efficient to refund and defease in their entirety the 2013 Bonds;
and
WHEREAS, the Successor Agency deems it necessary and proper to
issue taxable tax allocation refunding bonds to refund and defease the 2013
Bonds; and
WHEREAS, for the corporate purposes of the Successor Agency, the
Successor Agency deems it necessary to issue at this time tax allocation
refunding bonds in a principal amount of not to exceed One Hundred Million
Dollars ($100,000,000) (the “Bonds”), and to irrevocably set aside a portion
of the proceeds of such Bonds in a separate segregated trust fund which will
be used to refund the outstanding Refunded Bonds of the Prior Agency, to pay
costs in connection with the issuance of the Bonds, and to make certain other
deposits as required by the Original Indenture (defined herein) as amended
and supplemented by a Third Supplemental Indenture of Trust; and
WHEREAS, in order to provide for the authentication and delivery of
the Bonds, to establish and declare the terms and conditions upon which the
Bonds are to be issued and secured and to secure the payment of the principal
thereof and interest and redemption premium (if any) thereon, the Successor
Resolution No. SA 2020 – 001
RDA 2021 Tax Allocation Refunding Bonds Refinance
Adopted: October 6, 2020
Page 3 of 9
Agency wishes to approve the issuance of the Bonds and authorize the
execution and delivery of the Third Supplemental Indenture of Trust; and
WHEREAS, pursuant to Section 34179 of the Redevelopment
Dissolution Law in Part 1.8 (commencing with Section 34161) and Part 1.85
(commencing with Section 34170) of Division 24 of the Health and Safety
Code of the State of California (the “Dissolution Law”), an oversight board (the
“Oversight Board”) has been established for the Successor Agency and the
Successor Agency has requested that the Oversight Board approve the
issuance of the Bonds by the Successor Agency, as authorized by Section
34177.5(f) of the Dissolution Law; and
WHEREAS, the Successor Agency hereby certifies that all acts and
proceedings required by law necessary to make the Bonds, when executed by
the Successor Agency, and authenticated and delivered by the Trustee, the
valid, binding and legal special obligations of the Successor Agency, and to
constitute the Original Indenture as amended and supplemented by the Third
Supplemental Indenture of Trust a valid and binding agreement for the uses
and purposes herein set forth in accordance with its terms, have been done
or taken; and
WHEREAS, the Successor Agency wishes at this time to approve all
matter relating to the issuance and sale of the Bonds; and
WHEREAS, the City Council on behalf of the Successor Agency has
previously approved a Debt Management Policy which complies with
Government Code Section 8855, and the delivery of the Bonds will be in
compliance with said policy; and
WHEREAS, Section 5852. 1 of the California Government Code, which
became effective on January 1, 2018, enacted pursuant to Senate Bill 450
(Chapter 625 of the 2017-2018 Session of the California Legislature), requires
that the Successor Agency obtain from an underwriter, municipal advisor or
private lender and disclose, in a meeting open to the public, prior to
authorization of the issuance of the Bonds, good faith estimates of (a) the
true interest cost of the Bonds, (b) the sum of all fees and charges paid to
third parties with respect to the Bonds, (c) the amount of proceeds of the
Bonds expected to be received net of the fees and charges paid to third parties
and any reserves or capitalized interest paid or funded with proceeds of the
Bonds, and (d) the sum total of all debt service payments on the Bonds
calculated to the final maturity of the Bonds plus the fees and charges paid to
third parties not paid with the proceeds of the Bonds; and
Resolution No. SA 2020 – 001
RDA 2021 Tax Allocation Refunding Bonds Refinance
Adopted: October 6, 2020
Page 4 of 9
WHEREAS, in compliance with Section 5852.1 of the California
Government Code, the Successor Agency has prepared, with the assistance of
the Underwriter, the required good faith estimates and such estimates are
included as Exhibit A to this Resolution.
NOW, THEREFORE, BE IT RESOLVED, by the Successor Agency
to the La Quinta Redevelopment Agency as follows:
SECTION 1. The Third Supplemental Indenture of Trust, by and between
the Successor Agency and U.S. Bank National Association, dated as of
February 1, 2021, in substantially the form submitted at this meeting and
made a part hereof as though set forth in full herein (the “Third Supplemental
Indenture”), is hereby approved. An Authorized Representative, as defined
below, is hereby authorized and directed to execute and deliver to the Third
Supplemental Indenture in the form presented at this meeting with such
changes insertions and omissions as may be requested by Bond Counsel and
approved by the Authorized Representative, said execution being conclusive
evidence of such approval.
SECTION 2. Subject to the provisions of the Third Supplemental
Indenture referred to in Section 1 hereof, the issuance of the Bonds in the
aggregate principal amount of not to exceed One Hundred Million Dollars
($100,000,000) on the terms and conditions set forth in, and subject to the
limitations specified in, the Third Supplemental Indenture, is hereby
authorized and approved. The Bonds will be dated, will bear interest at the
rates, will mature on the dates, will be issued in the form, will be subject to
redemption, and will be as otherwise provided in the Third Supplemental
Indenture, as the same will be completed as provided in this Resolution. The
proceeds of the sale of the Bonds shall be applied as provided in the Third
Supplemental Indenture.
SECTION 3. The Bond Purchase Contract (the “Bond Purchase Contract”)
between the Successor Agency and Hilltop Securities Inc. (the “Underwriter”),
in substantially the form submitted at this meeting and made a part hereof as
though set forth in full herein, is hereby approved. An Authorized
Representative is hereby authorized and directed to execute the Bond
Purchase Contract in the form presented at this meeting with such changes,
insertions and omissions as may be approved by the Authorized
Representative, said execution being conclusive evidence of such approval;
provided, however, that the Bond Purchase Contract shall be signed only if
the terms of the agreement are such that (i) the existing indebtedness is not
accelerated, except to the extent necessary to achieve substantially level debt
service, (ii) the principal amount of the Bonds will not exceed the amount
required to finance the refunding of the 2013 Bonds and including establishing
Resolution No. SA 2020 – 001
RDA 2021 Tax Allocation Refunding Bonds Refinance
Adopted: October 6, 2020
Page 5 of 9
a customary debt service reserve fund and paying related costs of issuance,
(iii) the Underwriter’s Discount not including original issue discount, shall not
exceed three-quarters percent (.750%) of the par value of the Bonds; and
(iv) the net present value savings amount generated from the issuance of the
Bonds, expressed as a percentage of the aggregate principal amount of the
2013 Bonds, will be at least 3.00%.
SECTION 4. The Preliminary Official Statement relating to the Bonds (the
“Preliminary Official Statement”), in the form presented and on file with the
Secretary, is hereby approved. An Authorized Representative is hereby
authorized and directed, for and in the name and on behalf of the Successor
Agency, to cause the Preliminary Official Statement in substantially said form,
with such additions or changes therein as the Authorized Representative may
approve, to be deemed final for the purposes of Rule 15c2-12 of the Securities
and Exchange Act of 1934 (“Rule 15c2-12”). The Underwriter is hereby
authorized to distribute the Preliminary Official Statement to prospective
purchasers of the Bonds in substantially the form hereby approved, together
with such additions thereto and changes therein as are determined necessary
by the Authorized Representative to make the Preliminary Official Statement
final as of its date for purposes of Rule 15c2-12, including, but not limited to,
such additions and changes as are necessary to make all information set forth
therein accurate and not misleading.
SECTION 5. The preparation and delivery of an Official Statement, and
its use by the Successor Agency and the Underwriter, in connection with the
offering and sale of the Bonds, is hereby authorized and approved. The Official
Statement shall be in substantially the form of the Preliminary Official
Statement with such changes, insertions and omissions as may be requested
by Bond Counsel or the Underwriter and approved by on Authorized
Representative, as defined below, such approval to be conclusively evidenced
by the execution and delivery thereof. The Authorized Representative is
hereby authorized and directed to execute the final Official Statement and any
amendment or supplement thereto, in the name of and on behalf of the
Successor Agency, and thereupon to cause the final Official Statement and
any such amendment or supplement to be delivered to the Underwriter.
SECTION 6. The form of the Continuing Disclosure Agreement in
substantially the form submitted at this meeting and made a part hereof as
though set forth in full herein, is hereby approved. The Authorized
Representative is hereby authorized and directed to execute and deliver the
Continuing Disclosure Agreement(s) in the form presented at this meeting
with such changes, insertions and omissions as may be requested by Bond
Counsel and approved by the Authorized Representative, said execution being
conclusive evidence of such approval.
Resolution No. SA 2020 – 001
RDA 2021 Tax Allocation Refunding Bonds Refinance
Adopted: October 6, 2020
Page 6 of 9
SECTION 7. The form of the Escrow Agreement, by and among the
Successor Agency, the Authority and U.S. Bank National Association, dated
February 1, 2021, in substantially the form submitted at this meeting and
made a part hereof as though set forth in full herein, is hereby approved. An
Authorized Representative, as defined below, is hereby authorized and
directed to execute and deliver the Escrow Agreement relating to each of the
series of Refunded Bonds in the general form presented at this meeting with
such changes, insertions and omissions as may be requested by Bond Counsel
and approved by the Executive Director, said execution being conclusive
evidence of such approval.
SECTION 8. The Chair of the Successor Agency, the Executive Director
of the Successor Agency, the Secretary of the Successor Agency, their written
designee, and any other proper officer of the Successor Agency (“Authorized
Representative”), acting singly, be and each of them hereby is authorized and
directed to execute and deliver any and all documents and instruments,
relating to the Bonds, and each series thereof, and to do and cause to be done
any and all acts and things necessary or proper for carrying out the
transactions contemplated by the Original Indenture, the Third Supplemental
Indenture, the Bond Purchase Contract, the Preliminary Official Statement,
the Continuing Disclosure Agreement, the Escrow Agreement, this Resolution
and any such agreements approved by Bond Counsel.
SECTION 9. U.S. Bank National Association is hereby appointed as
Trustee and Escrow Bank, Rutan & Tucker, LLP is hereby appointed as Bond
Counsel, Nixon Peabody LLP ls hereby appointed as Disclosure Counsel.
Harrell & Company Advisors, LLC is hereby appointed as Municipal Advisor and
the Executive Director of the Successor Agency is authorized to execute
contracts for any or all such services pursuant to proposals on file with the
Executive Director, and Willdan Financial Services is hereby appointed as
Dissemination Agent and the Executive Director of the Successor Agency is
authorized to execute contracts for any or all such services pursuant to
proposals on file with the Executive Director.
SECTION 10. The Successor Agency is hereby authorized to recover its
costs of issuance with respect to the Bonds, including staff time and costs.
SECTION 11. This Resolution shall take effect immediately upon its
adoption.
PASSED, APPROVED AND ADOPTED at the meeting of the Successor
Agency to the La Quinta Redevelopment Agency held this 6th day of October,
2020, by the following vote:
Resolution No. SA 2020 – 001
RDA 2021 Tax Allocation Refunding Bonds Refinance
Adopted: October 6, 2020
Page 8 of 9
EXHIBIT A
SB 450 GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to
the Bonds in accordance with California Government Code Section
5852.1. Such good faith estimates have been provided to the Successor
Agency by Hilltop Securities, Inc. (the “Underwriter”).
Principal Amount of the Bonds. The Underwriter has informed the
Successor Agency that, based on the Successor Agency’s financing plan and
current market conditions, its good faith estimate of the aggregate principal
amount of the Bonds to be sold is $99,210,000.00 (the “Estimated Principal
Amount”).
True Interest Cost of the Bonds. The Underwriter has informed the
Successor Agency that, assuming that the respective Estimated Principal
Amount of the Bonds are sold, and based on market interest rates prevailing
at the time of preparation of such estimate, its good faith estimate of the true
interest cost of the Bonds, which means the rate necessary to discount the
amounts payable on the respective principal and interest payment dates to
the purchase price received for the Bonds, is 1.927%.
Finance Charge of the Bonds. The Underwriter has informed the
Successor Agency that, assuming that the Estimated Principal Amount of the
Bonds are sold, and based on market interest rates prevailing at the time of
preparation of such estimate, its good faith estimate of the finance charge for
the Bonds, which means the sum of all fees and charges paid to third parties
(or costs associated with the Bonds), is $951,626.99.
Amount of Proceeds to be Received. The Underwriter has informed the
Successor Agency that, assuming that the Estimated Principal Amount of the
Bonds are sold, and based on market interest rates prevailing at the time of
preparation of such estimate, its good faith estimate of the amount of
proceeds expected to be received by the Successor Agency for sale of the
Bonds, less the finance charge of the Bonds as estimated above, paid or
funded with proceeds of the Bonds, is $98,258,373.01.
Total Payment Amount. The Underwriter has informed the Successor
Agency that, assuming that the Estimated Principal Amount of the Bonds are
sold, and based on market interest rates prevailing at the time of preparation
of such estimate, its good faith estimate of the total payment amount, which
means the sum total of all payments the Successor Agency will make to pay
Resolution No. SA 2020 – 001
RDA 2021 Tax Allocation Refunding Bonds Refinance
Adopted: October 6, 2020
Page 9 of 9
debt service on the Bonds, plus the finance charge for the Bonds, as described
above, not paid with the respective proceeds of the Bonds, calculated to the
final maturity of the Bonds, is $110,545,606.07 and the sum of annual
ongoing costs to administer the Bonds not paid with proceeds of the Bonds is
$5,000.00.
The foregoing estimates constitute good faith estimates only and are
based on market conditions prevailing at the time of preparation of such
estimates on September 23, 2020. The actual principal amount of the Bonds
issued and sold, the true interest cost thereof, the finance charges thereof,
the amount of proceeds received therefrom and total payment amount with
respect thereto may differ from such good faith estimates due to (a) the actual
date of the sale of the Bonds being different than the date assumed for
purposes of such estimates, (b) the actual principal amount of Bonds sold
being different from the respective Estimated Principal Amount, (c) the actual
amortization of the Bonds being different than the amortization assumed for
purposes of such estimates, (d) the actual market interest rates at the time
of sale of the Bonds being different than those estimated for purposes of such
estimates, (e) other market conditions, or (f) alterations in the Successor
Agency’s financing plan, or a combination of such factors. The actual date of
sale of the Bonds and the actual principal amount of Bonds sold will be
determined by the Successor Agency based on various factors. The actual
interest rates borne by the Bonds will depend on market interest rates at the
time of sale thereof. The actual amortization of the Bonds will also depend,
in part, on market interest rates at the time of sale thereof. Market interest
rates are affected by economic and other factors beyond the control of the
Successor Agency.
PRELIMINARY OFFICIAL STATEMENT DATED ______, 2021 – DRAFT OF OCTOBER 1, 2020
NEW ISSUE – BOOK-ENTRY RATING
S&P: “___”
(See “CONCLUDING INFORMATION - Rating on the Bonds” herein)
In the opinion of Rutan & Tucker, LLP, Costa Mesa, California, Bond Counsel, interest on the Bonds is exempt from State
of California personal income taxes. The Successor Agency does not intend for interest on the Bonds to be excluded from
gross income for federal income tax purposes, but such interest is exempt from State of California personal income taxes.
See “TAX MATTERS” herein.
$99,210,000*
SUCCESSOR AGENCY TO THE
LA QUINTA REDEVELOPMENT AGENCY
LA QUINTA REDEVELOPMENT PROJECT AREAS NO. 1 AND 2
SUBORDINATE TAX ALLOCATION REFUNDING BONDS
2021 TAXABLE SERIES A
Dated: Date of Delivery Due: September 1 as shown on the inside cover page
Proceeds from the sale of the Successor Agency to the La Quinta Redevelopment Agency (the “Successor Agency”) La
Quinta Redevelopment Project Areas No. 1 and 2 Subordinate Tax Allocation Refunding Bonds, 2021 Taxable Series A
(the “Bonds”) will be used to refinance certain outstanding obligations of the Successor Agency.
The Bonds will be issued under an Indenture of Trust, dated as of December 1, 2013 (the “Original Indenture”) between
the Successor Agency and U.S. Bank National Association as Trustee (the “Trustee”) as amended and supplemented by (i)
a First Supplemental Indenture of Trust dated as of December 1, 2013, (ii) a Second Supplemental Indenture of Trust,
dated as of October 1, 2016 and (iii) a Third Supplemental Indenture of Trust dated as of February 1, 2021 by and between
the Successor Agency and the Trustee (the “Third Supplement” and, with the Original Indenture, the “Indenture”). The
Bonds are special obligations of the Successor Agency and are payable solely from and secured by a pledge of certain tax
increment revenues of the La Quinta Redevelopment Agency (the “Prior Agency”) La Quinta Redevelopment Project
Areas No. 1 and 2 and a pledge of amounts in certain funds and accounts established under the Indenture (see “SECURITY
FOR THE BONDS” and “RISK FACTORS”).
Interest on the Bonds is payable semiannually on each September 1 and March 1, commencing September 1, 2021, until
maturity (see “THE BONDS - General Provisions” herein).
The Bonds do not constitute a debt or liability of the City of La Quinta, the County of Riverside, the State of
California or of any political subdivision thereof, other than the Successor Agency. The Successor Agency shall
only be obligated to pay the principal of the Bonds, or the interest thereon, from the funds described herein, and
neither the faith and credit nor the taxing power of the City of La Quinta, the County of Riverside, the State of
California or any of its political subdivisions is pledged to the payment of the principal of or the interest on the
Bonds. The Successor Agency has no taxing power.
The cover page contains certain information for quick reference only. It is not a summary of the issues. Potential investors
must read the entire Official Statement to obtain information essential to the making of an informed investment decision.
See “RISK FACTORS” herein for a discussion of special risk factors that should be considered in evaluating the investment
quality of the Bonds.
The Bonds are being offered when, as and if issued, subject to the approval as to their legality by Rutan & Tucker, LLP,
Costa Mesa, California. Certain legal matters will also be passed on for the Successor Agency by Nixon Peabody LLP,
Los Angeles, California, as Disclosure Counsel, and by the City Attorney, as Successor Agency Counsel. Certain legal
matters will be passed on for the Underwriter by its counsel, of Best Best & Krieger LLP, Riverside, California. It is
anticipated that the Bonds will be available for delivery through the facilities of The Depository Trust Company on or
about February 17, 2021 (see “APPENDIX G - THE BOOK-ENTRY SYSTEM” herein).
The date of the Official Statement is _________, 2021.
__________________________
* Preliminary, subject to change.This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shPreliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisin which such offer, solicitation or sale would be unlawful under the securities laws of such jurisdiction. ATTACHMENT 4
$99,210,000*
SUCCESSOR AGENCY TO THE
LA QUINTA REDEVELOPMENT AGENCY
LA QUINTA REDEVELOPMENT PROJECT AREAS NO. 1 AND 2
SUBORDINATE TAX ALLOCATION REFUNDING BONDS
2021 TAXABLE SERIES A
MATURITY SCHEDULE
Maturity Date Principal Interest CUSIP®†
September 1 Amount Rate Yield Price (85473T)
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
__________________________
* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP
Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. CUSIP numbers
have been assigned by an independent company not affiliated with the Successor Agency, the Municipal Advisor or
the Underwriter and are included solely for the convenience of the holders of the Bonds. None of the Successor
Agency, the Municipal Advisor or the Underwriter is responsible for the selection or use of these CUSIP numbers,
and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a
specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions
including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of
secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion
of certain maturities of the Bonds.
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission, as amended (“Rule
15c2-12”), this Preliminary Official Statement constitutes an “official statement” of the Successor Agency with respect to the
Bonds that has been deemed “final” by the Successor Agency as of its date except for the omission of no more than the information
permitted by Rule 15c2-12.
No Offering May be Made Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized
to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement,
and if given or made, such other information or representation must not be relied upon as having been authorized.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to
buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
Effective Date. This Official Statement speaks only as of its date and the information and expressions of opinion contained in
this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the
Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the Successor Agency
or the Project Areas since the date of this Official Statement.
Use of This Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to in this
Official Statement and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not
a contract with the purchasers of the Bonds.
Preparation of This Official Statement. The information contained in this Official Statement has been obtained from sources
that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The information and
expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any
sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the
Successor Agency since the date hereof. This Official Statement is submitted in connection with the sale of the Bonds referred
to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the
Successor Agency. All summaries of the Bonds, the Indenture and other documents, are made subject to the provisions of such
documents and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such
documents on file with the Successor Agency for further information. See “INTRODUCTION - Summary Not Definitive.”
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the
information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal
securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy
or completeness of such information.
Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain
the market price of the Bonds at levels above that which might otherwise prevail in the open market. If commenced, the
Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Bonds to certain
dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of
this Official Statement, and those public offering prices may be changed from time to time by the Underwriter.
Bonds are Exempt From Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of
municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange
Act of 1934.
Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute
“forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section
21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of
1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,”
“budget” or other similar words.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-
LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS
WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY
DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY
SUCH FORWARD-LOOKING STATEMENTS. THE SUCCESSOR AGENCY DOES NOT PLAN TO ISSUE ANY UPDATES
OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS,
CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.
Website. The City of La Quinta maintains an Internet website, but the information on the website is not incorporated in this
Official Statement.
SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY
LA QUINTA, CALIFORNIA
BOARD OF DIRECTORS
Linda Evans, Chair
John Peña, Vice-Chair
Kathleen Fitzpatrick, Member
Robert Radi, Member
Steve Sanchez, Member
______________________________________________
AGENCY/CITY STAFF
Jon McMillen, Executive Director/City Manager
Monika Radeva, Agency Secretary/City Clerk
Karla Romero, Finance Director
William Ihrke, Agency Counsel/City Attorney
__________________________________________
PROFESSIONAL SERVICES
Bond Counsel/Agency Counsel
Rutan & Tucker LLP
Costa Mesa, California
Disclosure Counsel
Nixon Peabody LLP
Los Angeles, California
Trustee and Escrow Bank
U.S. Bank National Association
Los Angeles, California
Municipal Advisor
Harrell & Company Advisors, LLC
Orange, California
Underwriter
Hilltop Securities, Inc.
Cardiff by the Sea, California
TABLE OF CONTENTS
INTRODUCTION ...................................................... 1
The Successor Agency and the Prior Agency ............ 1
The City ..................................................................... 2
Authority and Purpose ............................................... 2
Tax Allocation Financing Under the Dissolution
Act .......................................................................... 2
The Project Areas ....................................................... 3
Bonded Debt of the Successor Agency ...................... 3
Security for the Bonds ............................................... 3
Reserve Account Surety Bond ................................... 4
Legal Matters ............................................................. 5
Offering of the Bonds ................................................ 5
Summary Not Definitive ............................................ 5
THE BONDS ............................................................... 6
General Provisions ..................................................... 6
No Redemption Prior to Maturity .............................. 6
Scheduled Debt Service on the Bonds ....................... 7
THE FINANCING PLAN .......................................... 8
The Refunding Plan ................................................... 8
Estimated Sources and Uses of Funds ....................... 9
THE DISSOLUTION ACT ........................................ 9
SECURITY FOR THE BONDS .............................. 10
Pledged Tax Revenues ............................................. 10
Redevelopment Property Tax Trust Fund ................ 11
Recognized Obligation Payment Schedules ............ 13
Pledge of Pledged Tax Revenues ............................. 15
No Additional Debt Other Than Refunding Bonds .. 16
THE SUCCESSOR AGENCY ................................. 17
Successor Agency Powers ....................................... 17
Redevelopment Plans ............................................... 17
SB 107 Effects on Plan Limits ................................. 18
THE PROJECT AREAS .......................................... 19
Description of the Project Areas .............................. 19
Assessed Valuations and Pledged Tax Revenues .... 19
Major Taxpayers ...................................................... 22
Assessment Appeals ................................................. 23
Tax Collections ........................................................ 24
FINANCIAL INFORMATION ............................... 24
Successor Agency Accounting Records and
Financial Statements ............................................. 24
Property Taxation in California ................................ 25
Tax Sharing Agreements and Tax Sharing Statutes . 28
Outstanding Indebtedness and Enforceable
Obligations ........................................................... 28
Flow of Funds .......................................................... 29
Projected Pledged Tax Revenues ............................. 30
Debt Service Coverage ............................................ 31
RISK FACTORS ...................................................... 32
Factors Which May Affect Pledged Tax Revenues .. 32
Real Estate and General Economic Risks ................ 36
COVID-19 ............................................................... 36
Last and Final Recognized Obligation Payment
Schedule ............................................................... 37
Cybersecurity ........................................................... 38
Secondary Market .................................................... 38
TAX MATTERS ....................................................... 38
Information Reporting and Backup Withholding .... 39
LEGAL MATTERS .................................................. 39
Enforceability of Remedies ..................................... 39
Approval of Legal Proceedings ............................... 39
No Litigation ........................................................... 40
CONCLUDING INFORMATION .......................... 40
Rating on the Bonds ................................................ 40
The Municipal Advisor ............................................ 40
Continuing Disclosure ............................................. 40
Underwriting ........................................................... 41
References ............................................................... 41
Execution ................................................................. 41
APPENDIX A - SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE AND
SUPPLEMENTS THERETO
APPENDIX B - MUNICIPAL ADVISOR’S
PROJECTED TAX REVENUES REPORT
APPENDIX C - CITY OF LA QUINTA
INFORMATION STATEMENT
APPENDIX D - CITY AUDITED FINANCIAL
STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30, 2019
APPENDIX E - FORM OF CONTINUING
DISCLOSURE AGREEMENT
APPENDIX F - PROPOSED FORM OF BOND
COUNSEL OPINION
APPENDIX G - THE BOOK-ENTRY SYSTEM
1
OFFICIAL STATEMENT
$99,210,000*
SUCCESSOR AGENCY TO THE
LA QUINTA REDEVELOPMENT AGENCY
LA QUINTA REDEVELOPMENT PROJECT AREAS NO. 1 AND 2
SUBORDINATE TAX ALLOCATION REFUNDING BONDS
2021 TAXABLE SERIES A
This Official Statement, which includes the cover page, inside cover page and appendices (the “Official
Statement”), is provided to furnish certain information concerning the sale of the Successor Agency to the
La Quinta Redevelopment Agency La Quinta Redevelopment Project Areas No. 1 and 2 Subordinate Tax
Allocation Refunding Bonds, 2021 Taxable Series A (the “Bonds”).
INTRODUCTION
This Introduction contains only a brief description of this issue and does not purport to be complete. The
Introduction is subject in all respects to more complete information in the entire Official Statement and the
offering of the Bonds to potential investors is made only by means of the entire Official Statement and the
documents summarized herein. Potential investors must read the entire Official Statement to obtain
information essential to the making of an informed investment decision (see “RISK FACTORS” herein). For
definitions of certain capitalized terms used herein and not otherwise defined, and the terms relating to the
Bonds, see the summary included in “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE
INDENTURE AND SUPPLEMENTS THERETO” herein.
The Successor Agency and the Prior Agency
The La Quinta Redevelopment Agency (the “Prior Agency”) was established in 1983 by the City Council
(the “City Council”) of the City of La Quinta (the “City”) pursuant to the Community Redevelopment Law
(the “Redevelopment Law”), constituting Part 1 of Division 24 (commencing with Section 33000) of the
Health and Safety Code of the State of California (the “State”). On June 29, 2011, Assembly Bill No. 26
(“AB X1 26”) was enacted as Chapter 5, Statutes of 2011. As a result of AB X1 26 and the decision of the
California Supreme Court in California Redevelopment Association, et al. v. Matosantos, et al., 53 Cal. 4th
231 (Cal. 2011), as of February 1, 2012, all redevelopment agencies in the State were dissolved, including
the Prior Agency, and successor agencies were designated as successor entities to the former redevelopment
agencies to expeditiously wind down the affairs of the former redevelopment agencies.
The primary provisions enacted by AB X1 26 relating to the dissolution and wind down of former
redevelopment agency affairs are Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with
Section 34170) of Division 24 of the Health and Safety Code of the State, as amended on June 27, 2012 by
Assembly Bill No. 1484 (“AB 1484”), enacted as Chapter 26, Statutes of 2012, and as further amended on
September 22, 2015 by Senate Bill No. 107 (“SB 107”) enacted as Chapter 325, Statutes of 2015. The
provisions of Part 1.85 as amended by AB 1484 and SB 107 are referred to in this Official Statement as the
“Dissolution Act.” The Redevelopment Law, as amended by the Dissolution Act, is sometimes referred to
herein as the “Law.”
__________________________
* Preliminary, subject to change.
2
Pursuant to Section 34173 of the Dissolution Act, the City Council serves as the governing board of the
successor agency to the Prior Agency. Since the February 1, 2012 dissolution of the Prior Agency, the City
has served as the Successor Agency to the La Quinta Redevelopment Agency (the “Successor Agency”).
The City Manager acts as the Successor Agency’s Executive Director (see “THE SUCCESSOR AGENCY”
herein).
Section 34173(g) of the Dissolution Act expressly affirms that the Successor Agency is a separate public
entity from the City, that the two entities shall not merge, and that the liabilities of the Prior Agency will
not be transferred to the City nor will the assets of the Prior Agency become assets of the City (see “THE
SUCCESSOR AGENCY” herein).
The City
The City was incorporated in 1982 and became a charter city in 1996. It encompasses over 35 square miles
located is located in the area of Riverside County (the “County”) known as the “Coachella Valley,”
approximately 20 miles east of Palm Springs (see “APPENDIX C - CITY OF LA QUINTA INFORMATION
STATEMENT” herein).
Authority and Purpose
The Bonds are being issued pursuant to the Constitution and laws of the State, including Article 11
(commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code
of the State (the “Refunding Law”), the Law and an Indenture of Trust, dated as of December 1, 2013 (the
“Original Indenture”) between the Successor Agency and U.S. Bank National Association as Trustee (the
“Trustee”) as amended and supplemented by (i) a First Supplemental Indenture of Trust dated as of
December 1, 2013, (ii) a Second Supplemental Indenture of Trust, dated as of October 1, 2016 and (iii) a
Third Supplemental Indenture of Trust dated as of February 1, 2021 by and between the Successor Agency
and the Trustee (the “Third Supplement” and, with the Original Indenture, the “Indenture”).
The Bonds are being issued to refinance the Prior Agency’s outstanding La Quinta Redevelopment Project
Areas No. 1 and 2, Subordinate Tax Allocation Refunding Bonds, 2013 Series A (the “2013 Series A
Bonds”) and La Quinta Redevelopment Project Areas No. 1 and 2, Subordinate Tax Allocation Refunding
Bonds, 2013 Taxable Series B (the “2013 Series B Bonds” and together with the 2013 Series A Bonds, the
“Refunded Bonds”). See “THE FINANCING PLAN” herein.
Tax Allocation Financing Under the Dissolution Act
Prior to the enactment of AB X1 26, the Redevelopment Law authorized the financing of redevelopment
projects through the use of tax increment revenues. This method provided that the taxable valuation of the
property within a redevelopment project area on the property tax roll last equalized prior to the effective
date of the ordinance which adopted the redevelopment plan became the base year valuation. Assuming
the taxable valuation never dropped below the base year level, the Taxing Agencies, as defined herein,
thereafter received that portion of the taxes produced by applying then current tax rates to the base year
valuation, and the redevelopment agency was allocated the remaining portion produced by applying then
current tax rates to the increase in valuation over the base year. Such incremental tax revenues (referred to
as “Tax Increment Revenues” herein) allocated to a redevelopment agency were authorized to be pledged
to the payment of agency obligations.
Under the Dissolution Act, moneys will be deposited from time to time in a Redevelopment Property Tax
Trust Fund (the “Redevelopment Property Tax Trust Fund” or “RPTTF”) held by a county auditor-controller
with respect to a successor agency, which are equivalent to the Tax Increment Revenues that were formerly
allocated under the Redevelopment Law to the redevelopment agency and formerly authorized under the
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Redevelopment Law to be used for the financing of redevelopment projects. See “THE DISSOLUTION
ACT” herein for additional information.
The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of moneys
deposited from time to time in the Redevelopment Property Tax Trust Fund. Pledged Tax Revenues, as
defined herein, pledged to pay the Bonds consist of a portion of the amounts deposited from time to time
in the Redevelopment Property Tax Trust Fund established pursuant to and as provided in the Dissolution
Act (see “Security for the Bonds” below).
The Dissolution Act provides that any bonds authorized thereunder to be issued by the Successor Agency
will be considered indebtedness incurred by the Prior Agency, with the same legal effect as if the bonds had
been issued prior to the effective date of AB X1 26, in full conformity with the applicable provision of the
Redevelopment Law that existed prior to that date, and will be included in the Successor Agency’s
Recognized Obligation Payment Schedules (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF
THE INDENTURE AND SUPPLEMENTS THERETO - DEFINITIONS” and “SECURITY FOR THE BONDS -
Recognized Obligation Payment Schedules”).
The Project Areas
The Redevelopment Plan for the La Quinta Redevelopment Project Area No. 1 was approved by Ordinance
No. 43 adopted by the City Council on November 29, 1983, and has been amended several times. The La
Quinta Redevelopment Project Area No. 1 (“Project Area No. 1”) encompasses 17.9 square miles (11,475
acres) of commercial, public and residential properties.
The Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 was approved by Ordinance
No. 139 adopted by the City Council on May 16, 1989, and has also been amended several times. The La
Quinta Redevelopment Project Area No. 2 (“Project Area No. 2”) encompasses 4.9 square miles (3,130
acres) of commercial, public and residential properties.
Project Area No. 1 and Project Area No. 2 are referred to herein individually as a “Project Area” and
collectively as the “Project Areas,” and the Redevelopment Plans for Project Area No. 1 and Project Area
No. 2 are re referred to herein individually as a “Redevelopment Plan” and collectively as the
“Redevelopment Plans.”
See “THE PROJECT AREAS” herein for additional information on the Project Areas and “THE SUCCESSOR
AGENCY” herein for additional information on the Redevelopment Plans.
Bonded Debt of the Successor Agency
The Bonds are being issued on a subordinate basis to the $65,600,000 Successor Agency to the La Quinta
Redevelopment Agency, La Quinta Redevelopment Project Areas No. 1 and 2, Tax Allocation Refunding
Bonds, 2014 Series A (the “Senior Bonds”), of which $52,095,000 are currently outstanding.
The Successor Agency previously issued $35,035,000 La Quinta Redevelopment Project Areas No. 1 and
2, Subordinate Tax Allocation Refunding Bonds, 2016 Taxable Series A (the “2016 Parity Bonds”), of which
$29,380,000 are currently outstanding. The Bonds are being issued on a parity with the 2016 Parity Bonds.
Security for the Bonds
For the security of the Bonds, the Successor Agency grants a pledge of and lien on all of the Pledged Tax
Revenues. “Pledged Tax Revenues” are defined under the Indenture as the portion of the monies deposited
from time to time in the Redevelopment Property Tax Trust Fund as provided by Section 34183(a)(2) of the
Dissolution Act, less the amount required to pay debt service on the Senior Bonds. Under the Dissolution
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Act, monies deposited in the Redevelopment Property Tax Trust Fund (“RPTTF”) as used in the definition
of Pledged Tax Revenues, means taxes that were eligible for allocation to the Prior Agency with respect to
the Project Areas and are allocated to the Successor Agency pursuant to Article 6 of Chapter 6 (commencing
with Section 33670) of the Law and Section 16 of Article XVI of the Constitution of the State, or pursuant
to other applicable State laws. The deposit in the Redevelopment Property Tax Trust Fund excludes
amounts first paid pursuant to Section 34183(a)(1) of the Dissolution Act, under Contractual Tax Sharing
Agreements and as Statutory Tax Sharing (as defined herein), except as described below. By definition,
under the Dissolution Act, Pledged Tax Revenues are net of the County’s administrative costs allowed under
Section 34182 of the Dissolution Act and Section 95.3 of the Revenue and Taxation Code. See “FINANCIAL
INFORMATION - Property Taxation in California” and “- Tax Sharing Agreements and Tax Sharing
Statutes” herein.
Certain payments due under Contractual Tax Sharing Agreements are subordinate to bonded indebtedness
of the Prior Agency (“Subordinated Pass-Through Amounts”). The Successor Agency believes that
pursuant to the Dissolution Act that the Subordinated Pass-Through Amounts in Project Area No. 1, in
certain circumstances, would be available pursuant to Health & Safety Code Section 34183(b) to pay debt
service on the Bonds and the 2016 Parity Bonds. The Pledged Tax Revenues, before deducting the amounts
for debt service on the Senior Bonds, plus the Subordinated Pass-Through Amounts in Project Area No. 1,
are referred to herein as “Available Revenues.” The Municipal Advisor has included the Available
Revenues in calculating amounts available to pay debt service shown in the table entitled “PROJECTED
PLEDGED TAX REVENUES” and the table under the heading “Debt Service Coverage” herein.
The Successor Agency may issue refunding bonds payable from Pledged Tax Revenues on a parity with the
Bonds and the 2016 Parity Bonds (“Parity Debt”) to refinance the Bonds, the 2016 Parity Bonds or the
Senior Bonds. See “SECURITY FOR THE BONDS - No Additional Debt Other Than Refunding Bonds”
herein.
Taxes levied on the property within the Project Areas on that portion of the taxable valuation over and above
the taxable valuation of the base year property tax roll of each Project Area, will be deposited in the RPTTF
for transfer by the County Auditor-Controller to the Successor Agency’s Redevelopment Obligation
Retirement Fund, as defined herein, on January 2 and June 1 of each year to the extent required for
payments listed in the Successor Agency’s Recognized Obligation Payment Schedule in accordance with
the requirements of the Dissolution Act. Moneys transferred by the County Auditor-Controller to the
Successor Agency will be deposited into the Successor Agency’s Redevelopment Obligation Retirement
Fund and amounts required for payment of debt service on the Bonds will be transferred by the Successor
Agency to the Trustee for deposit in the Debt Service Fund established under the Indenture. See
“SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules” herein.
The Bonds do not constitute a debt or liability of the City, the County, the State or of any political
subdivision thereof, other than the Successor Agency. The Successor Agency shall only be obligated
to pay the principal of the Bonds, or the interest thereon, from the funds described herein, and neither
the faith and credit nor the taxing power of the City, the County, the State or any of its political
subdivisions is pledged to the payment of the principal of or the interest on the Bonds. The Successor
Agency has no taxing power.
Reserve Account Surety Bond
In order to further secure the payment of the principal of and interest on the Bonds, a separate Reserve
Account has been established by the Trustee under the Indenture. The Reserve Account will be funded by
the purchase of a Municipal Bond Debt Service Reserve Insurance Policy (the “2021 Reserve Policy”)
issued by [________] in an amount equal to the Reserve Requirement for the Bonds as defined in the
Indenture. See “SECURITY FOR THE BONDS - Reserve Account.”
5
Legal Matters
All legal proceedings in connection with the issuance of the Bonds are subject to the approving opinion of
Rutan & Tucker, LLP, Costa Mesa, California, as Bond Counsel (“Bond Counsel”). Such opinion, and
certain tax consequences incident to the ownership of the Bonds, including certain exceptions to the tax
treatment of interest, are described more fully under the heading “TAX MATTERS” herein. Certain legal
matters will be passed on for the Successor Agency by Nixon Peabody LLP, Los Angeles, California, as
Disclosure Counsel, by the City Attorney, as General Counsel to the Successor Agency, and for the
Underwriter by their Counsel, Best Best & Krieger LLP, Riverside, California.
Offering of the Bonds
Authority for Issuance. The Bonds are to be issued and secured pursuant to the Indenture, as authorized
by Resolution No. _________ of the Successor Agency adopted on _________, 2020, the Refunding Law
and the Law. The Countywide Oversight Board (the “Oversight Board”) approved the action taken by the
Successor Agency to refinance the ____ Bonds on _________, 2020. The State Department of Finance
approved the Oversight Board action by letter dated _________, 2021.
Offering and Delivery of the Bonds. The Bonds are being sold to Hilltop Securities Inc. (the
“Underwriter”). The Bonds are offered, when, as and if issued, subject to the approval as to their legality
by Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery through
the facilities of The Depository Trust Company on or about __________, 2021.
Summary Not Definitive
The summaries and references contained herein with respect to the Indenture, the Bonds and other statutes
or documents do not purport to be comprehensive or definitive and are qualified by reference to each such
document or statute, and references to the Bonds are qualified in their entirety by reference to the form
thereof included in the Indenture. Copies of these documents may be obtained after delivery of the Bonds
from the Successor Agency at 78-495 Calle Tampico, La Quinta, California 92253.
[Remainder of Page Intentionally Left Blank]
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THE BONDS
General Provisions
Repayment of the Bonds. Interest on the Bonds is payable at the rates per annum set forth on the inside
cover page hereof. Interest on the Bonds will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
Interest on the Bonds will be payable on September 1 and March 1 (each an “Interest Payment Date”),
commencing September 1, 2021, and thereafter from the Interest Payment Date next preceding the date of
authentication thereof, unless (a) it is authenticated after a Regular Record Date and on or before the
following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or
(b) a Bond is authenticated on or before August 15, 2021, in which event it shall bear interest from the
Delivery Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is
in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously
been paid or made available for payment thereon.
Interest on the Bonds shall be payable on each Interest Payment Date to the person whose name appears on
the Registration Books as the Owner thereof as of the Regular Record Date immediately preceding each
such Interest Payment Date, such interest to be paid by check of the Trustee mailed on the Interest Payment
Date by first class mail to such Owner at the address of such Owner as it appears on the Registration Books;
provided, however, that upon the written request of any Owner of at least $1,000,000 in principal amount
of Bonds received by the Trustee at least fifteen (15) days prior to such Regular Record Date, payment shall
be made by wire transfer in immediately available funds to an account in the United States designated by
such Owner. Principal of and redemption premium (if any) on any Bond shall be paid upon presentation
and surrender thereof, at maturity or redemption, at the Trust Office of the Trustee. Both the principal of
and interest on the Bonds shall be payable in lawful money of the United States of America.
The Bonds are authorized to be issued in denominations of $5,000 or any integral multiple thereof, and will
be dated as of the date of their original delivery.
Transfer or Exchange of Bonds. So long as the Bonds are in the book-entry system of The Depository
Trust Company (“DTC”) as described below, the rules of DTC will apply for the transfer and exchange of
Bonds.
Book-Entry System. DTC will act as securities depository for the Bonds. The Bonds will be issued as
fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other
name as may be requested by an authorized representative of DTC. Interest on and principal of the Bonds
will be payable when due by wire of the Trustee to DTC which will in turn remit such interest and principal
to DTC Participants, which will in turn remit such interest and principal to Beneficial Owners of the Bonds
(see “APPENDIX G - THE BOOK-ENTRY SYSTEM” herein). As long as DTC is the registered owner of the
Bonds and DTC’s book-entry method is used for the Bonds, the Trustee will send any notices to Bond
Owners only to DTC.
DTC may discontinue providing its services as securities depository with respect to the Bonds at any time
by giving reasonable notice to the Successor Agency or the Trustee. Under such circumstances, if a
successor securities depository is not obtained, Bonds are required to be printed and delivered as described
in the Indenture. The Successor Agency may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, the Bonds will be printed and delivered
as described in the Indenture.
No Redemption Prior to Maturity
The Bonds are not subject to redemption prior to maturity.
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Scheduled Debt Service on the Bonds
The following is the scheduled semi-annual debt service on the Bonds.
Payment Date
Principal
Interest
Semi-Annual
Debt Service
Annual
Debt Service
September 1, 2021
March 1, 2022
September 1, 2022
March 1, 2023
September 1, 2023
March 1, 2024
September 1, 2024
March 1, 2025
September 1, 2025
March 1, 2026
September 1, 2026
March 1, 2027
September 1, 2027
March 1, 2028
September 1, 2028
March 1, 2029
September 1, 2029
March 1, 2030
September 1, 2030
March 1, 2031
September 1, 2031
March 1, 2032
September 1, 2032
Total
[Remainder of Page Intentionally Left Blank]
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THE FINANCING PLAN
The Refunding Plan
On the Delivery Date, a portion of the proceeds of the Bonds will be transferred to the Trustee as escrow
bank (“Escrow Bank”) for deposit pursuant to an Escrow Agreement dated as of February 1, 2021 (the
“Escrow Agreement”) between the Successor Agency and the Escrow Bank. The amount deposited under
the Escrow Agreement, together with other available moneys and earnings thereon, will be irrevocably
pledged for the payment of the Refunded Bonds as follows:
• to the payment of the principal and interest of the 2013 Series A Bonds when due, through and
including September 1, 2023 and to the redemption in full on September 1, 2023 of the $56,150,000
outstanding 2013 Series A Bonds maturing on or after September 1, 2024 at a redemption price
equal to 100% of the principal amount of the 2013 Series A Bonds to be redeemed together with
accrued interest thereon to the date fixed for redemption, without premium, and
• to the payment of the principal and interest of the 2013 Series B Bonds when due, through and
including September 1, 2023 and to the redemption in full on September 1, 2023 of the $13,160,000
outstanding 2013 Series B Bonds maturing on or after September 1, 2024 at a redemption price
equal to 100% of the principal amount of the 2013 Series B Bonds to be redeemed together with
accrued interest thereon to the date fixed for redemption, without premium.
Amounts so deposited under the Escrow Agreement will be pledged respectively to the payment of principal
and interest when due or to the payment of the redemption price of the Refunded Bonds on the respective
redemption dates and the sufficiency of the amounts deposited under the Escrow Agreement for such
purpose will be verified by __________. The lien of the Refunded Bonds will be discharged, terminated
and of no further force and effect upon the deposit with the Escrow Bank of the amounts required pursuant
to the Escrow Agreement.
The amounts held by the Escrow Bank for the respective Refunded Bonds under the Escrow Agreement are
pledged solely to the payment of amounts due and payable by the Successor Agency under the Escrow
Agreement. The funds deposited under the Escrow Agreement will not be available for the payment of debt
service on the Bonds.
[Remainder of Page Intentionally Left Blank]
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Estimated Sources and Uses of Funds
Under the provisions of the Indenture, the Trustee will receive the proceeds from the sale of the Bonds and
other available funds and will apply them as shown below.
Sources of Funds
Par Amount of Bonds
Funds Held for the Refunded Bonds
Total Source of Funds
Uses of Funds
Transfer to Escrow Bank
Underwriter’s Discount
Costs of Issuance Fund (1)
Total Use of Funds
______________________________
(1) Costs of issuance include fees and expenses of Bond Counsel, the Municipal Advisor, Disclosure Counsel,
Verification Agent, Trustee and Escrow Bank, costs of printing the Official Statement, rating fee and other costs
of issuance of the Bonds.
THE DISSOLUTION ACT
The Dissolution Act requires the County Auditor-Controller to determine the amount of property taxes that
would have been allocated to the Prior Agency (pursuant to subdivision (b) of Section 16 of Article XVI
of the State Constitution) had the Prior Agency not been dissolved pursuant to the operation of AB X1 26,
using current assessed values on the last equalized roll on August 20, and to deposit that amount in the
Redevelopment Property Tax Trust Fund for the Successor Agency established and held by the County
Auditor-Controller pursuant to the Dissolution Act. The Redevelopment Property Tax Trust Fund is
sometimes referred to herein as the “RPTTF.”
The Dissolution Act provides that any bonds authorized thereunder to be issued by the Successor Agency
will be considered indebtedness incurred by the Prior Agency, with the same lien priority and legal effect
as if the bonds had been issued prior to the effective date of AB X1 26, in full conformity with the
applicable provisions of the Redevelopment Law that existed prior to that date, and will be included in the
Successor Agency’s Recognized Obligation Payment Schedules (see “SECURITY FOR THE BONDS -
Recognized Obligation Payment Schedules”).
The Dissolution Act further provides that bonds authorized by the Dissolution Act to be issued by the
Successor Agency will be secured by a pledge of, and lien on, and will be repaid from moneys deposited
from time to time in the Redevelopment Property Tax Trust Fund, and that property tax revenues pledged
to any bonds authorized to be issued by the Successor Agency under the Dissolution Act, including the
Bonds, are taxes allocated to the Successor Agency pursuant to subdivision (b) of Section 33670 of the
Redevelopment Law and Section 16 of Article XVI of the State Constitution.
Pursuant to subdivision (b) of Section 33670 of the Redevelopment Law and Section 16 of Article XVI of
the State Constitution and as provided in the Redevelopment Plans, taxes levied upon taxable property in
the Project Areas each year by or for the benefit of the State, any city, county, city and county, district, or
other public corporation (herein sometimes collectively called “taxing agencies”) after the effective date
of the ordinance approving the related Redevelopment Plan, or the respective effective dates of ordinances
approving amendments to the related Redevelopment Plan that added territory to a Project Area, if any,
are to be divided as follows:
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(a) To Taxing Agencies: That portion of the taxes which would be produced by the rate upon which
the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed
value of the taxable property in a Project Area as shown upon the assessment roll used in connection
with the taxation of such property by such taxing agency last equalized prior to the effective date
of the ordinance adopting the Redevelopment Plan (the “base year valuation”), will be allocated to,
and when collected will be paid into, the funds of the respective taxing agencies as taxes by or for
the taxing agencies on all other property are paid; and
(b) To the Prior Agency/Successor Agency: Except for that portion of the taxes in excess of the amount
identified in (a) above which are attributable to a tax rate levied by a taxing agency for the purpose
of producing revenues in an amount sufficient to make annual repayments of the principal of, and
the interest on, any bonded indebtedness approved by the voters of the taxing agency on or after
January 1, 1989 for the acquisition or improvement of real property, which portion shall be
allocated to, and when collected shall be paid into, the fund of that taxing agency, that portion of
the levied taxes each year in excess of such amount, annually allocated within limitations
established by the Redevelopment Plan, following the date of issuance of the Bonds, when collected
will be paid into a special fund of the Successor Agency. Section 34172 of the Dissolution Act
provides that, for purposes of Section 16 of Article XVI of the State Constitution, the
Redevelopment Property Tax Trust Fund shall be deemed to be a special fund of the Successor
Agency to pay the debt service on indebtedness incurred by the Prior Agency or the Successor
Agency to finance or refinance the redevelopment projects of the Prior Agency.
That portion of the levied taxes described in paragraph (b) above, less amounts deducted pursuant to
Section 34183(a) of the Dissolution Act for permitted administrative costs of the County Auditor-
Controller, constitute the amounts required under the Dissolution Act to be deposited by the County
Auditor-Controller into the Redevelopment Property Tax Trust Fund. In addition, Section 34183 of the
Dissolution Act effectively eliminates the January 1, 1989 date from paragraph (b) above. Pursuant to SB
107, effective September 22, 2015, debt service override revenues approved by the voters for the purpose
of supporting pension programs or capital projects, and programs related to the State Water Project, that
are not pledged to or needed for debt service on successor agency obligations are allocated and paid to the
entity that levies the override and will not be deposited into the Redevelopment Property Tax Trust Fund.
Therefore, overrides levied within the Project Areas are not pledged to the payment of debt service on the
Bonds.
SECURITY FOR THE BONDS
Pledged Tax Revenues
Definition of Pledged Tax Revenues. For the security of the Bonds, the Successor Agency grants a pledge
of and lien on all of the Pledged Tax Revenues. “Pledged Tax Revenues” are defined under the Indenture
as the portion of the monies deposited from time to time in the Redevelopment Property Tax Trust Fund, as
provided in Section 34183(a)(2) of the Dissolution Act less the amount required to pay debt service on the
Senior Bonds.
Under the Dissolution Act, monies deposited from time to time in the Redevelopment Property Tax Trust
Fund means taxes that were eligible for allocation to the Prior Agency with respect to the Project Areas and
are allocated to the Successor Agency pursuant to Article 6 of Chapter 6 (commencing with Section 33670)
of the Law and Section 16 of Article XVI of the Constitution of the State, or pursuant to other applicable
State laws. The deposit in the Redevelopment Property Tax Trust Fund excludes amounts first paid pursuant
to Section 34183(a)(1) of the Dissolution Act, under Contractual Tax Sharing Agreements and as Statutory
Tax Sharing (as defined below), except as described below.
“Contractual Tax Sharing Agreements” are defined herein to mean those agreements entered into by the
Prior Agency with certain taxing agencies pursuant to Health & Safety Code Section 33401, and providing
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for the payment of a portion of tax increment revenues allocable to such taxing agency. Certain payments
due under Contractual Tax Sharing Agreements are subordinate to bonded indebtedness of the Prior Agency
(“Subordinated Pass-Through Amounts”). “Statutory Tax Sharing” means those payments due to taxing
agencies pursuant to the provisions of Health & Safety Code Sections 33607.5 and 33607.7.
By definition, under the Dissolution Act, Pledged Tax Revenues are net of the County’s administrative costs
allowed under Section 34182 of the Dissolution Act and Section 95.3 of the Revenue and Taxation Code.
See “FINANCIAL INFORMATION - Property Taxation in California” and “- Tax Sharing Agreements and
Tax Sharing Statutes” herein.
The Successor Agency believes that pursuant to the Dissolution Act that the Subordinated Pass-Through
Amounts in Project Area No. 1, in certain circumstances, would be available pursuant to Health & Safety
Code Section 34183(b) to pay debt service on the Bonds and the 2016 Parity Bonds. The Pledged Tax
Revenues, before deducting the amounts for debt service on the Senior Bonds, plus the Subordinated Pass-
Through Amounts in Project Area No. 1, are referred to herein as “Available Revenues.” The Municipal
Advisor has included the Available Revenues in calculating amounts available to pay debt service shown
in the table entitled “PROJECTED PLEDGED TAX REVENUES.”
See “Pledge of Tax Revenues” below and “FINANCIAL INFORMATION - Tax Sharing Agreements and Tax
Sharing Statutes” herein.
Redevelopment Property Tax Trust Fund
Deposits to the Redevelopment Property Tax Trust Fund. Section 34172 of the Dissolution Act provides
that, for purposes of Section 16 of Article XVI of the State Constitution, the Redevelopment Property Tax
Trust Fund shall be deemed to be a special fund of the Successor Agency to pay the debt service on
indebtedness incurred by the Prior Agency or the Successor Agency to finance or refinance the
redevelopment projects of the Prior Agency.
Disbursements From the Redevelopment Property Tax Trust Fund. The Redevelopment Law
authorized redevelopment agencies to make payments to Taxing Agencies to alleviate any financial burden
or detriments to such Taxing Agencies caused by a redevelopment project. The Prior Agency entered into
a number of Contractual Tax Sharing Agreements with the Taxing Agencies for this purpose. Additionally,
Sections 33607.5 and 33607.7 of the Redevelopment Law required mandatory Statutory Tax Sharing
applicable to redevelopment projects adopted on or after January 1, 1994 or amended after January 1, 1994
in a manner specified in such section. The Successor Agency is also obligated to make certain Statutory
Tax Sharing payments. See “FINANCIAL INFORMATION - Tax Sharing Agreements and Tax Sharing
Statutes” herein).
Typically, under the Redevelopment Property Tax Trust Fund distribution provisions of the Dissolution Act,
a county auditor-controller is to distribute funds for each six-month period in the following order specified
in Section 34183 of the Dissolution Act:
(i) first, subject to certain adjustments (as described below) for subordinations to the extent permitted
under the Dissolution Act (if any, as described below under “FINANCIAL INFORMATION - Tax
Sharing Agreements and Tax Sharing Statutes”) and no later than each January 2 and June 1, to
each local taxing agency and school entity, to the extent applicable, amounts required for pass-
through payments such entity would have received under provisions of the Redevelopment Law, as
those provisions read on January 1, 2011, including the Contractual Tax Sharing Agreements and
the Statutory Tax Sharing Amounts;
(ii) second, on each January 2 and June 1, to the successor agency for payments listed in its Recognized
Obligation Payment Schedule, with debt service payments (and amounts required to replenish the
related reserve funds, if any) scheduled to be made for tax allocation bonds having the highest
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priority over payments scheduled for other debts and obligations listed on the Recognized
Obligation Payment Schedule;
(iii) third, on each January 2 and June 1, to the successor agency for the administrative cost allowance,
as defined in the Dissolution Act; and
(iv) fourth, on each January 2 and June 1, to taxing entities any moneys remaining in the
Redevelopment Property Tax Trust Fund after the payments and transfers authorized by clauses (i)
through (iii), in an amount proportionate to such taxing entity’s share of property tax revenues in
the tax rate area in that fiscal year (without giving effect to any pass-through obligations that were
established under the Redevelopment Law).
The Dissolution Act requires the County Auditor-Controller to distribute from the Redevelopment Property
Tax Trust Fund amounts required to be distributed under any Contractual Tax Sharing Agreements and
Statutory Tax Sharing to the Taxing Agencies on each January 2 and June 1 before amounts are distributed
by the County Auditor-Controller from the Redevelopment Property Tax Trust Fund to the Successor
Agency’s Redevelopment Obligation Retirement Fund, unless: (i) pass-through payment obligations have
been made subordinate to debt service payments for the bonded indebtedness of the Prior Agency, as
succeeded to by the Successor Agency; (ii) the Successor Agency has reported, no later than the December 1
and May 1 preceding the applicable January 2 or June 1 distribution date, that the total amount available to
the Successor Agency from the Redevelopment Property Tax Trust Fund allocation to the Successor
Agency’s Redevelopment Obligation Retirement Fund, from other funds transferred from the Prior Agency
and from funds that have or will become available through asset sales and all redevelopment operations is
insufficient to fund the Successor Agency’s enforceable obligations, pass-through payments and the
Successor Agency’s administrative cost allowance for the applicable Recognized Obligation Payment
Schedule period; and (iii) the State Controller has concurred with the Successor Agency that there are
insufficient funds for such purposes.
If the requirements set forth in clauses (i) through (iii) of the foregoing paragraph have been met, the
Dissolution Act provides for certain modifications in the distributions otherwise calculated to be distributed
on the applicable January 2 or June 1 property tax distribution date (as adjusted for weekends and holidays).
To provide for calculated shortages to be paid to the Successor Agency for enforceable obligations, the
amount of the deficiency will first be deducted from the residual amount otherwise calculated to be
distributed to the taxing entities under the Dissolution Act after payment of the Successor Agency’s
enforceable obligations, pass-through payments and the Successor Agency’s administrative cost allowance.
If such residual amount is exhausted, the amount of the remaining deficiency will be deducted from amounts
available for distribution to the Successor Agency for administrative costs for the applicable Recognized
Obligation Payment Schedule period in order to fund the enforceable obligations. Finally, funds required
for servicing bond debt may be deducted from the Subordinated Pass-Through Amounts to be distributed
under Contractual Tax Sharing Agreements, in order to be paid to the Successor Agency for enforceable
obligations, but only after the amounts described in the previous two sentences have been exhausted.
Pursuant to Contractual Tax Sharing Agreements with certain taxing agencies, such payments are
subordinate to any bonds of the Successor Agency in accordance with the terms of such agreements.
However, the Successor Agency cannot guarantee that the process prescribed by the Dissolution Act for
administering any subordinations provided in the Contractual Tax Sharing Agreements.
The Dissolution Act provides for a procedure by which the Successor Agency may make the payment of
Statutory Tax Sharing Amounts subordinate to the Bonds. The Successor Agency had not previously
undertaken proceedings to subordinate such payments to the Refunded Bonds. The Successor Agency will
not undertake any procedure to subordinate the Statutory Tax Sharing Amounts to the Bonds, and therefore,
Statutory Tax Sharing Amounts are not subordinate to the Bonds.
See “FINANCIAL INFORMATION” and “APPENDIX B - MUNICIPAL ADVISOR’S PROJECTED TAX
REVENUES REPORT” for additional information regarding the Contractual Tax Sharing Agreements, the
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Statutory Tax Sharing Amounts applicable to the Successor Agency and the revenues derived from the
Project Areas.
Recognized Obligation Payment Schedules
Enforceable Obligations. The Dissolution Act requires successor agencies to prepare and approve, and
submit to the successor agency’s oversight board and the State Department of Finance for approval, a
Recognized Obligation Payment Schedule pursuant to which enforceable obligations (as defined in the
Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for
each enforceable obligation. As defined in the Dissolution Act, “enforceable obligation” includes bonds,
including the debt service, reserve set-asides, and any other payments required under the indenture or
similar documents governing the issuance of the outstanding bonds of the former redevelopment agency,
as well as other obligations such as loans, judgments or settlements against the former redevelopment
agency, any legally binding and enforceable agreement that is not otherwise void as violating the debt limit
or public policy, contracts necessary for the administration or operation of the successor agency, and
amounts borrowed from the Low and Moderate Income Housing Fund and from the city. A reserve may be
included on the Recognized Obligation Payment Schedule and held by the successor agency when required
by the bond indenture or when the next property tax allocation will be insufficient to pay all obligations
due under the provisions of the bond for the next payment due in the following six-month period (see
“APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND SUPPLEMENTS
THERETO - COVENANTS OF THE SUCCESSOR AGENCY”). The Successor Agency has covenanted to
request such reserves as described below.
Under the Dissolution Act, the categories of sources of payments for enforceable obligations listed on a
Recognized Obligation Payment Schedule are the following: (i) the former low and moderate income
housing fund, (ii) bond proceeds, (iii) reserve balances, (iv) administrative cost allowance, (v) the
Redevelopment Property Tax Trust Fund (but only to the extent no other funding source is available or
when payment from property tax revenues is required by an enforceable obligation or otherwise required
under the Dissolution Act), or (vi) other revenue sources (including rents, concessions, asset sale proceeds,
interest earnings, and any other revenues derived from the former redevelopment agency, as approved by
the oversight board). Other than amounts deposited in the Redevelopment Property Tax Trust Fund and
amounts held in funds and accounts under the Indenture, the Successor Agency does not expect to have any
other funds available to pay the Bonds.
The Dissolution Act provides that only those payments listed in the Recognized Obligation Payment
Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation
Payment Schedule.
Required Approvals. As provided in SB 107, the Recognized Obligation Payment Schedule, with respect
to each fiscal year, and segregated into each six-month period beginning July 1 and January 1, must be
submitted by the Successor Agency, after approval by the Oversight Board, to the County Auditor-
Controller, the State Department of Finance, and the State Controller by each February 1. For information
regarding procedures under the Dissolution Act relating to late Recognized Obligation Payment Schedules
and implications thereof on the Bonds, see “RISK FACTORS - Last and Final Recognized Obligation
Payment Schedule.”
Commencing on September 22, 2015, successor agencies that have received a Finding of Completion and
the concurrence of the Department of Finance as to the items that qualify for payment, among other
conditions, may at their option, file a “Last and Final” Recognized Obligation Payment Schedule. If
approved by the Department of Finance, the Last and Final Recognized Obligation Payment Schedule will
be binding on all parties, and the Successor Agency will no longer submit a Recognized Obligation Payment
Schedule to the Department of Finance or the Oversight Board. The County Auditor-Controller will remit
the authorized funds to the Successor Agency in accordance with the approved Last and Final Recognized
Obligation Payment Schedule until each remaining enforceable obligation has been fully paid.
14
A Last and Final Recognized Obligation Payment Schedule may only be amended twice, and only with
approval of the Department of Finance and the County Auditor-Controller. On November 22, 2017, the
Department of Finance approved the Successor Agency’s Last and Final Recognized Obligation Payment
Schedule. Upon issuance of the Bonds, the Successor Agency will request the Department of Finance to
approve an amendment to the Last and Final Recognized Obligation Payment Schedule, to reflect the
reduced debt service on the Bonds compared to the debt service approved for the Refunded Bonds.
Determination of Available Funding. In connection with the allocation and distribution by the County
Auditor-Controller of property tax revenues deposited in the Redevelopment Property Tax Trust Fund,
under the Dissolution Act the County Auditor-Controller must prepare estimates of the amounts of (i)
property tax to be allocated and distributed, and (ii) the amounts of pass-through payments to be made in
the upcoming six-month period, and provide those estimates to the entities receiving the distributions and
the State Department of Finance no later than April 1 and October 1 of each year, as applicable.
If, after receiving such estimate from the County Auditor-Controller, the Successor Agency determines and
reports, no later than December 1 or May 1, as applicable, that the total amount available to the Successor
Agency from the Redevelopment Property Tax Trust Fund allocation to the Successor Agency’s
Redevelopment Obligation Retirement Fund, from other funds transferred from the Prior Agency, and from
funds that have or will become available through asset sales and all redevelopment operations, is insufficient
to fund the payment of pass-through obligations, the Successor Agency’s enforceable obligations listed on
the Recognized Obligation Payment Schedule, and the Successor Agency’s administrative cost allowance,
the County Auditor-Controller must notify the State Controller and the State Department of Finance no later
than 10 days from the date of the Successor Agency’s notification. If the State Controller concurs that there
are insufficient funds to pay required debt service, the Dissolution Act provides for certain adjustments to
be made to the estimated distributions, as described in more detail under “Redevelopment Property Tax
Trust Fund” above.
Debt Service. In the Indenture, the Successor Agency covenants to comply with all of the requirements of
the Dissolution Act, including taking all actions required under the Dissolution Act to prepare and file an
amendment to the Last and Final Recognized Obligation Payment Schedule so as to enable the County
Auditor-Controller to distribute from the Redevelopment Property Tax Trust Fund for deposit in the
Redevelopment Obligation Retirement Fund all Pledged Tax Revenues as shall be required to enable the
Successor Agency to pay timely principal of, and interest on, the Bonds coming due in the related Bond
Year.
Pursuant to the Indenture, without limiting the generality of the foregoing covenant, the Successor Agency
will take all actions required under the Dissolution Act to amend the Last and Final Recognized Obligation
Payment Schedule by June 1, 2021 such that for the semiannual period ending each subsequent June 30,
the Recognized Obligation Payment Schedule which includes such period shall include the payment to the
Successor Agency of an amount equal to the sum of (a) the full amount of principal and interest on the
Senior Bonds coming due and payable on the succeeding March 1 and September 1, plus (b) an amount of
Pledged Tax Revenues equal to the full amount of interest coming due and payable on the Bonds and the
2016 Bonds and any obligations issued on a parity with the Bonds on the next succeeding March 1.
[The Successor Agency further agrees not to submit the final amendment permitted for its Last and Final
Recognized Obligation Payment Schedule under the Dissolution Act without the prior written consent of
____.]
The Successor Agency has no power to levy and collect taxes, and various factors beyond its control could
affect the amount of Pledged Tax Revenues available in any six-month period (or otherwise) to pay the
principal of and interest on the Bonds. See “RISK FACTORS.”
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Pledge of Pledged Tax Revenues
The Successor Agency has established the Redevelopment Obligation Retirement Fund pursuant to Section
34170.5(a) of the Law which the Successor Agency shall continue to hold and maintain so long as any of
the Bonds are Outstanding. The Successor Agency will deposit all of amounts received in any Bond Year
from the Redevelopment Property Tax Trust Fund in the Redevelopment Obligation Retirement Fund
promptly upon receipt thereof.
The Bonds and the 2016 Parity Bonds shall be secured by a first pledge of and lien on all of the Pledged
Tax Revenues in the Redevelopment Obligation Retirement Fund, the Debt Service Fund and accounts
therein created under the Indenture. The Bonds and the 2016 Parity Bonds are payable from monies
received from the Redevelopment Property Tax Trust Fund on a subordinate basis to the Senior Bonds.
The Indenture established a special trust fund known as the “Debt Service Fund,” and the accounts therein
referred to below, which will be held by the Trustee. After depositing the amounts required to pay the
Senior Bonds in the then current Bond Year with the trustee for the Senior Bonds, the Successor Agency
will promptly thereafter shall deposit amounts in the Redevelopment Obligation Retirement Fund to the
Debt Service Fund established and held under the Indenture until such time during such Bond Year as the
amounts so transferred to the Debt Service Fund under the Indenture equal the aggregate amounts required
to be transferred to the Trustee for deposit into the Interest Account, the Principal Account and the Reserve
Account of the Debt Service Fund in such Bond Year for the Bonds and the 2016 Parity Bonds pursuant to
the Indenture and for deposit in such Bond Year in the funds and accounts established with respect to any
other Parity Bonds, as provided in any Supplemental Indenture.
The Pledged Tax Revenues are pledged to the payment of principal of and interest on the Bonds pursuant
to the Indenture until the Bonds have been paid, or until moneys have been set-aside irrevocably for that
purpose. The Trustee will covenant to exercise such rights and remedies as may be necessary to enforce
the payment of the Pledged Tax Revenues when due under the Indenture, and otherwise to protect the
interests of the Bondholders in the event of default by the Successor Agency.
If the amount of Pledged Tax Revenues available in such Bond Year is insufficient to deposit the full amount
required to be deposited under the Indenture for the Bonds and the 2016 Parity Bonds, the Trustee shall
apply such amounts to debt service, ratably based on the full amounts required to be deposited without
preference or priority for series as further described in “APPENDIX A - SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE AND SUPPLEMENTS THERETO - EVENTS OF DEFAULT AND
REMEDIES OF OWNERS.”
All Pledged Tax Revenues received by the Successor Agency during any Bond Year in excess of the amount
required to be transferred to the Trustee during such Bond Year shall be released from the pledge and lien
of the Indenture for the security of the Bonds and shall be applied by the Successor Agency for any lawful
purposes of the Successor Agency.
The Bonds are special obligations of the Successor Agency. The Bonds do not constitute a debt or
liability of the City, the County, the State or of any political subdivision thereof, other than the
Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds,
or the interest thereon, from the funds described herein, and neither the faith and credit nor the
taxing power of the City, the County, the State or any of its political subdivisions is pledged to the
payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power.
The State Legislature has amended the Dissolution Act several times. The Successor Agency expects, but
cannot guarantee, that the processes for funding of enforceable obligations prescribed by any new
legislative change in the Dissolution Act will not interfere with its administering of the Pledged Tax
Revenues in accordance with the Indenture and will effectively result in adequate Pledged Tax Revenues
for the timely payment of principal of and interest on the Bonds when due.
16
No Additional Debt Other Than Refunding Bonds
Under the Indenture, in addition to the Bonds and the 2016 Parity Bonds, the Successor Agency may issue
or incur additional tax allocation bonds secured by a pledge and lien on Pledged Tax Revenues on a parity
with the Bonds and the 2016 Parity Bonds (“Parity Bonds”) in such principal amount as shall be determined
by the Successor Agency, pursuant to a separate or Supplemental Indenture adopted or entered into by the
Successor Agency and Trustee and for such purposes as are permitted under the Dissolution Act, including
without limitation Section 34177.5 thereof.
Subject to the foregoing, the Successor Agency may issue or incur such Parity Bonds subject to the
following additional specific conditions precedent:
(a) The Successor Agency will be in compliance with all covenants set forth in the Indenture;
(b) The Oversight Board shall have approved the issuance of Parity Bonds;
(c) The Parity Bonds will be on such terms and conditions as may be set forth in a separate or
Supplemental Indenture, which will provide for (i) bonds substantially in accordance with the
Indenture, and (ii) the deposit of moneys or Alternate Reserve Account Security into the Reserve
Account in an amount sufficient, together with the balance of the Reserve Account, to equal the
Reserve Requirement on all Bonds and 2016 Parity Bonds expected to be outstanding including the
Bonds;
(d) Receipt of a certificate or opinion of an Independent Financial Consultant stating:
(i) For the current and each future Bond Year the debt service for each such Bond Year with
respect to all Bonds and other Parity Bonds reasonably expected to be outstanding
following the issuance of the Parity Bonds;
(ii) For the then current fiscal year, the Pledged Tax Revenues to be received by the Agency
based upon the most recently certified assessed valuation of taxable property in the Project
Areas provided by the appropriate officer of the County;
(iii) For each future fiscal year, the Pledged Tax Revenues referred to in item (ii) together with
(a) the amount determined in accordance with Section 51(a) of the California Revenue
and Taxation Code (2% inflationary growth) and (b) the amount of Pledged Tax Revenues
to be payable with respect to construction completed but not yet on the tax roll, and taking
into account the expiration of the time to receive Pledged Tax Revenues with respect to
any portion of the Project Areas and any amounts to be paid pursuant to the Pass-Through
Agreements and the Statutory Pass-Through Amounts; and
(iv) That for the then current fiscal year, the Pledged Tax Revenues referred to in item (ii) and
for each future fiscal year the Pledged Tax Revenues referred to in item (iii) are at least
equal to the sum of 125% of the Maximum Annual Debt Service with respect to the
amounts referred to in item (i) above, and, for the then current fiscal year, 100% of Annual
Debt Service with respect to any subordinate debt and that the Agency is entitled under
the Dissolution Act, the Redevelopment Law and the Redevelopment Plans to receive
taxes under Section 33670 of the Redevelopment Law in an amount sufficient to meet
expected debt service with respect to all Bonds, and other Parity Bonds.
(e) The Parity Bonds will mature on and interest will be payable on the same dates as the Bonds (except
the first interest payment may be from the date of the Parity Bonds until the next succeeding
March 1 or September l) provided, however, nothing herein shall preclude the Successor Agency
from issuing and selling Parity Bonds which do not pay current interest.
17
THE SUCCESSOR AGENCY
As described in “INTRODUCTION,” the Prior Agency was dissolved as of February 1, 2012 pursuant to the
Dissolution Act. Thereafter, the City became the Successor Agency and the City Council serves as the
governing board of the Successor Agency.
Section 34173(g) of the Dissolution Act expressly affirms that the Successor Agency is a separate public
entity from the City, that the two entities shall not merge, and that the liabilities of the Prior Agency will
not be transferred to the City nor will the assets of the Prior Agency become assets of the City.
The City performs certain general administrative functions for the Successor Agency. The City Manager
serves as the Successor Agency’s Executive Director, the City Clerk serves as the Successor Agency
secretary and the Finance Director serves as the Successor Agency treasurer.
Successor Agency Powers
All powers of the Successor Agency are vested in its members, who are the elected members of the City
Council. Pursuant to the Dissolution Act, the Successor Agency is a separate public body from the City
and succeeds to the organizational status of the Prior Agency but without any legal authority to participate
in redevelopment activities, except to complete any work related to an approved enforceable obligation.
The Successor Agency is tasked with expeditiously winding down the affairs of the Prior Agency, pursuant
to the procedures and provisions of the Dissolution Act. Under the Dissolution Act, many Successor
Agency actions are subject to approval by the Oversight Board, as well as review by the State Department
of Finance.
Section 34179.5 of the Dissolution Act established a due diligence review process for determining the
unobligated balances that redevelopment agencies had available as of June 30, 2012 to remit to their
respective county auditor-controllers for distribution to affected Taxing Agencies within project areas of the
former redevelopment agencies. The Successor Agency has remitted to the County Auditor-Controller all
of the unobligated balances as determined by the State Department Finance. On November 6, 2013, the
Successor Agency received its Finding of Completion from the State Department of Finance. Receipt of
the Finding of Completion allows the Successor Agency to do several things, among them, developing a
plan for the disposition of any properties held by the Successor Agency and spending proceeds of bonds
issued prior to December 31, 2010, all requiring approval of the Oversight Board.
After receiving the finding of completion, each successor agency was required to submit a Long Range
Property Management Plan (a “Long Range Property Management Plan”) detailing what it intended to do
with its inventory of properties. Successor agencies were not required to immediately dispose of their
properties but are limited in terms of what they can do with the retained properties. Permissible uses
include: sale of the property, use of the property to fulfill an enforceable obligation, retention of the property
for future redevelopment, and retention of the property for governmental use. These plans must be filed by
successor agencies with the State Department of Finance within six months of receiving a finding of
completion. The State Department of Finance approved the Successor Agency’s Long Range Property
Management Plan on ______________. The Successor Agency has disposed of all property held at the
time of dissolution.
Redevelopment Plans
The City Council approved and adopted the Redevelopment Plan for Project Area No. 1 on November 29,
1983, pursuant to Ordinance No. 43. It was subsequently amended on December 20, 1994 pursuant to
Ordinance No. 258 to add limitations prescribed by AB 1290, again on March 21, 1995 pursuant to
Ordinance No. 264 to amend financial limits and time to initiate eminent domain actions, on August 19,
2003 pursuant to Ordinance No. 388 to eliminate the time limit to incur debt as authorized by SB 211 and
18
again on March 16, 2004 pursuant to Ordinance No. 402 to extend the Redevelopment Plan duration by one
year as authorized by SB 1045.
The City Council approved and adopted the Redevelopment Plan for Project Area No. 2 on May 16, 1989,
pursuant to Ordinance No. 139. It was subsequently amended on December 20, 1994 pursuant to Ordinance
No. 259 to add limitations prescribed by AB 1290, again on February 3, 2004 pursuant to Ordinance No.
399 to amend financial limits, on March 16, 2004 pursuant to Ordinance Nos. 403 and 404 to eliminate the
time limit to incur debt as authorized by SB 211 and to extend the Redevelopment Plan duration by one
year as authorized by SB 1045, and again on February 1, 2011 pursuant to Ordinance No. 485 to add
territory for purposes of affordable housing.
SB 107 Effects on Plan Limits
In accordance with the Redevelopment Law, redevelopment plans were required to include certain limits
on the financing of redevelopment projects. These limits could include a time limit on the life of the
redevelopment plan, a time limit to incur debt, a time limit on the receipt of Tax Increment Revenues and
the repayment of debt, and a limit on the amount of bonded indebtedness outstanding at any time.
SB 107, which was enacted in September 2015, contains provisions (the “SB 107 Plan Limits Provisions”)
which generally provide that, for the purpose of paying enforceable obligations (as such term is defined by
the Dissolution Act), such as the Bonds, the Successor Agency is no longer subject to the Plan Limits. In
contrast, for all other purposes, including pass-through payments to taxing entities (which are not
“enforceable obligations” because they are now paid not by the Successor Agency but by the County
Auditor-Controller directly from Redevelopment Property Tax Trust Fund disbursements), the County
Auditor-Controller has confirmed that it will continue to recognize the Plan Limits. As a matter of practical
implementation of the SB 107 Plan Limits Provisions, the County Auditor-Controller will deposit into the
Redevelopment Property Tax Trust Fund an amount of property tax revenues derived from a Project Area
above the Plan Limits only in a situation where there would not be sufficient moneys in the Redevelopment
Property Tax Trust Fund to make payments on outstanding enforceable obligations.
See “APPENDIX B - MUNICIPAL ADVISOR’S PROJECTED TAX REVENUES REPORT.”
[Remainder of Page Intentionally Left Blank]
19
THE PROJECT AREAS
Description of the Project Areas
Project Area No. 1 encompasses approximately 17.9 square miles (11,475 acres) accounting for
approximately fifty percent (50%) of the total current corporate area of the City.
Project Area No. 2 encompasses approximately 4.9 square miles (3,130 acres) accounting for approximately
fourteen percent (14%) of the total current corporate area of the City.
The Project Areas are primarily developed with residential uses.
Assessed Valuations and Pledged Tax Revenues
The Fiscal Year 2020-21 assessed value by land use in each Project Area is shown in Table No. 1 below.
TABLE NO. 1
ASSESSED VALUE BY LAND USE
% of % of
Category Project No. 1 Total Project No. 2 Total
Residential $5,154,419,388 90.8% $2,351,978,497 73.6%
Commercial 271,515,396 4.8% 700,223,148 21.9%
Recreational 94,955,318 1.7% 33,957,920 1.1%
Agricultural 6,997,821 0.1% 2,856,000 0.1%
Vacant Land 104,269,046 1.8% 47,034,167 1.5%
Unsecured 17,201,305 0.3% 53,773,198 1.7%
Cross Reference (1) 25,035,165 0.4% 3,946,969 0.1%
Other 2,908,352 0.1% 1,483,679 0.0%
Total $5,677,301,791 100.0% $3,195,253,578 100.0%
______________________________________
Source: Municipal Advisor.
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20
Historical assessed value and gross Tax Increment Revenues for Project Area No. 1 based on the equalized
tax rolls and actual gross Tax Increment Revenues deposited to the Redevelopment Property Tax Trust Fund
are shown below.
TABLE NO. 2
PROJECT AREA NO. 1
HISTORICAL ASSESSED VALUATIONS AND GROSS TAX INCREMENT REVENUES
2016-17 2017-18 2018-19 2019-20 2020-21
Secured Assessed Value $4,977,966,406 $5,103,964,054 $5,278,711,343 $5,482,423,278 $5,660,100,486
Unsecured Assessed Value 34,377,191 28,437,371 22,748,622 36,027,567 17,201,305
Total Assessed Valuation (1) 5,012,343,597 5,132,401,425 5,301,459,965 5,518,450,845 5,677,301,791
Base Year Valuation (199,398,232) (199,398,233) (199,398,233) (199,398,233) (199,398,233)
Incremental Valuation $4,812,945,365 $4,933,003,192 $5,102,061,732 $5,319,052,612 $5,477,903,558
Basic Tax Rate/$100 1.00% 1.00% 1.00% 1.00% 1.00%
Tax Increment Revenues 48,129,454 49,330,032 51,020,617 53,190,526 54,779,036
Unitary Revenues 648,065 673,895 700,186 722,959 737,500 (2)
Gross Tax Increment Revenues $ 48,777,519 $ 50,003,927 $ 51,720,803 $ 53,913,485 $ 55,516,536
Actual RPTTF Deposit $ 49,210,774 $ 50,475,054 $ 51,956,505 $ 54,312,406 N/A
______________________________________
(1) Taxable Valuation as of August 20 equalized roll.
(2) Estimated.
Source: Riverside County Auditor-Controller.
Historical assessed value and gross Tax Increment Revenues for Project Area No. 2 based on the equalized
tax rolls and actual gross Tax Increment Revenues deposited to the Redevelopment Property Tax Trust Fund
are shown below.
TABLE NO. 3
PROJECT AREA NO. 2
HISTORICAL ASSESSED VALUATIONS AND GROSS TAX INCREMENT REVENUES
2016-17 2017-18 2018-19 2019-20 2020-21
Secured Assessed Value $2,777,740,583 $2,850,974,377 $2,959,127,650 $3,055,267,270 $3,141,480,380
Unsecured Assessed Value 58,960,131 60,680,434 56,673,732 56,542,535 53,773,198
Total Assessed Valuation (1) 2,836,700,714 2,911,654,811 3,015,801,382 3,111,809,805 3,195,253,578
Base Year Valuation (95,182,755) (95,182,755) (95,182,755) (95,182,755) (95,182,755)
Incremental Valuation $2,741,517,959 $2,816,472,056 $2,920,618,627 $3,016,627,050 $3,100,070,823
Basic Tax Rate/$100 1.00% 1.00% 1.00% 1.00% 1.00%
Tax Increment Revenues 27,415,180 28,164,721 29,206,186 30,166,271 31,000,708
Unitary Revenues 267,828 279,191 291,982 301,423 307,500 (2)
Gross Tax Increment Revenues $ 27,683,008 $ 28,443,912 $ 29,498,168 $ 30,467,694 $ 31,308,208
Actual RPTTF Deposit $ 28,205,847 $ 28,643,547 $ 29,637,091 $ 30,742,836 N/A
______________________________________
(1) Taxable Valuation as of August 20 equalized roll.
(2) Estimated.
Source: Riverside County Auditor-Controller.
21
Actual gross deposits and deductions from the RPTTF for Project Area No. 1 are shown below:
TABLE NO. 4
PROJECT AREA NO. 1
REDEVELOPMENT PROPERTY TAX TRUST FUND DEPOSITS
2016-17 2017-18 2018-19 2019-20
Gross Deposit to RPTTF $49,210,774 $50,475,054 $51,956,505 $54,312,406
Senior Tax Sharing (1,137,449) (2,269,947) (2,420,239) (2,622,759)
Available for Debt Service 48,073,325 48,205,107 49,536,266 51,689,647
Subordinate Tax Sharing (1) (20,052,159) (21,511,706) (22,227,242) (23,270,556)
Net Deposit to RPTTF $28,021,166 $26,693,401 $27,309,024 $28,419,092
______________________________________
(1) Available if needed to pay debt service pursuant to Section 34183(b) of the Dissolution Act.
Source: Riverside County Auditor-Controller.
Actual gross deposits and deductions from the RPTTF for Project Area No. 2 are shown below:
TABLE NO. 5
PROJECT AREA NO. 2
REDEVELOPMENT PROPERTY TAX TRUST FUND DEPOSITS
2016-17 2017-18 2018-19 2019-20
Gross Deposit to RPTTF $28,205,847 $28,643,547 $29,637,091 $30,742,836
Senior Tax Sharing (19,009,829) (19,304,225) (19,973,303) (20,716,940)
Net Deposit to RPTTF $ 9,196,018 $ 9,339,322 $ 9,663,788 $10,025,897
______________________________________
Source: Riverside County Auditor-Controller.
TABLE NO. 6
REDEVELOPMENT PROPERTY TAX TRUST FUND DEPOSITS
2016-17 2017-18 2018-19 2019-20
January RPTTF Deposit
June RPTTF Deposit
Gross RPTTF Deposits
County Administrative Fees
Tax Sharing (1)
RPTTF Available
______________________________________
(1) Including Subordinated Pass-Through Amounts, which are subordinate to the Bonds and the 2016 Bonds, but
withheld by Auditor-Controller prior to distribution of RPTTF unless required to pay enforceable obligations.
Source: Riverside County Auditor-Controller.
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22
Major Taxpayers
The ten largest property taxpayers represent 6.1% of the 2020-21 total assessed value of Project Area No.
1 and 6.2% of the incremental assessed value of Project Area No. 1.
TABLE NO. 7
PROJECT AREA NO. 1
TEN LARGEST TAXPAYERS AS A PERCENT OF 2020-21 TOTAL ASSESSED VALUE
2020-21 % of
Total Total
Assessed Assessed
Taxpayer Value Value Land Use
BRE Iconic LQR LLC $163,077,289 2.9% Hotel
Silverhawk Apartments LP 26,077,707 0.5% Apartments
Palm Desert Lodging 24,312,125 0.4% Hotel
RREF II CWC LAQ 22,268,605 0.4% Residential
HJ GG Partners LLC 20,982,350 0.4% Residential
OTLQ LLC 20,039,994 0.4% Commercial
LQ Investment 17,024,220 0.3% Commercial
Tradition Golf Club 16,574,079 0.3% Country Club
Quarry at La Quinta Inc. 14,284,458 0.3% Hotel
Silverrock Phase I 12,346,106 0.2% Golf Course
$336,986,933 6.1%
______________________________________
Source: Municipal Advisor.
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23
The ten largest property taxpayers represent 9.3% of the 2020-21 total assessed value of Project Area No.
2 and 9.5% of the incremental assessed value of Project Area No. 2.
TABLE NO. 8
PROJECT AREA NO. 2
TEN LARGEST TAXPAYERS AS A PERCENT OF 2020-21 TOTAL ASSESSED VALUE
2020-21 % of
Total Total
Assessed Assessed
Taxpayer Value Value Land Use
Inland American La Quinta Pavilion $ 50,248,920 1.6% Commercial
Hawthorne IL Propco 45,760,953 1.4% Assisted Living
Walmart Real Estate Business Trust 32,199,420 1.0% Commercial
Health Care Reit Inc. 27,473,475 0.9% Commercial
Aventine Dev. 27,380,407 0.9% Apartments
Costco Wholesale Corporation 26,550,676 0.8% Commercial
CSRA Komar Desert Center St. 26,343,936 0.8% Commercial
RREF La Quinta REO 20,934,021 0.7% Commercial
TD Desert Development LP 19,700,507 0.6% Residential
Eagle Hardware and Garden Inc./Lowes 19,239,506 0.6% Commercial
$295,831,821 9.3%
______________________________________
Source: Municipal Advisor.
Assessment Appeals
Project Area No. 1
As of July 2020, there were a total 44 pending appeals filed by property owners in Project Area No. 1 as
shown below. The total value of property under appeal for all years is $73.1 million. Some appeals have
been filed for multiple years for the same property. A summary of all pending appeals is shown below.
Pending Value of Property % of
Tax Year Appeals Under Appeal Tax Roll
2016-17 1 $ 1,622,318 0.0%
2017-18 2 4,570,727 0.1%
2018-19 14 23,804,606 0.4%
2019-20 27 43,071,328 0.8%
Total 44 $73,068,979 N/A
______________________________________
Source: Municipal Advisor.
For Fiscal Years 2015-16 to 2018-19, 13 of 59 (22%) of resolved appeals were successful, with an average
reduction in assessed value of 35.7%. The Successor Agency cannot predict the outcome of any pending
appeals.
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Project Area No. 2
As of July 2020, there were a total 77 pending appeals filed by property owners in Project Area No. 2 as
shown below. The total value of property under appeal for all years is $344.8 million. Some appeals have
been filed for multiple years for the same property. A summary of all pending appeals is shown below.
Pending Value of Property % of
Tax Year Appeals Under Appeal Tax Roll
2016-17 13 $ 59,941,506 2.1%
2017-18 16 67,320,471 2.3%
2018-19 30 149,627,794 5.0%
2019-20 18 67,909,524 2.2%
Total 77 $344,799,295 N/A
______________________________________
Source: Municipal Advisor.
For Fiscal Years 2015-16 to 2018-19, 10 of 29 (34%) of resolved appeals were successful, with an average
reduction in assessed value of 47.9%. The Successor Agency cannot predict the outcome of any pending
appeals.
While the Successor Agency expects some decline in total assessed valuation as a result of pending or
potential future appeals, no prediction can be made as to the amount of the decline in total assessed
valuation, if any, within the Project Areas. No reduction for pending appeals in the Project Areas has been
incorporated in the projections. Reductions in revenue for refunds resulting from successful appeals or
current or prior year appeals have also not been incorporated into the projections. The success rate of
appeals, reductions granted and refunds may vary from historical averages.
See “APPENDIX B - MUNICIPAL ADVISOR’S PROJECTED TAX REVENUES REPORT.”
Tax Collections
The County has adopted the “Teeter Plan” method of distributing property taxes to taxing agencies,
including redevelopment agencies. Under this method, the Successor Agency receives 100% of its tax
increment without regard to delinquencies.
Under the statute creating the Teeter Plan, the Board of Supervisors of the County could under certain
circumstances terminate the Teeter Plan in its entirety or terminate the Teeter Plan as to the Successor
Agency.
FINANCIAL INFORMATION
Successor Agency Accounting Records and Financial Statements
The activities of the Successor Agency are reported as a fiduciary trust fund as part of the City’s basic
financial statements. The Successor Agency does not prepare separate financial statements.
The City’s financial statements for the Fiscal Year ended June 30, 2019, attached hereto as “APPENDIX D”
have been audited by Eide Bailly LLP, Riverside, California (the “Auditor”). The City’s audited financial
statements are public documents and are included within this Official Statement without the prior approval
of the Auditor. The Auditor has not been engaged to perform, and has not performed, since the date of its
report included herein, any procedures on the financial statements addressed in that report. The Auditor
also has not performed any procedures relating to this Official Statement.
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Property Taxation in California
Manner in Which Property Valuations and Assessments are Determined (Article XIIIA). On June 6,
1978, California voters approved an amendment (commonly known as both Proposition 13 and the Jarvis-
Gann Initiative) to the State Constitution which imposes certain limitations on taxes that may be levied
against real property. This amendment, which added Article XIIIA to the State Constitution, among other
things, defines full cash value of property to mean “the county assessor’s valuation of real property as
shown on the 1975-76 tax bill under ‘full cash value,’ or, thereafter, the appraised value of real property
when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.”
This full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or any
reduction in the consumer price index or comparable local data, or any reduction in the event of declining
property value caused by substantial damage, destruction or other factors. The amendment further limits
the amount of any ad valorem tax on real property to 1% of the full cash value of that property, except that
additional taxes may be levied to pay debt service on indebtedness approved by the voters prior to July 1,
1978 and on any bonded indebtedness for the acquisition or improvement of real property which is approved
after July 1, 1978 by two-thirds of the votes cast by voters voting on such indebtedness. However, pursuant
to an amendment to the State Constitution, redevelopment agencies were prohibited from receiving any of
the tax increment revenue attributable to tax rates levied to finance bonds approved by the voters on or after
January 1, 1989 for the acquisition or improvement of real property. Moreover, Section 34183 of the
Dissolution Act effectively eliminates the January 1, 1989 date from such prohibitions and SB 107 further
states that pre-1989 tax override rates are no longer distributed to successor agencies except in limited
circumstances (see “SECURITY FOR THE BONDS - Pledged Tax Revenues,” and “- Property Tax Rate”
below and “RISK FACTORS - Factors Which May Affect Pledged Tax Revenues - Reduction in Inflationary
Rate”).
In the general election held November 4, 1986, voters in the State approved two measures, Propositions 58
and 60, which further amend the terms “purchase” and “change of ownership,” for purposes of determining
full cash value of property under Article XIIIA, to not include the purchase or transfer of (1) real property
between spouses and (2) the principal residence and the first $1,000,000 of other property between parents
and children. Proposition 60 amends Article XIIIA to permit the Legislature to allow persons over age 55
who sell their residence and buy or build another of equal or lesser value within two years in the same
county (or in certain cases, another county), to transfer the old residence’s assessed value to the new
residence.
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property
at the lesser of its originally determined (base year) full cash value compounded annually by the inflation
factor, or its full cash value as of the lien date, taking into account reductions in value due to damage,
destruction, obsolescence or other factors causing a decline in market value. Reductions based on
Proposition 8 do not establish new base year values, and the property may be reassessed as of the following
lien date up to the lower of the then-current fair market value or the factored base year value. The State
Board of Equalization has approved this reassessment formula and such formula has been used by county
assessors statewide, and such methodology has been upheld by the California courts. During the last
recession, the Prior Agency saw a reduction in property values of approximately __% between 2008-09 and
2011-12, which the Successor Agency attributes to Proposition 8 reductions.
As a result of the Governor of the State’s (“Governor”) declaration of a State of Emergency to exist in
California as a result of the threat of the COVID-19 virus, the County could process future Proposition 8
reductions due to the economic impact of COVID-19 on property value. See “RISK FACTORS - COVID-
19.” Neither the Successor Agency nor the Municipal Advisor is able to estimate the potential impact on
future property values or tax increment revenues.
Unsecured and Secured Property. In California, property which is subject to ad valorem taxes is
classified as “secured” or “unsecured.” The secured classification includes property on which any property
tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become
26
a lien against the taxed unsecured property, but may become a lien on certain other property owned by the
taxpayer. Every tax which becomes a lien on secured property, arising pursuant to State law, has priority
over all other liens on the secured property, regardless of the time of the creation of the other liens.
Property in the Project Areas is assessed by the Riverside County Assessor except for public utility property
which is assessed by the State Board of Equalization.
The valuation of secured property is determined as of January 1 each year for taxes owed with respect to
the succeeding fiscal year. The tax rate is equalized during the following September of each year, at which
time the tax rate is determined. Secured and unsecured property is entered on separate parts of the
assessment roll maintained by the county assessor. The method of collecting delinquent taxes is
substantially different for the two classifications of property.
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of the fiscal
year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10%
penalty attaches to any delinquent payment in addition to a $20 cost on the second installment. On July 1
of each fiscal year any property which is delinquent will become defaulted. Such property may thereafter
be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty of
l½% per month to the time of redemption, together with any other charges permitted by law. If taxes are
unpaid for a period of five years or more, the property is subject to sale by the County Tax Collector. The
exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll
is the sale of the property securing the taxes for the amount of taxes which are delinquent.
Property taxes on the unsecured roll become delinquent, if unpaid on August 31. A 10% penalty attaches
to delinquent taxes on property on the unsecured roll, and an additional penalty of l½% per month begins
to accrue on November 1 of the fiscal year. The County has four ways of collecting delinquent unsecured
personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the
County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer;
(3) filing a certificate of delinquency for record in the County Recorder’s Office, in order to obtain a lien
on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or
possessory interests belonging or assessed to the assessee.
After the Governor’s declaration of a State of Emergency to exist in California as a result of the threat of
COVID-19 Pandemic (the “Pandemic”), the Riverside County Treasurer-Tax Collector stated his office’s
intent to accommodate those who have been directly impacted by the Pandemic and who are unable to pay
property taxes timely due to circumstances related to this crisis. The Treasurer-Tax Collector does not have
the authority to extend the payment delinquency date (including the payment date of April 10, 2020) and
all payments received after the due date are assessed late penalties and costs as required by law. However,
taxpayers were permitted to submit to the Treasurer-Tax Collector a Penalty Cancellation Request Form
and documentation to support the cancellation of penalties as allowed in limited circumstances under the
then-current State law, allowing for waiver of penalties, costs and other charges when failure to make a
timely payment is due to reasonable cause and circumstances beyond the taxpayer’s control, and occurred
notwithstanding the exercise of ordinary care in the absence of willful neglect. The request for penalty
waiver was only applicable to taxes with delinquent dates beginning April 11, 2020 and was required to be
filed must be filed by June 30, 2020, with certain taxpayers having until May 6, 2021.
The Governor’s Executive Order N-61-20 extended the penalty and interest waiver through May 2021.
Although the Successor Agency received all of the RPTTF authorized to be paid to it on June 1, 2020,
future property taxes to the Successor Agency could be impacted by both the economic impact of COVID-
19 on property value and on the timely collection of property tax. The value of property on the Fiscal Year
2021-22 tax roll and future tax rolls, could be reduced. The initial impact could occur because the April
2020, December 2020 and April 2021 property tax installments could be deferred by some taxpayers, or
some taxpayers may be unable to make their property tax payments going forward.
27
Neither the Successor Agency nor the Municipal Advisor is able to estimate the potential impact on future
property collections, values or tax increment revenues as a result of the Pandemic or the County’s current
or potential future waiver of property tax delinquent penalties resulting in some taxpayers deferring their
payment.
Supplemental Assessments. Legislation adopted in 1984 (Section 75, et seq. of the Revenue and Taxation
Code of the State of California) provides for the supplemental assessment and taxation of property at its
full cash value as of the date of a change of ownership or the date of completion of new construction (the
“Supplemental Assessments”). To determine the amount of the Supplemental Assessments the County
Auditor applies the current year’s tax rate to the supplemental assessment roll and computes the amount of
taxes that would be due for the full year. The taxes due are then adjusted by a proration factor to reflect the
portion of the tax year remaining as determined by the date on which the change in ownership occurred or
the new construction was completed. Supplemental Assessments become a lien against the real property
on the date of the change of ownership or completion of new construction.
Unitary Property. Commencing in the 1988-89 Fiscal Year, the Revenue and Taxation Code of the State
of California changed the method of allocating property tax revenues derived from state assessed utility
properties. It provides for the distribution of state assessed values to tax rate areas by a county-wide
mathematical formula rather than assignment of state assessed value according to the location of those
values in individual tax rate areas.
Commencing with the 1988-89 Fiscal Year, each county has established one county-wide tax rate area. The
assessed value of all unitary property in the county has been assigned to this tax rate area and one tax rate
is levied against all such property (“Unitary Revenues”).
The property tax revenue derived from the assessed value assigned to the county-wide tax rate area shall be
allocated as follows: (1) each jurisdiction will be allocated up to 2% of the increase in Unitary Revenues
on a pro rata basis county-wide; and (2) any decrease in Unitary Revenues or increases less than 2%, or any
increase in Unitary Revenues above 2% will be allocated among jurisdictions in the same proportion of
each jurisdiction’s Unitary Revenues received in the prior year to the total Unitary Revenues county-wide.
The Unitary Revenues allocated to the Project Areas in Fiscal Year 2019-20 are $1,024,382.
Legislation adopted in 2006 (SB 1317, Chapter 872) provides that, commencing with Fiscal Year 2007-08,
certain property related to new electrical facilities shall be allocated entirely to the county in which such
property is located and property tax revenues derived from such property shall be allocated to such county
and certain Taxing Agencies within such county.
Property Tax Rate. The difference between the $1.00 general tax levy provided under Article XIIIA tax
rate and those actually levied (referred to as the “tax override rate”) represents the tax levied by overlapping
entities to pay debt service on bonded indebtedness approved by the voters.
Section 34183 of the Dissolution Act effectively eliminated the tax override rate from the calculation of tax
increment revenues with respect to tax override rates authorized by voters for the purpose of repaying
bonded indebtedness for the acquisition or improvement of real property. Future Tax Increment Revenues
have been projected by applying a tax rate of $1.00 per $100 of taxable value general levy to incremental
taxable values.
Administrative Costs. In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which
allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local
government jurisdictions on a prorated basis. SB 1559 (Chapter 697, Statutes of 1992) explicitly includes
redevelopment agencies among the jurisdictions which are subject to such charges. In addition, Sections
34182(e) and 34183(a) of the Dissolution Act allow administrative costs of the County Auditor-Controller
for the cost of administering the provisions of the Dissolution Act, as well as the foregoing SB 1559
amounts, to be deducted from property tax revenues before moneys are deposited into the Redevelopment
28
Property Tax Trust Fund. For Fiscal Year 2019-20, the County administrative fees charged to the Project
Areas including administration of the Redevelopment Property Tax Trust Fund were $798,236. In total, the
fees represent approximately 0.94% of gross deposits to the Redevelopment Property Tax Trust Fund.
Tax Sharing Agreements and Tax Sharing Statutes
Tax Sharing Agreements
Pursuant to prior Section 33401(b) of the Redevelopment Law, a redevelopment agency was authorized to
enter into an agreement to pay tax increment revenues to any taxing agency that has territory located within
a redevelopment project to alleviate any financial burden or detriment caused by the redevelopment project.
These agreements are commonly referred to as “tax sharing agreements” or “pass-through agreements.”
The tax sharing agreements (“Contractual Tax Sharing Agreements”) entered into with respect to each
Project Area are described in “APPENDIX B - MUNICIPAL ADVISOR’S PROJECTED TAX REVENUES
REPORT.”
Since dissolution, the County Auditor-Controller calculates and pays the Contractual Tax Sharing
Agreement amounts. These amounts are deducted from tax increment revenue deposited in the
Redevelopment Property Tax Trust Fund.
Tax Sharing Statutes
Certain provisions were added to the Redevelopment Law by the adoption of AB 1290 in 1994. If new
territory was added to a redevelopment project, under Section 33607.5 of the Redevelopment Law, any
affected taxing entity would share in the tax increment revenues generated by such added area pursuant to
a statutory formula (“Statutory Tax Sharing”).
In addition, pursuant to Section 33333.6(e)(2) of the Redevelopment Law, if the Prior Agency deleted the
time limit to incur indebtedness in a redevelopment project (as amended pursuant to SB 211) or increased
the total amount of tax increment revenues to be allocated to the project area or increased the duration of
the redevelopment plan and the period for receipt of tax increment revenues, Statutory Tax Sharing is
required under Section 33607.7 of the Redevelopment Law with all affected taxing entities not already a
party to a tax sharing agreement, once the original limitations have been reached.
The Dissolution Act provides for a procedure by which the Successor Agency may make Statutory Tax
Sharing amounts subordinate to the Bonds. The Successor Agency will not undertake such procedure to
subordinate such payments with respect to the Bonds.
The Statutory Tax Sharing calculations with respect to each Project Area are described in “APPENDIX B -
MUNICIPAL ADVISOR’S PROJECTED TAX REVENUES REPORT.” Since dissolution, the County Auditor-
Controller calculates and pays the Statutory Tax Sharing amounts. These amounts are deducted from tax
increment revenue deposited in the Redevelopment Property Tax Trust Fund.
Outstanding Indebtedness and Enforceable Obligations
The Successor Agency issued the Senior Bonds in the principal amount of $65,600,000. The Senior Bonds
are outstanding as of January 1, 2021 in the principal amount of $52,095,000 and mature September 1,
2034. Payment of the Senior Bonds is senior to the payment of the Bonds and the 2016 Parity Bonds.
The Successor Agency issued the 2016 Parity Bonds in the principal amount of $35,055,000. The 2016
Parity Bonds are outstanding as of January 1, 2021 in the principal amount of $29,380,000 and mature
September 1, 2039. Payment of the 2016 Parity Bonds is on a parity with the Bonds.
29
The only other enforceable obligations that have been approved for payment on the Last and Final
Recognized Obligation Payment Schedule are repayment of a City advance to the Successor Agency, bond
administration fees and a minor amount of administrative costs. Payment of such amounts is subordinate
to the Bonds, the 2016 Parity Bonds and the Senior Bonds.
Flow of Funds
Under the Indenture, in the Last and Final Recognized Obligation Payment Schedule period beginning
January 2 of each year, the Successor Agency is required to request funding of 100% of the principal and
interest due on the Senior Bonds in the calendar year. The Successor Agency is also required to request
funding of 100% of the interest due on the Bonds and the 2016 Bonds on March 1, payable on a basis
subordinate to the 2014 Bonds.
Under the Indenture, in the Last and Final Recognized Obligation Payment Schedule period beginning
July 1 of each year, the Successor Agency is required to request funding of 100% of the principal and
interest due on the Bonds and the 2016 Bonds on September 1.
[Remainder of Page Intentionally Left Blank]
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Projected Pledged Tax Revenues
Receipt of projected Pledged Tax Revenues shown in Table No. 9 in the amounts and at the times projected
depends on the realization of certain assumptions relating to the Tax Increment Revenues. The Municipal
Advisor has projected taxable valuation and Pledged Tax Revenues in the Project Areas. The Successor
Agency believes the assumptions set forth in “APPENDIX B - MUNICIPAL ADVISOR’S PROJECTED TAX
REVENUES REPORT” upon which the projections are based are reasonable; however, some assumptions
may not materialize and unanticipated events and circumstances may occur (see “RISK FACTORS”).
Therefore, the actual Pledged Tax Revenues received during the forecast period may vary from the
projections and the variations may be material, affecting the Successor Agency’s ability to timely pay
principal of and interest on the Bonds.
TABLE NO. 9
PROJECTED PLEDGED TAX REVENUES
(in $’000’s)
Project No. 1 Project No. 2 Available Senior Pledged Project No. 1
Fiscal Net RPTTF Net RPTTF Before Bonds Tax Subordinate Net
Year Deposit (1) Deposit Senior Bonds Debt Service Revenues Pass-Through (2) Revenues
2021 $28,244 $ 9,875 $38,119 $(5,265) $32,854 $23,703 $56,557
2022 28,789 10,067 38,856 (5,267) 33,589 24,186 57,775
2023 29,343 10,263 39,606 (5,262) 34,344 24,679 59,023
2024 29,909 10,395 40,304 (5,266) 35,039 25,182 60,221
2025 30,484 10,589 41,073 (5,262) 35,812 25,695 61,507
2026 31,074 10,789 41,863 (5,260) 36,603 26,218 62,821
2027 31,673 10,991 42,664 (5,261) 37,404 26,752 64,156
2028 32,286 11,197 43,483 (5,263) 38,221 27,295 65,516
2029 32,911 11,409 44,320 (5,261) 39,060 27,851 66,911
2030 33,545 11,626 45,171 (5,264) 39,907 28,419 68,326
2031 34,197 11,845 46,042 (5,263) 40,779 28,995 69,774
2032 34,860 12,069 46,929 (5,262) 41,668 29,584 71,252
___________________________________
(1) After deductions for Subordinated Pass-Through Amounts.
(2) Available if needed to pay debt service pursuant to Section 34183(b) of the Dissolution Act.
Source: Municipal Advisor.
The projected Pledged Tax Revenues shown above are subject to several variables described herein. See
“RISK FACTORS” herein. The Successor Agency provides no assurance that the projected Pledged Tax
Revenues will be achieved. Neither the Successor Agency nor the Municipal Advisor is able to estimate
the potential impact of COVID-19 on future property values or tax increment revenues.
[Remainder of Page Intentionally Left Blank]
31 Debt Service Coverage Set forth below is the estimated debt service coverage of the Bonds, the 2016 Parity Bonds and the Senior Bonds using Available Revenues shown in Table No. 9. TABLE NO. 10 DEBT SERVICE COVERAGE (in $’000’s) Available 2016 Combined Fiscal Revenues Senior Parity 2021 Coverage Year Before Senior Bonds (1)(2) Bonds Bonds Bonds* Total* Ratio 2021 $61,822 $5,265 $2,471 $9,434 $17,170 3.60 2022 63,042 5,267 2,462 9,155 16,884 3.73 2023 64,285 5,262 2,463 9,156 16,881 3.81 2024 65,486 5,266 2,462 9,153 16,881 3.88 2025 66,768 5,262 2,463 9,156 16,881 3.96 2026 68,081 5,260 2,466 9,155 16,881 4.03 2027 69,416 5,261 2,466 9,161 16,887 4.11 2028 70,778 5,263 2,457 9,158 16,878 4.19 2029 72,171 5,261 2,463 9,150 16,873 4.28 2030 73,590 5,264 2,470 9,156 16,890 4.36 2031 75,037 5,263 2,467 9,160 16,890 4.44 2032 76,513 5,262 2,462 9,156 16,879 4.53 ___________________________________ (1) Available Revenues before Senior Bonds equal “Available Revenues” shown in Table No. 9, that is, Pledged Tax Revenues plus Senior Bonds Debt Service. (2) Includes amounts payable under Subordinated Pass-Through Amounts which would be available if needed to pay debt service pursuant to Section 34183(b) of the Dissolution Act Source: Hilltop Securities and Municipal Advisor. * Preliminary, subject to change.
32
RISK FACTORS
The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it
could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include, but
are not limited to, the following matters and should be considered, along with other information in this
Official Statement, by potential investors.
Factors Which May Affect Pledged Tax Revenues
The ability of the Successor Agency to pay principal of and interest on the Bonds depends on the timely
receipt of Pledged Tax Revenues as projected herein (see “FINANCIAL INFORMATION - Projected Pledged
Tax Revenues” herein). Projections of Pledged Tax Revenues are based on the underlying assumptions
relating to Tax Increment Revenues of the Project Areas. Pledged Tax Revenues allocated to the Successor
Agency (which constitute the ultimate source of payment of principal of and interest on the Bonds, as
discussed herein) are determined by the amount of incremental valuation of taxable property in the Project
Areas, taxed at a rate of $1.00 per $100 of assessed value (1%) and the percentage of taxes collected in the
Project Areas, adjusted to reflect prior claims on the Tax Increment Revenues. A number of factors which
may affect Tax Increment Revenues, and consequently, Pledged Tax Revenues, are outlined below.
Reductions in Assessed Value. Tax Increment Revenues allocated to the Redevelopment Property Tax
Trust Fund are determined by the amount of incremental taxable value in the Project Areas taxed at a rate
of $1.00 per $100 of assessed value (1%). The reduction of taxable values of property in the Project Areas
caused by economic factors beyond the Successor Agency’s control, such as relocation out of the Project
Areas by one or more major property owners, sale of property to a non-profit corporation exempt from
property taxation, or the complete or partial destruction of such property caused by, among other
eventualities, earthquake or other natural disaster, could cause a reduction in the Pledged Tax Revenues that
provide for the repayment of and secure the Bonds. Such reduction of Pledged Tax Revenues could have
an adverse effect on the Successor Agency’s ability to make timely payments of principal of and interest on
the Bonds.
Article XIIIA. Pursuant to the California voter initiative process, on June 6, 1978, California voters
approved Proposition 13 which added Article XIIIA to the California Constitution. This amendment
imposed certain limitations on taxes that may be levied against real property to 1% of the full cash value of
the property, adjusted annually for inflation at a rate not exceeding 2% annually. Full cash value is
determined as of the 1975-76 assessment year, upon change in ownership (acquisition) or when newly
constructed (see “FINANCIAL INFORMATION - Property Taxation in California” herein for a more
complete discussion of Article XIIIA). Article XIIIA has subsequently been amended to permit reduction
of the “full cash value” base in the event of declining property values caused by substantial damage,
destruction or other factors, and to provide that there would be no increase in the “full cash value” base in
the event of reconstruction of property damaged or destroyed in a disaster and in other special
circumstances.
Reduction in Inflationary Rate. The annual inflationary adjustment, while limited to 2%, is determined
annually and may not exceed the percentage change in the California Consumer Price Index (CCPI).
Because the Revenue and Taxation Code does not distinguish between positive and negative changes in the
CCPI used for purposes of the inflation factor, there was a decrease of 0.237% in 2009-10 – applied to the
2010-11 tax roll – reflecting the actual change in the CCPI, as reported by the State Department of Finance.
For each fiscal year since Article XIIIA has become effective (the 1978-79 Fiscal Year), the annual increase
for inflation has been at least 2% except in ten fiscal years as shown below:
33
Tax Roll Percentage Tax Roll Percentage
1981-82 1.000% 2010-11 (0.237)%
1995-96 1.190% 2011-12 0.753%
1996-97 1.110% 2014-15 0.454%
1998-99 1.853% 2015-16 1.998%
2004-05 1.867% 2016-17 1.525%
It is possible that as a result of the economic impact of the Pandemic, the CCPI may not exceed 2% in the
next several years.
Split Roll Initiative. An initiative measure (the “Split Roll Initiative”) to amend Article XIIIA has qualified
for the State’s November 2020 ballot. If adopted, the Split Roll Initiative would base property taxes for
commercial and industrial properties on market values. The change from the purchase price to market value
would be phased-in beginning in fiscal year 2022-23. Properties whose occupants are 50 percent or more
small businesses would be taxed based on market value beginning in fiscal year 2025-2026. Such market
values would be reassessed by the applicable county assessor’s office at least once every three years. The
Split Roll Initiative includes exceptions for businesses with a total market value of less than $3 million
(adjusted for inflation), which would continue to be subject to property taxes based on purchase price, and
exempts from property tax assessments up to $500,000 of the value of personal property, or all personal
property for businesses with fewer than 50 employees. The State Legislature also referred a related
constitutional amendment which also qualified for the November 2020 ballot. This ballot measure would
add additional exemptions and limitations to the properties subject to market value adjustment. There can
be no assurance that the Split Roll Initiative or the related ballot measure will be adopted by voters.
Moreover, if the Split Roll Initiative is adopted, the Successor Agency is unable to predict how it would
affect the relationship of the assessed value between land use types (i.e. residential versus commercial) in
the Project Areas in future years or what other impacts the Split Roll Initiative might have on the Pledged
Tax Revenues or the local economy.
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property
at the lesser of its originally determined (base year) full cash value compounded annually by the inflation
factor, or its full cash value as of the lien date, taking into account reductions in value due to damage,
destruction, obsolescence or other factors causing a decline in market value. Reductions based on
Proposition 8 do not establish new base year values, and the property may be reassessed as of the following
lien date up to the lower of the then-current fair market value or the factored base year value. The State
Board of Equalization has approved this reassessment formula and such formula has been used by county
assessors statewide. This methodology has been approved by the Fourth District Court of Appeals in a case
in which the California Supreme Court declined further review. See “FINANCIAL INFORMATION -
Property Taxation in California - Proposition 8 Adjustments” herein.
If Proposition 8 adjustments are made by the County Assessor in future years because of declines in the fair
market value of properties caused by the lack of real estate development in the area generally or other
economic factors, Pledged Tax Revenues may be adversely affected and as a possible consequence may
have an adverse effect on the Successor Agency’s ability to pay debt service on the Bonds.
As a result of the Pandemic, the County could process future Proposition 8 reductions due to the economic
impact of COVID-19 on property value. If Proposition 8 adjustments are made by the County Assessor in
future years because of declines in the fair market value of properties caused by the lack of real estate
development in the area generally or other economic factors, Pledged Tax Revenues may be adversely
affected and as a possible consequence may have an adverse effect on the Successor Agency’s ability to
pay debt service on the Bonds.
Assessment Appeals. Assessment appeals may be filed by property owners seeking a reduction in the
assessed value of their property. After the property owner files an appeal, the County’s Appeals Board will
34
hear the appeal and make a determination as to whether or not there should be a reduction in assessed value
for a particular property and the amount of the reduction, if any. To the extent that any reductions are made
to the assessed valuation of such properties with appeals currently pending, or appeals subsequently filed,
Tax Increment Revenues, and correspondingly, Pledged Tax Revenues will be reduced. Such reductions
may have an adverse effect on the Successor Agency’s ability to pay debt service on the Bonds. As of April
2020, there were 44 pending appeals within the Project Area No. 1 relating to $73.1 million of 2019-20 or
prior years’ assessed value and 77 pending appeals within the Project Area No. 2 relating to $344.8 million
of 2019-20 or prior years’ assessed value. As a result of the Pandemic and the impact of COVID-19 on the
economy and property value, the Successor Agency may experience a rise in the number of assessment
appeals. See “THE PROJECT AREAS - Assessment Appeals” herein. To the extent these appeals are
resolved in favor of any property owner, Pledged Tax Revenues will be reduced.
Natural Hazards. Any natural disaster or other physical calamity, including earthquake, may have the
effect of reducing Pledged Tax Revenues through reduction in the aggregate assessed valuation within the
boundaries of the Project Areas.
The City, like most communities in California, is an area of unpredictable seismic activity, and therefore,
is subject to potentially destructive earthquakes. Numerous active and inactive fault lines pass through or
near the City. The occurrence of severe seismic activity in the City could result in substantial damage to
property located in the Project Areas, and could lead to successful appeals for reduction in assessed values
of such property. Such a reduction could result in a decrease in Pledged Tax Revenues.
Approximately 0.4% of the Project Areas are located in a 100-Year Flood Plain. Additionally, significant
localized flooding events have occurred affecting a limited number of properties in the Project Areas. The
Successor Agency cannot guarantee that flooding events in future years, if any, will not impact the value
of properties within the Project Areas.
The occurrence of one or more natural disasters could occur and could result in damage to improvements
and property within the Project Areas of varying seriousness. Such damage may significantly reduce
Pledged Tax Revenues received by the Successor Agency and may adversely impact the Successor
Agency’s ability to pay debt service on the Bonds.
Hazardous Substances. An additional environmental condition that may result in the reduction in the
assessed value of parcels would be the discovery of a hazardous substance that would limit the beneficial
use of a property within the Project Areas. In general, the owners and operators of a property may be
required by law to remedy conditions of the property relating to releases or threatened releases of hazardous
substances. The owner (or operator) may be required to remedy a hazardous substance condition of
property whether or not the owner (or operator) has anything to do with creating or handling the hazardous
substance. The effect, therefore, should any of the property within the Project Areas be affected by a
hazardous substance would be to reduce the marketability and value of the property, perhaps by an amount
in excess of the costs of remedying the condition. The Successor Agency can give no assurance that future
development will not be limited by these conditions.
Certain Bankruptcy Risks. The enforceability of the rights and remedies of the Owners of the Bonds and
the obligations of the Successor Agency may become subject to the following: the federal bankruptcy code
and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting
the enforcement of creditors’ rights generally, now or hereafter in effect; usual equitable principles which
may limit the specific enforcement under state law of certain remedies; the exercise by the United States of
America of the powers delegated to it by the federal Constitution; and the reasonable and necessary
exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of
California and its governmental bodies in the interest of servicing a significant and legitimate public
purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated,
could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy
or otherwise and consequently may entail risks of delay, limitation, or modification of their rights.
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Levy and Collection of Taxes. The Successor Agency has no power to levy and collect property taxes,
and any property tax limitation, legislative measure, voter initiative or provision of additional sources of
income to Taxing Agencies having the effect of reducing the property tax rate must necessarily reduce the
amount of Tax Increment Revenues, and consequently, Pledged Tax Revenues that would otherwise be
available to pay the principal of, and interest on the Bonds.
After the Governor’s declaration of a State of Emergency to exist in California as a result of the threat of
COVID-19, the Riverside County Treasurer-Tax Collector stated his office’s intent to accommodate those
who have been directly impacted by the Pandemic and who are unable to pay property taxes timely due to
circumstances related to this crisis. The Treasurer-Tax Collector does not have the authority to extend the
payment delinquency date (including the payment date of April 10, 2020) and all payments received after
the due date are assessed late penalties and costs as required by law. However, taxpayers are permitted to
submit to the Treasurer-Tax Collector a Penalty Cancellation Request Form and documentation to support
the cancellation of penalties as allowed in limited circumstances under the then-current State law, allowing
for waiver of penalties, costs and other charges when failure to make a timely payment is due to reasonable
cause and circumstances beyond the taxpayer’s control, and occurred notwithstanding the exercise of
ordinary care in the absence of willful neglect. The request for penalty waiver was only applicable to taxes
with delinquent dates beginning April 11, 2020 and was required to be filed by June 30, 2020, with certain
taxpayers having until May 6, 2021.
The Governor’s Executive Order N-61-20 extended the penalty and interest waiver through May 2021.
Although the Successor Agency received all of the RPTTF authorized to be paid to it on June 1, 2020,
future property taxes to the Successor Agency could be impacted by both the economic impact of COVID-
19 on property value and on the timely collection of property tax. The value of property on the Fiscal Year
2021-22 tax roll and future tax rolls could be reduced. The initial impact could occur because the April
2020, December 2020 and April 2021 property tax installments could be deferred by some taxpayers, or
some taxpayers may be unable to make their property tax payments going forward. Neither the Successor
Agency nor the Municipal Advisor is able to estimate the potential impact on future property collections,
values or tax increment revenues as a result of the Pandemic or the County’s current or potential future
waiver of property tax delinquent penalties resulting in some taxpayers deferring their payment.
Interpretation of and Future Changes in the Law; Voter Initiatives. The Redevelopment Law and the
Dissolution Act are complex bodies of law and their application to the Successor Agency, the
Redevelopment Plan and the Project Areas may be subject to different interpretations by the Successor
Agency, the Department of Finance, the County Auditor-Controller, Taxing Agencies and other interested
parties, including with respect to Contractual Tax Sharing Agreements and Statutory Tax Sharing
obligations and enforceable obligations. Since the effectiveness of the Dissolution Act, the State
Department of Finance and various successor agencies have from time to time disagreed about the
interpretation of different language contained in the Dissolution Act, as well as whether or not the State
Department of Finance has exceeded its authority in rejecting items from Recognized Obligation Payment
Schedules submitted by successor agencies, as evidenced by numerous lawsuits. While the Successor
Agency has covenanted in the Indenture to preserve and protect the security of the Bonds and the rights of
the Bondholders (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AND
SUPPLEMENTS THERETO - COVENANTS OF THE SUCCESSOR AGENCY”), any such action taken by the
Successor Agency could incur substantial time and cost that may have a detrimental effect on the Successor
Agency’s ability to timely pay debt service on the Bonds. Moreover, the Successor Agency cannot
guarantee the outcome of any such action taken by the Successor Agency to preserve and protect the security
of the Bonds and the rights of the Bondholders.
In addition to the existing limitations on Tax Increment Revenues described in this Official Statement under
“FINANCIAL INFORMATION - Property Taxation in California,” the California electorate or Legislature
could adopt future limitations with the effect of reducing Tax Increment Revenues payable to the Successor
Agency.
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Real Estate and General Economic Risks
Tax Increment Revenues as presented herein as available for payment of any indebtedness of the Successor
Agency are based upon the latest actual assessed values for the 2020-21 Fiscal Year. Redevelopment of
real property within the Project Areas by the City, as well as private development in the Project Areas, may
be adversely affected by changes in general economic conditions, fluctuations in the real estate markets and
interest rates, unexpected increases in development costs, changes in or new governmental policies
including governmental policies to restrict or control certain kinds of development and by other similar
factors. If development and redevelopment activities in the Project Areas encounters significant obstacles
of the kind described herein or other impediments, the economy of the area in and around the Project Areas
could be adversely affected, causing reduced taxable valuation of property in the Project Areas a reduction
of the Tax Increment Revenues and a consequent reduction in Pledged Tax Revenues available to repay the
Bonds. Due to the future decline in the general economy of the region, owners of property within the
Project Areas may be less able or less willing to make timely payments of property taxes, causing a delay
or reduction of Tax Increment Revenues and consequently a reduction in Pledged Tax Revenues available
to repay the Bonds.
COVID-19
The outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus, has been
characterized as a Pandemic by the World Health Organization. On January 31, 2020, the Secretary of the
United States Health and Human Services Department declared a public health emergency for the United
States and on March 13, 2020, the President of the United States declared the outbreak of COVID-19 in the
United States a national emergency. Subsequently, the President’s Coronavirus Guidelines for America and
the United States Centers for Disease Control and Prevention called upon Americans to take actions to slow
the spread of COVID-19 in the United States.
On March 4, 2020, the Governor proclaimed a state of emergency in California as a result of the threat of
COVID-19. Under the California Emergency Services Act, during a state of emergency, the Governor has
authority over all agencies of the state government and can exercise the State’s police powers. His powers
also include the power to promulgate, issue, and enforce orders and regulations as he deems necessary.
Since declaring the emergency, the Governor has issued a number of executive orders relating to COVID-
19 preparedness and mitigation. These include his March 19, 2020 Executive Order N-33-20, which
ordered all individuals living in the State of California to stay home or at their place of residence except as
needed to maintain continuity of operations of certain critical infrastructure sectors, as described in that
order and later designations. The County had issued a similar order (“County Order”) effective for its
residents on March 18, 2020. Since that time, gradual reopening first of lower-risk workplaces, public
spaces and then other businesses was permitted. However, from time to time, the Governor has directed
certain counties, including Riverside County, to roll back the opening of some of the businesses permitted
to open in June 2020. This is likely to continue as the cases of COVID-19 escalate in the near term, or in
the future. The State is monitoring closely the confirmed cases and deaths by county in making its decisions
on business and school openings and closings.
The City has held, and expects to continue to hold, meetings of its City Council substantially unhindered
by the Pandemic. As permitted under Executive Order N-33-20, certain of the City’s employees may
continue to come to work under designated exceptions for critical sectors and some of the City’s employees
are teleworking. The City’s business operations were not materially curtailed by employee absences
prompted by the stay-home order.
The Pandemic has negatively affected travel, commerce, investment values, and financial markets globally,
and is widely expected to continue to negatively affect economic output worldwide and within the City.
While federal and state governments (including California) have enacted legislation and taken executive
37
actions seeking to mitigate the negative public health and economic impacts of the Pandemic, the Successor
Agency offers no assurances that these interventions will have the intended effects.
The City continues to monitor the spread of COVID-19 and is working with local, state, and national
agencies to address the potential impact of the Pandemic upon the City. While the overall potential impact
of the Pandemic on the City cannot be fully quantified at this time, the continued outbreak of COVID-19
could lead to additional or modified public health restrictions and have an adverse effect on the financial
condition of property owners in the Project Areas and their ability to pay property taxes or the value of
property in the Project Areas resulting in a reduction in assessed value, and the effect could be material.
Prospective investors should assume that the current disruption to the national and global economies could
increase over the near term if further outbreaks occur and recovery may be prolonged. Therefore, the
associated impacts related to COVID-19 on the tax increment revenues could be materially adverse.
Furthermore, it is possible that there may be other outbreaks similar to COVID-19 in the future.
Recently, legislations have been introduced in order to assist various affected people and companies as a
result of the COVID-19 Pandemic. For example, Senate Bill 939 would allow under certain circumstances
a commercial tenant that is a small business or is an eating or drinking establishment, place of entertainment,
or performance venue that meets specified financial criteria, including experiencing a specified decline in
revenue after a Shelter-in-Place order took effect, to terminate a lease without any liability for future rent,
fees, or costs that otherwise may have been due under the lease. Also, Senate Bill 1431 would expand the
provisions allowing for reassessment of property. Under existing law, property may be reassessed for
damage or destruction caused by one of 3 specified occurrences, including a major misfortune or calamity
in an area or region subsequently proclaimed by the Governor to be in a state of disaster if the property was
damaged or destroyed by the misfortune or calamity that caused the Governor to proclaim the region to be
in a state of disaster. Senate Bill 1431 would specify that “damage” includes diminution in the value of
property as a result of any law, order, rule, or regulation of the state or any city, county, or other political
subdivisions providing tenant protections in response to the COVID-19 Pandemic and would also specify
that the term “major misfortune or calamity” includes the COVID-19 Pandemic.
Further, the Governor’s Executive Order N-61-20 extended the penalty and interest waiver for unpaid
property taxes through May 2021 as described above under the caption “- Factors that May Affect Pledged
Tax Revenues - Levy and Collection of Taxes.”
It is unknown what net impact, if any, the legislation described above or other future legislation, if enacted,
would have on the local economy or the property values within the Project Areas. Such net impact could
be materially adverse. The potential impact of the Pandemic on the Successor Agency cannot be quantified
at this time.
Last and Final Recognized Obligation Payment Schedule
The Dissolution Act provides that only those payments listed in the Recognized Obligation Payment
Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation
Payment Schedule. It also provides that a successor agency may file a Last and Final Recognized
Obligation Payment Schedule showing all remaining payments to be made for enforceable obligations. The
Successor Agency’s Last and Final Recognized Obligation Payment Schedule was approved by the
Department of Finance on November 22, 2017. The Successor Agency is permitted to amend the Last and
Final Recognized Obligation Payment Schedule twice. After issuance of the Bonds, the Successor Agency
expects to amend the Last and Final Recognized Obligation Payment Schedule to reduce the amount
included therein for the Refunded Bonds and add the debt service payable for the Bonds.
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Cybersecurity
As a recipient and provider of personal, private and sensitive information, the City faces multiple cyber
threats including, but not limited to, hacking, viruses, malware and other attacks on computers and other
sensitive digital networks and systems.
To date, the City has not experienced a material threat to its computer operating system. However, no
assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all
cases, or that any such attack will not materially impact the operations or finances of the City or the
Successor Agency, or the administration of the Bonds. The Successor Agency is also reliant on other entities
and service providers in connection with the administration of the Bonds, including without limitation the
County Tax Collector for the levy and collection of Pledged Tax Revenues, the Trustee, and the
Dissemination Agent. No assurance can be given that the City, the Successor Agency and these other
entities will not be affected by cyber threats and attacks in a manner that may affect the Bond Owners.
Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market
exists, that such Bonds can be sold for any particular price. Occasionally, because of general market
conditions or because of adverse history or economic prospects connected with a particular issue, secondary
marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices
of issues for which a market is being made will depend upon then prevailing circumstances. Such prices
could be substantially different from the original purchase price.
TAX MATTERS
In the opinion of Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest
on the Bonds is not excluded from gross income for federal income tax purposes under Section 103 of the
Code but interest on the Bonds is exempt from State of California personal income tax.
The amount by which a Bond Owner’s original basis for determining gain or loss on sale or exchange of
the applicable Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier
call date) constitutes amortizable bond premium, which a Bond Owner may elect to amortize under Section
171 of the Code; such amortizable bond premium reduces the Bond Owner’s basis in the applicable Bond
(and the amount of taxable interest received), and is deductible for federal income tax purposes. The basis
reduction as a result of the amortization of bond premium may result in a Bond Owner realizing a taxable
gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than
the original cost of the Bond to the Owner. Purchasers of Bonds should consult their own tax advisors as
to the treatment, computation and collateral consequences of amortizable bond premium.
Except for certain exceptions, the difference between the issue price of a Bond (the first price at which a
substantial amount of the Bonds of the same series and maturity is to be sold to the public) and the stated
redemption price at maturity with respect to such Bond (to the extent the redemption price at maturity is
greater than the issue price) constitutes original issue discount. Original issue discount accrues under a
constant yield method. The amount of original issue discount deemed received by the Bond Owner will
increase the Bond Owner’s basis in the Bond. Bond Owners should consult their own tax advisor with
respect to taking into account any original issue discount on the Bond.
The federal tax and State of California personal income tax discussion set forth above with respect to the
Bonds is included for general information only and may not be applicable depending upon a Beneficial
Owner’s particular situation. The ownership and disposal of the Bonds and the accrual or receipt of interest
with respect to the Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses
no opinion regarding any such tax consequences. BEFORE PURCHASING ANY OF THE BONDS,
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POTENTIAL PURCHASERS SHOULD CONSULT THEIR INDEPENDENT TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES RELATING TO THE BONDS AND THE TAXPAYER’S PARTICULAR
CIRCUMSTANCES.
The complete text of the final opinion that Bond Counsel expects to deliver upon the delivery of the Bonds
is set forth in “APPENDIX F.”
Information Reporting and Backup Withholding
Information reporting requirements apply to interest paid on tax-exempt obligations, including the Bonds.
In general, such requirements are satisfied if the interest recipient completes and provides the payer with a
Form W-9, “Request for Taxpayer Identification Number and Certification,” unless the recipient is one of
a limited class of exempt recipients, including corporations. A recipient not otherwise exempt from
information reporting who fails to satisfy the information reporting requirements will be subject to “backup
withholding,” which means that the payer is required to deduct and withhold a tax from the interest
payment, calculated in the manner set forth in the Code. For the foregoing purpose, a “payer” generally
refers to the person or entity from whom a recipient receives its payments of interest or who collects such
payments on behalf of the recipient.
If an owner purchasing a Bond through a brokerage account has executed a Form W-9 in connection with
the establishment of such account, as generally can be expected, no backup withholding should occur. In
any event, backup withholding does not affect the excludability of the interest on the Bonds from gross
income for federal income tax purposes. Any amounts withheld pursuant to backup withholding would be
allowed as a refund or a credit against the owner’s federal income tax once the required information is
furnished to the Internal Revenue Service.
LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the
Indenture or any other document described herein are in many respects dependent upon regulatory and
judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions,
the remedies provided for under such documents may not be readily available or may be limited. The
various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the
extent that the enforceability of certain legal rights related to the Bonds and the Indenture are subject to
limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of
creditors generally and by equitable remedies and proceedings generally.
Approval of Legal Proceedings
Rutan & Tucker, LLP, Costa Mesa, California, as Bond Counsel, will render opinions with respect to the
Bonds which state that the Indenture is a valid and binding obligation of the Successor Agency and
enforceable in accordance with its terms. The legal opinions of Bond Counsel will be subject to the effect
of bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights and to the exercise
of judicial discretion in accordance with general principles of equity. See “APPENDIX F” for the proposed
forms of Bond Counsel’s opinions with respect to the Bonds.
The Successor Agency has no knowledge of any fact or other information which would indicate that the
Indenture is not so enforceable against the Successor Agency, except to the extent such enforcement is
limited by principles of equity and by state and federal laws relating to bankruptcy, reorganization,
moratorium or creditors’ rights generally.
40
Certain legal matters will be passed on for the Successor Agency by the City Attorney, as General Counsel
to the Successor Agency. Nixon Peabody LLP, Los Angeles, California, will also pass on certain legal
matters for the Successor Agency as Disclosure Counsel. Certain legal matters will be passed on for the
Underwriter by its counsel, Best Best & Krieger LLP, Riverside, California. Fees payable to Disclosure
Counsel and Underwriter’s Counsel are contingent upon the sale and delivery of the Bonds.
No Litigation
There is no action, suit or proceeding known to the Successor Agency to be pending and notice of which
has been served upon and received by the Successor Agency, or threatened, restraining or enjoining the
execution or delivery of the Bonds or the Indenture or in any way contesting or affecting the validity of the
foregoing or any proceedings of the Successor Agency taken with respect to any of the foregoing.
CONCLUDING INFORMATION
Rating on the Bonds
S&P Global Ratings (“S&P”) has assigned a rating of “___” to the Bonds. Such rating reflects only the
views of S&P, and any desired explanation of the significance of such rating may be obtained from S&P.
Generally, a rating agency bases its rating on the information and materials furnished to it and on
investigations, studies and assumptions of its own.
There is no assurance such rating will continue for any given period of time or that such rating will not be
revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency,
circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse
effect on the market price of the Bonds. Except as otherwise required in the Continuing Disclosure
Agreement, the Successor Agency undertakes no responsibility either to bring to the attention of the owners
of any Bonds any downward revision or withdrawal of any rating obtained or to oppose any such revision
or withdrawal. A rating is not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time.
The Municipal Advisor
The material contained in this Official Statement was prepared by the Successor Agency with the assistance
of Harrell & Company Advisors, LLC, Orange, California, an independent financial consulting firm, which
advised the Successor Agency as to the financial structure and certain other financial matters relating to the
Bonds. The information set forth herein has been obtained by the Successor Agency from sources which
are believed to be reliable, but such information is not guaranteed by the Municipal Advisor as to accuracy
or completeness, nor has it been independently verified.
Continuing Disclosure
The Successor Agency will provide annually certain financial information and data relating to the Bonds
by not later than March 31 in each year commencing March 31, 2021 (the “Annual Report”), and to provide
notices of the occurrence of certain other listed events. Willdan Financial Services will act as Dissemination
Agent. The specific nature of the information to be contained in the Annual Report or the notices of listed
events and certain other terms of the continuing disclosure obligation are found in the form of the Successor
Agency’s Disclosure Agreement attached in “APPENDIX E - FORM OF CONTINUING DISCLOSURE
AGREEMENT.”
In the previous 5 years, the Successor Agency believes it has complied in all material respects with any
undertaking made pursuant to the Rule.
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Underwriting
The Bonds are being sold at an aggregate purchase price of $________ (representing the aggregate principal
amount of the Bonds less an underwriting discount of $__________) pursuant to a bond purchase contract
(“Bond Purchase Contract”) entered into between the Successor Agency and Hilltop Securities Inc. (the
“Underwriter”).
The expenses associated with the issuance of the Bonds are being paid by the Successor Agency from
proceeds of the Bonds. The right of the Underwriter to receive compensation in connection with the Bonds
is contingent upon the issuance and delivery by the Successor Agency, and the purchase by the Underwriter,
of the Bonds. The Bond Purchase Contract provides that the Underwriter will purchase all of the Bonds if
any are purchased and that the obligation of the Underwriter to accept and pay for the Bonds is subject to
certain terms and conditions set forth therein, including the approval by counsel of certain legal matters.
The Underwriter will initially offer the Bonds for sale at the prices and yields set forth on the inside cover
page of this Official Statement. Such prices or yields may subsequently change. The Underwriter reserves
the right to join with dealers and other investment banking firms in offering the Bonds for sale and may
offer to sell Bonds to dealers at prices lower than the initial offering prices.
References
All statements in this Official Statement involving matters of opinion, whether or not expressly so stated,
are intended as such and not as representations of fact. This Official Statement is not to be construed as a
contract or agreement between the Successor Agency and the purchasers or Owners of any of the Bonds.
Execution
The execution and delivery of this Official Statement by the Executive Director of the Successor Agency
has been duly authorized by the Successor Agency.
SUCCESSOR AGENCY TO THE
LA QUINTA REDEVELOPMENT AGENCY
By: ___________________________
Executive Director
[Remainder of Page Intentionally Left Blank]
A-1
APPENDIX A
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
AND SUPPLEMENTS THERETO
[TO BE PROVIDED BY BOND COUNSEL]
APPENDIX B
MUNICIPAL ADVISOR’S
PROJECTED TAX REVENUES REPORT
B-1
PROJECTED TAX REVENUES
Dissolution Act
On June 29, 2011, Assembly Bill No. 26 (“AB X1 26”) was enacted as Chapter 5, Statutes of 2011. As a
result of AB X1 26 and the decision of the California Supreme Court in California Redevelopment
Association, et al. v. Matosantos, et al., 53 Cal. 4th 231 (Cal. 2011), as of February 1, 2012, all
redevelopment agencies in the State were dissolved, including the Prior Agency, and successor agencies
were designated as successor entities to the former redevelopment agencies to expeditiously wind down the
affairs of the former redevelopment agencies.
AB X1 26 was amended on June 27, 2012 by Assembly Bill No. 1484 (“AB 1484”), enacted as Chapter 26,
Statutes of 2012 and by Senate Bill No. 107 (“SB 107”) enacted as Chapter 325, Statutes of 2015 (as
amended from time to time, the “Dissolution Act”).
Pursuant to Section 34173 of the Dissolution Act, the City Council serves as the governing board of the
successor agency to the Prior Agency. Since the February 1, 2012 dissolution of the Prior Agency, the City
has served as the Successor Agency to the La Quinta Redevelopment Agency (the “Successor Agency”).
Tax Allocation Financing
Prior to the enactment of AB X1 26, the Redevelopment Law authorized the financing of redevelopment
projects through the use of tax increment revenues. First, the assessed valuation of the taxable property in
a project area, as last equalized prior to adoption of the redevelopment plan, was established and became
the base roll. Thereafter, except for any period during which the assessed valuation dropped below the base
year level, the taxing agencies, on behalf of which taxes are levied on property within the project area,
receive the taxes produced by the levy of the then current tax rate upon the base roll. Taxes collected upon
any increase in the assessed valuation of the taxable property in a project area over the levy upon the base
roll could be pledged by a redevelopment agency to the repayment of any indebtedness incurred in financing
the redevelopment project. Redevelopment agencies themselves had no authority to levy taxes on property.
The Dissolution Act now requires the County Auditor-Controller to determine the amount of property taxes
that would have been allocated to the Prior Agency had the Prior Agency not been dissolved pursuant to the
operation of AB X1 26, using current assessed values on the last equalized roll on August 20, and to deposit
that amount in the Redevelopment Property Tax Trust Fund for the Successor Agency established and held
by the County Auditor-Controller (the “Redevelopment Property Tax Trust Fund”) pursuant to the
Dissolution Act. The Dissolution Act provides that any bonds authorized thereunder to be issued by the
Successor Agency will be considered indebtedness incurred by the dissolved Prior Agency, with the same
legal effect as if the bonds had been issued prior to effective date of AB X1 26, in full conformity with the
applicable provision of the Redevelopment Law that existed prior to that date, and will be included in the
Successor Agency’s Recognized Obligation Payment Schedule.
B-2
Tax Increment Revenues
Pursuant to subdivision (b) of Section 33670 of the Redevelopment Law and Section 16 of Article XVI of
the State Constitution and as provided in the Redevelopment Plans, taxes levied upon taxable property in
the Project Areas each year by or for the benefit of the State, any city, county, city and county, district, or
other public corporation (herein sometimes collectively called “taxing agencies”) after the effective date
of the ordinance approving the related Redevelopment Plan, or the respective effective dates of ordinances
approving amendments to the related Redevelopment Plan that added territory to a Project Area, if any,
are to be divided as follows:
(a) To Taxing Agencies: That portion of the taxes which would be produced by the rate upon which
the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed
value of the taxable property in a Project Area as shown upon the assessment roll used in connection
with the taxation of such property by such taxing agency last equalized prior to the effective date
of the ordinance adopting the Redevelopment Plan (the “base year valuation”), will be allocated to,
and when collected will be paid into, the funds of the respective taxing agencies as taxes by or for
the taxing agencies on all other property are paid; and
(b) To the Prior Agency/Successor Agency: Except for that portion of the taxes in excess of the amount
identified in (a) above which are attributable to a tax rate levied by a taxing agency for the purpose
of producing revenues in an amount sufficient to make annual repayments of the principal of, and
the interest on, any bonded indebtedness approved by the voters of the taxing agency on or after
January 1, 1989 for the acquisition or improvement of real property, which portion shall be
allocated to, and when collected shall be paid into, the fund of that taxing agency, that portion of
the levied taxes each year in excess of such amount, annually allocated within limitations
established by the Redevelopment Plan, following the date of issuance of the Bonds, when collected
will be paid into a special fund of the Successor Agency. Section 34172 of the Dissolution Act
provides that, for purposes of Section 16 of Article XVI of the State Constitution, the
Redevelopment Property Tax Trust Fund shall be deemed to be a special fund of the Successor
Agency to pay the debt service on indebtedness incurred by the Prior Agency or the Successor
Agency to finance or refinance the redevelopment projects of the Prior Agency.
That portion of the levied taxes described in paragraph (b) above, less amounts deducted pursuant to
Section 34183(a) of the Dissolution Act for permitted administrative costs of the County Auditor-
Controller, constitute the amounts required under the Dissolution Act to be deposited by the County
Auditor-Controller into the Redevelopment Property Tax Trust Fund. In addition, Section 34183 of the
Dissolution Act effectively eliminates the January 1, 1989 date from paragraph (b) above. Pursuant to SB
107, effective September 22, 2015, debt service override revenues approved by the voters for the purpose
of supporting pension programs or capital projects, and programs related to the State Water Project, that
are not pledged to or needed for debt service on successor agency obligations are allocated and paid to the
entity that levies the override and will not be deposited into the Redevelopment Property Tax Trust Fund.
Therefore, overrides levied within the Project Areas are not pledged to the payment of debt service on the
Bonds.
The amounts calculated in accordance with the provisions described above are referred to herein as “Tax
Increment Revenues.”
Redevelopment Plans
The City Council approved and adopted the Redevelopment Plan for Project Area No. 1 on November 29,
1983, pursuant to Ordinance No. 43. It was subsequently amended on December 20, 1994 pursuant to
Ordinance No. 258 to add limitations prescribed by AB 1290, again on March 21, 1995 pursuant to
Ordinance No. 264 to amend financial limits and time to initiate eminent domain actions, on August 19,
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2003 pursuant to Ordinance No. 388 to eliminate the time limit to incur debt as authorized by SB 211 and
again on March 16, 2004 pursuant to Ordinance No. 402 to extend the Redevelopment Plan duration by one
year as authorized by SB 1045.
The City Council approved and adopted the Redevelopment Plan for Project Area No. 2 on May 16, 1989,
pursuant to Ordinance No. 139. It was subsequently amended on December 20, 1994 pursuant to Ordinance
No. 259 to add limitations prescribed by AB 1290, again on February 3, 2004 pursuant to Ordinance No.
399 to amend financial limits, on March 16, 2004 pursuant to Ordinance Nos. 403 and 404 to eliminate the
time limit to incur debt as authorized by SB 211 and to extend the Redevelopment Plan duration by one
year as authorized by SB 1045, and again on February 1, 2011 pursuant to Ordinance No. 485 to add
territory for purposes of affordable housing.
Plan Limitations
In accordance with the Redevelopment Law, redevelopment plans were required to include certain limits
on the financing of redevelopment projects. These limits could include a time limit on the life of the
redevelopment plan, a time limit to incur debt, a time limit on the receipt of Tax Increment Revenues and
the repayment of debt, and a limit on the amount of bonded indebtedness outstanding at any time. SB 107
clarifies that the former limit on the amount of tax increment and time within which tax increment could be
received by redevelopment agencies in redevelopment plans no longer apply for purposes of paying
approved enforceable obligations such as the tax allocation bonds and loans incurred by the Prior Agency
or refunding tax allocation bonds issued by the Successor Agency. The original time limit for receipt of tax
increment in Project Area No. 1 was 2034, and for Project Area No. 2 was 2040.
Historical Assessed Value and Tax Increment Revenues
Historical assessed value and gross tax increment revenues for Project Area No. 1 based on the equalized
tax rolls and actual gross tax increment revenues deposited to the Redevelopment Property Tax Trust Fund
are shown below.
TABLE NO. B-1
PROJECT AREA NO. 1
HISTORICAL ASSESSED VALUATIONS AND GROSS TAX INCREMENT REVENUES
2016-17 2017-18 2018-19 2019-20 2020-21
Secured Assessed Value $4,977,966,406 $5,103,964,054 $5,278,711,343 $5,482,423,278 $5,660,100,486
Unsecured Assessed Value 34,377,191 28,437,371 22,748,622 36,027,567 17,201,305
Total Assessed Valuation (1) 5,012,343,597 5,132,401,425 5,301,459,965 5,518,450,845 5,677,301,791
Base Year Valuation (199,398,232) (199,398,233) (199,398,233) (199,398,233) (199,398,233)
Incremental Valuation $4,812,945,365 $4,933,003,192 $5,102,061,732 $5,319,052,612 $5,477,903,558
Basic Tax Rate/$100 1.00% 1.00% 1.00% 1.00% 1.00%
Tax Increment Revenues 48,129,454 49,330,032 51,020,617 53,190,526 54,779,036
Unitary Revenues 648,065 673,895 700,186 722,959 737,500(2)
Gross Tax Revenues $ 48,777,519 $ 50,003,927 $ 51,720,803 $ 53,913,485 $ 55,516,536
Actual RPTTF Deposit $ 49,210,774 $ 50,475,054 $ 51,956,505 $ 54,312,406 N/A
______________________________________
(1) Taxable Valuation as of August 20 equalized roll.
(2) Estimated.
Source: Riverside County Auditor-Controller.
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Actual gross deposits and deductions from the RPTTF for Project Area No. 1 are shown below:
TABLE NO. B-2
PROJECT AREA NO. 1
HISTORICAL TAX REVENUES
2016-17 2017-18 2018-19 2019-20
Actual Tax Revenues $49,210,774 $50,475,054 $51,956,505 $54,312,406
Senior Tax Sharing (1,137,449) (2,269,947) (2,420,239) (2,622,759)
Available for Debt Service 48,073,325 48,205,107 49,536,266 51,689,647
Subordinate Tax Sharing(1) (20,052,159) (21,511,706) (22,227,242) (23,270,556)
Net Deposit to RPTTF $28,021,166 $26,693,401 $27,309,024 $28,419,092
______________________________________
(1) Available if needed to pay debt service pursuant to Section 34183(b) of the Dissolution Act.
Source: Riverside County Auditor-Controller.
Historical assessed value and gross tax increment revenues for Project Area No. 2 based on the equalized
tax rolls and actual gross tax increment revenues deposited to the Redevelopment Property Tax Trust Fund
are shown below.
TABLE NO. B- 3
PROJECT AREA NO. 2
HISTORICAL ASSESSED VALUATIONS AND GROSS TAX INCREMENT REVENUES
2016-17 2017-18 2018-19 2019-20 2020-21
Secured Assessed Value $2,777,740,583 $2,850,974,377 $2,959,127,650 $3,055,267,270 $3,141,480,380
Unsecured Assessed Value 58,960,131 60,680,434 56,673,732 56,542,535 53,773,198
Total Assessed Valuation (1) 2,836,700,714 2,911,654,811 3,015,801,382 3,111,809,805 3,195,253,578
Base Year Valuation (95,182,755) (95,182,755) (95,182,755) (95,182,755) (95,182,755)
Incremental Valuation $2,741,517,959 $2,816,472,056 $2,920,618,627 $3,016,627,050 $3,100,070,823
Basic Tax Rate/$100 1.00% 1.00% 1.00% 1.00% 1.00%
Tax Increment Revenues 27,415,180 28,164,721 29,206,186 30,166,271 31,000,708
Unitary Revenues 267,828 279,191 291,982 301,423 307,500(2)
Gross Tax Revenues $ 27,683,008 $ 28,443,912 $ 29,498,168 $ 30,467,694 $ 31,308,208
Actual RPTTF Deposit $ 28,205,847 $ 28,643,547 $ 29,637,091 $ 30,742,836 N/A
______________________________________
(1) Taxable Valuation as of August 20 equalized roll.
(2) Estimated.
Source: Riverside County Auditor-Controller.
[Remainder of Page Intentionally Left Blank]
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Actual gross deposits and deductions from the RPTTF for Project Area No. 2 are shown below:
TABLE NO. B-4
PROJECT AREA NO. 2
HISTORICAL TAX REVENUES
2016-17 2017-18 2018-19 2019-20
Actual Tax Revenues $28,205,847 $28,643,547 $29,637,091 $30,742,836
Senior Tax Sharing (19,009,829) (19,304,225) (19,973,303) (20,716,940)
Net Deposit to RPTTF $ 9,196,018 $ 9,339,322 $ 9,663,788 $10,025,897
______________________________________
Source: Riverside County Auditor-Controller.
Major Taxpayers
The ten largest property taxpayers represent 6.1% of the 2020-21 total assessed value of Project Area No.
1 and 6.2% of the incremental assessed value of Project Area No. 1.
TABLE NO. B-5
PROJECT AREA NO. 1
TEN LARGEST TAXPAYERS AS A PERCENT OF 2020-21 TOTAL ASSESSED VALUE
2020-21 % of
Total Total
Assessed Assessed
Taxpayer Value Value Land Use
BRE Iconic LQR LLC $163,077,289 2.9% Hotel
Silverhawk Apartments LP 26,077,707 0.5% Apartments
Palm Desert Lodging 24,312,125 0.4% Hotel
RREF II CWC LAQ 22,268,605 0.4% Residential
HJ GG Partners LLC 20,982,350 0.4% Residential
OTLQ LLC 20,039,994 0.4% Commercial
LQ Investment 17,024,220 0.3% Commercial
Tradition Golf Club 16,574,079 0.3% Country Club
Quarry at La Quinta Inc. 14,284,458 0.3% Hotel
Silverrock Phase I 12,346,106 0.2% Golf Course
$336,986,933 6.1%
______________________________________
Source: Municipal Advisor.
[Remainder of Page Intentionally Left Blank]
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The ten largest property taxpayers represent 9.3% of the 2020-21 total assessed value of Project Area No.
2 and 9.5% of the incremental assessed value of Project Area No. 2.
TABLE NO. B-6
PROJECT AREA NO. 2
TEN LARGEST TAXPAYERS AS A PERCENT OF 2020-21 TOTAL ASSESSED VALUE
2020-21 % of
Total Total
Assessed Assessed
Taxpayer Value Value Land Use
Inland American La Quinta Pavilion $ 50,248,920 1.6% Commercial
Hawthorne IL Propco 45,760,953 1.4% Assisted Living
Walmart Real Estate Business Trust 32,199,420 1.0% Commercial
Health Care Reit Inc. 27,473,475 0.9% Commercial
Aventine Dev. 27,380,407 0.9% Apartments
Costco Wholesale Corporation 26,550,676 0.8% Commercial
CSRA Komar Desert Center St. 26,343,936 0.8% Commercial
RREF La Quinta REO 20,934,021 0.7% Commercial
TD Desert Development LP 19,700,507 0.6% Residential
Eagle Hardware and Garden Inc./Lowes 19,239,506 0.6% Commercial
$295,831,821 9.3%
______________________________________
Source: Municipal Advisor.
Assessment Appeals
Project Area No. 1
As of July 2020, there were a total 44 pending appeals filed by property owners in Project Area No. 1 as
shown below. The total value of property under appeal for all years is $73.1 million. Some appeals have
been filed for multiple years for the same property. A summary of all pending appeals is shown below.
Pending Value of Property % of
Tax Year Appeals Under Appeal Tax Roll
2016-17 1 $ 1,622,318 0.0%
2017-18 2 4,570,727 0.1%
2018-19 14 23,804,606 0.4%
2019-20 27 43,071,328 0.8%
Total 44 $73,068,979 N/A
______________________________________
Source: Municipal Advisor.
For Fiscal Years 2015-16 to 2018-19, 13 of 59 (22%) of resolved appeals were successful, with an average
reduction in assessed value of 35.7%. The Successor Agency cannot predict the outcome of any pending
appeals.
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Project Area No. 2
As of July 2020, there were a total 77 pending appeals filed by property owners in Project Area No. 2 as
shown below. The total value of property under appeal for all years is $344.8 million. Some appeals have
been filed for multiple years for the same property. A summary of all pending appeals is shown below.
Pending Value of Property % of
Tax Year Appeals Under Appeal Tax Roll
2016-17 13 $ 59,941,506 2.1%
2017-18 16 67,320,471 2.3%
2018-19 30 149,627,794 5.0%
2019-20 18 67,909,524 2.2%
Total 77 $344,799,295 N/A
______________________________________
Source: Municipal Advisor.
For Fiscal Years 2015-16 to 2018-19, 10 of 29 (34%) of resolved appeals were successful, with an average
reduction in assessed value of 47.9%. The Successor Agency cannot predict the outcome of any pending
appeals.
While the Successor Agency expects some decline in total assessed valuation as a result of pending or
potential future appeals, no prediction can be made as to the amount of the decline in total assessed
valuation, if any, within the Project Areas. No reduction for pending appeals in the Project Areas has been
incorporated in the projections. Reductions in revenue for refunds resulting from successful appeals or
current or prior year appeals have also not been incorporated into the projections. The success rate of
appeals, reductions granted and refunds may vary from historical averages.
Tax Sharing Agreements
Pursuant to prior Section 33401(b) of the Redevelopment Law, a redevelopment agency could enter into an
agreement to pay tax increment revenues to any taxing agency that has territory located within a
redevelopment project to alleviate any financial burden or detriment caused by the redevelopment project.
These agreements are commonly known as “tax sharing agreements” or “pass-through agreements” and are
referred to herein as “Contractual Tax Sharing Agreements.” The following describes the agreements
entered into with respect to the Project Areas.
For the purpose of calculating tax sharing under either Section 33401 or 33607 of the Redevelopment Law
(described under the caption “Tax Sharing Statutes”), the Dissolution Act provides that, if applicable, the
amount of tax sharing payments shall be computed as though the requirement to set aside funds for the Low
and Moderate Income Housing Fund was still in effect.
Project Area No. 1
County General Fund, Library, and Fire Districts
Pursuant to the “Replacement Cooperation Agreement Between the County of Riverside and the City of La
Quinta and the La Quinta Redevelopment Agency” executed on December 21, 1993, the County General
Fund, Library District, and Fire District are to receive their full 100 percent share of the gross (before
housing fund deposits) tax increment. The County General Fund tax levy within the Project Area is 24.78
percent, while the Library and Fire District tax levies are 2.77 percent and 5.96 percent, respectively.
The Replacement Cooperation Agreement provides that the payment of County tax increment revenue is
subordinate to debt service for existing Project bond debt, and any future bonds issued in connection with
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La Quinta Project No. 1. However, the Agreement required the Prior Agency to size new bond issuances
in such a way that sufficient funds are projected to be available to satisfy its obligations to the County
pursuant to the Agreement without subordination.
Coachella Valley Unified School District
The Prior Agency’s agreement with the Coachella Valley Unified School District provided for a fixed series
of payments to be made by the Prior Agency to the Coachella Valley Unified School District, with the final
payment due July 1, 2012. Their obligations under this agreement have been paid in full.
Desert Sands Unified School District
The Prior Agency’s agreement with the Desert Sands Unified School District (“DSUSD”) requires that the
Agency deposit a portion of the DSUSD’s revenues into a capital fund to be used for the purpose of
financing various capital projects that benefit both DSUSD and the Project Area. The payments were
contingent upon the Prior Agency reaching a $300 million tax increment threshold, which occurred in 2004-
05. Annually, during the first ten years following the year in which the Prior Agency’s cumulative tax
increment exceeded $300 million, the Agency was required to deposit an amount equal to 20 percent of the
DSUSD’s 29.09 percent share. Beginning in the eleventh year (2015-16) and continuing for the
Redevelopment Plan’s duration, the Successor Agency will deposit 25 percent of the DSUSD’s share of tax
increment.
The Agreement provides that payments to the DSUSD do not constitute an “express pledge” within the
meaning of Redevelopment Law Section 33671.5, and therefore, payments to the DSUSD are subordinate
to all bond debt service.
Desert Community College
The Prior Agency’s agreement with Desert Community College District requires the Agency to pay 20
percent of the Desert Community College District's share to the District. The payments were contingent
upon the Prior Agency reaching a $300 million tax increment threshold. Beginning in the eleventh year
following the $300 million threshold event (2015-16) and continuing thereafter, the Successor Agency is
required pay 25 percent of the Desert Community College District’s share. The Agreement provides that
payments to the District do not constitute an “express pledge” within the meaning of Redevelopment Law
Section 33671.5, and therefore, payments to the Desert Community College District are subordinate to all
bond debt service.
Coachella Valley Mosquito and Vector Control
The Prior Agency’s agreement with the Coachella Valley Mosquito and Vector Control District, requires
the Agency to pay the District its full 100 percent share of the gross tax increment net of the 20 percent
contribution to the Housing Fund, of the District's 1.39 percent levy of the net tax increment (net of housing
fund deposits). The levy shall not exceed 1.43 percent and it is currently 1.39 percent. This pass-through
obligation is senior to all bond debt service payments and is excluded from the pledge of nonhousing
revenues for the bond financing.
The Dissolution Act specifically allows the payments under tax sharing agreements that were calculated
“net of housing fund deposits” to continue to be calculated as if the housing fund deposits continued to be
made.
Coachella Valley Water District
The Prior Agency’s agreement with the Coachella Valley Water District requires that the Successor Agency
pay to the Coachella Valley Water District (“CVWD”) a portion of the CVWD share of the gross tax
increment, equal to 2.78 percent. The Agreement includes those payments to CVWD, CVWD
Improvement District, and CVWD Storm Water Unit, and provides that such payments shall not be
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subordinate to all debt service other than that previously issued to finance flood control improvements.
Therefore, these payments are not subordinate to existing and new bond debt service payments.
Project Area No. 2
Desert Community College District (Formerly the Coachella Valley Community College District)
The Prior Agency’s agreement with the Desert Community College District provides that the College
District will receive 50 percent of the tax increment revenue generated by the College District’s 7.73 percent
property tax levy.
Coachella Valley Mosquito and Vector Control District
The Prior Agency’s agreement with the Coachella Valley Mosquito and Vector Control District provides
for payment to the District of 100 percent of the tax increment revenue generated by the District’s 1.41
percent share of property tax levy.
Desert Recreation District
The Prior Agency’s agreement with the Desert Recreation District provides for payment to the District of
25 percent of the tax increment revenue generated by the District’s 2.13 percent property tax levy.
Coachella Valley Water District
The Prior Agency’s agreement with the Water District provides for payment to the Water District of 100
percent of the tax increment revenue generated by the Water District’s 7.67 percent property tax levy,
inclusive of the Coachella Valley Water District, the CVWD Improvement District, and the CVWD Storm
Water Unit.
County of Riverside
The Prior Agency’s agreement with the County of Riverside provides for full payment of the tax increment
revenue generated by the County General Fund (24.43%), Library District (2.80%), and Fire District
(6.03%) property tax levies. Additionally, the Agency is paying the County $1.2 million over the next 5
years to reimburse the County for tax increment revenue generated by the County’s General Fund property
tax levy the Agency retained during the initial years of the Redevelopment Plan.
Riverside County Superintendent/County Office of Education
This Prior Agency’s agreement with the Riverside County Superintendent/Office of Education provides
that the Office shall receive 50% of the tax increment revenue generated by their 4.20% share of the
property tax levy.
Desert Sands Unified School District
The Prior Agency’s agreement with DSUSD provides that the Agency will retain 50 percent of the tax
increment revenue generated by the DSUSD’s 37.19 percent share of the property tax levy. The remaining
50 percent is paid to DSUSD.
Tax Sharing Statutes
Certain provisions were added to the Redevelopment Law by the adoption of AB 1290 in 1994. If a project
area was created after 1994, or if new territory was added to a project area, under Section 33607.5 of the
Redevelopment Law, any affected taxing entity would share in the Tax Increment Revenues generated by
such added area pursuant to a statutory formula (“Statutory Tax Sharing”).
In addition, pursuant to Section 33333.6(e)(2) of the Redevelopment Law, if the Agency amended or deleted
the time limit to incur indebtedness in a project area or increased the total amount of Tax Increment
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Revenues to be allocated to the project area or increased the duration of the redevelopment plan for a project
area and the period for receipt of Tax Increment Revenues, Statutory Tax Sharing is also be required under
Section 33607.7 of the Redevelopment Law with all affected taxing agencies not already a party to a tax
sharing agreement, once the original limitations have been reached.
In general, the amounts to be paid pursuant to Statutory Tax Sharing are as follows:
(a) commencing in the first fiscal year after the limitation has been reached, an amount equal to 25%
of tax increment revenues generated by the incremental increase of the current year assessed
valuation over the assessed valuation in the fiscal year that the limitation had been reached, after
the amount required to be deposited in the Low and Moderate Income Housing Fund has been
deducted;
(b) in addition to amounts payable as described in (a) above, commencing in the 11th fiscal year after
the limitation has been reached, an amount equal to 21% of tax increment revenues generated by
the incremental increase of the current year assessed valuation over the assessed valuation in the
preceding 10th fiscal year that the limitation had been reached, after the amount required to be
deposited in the Low and Moderate Income Housing Fund has been deducted; and
(c) in addition to amounts payable as described in (a) and (b) above, commencing in the 31st fiscal year
after the limitation has been reached, an amount equal to 14% of tax increment revenues generated
by the incremental increase of the current year assessed valuation over the assessed valuation in
the preceding 30th fiscal year that the limitation had been reached, after the amount required to be
deposited in the Low and Moderate Income Housing Fund has been deducted.
(d) The City may elect to receive a portion of the tax increment generated in (a) above, after the amount
required to be deposited in the Low and Moderate Income Housing Fund has been deducted.
(e) The Agency may subordinate the amount required to be paid to an affected taxing entity to any
indebtedness after receiving the consent of the taxing entity.
With respect to a taxing entity that is a party to a tax sharing agreement, tax sharing payments would
continue pursuant to the Tax Sharing Agreement after the original limitations in the Redevelopment Plan
were passed.
The Agency eliminated the January 1, 2004 time limit to incur debt for Project Area No. 1 and payments to
certain taxing entities pursuant to Section 33607.7 commenced in Fiscal Year 2004-05. The Agency also
eliminated the May 16, 2009 time limit to incur debt for Project Area No. 2, and payments to certain taxing
entities pursuant to Section 33607.7 commenced in Fiscal Year 2009-10.
As noted above, with the consent of the Taxing Entity, the payments under the Tax Sharing Statutes may be
subordinated to certain Agency obligations. No payments to Taxing Entities with respect to Statutory Tax
Sharing have been subordinated.
Since dissolution, the County Auditor-Controller calculates and pays the Statutory Tax Sharing amounts.
Projected Tax Revenues
Deposits in the Redevelopment Property Tax Trust Fund in the amounts and at the times projected by the
Successor Agency depends on the realization of certain assumptions relating to the Tax Increment
Revenues. The projections of Tax Increment Revenues and the corresponding Pledged Tax Revenues from
the Project Areas shown on the following tables were based on the assumptions shown below. The
Municipal Advisor believes the assumptions upon which the projections are based are reasonable; however,
some assumptions may not materialize and unanticipated events and circumstances may occur.
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(a) The 2020-21 secured roll was increased by 2% annually for inflation in future years.
(b) The values of unsecured personal property have been maintained throughout the projections at the
2020-21 unsecured roll value.
(c) The amount of unitary revenues have been maintained throughout the projections at their 2019-20
amount.
(d) For the purposes of the projections, it was assumed that no additional assessed value would be
added to the tax rolls as a result of new construction.
(e) No potential future Proposition 8 adjustments or potential reductions in value as a result of pending
assessment appeals are reflected in the projections.
(f) A tax rate of $1.00 per $100 of assessed value applied to the taxable property in the Project Areas
was used to determine Tax Increment Revenues.
(g) Projected Pledged Tax Revenues do not reflect supplemental property taxes.
(h) Projected Pledged Tax Revenues include a deduction for administrative costs charged by Riverside
County.
(i) Projected Pledged Tax Revenues include a deduction for payments due to taxing agencies under
Contractual Tax Sharing Agreements or applicable Tax Sharing Statutes, excluding the subordinate
payments of the Subordinated Pass-Through Amounts.
[Remainder of Page Intentionally Left Blank]
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TABLE NO. B-7
SUCCESSOR AGENCY PROJECTED TAX REVENUES
(in thousands)
Project No. 1 Project No. 2 Project No. 1
Fiscal Net RPTTF Net RPTTF Net RPTTF Subordinated Available
Year Deposit (1) Deposit Deposit Pass-Through Amounts (2) Revenues
2021 $28,244 $ 9,875 $38,119 $23,703 $61,822
2022 28,789 10,067 38,856 24,186 63,042
2023 29,343 10,263 39,606 24,679 64,285
2024 29,909 10,395 40,304 25,182 65,486
2025 30,484 10,589 41,073 25,695 66,768
2026 31,074 10,789 41,863 26,218 68,081
2027 31,673 10,991 42,664 26,752 69,416
2028 32,286 11,197 43,483 27,295 70,778
2029 32,911 11,409 44,320 27,851 72,171
2030 33,545 11,626 45,171 28,419 73,590
2031 34,197 11,845 46,042 28,995 75,037
2032 34,860 12,069 46,929 29,584 76,513
______________________________________
(1) After deduction of Subordinated Pass-Through Amounts.
(2) Available if needed to pay debt service pursuant to Section 34183(b) of the Dissolution Act.
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B-13 TABLE NO. B-8 PROJECT AREA NO. 1 PROJECTED TAX REVENUES (in thousands) Senior Tax Sharing Agreements Subordinated Tax Sharing Amounts County CV Mosquito CV Statutory Desert Sands Desert Net Fiscal Gross Admin and Vector Water Tax County County County Unified Community Deposit to Year RPTTF Fees Control District Sharing General Library Fire School College RPTTF 2021 $55,517 $(522) $(618) $(1,543) $ (887) $(13,757) $(1,538) $(3,310) $(4,037) $(1,061) $28,244 2022 56,649 (533) (630) (1,574) (937) (14,037) (1,569) (3,378) (4,120) (1,082) 28,789 2023 57,803 (543) (643) (1,606) (989) (14,323) (1,601) (3,447) (4,204) (1,104) 29,343 2024 58,981 (554) (656) (1,639) (1,041) (14,615) (1,634) (3,517) (4,289) (1,127) 29,909 2025 60,182 (566) (670) (1,672) (1,095) (14,912) (1,667) (3,589) (4,377) (1,150) 30,484 2026 61,408 (577) (683) (1,707) (1,149) (15,216) (1,701) (3,662) (4,466) (1,173) 31,074 2027 62,657 (589) (697) (1,741) (1,205) (15,526) (1,736) (3,736) (4,557) (1,197) 31,673 2028 63,932 (601) (711) (1,777) (1,262) (15,842) (1,771) (3,812) (4,649) (1,221) 32,286 2029 65,233 (613) (726) (1,813) (1,319) (16,164) (1,807) (3,890) (4,744) (1,246) 32,911 2030 66,559 (626) (741) (1,850) (1,378) (16,493) (1,844) (3,969) (4,841) (1,272) 33,545 2031 67,912 (638) (756) (1,887) (1,439) (16,828) (1,881) (4,050) (4,939) (1,297) 34,197 2032 69,292 (651) (771) (1,926) (1,500) (17,170) (1,919) (4,132) (5,039) (1,324) 34,860 [Remainder of Page Intentionally Left Blank]
B-14 TABLE NO. B-9 PROJECT AREA NO. 2 PROJECTED TAX REVENUES (in thousands) Tax Sharing Agreements County Desert Sands Desert CV Mosquito County Desert CV Statutory Net Fiscal Gross Admin County County County Unified Community and Vector Office of Recreation Water Tax Deposit to Year RPTTF Fees General Library Fire School College Control Education District District Sharing RPTTF 2021 $31,308 $(294) $(7,649) $ (877) $(1,888) $(5,822) $(1,210) $(441) $(657) $(167) $(2,401) $ (27) $ 9,875 2022 31,937 (300) (7,802) (894) (1,926) (5,939) (1,234) (450) (671) (170) (2,450) (34) 10,067 2023 32,577 (306) (7,959) (912) (1,964) (6,058) (1,259) (459) (684) (173) (2,499) (41) 10,263 2024 33,231 (312) (8,118) (930) (2,004) (6,179) (1,284) (469) (698) (177) (2,549) (116) 10,395 2025 33,898 (319) (8,281) (949) (2,044) (6,303) (1,310) (478) (712) (181) (2,600) (132) 10,589 2026 34,578 (325) (8,447) (968) (2,085) (6,430) (1,336) (488) (726) (184) (2,652) (148) 10,789 2027 35,272 (332) (8,617) (988) (2,127) (6,559) (1,363) (497) (741) (188) (2,705) (164) 10,991 2028 35,979 (338) (8,790) (1,007) (2,170) (6,690) (1,391) (507) (756) (192) (2,760) (181) 11,197 2029 36,701 (345) (8,966) (1,028) (2,213) (6,825) (1,418) (517) (771) (195) (2,815) (199) 11,409 2030 37,437 (352) (9,146) (1,048) (2,257) (6,961) (1,447) (528) (786) (199) (2,871) (216) 11,626 2031 38,188 (359) (9,329) (1,069) (2,303) (7,101) (1,476) (538) (802) (203) (2,929) (234) 11,845 2032 38,954 (366) (9,516) (1,091) (2,349) (7,243) (1,506) (549) (818) (207) (2,988) (252) 12,069 [Remainder of Page Intentionally Left Blank]
C-1
APPENDIX C
CITY OF LA QUINTA INFORMATION STATEMENT
The following information concerning the City of La Quinta is presented as general background data. The
Bonds are payable solely from Pledged Tax Revenues, as described in the Official Statement. The Bonds
are not an obligation of the City, and the taxing power of the City is not pledged to the payment of the
Bonds.
General Information
The City is located 127 miles east of Los Angeles and 20 miles east of Palm Springs in the area of Riverside
County known as the “Coachella Valley.” The City was originally a general law city incorporated on
May 1, 1982, became a charter city in November 1996 and provides for a Council-City Manager form of
government consisting of five Council Members elected to four-year overlapping terms. The Mayor is
directly elected by the citizens to a two-year term.
The City encompasses an area of over 35 square miles.
Population
The following table provides population growth for the City of La Quinta and Riverside County between
2016 and 2020.
TABLE NO. C-1
CHANGE IN POPULATION
CITY OF LA QUINTA AND RIVERSIDE COUNTY
2016 – 2020
CITY OF LA QUINTA RIVERSIDE COUNTY
January 1 Percentage Percentage
Year Population Change Population Change
2016 39,769 2,343,785
2017 40,065 0.7% 2,376,580 1.4%
2018 40,217 0.4% 2,400,762 1.0%
2019 40,389 0.4% 2,422,146 0.9%
2020 40,660 0.7% 2,442,304 0.8%
% Change Between 2016 - 2020 2.2% 4.2%
__________________________________
Source: State of California, Department of Finance, “E-4 Population Estimates for Cities, Counties and the State,
2011-2020, with 2010 Census Benchmark” Sacramento, California, May 2020.
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C-2
Per Capita Personal Income
Per capita personal income information for Riverside County, the State of California and the United States
are summarized in the following table. Per capita personal income for the City is not available.
TABLE NO. C-2
PER CAPITA PERSONAL INCOME
RIVERSIDE COUNTY, STATE OF CALIFORNIA AND UNITED STATES
2014 – 2018
Year Riverside County (1) State of California (1) United States (1)
2014 $34,753 $52,324 $47,058
2015 36,642 55,758 48,978
2016 37,936 57,739 49,870
2017 38,975 60,156 51,885
2018 40,637 63,557 54,446
__________________________________
(1) For Riverside County, State of California and United States, per capita personal income was computed using
Census Bureau midyear population estimates. Estimates for 2010-2018 reflect county population estimates
available as of March 2019.
Note: All dollar estimates are in thousands of current dollars (not adjusted for inflation). Calculations are performed
on unrounded data.
Last updated: November 14, 2019, new statistics for 2018; revised statistics for 2014-2017.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
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C-3
Employment
As of July 2020, the civilian labor force for the City was approximately 19,400 of whom 16,500 were
employed. The unadjusted unemployment rate as of July 2020 was 15.0% for the City as compared to
13.7% for the County and 13.7% for the State. Civilian labor force, employment and unemployment
statistics for the City, County, the State and the nation, for the years 2015 through 2019 are shown in the
following table:
TABLE NO. C-3
CITY OF LA QUINTA
CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
ANNUAL AVERAGES
Civilian Unemployment
Year Labor Force Employment Unemployment Rate
2015
City of La Quinta 17,700 16,900 700 4.2%
Riverside County 1,033,300 964,100 69,200 6.7%
California 18,828,800 17,660,700 1,168,100 6.2%
United States 157,130,000 148,834,000 8,296,000 5.3%
2016
City of La Quinta 18,500 17,400 1,100 6.0%
Riverside County 1,051,400 987,200 64,200 6.1%
California 19,021,200 17,980,100 1,041,100 5.5%
United States 159,187,000 151,436,000 7,751,000 4.9%
2017
City of La Quinta 18,700 17,700 1,000 5.2%
Riverside County 1,072,200 1,015,800 56,300 5.3%
California 19,176,400 18,257,100 919,300 4.8%
United States 160,320,000 153,337,000 6,982,000 4.4%
2018
City of La Quinta 19,000 18,100 900 4.5%
Riverside County 1,091,400 1,042,700 48,700 4.5%
California 19,280,800 18,460,700 820,100 4.3%
United States 162,075,000 155,761,000 6,314,000 3.9%
2019
City of La Quinta 19,200 18,400 800 4.1%
Riverside County 1,104,000 1,057,900 46,100 4.2%
California 19,411,600 18,627,400 784,200 4.0%
United States 163,539,000 157,538,000 6,001,000 3.7%
__________________________________
Source: California State Employment Development Department and United States Bureau of Labor Statistics.
C-4
Industry
The City is located in the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (“MSA”). The
July 2020 unemployment rate in the Riverside-San Bernardino-Ontario MSA was 13.4%.
TABLE NO. C-4
RIVERSIDE-SAN BERNARDINO-ONTARIO MSA
WAGE AND SALARY WORKERS BY INDUSTRY (1)
(in thousands)
Industry 2016 2017 2018 2019 2020
Government 231.4 239.4 244.7 248.9 227.4
Other Services 44.4 45.7 45.6 46.1 35.2
Leisure and Hospitality 159.3 164.3 168.5 173.2 118.8
Educational and Health Services 212.8 223.3 237.4 248.2 242.4
Professional and Business Services 143.2 144.6 150.6 156.3 146.0
Financial Activities 44.5 43.8 43.7 44.4 43.0
Information 12.1 11.9 11.6 11.7 9.6
Transportation, Warehousing and Utilities 105.0 120.3 131.5 143.0 139.2
Service Producing
Retail Trade 176.2 178.6 178.6 179.4 161.3
Wholesale Trade 62.0 62.5 65.7 67.4 67.4
Manufacturing
Nondurable Goods 34.8 35.2 36.2 36.4 32.0
Durable Goods 64.8 64.2 65.3 65.2 59.6
Goods Producing
Construction 93.8 100.0 107.6 108.7 102.4
Mining and Logging 0.9 0.9 1.2 1.2 1.1
Total Nonfarm 1,385.2 1,434.7 1,488.2 1,530.1 1,385.4
Farm 14.3 15.8 16.0 17.4 15.3
Total (all industries) 1,399.5 1,450.5 1,504.2 1,547.5 1,400.7
__________________________________
(1) Annually, as of July.
Note: The unemployment rate is calculated using unrounded data. Data may not add due to rounding.
Source: State of California Employment Development Department, Labor Market Information Division, “Industry
Employment & Labor Force - by month, March 2019 Benchmark.”
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C-5
The major employers operating within the City and their respective number of employees as of June 30,
2019 are shown in Table No. C-5.
TABLE NO. C-5
CITY OF LA QUINTA
MAJOR EMPLOYERS
Name of Company Employment Type of Business/Service
Desert Sands Unified School District 2,852 Government
La Quinta Resort & Club/PGA West 1,412 Hotel & Golf Resort
Wal-Mart Super Center 300 Retailer
Costco 290 Retailer
Home Depot 212 Retailer
Target 180 Retailer
Lowe’s Home Improvement 150 Retailer
Imperial Irrigation District 134 Utility Company
In N Out 84 Fast Food Restaurant
Vons 83 Grocery Store
__________________________________
Source: City of La Quinta.
The City is not aware of any significant change since June 30, 2019 to the principal employers shown in
Table No. C-5, although some of the businesses listed may have been impacted by the stay at home orders
and/or roll back of re-openings and the City cannot guarantee that all of these businesses will continue to
operate in the City.
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C-6
Commercial Activity
Taxable transactions by type of business for the City of La Quinta for 2015 through 2019 (the most recent
year for which statistics are available from the Department of Tax and Fee Administration for the full year)
are summarized in Table No. C-6.
Taxable transactions for Fiscal Year 2019-20 and Fiscal Year 2020-21 have been impacted by the stay at
home orders and roll back of re-openings, and the Governor’s executive order relating to sales tax payments.
TABLE NO. C-6
CITY OF LA QUINTA
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in $ thousands)
2015 – 2019
2015 2016 2017 2018 2019
Clothing and Clothing
Accessories Stores $ 26,050 $ 27,251 $ 31,674 $ 34,403 $ 33,551
General Merchandise Stores 210,220 208,980 225,189 234,721 238,338
Food and Beverage Stores 41,302 38,719 43,161 44,919 45,149
Food Services and Drinking Places 107,831 119,503 120,479 125,483 135,565
Home Furnishings and
Appliance Stores 36,480 42,062 42,681 47,348 41,704
Building Materials and Garden
Equipment and Supplies 75,484 79,098 83,764 86,611 87,200
Motor Vehicles and Parts Dealers 85,507 79,626 77,503 78,878 82,406
Gasoline Stations 24,063 21,760 20,767 22,626 22,810
Other Retail Group 48,643 45,658 46,933 47,892 45,375
Total Retail and Food Services 655,580 662,657 692,151 722,881 732,098
All Other Outlets 84,042 92,574 93,982 105,161 107,563
Total All Outlets $739,622 $755,231 $786,133 $828,042 $839,661
_________________________________
Note: Detail may not compute to total due to rounding.
Source: California Department of Tax and Fee Administration, “Taxable Sales in California Cities, by Type of
Business.”
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C-7
Building Activity
The following table summarizes building activity valuations for the City of La Quinta for the five Fiscal
Years 2014-15 through 2018-19.
TABLE NO. C-7
CITY OF LA QUINTA
BUILDING ACTIVITY AND VALUATION
2014-15 - 2018-19
2014-15 2015-16 2016-17 2017-18 2018-19
Estimated Valuation
Building Permits Issued
__________________________________
Source: City of La Quinta.
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APPENDIX D
CITY AUDITED FINANCIAL STATEMENTS FOR THE FISCAL
YEAR ENDED JUNE 30, 2019
E-1
APPENDIX E
FORM OF CONTINUING DISCLOSURE AGREEMENT
[TO BE PROVIDED BY DISCLOSURE COUNSEL]
F-1
APPENDIX F
PROPOSED FORM OF BOND COUNSEL OPINION
[TO BE PROVIDED BY BOND COUNSEL]
G-1
APPENDIX G
THE BOOK-ENTRY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record
keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other
payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial
ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants
and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no
representations can be made concerning these matters and neither the DTC Participants nor the Beneficial
Owners should rely on the foregoing information with respect to such matters, but should instead confirm
the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent
appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in
this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to
the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b)
certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or
(c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the
Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants
will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with
the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing
with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository
for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in
the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of
the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If,
however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued
with respect to each $500 million of principal amount, and an additional certificate will be issued with
respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the
New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5
million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market
instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC.
DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants’ accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of
The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National
Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered
clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is
also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of
G-2
AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com. The information contained on
such Internet site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of
each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and
Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC
are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration
in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the
identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be
the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of
their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to
augment the transmission to them of notices of significant events with respect to the Securities, such as
redemptions, tenders, defaults, and proposed amendments to the Security documents. For example,
Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their
benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and request that copies of notices
be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue
are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to
whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made
to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s
practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail
information from Issuer or Agent, on payable date in accordance with their respective holdings shown on
DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts of customers in bearer form or
registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or
G-3
Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment
of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as
may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent,
disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at
any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a
successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository). In that event, Security certificates will be printed and delivered to
DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy
thereof.
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ATTACHMENT 3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of February 1, 2021 (this
“Agreement”), is by and between the Successor Agency to the La Quinta
Redevelopment Agency (the “Successor Agency”), and U.S. Bank National
Association, acting in its capacity as escrow bank (the “Escrow Bank”)
pursuant to this Agreement;
W I T N E S S E T H:
WHEREAS, the La Quinta Redevelopment Agency (the “Prior Agency”)
was a public body, corporate and politic, duly created, established and
authorized to transact business and exercise its powers under and pursuant
to the provisions of the Community Redevelopment Law (Part 1 of Division 24
(commencing with Section 33000) of the Health and Safety Code of the State
of California) (the “Law”), and the powers of the Prior Agency included the
power to issue Bonds for any of its corporate purposes; and
WHEREAS, Assembly Bill AB X1 26, effective June 29, 2011, together
with Assembly Bill 1484 (collectively, the “Dissolution Act”) resulted in the
Prior Agency being dissolved as of February 1, 2012; and
WHEREAS, the authority, rights, powers, assets, duties and obligations
of the Prior Agency were transferred on February 1, 2012 to the Successor
Agency; and WHEREAS, the Successor Agency previously issued $97,190,000
aggregate principal amount of the Successor Agency to the La Quinta
Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Subordinate Tax Allocation Refunding Bonds, 2013 Series A (the “2013 Series
A Bonds”) pursuant to an Indenture of Trust and a First Supplemental
Indenture of Trust each dated as of December 1, 2013 (collectively the
“Original Indenture”) ; and
WHEREAS, the Successor Agency previously issued $23,055,000
aggregate principal amount of the Successor Agency to the La Quinta
Redevelopment Agency, La Quinta Redevelopment Project Area Nos. 1 and 2,
Subordinate Tax Allocation Refunding Bonds, 2013 Taxable Series B (the
“2013 Series B Bonds”) pursuant to the Original Indenture; and
WHEREAS, for the corporate purposes of the Successor Agency, the
Successor Agency deems it necessary to issue at this time tax allocation
refunding bonds in a principal amount __________ Million _________
Thousand Dollars ($__________) (the “Bonds”), and to irrevocably set aside
a portion of the proceeds of such Bonds in a separate segregated trust fund
which will be used to refund the outstanding the 2013 Bonds of the Successor
Agency and to pay costs in connection with the issuance of the Bonds; and
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the Successor Agency and the Escrow Bank
agree as follows:
SECTION 1. Deposit of Moneys.
(a) The Successor Agency hereby deposits with the Escrow
Bank $__________ of Bond proceeds and monies from the 2013 Bonds Funds
and Accounts set forth below to be held in irrevocable escrow by the Escrow
Bank separate and apart from other funds of the Successor Agency and the
Escrow Bank in a fund hereby created and established and to be known as the
“Escrow Fund”, and to be applied solely as provided in this Agreement. Such
moneys shall be invested in Federal Securities and $__________ shall be held
in uninvested cash as provided in Schedule B herein.
(b) The Escrow Bank hereby acknowledges receipt of the
written opinion of ______, a firm of independent public accountants, dated
_____________, 2021, relating to the sufficiency of the cash deposited
pursuant hereto to defease the 2013 Bonds (the “Verification Report”), and
the opinion of Rutan & Tucker, LLP, dated _____________, 2021, relating to
this Agreement.
SECTION 2. Use and Investment of Moneys. The Escrow Bank
acknowledges receipt of the moneys described in Section 1 and agrees:
(a) such moneys in an amount equal to $__________ in Federal
Securities and $__________ held in uninvested cash shall be held for the
purpose of defeasing the 2013 Bonds; and
(b) to make the payments required under Section 3(a) hereof
at the times set forth in Section 3(a) hereof.
SECTION 3. Payment of 2013 Bonds.
(a) Payment. The Escrow Bank shall transfer from the Escrow
Fund to the paying agent for the 2013 Bonds (the “Paying Agent”) amounts
sufficient to pay the principal of and interest on the 2013 Bonds when due to
and including September 1, 2023 and the redemption price of the 2013 Bonds
on September 1, 2023 as shown on Schedule A. Such transfers shall
constitute the respective payments of the principal of and interest on the 2013
Bonds and redemption price due from the Successor Agency.
(b) Unclaimed Moneys. Any moneys which remain unclaimed
for two years after the date such moneys have become due and payable
hereunder shall be repaid by the Escrow Bank to the Successor Agency and
deposited by the Successor Agency in the Debt Service Fund relating to the
2013 Bonds. Any moneys remaining in the Escrow Fund established
hereunder after September 2, 2023 (aside from unclaimed monies) of the
2013 Bonds which are in excess of the amount needed to pay owners of the
2013 Bonds payments of principal and interest and redemption premium, if
any, with respect to the 2013 Bonds or to pay any amounts owed to the
Escrow Bank shall be immediately transferred by the Escrow Bank to the
Successor Agency and deposited by the Successor Agency in the Debt Service
Fund relating to the Bonds.
(c) Priority of Payments. The holders of the 2013 Bonds shall
have a first lien on the moneys in the Escrow Fund which are allowable and
sufficient to pay the 2013 Bonds until such moneys are used and applied as
provided in this Agreement, as verified by the Verification Report. Any cash
or securities held in the Escrow Fund are irrevocably pledged only to the
holders of the 2013 Bonds.
(d) Termination of Obligation. Upon deposit of the moneys set
forth in Section 1 hereof with the Escrow Bank pursuant to the provisions of
Section 1 hereof, all obligations of the Successor Agency with respect to the
2013 Bonds shall cease and terminate, except only the obligation to make
payments therefor from the moneys provided for hereunder, and the owners
of the 2013 Bonds shall cease to be entitled to any lien, benefit or security
relating to the 2013 Bonds.
SECTION 4. Performance of Duties. The Escrow Bank agrees to
perform the duties set forth herein.
SECTION 5. Reinvestment. Upon written direction of the Successor
Agency, the Escrow Bank may reinvest any uninvested amounts held as cash
under this Agreement in noncallable non-prepayable obligations which are
direct obligations issued by the United States Treasury or obligations which
are unconditionally guaranteed as to full and timely payment by the United
States of America provided (i) the amounts of and dates on which the
anticipated transfers from the Escrow Fund to the Paying Agent for the
payment of the principal of, redemption price of, and interest on the 2013
Bonds will not be diminished or postponed thereby, (ii) the Escrow Bank shall
receive the unqualified opinion of nationally recognized municipal bond
counsel to the effect that such reinvestment will not adversely affect the
exclusion from gross income for state income tax purposes of interest on the
Bonds or the 2013 Bonds, (iii) the Escrow Bank shall receive from a firm of
independent certified public accountants a certification that, immediately after
such reinvestment, the principal of and interest on obligations in the Escrow
Fund will, together with other cash on deposit in the Escrow Fund available for
such purposes, be sufficient without reinvestment to pay, when due, the
principal or redemption price of and interest on the 2013 Bonds; and (iv) the
Escrow Bank shall receive an opinion of nationally recognized bond counsel
that such reinvestment is permissible under this Agreement.
SECTION 6. Indemnity. The Successor Agency hereby assumes
liability for, and hereby agrees (whether or not any of the transactions
contemplated hereby are consummated) to indemnify, protect, save and keep
harmless the Escrow Bank and its respective successors, assigns, agents,
employees and servants, from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements (including reasonable legal fees and disbursements) of
whatsoever kind and nature which may be imposed on, incurred by, or
asserted against, the Escrow Bank at any time (whether or not also
indemnified against the same by the Successor Agency or any other person
under any other agreement or instrument, but without double indemnity) in
any way relating to or arising out of the execution, delivery and performance
of its Agreement, the establishment hereunder of the Escrow Fund, the
acceptance of the funds and securities deposited therein, and any payment,
transfer or other application of moneys or securities by the Escrow Bank in
accordance with the provisions of this Agreement; provided, however, that
the Successor Agency shall not be required to indemnify the Escrow Bank
against the Escrow Bank’s own negligence or willful misconduct or the
negligent or willful misconduct of the Escrow Bank’s respective successors,
assigns, agents and employees or the breach by the Escrow Bank of the terms
of this Agreement. In no event shall the Successor Agency or the Escrow Bank
be liable to any person by reason of the transactions contemplated hereby
other than to each other as set forth in this section. The indemnities contained
in this section shall survive the termination of this Agreement.
SECTION 7. Responsibilities of the Escrow Bank. The Escrow Bank and
its respective successors, assigns, agents and servants shall not be held to
any personal liability whatsoever, in tort, contract or otherwise, in connection
with the execution and delivery of this Agreement, the establishment of the
Escrow Fund, the acceptance of the moneys or securities deposited therein,
to accomplish the refunding and defeasance of the 2013 Bonds or any
payment, transfer or other application of moneys or obligations by the Escrow
Bank in accordance with the provisions of this Agreement or by reason of any
non-negligent act, non-negligent omission or non-negligent error of the
Escrow Bank made in good faith in the conduct of its duties. The recitals of
fact contained in the “whereas” clauses herein shall be taken as the
statements of the Successor Agency and the Escrow Bank assumes no
responsibility for the correctness thereof. The Escrow Bank makes no
representation as to the sufficiency of the monies deposited to accomplish the
refunding and defeasance of the 2013 Bonds or to the validity of this
Agreement as to the Successor Agency and, except as otherwise provided
herein, the Escrow Bank shall incur no liability with respect thereto. The
Escrow Bank shall not be liable in connection with the performance of its duties
under this Agreement except for its own negligence, willful misconduct or
default, and the duties and obligations of the Escrow Bank shall be determined
by the express provisions of this Agreement. The Escrow Bank may consult
with counsel, who may or may not be counsel to the Successor Agency, and
in reliance upon the written opinion of such counsel shall have full and
complete authorization and protection with respect to any action taken,
suffered or omitted by it in good faith in accordance therewith. Whenever the
Escrow Bank shall deem it necessary or desirable that a matter be proved or
established prior to taking, suffering, or omitting any action under this
Agreement, such matter may be deemed to be conclusively established by a
certificate signed by an authorized officer of the Successor Agency. The
Successor Agency acknowledges that to the extent regulations of the
Comptroller of the Currency or other applicable regulatory entity grant the
Successor Agency the right to receive brokerage confirmations of security
transactions as they occur, the Successor Agency specifically waives receipt
of such confirmations to the extent permitted by law. The Escrow Bank will
furnish the Successor Agency periodic cash transaction statements which
include detail for all investment transactions made by the Escrow Bank
hereunder.
SECTION 8. [Reserved].
SECTION 9. Irrevocable Instructions as to Notice. The Escrow Bank
hereby acknowledges that upon the funding of the Escrow Fund as provided
in this Agreement, the receipt of the opinions described in Section 1(b) of this
Agreement and the giving of irrevocable instructions to provide written notice
the 2013 Bonds shall be paid in accordance with the terms of the Indenture
and all obligations of the Successor Agency with respect to the 2013 Bonds
shall cease and terminate.
SECTION 10. Amendments. This Agreement is made for the benefit of
the Successor Agency and the holders from time to time of the 2013 Bonds
and it shall not be repealed, revoked, altered or amended without the written
consent of all such holders, the Escrow Bank and the Successor Agency;
provided, however, but only after the receipt by the Escrow Bank of an opinion
of nationally recognized bond counsel that the exclusion from gross income of
interest on the Bonds and the 2013 Bonds will not be adversely affected for
federal income tax purposes, that the Successor Agency and the Escrow Bank
may, without the consent of, or notice to, such holders, amend this Agreement
or enter into such agreements supplemental to this Agreement as shall not
adversely affect the rights of such holders and as shall not be inconsistent
with the terms and provisions of this Agreement for any one or more of the
following purposes: (i) to cure any ambiguity or formal defect or omission in
this Agreement; (ii) to grant to, or confer upon, the Escrow Bank for the
benefit of the holders of the 2013 Bonds any additional rights, remedies,
powers or authority that may lawfully be granted to, or conferred upon, such
holders or the Escrow Bank; and (iii) to include under this Agreement
additional funds, securities or properties. The Escrow Bank shall be entitled
to rely conclusively upon an unqualified opinion of nationally recognized
municipal bond attorneys with respect to compliance with this Section 10,
including the extent, if any, to which any change, modification, addition or
elimination affects the rights of the holders of the 2013 Bonds or that any
instrument executed hereunder complies with the conditions and provisions of
this Section 10. In the event of any conflict with respect to the provisions of
this Agreement, this Agreement shall prevail and be binding.
SECTION 11. Term. This Agreement shall commence upon its
execution and delivery and shall terminate on the later to occur of either (i)
the date upon which the 2013 Bonds have been paid in accordance with this
Agreement or (ii) the date upon which no unclaimed moneys remain on
deposit with the Escrow Bank pursuant to Section 3(b) of this Agreement.
SECTION 12. Compensation. The Escrow Bank shall receive its
reasonable fees and expenses as previously agreed to; provided, however,
that under no circumstances shall the Escrow Bank be entitled to any lien nor
will it assert a lien whatsoever on any moneys or obligations in the Escrow
Fund for the payment of fees and expenses for services rendered by the
Escrow Bank under this Agreement.
SECTION 13. Severability. If any one or more of the covenants or
agreements provided in this Agreement on the part of the Successor Agency
or the Escrow Bank to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenants or agreements
shall be null and void and shall be deemed separate from the remaining
covenants and agreements herein contained and shall in no way affect the
validity of the remaining provisions of this Agreement.
SECTION 14. Counterparts. This Agreement may be executed in
several counterparts, all or any of which shall be regarded for all purposes as
one original and shall constitute and be but one and the same instrument.
SECTION 15. Governing Law. This Agreement shall be construed under
the internal laws of the State of California.
SECTION 16. Holidays. If the date for making any payment or the last
date for performance of any act or the exercising of any right, as provided in
this Agreement, shall be a legal holiday or a day on which banking institutions
in the city in which is located the principal office of the Escrow Bank are
authorized by law to remain closed, such payment may be made or act
performed or right exercised on the next succeeding day not a legal holiday
or a day on which such banking institutions are authorized by law to remain
closed, with the same force and effect as if done on the nominal date provided
in this Agreement, and no interest shall accrue for the period from and after
such nominal date.
SECTION 17. Assignment. This Agreement shall not be assigned by the
Escrow Bank or any successor thereto without the prior written consent of the
Successor Agency.
SECTION 18. Standard & Poor’s. The Successor Agency agrees to
provide S&P Global, 55 Water Street, 45th Floor, New York, New York 10041,
prior notice of each amendment entered into pursuant to Section 10 hereof
and a copy of such proposed amendment, and to forward a copy (as soon as
possible) of (i) each amendment hereto entered into pursuant to Section 10
hereof, and (ii) any action relating to severability or contemplated by Section
13 hereof.
SECTION 19. Reorganization of Escrow Bank. Notwithstanding
anything to the contrary contained in this Agreement, any company into which
the Escrow Bank may be merged or converted or with which it may be
consolidated or any company resulting from any merger, conversion or
consolidation to which the Escrow Bank is a party, or any company to which
the Escrow Bank may sell or transfer all or substantially all of its corporate
trust business shall be the successor to the Escrow Bank without execution or
filing of any paper or any paper or further act, if such company is eligible to
serve as Escrow Bank.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized officers this 1st day of February 2021.
SUCCESSOR AGENCY TO THE LA
QUINTA REDEVELOPMENT AGENCY
By:
Executive Director
U.S. BANK NATIONAL ASSOCIATION,
as Escrow Bank
By:
Authorized Officer
SCHEDULE A
Redemption of 2013 Bonds
Principal Principal
Date Matured Interest Redeemed Total
124/015610-0182
15505522.2 a10/15/20 SCHEDULE B
SCHEDULE B
Type of
Security
Maturity
Date
Par
Amount Rate Yield Price
2533 S. Coast Highway 101, Suite 250 ∙ Cardiff By The Sea, CA 92007 ∙ www.hilltopsecurities.com
ATTACHMENT 4
Summary of 2013 Refinancing
Successor Agency to the La Quinta Redevelopment Agency/Riverside County
Oversight Board
In December 2013, the Successor Agency completed the refinancing of its 1998,
2001, 2002 and 2003 Tax Allocation financings issued by the former
Redevelopment Agency. Issued in a tax-exempt and a taxable series, there is
now an opportunity to again refinance the Successor Agency’s 2013 Bonds, for
economic savings. The financings consist of $97,190,000 of Subordinate Tax
Allocation Refunding Bonds, 2013 Series A of which $69,990,000 are currently
outstanding and $23,055,000 Subordinate Tax Allocation Refunding Bonds, 2013
Taxable Series B of which $16,375,000 are currently outstanding (together the
“2013 Bonds”). Current bond interest rates are at historically low levels and
refinancing the 2013 Bonds will reduce annual bond payments, allowing
additional property tax revenue distribution to the City and local taxing agencies.
The 2013 Bonds currently pay interest at rates ranging from 3.00% to 5.82%.
Refinancing the 2013 Bonds is expected to reduce interest rates to levels ranging
from 0.82% to 2.25%.
Following the issuance of the 2021 Bonds, the Agency would have its final debt in place
and is expected to be as follows:
Original Principal Outstanding Principal Final Maturity Interest Rate Range
Project Areas 1 and 2
2013 Tax-Exempt Bonds $97,190,000 Defeased n/a n/a
2013 Taxable Bonds 23,055,000 Defeased n/a n/a
2014 Tax-Exempt Bonds 65,600,000 52,095,000 2034 5.000% - 5.000%
2016 Taxable Bonds 35,280,000 29,380,000 2039 2.679% - 4.527%
2021 Taxable Bonds* 99,210,000 99,210,000 2032 0.820% - 2.250%
* 2021 Taxable Bonds data are all estimates
Savings Analysis
The 2021 Bonds will be payable on the same dates (March 1 and September 1) and will
mature, without extension of final maturity, on September 1, 2032. In fact, the 2021
Bonds will mature one year earlier than the 2013 Bonds which have a final maturity of
September 1, 2033.
Refunding numbers on the 2021 Bonds show that based on current interest rates and
yields, the Successor Agency can achieve annual debt service savings of $298,327 to
$559,306 on an annual basis for overall savings of $6.823 million over the remaining
2533 S. Coast Highway 101, Suite 250 ∙ Cardiff By The Sea, CA 92007 ∙ www.hilltopsecurities.com
life of the 2013 Bonds. The overall estimated savings are after ALL costs associated with
the financing have been paid.
The following sets forth the detailed annual savings:
Bond Total Total
Year Refunded Refunding
Ending Debt Service Debt Service Savings
9/1/2021 $9,749,501 $9,451,174 $298,327
9/1/2022 9,749,388 9,194,658 554,730
9/1/2023 9,748,170 9,188,864 559,306
9/1/2024 9,746,402 9,188,160 558,242
9/1/2025 9,745,832 9,190,648 555,184
9/1/2026 9,749,368 9,190,113 559,256
9/1/2027 9,750,998 9,195,493 555,506
9/1/2028 9,748,563 9,191,603 556,961
9/1/2029 9,741,866 9,182,960 558,906
9/1/2030 9,745,756 9,188,185 557,571
9/1/2031 9,749,345 9,191,475 557,870
9/1/2032 9,750,364 9,192,275 558,089
9/1/2033 392,813 - 392,813
Total $117,368,363 $110,545,606 $6,822,757
Net Present Value Savings $6,085,590
Net Present Value Savings % 7.046%
Since the reduced debt service after refunding will reduce the amount of property taxes
deposited in the Redevelopment Property Tax Trust Fund required to be paid to the
Successor Agency, there will be additional “residual” property tax revenue that can be
distributed to taxing agencies that overlap the boundaries of the Redevelopment Project
Areas in accordance with their share of the general property tax levy shown below. The
City may be able to use up to 50% of the additional residual generated by the refunding
first to repay certain City advances to the former Redevelopment Agency, and if so, the
taxing agencies will receive their percentage of the remaining residual after such
payment estimated as follows.
School Districts: 62.50% or $4,264,223
Riverside County: 22.18% or $1,513,287
Water District: 7.21% or $491,921
City of La Quinta: 5.29% or 360,924
Recreation and Parks: 2.82% or 192,402
2533 S. Coast Highway 101, Suite 250 ∙ Cardiff By The Sea, CA 92007 ∙ www.hilltopsecurities.com
The following table sets forth the estimated Costs associated with the 2021 financing.
Underwriter’s Discount estimated at 0.45%, costs of issuance estimated at 0.28%, and
a debt service reserve surety bond fee of 0.23% for all in costs of 0.96% which is in line
with the percentage of costs associated with refunding programs of this security level
and size. As previously mentioned, the savings discussed above are after all costs of
issuance associated with the financing.
Estimated
2021 Bonds
Costs of Issuance
Rutan & Tucker, Bond Counsel $93,000
Nixon Peabody, Disclosure Counsel 20,000
Harrell & Company, Financial Advisor 67,000
Standard & Poor's Ratings Group, Rating Services 57,500
Grant Thornton, Verification Consultant 3,000
US Bank National Association, Trustee and Escrow Bank 6,950
Avia Communications, Financial Printing 2,000
Staff Reimbursement 23,000
Miscellaneous 2,550
Subtotal Costs of Issuance $275,000
Underwriter's Discount 446,445
Surety Bond Premium 226,828
Total Costs of Issuance $948,273
Percentage of Bond Financing 0.96%
The Financing Team expects the Bonds to be rated “AA” by Standard and Poor’s. The
2013 Bonds carry a reserve fund surety bond in lieu of cash for the existing debt service
reserve fund. The use of a replacement reserve fund surety bond will be required in
order to achieve the projected savings.
2013 Bonds Escrow Accounts
Proceeds from the financing will be held in an escrow that will pay regularly scheduled
principal and interest on the 2013 Bonds until their first optional call date of September
1, 2023. The proceeds held in the escrow will be invested in either State and Local
Government Securities or Open Market Securities, whichever are more efficient. The
2013 Bonds will be considered fully defeased on the date the 2021 Bonds are issued.
2533 S. Coast Highway 101, Suite 250 ∙ Cardiff By The Sea, CA 92007 ∙ www.hilltopsecurities.com
Conclusion
There is no way of knowing if the municipal market will maintain current interest rates
and yields long enough for the Successor Agency to complete the approval and the
Department of Finance review process estimated to require 60 to 75 days. We believe
your Financing Team should be able to steer the refinancing through the approval
process at little or no cost to the Successor Agency, should the refunding bonds not be
economically feasible following the approval and review process.
Timeline
The following is a general timeline for the proposed refinancing. This schedule will be
updated based on DOF approval actions and market conditions.
Scheduled Event Date to Complete
Successor Agency Board adopts Resolution approving Legal Documents October 6
Oversight Board adopts Resolution approving Agency Actions November 5
Submit Documents to Rating Agency/Surety Bond Providers Week of
January 4
DOF Approval of Financing Week of
January 11
Receive Rating/Surety Bond Week of
January 18
Bond Sale - Successor Agency signs Purchase Contract January 27
Bond Closing February 17
Oversight Board meeting to approve Last and Final Amendment March 4
November 5, 2020
1
County of Riverside Oversight Board Meeting
11/5/2020
Adopt a Resolution Approving the Issuance of Refunding Bonds
Bond Refinance Team
•Anticipated refinance amount is $99,210,000
•Cost of Issuance estimated at $275,000
•At time of sale, Underwriter discount for selling Bonds
•Savings discussed next are after these costs
Financial
Advisor Bond Counsel Disclosure
Counsel
Underwriter &
Underwriter’s
Counsel
Verification
Consultant
Trustee and
Escrow Bank
Fees
Rating Agency City Staff Time
1
2
November 5, 2020
2
Why Refinance?
•Refinancing 2013 Series Bonds will:
–Lower interest rates
•.82% to 2.25% versus current 3% to 5.82%
–Lower annual debt service payments by an average of $524,800
or $6.822 million over remaining term
–Provides additional property tax revenue to local agencies
Local Agency Savings Over 13 Years % of Savings
School Districts $ 4,264,200 62.5%
Riverside County $ 1,513,000 22.18%
CV Water District $ 491,900 7.21%
City of La Quinta $ 361,000 5.29%
Parks & Recreation $ 192,400 2.82%
Proposed Timeline
Date Entity Description
9/30/2020 Financial Advisory Commission Review and Support
10/6/2020 Successor Agency Review and Approval
11/5/2020 County Oversight Board Review and Approval
11/9/2020 CA Department of Finance Review and Approval
1/4/2021 S&P Global Ratings Credit Rating Agency Review and
Rating Update
1/11/2021 CA Department of Finance Approval Deadline
1/27/2021 City and Consultants Final Pricing
2/17/2021 City and Consultants Bond Closing
3/4/2021 CA Department of Finance Last and Final ROPS Amendment
3
4
November 5, 2020
3
Questions and Discussion
5