HomeMy WebLinkAbout1991-132
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RESOLUTION NO.
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RESOLUTION OF THE CITY .OF SAN BERANRDINO AUTHORIZING
3 ISSUANCE OF BONDS, APPROVING FORMS OF BOND INDENTURE, BOND
PURCHASE CONTRACT AND PRELIMINARY OFFICIAL STATEMENT FOR A
4 SPECIAL ASSESSMENT DISTRICT
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WHEREAS, the COMMON COUNCIL of the CITY OF SAN BERNARDINO,
6 CALIFORNIA, is conducting proceedings for the installation of
7 certain public improvements in a special assessment district
8 pursuant to the terms and provisions of the "Municipal Improve-
9 ment Act of 1913", being Division 12 of the Streets and Highways
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Code of the State of California,
said special assessment
11 district known and designated as ASSESSMENT DISTRICT NO. 977B
12 (hereinafter referred to as the "Assessment District"); and,
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WHEREAS, this legislative body has previously declared in
14 its Resolution of Intention to issue bonds to finance said
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improvements,
said bonds to issue pursuant to the terms and
16 provisions of the "Improvement Bond Act of 1915", being Division
17 10 of said Code; and,
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WHEREAS, at this time this legislative body is desirous to
19 set forth all formal terms and conditions relating to the autho-
20 rlzation, issuance and administration of said bonds; and,
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WHEREAS, there has been presented, considered and ready for
22 approval a bond indenture setting forth formal terms and condi-
23 tions relating to the issuance and sale of bonds; and,
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WHEREAS, there has also been presented for consideration by
25 this legislative body a form of Bond Purchase Contract authoriz-
26 ing the sale of bonds to Bateman Eichler, Hill Richards, a divi-
27 sion of Kemper Securities Group, the designated underwriter;
28 and,
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RESOLurION AurfDRIZING ISSUANCE OF IDNDS
FOR ASSESSMENT DISTRICT NO. 977B
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WHEREAS, there has also been presented for consideration by
3 this legislative body a form of Preliminary Official Statement
4 containing information including but not limited to the AsseSB-
5 ment District and the type of bonds, including terms and condi-
6 tions thereof; and,
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WHEREAS, this legislative body hereby further determines
8 that the unpaid assessments shall be specifically in the amount
9 as shown and Bet forth in the certificate of Paid and Unpaid
10 Assessments as certified by and on file with the Treasurer, and
11 for particulars as to the amount of said unpaid assessments,
12 said Certificate and list shall control and govern.
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NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS:
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RECITALS
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SECTION 1.
That the above recitals are true and correct.
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BOND AUTHORIZATION
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SECTION 2.
That this legislative body does hereby autho-
18 rize the issuance of bonds pursuant to the terms and provisions
19 of the "Improvement Bond Act of 1915", being Division 10 of the
20 Streets and Highways Code of the State of California, and also
21 pusuant to the specific terms and conditions as set forth in the
22 BOND INDENTURE presented herein.
23 BOND INDENTURE
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SECTION 3.
The BOND INDENTURE is approved substantially in
25 the form presented herein, subject to modifications as necessary
26 and as approved by the Treasurer, with the concurrence of Bond
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Counsel.
Final approval of the BOND INDENTURE shall be conclu-
28 sively evidenced by the signature of the Treasurer upon final
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RESOLurION AillHORIZING ISSUANCE OF roNDS
FOR ASSESSMENT DISl'RIcr NO. 977B
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delivery of bonds and receipt of proceeds.
A copy of said BOND
3 INDENTURE shall be kept on file with the transcript of these
4 proceedings and open for public inspection.
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BOND PURCHASE CONTRACT
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SECTION 4.
That the BOND PURCHASE CONTRACT as submitted by
7 Bateman Eichler, Hill Richards, the designated underwriter, is
8 hereby approved substantially in the form presented herein,
9 subject to modifications as necessary and approved by the
10 Treasurer, with the concurrence of Bond Counsel, with the final
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pricing of bonds being delegated to the Treasurer.
Final
12 Acceptance of the BOND PURCHASE CONTRACT shall be evidenced by
13 the signature of the Mayor on behalf of the City.
14 PRELIMINARY OFFICIAL STATEMENT
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SECTION 5.
That the PRELIMINARY OFFICIAL STATEMENT is
16 approved substantially in the form presented, subject to rnodifi-
17 cations as necessary and as approved by the Treasurer, with the
18 concurrence of Bond Counsel, and execution and distribution is
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hereby authorized.
A copy of said PRELIMINARY OFFICIAL STATE-
20 ME NT shall be kept on file with the transcript of these proceed-
21 ings and remain open for public inspection.
22 FINAL ASSESSMENTS
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SECTION 6.
That the Certificate of Paid and Unpaid AsseSB-
24 ments, as certified by the Treasurer, shall remain on file in
25 that office and be open for public inspection for all particu-
26 lara as it relates to the amount of unpaid assessments to secure
27 bonds for this Assessment District.
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RESOLUrION AUrHORIZrNq, ISSUflNCE OF ECNDS
FOR ASSESSMENr DISFRIcr NO. 977B
SUPERIOR COURT FORECLOSURE
SECTION 7.
This legislative body does further specifically
covenant for the benef,it of the bondholders to commence and
prosecute to completion foreclosure actions regarding delinquent
installments of the assessments in the manner, within the time
limits and pursuant to the terms and conditions as set forth in
the Bond Indenture as submitted and approved through the adop-
ticn of this Resolution, and the Director of Finance and the
City Attorney are hereby authorized and directed to commence and
prosecute the foreclosure actions and to take such other actions
as said officers deem appropriate from time to time to carry out
the purposes of this Section.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on the 15th
reQular
day of
1991, by the following vote, to wit:
April
AYES:
Council Members
Estrada, Reillv. Flores. Maudslev. Minor.
PODe-Ludlam. Miller
NOES:
None
ABSENT:
None
C(~ity~
The foregoing resolution is hereby approved this
7th
day
of
April
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1991.
City
Approved as to form and legal content:
James F. Penman
City ~rneY
By: ..~/.
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Res. 91-132
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BOND INDENTURE
This Bond Indenture (the "Indenture"). dated as of April 15, 1991, entered into and
approved by the City of San Bernardino, (the "Issuer"), a municipal corporation, to
establish the terms and conditions pertaining to the issuance of bonds in a special
assessment district known and designated as ASSESSMENT DISTRICT NO. 977B (the
"Assessment District").
SECTION 1.
SECTION 2.
SECTION 3.
SECTION 4.
SECTION 5.
SECTION 6.
Issuance, Designation and Amount. Pursuant to the provisions of the
"Improvement Bond Act of 1915" (the "Act"), being Division 10 of the
Streets and Highways Code of the State of California, the Issuer does
hereby authorize the issuance of bonds to represent unpaid assessments
within the Assessment District in a principal amount not to exceed
$1,013,048.90, and designated as the City of San Bernardino Assessment
District No. 977B Limited Obligation Improvement Bonds (the "Bonds").
Term of Bonds. Bonds to represent the unpaid assessments, and bear
interest at a rate not to exceed the current legal maximum rate of 12%
per annum, will be issued in the manner provided in the "Improvement
Bond Act of 1915", being Division 10 of the Streets and Highways Code
of the State of California, the last installment of which Bonds shall
mature a maximum of and not to exceed nineteen (19) years from the
second day of September next succeeding twelve (12) months from their
date. The provisions of Part 11.1 of said Act, providing an alterna-
tive procedure for the advance payment of assessments and the calling
of Bonds shall apply.
Registered Bonds and Denominations. Said Bonds shall be issuable only
as fully registered Bonds in the denomination of $5,000, or any
integral multiple thereof, except for one bond maturing in the first
year of maturity, which shall include the amount by which the total
issue exceeds the maximum integral multiple of $5,000 contained
therein.
Date of Bonds. All of said Bonds shall be dated the 2nd day of April,
1991, and interest shall accrue from that date.
Maturity. The Bonds shall be issued in serial form with annual
maturities on September 2nd of every year succeeding twelve (12) months
after their date, until the whole is paid. The amount maturing each
year shall be such as to result in approximately equal annual debt
service during the term of the issue as reflected by the interest rate
and/or rates and principal amounts maturing in the respective years of
matur i ty as shown on Exhibit "A" attached hereto and incorporated
herein by this reference, and the Issuer shall, immediately upon
completion of the cash collection period, prescribe the denominations
of the Bands, which shall be in convenient amounts, not necessarily
equal, and shall further provide for their issuance and delivery.
Interest. Each Bond shall be of a single maturity and shall bear
interest at the rate as set forth in Exhibit "A" attached hereto for
said Bonds from the interest payment date next preceding the date on
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SECTION 7.
SECTION 8.
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which it authenticated and registered, unless said Bond is authenti-
cated and registered as of an interest payment date, in which case it
shall bear interest from said interest payment date, or unless said
Bond is authenticated and r~9i8tered prior to the first interest
payment date, in which case it shall bear interest from its date, until
payment of its principal sum has been discharged.
Place of Payment. The principal on the Bonds shall be payable in
lawful money of the United States of America upon surrender of the Bond
at the office of Security Pacific National Bank in Los Angeles,
California, the designated registrar, transfer agent and paying agent
of the Issuer ("Fiscal Agent"), or such other registrar, transfer agent
or paying agent as may be designated by supplemental Indenture of the
Issuer.
Interest on said Bonds shall be paid on March 2 and September 2 of each
year, commencing September 2, 1991, by check or draft to the registered
owner thereof at his address as it appears on the books of registration
as of the 15th day immediately preceding said interest payment date.
Redemption.
(a) Optional Redemption. The Bonds may be redeemed prior to maturity,
in whole or in part, at the option of the Issuer, on any March 2
or September 2 thereafter at a redemption price equal to 103% of
the principal amount thereof, together with accrued interest to
the date of redemption, from any source of funds.
(b} Mandatory Redemption. The Bonds shall be subject to mandatory
redemption prior to maturity, in whole or in part in increments of
$5,000.00, on any March 2 or September 2 at a redemption price
equal to 103% of the principal amount thereof, together with
accrued interest to the date of redemption, from monies represent-
ing the prepayment of assessments.
(c) Selection of Bonds for Redemption. If less than all of the
outstanding Bonds are to be redeemed, the Fiscal Agent shall
select the Bonds to be redeemed in authorized denominations from
each maturity in the same proportion which such maturity repre-
sent s with respect to all of the outstanding Bonds and by lot
within a single maturity; provided, however, that the portion of
any Bond of a denomination of more than $5,000 to be redeemed
shall be in the principal amount of $5,000 or a multiple thereof,
and that, in selecting portions of such Bonds for redemption, the
Fiscal Agent shall treat each such Bond as representing that
number of Bonds of $5,000 denominations which is obtained by divid-
ing the principal amount of such Bonds to be redeemed in part by
S 5,000. The Fiscal Agent shall promptly notify the Issuer in
writing of the Bonds, or portions thereof, selected for
redemption.
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(d) Notice of Redemption. When the Fiscal Agent shall receive notice
from the Issuer of its election to redeem Bonds at least sixty
(60) days prior to the applicable redemption date, or when Bonds
are otherwise to be re~eemed pursuant to this Section 8, the
Fiscal Agent shall give notice, in the name and at the expense of
the Issuer, of the redemption of such Bonds. Such notice of
redemption shall (a) speoify the numbers of the Bonds selected for
redemption, except that where all the Bonds are subject to redemp-
tion, the numbers thereof need not be specified; (b) state the
date fixed for redemption; (c) state the redemption price; (d)
state the place or places where the Bonds are to be redeemed; and
(e) in the case of Bonds to be redeemed only in part, state the
portion of the Bond which is to be redeemed. Such notice shall
further state that on the date fixed for redemption there shall
become due and payable on each Bond, or portion thereof called for
redemption, the principal thereof, together with any premium, and
interest accrued to the redemption date, and that from and after
such date, interest thereon shall cease to accrue and be payable.
At least 30 days but no more than 45 days prior to the redemption
date, the Fiscal Agent shall mail by first class mail, a copy of
such notice, postage prepaid, to the respective owners of the
Bonds to be redeemed at their addresses appearing on the bond
register. The actual receipt by the owner of any Bond of notice of
such redemption shall not be a condition precedent thereto, and
failure to receive such notice shall not affect the validity of
the proceedings for the redemption of such Bonds, or the cessation
of interest on the redemption date. A certificate by the Fiscal
Agent that notice of such redemption has been given as herein
provided shall be conclusive as against all parties, and it shall
not be open to any bondowner to show that he or she failed to
receive notice of such redemption.
(e) Partial Redemption of Bonds. Upon surrender of any Bond to be
redeemed in part only, the Issuer shall execute and the Fiscal
Agent shall authenticate and deliver to the bondowner, at the
expense of the Issuer, a new Bond or Bonds of authorized denomina-
tions equal in aggregate principal amount to the unredeemed
portion of the Bond surrendered, with the same interest rate and
the same maturity.
(f) Effect of Notice and Availability of Redemption Money. Notice of
redemption having been duly given, as provided in this Section B,
and the amount necessary for the redemption having been made
available for that purpose and being available therefor on the
date fixed for such redemption:
(1) The Bonds, or portions thereof, designated for redemption
shall, on the date fixed for redemption, become due and
payable at the redemption price thereof as provided in this
Indenture, anything in this Indenture or in the Bonds to the
contrary notwithstanding;
Upon presentation and surrender thereof at the principal
corporate trust office of the Fiscal Agent, such Bonds shall
be redeemed at the specified redemption price;
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SECTION 9.
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(3) From and after the redemption date the Bonds or portions
thereof so designated for redemption shall be deemed to be no
longer outstanding and such Bonds or portions thereof shall
cease to bear further ,interest; and
(4) From and after the date fixed for redemption no owner of any
of the Bond or portlion thereof so designated for redemption
shall be entitled to any of the benefits of this Indenture,
or to any other rights, except with respect to payment of the
redemption price and interest accrued to the redemption date
from the amounts so made available.
Transfer of Reqistered Bonds. Any Bond may, in accordance with its
terms, be transferred, upon the books of registration required to be
kept pursuant to the provisions of Section 11, by the owner in whose
name it is registered, or by his duly authorized attorney or legal
representative, upon surrender of such Bond for registration of such
transfer, accompanied by delivery of a written instrument of transfer
in a form approved by the Fiscal Agent and duly executed by the owner
of said Bonds.
The Fiscal Agent shall require the payment by the Bondholder requesting
such transfer of any tax or other governmental charge required to be
paid with respect to such transfer and such charges as provided for in
the system of registration for registered debt obligations.
No transfer of Bonds shall be required to be made during the fifteen
(15) days preceding the selection of any Bonds for redemption prior to
the matur ity thereof, nor with respect to any Bond which has been
selected for redemption prior to the maturity thereof.
Upon any such registration of transfer, a new Bond or Bonds shall be
authenticated and delivered in exchange for such Bond, in the name of
the transferee, of any denomination or denominations authorized by this
Indenture, and in an aggregate principal amount equal to the principal
amount of such Bond or principal amount of such Bond or Bonds so surren-
dered. In all cases in which Bonds shall be exchanged or transferred,
the Fiscal Agent shall authenticate at the earliest practical time,
Bonds in accordance with the provisions of this Indenture. All Bonds
surrendered in such exchange or registration transfer shall forthwith
be cancelled.
SECTION 10. Exchange of Bonds. Bonds may be exchanged at the office of the Fiscal
Agent for alike aggregate principal amount of Bonds of the same
series, interest rate and maturity, subject to the terms and conditions
provided in the system of registration for registered debt obligations,
including the payment of certain charges, if any, upon surrender and
cancellation of the Bond. Upon such transfer and exchange, a new regis-
tered Bond or Bonds of any authorized denomination or denominations of
the same maturity for the same aggregate principal amount will be
issued to the transferee in exchange therefor.
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SECTION 11. Books of Registration. There shall be kept by the Fiscal Agent suffi-
cient books for the registration and transfer of the Bonds and, upon
presentation for such purpose, the Fiscal Agent shall, under such
reasonable regulations as it rylay prescribe, register or transfer or
cause to be registered. or transferred, on said register, Bonds as
hereinbefore provided.
SECTION 12. Execution of Bonds. The Bonds shall be executed in facsimile by the
Treasurer and by the City Clerk, and the corporate seal shall be
imprinted in facsimile on the Bonds. The Bonds shall then be delivered
to the Fiscal Agent for authentication and registration. In case an
officer who shall have signed or attested to any of the Bonds by
facsimile or otherwise shall cease to be such officer before the authen-
tication, delivery and issuance of the Bonds, such Bonds nevertheless
may be authenticated, delivered and issued, and upon such authentica-
tion, delivery and issue, shall be as binding as though those who
signed and attested the same had remained in office.
SECTION 13. Authentication. Only such of the Bonds as shall bear thereon a certifi-
cate of authentication substantially in the form below, manually
executed by the Fiscal Agent, shall be valid or obligatory for any
purpose or entitled to the benefits of this Indenture, and such certifi-
cate of the transfer agent and registrar shall be conclusive evidence
that the Bonds so authenticated have been duly executed, authenticated
and delivered hereunder, and are entitled to the benefits of this
Indenture.
FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described
in the Bond Indenture authorizing
the issuance of the Bonds.
Security Pacific National Bank
as Fiscal Agent
By:
Authorized signatory
Dated:
SECTION 14. Ownership of Bonds. The person in whose name any Bond shall be regis-
tered shall be deemed and regarded as the absolute owner thereof for
all purposes, and payment of or on account of the principal and redemp-
tion premium, if any, of any such Bond, and the interest on any Buch
Bond, shall be made only to or upon the order of the registered owner
thereof or his legal representative. All such payments shall be valid
and effectual to satisfy and discharge the liability upon such Bond,
including the redemption premium, if any, and interest thereon, to the
extent of the sum or sums so paid.
SECTION 15. Mutilated, Destroyed, Stolen or Lost Bonds. In case any Bond secured
hereby shall become mutilated or be destroyed, stolen or lost, the
Issuer shall cause to be executed and authenticated a new Bond of like
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date and tenor in exchange and substitution for and upon the cancella-
tion of such mutilated Bond or in lieu of and in substitution for such
Bond mutilated, destroyed, stolen or lost, upon the owner's paying the
reasonable expenses and charge~ in connection therewith, and, in the
case of a Bond destroyed, stolen or lost, his filing with the Fiscal
Agent and Issuer of evidence satisfactory to them that such Bond was
destroyed, stolen or lost, and of his ownership thereof, and furnishing
the Fiscal Agent and Issuer with indemnity satisfactory to them.
SECTION 16. Cancellation of Bonds. All Bonds paid or redeemed, either at or before
maturity, shall be cancelled upon the payment or redemption of such
Bonds, and shall be delivered to the Fiscal Agent when such payment or
redemption is made. All Bonds cancelled under any of the provisions of
this Indenture shall be destroyed by the Fiscal Agent, which shall
execute a certificate in duplicate describing the Bonds so destroyed,
and shall retain said executed certificate in its permanent files for
the issue.
SECTION 17. Application of Bond Proceeds. The proceeds of the sale of Bonds and
any good faith security deposit shall be received by the Fiscal Agent
and deposited in accordance with written instructions of the Issuer to
be provided at the time of, or prior to, the delivery of the Bonds.
SECTION 18. Creation of Funds. The Fiscal Agent is hereby authorized and directed
to establish the following Funds for purposes of making payment for the
costs and expenses for the works of improvement and payment of
principal and interest on the Bonds. The Funds to be created are
designated as follows:
IMPROVEMENT FUND, The proceeds from the sale of the Bonds, after
deposit of required amounts in the Reserve Fund and Redemption Fund,
shall be placed by the Fiscal Agent in the Fund hereby created,
pursuant to Sections 10602 and 10424 of the California Streets and
Highways Code, as amended, which shall be called the "Improvement
Fund", and the monies in said Fund shall be used only for Project Costs
as that term is defined hereinafter. "Project Costs" shall mean the
costs of acquisition or construction of the works of improvement as
authorized in the assessment proceedings and all incidental costs
related thereto, all as more particular described in the Engineer's
Report for Assessment District No. 977B on file in the office of the
City Clerk.
Upon receipt of a "Payment Request Form" in substantially the form
attached hereto as Exhibit "B", duly executed by the Mayor, the
Treasurer or the designee of either official (each an UAuthorized
Representative"), the Fiscal Agent shall pay the Project costs from
amounts in the Improvement Fund directly to the contractor of such
other person, corporation or entity entitled to payment hereunder
unless the Issuer requests payment to be made to the contractor or such
other party jointly, in which case said Project Costs shall be paid
jointly. The Fiscal Agent shall be responsible for the safekeeping and
investment of the monies held in the Improvement Fund and the disposi-
tion thereof in accordance with the written instructions of the Issuer
and this Indenture. The Fiscal Agent may rely on an executed Payment
Request Form as complete authorization for said payments.
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Any surplus in the Improvement Fund after completion of the improve-
ments shall remain in the Improvement Fund for a period of not less
than two (2) nor more than three (3) years from the receipt of Bond
proceeds as provided in SectioJ? 10427.1 of the California Streets and
Highways Code, and thereafter shall be utilized or distributed as deter-
mined by the Issuer.
REDEMPTION FUND: The Fiscal Agent is hereby authorized and directed to
keep a Redemption Fund designated by the name of the proceedings, into
which shall be placed (i) initially, an amount from proceeds of the
Bonds which, together with accrued interest, if any, on the Bonds
equals the interest on the Bonds to September 2, 1991, ( ii) all sums
received for the collection of the assessments and the interest
thereon, together with all penalties, if applicable, and (iii) any
surplus in the Improvement Fund authorized by the Issuer pursuant to
Streets and Highways Code Section 10427.1 to be credited against unpaid
assessments.
The Issuer shall transfer or cause to be transferred all sums received
for the collection of the assessments, interest and penalties thereon,
and all sums received for the prepayment of assessments to the Fiscal
Agent within fifteen (15) business days of the receipt thereof by the
Issuer.
Principal of and interest on said Bonds shall be paid by the Fiscal
Agent to the registered owners out of the Redemption Fund to the extent
funds on deposit in said Redemption Fund are available therefor. In
all respects not recited herein, said Bonds shall be governed by the
provisions of the Act. Under no circumstances shall be the Bonds or
interest thereon be paid out of any other fund except as provided by
law.
Prior to the first redemption date there shall be established by the
Fisal Agent a prepayment subaccount within the Redemption Fund to be
known as the Prepayment Account ("Prepayment Account"). The Fiscal
Agent shall deposit in the Prepayment Account all monies received from
the Treasurer representing the principal of and redemption premium on
any prepaid assessments. Such amounts shall be identified in writing
to the Fiscal Agent. Such monies shall be applied solely to the
payment of principal of and premium on Bonds to be redeemed prior to
maturity pursuant to the provisions of Section B of this Indenture.
RESERVE FUND: Pursuant to Part 16 of Division 10 of the California
Streets and Highways Code, as amended, there shall be created a special
reserve fund for the Bonds to be designated by the name of the Assess-
ment District and specified as the "Reserve Fund". An amount equal to
ten percent (10%) of the principal amount of the Bonds issued shall be
deposited in the Reserve Fund out of the Bond proceeds.
Monies in the Reserve Fund shall be applied by the Fiscal Agent as
follows:
A. Whenever there are insufficient funds in the Redemption Fund to pay
the next maturing installment of principal of or interest on the
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Bonds on the business day preceding such date of payment, the
Fiscal Agent shall transfer the amount necessary to make up such
deficiency from the Reserv.e Fund to the Redemption Fund. The
amounts so advanced shall b~ reimbursed upon receipt thereof by the
Issuer and transfer thereof to the Fiscal Agent for deposit into
the Reserve Fund from the proceeds of redemption or sale of the
parcels for which payment .of delinquent installments of assessments
and interest thereon have been made from the Reserve Fund. Such
proceeds shall be transferred by the Issuer to the Fiscal Agent
within ten (10) business days of receipt thereof by the Issuer and
the F hcal Agent shall immediately deposit such proceeds in the
Reserve Fund.
B. In the event an unpaid assessment is paid in cash in advance of the
final Bond maturity date, the Issuer is required to credit such
prepaid assessment with a proportionate share of the Reserve Fund,
thus reducing the total amount of the Reserve Fund. The amount to
be so credited is the pro-rata share of the original amount
deposited in the Reserve Fund, less any amount previously trans-
ferred from the Reserve Fund to the Redemption Fund as a result of
the delinquency in the payment of assessment installments for the
parcel for which the assessment is being prepaid. The Issuer shall
direct the Fiscal Agent in writing to transfer the amount represent-
ing such credit from the Reserve Fund to the Redemption Fund.
C. Interest earned on permitted investments of Reserve Fund monies
shall remain in the Reserve Fund so that the amount therein may
accumulate to and subsequently be maintained at the "Reserve
Requirement ". "Reserve Requirement II means an amount equal to the
lesser of (i) the maximum annual debt service on the Bonds, (ii)
125\ of the average annual debt service on the Bonds, or (iii) 10\
.of the principal amount of the outstanding Bonds. "Annual Debt
Service" on the Bonds for each year ending September 2 shall equal
the sum of (a) the interest falling due on the outstanding Bonds in
such 12 month per iOd, assuming that the outstanding Bonds are
retired as scheduled, and (b) the principal amount of the outstand-
ing Bonds falling due during such 12 month period. "Average Annual
Debt Service" shall mean the average annual debt service during the
term of the Bonds. "Maximum Annual Debt Service" shall mean, as
computed from time to time, the largest annual debt service during
the period from the date of such computation through the final
maturity of any outstanding Bonds.
D. On June 30 of each year, any interest earned on the investment of
monies on deposit in the Reserve Fund which would cause the amount
therein to exceed the Reserve Requirement shall be transferred by
the Fiscal Agent to the Redemption Fund and shall be credited
towards unpaid assessments each year during which part of the Bonds
remain outstanding. The auditor's record prepared pursuant to
Section 8682 of the Act shall reflect credits against each of the
unpaid assessments in the manner provided in Section 10427.1
therein in amounts equal to each assessment parcels' proportionate
share of any Reserve Fund disbursement.
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E. All sums remaining in the Reserve Fund in the year in which the
last installments of the assessments become due and payable shall
be credited toward the assessments as follows:
Prior to June 30th of the Fiscal Year next preceding the Fiscal
Year in which the last unpaid assessment installment becomes due
and payable, the Issuer shall determine the amount remaining in the
Reserve Fund, if any, after all sums advanced and interest thereon
have been reimbursed, and shall order the same to be distributed
and/or credited pursuant to its written direction in the manner set
forth in Section 10427.1 of the Act, provided only that where all
or any part of such assessments remain unpaid and are payable
installments, the amount apportioned to each parcel shall be
credited against the last unpaid assessment installment, then such
excess shall be credited against the next to last unpaid assessment
installment.
Whenever the balance in the Reserve Fund is sufficient to retire all
remaining outstanding Bonds, whether by advance retirement or other-
wise, collection of the principal and interest on the assessments shall
be discontinued and the Reserve Fund shall be liquidated by the Fiscal
Agent pursuant to the written direction of the Issuer and utilized in
the retirement of the Bonds.
In the event that the balance in the Reserve Fund at the time of liqui-
dation exceeds the amount required to retire all Outstanding Bonds in
the issue, the excess shall be apportioned to each parcel upon which
the individual assessment remained unpaid at the time the balance in
the Reserve Fund was sufficient to retire all outstanding Bonds in the
issue. The payments shall be made in cash by the Issuer to the respec-
tive owners of the parcels except that, if the excess is not greater
than one thousand dollars ($1,000), the excess may be transferred to
the General Fund of the Issuer.
REBATE FUND. The Fiscal Agent shall transfer into the Rebate Fund all
amounts required by the Issuer to be transferred in acordance with the
provisions of the Arbitrage Rebate Provisions attached hereto as
Exhibit "e". Subject to the provisions of said Arbitrage Rebate Provi-
sions, amounts on deposit in the Rebate Fund shall only be applied to
payments made to the United States of America in accordance with
written instructions of the Issuer. Notwithstanding any other provi-
sions of this Indenture, all earnings on amounts on deposit in the
Rebate Fund shall remain therein until paid to the Federal government.
SECTION 19. Investments. Obligations purchased as investments of monies in any of
the funds and accounts in which investments are authorized shall be
deemed at all times to be part of such funds and accounts. Except as
provided in Section 19 hereof with respect to the Reserve Fund and the
Rebate Fund, all investment earnings on monies held under this Inden-
ture shall, prior to the earlier of (i) the substantial completion of
the works of improvement, which shall be established by receipt by the
Fiscal Agent of a written notice from the Issuer stating that the autho-
rized improvements have been completed, (ii) three (3) years from the
date of delivery of the Bonds, or (iii) the date on which the Fiscal
9
Agent receives written notice from the Issuer stating that an amount
equal to the Bond proceeds allocable to the works of improvement and
authorized incidental expense have been expended ("Completion Date"),
be deposited into the Improveme~t Fund. After the Completion Date, all
such investment earnings. shall be deposited in the Redemption Fund.
Subject to the restrictions set forth herein, monies in said funds and
accounts may from time to time be invested by the Fiscal Agent at the
written direction of the Issuer, or if no such written direction is
given, in Authorized Investments (as defined hereinafter) and described
in (7) below, provided that:
(a) Monies in the Improvement Fund shall be invested in obligations
which will by their terms mature as close as practicable to the
date the Issuer estimates the monies represented by the particular
investment will be needed for withdrawal from such fund;
(b) Monies in the Redemption Fund shall be invested only in obliga-
tions which will by their terms mature on such dates so as to
ensure the payment of principal of and interest on the Bonds as
the same become due; and
(c) Half of the monies in the Reserve Fund may be invested in obliga-
tions which shall mature not more than five (5) years from the
date of purchase by the Fiscal Agent and the balance may be
invested in obligations which shall mature not more than ten years
from the date of purchase by the Fiscal Agent, provided that no
such obligation shall mature later than the final maturity of the
bonds.
The Fiscal Agent shall sell at the best price reasonably obtainable or
present for redemption any obligations so purchased whenever it may be
necessary to do so in order to provide monies to meet any payment or
transfer for such funds and accounts or from such funds and accounts.
For the purpose of determining at any given time the balance in any
such funds or accounts, any such investments constituting a part of
such funds and accounts shall be valued at the lesser of their market
value or cost. Notwithstanding anything herein to the contrary, the
Fiscal Agent shall not be responsible for any loss from any investments
pursuant to this Indenture.
"Authorized
securities
District:
Investments" means any of the following to the extent such
are eligible for the legal investment of funds of the
(1)
United states
indebtedness,
United States
interest;
Treasury notes, bonds, bills
or those for which the faith
is pledged for the payment
or certif icates of
and credit of the
of principal and
(2) Time certificates of deposit or negotiable certificates of deposit
issued by a state or nationally chartered bank or trust company,
including the Fiscal Agent, or a state or federal savings and loan
association; provided, that such certificates of deposit shall be
(i) continuously and fully insured by the Federal Deposit
10
Insurance Corporation or the Federal Sav ings and Loan Insurance
Corporation, or (ii) issued by any bank or trust company organized
under the laws of any state 9f the United States of America or any
national banking association (including the Fiscal Agent) having a
combined capital and surplus of at least one hundred million
dollars ($100,000,000), and such certificates shall have maturi-
ties of six (6 )months or less, or (iii) continuously and fully
secured by such securities as are described in clause (1) above,
which securities shall have a market value (as determined on a
marked-to-market basis calculated at least weekly, and exclusive
of accrued interest) of not less than the principal amount of such
certificates of deposit;
(3) Bills of exchange or time drafts drawn on and accepted by a commer-
cial bank (including the Fiscal Agent), otherwise known as
bankers' acceptances, which are eligible for purchase by members
of the Federal Reserve System; prov ided, that purchases of
eligible bankers' acceptances may not exceed two hundred seventy
(270) days' maturity;
(4) Commercial paper of "prime" quality of the highest ranking or of
the highest letter and numerical rating as provided by either
Moody's or Standard & Poor's, which commercial paper is limited to
issuing corporations that are organized and operating within the
United States of America and that have total assets in excess of
five hundred million dollars ($500,000,000) and that have an "A"
or higher rating for the issuer's debentures, other than commer-
cial paper, as provided by either Moody's or Standard & Poor's;
provided, that purchases of eligible commercial paper may not
exceed one hundred eighty (180) days' maturity nor represent more
than ten percent (10%) of the outstanding commercial paper of an
issuing corporation;
(5) Any repurchase agreement with any bank or trust company organized
under the laws of any state of the United States of America
(including the Fiscal Agent) or any national banking association
or government bond dealer reporting to, trading with and recog-
nized as a primary dealer by, the Federal Reserve Bank of New
York, which agreement is secured by anyone or more of the
securities described in clause (1) above; provided, that the under-
lying securities are (i) required by the repurchase agreement to
be held by any such bank, trust company or primary dealer having a
combined capital and ~urplus of at least one hundred million
dollars ($100,000,000) and being independent of the issuer of such
repurchase agreement, and (ii) maintained at a market value (as
determined on a marked-to-market basis calculated at least weekly)
of not less than 103% of the amount so invested; and,
(6) BondS, notes, warrants or other evidence of indebtedness of the
State of California or of any political subdivision or public
agency thereof which are rated in one of the two highest short-
term or long-term rating categories by either Moody'S or Standard
& Poor's.
11
1-
(7) Units of a taxable government money market portfolio restricted to
obligations issued or guaranteed as to payment of principal and
interest by the full faith and credit of the United States govern-
ment or repurchase agreements collateralized by such obligations.
(8) The Local Agency Investment Fund established pursuant to Section
16429.1 of the Government' Code of the State of California.
SECTION 20. No Issuer Liability. It is hereby further determined and declared that
the Issuer will not obligate itself to advance any available funds from
its Treasury to cure any deficiency or delinquency which may occur in
the Bond Redemption Fund by failure of property owners to pay annual
special assessments. This determination shall be clearly set forth and
stated in the title of the Bonds to be issued pursuant to these proceed-
ings as authorized and required by Section 8769 of the Streets and
Highways Code of the State of California.
SECTION 21. Covenant for superior Court Foreclosure. In the event of delinquency
in the payment of any installments of unpaid assessments, the Issuer
does covenant for the benef it of the owners of the Bonds that it will
review assessment records of the County not later than August 1 of each
year to determine the amount of the assessments collected in the prior
fiscal year. If the cumulative delinquencies in the payment of assess-
ment installments throughout the Assessment District exceed five
percent (5\), the Average Annual Debt Service on the Bonds, the Issuer
shall commence foreclosure action(s) on all parcels for which the
payment of assessment installments are delinquent in the Superior Court
of the State of california (Part 14, Division 10, "Improvement Bond Act
of 1915", Streets and Highways Code) on or before November 1 of each
year, and diligently prosecute and pursue such foreclosure proceedings
to judgment and sale. Initiation of such foreclosure actions may be
deferred in any fiscal year if the Reserve Fund is maintained at an
amount at least equal to the Reserve Requirement.
SECTION 22. Covenant to Maintain Tax-Exempt Status. The Issuer covenants that it
will not make any use of the proceeds of the Bonds issued hereunder
which would cause the Bonds to become "arbitrage bonds" subject to
Federal income taxation pursuant to the provisions of Section 148(a) of
the Code, or to become "Federally-guaranteed obligations" pursuant to
the provisions of Section 149 (b) of the Code, or to become "private
activity bonds" pursuant to the provisions of section 141 (a) of the
Code. To that end, the Issuer will comply with all applicable require-
ments of the Code and all regulations of the United States Department
of Treasury issued thereunder to the extent such requirements are, at
the time, applicable and in effect. Additionally, the Issuer agrees to
implement and follow each and every recommendation provided by bond
counsel and deemed to be necessary to be undertaken by the Issuer to
ensure compliance with all applicable provisions of the Code in order
to preserve the exemption of interest on the Bonds from Federal income
taxation.
SECTION 23. Covenant Regarding Arbitrage. The Issuer shall not take or permit nor
suffer to be taken any action with respect to the gross proceeds of the
Bonds as such term is defined under the Code which, if such action had
12
been reasonably expected to have been taken, or had been deliberately
and intentionally taken, on the date of issuance of the Bonds, would
have caused the Bonds to be "aJ;bitrage bonds" within the meaning of
Section 148 of the Code and the .regulations promulgated thereunder.
SECTION 24. Order to Print and Authenticate Bonds. The Treasurer is hereby
instructed to cause Bonds, as set forth above, to be printed, and to
proceed to cause said Bonds to be authenticated and delivered to an
authorized representative of the purchaser, upon payment of the
purchase price as set forth in the accepted proposal for the sale of
Bonds.
SECTION 25. Arbitrage Certificate. On the basis of the facts, estimates and circum-
stances now in existence and in existence on the date of issue of the
Bonds, as determined by the Treasurer, said Treasurer is hereby autho-
rized to certify that it is not expected that the proceeds of the issue
will be used in a manner that would cause such obligations to be
arbitrage Bonds. Such certification shall be delivered to the
purchaser together with the Bonds.
SECTION 26. Fiscal Aqent. The Issuer hereby appoints Security Pacific National
Bank as Fiscal Agent for the Bonds and approves the Fiscal Agent Agree-
ment by and between the Issuer and said Fiscal Agent, which Agreement
is on file in the office of the City Clerk of the Issuer. The Fiscal
Agent is hereby authorized to and shall mail interest payments to the
Bondowners, select Bonds for redemption, give notice of redemption of
Bonds, maintain the Bond register and maintain and administer the
Redemption Fund, the Reserve Fund, the Improvement Fund and the Rebate
Fund. The Fiscal Agent is hereby authorized to pay the principal of
and premium, if any, on the Bonds when the same are duly presented to
it for payment at maturity or on call and redemption, to provide for
the registration of transfer and exchange of Bonds presented to it for
such purposes, to provide for the cancellation of BondS, all as
provided in this Indenture, and to provide for the authentication of
Bonds, and shall perform all other duties assigned to or imposed on it
as provided in this Indenture. The Fiscal Agent shall keep accurate
records of all funds administered by it and all Bonds paid and
discharged by it. The Fiscal Agent initially appointed, and any
successor thereto, may be removed by the Issuer and a successor or
successors may be appointed. So long as any Bonds are outstanding and
unpaid the Fiscal Agent and any successor or successors thereto desig-
nated by the Issuer shall continue to be Fiscal Agent of the Issuer for
all of said purposes until the designation of a successor or successors
as Fiscal Agent. The Issuer.shall compensate the Fiscal Agent for the
performance of its services hereunder pursuant to the Fiscal Agent
Agreement.
A Fiscal Agent appointed hereunder may resign at any time upon 90 days'
written notice and after appointment of a successor. Upon merger,
consolidation or reorganization of a Fiscal Agent, the Issuer will
appoint a new Fiscal Agent, which may be the corporation resulting from
such reorganization.
13
SECTION 27. Liability of Fiscal Aqent. The recitals of fact and all promises,
covenants and agreements contained herein and in the Bonds shall be
taken as statements, promises, covenants and agreements of the Issuer,
and the Fiscal Agent assumes no responsibility for the correctness of
the same and makes no representations a8 to the validity or sufficiency
of this Indenture or of the Bonds, and shall incur no responsibility in
respect thereof other than in 'connection with its duties or obligations
herein, or in the Bonds or in the certificate of authorization assigned
to or imposed upon the Fiscal Agent. The Fiscal Agent shall be under
no responsibility or duty with respect to the issuance of the Bonds for
value. The Fiscal Agent shall not be liable in connection with the
performance of its duties hereunder, except for its own negligence or
willful misconduct. The Fiscal Agent shall be protected in acting on
any notice, resolution, request, consent, certificate or other document
believed by it to be genuine and to have been signed or presented by
the proper party.
SECTION 26. Defeasance. If all outstanding Bonds shall be paid and discharged in
anyone or more of the following ways:
(a) by paying or causing to be paid the principal of and interest with
respect to all Bonds outstanding, as and when the same become due
and payable;
(b) by depositing with the Fiscal Agent, in trust, at or before
maturity, money which, together with the amounts then on deposit
in the Redemption Fund and the Reserve Fund, is fully sufficient
to pay the principal of and interest on all Bonds outstanding as
and when the same shall become due and payable; or
(c) by depositing with the Fiscal Agent, in trust, direct obligations
of, or obligations guaranteed by, the United States of America, in
which the Issuer may lawfully invest its money, in such amount as
a firm of certified public accountants selected by the Issuer
shall determine, at the expense of the Issuer, will, together with
the interest to accrue thereon and monies then on deposit in the
Redemption Fund and the Reserve Fund together with the interest to
accrue thereon, be fully sufficient to pay and discharge the
principal of and interest on all Bonds outstanding as and when the
same shall become due and payable;
then, at the election of the Issuer, and notwithstanding that any Bonds
shall not have been surrendered for payment, all obligations of the
Issuer under this Indenture with respect to the Fiscal Agent shall
cease and terminate, except for the obligation to pay the fees and
expenses of the Fiscal Agent incurred to such date of deposit and any
indemnifications which by their terms survive the termination of this
Indenture, and with respect to all outstanding Bonds shall cease and
terminate, except for the obligation of the Fiscal Agent to payor
cause to be paid to the owners of the Bonds not so surrendered and
paid, all sums due thereon. Notice of such election shall be filed
with the Fiscal Agent. Any funds held by the Fiscal Agent, at the time
of receipt of such notice from the Issuer, which are not required for
the purpose above mentioned, shall be paid over to the Issuer.
14
SECTION 29. Purpose. Proceeds from the Bonds shall be used for payment of the
costs and expenses of the authorized public capital facilities, and all
appurtenances and incidental costs as set forth above.
SECTION 30. provisions Constitute Contract. The provisions of this Indenture and
the Bonds shall constitute a contract between the Issuer and the
bondowners and the provision... hereof and thereof shall be enforceable
by any bondowner for the equal benefit and protection of all bondowners
similarily situated by mandamus, accounting, mandatory injunction or
any other suit, action or proceeding at law or in equity that is now or
may hereafter be authorized under the laws of the State of California
in any court of competent jurisdiction. Said contract is made under
and is to be construed in accordance with the laws of the state of
California.
After the issuance and delivery of the Bonds this Indenture shall not
be subject to recission, but shall be subject to modification to the
extent and in the manner provided in this Indenture, but to no greater
extent and in other manner.
SECTION 31. Unclaimed Funds. Notwithstanding any provisions of this Indenture,
subject to applicable state escheat laws, any monies held by the Fiscal
Agent in trust for the paymen~ of the principal or premium, if any, or
interest on, any Bonds and remaining unclaimed for four years after the
principal of all of the Bonds has become due and payable (whether at
maturity or upon call for redemption or by declaration as provided in
this Indenture), if such monies were held at such date, or four years
after the date of deposit of such monies if deposited after said date
when all of the Bonds became due and payable, shall be repaid to the
Issuer free from the lien created by this Indenture, and all liability
of the Fiscal Agent with respect to such monies shall thereupon cease
and the bondowners shall, upon such payment, look only to the Issuer
for payment; provided, however, that before the repayment of such
monies to the Issuer as aforesaid, the Fiscal Agent may (at the cost of
the Issuer) first publish at least once in a nationally recognized
financial publication published in New York, New York, and Los Angeles,
California, a notice, in such form as may be deemed appropriate by the
Fiscal Agent, with respect to the provisions relating to the repayment
to the Issuer of the monies held for the payment thereof.
SECTION 32. Arbitrage Rebate Exemption Covenant. The term "bond proceeds" as used
in this Section shall mean amounts actually or constructively received
by the Issuer from the sale of the Bonds. The term "investment
proceeds" as used in this Section means amounts actually or construc-
tively received from the investment of the bond proceeds.
The Issuer shall expend all of the bond proceeds, other than bond
proceeds deposited in the Reserve Fund, and all of the investment
proceeds (including investment proceeds received from the investment of
bond proceeds deposited in the Reserve Fund) for the purposes for which
the Bond has been authorized to be issued, within six (6) months follow-
ing the date of delivery of the Bonds to the initial purchaser thereof.
15
1-
In determining the amount to be expended in accordance with the
previously described requirement, investment proceeds shall be limited
to amounts earned on the bond proceeds before the close of the six (6)
month period described hereinabove.
In the event that the Issuer does not satisfy the expenditure require-
ments of this Section, the Issuer shall assure compliance with applic-
able requirements contained in the Code for rebate to the federal
government of excess investment earnings, if any, with respect to
earnings on the bond proceeds, the investment proceeds, and on other
applicable funds.
Notwithstanding any other provision of this Section, the Issuer shall
assure compliance with applicable requirements contained in the Code
for rebate to the federal government of excess investment earnings, if
any, with respect to earnings on the Reserve Fund and on other applic-
able funds after the date which is six (6) months from the date of
delivery of the Bonds to the initial purchaser thereof.
IN WITNESS WHEREOF, the Issuer has executed this Bond Indenture effective the date
first written hereinabove.
16
Res. 91-132
EXHIBIT. "A"
MATURITY SCHEDULE
YEAR
PRINCIPAL
INTEREST RATE
17
I
Res. 91-132
EXHIBIT "B"
PAYMENT REQUEST FORM
(Attach duplicate original of Payee's
statement(s) or invoice(s))
PROGRESS PAYMENT
FULL/FINAL PAYMENT
The Fiscal Agent is hereby requested to pay from the city of San Bernardino,
Assessment District No. 977B Improvement Fund established by the Bond Indenture
dated April 15, 1991, to the person, corporation or other entity designated below as
Payee, the sum set forth below such designation, in payment of the Project Costs
described below. The amount shown below is due and payable under a purchase order,
contract or other authorization with respect to the Project Costs described below
and has not formed the basis of any prior request for payment.
Payee:
Address:
Amount: $
Description of Project Costs or portion thereof accepted by the Treasurer on behalf
of Assessment District No. 977B, and authorized to be paid to the Payee:
---\,0 b<-.\:cS b1
c'fL ~,(e(
-,\ye~,r
f"iJo'10( ! or..:
I " ,('Q,e.
, 0~?\:'1 . \
,yv Vrr,' V"
, ()\\:\
C, ;-r\,c, v
Executed by Authorized Representative
of the City of San Bernardino
Signature:
Name:
Title:
Dated:
Payment Request No.
18
Res. 91-132
EXHIBIT .C.
ARBITRAGE REBATE PROVISIONS
This document sets forth instructions regarding the investment and disposition of
monies deposited in various funds and accounts established for the City of San
Bernardino ("Issuer") Assessment District No. 977B in aggregate principal amount of
$1,013,048.90 ("Bonds"). THE INSTRUCTIONS SET FORTH IN THIS DOCUMENT SHALL APPLY
ONLY TO THE PROCEEDS OF THE BONDS DEPOSITED INTO THE RESERVE FUND PROVIDED THAT THE
CITY HAS COMPLIED WITH THE EXPENDITURE REQUIREMENT CONTAINED IN SECTION 32 OF THE
BOND INDENTURE.
The purpose of these instructions is to provide the Issuer with information
necessary to ensure that the investment of the monies in the funds and accounts
described herein will comply with the arbitrage limitations imposed by the Internal
Revenue Code of 1986.
DEFINITIONS
For purposes of these instructions, the following terms shall have the meanings set
forth below:
Bond Year. The term "Bond Year" means the 12 month period commencing on the
Delivery Date of the Bonds and each 12 month period thereafter.
Code. The term "Code" means the Internal Revenue Code of 1986.
Delivery Date. The term "Delivery Date" means the date the Bonds are delivered to
the initial purchaser.
Excess Investment Earnings.
equal to the Bum of:
The term "Excess Investment Earnings" means an amount
(1) The excess of
(a) The aggregate amount earned from the date of delivery of the Bonds on all
Non-purpose Obligations in which Gross Proceeds of the Bonds are invested
(other than amounts attributable to an excess described in this paraqraph
( 1) ), over
(b) The amount that would have been earned if the Yield on such Non-purpose
Obligations (other than amounts attributable to an excess described in
this paragraph (1)) had been equal to the Yield on the Bonds,
plus
(2) Any income attributable to the excess described in paragraph (1).
Gross Proceeds. The term "Gross Proceeds" means the sum of the following amounts:
(1) Or ig inal proceeds, L e., the. net amount after payment of all expenses of
issuance of the Bonds received by the Issuer as a result of the sale of the
Bonds, excluding original proceeds of the Bonds which become transferred
proceeds (determined in accordance with applicable Regulations) of obligations
issued to refund in whole or in part the Bonds;
19
(2) Investment proceeds, Le., amounts received at any time by the Issuer, such as
interest and dividends, resulting from the investment of any original proceeds
(as referenced in (2) above) or investment proceeds in Non-purpose obligations,
increased by any profits and decreased 1if necessary, below zero) by any losses
on such investments, excluding. investment proceeds which become transferred
proceeds (determined in accordance with applicable Regulations) of obligations
issued to refund in whole or in part the Bonds;
(3) Sinking fund proceeds, i.e., amounts, other than original proceeds, investment
proceeds or transferred proceeds (as referenced in (1) above) of the Bonds,
which are held in the Redemption Fund and any other fund to the extent that the
Issuer reasonably expects to use such other funds to pay principal or interest
on the Bonds;
(4) Amounts in the Reserve Fund and in any other fund established as a reasonably
required reserve or replacement fund;
(5) Amounts, other than as specified in this definition, used to pay principal and
interest on the Bonds; and,
(6) Amounts received as a result of investing amounts described in this definition.
Investment Property. The term "Investment Property" means any security (as defined
in Section 165(g)(2)(A) or (B) of the Code), obligation, annuity or investment-type
property within the meaning of Section 14B(b)(2) of the Code in which Gross Proceeds
are invested, but, excluding, however, ob~igations of the type described in Notice
87-22 published in the Internal Revenue Bulletin 1987-10 on March 9, 1987, and other
property excluded under the Regulations.
Non-purpose Obliqation. The term "Non-purpose Obligation" means any Investment
Property which is acquired with the Gross Proceeds of the Bonds and is not acquired
in order to carry out the governmental purpose of the Bonds.
purchase Price. The term "Purchase Price", for the purpose of computation of the
Yield of the Bonds, has the same meaning as the term "Issue Price" in sections
1273(b) and 1274 of the Code, and, in general, means the initial offering price to
the public (not including bond houses and brokers, or similar persons or
organizations acting in the capacity of underwriters or wholesalers) at which price
a substantial amount of the Bonds are sold. The term "Purchase Price", for the
purpose of computation of Yield of Non-purpose Obligations means the fair market
value of the Non-purpose Obligation on the date of use of Gross Proceeds of the
Bonds for acquisition thereof, or if later, on the date that Investment Property
constituting a Non-purpose Obligation becomes a Non-purpose Obligation of the
Bonds.
Regulations. The term "Regulations" means temporary and permanent Regulations
promulgated under Section 148 of the Code.
Yield. The term "Yield" means that yield 'which, when used in computing the present
worth of all payments of principal and interest (or other payments in the case of
Non-purpose Obligations which require payments in a form not characterized as princi-
pal and interest) on a Non-purpose obligation or on the Bonds produces an amount
equal to the Purchase pr ice of such Non-purpose Obligation or the Bonds, all
computed as prescribed in applicable Regulations.
20
REBATE PROVISIONS
Creation of Rebate Fund. The Fiscal Agent must create a Rebate Fund. Annually, on
the last day of each Bond Year, or on the preceding business day in the event that
such last day is not a business day, -the Issuer shall provide written instructions
to the Fiscal Agent directing the Fiscal Agent to transfer from the Improvement
Fund, Reserve Fund and Redemption Fund, as appropriate, for purposes of ultimate
rebate to the United States, an amount equal to Excess Investment Earnings.
Calculation of Excess Investment Earnings. Prior to the last day of the first Bond
Year, the Issuer shall calculate the Excess Investment Earnings. Thereafter, prior
to the last day of each Bond Year and on the date of retirement of the Bonds, the
Issuer shall calculate the amount of Excess Investment Earnings. This calculation
shall be made or caused to be made by the Issuer in accordance with the following
rules:
(1) Except as provided in paragraph (2) below, in determining the amount described
in paragraph (l)(a) of the definition of Excess Investment Earnings, the aggre-
gate amount earned on Non-Purpose Obligations shall include (i) all income
realized under Federal income tax accounting principles (whether or not the
person earning such income is subject to Federal income tax) with respect to
such Non-purpose Obligations and with respect to the reinvestment of investment
receipts from such Non-purpose Obligations (without regard to the transaction
costs incurred in acquiring, carrying, selling or redeeming such Non-purpose
Obligations), including, but not limited to, gain or loss realized on the dispo-
sition of such Non-purpose Obligations (without regard to when such gains are
taken into account under Section 453 of the Code relating to taxable year of
exclusion of gross income), and income under Section 1272 of the Code (relating
to original issue discount) and (ii) any unrealized gain or loss as of the date
of retirement of the Bonds in the event that any Non-purpose Obligation is
retained after such date.
(2) Investment Property shall be treated as acquired for its fair market value at
the time it becomes a Non-purpose Obligation, so that gain or loss on the dispo-
sition of such Investment Property shall be computed with reference to such
fair market value as its adjusted basis.
(3) In determining the amount described in paragraph (l) (b) of the definition of
Excess Investment Earnings, the Yield on the Bonds shall be determined based on
the actual Yield of the Bonds during the period between the date of issuance of
the Bonds and the date the computation is made (with adjustments for discount).
(4) In determining the amount described in paragraph (ii) of the definition of
Excess Investment Earnings, all income attributable to the excess described in
paragraph (1) of said definition must be taken into account, whether or not
that income exceeds the Yield on the Bonds, and no amount may be treated as
"negative arbitrage".
(5) In determining the amount described in the definition of Excess Investment Earn-
ings, there shall be excluded any amount earned on any fund or account which is
used primarily to achieve a proper matching of revenues and debt service within
21
each Bond Year and which is depleted at least once a year, except for reason-
able carryover amount not in excess of the greater of one year's earnings on
such fund or account or 1/12 of annual debt service, as well as amounts earned
on said earnings.
Payment to United States. The Issuer shall provide the Fiscal Agent with written
instructions directing the Fiscal Agent to' pay from the Rebate Fund an amount equal
to Excess Investment Earnings to the United States in installments with the first
payment to be made not later than thirty (30) days after the end of the fifth Bond
Year, and with subsequent payments to be made not later than five (5) years after
the preceding payment was due. The Issuer shall assure that each such installment
is in an amount equal to at least ninety percent (90\ > of the Excess Investment
Earnings with respect to the Bonds as of the close of the computation period. Not
later than sixty (60) days after the retirement of the Bonds, the Issuer shall
provide the Fiscal Agent with written instructions directing the Fiscal Agent to pay
from the Rebate Fund to the United States one hundred percent (100\> of the thereto-
fore unpaid Excess Investment Earnings of the Bonds. In the event that there are
any amounts remaining in the Rebate Fund following the payment required by the
preceding sentence, the Issuer shall request in writing that the Fiscal Agent
transfer such funds to the Issuer and use such amount for any lawful purpose of the
Issuer. The Issuer shall cause the Fiscal Agent to remit payments to the United
States at the address prescribed by the Regulations as the same may be from time to
time in effect with such reports and statements as may be prescribed by such Regula-
tions. In the event that, for any reason, amounts in the Rebate Fund are insuffi-
cient to make the payments to the United States which are required hereunder, the
Issuer shall assure that such payments are made to the United States on a timely
basis from any funds lawfully available therefor.
Further Obligation of Issuer. The Issuer shall assure that Excess Investment
Earnings are not paid or disbursed except as provided in these instructions. To
that end, the Issuer shall assure that investment transactions are on an arms-length
basis. In the event that Non-purpose Obligations consist of certificates of deposit
or investment contracts, investment in such Non-Purpose Obligations shall be made in
accordance with the procedures described in applicable Regulations as from time time
in effect.
MAINTENANCE OF RECORDS. The Issuer shall keep and retain for a period of six (6)
years following the retirement of the Bonds, recorda of all determinations made
pursuant to these Instructions.
* * . *
22
Res. 91-132
CITY OF SAN BERNARDINO
1915 ACT LIMITED OBLIGATION IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 977B
PURCHASE CONTRACT
April _, 1991
Mayor and Common Council
City of San Bernardino
300 North "0" Street
San Bernardino, California 92418
Dear Mayor and councilmembers:
Bateman Eichler, Hill Richards, a division of Kemper
Securities Group, Inc. (the "Underwriter"), acting not as
fiduciary or agent for you, but on behalf of itself, offers to
enter into this Purchase Contract with the City of San
Bernardino (the "City"), which upon acceptance will be binding
upon the city and upon the Underwriter. This offer is made
subject to the city's acceptance by the execution of this
Purchase Contract and its delivery to the Underwriter at or
before 11:59 p.m., local time, on the date set forth herein
above, and, if not so accepted, will be subject to withdrawal
by the Underwriter upon notice delivered to the city at any
time prior to the acceptance hereof by the City.
1. Purchase. Sale and Deliverv of the Bonds.
(a) Subject to the terms and conditions and in
reliance upon the representations, warranties and agreements
herein set forth, the Underwriter hereby agrees to purchase
from the ci ty, and the City hereby agrees to sell to the
Underwriter, all (but not less than all) of the City of San
Bernardino 1915 Act Limited Obligation Improvement Bonds for
Assessment District No. 977B (the "Bonds"), in an aggregate
principal amount not to exceed $1,013,048.90, dated as of
April 2, 1991 bearing interest from said date (payable on
March 2 and September 2 in each year commencing September 2,
1991) at such rates per annum and maturing on such dates and
in such amounts as set forth in the form of "Exhibit A"hereto.
The Bonds shall be substantially in the form described in,
shall be issued upon satisfaction of the contingencies set
forth in, shall be secured under the provisions of, and shall
1
be payable and subject to redemption as provided in a Bond
Indenture adopted by the city on April __, 1991, (as amended
from time to time, the "Indenture"), the Preliminary Official
statement relating to the Bonds attached hereto as Exhibit "B"
(the "Preliminary Official statement") and the Improvement
Bond Act of 1915, constituting Division 10 of the streets and
Highways Code of the state of California (the "Act").
(b) By its acceptance of this proposal, the city
approves the Preliminary Official statement and the final
official statement relating to the Bonds (the "Official
statement") consisting of the Preliminary Official statement
with such changes as may be made thereto, with the approval of
the city's Attorney, the City's Bond Counsel and the
Underwriter, from time to time prior to the Closing Date. The
city hereby authorizes the Underwriter to use and distribute
in connection with the offer and sale of the Bonds: the
Preliminary Official statement, the Official statement the
Indenture, this Purchase Contract and all information
contained herein, and all other documents, certificates and
statements furnished by the city to the Underwriter in
connection with the transactions contemplated by this Purchase
Contract.
(c) Except as the City and the Underwriter may
otherwise agree, the city will deliver to the Underwriter at
9:00 a.m. local time, on or before April ,1991 or such
later date as may be acceptable to the Underwriter (the
"Closing Date"), (i) at the offices of Brown, Harper, Burns
and Hentschke, in San Diego, California, the Bonds, in
definitive form (all Bonds being lithographed on steel
engraved borders and bearing CUSIP numbers), duly executed by
the city in the manner provided for in the Indenture and the
Act; and (ii) at the offices of Brown, Harper, Burns and
Hentschke, San Diego, California, the other documents
hereinafter mentioned and the Underwriter will accept such
delivery and pay the purchase price of the Bonds by certified
or official bank check payable in immediately available funds
(such delivery and payment being herein referred to as the
"Closing"). The Bonds shall be made available to the
Underwriter not later than 24 hours prior to the Closing Date
for purposes of inspection and packaging. The Bonds shall be
in fully registered form and shall be registered in accordance
with instructions to be supplied to the city by the
Underwriter.
2. Representations.
The city represents
underwriter that:
Warranties and Aqreements of the ci tv.
and warrants to and agrees with the
(a)
under the
has, and
power and
The city is duly organized and validly existing
Constitution and laws of the State of California and
at the Closing Date will have, full legal right,
authority (i) to enter into this Purchase Contract,
2
(ii) to issue, sell and deliver the Bonds to the Underwriter
as provided herein, and (iii) to carry out, give effect to and
consummate the transactions contemplated by this Purchase
Contract, the Indenture, the Official statement and any city
resolutions or agreements referred to therein.
(b)
Date be in
Indenture,
agreements
The city has complied, and will at the Closing
compliance, in all material respects, with the
the Act, and all other applicable laws and the
referred to in subsection (a) hereof.
(c) The city has, or prior to the closing Date,
will have, duly and validly: (i) adopted the Indenture and
approved and authorized the execution and delivery of the
Bonds, this Purchase Contract, the Official statement and any
other applicable agreements; and (ii) authorized and approved
the performance by the city of its obligation contained in,
and the taking of any and all action as may be necessary to
carry out, given effect to and consummate the transactions
contemplated by, each of said documents; and at the Closing
Date (assuming due authorization, execution and delivery by
the respective other parties thereto, where necessary) the
Bonds, the Indenture, this Purchase Contract, and any other
applicable agreements will constitute the valid, legal and
binding obligations of the city, enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency
and other laws affecting the enforcement of creditors' rights
in general and to the application of equitable principles if
equitable remedies are sought.
(d) The City is not, and at the Closing Date will
not be, in any respect material to the transactions referred
to herein or contemplated hereby, in breach of or default
under any law or administrative rule or regulation of the
state of California, the United states of America, or of any
department, division, agency or instrumentality of either
thereof, or any applicable court or administrative decree or
order, or any loan agreement, note, resolution, indenture,
contract, agreement or other instrument to which the City is a
party or is otherwise subject or bound; and the adoption of
the Indenture, and the execution and delivery of the Bonds,
this Purchase Contract, any other applicable agreements and
the other city instruments contemplated by any of such
documents to which the city is a party, and compliance with
the provisions of each thereof, will not, in any respect
material to the transactions referred to herein or
contemplated hereby, conflict with or constitute a breach of
or default under any applicable law or administrative rule or
regulation of the state of California, the united states of
America, or of any department, division, agency or
instrumentality of either thereof, or any applicable court or
administrative decree or order or any loan agreement, note,
resolution, indenture, contract, agreement or other instrument
to which the city is a party or is otherwise subject or bound.
3
(e) All approvals, consents, authorizations,
elections and orders of or filings or registrations with any
governmental authority, board, agency or commission having
jurisdiction which would constitute a condition precedent to,
or the absence of which would materially adversely affect, the
performance by the city of its obligations hereunder and under
the Indenture, the Bonds and any other applicable agreements
have been obtained and are in full force and effect.
(f) The Bonds, the Indenture, and other applicable
agreements conform as to form and tenor to the descriptions
thereof contained in the Official statement; and the Bonds,
when delivered to and paid for by the Underwriter on the
Closing date as provided herein, will be validly issued and
outstanding and entitled to all the benefits and security of
the Indenture.
(g) The
Official statement
and pursuant to the
and legally binding
been levied, all as
special assessments referred to in the
have been duly and lawfully levied under
Act, and such assessments constitute valid
liens on the properties on which they have
described in the Official statement.
(h) Except as disclosed in the Official statement,
there are no outstanding assessment liens against any of the
properties within the city's Assessment District No. 977B (the
"Assessment District") which are senior to the assessment
liens referred to in paragraph (g) hereof.
( i) To the best knowledge of the ci ty after
diligent inquiry, the Preliminary Official statement is, and
the Official statement will be, as of the Closing Date, true,
correct and complete in all material respects; and, to the
best knowledge of the City after diligent inquiry, the
Preliminary Official statement does not, and the Official
statement will not, as of the Closing Date, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not miSleading.
(j) During the period commencing on the date hereof
and ending on the date 90 days following the Closing Date, if
any event shall occur of which the City has knowledge and as a
result of which it may be necessary to supplement the Official
statement in order to make the statements therein, in light of
the circumstances existing at such time, not misleading, the
City shall forthwith notify the Underwriter thereof and, if in
the opinion of the Underwriter such event requires an
amendment or supplement to the Official statement, the City
will at no expense to the Underwriter amend or supplement the
Official statement in a form and manner jointly approved by
the city and the Underwriter.
4
(k) The Indenture creates a valid pledge of, lien
upon and security interest in the unpaid assessments in the
Assessment District and the interest thereon and the moneys in
all funds and accounts established pursuant to the Indenture,
including the investments thereof, subject in all cases to the
provisions of the Indenture permitting the application thereof
for the purposes and on the terms and conditions set forth
therein.
(1) To the best knowledge of the City after
diligent inquiry, no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
regulatory agency, or public board or body (except for actions
filed by or on behalf of the City) is pending or threatened,
in any way affecting the existence of the city or the titles
of its officers to their respective offices or seeking to
restrain or to enjoin the issuance, sale or delivery of the
Bonds, the application of the proceeds thereof in accord with
the Indenture, the collection or application of assessment
pledged or to be pledged to pay the principal of and interest
on the Bonds, or the pledge thereof, or in any way contesting
or affecting the validity or enforceability of the
assessments, the Bonds, the Indenture, any other appl icable
agreements, this Purchase Contract, or any action of the city
contemplated by any of said documents, or in any way
contesting the completeness or accuracy of the Official
statement or the powers of the City or its authority with
respect to the Bonds, the Indenture, any other applicable
agreements, this Purchase Contract or any action of the City
contemplated by any of said documents, or in any way seeking
to enjoin or restrain the city from approving the development
of any of the property within the Assessment District, or
which would adversely affect the exclusion from gross income
for purposes of federal income taxes of interest paid on the
Bonds or the exemption of such interest from California
personal income taxation; nor to the best knowledge of the
City is there any basis therefor.
(m) The City will furnish such information, execute
such instruments and take such other action in cooperation
with the Underwriter as the Underwriter may reasonably request
to qualify the Bonds for offer and sale under the "blue sky"
or other securities laws and regulations of such states and
other jurisdictions of the united states as the Underwriter
may designate; provided, however, that the city shall not be
required to consent to service of process outside of
California.
(n) Any certificate signed by any official of the
city authorized to do so shall be deemed a representation and
warranty by the city to the Underwriter as to the statements
made therein.
5
(0) The City will apply the proceeds of the Bonds
to the acquisition of public improvements of benefit to the
Assessment District in accordance with the Indenture and all
other applicable documents and as described in the Official
statement.
(p) The city will not invest or otherwise use
proceeds of the Bonds in any manner which would cause the
Bonds to be considered arbitrage bonds within the meaning of
Section 148 of the Internal Revenue Code of 1986, as amended.
(q) The City will give reasonable notice to the
Underwriter prior to its approval of any reapportionment of
any assessment so as to provide the Underwriter with an
opportunity to advise the city whether and to what extent such
reapportionment would result in a reduction in the security
for the Bonds provided by the unpaid assessment.
(r) The city will, at the Underwriter's request,
take any action reasonably necessary to assure or maintain the
exclusion from gross income for purposes of federal income
taxes of interest on the Bonds and will not take any action,
or permit any action to be taken with respect to which it may
exercise control, which would result in the loss of that
exclusion.
(s) The City will not refund some, but not all, of
the Bonds if, as a result of such refunding, the average value
to lien ratio applicable to parcels with unpaid assessments
securing the Bonds which were not refunded would be less than
an average 7.1:1 lien to value ratio.
3. Conditions to the Obliqations of the Underwriter. The
obligations of the Underwriter to accept delivery of and pay
for the Bonds on the Closing Date shall be subject, at the
option of the Underwriter, to the accuracy in all material
respects of the representations and warranties on the part of
the City contained herein as of the date hereof and as of the
closing Date, to the accuracy in all material respects of the
statements of the officers and other officials of the City, as
well as of the other individuals referred to herein, made in
any certificates or other documents furnished pursuant to the
provisions hereof; to the performance by the ci ty of its
obligations to be performed hereunder at or prior to the
Closing Date; and to the following additional conditions:
(a) At the closing Date, the Indenture, and any
other applicable agreements shall be in full force and effect,
and shall not have been amended, modified or supplemented,
except as may have been agreed to in writing by the
Underwriter, and there shall have been taken in connection
therewith, with the issuance of the Bonds and with the
transactions contemplated thereby and by this Purchase
contract, all such actions as, in the opinion of Brown,
6
Harper, Burns and Hentschke ("Bond Counsel"), shall be
necessary and appropriate;
(b) At the closing Date, the Official statement
shall be in form and substance satisfactory to the
Underwriter.
(c) At the Closing Date, taxes and assessments
shall not be delinquent on properties within the Assessment
District, except as specifically approved by the Underwriter;
(d) Between the date hereof and the Closing Date,
the market price or marketability of the Bonds (at the yields
to be set forth in Exhibit A) shall not have been materially
adversely affected, in the judgment of the underwriter
(evidenced by a written notice to the city terminating the
obligation of the underwriter to accept delivery of and pay
for the Bonds), by reason of any of the following:
(i) legislation introduced in or enacted by
the Congress or recommended to the Congress by the
President of the United States, the Department of the
Treasury, the Internal Revenue Service, or any member of
Congress, or favorably reported for passage to either
House of Congress by any committee of such House to which
such legislation has been referred for consideration, or a
decision rendered by a court established under Article III
of the Constitution of the united States of America or by
the Tax Court of the united States of America, or an
order, ruling, regulation (final, temporary or proposed),
press release or other form of notice issued or made by or
on behalf of the Treasury Department of the United states
of America or the Internal Revenue Service, with the
purpose or effect, directly or indirectly, of imposing
federal income taxation upon such interest as would be
received by any holder of a Bond;
(ii) legislation introduced in or enacted (or
resolution passed) by the congress or an order, decree or
injunction issued by any court of competent jurisdiction,
or an order, ruling, regulation (final, temporary or
proposed), press release or other form of notice issued or
made by or on behalf of the Securities and Exchange
commission, or any other governmental agency having
jurisdiction of the subject matter, to the effect that
obligations of the general character of the Bonds,
including any or all underlying arrangements, are not
exempt from registration under or other requirements of
the Securities Act of 1933, as amended, or that the
Indenture Act of 1939, as amended, or that the issuance,
offering or sale of obligations of the general character
of the Bonds, including any or all underlying
arrangements, as contemplated hereby or by the Official
7
, ,
statement or otherwise is or would be in violation of the
federal securities laws as amended and then in effect;
(iii) a general suspension of trading in
securities on the New York stock Exchange or the American
stock Exchange, the establishment of minimum prices on
either such exchange, the establishment of material
restrictions (not in force as of the date hereof) upon
trading in securities generally by any governmental
authority or any national securities exchange, a general
banking moratorium declared by federal, state of New York
or state of California officials authorized to do so, or a
war or other national calamity;
(iv) the withdrawal or downgrading of any rating of
any securities of the City by a national rating agency;
(v) any amendment to the federal or California
Constitution or action by any federal or California court,
legislative body, regulatory body or other authority
materially adversely affecting the tax status of the city,
its property, income, securities (or interest thereon),
the validity or enforceability of the assessment;
(vi) the New York stock Exchange or other national
securities exchange or any governmental authority, shall
impose, as to the Bonds or obligations of the general
character of the Bonds, any material restrictions not now
in force, or increase materially those now in force, with
respect to the extension of credit by, or the charge to
the net capital requirements of, underwriters;
(vii) any event occurring, or information
becoming known which, in the judgment of the Underwriter,
makes untrue in any material respect any statement or
information contained in the Official statement, or has
the effect that the Official statement contains any untrue
statement of material fact or omits to state a material
fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances
under which they were made, not miSleading; or
(viii) general political, economic and market
conditions which, in the sole opinion of the Underwriter,
shall not be satisfactory to permit the sale of the Bonds.
(e) At or prior to the Closing Date, the
Underwriter shall have received two counterpart originals or
certified copies of the following documents, in each case
satisfactory in form and substance to the Underwriter:
(i) the Official statement, executed on behalf
of the City by the mayor or an authorized member of its
8
, .
City Council, or such other city official as may be
approved by the underwriter;
(ii) the Indenture, together with a certificate of
the City Clerk of the City, dated as of the closing Date,
to the effect that it is a true, correct and complete copy
of the one duly adopted by the city and that it has not
been amended, modified or rescinded (except as may have
been agreed to by the Underwriter) and is in full force
and effect as of the Closing Date;
(iii) an unqualified opinion, dated the Closing
Date and addressed to the City, of Bond Counsel to the
effect that the Bonds are the valid, legal, binding
obligations of the city and that the interest thereon is
excluded from gross income for purposes of federal income
taxes, if not a specific preference item for purposes of
federal individual and corporate alternative minimum taxes
and is exempt from personal income taxes of the state of
California, all as provided in the Official statement,
together with an unqualified opinion of Bond Counsel,
dated the Closing Date and addressed to the Underwriter,
to the effect that such opinion addressed to the City may
be relied upon by the Underwriter to the same extent as if
such opinion was addressed to it;
(iv) an opinion, dated the Closing Date and
addressed to the Underwriter, of Bond Counsel to the
effect that (1) this Purchase Contract has been duly
authorized, executed and delivered by the City and,
assuming due authorization, execution and delivery by the
Underwriter, constitutes a legal, valid and binding
agreement of the city, enforceable in accordance with its
terms, subj ect to bankruptcy , insolvency and other laws
affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by the
application of equitable principles if equitable remedies
are sought; (2) the Bonds are not subject to the
registration requirements of the Securities Act of 1933,
as amended, and the Indenture is exempt from qualification
under the Trust Indenture Act of 1939, as amended; (3) the
Bonds and the Indenture conform as to form and tenor to
the descriptions thereof contained in the Official
Statement, and the statements contained in the Official
Statement on the cover and under the captions
"Introductory Statement", "The Bonds", "Security for the
Bonds", "Special Risk Factors", "Miscellaneous Legal
Opinion", and "Miscellaneous Tax Exempt", insofar as
such statements purport to summarize certain provisions of
the Act, the Bonds, the Indenture, and other applicable
laws and agreements, present a fair and accurate summary
of such provisions, and such summaries do not contain any
untrue statements of a material fact or omit to state a
material fact required to be stated in the Official
9
statement or necessary to make the statements made
therein, in the light of the circumstances under which
they are made, not misleading in any material respect; (4)
the Indenture and the Bonds constitute legal, valid and
binding agreements of the city enforceable in accordance
with their terms except as such enforceability may be
limited by bankruptcy, insolvency and other laws affecting
the enforcement of creditors' rights in general and the
application of equitable principles if equitable remedies
are sought; (5) the Indenture creates a val id pledge of,
lien upon and security interest in the proceeds of the
Bonds, the unpaid assessments in the Assessments District
and the interest thereon, and the moneys in all funds and
accounts established pursuant to the Indenture, including
the investments thereof, subject in all cases to the
provisions of the Indenture permitting the application
thereof for the purposes and on the terms and conditions
set forth therein; (6) the assessments in the Assessment
District have been duly and lawfully levied under and
pursuant to the Act and constitute valid and legally
binding liens on the respective properties on which they
were levied; and (7) based upon the information provided
to such counsel in the course of their participation in
the preparation of the Official statement and (except as
provided above) without having undertaken to determine
independently the accuracy or completeness of the
statements contained in the Official statement, such
counsel have no reason to believe that the Official
statement (except for the financial and statistical data
included therein and assumptions with respect thereto, as
to which no view need be expressed) as of the date of the
Official statement omitted, or as of the Closing Date
omits, to state any material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
(v) an opinion, dated the Closing Date and
addressed to the Underwriter, of Brown, Harper, Burns and
Hentschke, Bond Counsel, to the effect that (1) the Bonds
are exempt from the registration requirements of the
Securities Act of 1933, as amended, and the Indenture is
exempt from qualification under the Trust Indenture Act of
1939, as amended, and (2) based upon the information made
available to them in the course of their participation in
the preparation of the Official Statement as bond counsel
and without having undertaken to determine independently
or assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in
the Official Statement, such counsel do not believe that
the Official Statement, as of its date and as of the
closing Date, contains any untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary to make the statements
10
therein, in the light of the circumstances under which
they were made, not misleading (except that no opinion or
belief need be expressed as to any appendices and any
other financial and statistical data contained in the
Official statement); and such memoranda of said firms, or
of other counsel specified by the Underwriter.
(vi) a certificate, dated the Closing Date and
signed by the Mayor to the effect that (1) the
representations and warranties of the city contained
herein are true and correct in all material respects on
and as of the closing Date with the same effect as if made
on the Closing Date; (2) to the best knowledge of said
officer, no event has occurred since the date of the
Official statement which should be disclosed in the
Official statement in order to make the statements and
information therein not misleading in any material
respect; and (3) the City has complied with all the
agreements and satisfied all the conditions on its part to
be performed or satisfied under this Purchase Contract,
the Indenture, and the Official statement at and prior to
the Closing Date;
(vii) An opinion, dated the Closing Date and
addressed to the Underwriter, of the city Attorney, to the
effect that (1) to his best knowledge after diligent
inquiry no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any
court, regulatory agency, public board or body, is pending
or threatened affecting the existence of the city or the
titles of its officers to their respective offices, or
seeking to restrain or to enjoin the issuance, sale or
delivery of the Bonds, the application of the proceeds
thereof in accordance with the Indenture, the collection
or application of the assessment and the interest thereon
to pay the principal of and interest on the Bonds, or
contesting or affecting the validity or enforceability of
the Bonds, the Indenture, this Purchase Contract, or
action of the City contemplated by any of said documents,
or contesting the completeness or accuracy of the Official
statement or the powers of the city or its authority with
respect to the Bonds, the Indenture, this Purchase
contract, or any action on the part of the City
contemplated by any of said documents, or seeking to
enjoin or restrain the city from approving the development
of any of the property within the Assessment District, or
which challenges the exclusion of interest paid on the
Bonds from gross income for purposes of federal income
taxation or the exemption of such interest from California
personal income taxation, nor to his knowledge is there
any basis therefor; (2) the city is duly organized and
validly existing under the Constitution and laws of the
state of California with full legal right, power and
authority to issue the Bonds and to perform all of its
11
obligations under this Purchase Contract, and the Bonds;
(3) to the best of the knowledge of the City's Attorney
the City has duly and validly adopted the Indenture, and
it is in full force and effect; (4) to the best of the
knowledge of the city's Attorney the city has duly
authorized, executed and delivered this Purchase Contract
and the Official statement; (5) to the best of the
knowledge of the city's Attorney assuming due
authorization, execution and delivery by the Underwriter,
this Purchase Contract constitutes a legal, valid and
binding agreement of the City enforceable in accordance
with its terms, subject to bankruptcy, insolvency and
other laws affecting the enforcement of creditors' rights
in general and to the application of equitable principles
if equitable remedies are sought; and (6) the statements
contained in the Official statement (excluding the
Appendices thereto as to which no opinion is expressed),
to the best of the knowledge of the city's Attorney and
without undertaking to verify the same with independent
investigation, do not contain any untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading;
(viii) a transcript of all proceedings relating
to the authorization, issuance, sale and delivery of the
Bonds;
(ix) a certificate, dated the Closing Date, of GFB-
Friedrich & Associates, Inc. to the effect that the
material contained dated as of November 13, 1990 in the
Official statement under the heading "The Assessment
District" does not contain any untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading;
(x) the final appraisal report of Michael
Frauenthal & Associates, Inc. setting forth appraised
values for the 185 parcels within the Assessment District
addressed therein not less than the respective appraised
values set forth in the Preliminary Official statement and
a certificate of such person dated the Closing Date,
confirming his consent to the reproduction of the
appraisal report in the Official statement and to the
effect that, as of the date hereof and as of the Closing
Date, the appraisal report set forth in the Official
statement and the statements in the Official statement
under the caption "Land Values" did not contain any untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements contained
12
therein, in the light of the circumstances under which
they were made, not misleading;
(xi) such additional legal op1n1ons, certificates
(including a non-arbitrage certificate), instruments and
other documents as the Underwriter may reasonably request
to evidence the truth and accuracy, as of the date hereof
and as of the Closing Date, of the City's representations
and warranties contained herein and of the statements and
information contained in the Official statement and the
due performance or satisfaction by the city at or prior to
the Closing of all agreements then to be performed and all
conditions then to be satisfied by the city in connection
with the transactions contemplated hereby and by the
Indenture and the Official statement.
All the opinions, letters, certificates, instruments and
other documents mentioned in this section or elsewhere in this
Purchase Contract shall be deemed to be in compliance with the
terms hereof if, and only if, they are in form and substance
satisfactory to the Underwriter.
If any of the conditions to the obligations of the
Underwriter contained in this section or elsewhere in this
Purchase Contract shall not have been satisfied when and as
required herein, all obligations of the Underwriter hereunder
may be terminated by the Underwriter at, or at any time prior
to, the Closing Date by written notice to the city.
4. Indemnification. The City will indemnify and hold
harmless the Underwriter, and each person, if any, who
controls the Underwriter within the meaning of the Securities
Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, from and against any and all losses, claims,
damages, expenses or liability, joint or several, to which
they or any of them may become subject under the Securities
Act of 1933, as amended and the Securities Exchange Act of
1934, as amended, or under any other statue or at common law
or otherwise, and, except as hereinafter provided, will
reimburse the Underwriter and each such controlling person, if
any, for any legal or other expenses reasonably incurred by
them or any of them in connection with investigating or
defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material
fact with respect to the information contained in the Official
Statement (including the appendices thereto) which the City
has supplied or which related directly to the Assessment
District or arise out of or are based upon the omission or
alleged omission to state therein a material fact with respect
to such information required to be stated therein or necessary
in order to make the statements therein not misleading.
Promptly after receipt by the Underwriter or any such
13
controlling person of notice of the commencement of any action
in respect of which indemnity may be sought against the City
under this paragraph, such person will notify the city in
writing of the commencement thereof, and, subject to the
provisions hereinafter stated, the city may assume the defense
of such action (including the employment of counsel, as the
case may be, and the payment of expenses) insofar as such
action shall relate to any alleged liability in respect of
which indemnity may be sought against the city. The
Underwriter or any such controlling persons shall have the
right to employ counsel in any such action and to provide or
participate in the defense thereof, and the fees and expenses
of such counsel reasonably incurred shall be at the expense of
the city, provided that the city shall consent to the
selection of such counsel. The city shall not be liable to
indemnify any person for any settlement of any such action
effected without its consent.
5. Expenses.
(a) Whether or not the Underwriter accepts delivery
of and pays for the Bonds as set forth herein, it shall be
under no obligation to pay, and the city shall payor cause to
be paid (out of the proceeds of the Bonds or any other legally
available funds of the city) all expenses incident to the
performance of the city's obligations hereunder, including but
not limited to the cost of printing, engraving and delivering
the Bonds to the Underwriter; the cost of printing,
distribution and delivery of the Preliminary Official
statement and the Official statement in reasonable quantities
as requested by the underwriter; the fees and disbursements of
Bond counsel, accountants, engineers, appraisers, and any
other experts or consultants retained in connection with the
Bonds; and any other expenses not specifically enumerated in
paragraph (b) of this section incurred in connection with the
issuance of the Bonds.
(b) Whether or not the Bonds are delivered to the
Underwriter as set forth herein, the city shall be under no
obligation to pay, and the Underwriter shall pay, all expenses
paid or incurred to qualify the Bonds for sale under any "blue
sky" laws; and all other expenses paid or incurred by the
underwriter in connection with its offering and distribution
of the Bonds not specifically enumerated in paragraph (a) of
this section.
6. Notices. Any notice or other communication to be given
to the city under this Purchase Contract may be given by
delivering the same in writing to Director of Finance, city of
San Bernardino, 300 North "D" street, San Bernardino,
California 92418; and any notice or other communication to be
given to the Underwriter under this Purchase Contract may be
given by delivering the same in writing to Bateman Eichler,
Hill Richards, a division of Kemper Securities Group, Inc. 700
14
South Flower Street, 26th Floor, Los Angeles, California
90017, Attention: Public Finance Department.
7. Parties in Interest. This Purchase Contract is made
solely for the benefit of the city and the Underwriter
(including successors or assignees of the Underwriter) and no
other person, including but not limited to any owner of land
within the Assessment District, shall acquire or have any
right hereunder or by virtue hereof.
8. Survival of Representations and Warranties. The
representations and warranties of the City, set forth in or
made pursuant to this Purchase contract, shall not be deemed
to have been discharged, satisfied or otherwise rendered void
by reason of the closing or termination of this Purchase
Contract, regardless of any investigations made by or on
behalf of the Underwriter (or statements as to the results of
such investigations) concerning such representations and
statements of the city and regardless of delivery of and
payment for the Bonds.
9. Offerinq bv Underwriter. It is understood that the
Underwriter proposes to offer the Bonds for sale to the public
(which may include selected dealers) as set forth in the
Official Statement. Concessions from the public offering
price may be allowed to selected dealers. It is understood
that the initial public offering price and concessions set
forth in the Official Statement may vary after the initial
public offering. It is further understood that the Bonds may
be offered to the public at prices other than the par value
thereof. The net premium on the sale of the Bonds, if any,
shall accrue to the benefit of the underwriter. The city
hereby confirms the authority and use by the Underwriter of
the Official Statement.
10. Time. Time shall be of the essence of this Agreement.
11. Counterparts. This Agreement may be executed in any
number of counterparts.
15
12. Effective. This Purchase Contract shall become effective
and binding upon the respective parties hereto upon the
execution of the acceptance hereof by the City and shall be
valid and enforceable as of the time of such acceptance.
Very truly yours,
BATEMAN EICHLER, HILL RICHARDS,
a divsion of Kemper Securities Group, Inc.
By
Senior Vice President
Accepted:
Its Ma or
)
CITY OF SAN
~#
--~
16
Res. 91-132
EXHIBIT A TO PURCHASE CONTRACT
Maturity
September 2
Annual Rate
Interest
Debt Service
Principal
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
23,048.90
25,000
25,000
30,000
30,000
35,000
35,000
40,000
40,000
45,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
90,000
95,000
Total $1,013,048.90
The purchase price for the Bonds shall be 98% plus accrued
interest on the Bonds from their dated date until the Closing Date.
The foregoing dates, amounts, coupon rates and purchase price have
been agreed to this th day of April, 1991.
CITY OF SAN BERNARDINO
BATEMAN EICHLER, HILL RICHARDS
a division of Kemper
Securities Group, Inc.
Mayor
By:
Senior vice President
By:
Res. 91-132
EXHIBIT B TO PURCHASE CONTRACT
, .
NEW ISSUE
In the opinion of Bond Counsel, under existing law, regulations,
rulings and judicial decisions, interest on the Bonds is exempt from state
of California personal income taxes, is excluded from gross income for
purposes of income taxation by the United states of America, and is not an
item of tax preference for purposes of the alternative minimum tax imposed
by the United states on individuals and corporations, subject to certain
qualifications more particularly described under the heading
"MISCELLANEOUS - Tax Exemption" herein.
City of San Bernardino Res. 91-132
COUNTY OF SAN BERNARDINO
STATE OF CALIFORNIA
$1,013,048.90*
CITY OF SAN BERNARDINO
1915 ACT LIMITED OBLIGATION IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 977B
Dated: April 2, 1991
Due: september 2, as shown below
The Bonds which comprise the issue described herein are issued by the
City of San Bernardino, California (The "City") pursuant to the
Improvement Bond Act of 1915, constituting Division 10 of the Streets and
Highways Code, and are secured by assessments levied in proceedings
conducted by the City pursuant to the Municipal Improvement Act of 1913,
Division 12 of the Streets and Highways Code.
The Bonds are issued only as fully registered Bonds in the
denomination of $5,000 each or any integral multiple thereof, except that
one Bond maturing in 1992 includes an additional principal amount of
$3,048.90. Interest is payable on September 2, 1991, and semiannually
thereafter on March 2 and September 2 in each year. The principal of and
premium, if any, on the Bonds are payable at the principal corporate trust
office of Security Pacific National Bank, Los Angeles, California acting
as Paying Agent, Transfer Agent, Registrar, and Fiscal Agent. Interest on
the bonds is payable by check or draft mailed to the registered owners
thereof. The Bonds will mature on September 2 of each of the years and in
the amounts, and will bear interest at the rates, set forth in the
following schedule.
MATURITY SCHEDULE
Maturity Interest Maturity Interest
Date Amount Rate Price Date Amount Rate Price
1992 23,048.90 2002 45,000
1993 25,000 2003 50,000
1994 25,000 2004 55,000
1995 30,000 2005 60,000
1996 30,000 2006 65,000
1997 35,000 2007 70,000
1998 35,000 2008 75,000
1999 40,000 2009 80,000
2000 40,000 2010 90,000
2001 45,000 2011 95,000
The Bonds are subject to redemption on any March 2 or September 2 in
advance of maturity upon giving 30 days prior notice and upon payment of
the principal and interest accrued thereon to the date of redemption, plus
a redemption premium of 3% of the principal amount of the Bonds to be
redeemed.
, .
acquisition of certain pUblic improvements determined by the city to be of
benefit to the properties within the City's Assessment District No. 977B.
The Bonds will be secured by unpaid assessments on land within the
Assessment District. Under provJ.sions of the Improvement Bond Act of
1915, installments of the principal and interest sufficient to meet annual
Bond debt service requirements are to be included on the regular property
tax bills sent to owners of property against which there are unpaid
assessments. These annual installments are to be paid into a Redemption
Fund for the Bonds and used to pay debt service on the Bonds as it becomes
due.
The Bonds are not secured by the general taxing power of the City,
the state of California or any of its political sUbdivisions, nor is the
full faith and credit of the city, the state of California or any of its
political subdivisions pledged to the payment of the Bonds. The city
shall not be obligated to use available funds (including any surplus
funds) to purchase delinquent parcels or to pay the delinquent installment
and future installments of the assessments on delinquent parcels. (see
"SECURITY FOR THE BONDS, No Pledge of City Funds" herein.) The holders of
the Bonds must assume, therefore, that the sole source of funds with which
to cover deficiencies in the Redemption Fund will be the Reserve Fund.
See the section of this Official Statement entitled "SPECIAL RISK
FACTORS" for a discussion of special factors which should be considered,
in addition to the other matters set forth herein, in evaluating the
investment quality of the Bonds.
The Bonds are offered when, as and if issued, subject to approval of
Brown, Harper, Burns and Hentschke, San Diego, California, Bond Counsel.
The Bonds are expected to be available for delivery on or about April ___,
1991, in New York, New York.
Bateman Eichler, Hill Richards,
a division of Kemper Securities Group, Inc.
Dated April
, 1991
"
No dealer, broker, salesman or other person has been
authorized by the city of San Bernardino or the Underwriter to give
any information or to make any representations other than those
contained in this Official statement, and, if given or made, such
other information or representation must not be relied upon as
having been authorized by either of the foregoing. This Official
Statement does not constitute an offer to sell or the solicitation
of an offer to buy, nor shall there be any sale of the Bonds by any
person in any jurisdiction in which it is unlawful for such person
to make such offer, solicitation or sale.
The information set forth herein has been obtained from the
City of San Bernardino and other sources which are believed to be
reliable, but, such information is not guaranteed as to accuracy or
completeness and such information is not to be construed as a
representation by the Underwriter. The information and expression
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 city of San
Bernardino or Assessment District No. 977B.
The summaries and references to the legislation and
resolutions relating to the authorization, sale and issuance of the
Bonds, and to other statutes and documents referred to herein do
not purport to be comprehensive or definitive and are qualified in
their entirety by reference to each such statute and document.
This Official Statement is not to be construed as a contract
between the City of San Bernardino or the Underwriter and the
purchaser or owner of any of the Bonds.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER
MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Res. 91-132
, ,
, ,
CITY OF SAN BERNARDINO
Common Council
W.R. Holcomb, Mayor
Esther R. Estrada, Councilperson
Tom Minor, Councilperson
Jess Flores, Councilperson
Michael Maudsley, Councilperson
Valerie Pope-Ludlam, Councilperson
Jack Reilly, Councilperson
Norine Miller, councilperson
city Staff
Shauna Edwins, city Administrator
craig A. Graves, city Treasurer
Andrew Green, Director of Finance
Rachel Krasney, city Clerk
James F. Penman, city Attorney
Roger G. Hardgrave, Director of Public Works
SPECIAL SERVICES
Bond Counsel
Brown, Harper, Burns
and Hentschke
formerly, Brown & Diven
San Diego, california
Assessment Engineer
GFB-Friedrich & Associates, Inc.
Riverside, California
Appraiser
Michael Frauenthal & Associates, Inc.
capistrano Beach, California
Fiscal Agent
Security Pacific National Bank
Los Angeles, California
. ' , "'
i "
TABLE OF CONTENTS
Paqe No.
Introductory Statement 1
The Bonds 2
Purpose of the Bonds 2
Authority for Issuance 2
Description of the Bonds 2
Bond Payment, Registration and Transfer 2
Redemption of the Bonds 3
Refunding Bonds 4
Redemption Fund Deficiencies 5
Sources and Application of Funds 6
Debt Service Schedule 6
Security for the Bonds 7
Assessments 7
Reserve Fund 7
Covenant to Commence Superior Court Foreclosure 9
Land Values 10
Prior Assessments 11
No Pledge of city Funds 11
Special Risk Factors 11
Nonpayment of Assessment Installments 11
Concentration of Ownership 12
Failure to Develop Properties 12
Tax Delinquencies 12
Foreclosure Delays 13
Loss of Tax Exemption 13
Bankruptcy 13
The Assessment District 14
Assessment Proceedings 14
Estimated Project Costs 15
Assessment criteria 15
Location, Size and Topography 16
Land Use and Zoning 16
Land Development 16
Miscellaneous 16
No Litigation 16
Legal opinion 17
Tax Exemption 17
No Rating 18
Underwriting 18
Execution of Official Statement 18
Appendix A
Appendix B
Appendix C
Appendix D
Appraisal Report Summary
List of Assessments and Land Values
Assessment District Diagrams
General Information on the City of San
Bernardino
Res. 91-132
$1,013,048.90*
CXTY OF SAN BERNARDXNO
1915 ACT LXMXTED OBLXGATXON XMPROVEMENT BONDS
ASSESSMENT DXSTRXCT NO. 977B
XNTRODUCTORY STATEMENT
This Preliminary Official statement is provided to furnish
information relating to the issuance by the City of San Bernardino,
California (the "city"), of $1,013,048.90* principal amount of its
Limited obligation Improvement Bonds (the "Bonds") for Assessment
District No. 977B (Cajon and June area) (the "Assessment District").
The Assessment District was formed pursuant to the Municipal
Improvement Act of 1913, Division 12 of the California streets and
Highways Code (the "1913 Act"); and the Bonds are issued pursuant
to the Improvement Bond Act of 1915, Division 10 of the California
streets and Highways Code (the "1915 Act"). The proceeds from the
sale of the Bonds will be used to finance the cost of acquiring
certain public improvements determined by the city to benefit the
properties within the Assessment District, to fund a reserve fund
(the "Reserve Fund"), and to pay costs related to the issuance of
the Bonds.
The Bonds are payable from the annual assessment installments
collected on the regular property tax bills sent to owners of
property having unpaid assessments levied against them. In the
event of a delinquency in the payment of any installment of an
assessment, the city will transfer from the Reserve Fund to the
redemption fund establ ished for the Bonds (the "Redemption Fund")
the amount necessary to pay the next maturing installment of
principal and interest on the Bonds. The Reserve Fund will be
funded from proceeds from the sale of the Bonds in an amount equal
to $101,304. In the event a superior court foreclosure proceeding
is instituted by the city to enforce the lien of a delinquent
assessment installment and the city purchases such parcel, the
Reserve Fund will be used to make advances to the Redemption Fund
for payment of the delinquent assessment installment and future
installments on the assessment, and interest thereon, until such
property is resold by the city. (See "SECURITY FOR THE BONDS"
herein) .
As authorized by the 1915 Act, the City has determined not to
obligate itself to advance available funds from the city treasury
to cure any deficiency or delinquency which may occur in the
Redemption Fund by reason of the failure of a property owner to pay
an assessment installment.
* Preliminary - Subject to change
1
The Bonds are not an obligation of the city, the state of
California (the "state") or any of its political subdivisions, nor
has the City, the state or any of its political subdivisions
pledged its full faith and credit for the payment of the Bonds.
See the section of this Official statement entitled "SPECIAL
RISK FACTORS" for a discussion of special factors which should be
considered, in addition to other matters set forth herein, in
considering the investment quality of the Bonds.
The discussions and information herein do not purport to be
comprehensive or definitive. All references to the Bonds and the
assessment proceedings are qualified in their entirety by reference
to the city's Bond Indenture and resolutions setting forth the
terms and descriptions thereof.
THE BONDS
Purpose of the Bonds
The Bonds are being issued in order to acquire certain public
improvements servicing approximately 185 residential units to be
developed by Century Homes in the Assessment District.
Authority for Issuance
The improvement proceedings for the Assessment District were
initiated by adoption of Resolution No. 91-21 (the "Resolution of
Intention") by the Common Council on January 23, 1991. The Bonds
represent and are secured by unpaid assessments levied against
private property in the Assessment District in accordance with the
provisions of the 1913 Act and will be issued pursuant to the 1915
Act.
Description of the Bonds
The Bonds will be dated April 2, 1991, and will bear interest
at the rates, and will mature in the principal amounts and on the
dates, set forth on the cover page of this Official Statement. The
Bonds are issued as fully registered Bonds in the denomination of
$5,000 each or any integral multiple thereof, except that one Bond
of the first maturity includes an additional principal amount of
$3,048.90.
Bond Payment, Registration and Transfer
Interest on the Bonds will be payable semiannually on March 2
and September 2 of each year (each an "Interest Payment Date"),
commencing September 2, 1991. principal of and premium, if any, on
the Bonds are payable at the principal corporate trust office of
Security Pacific National Bank, Los Angeles, California, (the
2
"Fiscal Agent"), and interest thereon is payable by check or draft
mailed to the respective registered owners as their names appear on
the registration books of the Paying Agent as of the fifteenth day
immediately preceding each Interest Payment Date (the "Record
Date").
Each Bond shall bear interest from the Interest Payment Date
next preceding the date on which it is authenticated and
registered, unless it is authenticated and registered (i) after a
Record Date and on or before the fOllowing Interest Payment Date,
in which event it shall bear interest from such Interest Payment
Date, or (ii) on or before the first Record Date, in which event it
shall bear interest from April 2, 1991; provided, however, that if
at the time of authentication and registration of a Bond interest
thereon is in default, such Bond shall bear interest from the date
to which interest shall have been paid.
Transfer of ownership of a Bond shall be made by exchanging
the same for a new fully registered Bond of the same maturity in
the same aggregate principal amount. All such exchanges shall be
made in such manner and upon such terms as may from time to time be
determined and prescribed by the city; provided, however, that no
such Payment Date and such Interest Payment Date or during the
period from the selection of Bonds for redemption through and
including the applicable redemption date. Such transfer and
registration shall take place at the principal corporate trust
office of the Fiscal Agent.
If any Bond is mutilated, lost, stolen or destroyed, the City
may execute and the Fiscal Agent may authenticate and deliver a new
Bond or Bonds in replacement thereof in the same aggregate
principal amount and of the same maturity. Mutilated Bonds must be
surrendered to the Fiscal Agent. In the case of a lost, stolen and
destroyed Bond, the City and the Fiscal Agent may require
satisfactory evidence of the loss, theft or destruction of the Bond
and indemnification prior to authenticating and delivering a new
Bond. The City and Fiscal Agent may charge the owners of
mutilated, lost, stolen or destroyed Bonds for their reasonable
fees and expenses in connection with replacing such Bonds.
Redemption of the Bonds
Any Bond or portion thereof in increments of $5,000 may be
called for redemption prior to maturity on any March 2 or
September 2 upon payment of 103% of the par value, plus accrued
interest to the date of redemption. No interest will accrue on a
Bond called for redemtion after the redemption date. The
determination as to which Bond or Bonds or portion thereof are to
be called is to be made by the Fiscal Agent in accordance with the
provisions of the 1915 Act and the Bond Indenture. These
provisions generally require the redemption of Bonds
3
proportionately from each maturity and the random selection of
Bonds within each maturity.
Redemption of the Bonds may occur as a result of either the
issuance of refunding bonds (See "Refunding Bonds" herein) or the
prepayment of one or more assessments. Under the provisions of the
1915 Act, a property owner may prepay the assessment and remove the
lien on the same from his or her property by paying the sum of the
following amounts: (a) the amount of any delinquent installments
of principal and interest, together with penalties accrued to the
date of prepayment; (b) the unpaid, nondelinquent principal of the
assessment, including principal posted to the tax roll for the
current fiscal year but not yet paid; (c) an allowance for
redemption premium, calculated by multiplying the amount of the
unmatured principal (exclusive of principal due during the fiscal
year of prepayment) by three percent; (d) a reasonable fee, to be
fixed by the city Treasurer, for the cost of administering the
prepayment and the advance redemption of Bonds; and (e) interest
accrued to the next Interest Payment Date which is not less than 90
days after the date of prepayment. Upon a prepayment of an
assessment, the amount thereof shall be disbursed as follows: (a)
the administrative fee shall be deposited into the general fund of
the city; (b) delinquent principal, interest, and penalties shall
be transferred to the Redemption Fund unless the Reserve Fund has
been depleted on account of the delinquencies, in which case the
delinquent amounts and penalties shall be transferred instead to
the Reserve Fund; (c) the installment of principal due in the
fiscal year of prepayment shall be transferred to the Redemption
Fund; (d) interest accrued to the next Interest Payment Date shall
be transferred to the Redemption Fund; and (e) the balance shall be
used to advance the maturity of Bonds to the next redemption date
to the maximum extent that principal and redemption premium may be
paid in full from said balance.
Refunding Bonds
Pursuant to the Refunding Act of 1984 for 1915 Improvement Act
Bonds the city may issue refunding bonds for the purpose of
redeeming any or all of the Bonds. Upon issuing refunding bonds,
the city could require that the Bonds be exchanged for refunding
bonds on any basis which the City council determines is for the
benefit of the City, but only with the consent of the Bondholders.
As an alternative to exchanging the refunding bonds for the Bonds,
the City could sell the refunding bonds and utilize the proceeds to
pay the principal of and interest and redemption premium, if any,
on the Bonds as they become due, or advance the maturity of Bonds
and pay the principal of and interest and redemption premium
thereon. A refunding of some, but not all, of the Bonds could
result in a situation in which the Bonds remaining outstanding
after such refunding are secured by unpaid assessments on the less
valuable properties within the Assessment District.
4
Redemption Fund Deficiencies
If a deficiency occurs in the Redemption Fund with respect to
past due principal or interest or with respect to interest which
will become due during the then current tax collecting year and
said deficiency cannot be eliminated with transfers from the
Reserve Fund, but it does not appear to the city Treasurer that
there will be an ultimate loss to the bondholders, the City
Treasurer shall pay matured Bonds as presented and make interest
payments when due, as long as there are available funds in the
Redemption Fund, in the following order of priority: (1) all
matured interest payments shall be made prior to the payment of any
principal; (2) interest shall be paid on Bonds in order of their
respective maturities starting at the earliest maturity date and in
ascending numerical order within a single maturity; and (3)
principal shall be paid in the order in which Bonds are presented
for payments. Bonds not paid when presented, and interest payments
not paid when due, shall bear interest at the rate stated in the
Bonds, without compounding, until paid or until ten days from the
mailing of notice to bondholders that funds are available with
which to make a payment with respect to such Bonds and/or interest.
If it appears to the city Treasurer that a Redemption Fund
deficiency presents a danger of an ultimate loss accruing to the
bondholders for any reason, he or she shall withhold payment of
principal and interest and report the facts to the city council so
that it may take proper action to equitably protect all
bondholders. Upon receipt of such a report from the city
Treasurer, the Common Council is required to fix a date for a
public hearing and post notice thereof. Following said public
hearing, if it determines that there will be no ultimate loss to
the bondholders, it shall direct the City Treasurer to pay matured
Bonds and interest as long as there is available money in the
Redemption Fund. If the Common Council determines that there will
ultimately be insufficient money in the Redemption Fund to
discharge the unpaid Bonds and interest, it shall direct the city
Treasurer to pay the holders of all outstanding and unpaid Bonds
such proportion of the money then on deposit in the Redemption Fund
as said money bears to the total amount of the unpaid principal of
the Bonds and the interest which has accrued or will accrue
thereon. Similar proportionate payments shall thereafter be made
periodically as moneys come into the Redemption Fund.
5
Sources and Application of Funds
The Bond proceeds (other than accrued interest, which is to be
deposited in the Redemption Fund) will be applied as follows:
Sources of Funds
Principal Amount of Bonds
Less: Bond Discount
Total Sources of Funds
$ 1,013,048.90*
Application of Funds
Improvement Fund $
Reserve Fund
Incidental Costs, Costs of Issuance
and Capitalized Interest
Total Application of Funds
Debt Service Schedule
Set forth below is the debt service schedule for the Bonds:
Maturity
September 2
Principal
Interest
Debt Service
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
TOTALS
23,048.90
25,000
25,000
30,000
30,000
35,000
35,000
40,000
40,000
45,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
90,000
95.000
$ 1,013,048.90
* Preliminary - Subject to Change
6
Res. 91-132
SECURITY FOR THE BONDS
Assessments
The Bonds are secured by unpaid assessments levied against
private property within the Assessment District pursuant to the
assessment proceedings. Such unpaid assessments, together with
interest thereon and moneys in the Redemption Fund, constitute a
trust fund for the redemption and payment of the principal of,
premium, if any, and interest on the Bonds. principal of, premium,
if any, and interest on the Bonds are payable exclusively out of
the Redemption Fund. The Reserve Fund is also a trust fund for the
benefit of the registered owners of the Bonds. (See "SECURITY FOR
THE BONDS - Reserve Fund" herein).
The assessments and each installment thereof, and any interest
and penalties thereon, constitute liens against the parcels of land
on which they are levied until the same are paid. Such liens are
subordinate to all fixed special assessment liens previously
imposed upon such property, but have priority over all existing and
future private liens and over all fixed special assessment liens
which may thereafter be created against the property.
Although the unpaid assessments constitute liens on assessed
parcels, they do not constitute a personal indebtedness of the
respective property owners. There is no assurance that the
property owners will be financially able to pay the annual
assessment installments or that they will pay such installments
even if financially able to do so.
The Bonds are not secured by the general taxing power of the
City, the State or any of its political subdivisions, nor is the
full faith and credit of the City, the State or any of its
political subdivisions pledged to the payment of the Bonds.
Installments sufficient to meet annual payments of principal
of and interest on the Bonds will be collected on the regular
property tax bills sent to owners of property against which there
are unpaid assessments. These annual installments are to be paid
into the Redemption Fund which will be held by the Fiscal Agent,
and used to pay the principal of and interest on the Bonds as they
become due. The installment billed against each property each year
represents such property's pro rata share of the total amount of
principal of and interest coming due on the Bonds with respect to
such years. The failure of a property owner to pay an annual
assessment installment will not result in an increase in assessment
installments against other property in the Assessment District.
Reserve Fund
In the event of a delinquency in the payment of any
installment of an assessment, the Fiscal Agent will transfer from
7
the Reserve Fund, to the extent of available funds therein, to the
Redemption Fund the amount necessary, in addition to the moneys on
deposit therein, to pay the next maturing installment of principal
and interest on the Bonds. In the event a superior court
foreclosure action is instituted to enforce a delinquent assessment
installment and the city purchases such property, the Reserve Fund
will be used, to the extent of available funds, to make advances to
the Redemption Fund for payment of the delinquent amount of the
assessment on the property and future assessment installments,
including interest thereon, until such property is resold by the
city or redeemed. Pursuant to the provisions of the 1915 Act, the
City has determined not to obligate itself to advance any available
funds from the city treasury to cover any deficiency or delinquency
which may occur in the Redemption Fund by reason of the failure of
a property owner to pay an annual assessment installment. (This
determination by the city would not prevent the City Council, in
its sole discretion, from so advancing such funds).
The Bond Indenture adopted by the Common Council provides for
the establishment of a Reserve Fund to be held by the Fiscal Agent
of the City as a separate trust account. The Reserve Fund shall be
a source of available funds from which the City may make payment of
delinquent assessment installments. It is estimated that this
Reserve Fund shall be funded in an initial amount of $101,304* The
Reserve Fund shall be maintained, used, transferred, reimbursed,
and liquidated as follows:
(a) Whenever there are insufficient funds in the Redemption
Fund to pay the next maturing installment of principal of or
interest on the Bonds, an amount necessary to make up such
deficiency will be advanced from the Reserve Fund to the Redemption
Fund. Payments from the Reserve Fund, if required, shall be deemed
an advance to be reimbursed from the proceeds of collections of
delinquent assessments or redemption or sale of any delinquent
property.
(b) If any assessment is repaid in whole or in part prior to
the final maturity of the Bonds, the amount of principal of the
assessment to be prepaid will be reduced by the percentage which
the original amount deposited in the Reserve Fund bears to the
total amount of the original assessment on all land in the
Assessment District. The reduction in the amount of principal
prepaid will be compensated for by a transfer of a like amount from
the Reserve Fund to the Redemption Fund.
(c) Investment income from the Reserve Fund (except such
income which represents a yield in excess of the yield on the
Bonds) will accrue to the Reserve Fund. If on June 30 of each year
the amount of any income realized from the investment of the money
in the Reserve Fund plus the remaining principal amount thereof
* Preliminary - subject to Change
8
exceeds the least of (i) ten percent (10%) of the aggregate
principal amount of the Bonds then outstanding, (ii) the maximum
annual debt service for such Bonds for the next succeeding fiscal
year, or (iii) 125% of the average annual debt service on all Bonds
then outstanding, the amount of such excess shall be transferred
from the Reserve Fund to the Redemption Fund, in the manner
provided in Part 16 (commencing with section 8880) of Division 10
of the streets and Highways Code, and credited on the unpaid
balance of the assessment as provided in section 10427.1 of said
Code. Earnings greater than the yield on the Bonds shall be
transferred to an excess earnings account for rebate to the federal
government.
(d) An amount equal to the interest annually transferred from
the Reserve Fund to the Redemption Fund pursuant to paragraph (c)
above shall be credited towards unpaid assessments each year during
which any part of the Bonds remain outstanding.
(e) Whenever the balance in the Reserve Fund is sufficient to
retire all remaining outstanding Bonds, whether by advance
retirement or otherwise, the balance of the Reserve Fund will be
transferred to the Redemption Fund, collection of the assessment
installments will be discontinued and the Redemption Fund will be
liquidated in retirement of the Bonds.
Covenant to Commence Superior Court Foreclosure
The 1915 Act provides that in the event any assessment or
installment thereof or any interest thereon is not paid when due,
the City may order the institution of a superior court action to
foreclose the lien of the unpaid assessment. In such an action,
the real property subject to the unpaid assessment may be sold at
jUdicial foreclosure sale. This foreclosure sale procedure is not
mandatory. However, in the Bond Indenture the city has covenanted
with the owners of the Bonds that it will review the assessment
records of the County of San Bernardino not later than August 1 of
each year to determine the cummulative amount of delinquent
assessments in the prior year. In the event such delenquenies
exceed 5% of the average amount of debt service during the term of
the bonds, it will order and cause to be commenced, on or before
November 1 of each year, and thereafter diligently prosecute to
completion, superior court foreclosure proceedings upon the lien of
such delinquent unpaid assessments. Initiation of such foreclosure
actions may be deffered in any fiscal year if the Reserve Fund is
maintained at an amount equal to the Reserve Requirement.
Prior to July 1, 1983, the right of redemption from
foreclosure was limited to a period of one year from the date of
sale. Under legislation effective July 1, 1983, the statutory
right of redemption from any such foreclosure has been repealed.
However, a period of 140 days must elapse after service of the
notice of levy before the sale of such parcel. If the purchaser at
9
the sale is a judgment creditor, i.e. the City, an action may be
commenced by the delinquent property owner within six months after
the date of sale to set aside such sale.
In the event such a superior court foreclosure is necessary,
there may be a delay in payments to the Bondowners pending
prosecution of the foreclosure proceedings and receipt by the city
of proceeds from the foreclosure sale. Moreover, the lot or parcel
securing the delinquent assessment may not be sold unless the
amount to be paid pursuant to the bid is at least equal to the
amount of the judgment with costs and interest, costs and interest
accruing after issuance of the writ pursuant to which the sale has
been conducted, the levying officer's costs, and any other amounts
the total of which is required by law to be bid in order that such
lot or parcel may be sold. It is therefore possible that no
adequate bid for the purchase of any property would be received at
the foreclosure sale.
Land Values
Reference is made to Appendix A which contains an appraisal
report from Michael Frauenthal M.A.I. of Michael Frauenthal &
Associates, of capistrano Beach, California (the "Appraisal
Consultant") stating the Appraisal Consultant's opinion with
respect to the value of the assessed properties located in the
Assessment District. The opinion of the Appraisal Consultant
assumes that improvements to be financed by the Bonds have been
completed. (See "Appendix B List of Assessments and Land
Values.")
The 1915 Act requires only that a parcel be sold for the
delinquent amount, (plus costs and penalties) and not the entire
outstanding assessment; however, there is no assurance that in the
event of a foreclosure sale for a delinquent assessment installment
a legally sufficient bid will be received for such property (see
"SPECIAL RISK FACTORS" herein).
The lien ratio analysis set forth below is based upon the
outstanding special assessment indebtedness on the property within
Assessment District No. 977B.
The following table summarizes the assessment and value
information for each parcel in the Assessment District as set forth
in Appendix B. The table indicates the amount of the assessments
in the lien ratio groups. The lien ratios are arrived at by
dividing the Appraisal Consultant's estimated value of a parcel by
the total of the special assessment indebtedness applicable
thereto. For example, a 2:1 lien ratio means that the estimated
land value is twice the lien amount.
10
Lien Ratio Groups
Lien Ratio Analysis
Estimated Amount
of Assessment
in Group
Percentage Per
Lien Ratio Group
7:1 - 12:1
$1.013.048.90
100.00%
TOTALS
$1,013,048.90
100.00%
Prior Assessments
The assessments and each installment thereof and any interest
and penalties thereon constitute a lien against the lots and
parcels of land on which they were imposed until the same are paid.
Such lien is subordinate to all fixed special assessment liens
previously imposed upon the same property, is on a parity with the
lien of the reassessments securing the Refunding Bonds, and has
priority over all existing and future private liens and over all
fixed special assessment liens which may thereafter be created
against the property. Such lien is co-equal to and independent of
the liens for general property taxes and Community Facilities
District special taxes. This Assessment District has prior
assessments from Assessment District 977A.
No Pledge of City Funds
As authorized by the 1915 Act, the city has determined not to
obligate itself to advance available funds from the city Treasury
to cure any deficiency or delinquency which may occur in the
Redemption Fund by reason of the failure of a property owner to pay
an assessment installment. The City's legal obligations with
respect to any delinquency assessment installments are solely (i)
advancing funds from the Reserve Fund to the Redemption Fund to the
extent such funds are available, and (ii) instituting judicial
foreclosure proceedings. The City has no obligation to advance
available funds of the city to the Redemption Fund under any
circumstances.
SPECIAL RISK FACTORS
Nonpayment of Assessment Installments
In order to pay debt service on the Bonds, it is necessary
that unpaid installments of assessments on land within the
Assessment District be paid in a timely manner. Failure by owners
of such land to pay installments of assessments when due, depletion
of the Reserve Fund, or the inability of the City to sell parcels
which have been subject to foreclosure proceedings for the legally
established minimum amounts may result in the inability of the City
11
to make full or punctual payment of debt service on the Bonds.
There is no assurance the property owners will be able to pay the
assessment installments or that they will pay such installments
even though financially able to do so.
Concentration of Ownership
Currently all of the assessed parcels in the Assessment
District are owned by Century Homes Communities (Century Homes).
Presently 185 parcels are subdivided and ready for construction of
single family detached homes. Century Homes, one of the Inland
Empire's largest builders of affordable single-family homes was
founded in 1976 as a joint venture between two custom homebuilders,
John Pavelak and Chester squibb. Century Homes' operations include
location, acquisition and development of land, and the design,
construction, marketing and sale of homes. Century Homes has
constructed and sold over 5,000 homes since its inception. Any
high concentration of ownership, however, increases the risk of
non-payment to bond holders because delinquencies in payment of
assessments are more significant when the ownership is more
concentrated.
Failure to Develop Properties
Development of land within the Assessment District may be
affected by changes in general economic conditions, fluctuations in
the real estate market and other similar factors. Moreover, there
can be no assurance that land development operations within the
Assessment District will not be adversely affected by future local,
state and federal governmental policies relating to real estate
development, income tax treatment of real estate, or the national
economy. In addition, land development operations are subject to
comprehensive federal, state and local regulations. Approval is
required from various agencies in connection with layout and design
of developments, the nature and extent of improvements,
construction activity, land use, school facilities, zoning, health
requirements and numerous other matters. Failure to obtain any
such approval would adversely affect land development operations.
A slowdown of the development and sale of properties within the
Assessment District could adversely affect the ability and/or
willingness of the various property owners to pay the applicable
annual property taxes and assessment installments. In that event,
there could be a default in the payments of principal and interest
on the Bonds.
Tax Delinquencies
Assessment installments, from which funds necessary for the
payment of annual installments of principal of and interest on the
Bonds are derived, will be billed to each property against which
there is an unpaid assessment on the regular property tax bills
sent to the owner of such property commencing with tax bills for
12
fiscal year 1991-1992. Such installments are due and payable at
the same time, and generally bear the same penalties and interest
for nonpayment, as regular property tax installments. Assessment
installment payments cannot be made separately from property tax
payments. Therefore, the unwillingness or inability of a property
owner to pay regular property tax bills, as evidenced by property
tax delinquencies, may also indicate an unwillingness or inability
to make regular property tax payments and assessment installment
payments in the future. As of March 25, 1991 all parcels within
the assessment district are current, and there are no outstanding
delinquent property taxes.
Foreclosure Delays
Foreclosure prosecution could take two years or more due to
crowded local court calendars, legal delaying tactics, or
bankruptcy. (See "Bankruptcy" and "SECURITY FOR THE BONDS
Covenant for superior Court Foreclosure" herein). It is possible
also that no bid would be received at the foreclosure sale. As a
result, there could be a default in payment of the principal of and
interest on Bonds and curing of which would be dependent upon
resale of the property by the City or redemption of the property by
the property owner. No assurance can be given that the city will
be able to resell any such delinquent parcel for an amount
sufficient to pay all of the delinquent assessment installment
amounts including the principal, interest, penalties, and costs due
thereon.
Loss of Tax Exemption
As discussed under the caption "MISCELLANEOUS Tax
Exemption", interest on the Bonds could become includable in gross
income for purposes of federal income taxation, retroactive to the
date the Bonds were issued, as a result of future acts or omissions
of the city in violation of its covenants.
Bankruptcy
The payment of property owners' assessment installments and
the ability of the city to foreclose on the lien of a delinquent
unpaid assessment, as discussed in the section herein enti tIed
"SECURITY FOR THE BONDS", may be limited by bankruptcy, insolvency
or other laws generally affecting creditors' rights or by the laws
of California relating to judicial foreclosure.
The various legal opinions to be delivered concurrently with
the delivery of the Bonds, including Bond Counsel's approving legal
opinion, will be qualified, as to the enforceability of the various
legal instruments, by reference to bankruptcy, reorganization,
insolvency or other laws affecting the rights of creditors
generally.
13
Although bankruptcy proceedings would not cause the assessment
liens to become extinguished, bankruptcy of a property owner could
result in a delay in prosecuting superior court foreclosure
proceedings. Such a delay would increase the likelihood of a delay
or default in payment of the principal of and interest on the Bonds
and the possibility that delinquent assessment installments might
not be paid in full.
THE ASSESSMENT DISTRICT
In response to a request from century Homes, the City has
undertaken to conduct a series of assessment district improvement
proceedings to provide for the acquisition of major public
improvements for the benefit of land within the Assessment
District. The city requires the proposed public improvements as a
condition for development of the property.
Assessment proceedings
The Assessment District was initiated by the Common Council at
the request of Century Homes, the owner of the property within the
Assessment District. After the proceedings were initiated, the
engineer of work, GFB-Friedrich & Associates, Inc., prepared a
written report (the "Engineer's Report") which contains, among
other things, the estimate of project costs and the assessment for
each parcel. The total amount of the proposed assessment was based
upon the engineer's estimated cost of the project. The individual
assessments were spread among the various parcels of land within
the Assessment District on the basis of the special benefit to be
derived by each parcel from the improvements and acquisitions.
(See "Assessment criteria" herein).
The Engineer's Report was filed with and preliminarily
approved by the Common Council on January 23, 1991. Thereafter,
notice was published in a local newspaper designated by the Common
Council for that purpose. Notice was also posted along all of the
open streets within the Assessment District. In addition, notice
of the proposed assessment and a hearing thereon was mailed to the
owner whose property was proposed to be assessed. The notices
advised the property owner of the filing of the Engineer's Report,
the date, time and place for a hearing on the Project, the proposed
assessments and the right to protest. The mailed notice also
advised the property owner of the amount proposed to be assessed
against its properties, as shown in the Engineer's Report. The
property owner had the right to protest in writing prior to or at
the commencement of the hearing and to be heard at the hearing.
The owner of land proposed to be assessed in the Assessment
District, did not file written protests.
14
At the conclusion of the hearing on March 11, 1991, the Common
Council unanimously adopted Resolution No. 91-83 confirming the
assessments, overruling protests and ordering the acquisition.
After confirmation, the assessments became liens against the
various assessed parcels. The property owner was given published
and mailed notice of the opportunity to pay all or a portion of the
assessment in cash within 30 days of the recording of the
assessment. The notice further advised the property owner that if
a cash payment was not made, bonds would be sold to represent
unpaid assessments. The cash payment period ended on
No cash payments were received.
Estimated project Costs
The following table sets forth the Assessment Engineer's
confirmed estimated costs of the project.
city of San Bernardino
Assessment District No. 977B
Engineer's Estimate of Costs
Estimated Cost of Construction:
Estimated Incidental Costs, Reserve and Expenses:
Estimated Total project Cost:
Less: Estimated contribution:
$1,193,133.54
170.691.68
$1,363,825.22
350.776.32
Balance to Assessment:
1,013,048.90*
Assessment criteria
The law requires and the statutes provide that assessments, as
levied pursuant to the provisions of the "Municipal Improvement Act
of 1913," must be based on the benefit that the properties receive
from the works of improvement. The statute does not specify the
method or formula that should be used in any special assessment
district proceedings. The responsibility rests with the Assessment
Engineer, who is retained for the purpose of making an analysis of
the facts and determining the correct apportionment of the
assessment obligation.
The Assessment Engineer then makes his recommendation at the
public hearing on the Assessment District, and the final authority
and decision rests with the Common Council after hearing all
testimony and evidence presented at that public hearing. Upon the
conclusion of the public hearing, the Common Council must make the
final decision in determining whether or not the assessment spread
has been made in direct proportion to the benefits received.
The special benefits that inure to the property owners within
the boundary of the total project, Assessment District No. 977B,
are the construction of street, storm drainage, water system, and
15
sewerage improvements, and the necessary appurtenant work to
provide complete, functional improvements for all houses within
Tracts 14184 and 14185. The construction cost and proportionate
share of the incidental costs for bid items will be spread on an
assessment unit basis to those areas or subareas of the Assessment
District that benefit from the works of improvement. The benefit
received from the above-cited works of improvement is estimated to
be in direct proportion to the number of assessment units per
parcel.
Location, Size and Topography
The Assessment District which is located in the City of San
Bernardino consists of approximately 46 acres designated for
residential development. Specifically, the Assessment District is
comprised of 185 assessed parcels owned by one sole property owner
whose residential developments are expected to yield approximately
185 units in Phase I. The Assessment District is generally located
to the northwest side of Cajon Boulevard. A map showing the
general location of the Assessment District is set forth in
Appendix C "Assessment Diagram."
Land Use and zoning
The Assessment District is covered by the City of San
Bernardino General Plan. The properties in the Assessment District
are zoned for residential use pursuant to this General Plan.
Land Development
Century Homes intends to construct 185 single family detached
homes ranging in price from $99,900 to $144,900 in Phase I of
Assessment District 977B. These homes will range in size from 1024
square feet with 2 bedrooms and 2 baths to 2191 square feet with 3
bedrooms and 2 3/4 baths. There will be 6 model choices, including
both 1 and 2 story models. Each model will have a three car garage
with the option of converting the third garage to a bonus room.
MISCELLANEOUS
No Litigation
There is no action, suit, or proceeding known by the City to
be pending at the present time restraining or enjoining the
delivery of the Bonds or in any way contesting or affecting the
validity of the Bonds or any proceedings of the City taken with
respect to the execution or delivery thereof. A no litigation
opinion, provided by legal counsel of the city will be delivered to
the Underwriter simultaneously with the delivery of the Bonds.
16
Legal opinion
All proceedings in connection with the issuance of the Bonds
are subject to the approval of Brown, Harper, Burns and Hentschke,
San Diego, California, Bond Counsel for the City, in connection
with the issuance of the Bonds. The unqualified opinion of Bond
Counsel, approving the validity of the Bonds, will be printed on
each Bond.
Tax Exemption
In the opinion of Bond Counsel, under existing laws,
regulations, rulings and judicial decisions, interest on the Bonds
is exempt from personal income taxes imposed by the State of
California, is excluded from gross income for federal income tax
purposes, and is not an item of tax preference for purposes of the
federal alternative minimum tax imposed on individuals and
corporations. However, Bond Counsel notes that, with respect to
corporations (as defined for federal income tax purposes), interest
on the Bonds will be included in determining corporate adjusted net
book income a portion of which may increase the alternative minimum
taxable income of such corporations.
Bond Counsel's opinion as to the exclusion from gross income
of interest on the Bonds is subject to the condition that the city
comply with all requirements of the Code which must be satisfied
subsequent to the issuance of the Bonds to assure that such
interest will not become includable in gross income for federal
income tax purposes. Failure to comply with such requirements
could cause the interest on the Bonds to be included in gross
income for federal income tax purposes retroactive to the date of
issuance of the Bonds. The City has covenanted to comply with all
such requirements. Bond Counsel will not undertake to determine
(or to inform any person) whether any actions taken (or not taken)
or events occurring after the issuance of the Bonds may affect the
tax status of interest on the Bonds.
Although Bond Counsel has rendered an opinion that interest on
the Bonds is excluded from gross income for federal income tax
purposes, the accrual or receipt of interest on the. Bonds may
otherwise affect the federal income tax liability of the recipient.
The extent of these other tax consequences will depend upon the
recipient's particular tax status and other items of income or
deduction. Bond Counsel expressed no opinion regarding any such
consequences. Accordingly, all potential purchasers should consult
their tax advisors before buying any of the Bonds.
Certain corporate purchasers of the Bonds should be aware of
the following:
(a) The Code imposes an environmental tax with respect to
corporations on the excess of a corporation's modified alternative
17
r
minimum taxable income over $2,000,000. The
applies with respect to taxable years beginning
1986 and before January 1, 1992.
environmental tax
after December 31,
(b) The Code provides that in the case of an insurance
company subject to the tax imposed by section 831 of the Code, for
taxable years beginning after December 31, 1986 the amount which
otherwise would be taken into account as "losses incurred" under
Section 832(b) (5) shall be reduced by an amount equal to 15% of the
interest on the Bonds that is received or accrued during the
taxable year.
(c) Interest on the Bonds may be included in the income of a
foreign corporation for purposes of the branch profits tax imposed
by section 884 of the Code. Under certain circumstances, interest
on the Bonds may be subject to the tax on "excess net passive
income" of subchapter S corporations imposed by section 1375 of the
Code.
No Rating
No rating has been sought or obtained for the Bonds.
Underwriting
Bateman Eichler, Hill Richards, a division of Kemper
Securities Group, Inc., Underwriter of the Bonds, will purchase the
Bonds from the city at a purchase price equal to 98%, plus accrued
interest. The public offering prices may be changed from time to
time by the Underwriter. The Underwriter may offer and sell Bonds
to certain dealers and others at a price lower than the offering
prices stated on the cover page hereof.
Execution of Official statement
The execution and delivery of this Official Statement has been
duly authorized by the city.
CITY OF SAN BERNARDINO
By: /s/ W.R. Holcomb
Mayor
18
Res. 91-132
APPENDIX A
APPRAISAL REPORT SUMMARY
APPENDIX A
APPRAISAL REPORT SUMMARY
MICHAEL FRAUENTHAL & ASSOCIATES, INC.
Res. 91-132
Real Estate Appraisers-Consultants
November 13, 1990
Ms. Pamela D. Newcomb
First Vice President,
Bateman Eichler, Hill
1205 Prospect street
suite 550
La Jolla, California
Public Finance
Richards, Inc.
92037
Re: Assessment District No. 977B Ca;on and June Area
Acquisition
Dear Ms. Newcomb,
At your request we have prepared an update appraisal of the
various parcels located within the Assessment District 977B Cajon
and June Area Acquisition. The subject property consists of 185
lots and one detention basin located within Tract Map 14185. The
attached represents an update summary of the land value analysis
presented in our detailed appraisal report dated May 5, 1989.
This summary is comprised of limiting conditions, certification,
purpose of the appraisal, definition of market value, property
rights appraised, date of value, description of Assessment
District No. 977B, a property history section, highest and best
use analysis, the appraisal problem identification and
value conclusions. Additionally, a summary of the market data
utilized is provided in the Addenda section of this summary
report.
.~
Please reference our detailed appraisal report of May 5, 1989
for additional information relative to the subject project.
I have been assisted in the research and analysis for this ap-
praisal by Charles R. Frauenthal, Associate.
Respectfully submitted,
MICHAEL FRAUENTHAL & ASSOCIATES, INC.
/I.t~d/ ~~~')
Michael F. Frauenthal, SRPA, MAl
MF/kf
34237 Via Santa Rosa. Capistrano Beach, CA 92624 . (714) 496-1676
ASSIGNMENT IDENTIFICATION FOR THIS APPRAISAL
Property Identification: The subject site is located on the
northwest side of cajon Boulevard, in the city of San
Bernardino, county of San Bernardino, california. For the
purpose of this update valuation, the subject property is
further defined as those 185 parcels lying within Tract Map
14185.
The total land area in Tract Map 14185 is 46.66 gross acres.
This area includes the extension of the existing Rosarita street
and the following proposed streets; Bronson street, Don Pablo
Court, Cristy Avenue, Portola Avenue, Rachael Court, and Vermont
street. The total gross area also includes a single water reten-
tion basin identified on Tract 14185 as (Lot A).
The total net land area for Lots 1 through 185 only (excluding
the streets), is 33.84 acres.
owner of Record: The current owner of record is century Homes
Communities.
furpose and Date of the APpraisal; The purpose of this ap-
praisal is to set forth our opinion relative to the fair market
value of (1) the unimproved land value of Tract 14185 and; (2)
the finished value of the 185 residential parcels within Tract
14185, together with the single detention basin.
The date of this appraisal is November 2, 1990.
Funotion of the APpraisal; The function of this appraisal
is to provide information regarding the market value of the
existing and improved subject lots for the basis of underwrit-
ing a bond issue.
Scope of the APpraisal: The scope of this appraisal involved
an inspection of the subject property, and a collection,
confirmation and analysis of appropriate and available data.
upon the completion of ~his research, we have prepared a valua-
tion analysis utilizing the Sales comparison Approach.
property Riahts Beina APpraised: The property rights appraised
are those of a fee simple estate. A fee simple estate is de-
fined by the Dictionary of Real Estate Appraisal by the American
Institute of Real Estate Appraisers, 1984, as follows:
"Fee simple. An absolute fee; a fee without
limitations to any particular class of heirs, or
restrictions, but subject to the limitations or
eminent domain, escheat, police power and taxation.
An inheritable estate."
Page 1
Leqal Descriotion: Please refer to the Legal Description
provided in the Addenda section of our detailed report, dated
May 5, 1989. Note that this legal description includes that area
contained within Tract 14184 as well as Tract 14185.
Market Value Definition:
value is provided:
The following definition of market
The most probable price which a property should bring in a com-
petitive and open market under all conditions requisite to a
fair sale, the buyer and seller, each acting prudently, knowl-
edgeably, and assuming the price is not affected by undue stimu-
lus.
Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer
under conditions whereby:
(a) Buyer and seller are typically motivated;
(b) Both parties are well informed or well advised, and each
acting in what he considers his own best interest;
(c) A reasonable time is allowed for exposure in the open mar-
ket;
(d) Payment is made in terms of cash in u.s. dollars or in
terms of financial arrangements comparable thereto; and
(e) The price represents the normal consideration of the
property sold unaffected by special or creative financing
or sales concessions granted by anyone associated with the
sale.
GENERAL ASSUMPTIONS AND LIMITING CONDITIONS
Title to Real Estate. No responsibility is assumed for the
legal description or for matters including legal or title con-
siderations. Title to the report is assumed to be good and
marketable unless otherwise stated.
Liens or Encumbrances. The property is appraised free and clear
of any and all liens or encumbrances, unless otherwise stated.
Ownershio.
management
Responsible
are assumed.
ownership
and
competent
property
Information
believed to
accuracy.
and Data. The information furnished by others is
be reliable. However, no warranty is given for its
Enqineerinq. All engineering is assumed to be correct. The
plot plans and illustrated material in this report are included
only to assist the reader in visualizing the property.
Hidden Conditions. It is assumed that
or inapparent conditions of the property,
that render it more or less valuable.
there are no hidden
subsoil, or structures
No responsibility is
Page 2
assumed for such conditions or for arranging for engineering
studies that may be required to discover them.
Federal. state and Looal Laws. It is assumed that there is
full compliance with all applicable federal, state and local
environmental regulations and laws, unless non-compliance is
stated, defined and considered in the appraisal report.
APplioable Zoninq and Use Requlations. It is assumed that
all applicable zoning and use regulations and restrictions have
been complied with, unless a non-conformity has been stated,
defined, and considered in the appraisal report.
Lioenses, certifioates of Oooupanov and Consents. It is
assumed that all required licenses, certificates of occupancy,
consents, or other legislative or administrative authority from
any local, state, or national government, or private entity
or organizations have been or can be obtained or renewed, for
any use on which the value estimate contained in this report is
based.
Enoroaohments. It is assumed that the utilization of the land
and improvements is within the boundaries or property lines of
the property described, and that there is no encroachment or
trespass, unless noted in the report.
Distribution of the Total Value. The distribution, if any,
of the total valuation in this report between land and improve-
ments applies only under the stated program of utilization. The
separate allocations for land and buildings must not be used in
conjunction with any other "appraisal and are invalid if so used.
Rioht of publioation. possession of this report, or a copy
thereof, does not carry with it the right of publication.
Court Testimonv. The appraiser, by reason of this appraisal, is
not required to give further consultation, testimony, or be
in attendance in court with reference to the property in ques-
tion, unless arrangements have been previously made.
Advertisino. Neither all, nor any part of the contents of
this report, especially any conclusions as to value, the iden-
tity of the appraiser, or the firm with which the appraiser is
connected, shall be disseminated to the public through advertis-
ing, public relations, news, sales, or other media, without the
prior written consent and approval of the appraiser.
Fractional Interests. Any value estimates provided in the report
apply to the entire property, and any proration or division of
the total into fractional interests, will invalidate the value
estimate, unless proration or division of interests has been set
forth in the report.
Page 3
Proposed Pro;ects. If the subject of this appraisal report
is a proposed project, and if only preliminary plans or
specifications were available in preparation of this appraisal,
the analysis is subject to a review of the final plans and speci-
fications, when available, unless otherwise stated.
Proposed Improvements. Any proposed improvements are assumed
to have been completed unless otherwise stipulated; any con-
struction is assumed to conform with the building plans refer-
enced in this report.
Available Data. It is assumed the reader or user of this
report has been provided with copies of available building
plans, all leases, and amendments, if any, encumbering the
property.
Boundarv Survev. No legal description or survey was
furnished to this appraiser unless otherwise noted in this
report. The county tax plat was used to ascertain the physical
dimensions and acreage of the property. Should a survey prove
these characteristics inaccurate, it may be necessary for this
appraisal to be adjusted.
Forecasts. pro;ections. and Qperatinq Estimates. The forecast,
projections, or operating estimates contained herein are based
on current market conditions, anticipated short-term supply
and demand factors, and a continued stable economy. These
forecasts are, therefore, subject to changes in future
conditions.
Page 4
PROPERTY HISTORY
The following property history synopsis conforms with profes-
sional appraisal guidelines, which require reasonable detail
regarding any current agreement of sale, option, or sales list-
ing of the subject property being appraised, as well as any
prior sales of said property that have occurred within three
years preceding the date when this appraisal was prepared.
As described in our detailed report, the subject site is a
portion of four contiguous San Bernardino County Assessor's
parcels, 267-011-19 (portions); 262-201-08; 262-231-03 and 04.
These parcels are currently owned by Century Homes Communities
who purchased this property on June 14, 1989 for a reported
sale price of $2,011,000, in an all cash transaction.
Subsequent to this transaction, the subject property has been
subdivided as noted into Tracts 14184 and 14185, for a total of
277 residential lots. As of the date of our most recent inspec-
tion, November 2, 1990, a total of 155 units have been developed
and sold as individual parcels.
No other transactions involving the subject property are known to
have occurred within the past three years.
Page 5
HIGHEST AND BEST USE
The Highest and Best Use is defined as follows:
(1) Highest and Best Use is "that reasonable and probable use
that will support the highest present value, as defined,
as of the effective date of the appraisal".
(2) Both the site and the improved property have a highest and
best use (or most probable use) at any given point in
time. The highest and best use of the improved property
mayor may not be the same as the highest and best use of
the site.
(3) The determination of highest and best use results from the
appraiser's judgment and analytical skills, i.e., the use
determined from analysis represents an opinion, not a fact
to be found.
(4) Highest and best use must be reasonable, probable and
proximate (likely to occur soon, if not immediately). It
is not speculative or conjectural. It mayor may not be
the present use of either the site or the improved proper-
ty.
(5) Highest and best use can change over time as external
market forces change. They include effective demand,
public tastes and standard land use requirements
(especially zoning), and competition. In addition, the
character of the subject property itself may change,
thereby changing its highest and best use.
AS VACANT
Leqal Use:
The subject 185 parcels are contained within Tract Map Number
14185. These sites are zoned RS by the city of San
Bernardino which permits residential subdivision development
for single family homes, with minimum lot sizes of 7,200
square feet and a maximum density of 4.5 units per acre. Based
upon our review of the subject site and Tract Map 14185, it is
our opinion that the subject property conforms to the zoning
restrictions. Further, according to survey data provided by
Musser Engineering Consultants, Inc., the lot sizes conform to
the zoning restriction.
There are no known private restrictions which affect the title,
only common restrictions (utility and ingress/egress easements)
were found to exist. It appears that the subject residential
project is feasible from a legal point of view.
Page 6
physical Use:
The second constraint imposed on the possible use of the sub-
ject property is dictated by the physical constraints of the
site itself.
The subject site has a gross area of 46.66 acres. The size and
shape permit flexibility in the development of the site and its
accessibility is good with multiple street access. All utili-
ties are available to the site and the property is basically
level. Therefore, the physical aspects of the site do not re-
strict its development to its highest and best use.
Financiallv Feasible:
The determination of financially feasible is dependent primarily
upon demand. As of the date of our current inspection, November
2, 1990, the subject subdivision has sold a total of 155 homes.
The subject project began selling homes in December 1989 and
based on the 155 residences sold, an absorption rate of approxi-
mately 15.5 units per month is reflected. Because of the brisk
sales at the subject, a lottery was held May 5, 1990 for Phase 4
of the subject and all 30 homes in that phase were sold on that
date. Three of those homes did not close escrow and are current-
ly available for sale.
Because the subject homes are priced at the low end of the market
(product cost), the sales activity has been very good. Although
the real estate market in the Southern California area has been
slowing, the demand for good quality entry level housing is
expected to remain moderate to strong. Therefore, based on our
market observations and the sales rates experienced at the sub-
ject tract the project appears to be feasible from a financial
point of view.
No alternative use of the subject site is expected to provide a
higher rate of return than a maximum density single family
residential development, as proposed.
Summary:
Predicated upon the preceding analysis, the highest and best use
of the subject site, as vacant, is concluded to be a
maximum density single family subdivision. This use, as
proposed, should provide the greatest return to the land
investment.
APpraisal Problem
The appraisal problem consists of estimating the market value of
the 185 lots in Tract 14185, as if in a raw, unimproved status.
Additionally, the 185 parcels contained in Tract Map 14185 will
be valued as if in a finished, buildable status.
Page 7
At present, the subject property is being developed with Phases 5
and 6 which contain 54 single family residences. The streets for
Phases 5, 6, 7, 8 and 9 are currently in and all utilities are
available to the site. None of the improvements (54 single
family residences) which are in various stages of construction
in Tract 14185 are included in our valuation. The detention
basin is included but given no value because it is owned and
maintained by the city of San Bernardino. These basins are
required for flood control purposes and cannot be considered as
usable residential lots. This area is however, considered in our
raw land analysis.
Because the subject land only is being appraised, the Cost and
Income Approaches to value were not considered applicable.
Therefore, we have utilized only the Sales Comparison Approach in
this valuation.
Assessment District No. 977B
The Assessment District No. 977 was formed by the city of San
Bernardino as a means of providing funding for street
improvements, storm drain improvements, sewer improvements,
water main connections/improvements and grading as required
within public right-of-ways. This District is comprised of
Tracts 14184 and 14185, which are being improved with single
family residences. The assessment was split between the two
tracts and is identified as 977A (Tract 14184) and 977B (Tract
14185) .
The total cost of the entire assessment district (977A and 977B)
is estimated to be $683,412. The total cost estimate allocated
to Tract 14184 is $472,124.74 and the total cost allocated to
Tract 14185 is $211,287.26.
A detailed analysis and description of the assessment methodology
is presented in the Engineer's Report prepared by GFB-
Friedrich & Associates, Inc. dated January 22, 1990.
Value Conclusions
In order to estimate the market value of the subject property as
if in a raw, unfinished condition and for the value of each
parcel as buildable, finished lots, we surveyed the surrounding
area for comparable land sales. Eight of the sales found were
selected for their comparability to the subject and are presented
on Table 2 in the Addenda section of this summary report. Lot
finishing costs were obtained from developers and/or brokers
involved with each of these land sales. In addition, lot finish-
ing cost estimates provided to us by Century Homes were consid-
ered for the subject site.
All sales were adjusted for time, location and physical charac-
teristics to arrive at the following value conclusions for the
subject parcels.
Page 8
I
I
I
Res. 91-132
Unit Measure
Unit Value
Estimated Unimproved
Land Value
----------------------------------------------------------
46.66 Acres
$42,OOOjacre
$1,959,720
Total "Unimproved" Value
Assessment District 977B
$1,959,720
---------
-------
unit Measure
Unit Value
Estimated Unimproved
Land Value
----------------------------------------------------------
185 Lots
See Table 1
$8,132,500
Detention Basin
(Lot IfAIf)
-0-
-0-
Total "Improved" Value
Assessment District 977B
$8,132,500
----------
----------
Page 9
Res. 91-132
Table Pg. 1 of 4
TI\BLE 1
IMPHOVEU I.OT VI\LUES
'l'HI\C'l' 14185
===========~=============~=~~===============~=====
roOT I\HEI\ ESTIMI\TED ESTIMI\TED
1.01" (Sq. Ft.) LOT PHEMIUM MI\RKET VALUE
==================================================
1 8,323 ~0.0 43,500
2 7,773 0.0 43,500
3 7,576 0.0 43,500
4 8,309 $I,OUU 44,500
5 8,320 $1~000 44,500
6 7,800 O.U 43,500
7 7,417 O.U 43,500
8 8,714 12'OUO 45,50U
9 12,932 3,00U 46,500
]0 14,]35 3,000 46,500
]1 9,126 2~000.00 45,50U
]2 7,596 43,500
13 7,200 O.U 43,50U
14 7,720 $1,000 44,500
15 7,720 $1~000 44,500
16 7,200 0.0 43,500
17 7,611 U.U 43,500
]8 8,336 11 000 44,5UO
19 11,842 3;000 46,500
20 9,980 2,OUO 45,500
21 13,077 3,000 46,500
22 9,870 2~000.00 45,500
23 7,205 :;. 43,500
24 7,225 $1~000 44,500
25 7,266 :;.0.0 43,500
26 8,114 $1~000 44,500
27 7,619 :;.0.0 43,500
28 8,539 11,OUO 44,500
29 12,704 3,000 46,500
30 9,968 3 000 46,500
31 7,325 0.0 43,500
32 7,215 0.0 43,500
33 7,215 0.0 43,500
34 7,349 0.0 43,500
35 7,548 0.0 43,500
36 7,574 0.0 13,500
37 7,941 0.0 43,500
38 7,2UO 0.0 43,500
39 7,200 0.0 43,500
40 7,200 0.0 43,500
41 7,200 0.0 43,500
42 7,200 0.0 43,500
43 7,200 0.0 43,500
44 7,200 0.0 43,500
45 7,200 U.O 43,500
46 7,200 0.0 43,500
47 7,200 0.0 43,500
48 7,380 0.0 43,500
49 7,380 0.0 43,500
50 7,380 0.0 43,500
51 7,380 0.0 43,500
52 7,38U 0.0 43,500
53 7,380 0.0 43,500
54 7,380 0.0 43,500
55 7,380 0.0 43,500
56 7,380 0.0 43,500
57 8,434 $1,000 44,50U
58 8,700 $1,000 .44,500
Table Pg. 2 of 4
TABU': 1 (continued)
LOT AREA ES'l'1l1ATEU ESTIMATED
LOT R (Sq. Ft. ) LOT PREMIUl1 I1ARKET VALUE
=====~============================================
59 9,625 12'000 45,500
60 11,130 3,000 46,500
61 9,550 2,000 45,500
62 8,429 1 000 44 , 500
63 7,206 0.0 43,500
64 7,200 0.0 43 , 500
65 7,200 0.0 43,500
66 7,200 0.0 43,500
67 7,200 0.0 43,500
68 7,200 0.0 43,500
69 7,200 U.U 43,500
70 7,200 0.0 43,500
71 7,200 0.0 43,500
72 7,200 U.U 43,500
73 7,200 0.0 43,500
74 7,200 U.O 43,500
75 7,216 U.U 43,5UO
76 8,728 r'OOO 44,50U
77 12,591 3,OUO 46,5UO
78 9,478 rs 45,500
79 8,721 44,500
80 7,500 0.0 43,50U
81 7,500 0.0 43,500
82 7,500 0.0 43,500
83 7,50U U.O 43,500
84 7,500 0.0 43,500
85 8,232 ~1,000 44,500
86 7,956 1. 000 44 , 500
87 7,200 0.0 43,500
88 7,200 0.0 43,500
89 7,200 0.0 43,500
90 7,200 0.0 43,500
91 7,223 0.0 43,500
92 7,725 0.0 43,500
93 7,480 0.0 43,500
94 8,039 0.0 43,500
95 7,350 0.0 43,500
96 7,350 0.0 43,500
97 7,350 U.U 13,500
98 7,350 0.0 13,500
99 7,515 0.0 13,500
100 7,592 11,000 44,500
101 9,991 TS8 15,500
102 8,379 44 , 500
103 7,927 0.0 13,500
101 7,122 0.0 13,500
105 7,991 0.0 13,500
106 7,536 U.O 13,5UO
107 7,192 $1 UUU 44 ,500
108 7,351 0.0 13,5UU
109 7,782 O.U 13,50U
110 7,258 U.U 43,500
111 7,325 U.U 43,50U
112 7,5UU U.U 43,500
113 7,500 U.U 13,500
111 7,50U O.U 13,50U
115 7,5UU U.U 43,5UU
116 7,500 0.0 13,5UO
117 7,200 U.U 13,5UU
118 7.200 . U.O 43. SUO
119 7,20U U.U 4J.500
120 7,200 0.0 43,500
Table Pg. 3 ;f 4
TABU': 1 (continued)
L,O'1' AREA ES'I'IMA'1'EIJ ESTIMATEO
UJ'l' # (Sq. Ft.) LO'I' PREMIUM f1ARKET VALUE
=~==~=============================================
]21 7,200 $0.0 43 , 500
] 22 8,411 I" 0"' 14,500
]23 11,069 3,000 16,500
]24 9,819 2,000 15,500
]25 I1,B33 3,000 16,500
]26 9,267 .2 000 15,500
]27 7,500 0.0 13,500
128 7,500 0.0 43,500
129 7,500 0.0 43,500
130 7,500 0.0 43,500
131 7,500 0.0 13,500
132 7,500 0.0 13,500
]33 B,564 p,ooo 11 , 500
134 8,435 1 000 11 ,500
135 7,740 0.0 43,500
]36 7,710 0.0 43,500
]37 7,740 0.0 13,500
13B 7,740 0.0 13,500
]39 7,740 0.0 13,500
140 7,751 0.0 13,500
141 B,313 I" 000 14,500
142 7,921 1,000 11,500
143 11,621 3,000 16,500
114 9,257 2,000 15,500
115 11,717 3 000 16,500
146 7,642 0.0 13,500
147 7,571 0.0 43,500
118 7,549 0.0 43,500
149 7,519 0.0 13,500
150 7,549 0.0 13,500
151 7,519 0.0 43,500
]52 8,422 p,ooo 11,500
]53 8,266 1 000 11,500
154 7,215 0.0 13,500
155 7,215 0.0 13,500
156 7,2]5 0.0 43,500
157 7,2]5 0.0 13,500
15B 7,215 0.0 13,500
]59 7,2]5 0.0 43,500
160 7,215 0.0 13,500
161 7,221 0.0 13,500
162 7,210 0.0 13,500
163 7,311 0.0 13,500
161 7,206 0.0 13,500
165 7,206 0.0 13,500
]66 7,206 0.0 13,500
167 7,206 0.0 13,500
168 7,205 0.0 13,500
169 7,205 0.0 13,500
170 7,243 0.0 13,500
] 71 7,219 0.0 13,500
172 7,220 0.0 13,500
] 73 7,232 0.0 13,500
174 7,200 0.0 13,500
Table Pg. 4 of 4
TABLE 1 (cont.lnlled)
LoOT AREA ES'l'UIATEIJ ESTIMATED
LOT B (sq. Ft.) loOT I'RF.MIUM 11ARKET VALUE
=====~============================================
175 7,200 r 4J,500
176 7,200 0.0 4J,500
17"/ 7,J05 0.0 4J,500
17B 7,640 0.0 4J,500
179 7,JBB 0.0 4J,500
IBO 7,4BB 0.0 4J , 500
IBl 7,5B6 ~1,000 41\,500
1B2 7,643 1!000 44,500
IB3 B,B91\ 0.0 4J,500
IBI\ B,71\B 0.0 I\J,500
185 8,357 0.0 43,500
-------- -------- ----------
TOTAL: 1,1\71\,116 $85,000 $8,IJ2,500
33.84 ACRES ----------
----------
NoTE: J\LL LoT SIZES J\RE RoUNDED TO TilE NEl\REST SQUJ\RE FOoT.
Res. 91-132
ADDENDA
Land Sales (Table 2)
Tract Map
certification
Professional Qualifications:
Michael F. Frauenthal, MAl, SRPA
Page 10
TABLE 2
LAND SALES SUMMART
TRACT T~185
tOCA TlON LANO AREA SALES PRICE
HAr GRID SALES DATE ACRES LOT SIZE PER ACRE LANO
COOP NO APN SALES PRICE NO OF LOTS (SF) PER LOT STATUS
==================================================================================================
SUBJECT NUC OF CAJON BLVD ~6.66 ACRES 7,200 RAU W
ANO JUNE STREET GROSS HIN APPROVED
SAN BERNARDINO, CA (185) HAP
6.E1, SAN BERNAROINO CO.
262-231'03, 04
ALONG CIIESTNUT AVE. 06f1~/90 5.95 10,800 $33,613 RAU W
HE OF Ollto AVE. $200,000 N/A HIN NO MAP
SAN BERNARDINO, CA
49-03, SAN BERNARDINO CO.
261-032-0~
2 ALONG NUS Of LITTLE LEAGUE 02/27/90 29.86 N/A $34,491. RAU W
DRIVE, SIO BELHONT AVE. $1.030.000 N/A NO HAP
SAN BERNARDINO, CA
~9.03, SAN 8ERNAROINO CO.
261'121-10, 261'131-03
3 NEC OF HAGNOLIA AVE. 05/03/90 20.00 10,800 $47,500 RAU W
ANO IRVINGTON AVE. $950,000 M HIN $1~,8~~ NO HAP
SAN 8ERNAROINO, CA
~9-0~, SAN BERNAROINO CO.
261-1~1'03
~ ALONG TERRA VISTA ORIVE 02/09/90 22.77 6,000 $1~9,100 RAU U/
NU OF PALHETTO AVE. $3,395,000 110 $30,86~ APPROVEO
RIALTO, CA HAP
5-02, SAN BERNARDINO CO.
239-3Bl-12
5 ALONG MANGO AVE 01105190 7.13 10,800 SI90,7~3 RAU W
SIO UALNUl AVE $1,360,000 36 $37,778 lEIHA1IVE
RIALTO, CA HAP
5-06, SAN BERNARDINO CO.
2',0-131-02, OS, 58, 85 & 88
2~0-161-T5
6 sue or SAN BERNARDINO AVE Of,117/90 13.80 7,200 S151,297 R^\.l Uf
AND 1I NDEN AVE $2,100,000 60 $35,000 APPROVED
BL()()MINGTON. CA HAP
15-A6, SAN BERNARDINO co.
252-071-01, 252-081-07,20,
21 ANO 2~
7 NEt or RANDAll & PEPPER 02f15190 ~1.20 6,200 S09,632 RAY I,lf
AVENUES $3,700,000 165 $22,42/. IEtHAIIVE
COl ION, CA HAP
15-A6, SAN BERNAROI~O CO.
160-313-01,02,03,O~,07
250-211-05,12,15
8 ALONG 161" stREET a Of,/30/90 9.74 7, SOD $68,634 RAU UI
CAl1FORNIA STREET S668,500 3~ HIN $19,662 ArPRovED
SAN 8ERNARDINO, CA HAP
7-A6, SAN 8ERNARDINO co.
269-1~2.29 THRU 40
269-1~3'06, 07
i\w q II Y:.;.
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fu,) , 91- iY1.
CERTIFICATION
We, certify that, to the best of our knowledge and belief:
1. The statements of fact contained in this report are true and
correct.
2. The reported analyses, opinions, and conclusions are limited
only by the reported assumptions and limiting conditions,
and is our personal, unbiased professional analyses, opin-
ions, and conclusions.
3. We have no present or prospective interest in the property
that is the subject of this report, and we have no personal
interest or bias with respect to the parties involved.
4. Our compensation is not contingent on an action or event
resulting from the analyses, opinions, or conclusions in, or
the use of, this report.
5. Our analyses, opinions, and conclusions were developed, and
this report has been prepared, in conformity with the Uni-
form Standards of Professional Appraisal Practice.
6. We have made a personal inspection of the property that is
the subject of this report.
7. Charles R. Frauenthal, provided significant professional
assistance to the persons signing this report.
8. We certify that to the best of our knowledge and belief, the
reported analyses, opinions and conclusions were developed,
and this report has been prepared, in conformity with the
requirements of the Code of Professional Ethics and the
Standards of Professional Practice of the American Institute
of Real Estate Appraisers.
9. We certify that the use of this report is subject to the
requirements of the American Institute of Real Estate Ap-
praisers relating to the review by its duly authorized
representatives.
10. As of the date of this report, Michael F. Frauenthal, has
completed the requirements of the continuing education
program of the American Institute of Real Estate Appraisers.
Respectfully submitted,
, ! .. -, J .-1 -
/,or( ~-'~ ;/,-~. z1~
.' / ,.. ____/ ../L4 I -' - ':---/ ,-//--/44/ .-
Mfchael F. Frauenthal, MAl, RPA
0-s.-<> e\l \~ ;).
MICHAEL FRAUENTHAL & ASSOCIATES, INC.
Real Estate Appraisers-Consultants
PROFESSIONAL QUALIFICATIONS
OF
MICHAEL F. FRAUENTHAL, MAI, SRPA
POSITION:
Independent Appraiser/Consultant
ADDRESS:
34237 Via Santa Rosa
Capistrano Beach, CA 92624 (714)496-1676
EMPLOYMENT:
1984-1985
American Diversified savings Bank
Costa Mesa, California
Southwest Regional Appraisal Manager
1982-1984 Charles Dunn Company, Los Angeles,
California, Appraiser
1976-1982 Harold Davidson & Associates, Inc.
Los Angeles, California
Appraiser/Director of Acquisitions
EDUCATION: University of Southern California, Los
Angeles, California, 1972-1976, B.S. -
Business/Real Estate Finance
AI REA Courses successfully completed: 1A-1, 1A-2,
1B-1, 1B-2, 1B-3 - Ethics, Residential Valuation,
Rural Valuation, Case Studies, Report Writing,
Investment Analysis, Litigation Valuation and
Comprehensive Examination
AIREA seminars
Demonstration
Feasibility and
attended include:
Report writing,
Market Analysis
Commercial
Real Estate
society of Real Estate Appraisers
Courses Completed: 101, 102, 201, and 202
Additional Real Estate Education: Marshall
Valuation Service -- Residential and Commercial Cost
Handbook and Computer Seminars. R41-C and the
Appraiser, Standards of Professional Practice.
University of California at Los Angeles Real Estate
Investment Analysis, Real Estate Syndication
34237 Via Santa Rosa. Capistrano Beach, CA 92624. (714) 496-1676
PROFESSIONAL QUALIFICATIONS
MICHAEL F. FRAUENTHAL, HAI, SRPA
LICENSE: Real Estate Broker, State of California
(1978-1986), #0-618594-6
ALLIED REAL ESTATE EXPERIENCE:
Fourteen years in all phases of Real Estate Appraisal
TYPE OF PROPERTIES APPRAISED:
commercial: Neighborhood and convenience shopping
high-rise office buildings, garden-office building,
store buildings, gasoline service stations, etc.
centers,
retail
Industrial:
etc.
Warehouse manufacturing plants, loft buildings,
Residential: Apartment houses, condominiums, residential
subdivision, single-family dwellings, motels, etc.
Vacant Land: Residential, commercial, industrial and
agricultural sites
Special Purposes: Convalescent hospitals, churches, regional
entertainment facility, agricultural site, etc.
PROFESSIONAL ORGANIZATIONS:
Appraisal Institute
Orange county Chapter, Director 1991-92
Admissions Committee - 1991
American Institute of Real Estate Appraisers
Designation MAl
MAl Member Number 7093
Member Admissions Committee 1987-90
Society of Real Estate Appraisers
Designation SRPA
Member, Ethics Committee, Chapter 132
Chapter Director 1986-87, 1987-88
Admissions Committee - 1989-1990
Res. 91-132
APPENDIX B
LIST OF ASSESSMENTS AND LAND VALUES
Res. 91-132
CITY OF SAN BERNARDINO
ASSESSMENT DISTRICT NO. 977B
LIST OF ASSESSMENTS AND LAND VALUES
Assessment Estimated Assessment Lien-to-Value Delinquent Parcel
Number (1) Value (2) Amount (1) Ratio Taxes (3 ) Owner (1)
1 43,500 5,475.94 7.94:1 Century Rrns
2 43,500 5,475.94 7.94:1 Century Rrns
3 43,500 5,475.94 7.94:1 Century Rms
4 44,500 5,475.94 8.13:1 century Rms
5 44,500 5,475.94 8.13:1 Century Rms
6 43,500 5,475.94 7.94:1 Century Rrns
7 43,500 5,475.94 7.94:1 Century Rms
8 45,500 5,475.94 8.31:1 Century Rrns
9 46,500 5,475.94 8.49:1 Century Rrns
10 46,500 5,475.94 8.49:1 Century Rms
11 45,500 5,475.94 8.31:1 Century Rms
12 43,500 5,475.94 7.94:1 Century Rrns
13 43,500 5,475.94 7.94:1 Century Rrns
14 44,500 5,475.94 8.13:1 Century Rms
15 44,500 5,475.94 8.13:1 Century Rrns
16 43,500 5,475.94 7.94:1 Century Rrns
17 43,500 5,475.94 7.94:1 century Rrns
18 44,500 5,475.94 8.13:1 Century Rrns
19 46,500 5,475.94 8.49:1 Century Rrns
20 45,500 5,475.94 8.31:1 Century Rrns
21 46,500 5,475.94 8.49:1 century Rms
22 45,500 5,475.94 8.31:1 century Rms
23 43,500 5,475.94 7.94:1 Century Rrns
24 44,500 5,475.94 8.13:1 Century Hrns
25 43,500 5,475.94 7.94:1 Century Hrns
26 44,500 5,475.94 8.13:1 Century Hms
27 43,500 5,475.94 7.94:1 Century Hrns
28 44,500 5,475.94 8.13:1 Century Hms
29 46,500 5,475.94 8.49:1 Century Hrns
30 46,500 5,475.94 8.49:1 Century Hrns
31 43,500 5,475.94 7.94:1 century Hrns
32 43,500 5,475.94 7.94:1 Century Hms
33 43,500 5,475.94 7.94:1 Century Rms
34 43,500 5,475.94 7.94:1 Century Hrns
35 43,500 5,475.94 7.94:1 Century Hrns
36 43,500 5,475.94 7.94:1 Century Hrns
37 43,500 5,475.94 7.94:1 Century Hrns
38 43,500 5,475.94 7.94:1 Century Rrns
39 43,500 5,475.94 7.94:1 Century Hms
40 43,500 5,475.94 7.94:1 Century Hrns
41 43,500 5,475.94 7.94:1 Century Hms
42 43,500 5,475.94 7.94:1 Century Hrns
43 43,500 5,475.94 7.94:1 Century Hrns
44 43,500 5,475.94 7.94:1 Century Hrns
45 43,500 5,475.94 7.94:1 Century Hrns
46 43,500 5,475.94 7.94:1 Century Hrns
47 43,500 5,475.94 7.94:1 Century Hrns
48 43,500 5,475.94 7.94:1 Century Hrns
49 43,500 5,475.94 7.94:1 century Hrns
Assessment Estimated Assessment Lien-to-Value Delinquent Parcel
Number (1) Value (2) Amount (1) Ratio Taxes (3) Owner (1)
50 43,500 5,475.94 7.94:1 Century Rms
51 43,500 5,475.94 7.94:1 Century Rms
52 43,500 5,475.94 7.94:1 Century Rms
53 43,500 5,475.94 7.94:1 Century Rms
54 43,500 5,475.94 7.94:1 Century Rms
55 43,500 5,475.94 7.94:1 Century Rms
56 43,500 5,475.94 7.94:1 century Rms
57 44,500 5,475.94 8.13:1 Century Rms
58 44,500 5,475.94 8.13:1 Century Rms
59 45,500 5,475.94 8.31:1 Century Rms
60 46,500 5,475.94 8.49:1 Century Rms
61 45,500 5,475.94 8.31:1 Century Rms
62 44,500 5,475.94 8.13:1 Century Rms
63 43,500 5,475.94 7.94:1 Century Rms
64 43,500 5,475.94 7.94:1 Century Rms
65 43,500 5,475.94 7.94:1 Century Rms
66 43,500 5,475.94 7.94:1 Century Rms
67 43,500 5,475.94 7.94:1 Century Rms
68 43,500 5,475.94 7.94:1 century Rms
69 43,500 5,475.94 7.94:1 Century Rms
70 43,500 5,475.94 7.94:1 Century Rms
71 43,500 5,475.94 7.94:1 Century Rms
72 43,500 5,475.94 7.94:1 Century Rms
73 43,500 5,475.94 7.94:1 Century Rms
74 43,500 5,475.94 7.94:1 Century Rms
75 43,500 5,475.94 7.94:1 Century Rms
76 44,500 5,475.94 8.13:1 Century Rms
77 46,500 5,475.94 8.49:1 Century Rms
78 45,500 5,475.94 8.31:1 Century Rms
79 44,500 5,475.94 8.13:1 Century Rms
80 43,500 5,475.94 7.94:1 Century Rms
81 43,500 5,475.94 7.94:1 century Rms
82 43,500 5,475.94 7.94:1 Century Rms
83 43,500 5,475.94 7.94:1 Century Rms
84 43,500 5,475.94 7.94:1 Century Rms
85 44,500 5,475.94 8.13:1 Century Rms
86 44,500 5,475.94 8.13:1 Century Rms
87 43,500 5,475.94 7.94:1 Century Rms
88 43,500 5,475.94 7.94:1 century Rms
89 43,500 5,475.94 7.94:1 Century Rms
90 43,500 5,475.94 7.94:1 Century Rms
91 43,500 5,475.94 7.94:1 Century Rms
92 43,500 5,475.94 7.94:1 Century Rms
93 43,500 5,475.94 7.94:1 Century Rms
94 43,500 5,475.94 7.94:1 Century Rms
95 43,500 5,475.94 7.94:1 Century Rms
96 43,500 5,475.94 7.94:1 Century Rms
97 43,500 5,475.94 7.94:1 Century Rms
98 43,500 5,475.94 7.94:1 Century Rms
99 43,500 5,475.94 7.94:1 Century Rms
100 44,500 5,475.94 8.13:1 Century Rms
101 45,500 5,475.94 8.31:1 Century Rms
102 44,500 5,475.94 8.13: 1 Century Rms
103 43,500 5,475.94 7.94:1 Century Rms
104 43,500 5,475.94 7.94:1 Century Rms
105 43,500 5,475.94 7.94:1 Century Rms
106 43,500 5,475.94 7.94:1 Century Rms
Assessment Estimated Assessment Lien-to-Value Delinquent Parcel
Number (1) Value (2) Amount (1) Ratio Taxes (3) Owner (1)
107 44,500 5,475.94 8.13:1 Century Hms
108 43,500 5,475.94 7.94:1 Century Hms
109 43,500 5,475.94 7.94:1 Century Hms
110 43,500 5,475.94 7.94:1 Century Hms
111 43,500 5,475.94 7.94:1 Century Hms
112 43,500 5,475.94 7.94:1 Century Hms
113 43,500 5,475.94 7.94:1 Century Hms
114 43,500 5,475.94 7.94:1 century Hms
115 43,500 5,475.94 7.94:1 Century Hms
116 43,500 5,475.94 7.94:1 Century Hms
117 43,500 5,475.94 7.94:1 Century Hms
118 43,500 5,475.94 7.94:1 Century Hms
119 43,500 5,475.94 7.94:1 Century Hms
120 43,500 5,475.94 7.94:1 century Hms
121 43,500 5,475.94 7.94:1 Century Hms
122 44,500 5,475.94 8.13:1 Century Hms
123 46,500 5,475.94 8.49:1 Century Hms
124 45,500 5,475.94 8.31:1 century Hms
125 46,500 5,475.94 8.49:1 Century Hms
126 45,500 5,475.94 8.31:1 Century Hms
127 43,500 5,475.94 7.94:1 century Hms
128 43,500 5,475.94 7.94:1 Century Hms
129 43,500 5,475.94 7.94:1 Century Hms
130 43,500 5,475.94 7.94:1 century Hms
131 43,500 5,475.94 7.94:1 Century Hms
132 43,500 5,475.94 7.94:1 Century Hms
133 44,500 5,475.94 8.13:1 Century Hms
134 44,500 5,475.94 8.13:1 Century Hms
135 43,500 5,475.94 7.94:1 Century Hms
136 43,500 5,475.94 7.94:1 Century Hms
137 43,500 5,475.94 7.94:1 century Hms
138 43,500 5,475.94 7.94:1 Century Hms
139 43,500 5,475.94 7.94:1 Century Hms
140 43,500 5,475.94 7.94:1 Century Hms
141 44,500 5,475.94 8.13:1 Century Hms
142 44,500 5,475.94 8.13:1 Century Hms
143 46,500 5,475.94 8.49:1 Century Hms
144 45,500 5,475.94 8.31:1 Century Hms
145 46,500 5,475.94 8.49:1 Century Hms
146 43,500 5,475.94 7.94:1 Century Hms
147 43,500 5,475.94 7.94:1 century Hms
148 43,500 5,475.94 7.94:1 Century Hms
149 43,500 5,475.94 7.94:1 Century Hms
150 43,500 5,475.94 7.94:1 Century Hms
151 43,500 5,475.94 7.94:1 Century Hms
152 44,500 5,475.94 8.13:1 Century Hms
153 44,500 5,475.94 8.13: 1 Century Hms
154 43,500 5,475.94 7.94:1 Century Hms
155 43,500 5,475.94 7.94:1 Century Hms
156 43,500 5,475.94 7.94:1 century Hms
157 43,500 5,475.94 7.94:1 Century Hms
158 43,500 5,475.94 7.94:1 Century Hms
159 43,500 5,475.94 7.94:1 century Hms
160 43,500 5,475.94 7.94:1 century Hms
161 43,500 5,475.94 7.94:1 Century Hms
162 43,500 5,496.49 7.94:1 Century Hms
163 43,500 5,475.94 7.94:1 Century Hms
Assessment
Number (11
Estimated
Value (21
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
43,500
44,500
44,500
43,500
43,500
43,500
-0-
Assessment
Amount (11
Lien-to-Value
Ratio
Delinquent
Taxes (31
Parcel
Owner (1)
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
5,475.94
-0-
century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
Century Hms
century Hms
Century Hms
Century Hms
Century Hms
century Rms
Century Hms
Century Hms
Century Hms
Century Hms
City of SB
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
7.94:1
8.13:1
8.13:1
7.94:1
7.94:1
7.94:1
NjA
(1) Assessment information provided by GFB-Friedrich & Associates, Inc.,
Riverside, California.
(2) Value estimates provided by Michael Frauenthal & Associates, Inc.,
Capistrano Beach, California. For further information, see Appendix
A.
(3) No property tax delinquencies were reported for any of the assessed
parcels.
j- - ---
,
APPENDIX C
ASSESSMENT DIAGRAM
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Res. 91-132
APPENDIX D
GENERAL INFORMATION CONCERNING
THE CITY OF SAN BERNARDINO
Res. 91-132
General Information
The city of San Bernardino
The followinq information concerninq the citv of San
Bernardino and surroundinq areas are included onlv for the purpose
of suppl vinq qeneral information reqardinq the communi tv. The
Bonds are not a debt of the citv of San Bernardino. State of
California or anv of its political subdivisions. and neither said
citv. said State nor anv of its political subdivisions is liable
therefor.
General
The City of San Bernardino, county seat of San Bernardino
County, California, is located at the base of the San Bernardino
Mountains, 58 miles east of Los Angeles. The City was incorporated
on April 13, 1854. The City operates under a charter form of
government, directed by the Mayor and Common Council of seven
councilmen elected from their respective wards and the Mayor
elected at large by the voters.
population
The city's population according to the 1980 census was
118,092. A summary of the city's population from 1970 to 1990 is
shown below.
1970
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
106,892
118,092
121,900
129,400
128,800
131,000
134,700
137,400
140,900
148,900
153,700
164,164
U.S. Bureau of the Census.
Estimated by the population
Research Unit, California State
Department of Finance, as of January 1.
The following lists annual average number of wage and salary
employees by industry within Riverside and San Bernardino Counties
for 1985 to 1990.
Riverside and San Bernardino Counties
Annual Average Employment by Industry (1)
Mining
Construction
Manufacturing,
Nondurables
Manufacturing,
Durables
Transportation
& Public utilities
Wholesale Trade
Retail Trade
Finance, Insurance
& Real Estate
Service Industries
Federal Government
State & Local
Government
Total Non Agri-
cultural
Agriculture, Fores-
try & Fisheries
Total All
Industries
1986
1,300
41,900
19,300
50,100
30,500
20,300
123,300
23,800
129,100
19,700
99.500
558,800
23.100
581,400
1987
1,300
53,400
22,800
57,900
32,200
21,500
131,000
25,400
141,900
20,600
103.900
611,900
18.400
630,300
1988
1,300
48,800
23,600
57,400
30,300
21,600
135,300
26,500
147,500
19,800
105.000
617,100
24.900
642,000
1989
1,300
65,300
27,200
61,000
33,300
26,900
143,600
29,800
162,000
20,700
137.800
688,200
20.900
709,100
1990
1,400
67,500
28,700
61,000
35,400
32,400
151,800
32,600
179,500
21,200
128.300
739,900
21. 700
761,600
(1) Employment reported by place of work excluding workers involved
in labor disputes, self-employed, unpaid family and domestic
workers.
Source: State of California, Employment Development Department
unemployment
The civilian labor force employment and unemployment for the
Riverside-San Bernardino-Ontario labor market is shown below. The
total civilian employment as of December, 1990 was reported by the
State Employment Development Department to be 1,071,600. The total
civilian unemployment was 70,600, a rate of 6.6%.
Riverside-San Bernardino-Ontario Labor Market
Civilian Labor Force, Employment and unemployment
Labor Unemployment
Year (l) Force Emplovment Unemployment Rate
1990 1,071,600 1,001,000 70,600 6.6%
1989 1,023,600 965,200 58,400 6.1%
1988 944,300 900,300 44,000 4.7
1987 912,300 858,000 54,300 5.9
1986 824,600 775,000 49,600 6.0
1985 778,500 722,400 56,400 7.2
1984 665,600 608,200 57,800 8.6
1983 646,100 575,500 70,800 11. 0
1982 636,200 558,800 77,400 12.2
1981 604,400 553,700 50,700 8.4
1980 586,200 541,500 44,700 7.6
(1) January 1 to December 31 Average.
Source: State of California, Employment Development Department.
Employment and Industry
Located within San Bernardino's economic area are several
major employers. Norton Air Force Base is the City's single
largest employer. Approximately 4,500 civilian employees and 7,5?0
military personnel contribute to San Bernardino's economlC
environment through a gross annual payroll of $200,821,211. The
principal installation at Norton is the 63rd Military Airlift Wing,
and the base serves as one of the three ports of air embarkation
and debarkation for the Pacific theatre.
The United States Air Force has announced the closing of
Norton Air Force Base, which closing may begin as early as 1991.
Although the elimination of the area's major employer is likely to
have an adverse effect on the general economy of the City, steps
are being taken by the City, the United States Air Force and other
affected local jurisdictions to offset such negative impact. For
example, the Air Force has given preliminary approval to plans for
joint civilian and military use of Norton Air Force Base, the Air
Force has released a schedule for the clean-up of hazardous and
toxic materials on the 2,400-acre base, and the City has included
the base in a redevelopment project area.
other major employers include wholesale distributors of
beverages, produce, meats, candy, tobacco and sundries to the
entire Southern California inland regions. Some of the leading
distributors are: Gate city Beverage, Glaser Bros., Grand Central
Produce, Inland Distributor, Southwestern Meat and Provision,
Desert provision and the distributing firm of Bank, Bohemian and A.
Diel.
are:
The largest manufacturing firms in the San Bernardino area
Name of Company
The Sun Company
California Portland Cement
San Berdee Sports Wear
Haley Bros.
Fleetwood
Doane Products Co.
Rogers Bindery & Mail
Emplovment
475
367
360
180
146
122
118
Products
Printing and Publishing
Cement
Clothing
Wood doors
Travel trailers
Dog Food
Book binding
The largest nonmanufacturing firms in the San Bernardino area are:
Name of Company
Norton Air Force Base(l)
San Bernardino County
Loma Linda University and
Hospital
City School System
stater Bros. Market
Inland Center Mall
Santa Fe Railroad
central City Mall
Patton Hospital
city of San Bernardino
TRW Systems
Management
California State College,
San Bernardino
Campus Crusade for Christ
Center
Southern Pacific Railroad
San Bernardino Valley College
General Telephone Company
(1) Norton Air Force Base is
1991.
Source:
Emplovment
12,000
8,780
5,800
3,650
3,600
2,300
2,000
1,800
1,458
1,300
1,292
1,000
800
700
565
500
closing,
Products
Military and Civilian
County Administration
University and Hospital
Unified School system
supermarket
Regional Shopping Center
Transportation
Regional Shopping Center
State Mental Hospital
City Administration
Research/Program
State College
Christian Conference
Transportation
Community college
Communications
which may begin as early as
Research Division, State of California,
Bernardino County Census Bureau, 1984.
1985,
San
City of San Bernardino
liIumber of Permits and Valuation of Taxable Transactions
Retail stores Total All Outlets
No. of Taxable No. of Taxable
Year Permits Transactions Permits Transactions
1981 1,410 $ 793,340,000 3,185 $ 970,660,000
1982 1,453 830,753,000 4,504 1,008,440,000
1983 1,475 903,392,000 4,651 1,104,198,000
1984 1,546 1,018,191,000 4,578 1,257,308,000
1985 1,589 1,135,263,000 4,509 1,400,997,000
1986 1,620 1,214,245,000 4,520 1,496,335,000
1987 1,614 1,295,158,000 4,456 1,611,047,000
1988 1,693 1,443,831,000 4,482 1,774,958,000
1989 1,760 1,517,409,000 4,396 1,898,847,000
1990 (1) 1,852 1,123,499,000 4,654 1,406,356,000
(1) Represents first three quarters of 1990.
Source: State Board of Equalization, California.
Construction Activity
The following table shows building permit valuation for the city
from 1984 through 1988.
Building Permit Valuation
(Valuation in Thousands of Dollars)
1984 1985 1986 1987 1988
Residential
New single-dwelling $ 35,650 $ 21,001 $ 47,357 $ 53,699 $ 29,148
New mUlti-dwelling 43,906 42,268 89,706 18,441 157
Additions, alterations 4.815 4.356 4.331 5.056 1.193
Total Residential $ 84,371 $ 67,625 $141,394 $ 77,196 $ 35,530
Non-Residential
New commercial $ 27,798 $ 42,250 $ 44,972 $44,870 $ 37,740
New industrial 1,556 3,767 10,777 2,527 10,189
Other 8,898 1,704 7,709 3,153 9,095
Additions, alterations 15.978 14.511 13.265 23.076 15.994
Total Non-Residential 54.230 62.232 76.723 73.626 73.018
Total Valuation $138,601 $129,857 $218,117 $150,822 $108,548
No. of New Dwelling units
Single-dwelling 616 306 661 681 292
MUlti-dwelling 1.377 1. 186 2.426 483 4
Total units 1,993 1,492 3,087 1,164 296
Source: "California Building Activity," Economic Sciences Corporation.
Transportation
Four Interstate Highways traverse San Bernardino County.
Interstate 10 crosses the San Bernardino Valley in an east-west
direction. Interstate 15 runs north and south, passing through the
cities of San Bernardino and Riverside. Interstate 215 traverses
between Temecula in Riverside County and Devore in San Bernardino County
where it joins Interstate 15. Interstate 40 runs easterly from the city
of Barstow into Arizona.
U.S. Highway 95 serves the eastern sector of the county, and U.S.
395 the western part.
Santa Fe Railroad, Union Pacific Railroad and Southern Pacific
Railroad provide regularly scheduled service, with 24-hour switching
service and reciprocal-switching agreements between all three Railroads.
"piggy-back" service is available. San Bernardino is also served by
AMTRAK passenger service to all points east.
All major trucking lines have terminals in the San Bernardino area,
providing daily-scheduled service to all transcontinental points.
overnight truck delivery is available to Los Angeles, Long Beach, San
Diego, San Francisco, Northern California, Arizona, and Nevada.
ontario International Airport (20 miles west of the city) is served
by fourteen commercial airlines, including two intrastate and one
commuter airline. united Express and Skywest Airlines connect with
major carriers at Los Angeles International Airport. Rialto Airport, a
private and commuter airport, provides general aviation service.
Greyhound Lines provides transcontinental bus service. The
Southern California Rapid Transit District (RTD) provides hourly service
throughout the San Bernardino/Riverside/Ontario Metropolitan Area. The
Omnitrans System operated by a Joint Powers Authority between the County
of San Bernardino and the cities of Chino, Colton, Fontana, Loma Linda,
Montclair, ontario, Redlands, Rialto, San Bernardino and Upland provides
regular bus service within the City of San Bernardino and between the
ten cities and county areas, from Pomona to Calimesa.
utilities
The city provides domestic water service and sanitary sewer
services. Natural gas is supplied by Southern California Gas company.
Southern California Edison company provides electrical power. Telephone
service is provided by General Telephone Company.
community Facilities
RES. 91-132
San Bernardino has four acute
capacity, 491 physicians/surgeons, 205
chiropractors.
hospitals with 919 total bed
dentists, 53 optometrists, and 44
There are thirty-five elementary schools, eight junior high
schools, four high schools, San Bernardino Valley College (2 years),
California State University, San Bernardino (4 years), twelve parochial
schools and twenty-five business, trade, and professional schools in the
city. other institutions located nearby are Loma Linda University, the
University of Redlands and the University of California at Riverside.
There are 170 churches, five libraries, three newspapers, 13 radio
stations, 13 TV channels, three TV cable systms, twenty-six banks,
fifteen savings and loans, twenty parks and playgrounds, fourteen
theaters and five public golf courses. Other recreational facilities
include the 1,800 seat California Theatre of Performing Arts, an outdoor
bowl seating 5,000, and a baseball park seating 500. The city has a
California League baseball franchise, the "spirit." The City has six
recreation centers and a cultural arts center.